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Ex parte Ryan Gerald Russell.

N/A

1160647

Alabama

Alabama Supreme Court

I N T H E S U P R E M E C O U R T O F A L A B A M A November 17, 2017 1160647 Ex parte Ryan Gerald Russell. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Ryan Gerald Russell v. State of Alabama) (Shelby Circuit Court: CC-09-67; Criminal Appeals : CR-10-1910). CERTIFICATE OF JUDGMENT WHEREAS, the petition for writ of certiorari in the above referenced cause has been duly submitted and considered by the Supreme Court of Alabama and the judgment indicated below was entered in this cause on November 17, 2017: Writ Denied. No Opinion. p e r c u r ia m - Stuart, C.J., and Bolin, Parker, Shaw, Wise, Bryan, and Sellers, JJ., concur. Murdock and Main, JJ., dissent. NOW, THEREFORE, pursuant to Rule 41, Ala. R. App. P., IT IS HEREBY ORDERED that this Court's judgment in this cause is certified on this date. IT IS FURTHER ORDERED that, unless otherwise ordered by this Court or agreed upon by the parties, the costs of this cause are hereby taxed as provided by Rule 35, Ala. R. App. P. I, Julia J. Weller, as Clerk of the Supreme Court of Alabama, do hereby certify that the foregoing is a full, true, and correct copy of the instrument(s) herewith set out as same appear(s) of record in said Court. Witness my hand this 17th day of November, 2017. l i t a Clerk, Supreme Court of Alabama

November 17, 2017

aecab317-0279-4634-90af-11aebf73a732

Locklear Automotive Group, Inc. v. Elizabeth Montana Booth

N/A

1160436

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160335 ____________________ Locklear Automotive Group, Inc. v. Brad Hubbard Appeal from Tuscaloosa Circuit Court (CV-16-900716) ____________________ 1160336 ____________________ Locklear Automotive Group, Inc. v. Jeremy Averette Appeal from Tuscaloosa Circuit Court (CV-16-900683) ____________________ 1160337 ____________________ Locklear Automotive Group, Inc. v. Carol Fuller Appeal from Tuscaloosa Circuit Court (CV-16-901091) ____________________ 1160375 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Appeal from Bibb Circuit Court (CV-16-900098) ____________________ 1160435 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Appeal from Bibb Circuit Court (CV-16-900081) ____________________ 1160436 ____________________ Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Appeal from Bibb Circuit Court (CV-16-900074) ____________________ 1160437 ____________________ Locklear Automotive Group, Inc. v. Dorothea Williams Appeal from Bibb Circuit Court (CV-16-900073) MURDOCK, Justice. Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. 3 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes. I. Facts All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an 4 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC." The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters 5 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. 6 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about 7 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: _______________" (Capitalization in original; emphasis omitted; and emphasis added.) In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle- identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by 8 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case. A. Case no. 1160435: Jeffery Lollar and Betsy Lollar Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD. Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided 9 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information. The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.1 They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated 1The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 10 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017. On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 11 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Dodge Ram 3500 truck2 from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft. On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.3 He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; 2There is an immaterial discrepancy between Hood's complaint and the arbitration agreement on the year of the purchased vehicle, i.e., whether it was a 2015 or 2016 model. 3The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 12 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references. Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER," a signature of a dealer representative on a line designated "DEALER," and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC." 13 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC," and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified: "3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay. "4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document. "5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion." The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that 14 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER," the signature of a representative of the "DEALER," the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows: 15 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for -- because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate." Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration. C. Case no. 1160335: Brad Hubbard On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal 16 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 information. In early 2016, Hubbard discovered that he was the victim of identity theft. On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion. On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) 17 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated: "This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See 18 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So. 3d 27 (Ala. 2012). "Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED." (Capitalization in original.) Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.4 D. Case no. 1160336: Jeremy Averette On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft. On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On 4On February 8, 2017, this Court by order consolidated this appeal with case no. 1160336 and case no. 1160337 for purposes of filing the record and briefing. 19 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration. On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to 20 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration. E. Case no. 1160337: Carol Fuller On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft. 21 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD. On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying 22 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. F. Case no. 1160436: Elizabeth Booth On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft. On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity 23 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the order entered in Fuller's case, but it was issued by a different circuit judge. 24 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. G. Case no. 1160437: Dorothea Williams On January 13, 2016, Dorothea Williams purchased a 2016 Chrysler 200 automobile from Locklear CJD. In the course of doing so, she signed the arbitration agreement. At that time, Williams also completed a credit application and provided Locklear CJD with personal information. In February 2016, Williams was notified by the Northport Police Department that she had been the victim of identity theft. On October 6, 2016, Williams filed her complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 25 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 2016, Williams filed a response in opposition to the motion to compel. On January 23, 2017, Williams filed a supplemental response to the motion. In her response, Williams -- as did Hubbard, Averette, Fuller, and Booth -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Williams. Williams did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion. On February 1, 2017, the trial court granted the motion to compel as to Locklear CJD but denied it as to Locklear Group. Except for the name of the plaintiff, the order was substantively the same as the orders entered in the Fuller and Booth cases. It was issued by the same circuit judge who decided Booth's case. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. II. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: 26 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). 27 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 III. Analysis A. Case no. 1160335: Brad Hubbard; case no. 1160336: Jeremy Averette; case no. 1160337: Carol Fuller; case no. 1160436: Elizabeth Booth; and case no. 1160437: Dorothea Williams The arguments by the parties in the Hubbard, Averette, Fuller, Booth, and Williams cases are identical,5 and so we will address them together. As we observed in the rendition of the facts, the trial courts in those cases determined that the arbitration agreement "is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.'" It was on this premise that the trial courts concluded that the plaintiffs' claims against Locklear CJD must be arbitrated but that their claims against Locklear Group were not subject to arbitration because Locklear Group was not a signatory to the arbitration agreement. None of the plaintiffs in this group of appeals objected to arbitration of their claims against Locklear CJD. 5Hubbard, Averette, Fuller, Booth, and Williams are all represented by the same attorneys, and the argument sections of their appellee briefs are substantively very similar. 28 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1. Who Decides the Arbitrability of the Claims Against Locklear Group? We have stated that "[t]he question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme Court's terminology, simply 'arbitrability')." Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094, 1101 (Ala. 2014). "A court decides issues of substantive arbitrability '[u]nless the parties clearly and unmistakably provide otherwise.'" Id. (quoting AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986)). On appeal, Locklear Group contends that clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability exists in the arbitration agreement. Specifically, it cites the following language in the arbitration agreement: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: ... the terms of this agreement and all clauses herein contained, their breadth and scope, ... shall be submitted to BINDING ARBITRATION ...." 29 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (Capitalization in original; emphasis added.) In support of this contention, Locklear Group observes that in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), this Court evaluated an arbitration agreement that contained identical language as to arbitrability. Specifically, "[t]he single-page arbitration agreement provide[d] that the arbitrator decides 'the terms of this agreement and all clauses herein contained, their breadth and scope.'" 826 So. 2d at 132. The McGrue Court concluded that "[t]he language of the arbitration agreement is clear and unmistakable evidence indicating that McGrue and Jim Burke intended to arbitrate the question of arbitrability." Id. Likewise, in Ex parte Waites, 736 So. 2d 550 (Ala. 1999), the Court examined an arbitration agreement that contained the same language on arbitrability: "The arbitration provision included in the contract entered into by the parties states that the parties agree to arbitrate any disputes 'resulting from or arising out of the sale transaction entered into (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope ....'" 736 So. 2d at 552. The Waites Court concluded that "[t]his language expresses a clear intent to submit to arbitration the 30 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 issue of arbitrability." Id. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1054–55 (Ala. 2007) (concluding that an arbitration agreement that provided that the parties agreed to arbitrate "'all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, [and] the validity and scope of this Arbitration Provision'" "demonstrates that the parties intended to arbitrate whether the agreement applies to 'any disputes that arose from their relationship'"). For their part, the plaintiffs in these five appeals do not directly challenge the Locklear Group's position that language in the arbitration agreement sufficiently expresses an intention to arbitrate issues of arbitrability. Instead, they argue that Locklear Group did not sufficiently assert this position in the trial courts and that, therefore, it cannot serve as a basis for reversing the trial courts' orders. The plaintiffs observe that all of Locklear Group's motions to compel arbitration (which are substantially identical in all the cases before us) 31 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "consisted of six pages and fourteen numbered paragraphs. The motions contained only one sentence on the topic of who should decide disputes concerning the scope of the arbitration agreements. Specifically, the last sentence of paragraph 10 of the motions states[:] 'Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator.' This sentence was not followed by a citation to any legal authority." The plaintiffs in these five appeals note that "[t]his Court has long held that it 'will not hold a trial court to be in error unless that court has been apprised of its alleged error and has been given the opportunity to act thereon.'" Moultrie v. Wall, 172 So. 3d 828, 840 (Ala. 2015) (quoting Sea Calm Shipping Co. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990)). They argue that the solitary sentence in the motions to compel was not sufficient to apprise the trial courts that arbitrability issues -- including Locklear Group's ability, as a nonsignatory, to enforce the arbitration agreement -- had to be decided by the arbitrator. The plaintiffs contend that the sentence is a quintessential example of an "undelineated general proposition[] not supported by sufficient authority or argument." White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). The plaintiffs cite multiple cases in 32 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 which this Court concluded that a solitary reference to an argument in a motion before the trial court was not sufficient to raise the issue sought to be raised on appeal. See, e.g., Knight v. Alabama Power Co., 580 So. 2d 576, 578 (Ala. 1991) (noting that "except for the one sentence requesting the trial court to adopt the doctrine of comparative negligence, Knight presented nothing in the way of argument on that issue. ... This issue was not sufficiently argued to the trial court ...."); TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1243 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173 (Ala. 2008) (holding that an unsuccessful bidder for a public contract could not argue on appeal that the invitation to bid was ambiguous because it "did not raise this argument in the trial court" where "[t]he only mention of ambiguity TFT made at trial came in one sentence of TFT's trial brief"); and Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So. 2d 73, 81 (Ala. 2002) (observing that the plaintiff's only argument regarding the applicability of a six-year statute of limitations was one sentence in a three-page motion and concluding that "[i]t can hardly be said that [the plaintiff] 33 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 has presented this argument to the trial court and opposing parties so as to give them an opportunity to address this issue"). In the Booth and Williams appeals, Locklear Group responds that, in addition to the sentence in its motion to compel arbitration, it also raised the issue of arbitrability in the hearings on those motions.6 Booth and Williams have filed motions to strike Locklear Group's references and arguments to statements it might have made in the hearings in the Booth and Williams cases, observing that no transcript of those hearings was made and so there is no evidence in the record concerning what was argued in those hearings. Booth and Williams further observe that Locklear Group could have submitted a statement under Rule 10(d), Ala. R. App. P., recounting its recollection of what was argued in the hearings if it had wanted those statements to be included as evidence before this Court, but it failed to do so.7 Finally, Booth 6Locklear Group does not argue that it presented the arbitrability argument in the hearings in the Hubbard, Averette, and Fuller cases. 7Rule 10(d), Ala. R. App. P., states, in part: "If no report of the evidence or proceedings at a hearing or trial was made, or if a transcript is unavailable, the appellant may 34 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Williams cite multiple cases in which this Court has refused to allow a party unilaterally to alter or supplement the record through statements in an appellate brief. See, e.g., Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So. 3d 124, 134 (Ala. 2011) (noting that "because the hearing in this case was not transcribed, nothing presented at that hearing may form the basis for reversing the trial court's denial of Parker's motion to compel arbitration"); Bechtel v. Crown Cent. Petroleum Corp., 451 So. 2d 793, 795 (Ala. 1984) (observing that the appellant "states that estoppel was raised in oral argument at the hearing on the motion for summary judgment. However, no transcription of that hearing is included in the record. This court is limited to a review of the record alone and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel."). In its responses to the motions to strike, Locklear Group admits that "there is no record of the oral argument," that "no steps were taken to create a statement of what occurred at the hearing[s]," and that Booth and Williams "correctly prepare a statement of the evidence or proceedings from the best available means, including the appellant's recollection." 35 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 present[] the case law on this issue." Accordingly, we grant the motions to strike Locklear Group's references to arguments it allegedly made in the hearings on its motions to compel arbitration in the Booth case and the Williams case. Thus, as in the Hubbard, Averette, and Fuller cases, the only reference to arbitrability in the trial courts in the Booth and Williams cases was the single statement in Locklear Group's motion to compel arbitration. We agree with the plaintiffs that Locklear Group's solitary statement in its motion to compel arbitration that the arbitrator should decide the arbitrability of the claims against it was not sufficient to apprise the trial court that Locklear Group was relying on that argument. The first three numbered paragraphs in the motion set out facts relevant to the issue of arbitration, including quotations of substantial portions of the arbitration agreement. The next three paragraphs argued that the transaction at issue affected interstate commerce. The following four paragraphs -- including paragraph 10, which contains the one sentence referencing arbitrability of the arbitration issue -- argued that the language of the arbitration agreement was broad 36 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 enough to include the subject matter of the underlying claims asserted by the plaintiffs. Paragraph 10 stated: "Arbitration contracts cannot be singled out and be subjected to any different or more stringent rules of construction than other contracts. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996). As plainly demonstrated by its language, the arbitration agreement in this case is sufficiently broad in scope to require arbitration of all disputes relating to: "'the resolution of any dispute arising out of, relating to, resulting from or concerning any contracts or agreements ... entered into by the parties, all alleged representation, promises and covenants, issues concerning compliance with any state or federal law or regulation ...[,] any matters taking place either before or after the parties entered into this agreement ...[,] the terms of this agreement and all clauses herein contained, their breadth and scope ...' "(Exhibit A). The present case clearly arises out of and relates to the Plaintiff's purchase of the [vehicle] at issue, events taking place before and after the parties entered into the agreement, the dealership's compliance with state and/or federal law or regulations and alleged misrepresentations and/or omissions of Locklear in connection therewith. Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator." The next paragraph argued that courts have a duty under the Federal Arbitration Act to "rigorously enforce agreements to 37 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrate." The final few paragraphs stated the relief Locklear Group requested (i.e., that the trial court "should compel the Plaintiff to submit his dispute to binding arbitration, ... and all Court actions, including discovery, should be stayed pending arbitration") without any reference to having the arbitrator decide the issue of arbitrability. When the motion to compel arbitration is read as a whole, it is clear that Locklear Group did not articulate why the question of the arbitrability of the claims against it should be submitted to the arbitrator. Its overriding argument was devoted to the merits of the issue whether the arbitration agreement is broad enough to encompass the plaintiffs' underlying claims against Locklear Group even though Locklear Group was not a signatory to the arbitration agreement, not to the proposition that the arbitrator, and not the court, should decide this issue. Except for the brief reference in paragraph 10, Locklear Group never mentioned arbitration of the arbitrability issue anywhere in its motion, including in its paragraphs specifying the relief it was requesting from the trial courts. Locklear Group's single, unsupported, and unexplained sentence in this regard contrasts sharply with its 38 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 relatively fulsome discussion in its motion as to the breadth of the language of the arbitration agreement and how this language was sufficient to entitle Locklear Group to arbitrate the plaintiffs' underlying claims (not to mention the contrast with the Locklear Group's thoroughly explained position on the subject of arbitrability in its brief on appeal to this Court). Indeed, by focusing essentially all of its attention on whether the language of the arbitration agreement was broad enough to cover the plaintiffs' claims against it, Locklear Group suggested that that was the dispositive issue and that it was for trial court to decide it.8 Locklear Group contends that the fact that it argued to the trial courts that the scope of the arbitration agreement was broad enough to cover claims asserted by the plaintiffs and that it also mentioned the arbitrability of that issue constituted the presentation of two arguments in the 8A fair question exists, albeit one we need not address further, as to whether the trial courts' error could be said to have been invited under the circumstances. A party "'"may not predicate an argument for reversal on 'invited error,' that is, 'error into which he has led or lulled the trial court.'"'" White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d at 1057 (quoting Mobile Infirmary Med. Ctr. v. Hodgen, 884 So. 2d 801, 808 (Ala. 2003), quoting other cases). 39 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 alternative. The plaintiffs note, however, that the arguments "were not framed as alternative arguments." Instead, the arbitrability statement is tacked as an afterthought to Locklear Group's central claim that emphasized the broad scope of the arbitration agreement. Based on the foregoing, we conclude that, in the Hubbard, Averette, Fuller, Booth, and Williams cases, Locklear Group waived the issue whether the arbitration agreement by its terms assigns the issue of the arbitrability of the plaintiffs' claims against Locklear Group to the arbitrator for decision. 2. The Arbitrability of the Plaintiffs' Claims Against Locklear Group Having concluded that it was for the courts to decide the arbitrability of the underlying claims made by Hubbard, Averette, Fuller, Booth, and Williams against Locklear Group, we now consider whether the trial courts correctly decided that issue. Whether they did so turns on the proper application of the so-called "equitable-estoppel exception" to the general rule that an arbitration agreement binds only the signatories to that agreement. 40 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 a. The Exception to Equitable Estoppel for "Party Specific" Language Locklear Group argues that, despite the fact that it is not a signatory to the arbitration agreement, the plaintiffs "are equitably estopped from arguing that their claims against Locklear Group are not subject to arbitration." "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision. Ex parte Stamey, 776 So. 2d 85, 88–89 (Ala. 2000). One of the key exceptions to this rule is the theory of equitable estoppel, under which a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are '"'intimately founded in and intertwined with'"' the underlying contract obligations. Stamey, 776 So. 2d at 89 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), quoting in turn McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984))." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). This Court has, however, crafted an exception to this equitable-estoppel exception: "Where 'the language of the arbitration provisions limited arbitration to the signing parties,' this Court has not allowed the claims against the nonsignatories to be arbitrated." Id. at 380-81 (quoting Stamey, 776 So. 2d at 89). In other words, 41 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "[i]f an arbitration agreement is written in broad language so that it applies to '[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract,' Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998) (emphasis added), or even in slightly narrower language so that it applies to 'ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS CONTRACT OR THE PARTIES THERETO,' Stamey, 776 So. 2d at 91 (capitalization in original; emphasis added), this Court will proceed to determine whether arbitration may be compelled under the doctrine of equitable estoppel. "Conversely, if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, this Court's inquiry is at an end, and we will not permit arbitration of claims against the nonsignatory. See Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 131 (Ala. 2002) (affirming the trial court's order denying a nonsignatory's motion to compel arbitration where the arbitration agreement was between 'you [a signatory plaintiff] and us [a signatory defendant] or our employees, agents, successors or assigns') (bracketed language added); Ex parte Lovejoy, 790 So. 2d 933, 938 (Ala. 2000) (issuing a writ of mandamus directing a trial court to enter an order denying a nonsignatory's motion to compel arbitration where the arbitration provision was limited to 'all disputes or controversies between you [Lovejoy] and us [Allen Motor Company and its assignees]') (bracketed language and emphasis in original); First Family Fin. Servs. v. Rogers, 736 So. 2d 553, 560 (Ala. 1999) (reversing a trial court's order granting a nonsignatory's motion to compel arbitration where 'you [the plaintiffs] and we [First Family]' agreed to arbitrate and the arbitration provision elsewhere stated that it applied to 'all claims and disputes between you [the plaintiffs] and us [First Family],' 42 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and furthermore stated that it applied to 'any claim or dispute ... between you [the plaintiff] and any of our [First Family's] employees or agents, any of our affiliate corporations, and any of their employees or agents') (bracketed language and emphasis in original); and Med Center Cars[, Inc. v. Smith], 727 So. 2d [9] at 19 [(Ala. 1998)] (affirming a trial court's order denying nonsignatories' motions to compel arbitration where the arbitration provisions were limited to disputes and controversies 'BETWEEN BUYER AND SELLER') (capitalization in original)." 934 So. 2d at 381. The plaintiffs in this group of appeals contend that the arbitration agreement was limited to controversies between the signatories -- Locklear CJD and each plaintiff -- and thus that Locklear Group, as a nonsignatory, cannot enforce the arbitration agreement against the signatory plaintiffs. The plaintiffs highlight references in the arbitration agreement to "any party" or "the undersigned" or "the dealer." The trial courts' orders did the same. In this regard, the trial courts' orders set out the following passage, which they attribute to the arbitration agreement: "'In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the 43 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties .... shall be submitted to BINDING ARBITRATION.'" (Capitalization in original; ellipses supplied by the trial courts.) The plaintiffs argue that "[c]ontract language cannot get much more 'party specific' than [that found in the arbitration agreements]. There is no hint that the agreements are intended to cover claims against nonsignatories." The plaintiffs in particular emphasize a passage of the arbitration agreement that states that "the undersigned customer[s] and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." About this passage, the plaintiffs state: "Even aside from all the other party-specific language in the agreements, this language makes it clear that the agreements were intended to control disputes between and among the signatories, with no indication whatsoever that the agreements control any other dispute." 44 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 As Locklear Group observes, however, neither the plaintiffs nor the trial courts fully and accurately quote the operative language of the arbitration agreement. First, as to the sentence of the arbitration agreement emphasized by the plaintiffs, that sentence actually states in full as follows: "In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." Obviously, the purpose of this statement is simply to address which of two arbitration agreements would control disputes between the parties if the parties have entered into more than one such agreement related to the subject transactions. As to the above-quoted passage from the trial courts' orders, that passage conflates two separate sentences from the arbitration agreement. The first sentence, which in the arbitration agreement ends within the portion of the passage for which the trial courts substituted an ellipses, actually reads in its entirety as follows: 45 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." This sentence merely states that "the undersigned and the dealer ... stipulate and agree" that the transactions and agreements "are regulated by the laws of the United States of America" and that "agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." In short, this sentence does nothing more than express the agreement of the 46 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 parties that federal arbitration law is applicable to the arbitration agreement. The second sentence, part of which the trial courts added to the above-quoted passage following the ellipses, is in fact the operative part of the agreement for present purposes. But that sentence actually begins as follows: "The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) 47 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Contrary to the suggestion by the trial courts, this sentence in the arbitration agreement clearly is not "party specific" in the sense described in Mark Dodge, but, as emphasized, actually professes to be applicable to "all disputes" arising from the transaction and related matters. There is no language in this passage that restricts the disputes covered by the arbitration agreement to claims between the parties.9 The operative arbitration language in the arbitration agreement is similar to the language in the arbitration agreement in Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998), which provided that "'[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract ... shall be resolved by 9We note that Hubbard, Averette, Fuller, Booth, and Williams -- unlike the Lollars and Hood -- do not contend that the substantive nature of their identity-theft claims, rather than the nature of the parties against whom those claims are made, is such that the language of the arbitration agreement is not broad enough to encompass those claims. Such a contention would be difficult for Hubbard, Averette, Fuller, Booth, and Williams to maintain, given that they did not oppose Locklear CJD's motion for arbitration of the plaintiffs' similar identity-theft claims against it, which motion was based on the same substantive arbitration-agreement language. 48 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 binding arbitration.'" The Napier Court concluded that this language was "broad enough to encompass Napier and Godfrey's claims against [nonsignatories] Foremost and Manning." Id. at 53. The operative arbitration language in the arbitration agreement in these cases is also nearly identical to the language in the arbitration agreement at issue in Volkswagen Group of America, Inc. v. Williams, 64 So. 3d 1062, 1064 (Ala. Civ. App. 2010), which provided: "'The undersigned agree that all disputes ... resulting from or arising out of or relating to or concerning the transaction entered into ... shall be submitted to BINDING ARBITRATION ....'" In Williams, the Court of Civil Appeals disagreed with the plaintiff's contention that "the arbitration clause at issue is 'party specific.' The clause, rather, speaks to 'all disputes ... resulting from or arising out of or relating to or concerning the transaction,' a formulation that closely parallels the broad language recognized by the Alabama Supreme Court in Smith v. Mark Dodge, Inc., 934 So. 2d 375 (Ala. 2006), as authorizing a nonsignatory to assert a right to compel arbitration through application of equitable estoppel ...." Id. at 1065. 49 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 To reiterate, when "references [in arbitration provisions] to the parties specifically limited the claims that would be arbitrable under those provisions," the Court has concluded that the arbitration provisions "'are not broad enough to encompass claims against the nonsignatories.'" Ex parte Stamey, 776 So. 2d 85, 90 (Ala. 2000) (quoting Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9, 19 (Ala. 1998)). On the other hand, this Court also has held that, when an arbitration provision "contained no references to the parties that would impose a limitation on what claims would be arbitrated," the arbitration provision was broad enough to include claims that were related to the contract because the language was sufficient to indicate that "the party resisting arbitration ha[d] assented to the submission of claims against nonparties -- claims that otherwise would fall within the scope of the arbitration provision -- to arbitration." Stamey, 776 So. 2d at 89. Like the arbitration provisions in Napier and Williams, the operative arbitration language in the arbitration agreement is not limited to claims between the parties. Accordingly, Locklear Group has cleared this hurdle to the invocation of the doctrine of equitable estoppel 50 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 against Hubbard, Averette, Fuller, Booth, and Williams. We turn then to the central issue -- whether the plaintiffs' claims against Locklear Group, a nonsignatory, are sufficiently intertwined with their claims against Locklear CJD, a signatory. b. Sufficient Intertwining to Invoke Estoppel As noted, a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are "intimately founded in and intertwined with" the underlying contract obligations. Stamey, 776 So. 2d at 89. Smith v. Mark Dodge, Inc., 934 So. 2d at 380. In Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534 (Ala. 2008), this Court summarized the intertwining analysis provided in Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003): "In Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003), Blair Fulmer entered into a contract with SCI Alabama Funeral Services, Inc. ('SCI-Alabama'), for the provision of funeral and cremation services for his deceased mother. The contract included an arbitration provision. After Fulmer was given a vase that was supposed to have contained his mother's remains but allegedly did not, Fulmer sued SCI-Alabama and Service Corporation International ('SCI'), SCI-Alabama's parent corporation. The defendants filed a motion to compel arbitration, which the trial court denied. The defendants appealed. 51 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "SCI argued that, even though it was not a signatory to the contract containing the arbitration agreement, 'Fulmer's claims against the signatory defendant, SCI-Alabama, are so "intertwined" with his claims against SCI that arbitration of all of Fulmer's claims, including those against SCI, is appropriate.' 883 So. 2d at 634. After noting Stamey's two-part test, this Court addressed the first part, which relates to whether the claims against the nonsignatory defendant are intertwined with the claims against the signatory defendant. Finding that prong satisfied, this Court wrote: "'Here, Fulmer's claims against SCI are clearly "intimately founded in and intertwined with" his claims against SCI-Alabama.... All of Fulmer's claims arise from the same set of facts. Virtually none of Fulmer's claims makes a distinction between the alleged bad acts of SCI (the parent corporation) and those of SCI-Alabama (its subsidiary); rather, the claims are asserted as if SCI and SCI-Alabama acted in concert.' "883 So. 2d at 634." 988 So. 2d at 543. Just as in Fulmer, all of the plaintiffs' claims against Locklear Group in these cases are "intimately founded in" the same facts as are their claims against Locklear CJD. The plaintiffs' complaints make virtually no distinction between the bad acts of Locklear Group and those of Locklear CJD. Indeed, when the plaintiffs' complaints described purchasing 52 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their vehicles, they stated that they "dealt with Locklear [CJD] and/or Defendant Locklear [Group] employee[s]" and "[t]he Defendant Locklear [CJD] and/or Defendant Locklear [Group] ran a credit check on" each plaintiff. Every claim the plaintiffs asserted against Locklear CJD they also asserted against Locklear Group, and those claims were asserted as if Locklear CJD and Locklear Group had acted in concert, as if the latter was responsible for the acts of the former, and/or as if those persons who acted for one also acted for the other. Therefore, we conclude that the plaintiffs' claims against Locklear Group as a nonsignatory to the arbitration agreement are "intimately founded in and intertwined with" the underlying contract obligations and with the plaintiffs' contract-related claims against the signatory to the arbitration agreement, Locklear CJD, so that the doctrine of equitable estoppel is applicable. Based on the foregoing, Locklear Group can enforce the arbitration agreement against Hubbard, Averette, Fuller, Booth, and Williams; the trial courts in this group of cases erred in denying Locklear Group's motions to compel arbitration. 53 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 B. Case no. 1160435: Jeffery Lollar and Betsy Lollar As to the Lollars, Locklear CJD and Locklear Group argue that they met their prima facie burden so as to enforce the arbitration agreement, having filed a joint motion in support of which they submitted a contract calling for arbitration and uncontradicted evidence that the transaction affected interstate commerce. They also note that it is undisputed that the Lollars filed no response to their joint motion and supporting evidence. Accordingly, they contend that the trial court had no alternative but to grant their motion to compel arbitration and that it erred in not doing so. In support of their position, Locklear CJD and Locklear Group cite a passage from this Court's opinion Ex parte Greenstreet, Inc., 806 So. 2d 1203 (Ala. 2001): "We hold that once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce, the burden of persuasion shifts to the party opposing arbitration. If that party presents no evidence in opposition to a properly supported motion to compel arbitration, then the trial court should grant the motion to compel arbitration." 806 So. 2d at 1209 (emphasis added). 54 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The Lollars acknowledge that they failed to file a response to the motion to compel arbitration. They assert that failing to do so was an oversight that occurred because their counsel was expecting the trial court to set the motion to compel for a hearing just as it had done in two similar cases (one of which is before us in these appeals, case no. 1160375 -- Hood). Instead, in this case the trial court did not set a hearing; it simply entered an order denying arbitration before the Lollars filed a response. In an apparent attempt to rectify this oversight, the Lollars attach to their brief on appeal their own affidavits and a copy of what they contend was the actual arbitration agreement they signed. Locklear CJD and Locklear Group have rejoined with a motion to strike the attachments to the Lollars' brief as well as all references in their brief to those documents. As they note, this Court cannot consider evidence that is not part of the record on appeal. "'"[A]ttachments to briefs are not considered part of the record and therefore cannot be considered on appeal."' Morrow v. State, 928 So. 2d 315, 320 n. 5 (Ala. Crim. App. 2004) (quoting Huff v. State, 596 So. 2d 16, 19 (Ala. Crim. App. 1991)). Further, we 55 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 cannot consider evidence that is not contained in the record on appeal because this Court's appellate review '"is restricted to the evidence and arguments considered by the trial court."' Ex parte Old Republic Sur. Co., 733 So. 2d 881, 883 n.1 (Ala. 1999) (quoting Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ...)." Roberts v. NASCO Equip. Co., 986 So. 2d 379, 385 (Ala. 2007). Locklear CJD and Locklear Group are correct. We do not consider the evidence submitted by the Lollars on appeal or their arguments based on that evidence because that evidence and those arguments were not presented to the trial court; accordingly, we grant the motion to strike that evidence. Contrary to Locklear CJD and Locklear Group's argument, however, the Lollars' lack of response does not end our inquiry. It is true that, "once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce," the burden shifts to the nonmoving party to show otherwise. Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). It is likewise true that this Court has said that, "[i]f th[e nonmoving] party presents no evidence in opposition to a properly supported motion to compel arbitration, then the 56 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 trial court should grant the motion to compel arbitration." Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). Implicit in this standard is that we must evaluate whether the motion to compel arbitration does make a "prima facie showing" that the parties entered into an agreement to arbitrate the dispute in question and that this showing was "properly supported" by evidence of such an agreement. As we have otherwise recently expressed in another case in which the party opposing arbitration failed to present evidence in the trial court: "[U]nless on its face the arbitration provision is not valid or does not apply to the dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous." Family Sec. Credit Union v. Etheredge, [Ms. 1151000, May 19, 2017] ___ So. 3d ___ , ___ (Ala. 2017) (emphasis added). The arbitration agreement states: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into ... shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) There is no question that the arbitration agreement is broadly worded (a fact we have relied 57 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 upon in the appeals in the Booth, Williams, Hubbard, Averette, and Fuller cases in concluding that the nonsignatory, Locklear Group, could enforce the agreement against those plaintiffs). And "'where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract,'" as does this one, "'that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 505 (Ala. 1999) (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). But as stated, this broader application still is one that is tied to "the contract" to which reference is made, i.e., claims "'"arising out of or relating to" the contract,'" per the language at issue in Green Tree, for example. Or, in the case of the language at issue here, disputes "resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into." See also State v. Lorillad Tobacco, 1 So. 3d 1, 9 (Ala. 2008) (quoting Kenworth of Dothan, Inc. v. Bruner–Wells Trucking, Inc., 745 So. 2d 271, 275 (Ala. 1999)) (noting that, "[f]or a dispute to relate to the subject matter 58 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 of the arbitration provision, 'there must be some legal and logical nexus' between the dispute and the [subject matter of the] arbitration provision"). In this particular case, the parties agreed to arbitrate matters "relating to ... the transaction entered into," which was the Lollars' purchase of a 2009 Dodge Ram truck on May 28, 2013. According to the uncontradicted allegations of the complaint, the personal information of the Lollars' that was wrongly disseminated in connection with their identity-theft claims was provided to Locklear CJD in December 2015 during a visit to the dealership that was not related to the purchase of the 2009 Dodge Ram truck. On the face of the arbitration agreement, its terms do not apply to the interaction of the Lollars and the defendants that occurred in 2015. The 2013 vehicle purchase to which the 2013 arbitration agreement refers and relates is one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) is, quite simply, an unrelated matter. 59 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The situation is similar to one presented in Capitol Chevrolet & Imports, Inc. v. Payne, 876 So. 2d 1106 (Ala. 2003). In that case, Jean Payne purchased a used 1997 Cadillac Catera automobile from Capitol Chevrolet & Imports, Inc. ("Capitol"), on September 6, 2001. The arbitration agreement Payne signed in connection with the purchase had language similar to the arbitration agreement in this case: "'Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration ....'" 876 So. 2d at 1107. The Court described the facts involved in Payne's claims against Capitol as follows: "In September 2002, Payne sued Capitol and a Capitol salesperson, Jason Golden, alleging fraud and conversion. According to Payne's complaint, 60 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 approximately one month after she purchased the Catera, she returned the Catera to Capitol in reliance on Golden's representation that Capitol had a willing buyer for the vehicle. Payne relinquished possession of the Catera to Capitol and stopped making payments on the car. Payne alleged that Golden, while acting in the line and scope of his employment with Capitol, misrepresented to her that Capitol had a buyer for the Catera, and that, when Payne relinquished the Catera to Capitol in reliance on that misrepresentation, Golden converted the Catera for his personal use. Payne's complaint alleged that, as a result of the misrepresentation, she lost the use of her vehicle, suffered severe mental anguish, and suffered an adverse credit rating once she stopped making payments on the Catera." 876 So. 2d at 1107–08. The Court concluded that Payne's claims were not related to her purchase of the Catera and therefore were not subject to the arbitration agreement. "We do not believe that the plain language of the arbitration agreement would lead one to assume or understand that the agreement covered the claims alleged in Payne's complaint -- a later fraudulent misrepresentation, unrelated to the original sale of the vehicle, resulting in the conversion of the vehicle. The present dispute involves alleged subsequent tortious conduct on the part of Capitol and its agent that is not close enough in relation to the initial sale of the Catera to be covered by the language of the arbitration agreement." 876 So. 2d at 1110 (emphasis added). 61 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 In this case, as in Payne, the plain language of the arbitration agreement, which relates to the 2013 transaction, does not lead one to understand that the 2015 identity-theft claims would be covered under the agreement. We noted in Kenworth of Dothan that, "[i]n order for a dispute to be characterized as arising out of or relating to the subject matter of the [transaction], and therefore subject to arbitration, the language of the arbitration provision must reasonably apply to the dispute." 745 So. 2d at 275. In response to the clear disconnect between the transaction to which the arbitration agreement relates and the separate matters at issue in this action, Locklear CJD and Locklear Group do not really explain how the arbitration agreement is broad enough to encompass the Lollars' identity- theft claims. Instead, they attempt to rely upon the arbitrability clause in the arbitration agreement (i.e., the clause providing that the arbitrator is to decide disputes over the arbitrability of the parties' underlying substantive dispute) in an effort to avoid this issue. But the difficulty with this is the same one that existed in the Booth, Williams, Hubbard, Averette, and Fuller cases. That is, this issue was 62 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 not presented to the trial court in such a manner as to preserve it for later appellate review. For the reasons already stated in our discussion of those other cases, we cannot reverse the trial court's order on that basis. Because the arbitration agreement on its face does not apply to the Lollars' claims, we conclude that the trial court did not err in denying the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. C. Case no. 1160375: Anthony Hood The final appeal before us involves the joint motion to compel arbitration filed by Locklear CJD and Locklear Group in response to the complaint filed by Anthony Hood. Locklear CJD and Locklear Group contend that they presented a prima facie case in support of their motion to compel arbitration, i.e., that they introduced a contract calling for arbitration and produced evidence showing that the transaction affected interstate commerce. They argue that the trial court erred in determining the scope of the arbitration agreement because the arbitration agreement contained an arbitrability clause reflecting an agreement to allow the arbitrator to decide any arbitrability issues. 63 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's first response to these arguments is that the version of the arbitration agreement Locklear CJD and Locklear Group submitted to the trial court "is invalid and unenforceable because the agreement is fabricated and was not signed by [Hood] and the issue is for the Court to decide, not the arbitrator." "'[A] party who contests the existence of a contract containing an arbitration provision cannot be compelled to arbitrate that threshold issue because an arbitrator derives his authority solely from the parties' agreement. Only a court can resolve the question whether a contract exists.'" Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1053-54 (Ala. 2007) (quoting Edward D. Jones & Co. v. Ventura, 907 So. 2d 1035, 1040 (Ala. 2005)). Hood's position is meritless. As detailed in the rendition of the facts, Hood alleged in his complaint and reiterated in his response to the joint motion to compel arbitration that he purchased a 2016 Dodge Ram 3500 truck from Locklear CJD in December 2015. He also admitted in his response that he signed a "Pre-Dispute Arbitration Agreement" with Locklear CJD. Hood alleged in his response and in his supporting affidavit that the only difference between the 64 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 version of the arbitration agreement he signed and the one Locklear CJD and Locklear Group submitted with their joint motion to compel arbitration was that in the latter version "[t]he words 'Locklear Chrysler Jeep Dodge, LLC'" had been added near the bottom of the agreement in a different typeset than that of the rest of the agreement. Indeed, the version of the arbitration agreement Hood attached to his brief contains all the elements contained in the version attached to the defendants' joint motion to compel arbitration except the printed words "Locklear Chrysler Jeep Dodge, LLC" typed or printed above the "DEALER" signature line. Thus, Hood admits that he signed the arbitration agreement that contains the substantive language quoted in this opinion; he admits the agreement was signed by someone on behalf of the "DEALER," which he admits to be Locklear CJD; and he admits that the agreement contained an exact description of the vehicle he purchased. Even if the allegation that Locklear CJD and/or Locklear Group added the words "Locklear Chrysler Jeep Dodge, LLC" to the arbitration agreement after Hood signed the agreement is accepted as true, we are given no basis on which to conclude 65 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that this is a material alteration to the agreement for purposes of Hood's underlying claims. This Court has stated that in order to determine whether an alteration is material we should inquire: "Did the interposed matter make the 'instrument speak a language different in legal effect from that which it originally spoke, which carries with it some change in the rights, interests, or obligations of the parties?'" Benton v. Clemmons, 157 Ala. 658, 660, 47 So. 582, 583 (1908). See also 3B C.J.S. Alteration of Instruments § 4 (2017) ("In general, for the alteration of an instrument to be 'material,' the alteration must be such as to change the legal effect of the instrument."). In this instance, the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC" changed none of the obligations of the parties to the arbitration agreement. Hood knew and admitted that he was signing an arbitration agreement with Locklear CJD in connection with his purchase of a vehicle. A representative of the dealership signed the agreement. The terms of that agreement were not changed in any degree by the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC." Accordingly, the arbitration agreement was not "fabricated," 66 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Hood's argument does not defeat the arbitration of Hood's underlying claims.10 Like the Lollars, Hood also contends that his identity- theft allegations are not within the scope of the arbitration agreement because they do not "result[] from, aris[e] out of, relat[e] to or concern[] the transaction entered into," i.e., the purchase of a vehicle from Locklear CJD, which is the object of the arbitration agreement. In response, as in the Lollars' case (and the Hubbard, Averette, Fuller, Booth, and Williams cases), Locklear CJD and Locklear Group counter that there is a clause in the arbitration agreement that provides for the arbitrator to determine the scope of the arbitration agreement. Unlike all the other appeals before us, however, in this case not only was there a hearing on the motion to compel arbitration, but also that hearing was transcribed and the transcript submitted as part of the record on appeal. 10In an effort to provide an alternative ground for affirmance of the trial court's order as to Locklear Group, Hood also makes a "nonsignatory" argument similar to that made by first group of plaintiffs discussed above. This argument by Hood fails for the same reasons as did the similar argument by those other plaintiffs. See discussion, supra. 67 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 According to that transcript, Hood's counsel argued as follows to the trial court: "[O]ur argument is that somebody at the dealership was being allowed to [take customers' personal information] and then sell [their] identities out on the black market[, which] doesn't have anything to do with buying a car." In response, counsel for Locklear CJD and Locklear Group stated: "And our response to that specific argument is, first, we believe that the arbitration agreement is broad enough in scope to cover these. But, more importantly, we don't even get to that issue here before you, your Honor. The arbitration agreement clearly provides that the issue of scope and breadth arbitrability is for the arbitrator to decide, not this trial court. So whether or not the claims being asserted fall within the scope of the arbitration agreement is for the arbitrator to decide based on the plain and unambiguous language in the arbitration agreement. Plus, it applies for AAA rules, and there [are] Alabama Supreme Court cases that clearly state that, that in and of itself also shows an intent based on those rules to allow the arbitrator to decide the issue of scope and breadth. So that is something that the arbitrator is to determine and not this court." Thus, in Hood's case, Locklear CJD and Locklear Group clearly and explicitly argued to the trial court that there was an arbitrability clause in the arbitration agreement and that the import of the clause was that the issue whether 68 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's identity-theft claims were covered by the arbitration agreement was for the arbitrator to decide, not the trial court. Therefore, the effect of the arbitrability clause is properly before us in this appeal. Hood's first response to Locklear CJD and Locklear Group's invocation of the arbitrability clause is to contend that "clear and unmistakable evidence that [Hood] and [the] Locklear Defendants agreed to arbitrate the issue of arbitrability does not exist because a valid arbitration agreement does not exist." This argument relies upon Hood's assertion, which we just rejected, that the arbitration agreement was fabricated. Because we have concluded that a valid arbitration agreement was submitted by Locklear CJD and Locklear Group, the arbitrability clause cannot be ignored on that basis. Hood next contends that the "Locklear Defendants arguably waived a 'First Options clause' argument because this argument was not presented in their initial Motion to Compel Arbitration with the trial court or in oral argument on the 69 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 same."11 As we have already recounted, however, Locklear CJD and Locklear Group clearly and explicitly presented its arbitrability-clause argument to the trial court in the hearing on their joint motion to compel arbitration. Hood also argues that the arbitrability clause in the arbitration agreement is "wholly diverse from the "'First Options clause' in [Smith v.] Mark Dodge[, Inc., 934 So. 2d 375 (Ala. 2006)]." Hood notes that the arbitrability clause in Smith stated: "'[Smith] and [Mark Dodge] further agree that any question regarding whether a particular controversy is subject to arbitration shall be decided by the Arbitrator.'" 934 So. 2d at 378. Hood argues that "[t]he explicit language in Mark Dodge stating 'whether a particular controversy is subject to arbitration shall be decided by the Arbitrator' is clearly missing from [the] Locklear Defendants' fabricated arbitration agreement." In their principal brief, Locklear CJD and Locklear Group do not contend that the arbitrability clause in the arbitration agreement is similar in wording to the 11Hood's reference to a "First Options clause" is a reference to the discussion of arbitrability clauses in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). 70 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrability clause in Smith. Instead, they argue correctly that the arbitrability-clause language in the arbitration agreement is identical to language in arbitration agreements analyzed by this Court in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999).12 As Locklear CJD and Locklear Group observe, this Court in McGrue and Waites held that the arbitrability clauses in those arbitration agreements constituted clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability. In his brief to this Court, Hood addresses McGrue and Waites, but only by contending that they are distinguishable from the present case on the ground that "neither [McGrue nor Waites] disputed the validity of the underlying arbitration agreements." As we already have concluded, however, Hood's contention that the arbitration agreement was "fabricated" must be rejected. The fact remains, then, that in McGrue and Waites this Court concluded that language identical to that contained in the arbitration agreement was sufficient to warrant submission of issues of arbitrability to the 12See discussion, supra. 71 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrator. Hood offers no other reason why McGrue and Waites would not be dispositive of the present case. IV. Conclusion Based on the foregoing analysis, we affirm the order of the trial court in the Lollars' appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. We reverse the trial courts' orders in Hubbard's, Averette's, Fuller's, Booth's, and Williams's appeals, which denied the motions to compel arbitration as to Locklear Group, and in Hood's appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group; those causes are remanded for the trial courts to enter orders granting those motions. 72 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1160335 -- REVERSED AND REMANDED. 1160336 -- REVERSED AND REMANDED. 1160337 -- REVERSED AND REMANDED. 1160435 -- MOTION TO STRIKE GRANTED; AFFIRMED. 1160436 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. 1160437 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 1160375 -- REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. Murdock, J., concurs specially. 73 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MURDOCK, Justice (concurring specially in case no. 1160375). As the main opinion explains, Anthony Hood responds to the invocation by Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc., of this Court's decisions in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999), but he does so by arguing only that those cases involved no issue as to the validity of the underlying arbitration agreements, whereas, according to Hood, the underlying arbitration agreement in this case is invalid (the rejection of the latter proposition by the main opinion being a position with which I agree). Hood does not, for example, attempt to argue that the language of the arbitrability provision at issue here is materially different from that held to be sufficient in McGrue and Waites. Neither does Hood argue that we should overrule McGrue and Waites. And, although I confess concerns as to the sufficiency of the language here to meet the "clear and unmistakable" test articulated in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), other than pointing out that the language used here is "diverse" from the more explicit language employed in First Options, Hood does not 74 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 offer a sufficient explication of the asserted insufficiency so as to compel a reexamination of McGrue and Waites. And because the question at hand does not concern the subject- matter jurisdiction of the trial court or this Court, I cannot conclude that this Court should sua sponte explore the matter. In addition, neither party has even mentioned this Court's 2012 decision in Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). In particular, Hood does not argue that, even if the arbitrability language at issue satisfies the "clear and unmistakable" standard articulated in First Options, the particular underlying substantive claims in this case should not be sent to the arbitrator for consideration of their arbitrability because they do not even "arguably" fall within the ambit of the arbitration agreement. See Blackmon, 99 So. 3d at 1198. That is, no issue is raised as to whether Hood's identity-theft claims fall within the universe of disputes to which the so-called arbitrability clause is to apply. I feel no compunction therefore to cast a vote in this case reflective of the position I took in my dissent in 75 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Blackmon, a position to which I continue to adhere. See Blackmon, 99 So. 3d at 1199 (Murdock, J., dissenting). 76

September 29, 2017

3b829bfc-5cc9-44b3-b437-5770c5a1a97b

Saarinen v. Hall

N/A

1160066

Alabama

Alabama Supreme Court

REL: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1160066 _________________________ Bobby Saarinen and Chris Williams v. Louis Hall Appeal from Franklin Circuit Court (CV-15-900091) SELLERS, Justice. This Court granted Bobby Saarinen and Chris Williams permission to appeal, pursuant to Rule 5, Ala. R. App. P., from an interlocutory order of the Franklin Circuit Court 1160066 denying their motion for a summary judgment in Louis Hall's personal-injury action against them. In May 2014, Hall was injured while operating a power saw at his place of employment, a plant owned by Williams Manufacturing, Inc. ("Williams Manufacturing"). Hall sued Williams Manufacturing, as well as his co-employees Saarinen and Williams, who were in 2014 and still are supervisory employees at Williams Manufacturing ("the co-employees"). The record indicates that Williams is the owner of Williams Manufacturing and that Saarinen is the plant manager. In his complaint, Hall asserted theories of negligence, "willfulness," and "recklessness." Williams Manufacturing moved to dismiss the claims against it, asserting that Hall's exclusive remedy was under the Alabama Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975. The trial court granted Williams Manufacturing's motion and dismissed Hall's claims against it. Subsequently, Hall amended his complaint to allege that the co-employees had "caused or allowed the removal of a guard from the saw made the basis of this suit," had "fail[ed] to install a safety guard provided for the saw," 2 1160066 and had "fail[ed] to replace the unguarded saw with a new guarded saw." The co-employees filed a motion for a summary judgment. In support, they pointed to § 25-5-11, Ala. Code 1975. Section 25-5-11(a) provides, in relevant part: "If the injury ... for which compensation is payable under Articles 3 or 4 of [the Workers' Compensation Act] was caused under circumstances also creating a legal liability for damages on the part of any party other than the employer, ... the employee ... may bring an action against the other party to recover damages for the injury ..., and the amount of the damages shall be ascertained and determined without regard to [the Workers' Compensation Act]. If a party, other than the employer, is ... an ... employee of the same employer, ... the injured employee ... may bring an action against ... [the] person ... only for willful conduct which results in or proximately causes the injury ...." (Emphasis added.) See also Padgett v. Neptune Water Meter Co., 585 So. 2d 900, 901 (Ala. 1991) ("Section 25–5–11(a) provides that actions may be maintained against those parties that may be jointly liable with the employer, provided that if the other party is a coemployee, then his actions, in order to give rise to liability, must be willful."). Section 25-5-11(b) provides: "If personal injury ... to any employee results from the willful conduct, as defined in subsection (c) herein, of any ... employee of the same 3 1160066 employer ..., the employee shall have a cause of action against the person ...." As is relevant to this appeal, § 25- 5-11(c)(2) defines "willful conduct" as follows: "The willful and intentional removal from a machine of a safety guard or safety device provided by the manufacturer of the machine with knowledge that injury or death would likely or probably result from the removal; provided, however, that removal of a guard or device shall not be willful conduct unless the removal did, in fact, increase the danger in the use of the machine and was not done for the purpose of repair of the machine or was not part of an improvement or modification of the machine which rendered the safety device unnecessary or ineffective." In their summary-judgment motion, the co-employees established that, on the day he was injured, Hall was operating a power saw manufactured by Kalamazoo Industries, Inc. During depositions, the saw was described as a "straight cut-off saw." Although it is not entirely clear, photographs in the record appear to depict a saw with a round blade. Hall states in his appellee's brief that he used the saw to cut aluminum pipe, that "[t]he blade is above the table and the operator pulls it down by hand to cut the pipes on the table," and that, "[a]fter the cut takes place, the blade is spring loaded to return to the 'up' position." 4 1160066 The saw, which was purchased used by Williams Manufacturing, was manufactured with a guard covering a portion of the blade; Hall, however, did not think the guard was adequate. According to Hall's appellee's brief, "the guard on [the] saw did not fully cover the blade when the saw had finished cutting and sprung back to the 'up' position," at which point "the blade would be exposed by about 1 ½ inches." At Hall's request, someone at Williams Manufacturing installed an additional guard. Hall testified as follows during deposition: "Q. [The saw] had that orange guard on it that's depicted in these pictures, correct? "A. Yes. "Q. And later on, at your request, they added this silver guard. "A. Yeah. "Q. And I assume that was supposed to cover more of the blade; is that right? "A. It was supposed to have. "Q. Okay. But your testimony is that the blade would come down below the silver guard, correct -- "A. Correct. "Q. -- when you were cutting or after you'd cut, I suppose? 5 1160066 "A. After. After the saw went back up. "Q. Okay. Then did the -- when the saw went back up, did the silver guard cover the blade? "A. Not completely, no." After Hall's injury, Williams Manufacturing replaced the saw with a power saw manufactured by a different Company -- DeWalt. Hall testified during deposition that, before he was injured, Williams Manufacturing had already purchased the saw that eventually replaced the saw that injured Hall. He testified that the replacement saw had been delivered at least a month before his injury but had not been installed because, he was told, Williams Manufacturing was too busy to change out the saws. As Hall points out, the co-employees' motion for a summary judgment states that, "[w]hen Hall asked the [co- employee] defendants when they were going to replace the saw on which he was working, they said when they were less busy." Hall also points to Saarinen's testimony indicating that Williams Manufacturing was "in the middle of [its] busy season" and that "we were making rounds and reminding everybody that just because we were busy, we didn't want to lose focus on safety, [and] we didn't want people to do anything to injure themselves and get hurt." According to 6 1160066 Hall, he would not have been injured if he had been using the DeWalt saw because, he says, "it had a full wrap around guard." The trial court denied the co-employees' summary- judgment motion. Thereafter, pursuant to Rule 5(a), Ala. R. App. P., the trial court certified the following controlling question of law for this Court's consideration: "Is the presence of another saw on the premises that had not been installed and [that] was not manufactured by the manufacturer of the saw in question the equivalent of the removal of a safety guard under Alabama Code [1975,] § 25-5-11(c)(2)?" This Court granted the co-employees' request for permission to appeal from the trial court's interlocutory order denying their summary-judgment motion. Hall argues that the failure to replace the Kalamazoo saw in question with the newer DeWalt saw, which allegedly had a superior guard, was "tantamount to [the] removal of a safety guard under § 25-5-11(c)(2)." "[T]his Court has, on limited occasions, liberally interpreted the concept of 'removal' within the context of § 25–5–11(c)(2). In Bailey v. Hogg, 547 So. 2d 498, 500 (Ala. 1989), this Court held that the 'failure to install' a safety device provided by the manufacturer equated to the intentional and willful 'removal' of a safety device. Likewise, in Harris v. Gill, 585 So. 2d 831, 837 (Ala. 1991), this Court held that the act of 'bypassing' an original safety device by installing an alternative 7 1160066 safety device equated with the intentional and willful 'removal' of a safety device. Finally, in Moore v. Reeves, 589 So. 2d 173, 178–79 (Ala. 1991), we held that the 'failure to maintain and/or repair a safety guard' equated with the intentional and willful 'removal' of a safety guard." Cumbie v. L&A Contracting Co., 739 So. 2d 1099, 1102 (Ala. 1999). In the present case, there is no evidence indicating that the co-employees failed to install a guard provided by the manufacturer of the saw that injured Hall or that they failed to maintain or repair the guard provided. Moreover, although an additional guard was installed on the saw, that guard was not "an alternative safety device" in that the original guard was not bypassed.1 "To permit all actions based on negligence that 'pertains to safety or adds to the plaintiff's risk' would be contrary to the intent of the legislature. Hallmark[ v. Duke, 624 So. 2d [1058], 1062 [(Ala. 1993)]. We adhere to the view that '§ 25–5–11(c)(2) cannot be construed to allow a co-employee action in every situation where an employee is injured on the job and that any change in the limited right of action provided for in § 25–5–11(c)(2) must be left to the legislature.' Lane v. Georgia Cas. & Sur. Co., 670 So. 2d 889, 892 (Ala. 1995)." 1We note that the portion of the record upon which Hall relies in asserting that the co-employees added a guard to the saw suggests that someone named "Nevell" added the guard. We also note that Hall does not assert that the addition of the second guard rendered the saw less safe. 8 1160066 Cumbie, 739 So. 2d at 1103–04. The Court declines to extend the definition of willfulness in § 25-5-11(c)(2) to encompass the circumstances involved in the present case. Accordingly, we answer the specific question certified by the trial court in the negative. Under the facts in this case, the failure to install another, presumably safer, saw that was present on the premises but that had not been put into operation and that was manufactured by a different manufacturer than the saw that injured the plaintiff is not the equivalent of the removal of a safety guard so as to constitute willful conduct under § 25- 5-11(c)(2). Cf. Wadsworth v. Jewell, 902 So. 2d 664, 669 (Ala. 2004) (failure to provide an employee with an ergonomic keyboard, even though the employer had access to ergonomic keyboards, did not constitute the removal of a safety device provided by the manufacturer of the computer the employee was using when the injury occurred).2 The judgment of the trial 2The Court does not express an opinion as to whether the failure to install an allegedly safer machine that is present on the premises and made by the same manufacturer as the machine that injured an employee might come within the operation of § 25-5-11(c)(2). 9 1160066 court is reversed, and the cause is remanded for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Parker, Shaw, Main, and Wise, JJ., concur. Bolin and Bryan, JJ., concur in the result. 10

September 1, 2017

962ea323-01e3-484d-9099-0a90f5d075ad

Alabama River Group, Inc. v. Conecuh Timber, Inc. et al

N/A

1150040

Alabama

Alabama Supreme Court

I N T H E S U P R E M E C O U R T O F A L A B A M A November 17, 2017 1150040 Alabama River Group, Inc., and George Landegger v. Conecuh Timber, Inc. et al (Appeal from Monroe Circuit Court: CV-10-900079). CERTIFICATE OF JUDGMENT WHEREAS, the ruling on the application for rehearing filed in this case and indicated below was entered in this cause on November 17, 2017: Application Overruled. No Opinion. Parker, J. - Stuart, C.J., and Bolin, Shaw, Main, Wise, and Bryan, JJ., concur. Sellers, J., recuses himself. WHEREAS, the appeal in the above referenced cause has been duly submitted and considered by the Supreme Court of Alabama and the judgment indicated below was entered in this cause on September 29, 2017: Affirmed In Part; Affirmed Conditionally In Part. Parker, J. - Main, Wise, and Bryan, JJ., concur. Stuart, C.J., and Bolin, J., concur in part and concur in the result. Shaw, J., concurs in the result. Sellers, J., recuses himself. NOW, THEREFORE, pursuant to Rule 41, Ala. R. App. P., IT IS HEREBY ORDERED that this Court's judgment in this cause is certified on this date. IT IS FURTHER ORDERED that, unless otherwise ordered by this Court or agreed upon by the parties, the costs of this cause are hereby taxed as provided by Rule 35, Ala. R. App. P. I, Julia J. Weller, as Clerk of the Supreme Court of Alabama, do hereby certify that the foregoing is a full, true, and correct copy of the instrument(s) herewith set out as same appear(s) of record in said Court. Witness my hand this 17th day of November, 2017. Clerk, Supreme Court of Alabama

September 29, 2017

30522d3f-240c-4f6a-847e-3650081c6d7f

Locklear Automotive Group, Inc. v. Dorothea Williams

N/A

1160437

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160335 ____________________ Locklear Automotive Group, Inc. v. Brad Hubbard Appeal from Tuscaloosa Circuit Court (CV-16-900716) ____________________ 1160336 ____________________ Locklear Automotive Group, Inc. v. Jeremy Averette Appeal from Tuscaloosa Circuit Court (CV-16-900683) ____________________ 1160337 ____________________ Locklear Automotive Group, Inc. v. Carol Fuller Appeal from Tuscaloosa Circuit Court (CV-16-901091) ____________________ 1160375 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Appeal from Bibb Circuit Court (CV-16-900098) ____________________ 1160435 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Appeal from Bibb Circuit Court (CV-16-900081) ____________________ 1160436 ____________________ Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Appeal from Bibb Circuit Court (CV-16-900074) ____________________ 1160437 ____________________ Locklear Automotive Group, Inc. v. Dorothea Williams Appeal from Bibb Circuit Court (CV-16-900073) MURDOCK, Justice. Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. 3 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes. I. Facts All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an 4 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC." The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters 5 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. 6 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about 7 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: _______________" (Capitalization in original; emphasis omitted; and emphasis added.) In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle- identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by 8 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case. A. Case no. 1160435: Jeffery Lollar and Betsy Lollar Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD. Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided 9 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information. The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.1 They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated 1The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 10 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017. On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 11 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Dodge Ram 3500 truck2 from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft. On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.3 He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; 2There is an immaterial discrepancy between Hood's complaint and the arbitration agreement on the year of the purchased vehicle, i.e., whether it was a 2015 or 2016 model. 3The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 12 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references. Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER," a signature of a dealer representative on a line designated "DEALER," and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC." 13 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC," and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified: "3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay. "4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document. "5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion." The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that 14 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER," the signature of a representative of the "DEALER," the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows: 15 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for -- because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate." Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration. C. Case no. 1160335: Brad Hubbard On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal 16 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 information. In early 2016, Hubbard discovered that he was the victim of identity theft. On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion. On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) 17 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated: "This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See 18 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So. 3d 27 (Ala. 2012). "Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED." (Capitalization in original.) Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.4 D. Case no. 1160336: Jeremy Averette On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft. On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On 4On February 8, 2017, this Court by order consolidated this appeal with case no. 1160336 and case no. 1160337 for purposes of filing the record and briefing. 19 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration. On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to 20 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration. E. Case no. 1160337: Carol Fuller On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft. 21 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD. On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying 22 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. F. Case no. 1160436: Elizabeth Booth On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft. On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity 23 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the order entered in Fuller's case, but it was issued by a different circuit judge. 24 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. G. Case no. 1160437: Dorothea Williams On January 13, 2016, Dorothea Williams purchased a 2016 Chrysler 200 automobile from Locklear CJD. In the course of doing so, she signed the arbitration agreement. At that time, Williams also completed a credit application and provided Locklear CJD with personal information. In February 2016, Williams was notified by the Northport Police Department that she had been the victim of identity theft. On October 6, 2016, Williams filed her complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 25 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 2016, Williams filed a response in opposition to the motion to compel. On January 23, 2017, Williams filed a supplemental response to the motion. In her response, Williams -- as did Hubbard, Averette, Fuller, and Booth -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Williams. Williams did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion. On February 1, 2017, the trial court granted the motion to compel as to Locklear CJD but denied it as to Locklear Group. Except for the name of the plaintiff, the order was substantively the same as the orders entered in the Fuller and Booth cases. It was issued by the same circuit judge who decided Booth's case. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. II. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: 26 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). 27 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 III. Analysis A. Case no. 1160335: Brad Hubbard; case no. 1160336: Jeremy Averette; case no. 1160337: Carol Fuller; case no. 1160436: Elizabeth Booth; and case no. 1160437: Dorothea Williams The arguments by the parties in the Hubbard, Averette, Fuller, Booth, and Williams cases are identical,5 and so we will address them together. As we observed in the rendition of the facts, the trial courts in those cases determined that the arbitration agreement "is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.'" It was on this premise that the trial courts concluded that the plaintiffs' claims against Locklear CJD must be arbitrated but that their claims against Locklear Group were not subject to arbitration because Locklear Group was not a signatory to the arbitration agreement. None of the plaintiffs in this group of appeals objected to arbitration of their claims against Locklear CJD. 5Hubbard, Averette, Fuller, Booth, and Williams are all represented by the same attorneys, and the argument sections of their appellee briefs are substantively very similar. 28 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1. Who Decides the Arbitrability of the Claims Against Locklear Group? We have stated that "[t]he question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme Court's terminology, simply 'arbitrability')." Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094, 1101 (Ala. 2014). "A court decides issues of substantive arbitrability '[u]nless the parties clearly and unmistakably provide otherwise.'" Id. (quoting AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986)). On appeal, Locklear Group contends that clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability exists in the arbitration agreement. Specifically, it cites the following language in the arbitration agreement: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: ... the terms of this agreement and all clauses herein contained, their breadth and scope, ... shall be submitted to BINDING ARBITRATION ...." 29 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (Capitalization in original; emphasis added.) In support of this contention, Locklear Group observes that in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), this Court evaluated an arbitration agreement that contained identical language as to arbitrability. Specifically, "[t]he single-page arbitration agreement provide[d] that the arbitrator decides 'the terms of this agreement and all clauses herein contained, their breadth and scope.'" 826 So. 2d at 132. The McGrue Court concluded that "[t]he language of the arbitration agreement is clear and unmistakable evidence indicating that McGrue and Jim Burke intended to arbitrate the question of arbitrability." Id. Likewise, in Ex parte Waites, 736 So. 2d 550 (Ala. 1999), the Court examined an arbitration agreement that contained the same language on arbitrability: "The arbitration provision included in the contract entered into by the parties states that the parties agree to arbitrate any disputes 'resulting from or arising out of the sale transaction entered into (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope ....'" 736 So. 2d at 552. The Waites Court concluded that "[t]his language expresses a clear intent to submit to arbitration the 30 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 issue of arbitrability." Id. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1054–55 (Ala. 2007) (concluding that an arbitration agreement that provided that the parties agreed to arbitrate "'all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, [and] the validity and scope of this Arbitration Provision'" "demonstrates that the parties intended to arbitrate whether the agreement applies to 'any disputes that arose from their relationship'"). For their part, the plaintiffs in these five appeals do not directly challenge the Locklear Group's position that language in the arbitration agreement sufficiently expresses an intention to arbitrate issues of arbitrability. Instead, they argue that Locklear Group did not sufficiently assert this position in the trial courts and that, therefore, it cannot serve as a basis for reversing the trial courts' orders. The plaintiffs observe that all of Locklear Group's motions to compel arbitration (which are substantially identical in all the cases before us) 31 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "consisted of six pages and fourteen numbered paragraphs. The motions contained only one sentence on the topic of who should decide disputes concerning the scope of the arbitration agreements. Specifically, the last sentence of paragraph 10 of the motions states[:] 'Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator.' This sentence was not followed by a citation to any legal authority." The plaintiffs in these five appeals note that "[t]his Court has long held that it 'will not hold a trial court to be in error unless that court has been apprised of its alleged error and has been given the opportunity to act thereon.'" Moultrie v. Wall, 172 So. 3d 828, 840 (Ala. 2015) (quoting Sea Calm Shipping Co. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990)). They argue that the solitary sentence in the motions to compel was not sufficient to apprise the trial courts that arbitrability issues -- including Locklear Group's ability, as a nonsignatory, to enforce the arbitration agreement -- had to be decided by the arbitrator. The plaintiffs contend that the sentence is a quintessential example of an "undelineated general proposition[] not supported by sufficient authority or argument." White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). The plaintiffs cite multiple cases in 32 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 which this Court concluded that a solitary reference to an argument in a motion before the trial court was not sufficient to raise the issue sought to be raised on appeal. See, e.g., Knight v. Alabama Power Co., 580 So. 2d 576, 578 (Ala. 1991) (noting that "except for the one sentence requesting the trial court to adopt the doctrine of comparative negligence, Knight presented nothing in the way of argument on that issue. ... This issue was not sufficiently argued to the trial court ...."); TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1243 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173 (Ala. 2008) (holding that an unsuccessful bidder for a public contract could not argue on appeal that the invitation to bid was ambiguous because it "did not raise this argument in the trial court" where "[t]he only mention of ambiguity TFT made at trial came in one sentence of TFT's trial brief"); and Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So. 2d 73, 81 (Ala. 2002) (observing that the plaintiff's only argument regarding the applicability of a six-year statute of limitations was one sentence in a three-page motion and concluding that "[i]t can hardly be said that [the plaintiff] 33 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 has presented this argument to the trial court and opposing parties so as to give them an opportunity to address this issue"). In the Booth and Williams appeals, Locklear Group responds that, in addition to the sentence in its motion to compel arbitration, it also raised the issue of arbitrability in the hearings on those motions.6 Booth and Williams have filed motions to strike Locklear Group's references and arguments to statements it might have made in the hearings in the Booth and Williams cases, observing that no transcript of those hearings was made and so there is no evidence in the record concerning what was argued in those hearings. Booth and Williams further observe that Locklear Group could have submitted a statement under Rule 10(d), Ala. R. App. P., recounting its recollection of what was argued in the hearings if it had wanted those statements to be included as evidence before this Court, but it failed to do so.7 Finally, Booth 6Locklear Group does not argue that it presented the arbitrability argument in the hearings in the Hubbard, Averette, and Fuller cases. 7Rule 10(d), Ala. R. App. P., states, in part: "If no report of the evidence or proceedings at a hearing or trial was made, or if a transcript is unavailable, the appellant may 34 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Williams cite multiple cases in which this Court has refused to allow a party unilaterally to alter or supplement the record through statements in an appellate brief. See, e.g., Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So. 3d 124, 134 (Ala. 2011) (noting that "because the hearing in this case was not transcribed, nothing presented at that hearing may form the basis for reversing the trial court's denial of Parker's motion to compel arbitration"); Bechtel v. Crown Cent. Petroleum Corp., 451 So. 2d 793, 795 (Ala. 1984) (observing that the appellant "states that estoppel was raised in oral argument at the hearing on the motion for summary judgment. However, no transcription of that hearing is included in the record. This court is limited to a review of the record alone and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel."). In its responses to the motions to strike, Locklear Group admits that "there is no record of the oral argument," that "no steps were taken to create a statement of what occurred at the hearing[s]," and that Booth and Williams "correctly prepare a statement of the evidence or proceedings from the best available means, including the appellant's recollection." 35 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 present[] the case law on this issue." Accordingly, we grant the motions to strike Locklear Group's references to arguments it allegedly made in the hearings on its motions to compel arbitration in the Booth case and the Williams case. Thus, as in the Hubbard, Averette, and Fuller cases, the only reference to arbitrability in the trial courts in the Booth and Williams cases was the single statement in Locklear Group's motion to compel arbitration. We agree with the plaintiffs that Locklear Group's solitary statement in its motion to compel arbitration that the arbitrator should decide the arbitrability of the claims against it was not sufficient to apprise the trial court that Locklear Group was relying on that argument. The first three numbered paragraphs in the motion set out facts relevant to the issue of arbitration, including quotations of substantial portions of the arbitration agreement. The next three paragraphs argued that the transaction at issue affected interstate commerce. The following four paragraphs -- including paragraph 10, which contains the one sentence referencing arbitrability of the arbitration issue -- argued that the language of the arbitration agreement was broad 36 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 enough to include the subject matter of the underlying claims asserted by the plaintiffs. Paragraph 10 stated: "Arbitration contracts cannot be singled out and be subjected to any different or more stringent rules of construction than other contracts. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996). As plainly demonstrated by its language, the arbitration agreement in this case is sufficiently broad in scope to require arbitration of all disputes relating to: "'the resolution of any dispute arising out of, relating to, resulting from or concerning any contracts or agreements ... entered into by the parties, all alleged representation, promises and covenants, issues concerning compliance with any state or federal law or regulation ...[,] any matters taking place either before or after the parties entered into this agreement ...[,] the terms of this agreement and all clauses herein contained, their breadth and scope ...' "(Exhibit A). The present case clearly arises out of and relates to the Plaintiff's purchase of the [vehicle] at issue, events taking place before and after the parties entered into the agreement, the dealership's compliance with state and/or federal law or regulations and alleged misrepresentations and/or omissions of Locklear in connection therewith. Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator." The next paragraph argued that courts have a duty under the Federal Arbitration Act to "rigorously enforce agreements to 37 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrate." The final few paragraphs stated the relief Locklear Group requested (i.e., that the trial court "should compel the Plaintiff to submit his dispute to binding arbitration, ... and all Court actions, including discovery, should be stayed pending arbitration") without any reference to having the arbitrator decide the issue of arbitrability. When the motion to compel arbitration is read as a whole, it is clear that Locklear Group did not articulate why the question of the arbitrability of the claims against it should be submitted to the arbitrator. Its overriding argument was devoted to the merits of the issue whether the arbitration agreement is broad enough to encompass the plaintiffs' underlying claims against Locklear Group even though Locklear Group was not a signatory to the arbitration agreement, not to the proposition that the arbitrator, and not the court, should decide this issue. Except for the brief reference in paragraph 10, Locklear Group never mentioned arbitration of the arbitrability issue anywhere in its motion, including in its paragraphs specifying the relief it was requesting from the trial courts. Locklear Group's single, unsupported, and unexplained sentence in this regard contrasts sharply with its 38 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 relatively fulsome discussion in its motion as to the breadth of the language of the arbitration agreement and how this language was sufficient to entitle Locklear Group to arbitrate the plaintiffs' underlying claims (not to mention the contrast with the Locklear Group's thoroughly explained position on the subject of arbitrability in its brief on appeal to this Court). Indeed, by focusing essentially all of its attention on whether the language of the arbitration agreement was broad enough to cover the plaintiffs' claims against it, Locklear Group suggested that that was the dispositive issue and that it was for trial court to decide it.8 Locklear Group contends that the fact that it argued to the trial courts that the scope of the arbitration agreement was broad enough to cover claims asserted by the plaintiffs and that it also mentioned the arbitrability of that issue constituted the presentation of two arguments in the 8A fair question exists, albeit one we need not address further, as to whether the trial courts' error could be said to have been invited under the circumstances. A party "'"may not predicate an argument for reversal on 'invited error,' that is, 'error into which he has led or lulled the trial court.'"'" White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d at 1057 (quoting Mobile Infirmary Med. Ctr. v. Hodgen, 884 So. 2d 801, 808 (Ala. 2003), quoting other cases). 39 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 alternative. The plaintiffs note, however, that the arguments "were not framed as alternative arguments." Instead, the arbitrability statement is tacked as an afterthought to Locklear Group's central claim that emphasized the broad scope of the arbitration agreement. Based on the foregoing, we conclude that, in the Hubbard, Averette, Fuller, Booth, and Williams cases, Locklear Group waived the issue whether the arbitration agreement by its terms assigns the issue of the arbitrability of the plaintiffs' claims against Locklear Group to the arbitrator for decision. 2. The Arbitrability of the Plaintiffs' Claims Against Locklear Group Having concluded that it was for the courts to decide the arbitrability of the underlying claims made by Hubbard, Averette, Fuller, Booth, and Williams against Locklear Group, we now consider whether the trial courts correctly decided that issue. Whether they did so turns on the proper application of the so-called "equitable-estoppel exception" to the general rule that an arbitration agreement binds only the signatories to that agreement. 40 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 a. The Exception to Equitable Estoppel for "Party Specific" Language Locklear Group argues that, despite the fact that it is not a signatory to the arbitration agreement, the plaintiffs "are equitably estopped from arguing that their claims against Locklear Group are not subject to arbitration." "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision. Ex parte Stamey, 776 So. 2d 85, 88–89 (Ala. 2000). One of the key exceptions to this rule is the theory of equitable estoppel, under which a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are '"'intimately founded in and intertwined with'"' the underlying contract obligations. Stamey, 776 So. 2d at 89 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), quoting in turn McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984))." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). This Court has, however, crafted an exception to this equitable-estoppel exception: "Where 'the language of the arbitration provisions limited arbitration to the signing parties,' this Court has not allowed the claims against the nonsignatories to be arbitrated." Id. at 380-81 (quoting Stamey, 776 So. 2d at 89). In other words, 41 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "[i]f an arbitration agreement is written in broad language so that it applies to '[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract,' Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998) (emphasis added), or even in slightly narrower language so that it applies to 'ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS CONTRACT OR THE PARTIES THERETO,' Stamey, 776 So. 2d at 91 (capitalization in original; emphasis added), this Court will proceed to determine whether arbitration may be compelled under the doctrine of equitable estoppel. "Conversely, if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, this Court's inquiry is at an end, and we will not permit arbitration of claims against the nonsignatory. See Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 131 (Ala. 2002) (affirming the trial court's order denying a nonsignatory's motion to compel arbitration where the arbitration agreement was between 'you [a signatory plaintiff] and us [a signatory defendant] or our employees, agents, successors or assigns') (bracketed language added); Ex parte Lovejoy, 790 So. 2d 933, 938 (Ala. 2000) (issuing a writ of mandamus directing a trial court to enter an order denying a nonsignatory's motion to compel arbitration where the arbitration provision was limited to 'all disputes or controversies between you [Lovejoy] and us [Allen Motor Company and its assignees]') (bracketed language and emphasis in original); First Family Fin. Servs. v. Rogers, 736 So. 2d 553, 560 (Ala. 1999) (reversing a trial court's order granting a nonsignatory's motion to compel arbitration where 'you [the plaintiffs] and we [First Family]' agreed to arbitrate and the arbitration provision elsewhere stated that it applied to 'all claims and disputes between you [the plaintiffs] and us [First Family],' 42 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and furthermore stated that it applied to 'any claim or dispute ... between you [the plaintiff] and any of our [First Family's] employees or agents, any of our affiliate corporations, and any of their employees or agents') (bracketed language and emphasis in original); and Med Center Cars[, Inc. v. Smith], 727 So. 2d [9] at 19 [(Ala. 1998)] (affirming a trial court's order denying nonsignatories' motions to compel arbitration where the arbitration provisions were limited to disputes and controversies 'BETWEEN BUYER AND SELLER') (capitalization in original)." 934 So. 2d at 381. The plaintiffs in this group of appeals contend that the arbitration agreement was limited to controversies between the signatories -- Locklear CJD and each plaintiff -- and thus that Locklear Group, as a nonsignatory, cannot enforce the arbitration agreement against the signatory plaintiffs. The plaintiffs highlight references in the arbitration agreement to "any party" or "the undersigned" or "the dealer." The trial courts' orders did the same. In this regard, the trial courts' orders set out the following passage, which they attribute to the arbitration agreement: "'In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the 43 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties .... shall be submitted to BINDING ARBITRATION.'" (Capitalization in original; ellipses supplied by the trial courts.) The plaintiffs argue that "[c]ontract language cannot get much more 'party specific' than [that found in the arbitration agreements]. There is no hint that the agreements are intended to cover claims against nonsignatories." The plaintiffs in particular emphasize a passage of the arbitration agreement that states that "the undersigned customer[s] and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." About this passage, the plaintiffs state: "Even aside from all the other party-specific language in the agreements, this language makes it clear that the agreements were intended to control disputes between and among the signatories, with no indication whatsoever that the agreements control any other dispute." 44 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 As Locklear Group observes, however, neither the plaintiffs nor the trial courts fully and accurately quote the operative language of the arbitration agreement. First, as to the sentence of the arbitration agreement emphasized by the plaintiffs, that sentence actually states in full as follows: "In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." Obviously, the purpose of this statement is simply to address which of two arbitration agreements would control disputes between the parties if the parties have entered into more than one such agreement related to the subject transactions. As to the above-quoted passage from the trial courts' orders, that passage conflates two separate sentences from the arbitration agreement. The first sentence, which in the arbitration agreement ends within the portion of the passage for which the trial courts substituted an ellipses, actually reads in its entirety as follows: 45 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." This sentence merely states that "the undersigned and the dealer ... stipulate and agree" that the transactions and agreements "are regulated by the laws of the United States of America" and that "agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." In short, this sentence does nothing more than express the agreement of the 46 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 parties that federal arbitration law is applicable to the arbitration agreement. The second sentence, part of which the trial courts added to the above-quoted passage following the ellipses, is in fact the operative part of the agreement for present purposes. But that sentence actually begins as follows: "The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) 47 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Contrary to the suggestion by the trial courts, this sentence in the arbitration agreement clearly is not "party specific" in the sense described in Mark Dodge, but, as emphasized, actually professes to be applicable to "all disputes" arising from the transaction and related matters. There is no language in this passage that restricts the disputes covered by the arbitration agreement to claims between the parties.9 The operative arbitration language in the arbitration agreement is similar to the language in the arbitration agreement in Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998), which provided that "'[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract ... shall be resolved by 9We note that Hubbard, Averette, Fuller, Booth, and Williams -- unlike the Lollars and Hood -- do not contend that the substantive nature of their identity-theft claims, rather than the nature of the parties against whom those claims are made, is such that the language of the arbitration agreement is not broad enough to encompass those claims. Such a contention would be difficult for Hubbard, Averette, Fuller, Booth, and Williams to maintain, given that they did not oppose Locklear CJD's motion for arbitration of the plaintiffs' similar identity-theft claims against it, which motion was based on the same substantive arbitration-agreement language. 48 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 binding arbitration.'" The Napier Court concluded that this language was "broad enough to encompass Napier and Godfrey's claims against [nonsignatories] Foremost and Manning." Id. at 53. The operative arbitration language in the arbitration agreement in these cases is also nearly identical to the language in the arbitration agreement at issue in Volkswagen Group of America, Inc. v. Williams, 64 So. 3d 1062, 1064 (Ala. Civ. App. 2010), which provided: "'The undersigned agree that all disputes ... resulting from or arising out of or relating to or concerning the transaction entered into ... shall be submitted to BINDING ARBITRATION ....'" In Williams, the Court of Civil Appeals disagreed with the plaintiff's contention that "the arbitration clause at issue is 'party specific.' The clause, rather, speaks to 'all disputes ... resulting from or arising out of or relating to or concerning the transaction,' a formulation that closely parallels the broad language recognized by the Alabama Supreme Court in Smith v. Mark Dodge, Inc., 934 So. 2d 375 (Ala. 2006), as authorizing a nonsignatory to assert a right to compel arbitration through application of equitable estoppel ...." Id. at 1065. 49 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 To reiterate, when "references [in arbitration provisions] to the parties specifically limited the claims that would be arbitrable under those provisions," the Court has concluded that the arbitration provisions "'are not broad enough to encompass claims against the nonsignatories.'" Ex parte Stamey, 776 So. 2d 85, 90 (Ala. 2000) (quoting Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9, 19 (Ala. 1998)). On the other hand, this Court also has held that, when an arbitration provision "contained no references to the parties that would impose a limitation on what claims would be arbitrated," the arbitration provision was broad enough to include claims that were related to the contract because the language was sufficient to indicate that "the party resisting arbitration ha[d] assented to the submission of claims against nonparties -- claims that otherwise would fall within the scope of the arbitration provision -- to arbitration." Stamey, 776 So. 2d at 89. Like the arbitration provisions in Napier and Williams, the operative arbitration language in the arbitration agreement is not limited to claims between the parties. Accordingly, Locklear Group has cleared this hurdle to the invocation of the doctrine of equitable estoppel 50 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 against Hubbard, Averette, Fuller, Booth, and Williams. We turn then to the central issue -- whether the plaintiffs' claims against Locklear Group, a nonsignatory, are sufficiently intertwined with their claims against Locklear CJD, a signatory. b. Sufficient Intertwining to Invoke Estoppel As noted, a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are "intimately founded in and intertwined with" the underlying contract obligations. Stamey, 776 So. 2d at 89. Smith v. Mark Dodge, Inc., 934 So. 2d at 380. In Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534 (Ala. 2008), this Court summarized the intertwining analysis provided in Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003): "In Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003), Blair Fulmer entered into a contract with SCI Alabama Funeral Services, Inc. ('SCI-Alabama'), for the provision of funeral and cremation services for his deceased mother. The contract included an arbitration provision. After Fulmer was given a vase that was supposed to have contained his mother's remains but allegedly did not, Fulmer sued SCI-Alabama and Service Corporation International ('SCI'), SCI-Alabama's parent corporation. The defendants filed a motion to compel arbitration, which the trial court denied. The defendants appealed. 51 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "SCI argued that, even though it was not a signatory to the contract containing the arbitration agreement, 'Fulmer's claims against the signatory defendant, SCI-Alabama, are so "intertwined" with his claims against SCI that arbitration of all of Fulmer's claims, including those against SCI, is appropriate.' 883 So. 2d at 634. After noting Stamey's two-part test, this Court addressed the first part, which relates to whether the claims against the nonsignatory defendant are intertwined with the claims against the signatory defendant. Finding that prong satisfied, this Court wrote: "'Here, Fulmer's claims against SCI are clearly "intimately founded in and intertwined with" his claims against SCI-Alabama.... All of Fulmer's claims arise from the same set of facts. Virtually none of Fulmer's claims makes a distinction between the alleged bad acts of SCI (the parent corporation) and those of SCI-Alabama (its subsidiary); rather, the claims are asserted as if SCI and SCI-Alabama acted in concert.' "883 So. 2d at 634." 988 So. 2d at 543. Just as in Fulmer, all of the plaintiffs' claims against Locklear Group in these cases are "intimately founded in" the same facts as are their claims against Locklear CJD. The plaintiffs' complaints make virtually no distinction between the bad acts of Locklear Group and those of Locklear CJD. Indeed, when the plaintiffs' complaints described purchasing 52 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their vehicles, they stated that they "dealt with Locklear [CJD] and/or Defendant Locklear [Group] employee[s]" and "[t]he Defendant Locklear [CJD] and/or Defendant Locklear [Group] ran a credit check on" each plaintiff. Every claim the plaintiffs asserted against Locklear CJD they also asserted against Locklear Group, and those claims were asserted as if Locklear CJD and Locklear Group had acted in concert, as if the latter was responsible for the acts of the former, and/or as if those persons who acted for one also acted for the other. Therefore, we conclude that the plaintiffs' claims against Locklear Group as a nonsignatory to the arbitration agreement are "intimately founded in and intertwined with" the underlying contract obligations and with the plaintiffs' contract-related claims against the signatory to the arbitration agreement, Locklear CJD, so that the doctrine of equitable estoppel is applicable. Based on the foregoing, Locklear Group can enforce the arbitration agreement against Hubbard, Averette, Fuller, Booth, and Williams; the trial courts in this group of cases erred in denying Locklear Group's motions to compel arbitration. 53 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 B. Case no. 1160435: Jeffery Lollar and Betsy Lollar As to the Lollars, Locklear CJD and Locklear Group argue that they met their prima facie burden so as to enforce the arbitration agreement, having filed a joint motion in support of which they submitted a contract calling for arbitration and uncontradicted evidence that the transaction affected interstate commerce. They also note that it is undisputed that the Lollars filed no response to their joint motion and supporting evidence. Accordingly, they contend that the trial court had no alternative but to grant their motion to compel arbitration and that it erred in not doing so. In support of their position, Locklear CJD and Locklear Group cite a passage from this Court's opinion Ex parte Greenstreet, Inc., 806 So. 2d 1203 (Ala. 2001): "We hold that once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce, the burden of persuasion shifts to the party opposing arbitration. If that party presents no evidence in opposition to a properly supported motion to compel arbitration, then the trial court should grant the motion to compel arbitration." 806 So. 2d at 1209 (emphasis added). 54 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The Lollars acknowledge that they failed to file a response to the motion to compel arbitration. They assert that failing to do so was an oversight that occurred because their counsel was expecting the trial court to set the motion to compel for a hearing just as it had done in two similar cases (one of which is before us in these appeals, case no. 1160375 -- Hood). Instead, in this case the trial court did not set a hearing; it simply entered an order denying arbitration before the Lollars filed a response. In an apparent attempt to rectify this oversight, the Lollars attach to their brief on appeal their own affidavits and a copy of what they contend was the actual arbitration agreement they signed. Locklear CJD and Locklear Group have rejoined with a motion to strike the attachments to the Lollars' brief as well as all references in their brief to those documents. As they note, this Court cannot consider evidence that is not part of the record on appeal. "'"[A]ttachments to briefs are not considered part of the record and therefore cannot be considered on appeal."' Morrow v. State, 928 So. 2d 315, 320 n. 5 (Ala. Crim. App. 2004) (quoting Huff v. State, 596 So. 2d 16, 19 (Ala. Crim. App. 1991)). Further, we 55 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 cannot consider evidence that is not contained in the record on appeal because this Court's appellate review '"is restricted to the evidence and arguments considered by the trial court."' Ex parte Old Republic Sur. Co., 733 So. 2d 881, 883 n.1 (Ala. 1999) (quoting Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ...)." Roberts v. NASCO Equip. Co., 986 So. 2d 379, 385 (Ala. 2007). Locklear CJD and Locklear Group are correct. We do not consider the evidence submitted by the Lollars on appeal or their arguments based on that evidence because that evidence and those arguments were not presented to the trial court; accordingly, we grant the motion to strike that evidence. Contrary to Locklear CJD and Locklear Group's argument, however, the Lollars' lack of response does not end our inquiry. It is true that, "once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce," the burden shifts to the nonmoving party to show otherwise. Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). It is likewise true that this Court has said that, "[i]f th[e nonmoving] party presents no evidence in opposition to a properly supported motion to compel arbitration, then the 56 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 trial court should grant the motion to compel arbitration." Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). Implicit in this standard is that we must evaluate whether the motion to compel arbitration does make a "prima facie showing" that the parties entered into an agreement to arbitrate the dispute in question and that this showing was "properly supported" by evidence of such an agreement. As we have otherwise recently expressed in another case in which the party opposing arbitration failed to present evidence in the trial court: "[U]nless on its face the arbitration provision is not valid or does not apply to the dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous." Family Sec. Credit Union v. Etheredge, [Ms. 1151000, May 19, 2017] ___ So. 3d ___ , ___ (Ala. 2017) (emphasis added). The arbitration agreement states: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into ... shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) There is no question that the arbitration agreement is broadly worded (a fact we have relied 57 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 upon in the appeals in the Booth, Williams, Hubbard, Averette, and Fuller cases in concluding that the nonsignatory, Locklear Group, could enforce the agreement against those plaintiffs). And "'where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract,'" as does this one, "'that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 505 (Ala. 1999) (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). But as stated, this broader application still is one that is tied to "the contract" to which reference is made, i.e., claims "'"arising out of or relating to" the contract,'" per the language at issue in Green Tree, for example. Or, in the case of the language at issue here, disputes "resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into." See also State v. Lorillad Tobacco, 1 So. 3d 1, 9 (Ala. 2008) (quoting Kenworth of Dothan, Inc. v. Bruner–Wells Trucking, Inc., 745 So. 2d 271, 275 (Ala. 1999)) (noting that, "[f]or a dispute to relate to the subject matter 58 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 of the arbitration provision, 'there must be some legal and logical nexus' between the dispute and the [subject matter of the] arbitration provision"). In this particular case, the parties agreed to arbitrate matters "relating to ... the transaction entered into," which was the Lollars' purchase of a 2009 Dodge Ram truck on May 28, 2013. According to the uncontradicted allegations of the complaint, the personal information of the Lollars' that was wrongly disseminated in connection with their identity-theft claims was provided to Locklear CJD in December 2015 during a visit to the dealership that was not related to the purchase of the 2009 Dodge Ram truck. On the face of the arbitration agreement, its terms do not apply to the interaction of the Lollars and the defendants that occurred in 2015. The 2013 vehicle purchase to which the 2013 arbitration agreement refers and relates is one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) is, quite simply, an unrelated matter. 59 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The situation is similar to one presented in Capitol Chevrolet & Imports, Inc. v. Payne, 876 So. 2d 1106 (Ala. 2003). In that case, Jean Payne purchased a used 1997 Cadillac Catera automobile from Capitol Chevrolet & Imports, Inc. ("Capitol"), on September 6, 2001. The arbitration agreement Payne signed in connection with the purchase had language similar to the arbitration agreement in this case: "'Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration ....'" 876 So. 2d at 1107. The Court described the facts involved in Payne's claims against Capitol as follows: "In September 2002, Payne sued Capitol and a Capitol salesperson, Jason Golden, alleging fraud and conversion. According to Payne's complaint, 60 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 approximately one month after she purchased the Catera, she returned the Catera to Capitol in reliance on Golden's representation that Capitol had a willing buyer for the vehicle. Payne relinquished possession of the Catera to Capitol and stopped making payments on the car. Payne alleged that Golden, while acting in the line and scope of his employment with Capitol, misrepresented to her that Capitol had a buyer for the Catera, and that, when Payne relinquished the Catera to Capitol in reliance on that misrepresentation, Golden converted the Catera for his personal use. Payne's complaint alleged that, as a result of the misrepresentation, she lost the use of her vehicle, suffered severe mental anguish, and suffered an adverse credit rating once she stopped making payments on the Catera." 876 So. 2d at 1107–08. The Court concluded that Payne's claims were not related to her purchase of the Catera and therefore were not subject to the arbitration agreement. "We do not believe that the plain language of the arbitration agreement would lead one to assume or understand that the agreement covered the claims alleged in Payne's complaint -- a later fraudulent misrepresentation, unrelated to the original sale of the vehicle, resulting in the conversion of the vehicle. The present dispute involves alleged subsequent tortious conduct on the part of Capitol and its agent that is not close enough in relation to the initial sale of the Catera to be covered by the language of the arbitration agreement." 876 So. 2d at 1110 (emphasis added). 61 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 In this case, as in Payne, the plain language of the arbitration agreement, which relates to the 2013 transaction, does not lead one to understand that the 2015 identity-theft claims would be covered under the agreement. We noted in Kenworth of Dothan that, "[i]n order for a dispute to be characterized as arising out of or relating to the subject matter of the [transaction], and therefore subject to arbitration, the language of the arbitration provision must reasonably apply to the dispute." 745 So. 2d at 275. In response to the clear disconnect between the transaction to which the arbitration agreement relates and the separate matters at issue in this action, Locklear CJD and Locklear Group do not really explain how the arbitration agreement is broad enough to encompass the Lollars' identity- theft claims. Instead, they attempt to rely upon the arbitrability clause in the arbitration agreement (i.e., the clause providing that the arbitrator is to decide disputes over the arbitrability of the parties' underlying substantive dispute) in an effort to avoid this issue. But the difficulty with this is the same one that existed in the Booth, Williams, Hubbard, Averette, and Fuller cases. That is, this issue was 62 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 not presented to the trial court in such a manner as to preserve it for later appellate review. For the reasons already stated in our discussion of those other cases, we cannot reverse the trial court's order on that basis. Because the arbitration agreement on its face does not apply to the Lollars' claims, we conclude that the trial court did not err in denying the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. C. Case no. 1160375: Anthony Hood The final appeal before us involves the joint motion to compel arbitration filed by Locklear CJD and Locklear Group in response to the complaint filed by Anthony Hood. Locklear CJD and Locklear Group contend that they presented a prima facie case in support of their motion to compel arbitration, i.e., that they introduced a contract calling for arbitration and produced evidence showing that the transaction affected interstate commerce. They argue that the trial court erred in determining the scope of the arbitration agreement because the arbitration agreement contained an arbitrability clause reflecting an agreement to allow the arbitrator to decide any arbitrability issues. 63 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's first response to these arguments is that the version of the arbitration agreement Locklear CJD and Locklear Group submitted to the trial court "is invalid and unenforceable because the agreement is fabricated and was not signed by [Hood] and the issue is for the Court to decide, not the arbitrator." "'[A] party who contests the existence of a contract containing an arbitration provision cannot be compelled to arbitrate that threshold issue because an arbitrator derives his authority solely from the parties' agreement. Only a court can resolve the question whether a contract exists.'" Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1053-54 (Ala. 2007) (quoting Edward D. Jones & Co. v. Ventura, 907 So. 2d 1035, 1040 (Ala. 2005)). Hood's position is meritless. As detailed in the rendition of the facts, Hood alleged in his complaint and reiterated in his response to the joint motion to compel arbitration that he purchased a 2016 Dodge Ram 3500 truck from Locklear CJD in December 2015. He also admitted in his response that he signed a "Pre-Dispute Arbitration Agreement" with Locklear CJD. Hood alleged in his response and in his supporting affidavit that the only difference between the 64 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 version of the arbitration agreement he signed and the one Locklear CJD and Locklear Group submitted with their joint motion to compel arbitration was that in the latter version "[t]he words 'Locklear Chrysler Jeep Dodge, LLC'" had been added near the bottom of the agreement in a different typeset than that of the rest of the agreement. Indeed, the version of the arbitration agreement Hood attached to his brief contains all the elements contained in the version attached to the defendants' joint motion to compel arbitration except the printed words "Locklear Chrysler Jeep Dodge, LLC" typed or printed above the "DEALER" signature line. Thus, Hood admits that he signed the arbitration agreement that contains the substantive language quoted in this opinion; he admits the agreement was signed by someone on behalf of the "DEALER," which he admits to be Locklear CJD; and he admits that the agreement contained an exact description of the vehicle he purchased. Even if the allegation that Locklear CJD and/or Locklear Group added the words "Locklear Chrysler Jeep Dodge, LLC" to the arbitration agreement after Hood signed the agreement is accepted as true, we are given no basis on which to conclude 65 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that this is a material alteration to the agreement for purposes of Hood's underlying claims. This Court has stated that in order to determine whether an alteration is material we should inquire: "Did the interposed matter make the 'instrument speak a language different in legal effect from that which it originally spoke, which carries with it some change in the rights, interests, or obligations of the parties?'" Benton v. Clemmons, 157 Ala. 658, 660, 47 So. 582, 583 (1908). See also 3B C.J.S. Alteration of Instruments § 4 (2017) ("In general, for the alteration of an instrument to be 'material,' the alteration must be such as to change the legal effect of the instrument."). In this instance, the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC" changed none of the obligations of the parties to the arbitration agreement. Hood knew and admitted that he was signing an arbitration agreement with Locklear CJD in connection with his purchase of a vehicle. A representative of the dealership signed the agreement. The terms of that agreement were not changed in any degree by the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC." Accordingly, the arbitration agreement was not "fabricated," 66 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Hood's argument does not defeat the arbitration of Hood's underlying claims.10 Like the Lollars, Hood also contends that his identity- theft allegations are not within the scope of the arbitration agreement because they do not "result[] from, aris[e] out of, relat[e] to or concern[] the transaction entered into," i.e., the purchase of a vehicle from Locklear CJD, which is the object of the arbitration agreement. In response, as in the Lollars' case (and the Hubbard, Averette, Fuller, Booth, and Williams cases), Locklear CJD and Locklear Group counter that there is a clause in the arbitration agreement that provides for the arbitrator to determine the scope of the arbitration agreement. Unlike all the other appeals before us, however, in this case not only was there a hearing on the motion to compel arbitration, but also that hearing was transcribed and the transcript submitted as part of the record on appeal. 10In an effort to provide an alternative ground for affirmance of the trial court's order as to Locklear Group, Hood also makes a "nonsignatory" argument similar to that made by first group of plaintiffs discussed above. This argument by Hood fails for the same reasons as did the similar argument by those other plaintiffs. See discussion, supra. 67 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 According to that transcript, Hood's counsel argued as follows to the trial court: "[O]ur argument is that somebody at the dealership was being allowed to [take customers' personal information] and then sell [their] identities out on the black market[, which] doesn't have anything to do with buying a car." In response, counsel for Locklear CJD and Locklear Group stated: "And our response to that specific argument is, first, we believe that the arbitration agreement is broad enough in scope to cover these. But, more importantly, we don't even get to that issue here before you, your Honor. The arbitration agreement clearly provides that the issue of scope and breadth arbitrability is for the arbitrator to decide, not this trial court. So whether or not the claims being asserted fall within the scope of the arbitration agreement is for the arbitrator to decide based on the plain and unambiguous language in the arbitration agreement. Plus, it applies for AAA rules, and there [are] Alabama Supreme Court cases that clearly state that, that in and of itself also shows an intent based on those rules to allow the arbitrator to decide the issue of scope and breadth. So that is something that the arbitrator is to determine and not this court." Thus, in Hood's case, Locklear CJD and Locklear Group clearly and explicitly argued to the trial court that there was an arbitrability clause in the arbitration agreement and that the import of the clause was that the issue whether 68 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's identity-theft claims were covered by the arbitration agreement was for the arbitrator to decide, not the trial court. Therefore, the effect of the arbitrability clause is properly before us in this appeal. Hood's first response to Locklear CJD and Locklear Group's invocation of the arbitrability clause is to contend that "clear and unmistakable evidence that [Hood] and [the] Locklear Defendants agreed to arbitrate the issue of arbitrability does not exist because a valid arbitration agreement does not exist." This argument relies upon Hood's assertion, which we just rejected, that the arbitration agreement was fabricated. Because we have concluded that a valid arbitration agreement was submitted by Locklear CJD and Locklear Group, the arbitrability clause cannot be ignored on that basis. Hood next contends that the "Locklear Defendants arguably waived a 'First Options clause' argument because this argument was not presented in their initial Motion to Compel Arbitration with the trial court or in oral argument on the 69 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 same."11 As we have already recounted, however, Locklear CJD and Locklear Group clearly and explicitly presented its arbitrability-clause argument to the trial court in the hearing on their joint motion to compel arbitration. Hood also argues that the arbitrability clause in the arbitration agreement is "wholly diverse from the "'First Options clause' in [Smith v.] Mark Dodge[, Inc., 934 So. 2d 375 (Ala. 2006)]." Hood notes that the arbitrability clause in Smith stated: "'[Smith] and [Mark Dodge] further agree that any question regarding whether a particular controversy is subject to arbitration shall be decided by the Arbitrator.'" 934 So. 2d at 378. Hood argues that "[t]he explicit language in Mark Dodge stating 'whether a particular controversy is subject to arbitration shall be decided by the Arbitrator' is clearly missing from [the] Locklear Defendants' fabricated arbitration agreement." In their principal brief, Locklear CJD and Locklear Group do not contend that the arbitrability clause in the arbitration agreement is similar in wording to the 11Hood's reference to a "First Options clause" is a reference to the discussion of arbitrability clauses in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). 70 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrability clause in Smith. Instead, they argue correctly that the arbitrability-clause language in the arbitration agreement is identical to language in arbitration agreements analyzed by this Court in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999).12 As Locklear CJD and Locklear Group observe, this Court in McGrue and Waites held that the arbitrability clauses in those arbitration agreements constituted clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability. In his brief to this Court, Hood addresses McGrue and Waites, but only by contending that they are distinguishable from the present case on the ground that "neither [McGrue nor Waites] disputed the validity of the underlying arbitration agreements." As we already have concluded, however, Hood's contention that the arbitration agreement was "fabricated" must be rejected. The fact remains, then, that in McGrue and Waites this Court concluded that language identical to that contained in the arbitration agreement was sufficient to warrant submission of issues of arbitrability to the 12See discussion, supra. 71 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrator. Hood offers no other reason why McGrue and Waites would not be dispositive of the present case. IV. Conclusion Based on the foregoing analysis, we affirm the order of the trial court in the Lollars' appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. We reverse the trial courts' orders in Hubbard's, Averette's, Fuller's, Booth's, and Williams's appeals, which denied the motions to compel arbitration as to Locklear Group, and in Hood's appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group; those causes are remanded for the trial courts to enter orders granting those motions. 72 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1160335 -- REVERSED AND REMANDED. 1160336 -- REVERSED AND REMANDED. 1160337 -- REVERSED AND REMANDED. 1160435 -- MOTION TO STRIKE GRANTED; AFFIRMED. 1160436 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. 1160437 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 1160375 -- REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. Murdock, J., concurs specially. 73 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MURDOCK, Justice (concurring specially in case no. 1160375). As the main opinion explains, Anthony Hood responds to the invocation by Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc., of this Court's decisions in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999), but he does so by arguing only that those cases involved no issue as to the validity of the underlying arbitration agreements, whereas, according to Hood, the underlying arbitration agreement in this case is invalid (the rejection of the latter proposition by the main opinion being a position with which I agree). Hood does not, for example, attempt to argue that the language of the arbitrability provision at issue here is materially different from that held to be sufficient in McGrue and Waites. Neither does Hood argue that we should overrule McGrue and Waites. And, although I confess concerns as to the sufficiency of the language here to meet the "clear and unmistakable" test articulated in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), other than pointing out that the language used here is "diverse" from the more explicit language employed in First Options, Hood does not 74 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 offer a sufficient explication of the asserted insufficiency so as to compel a reexamination of McGrue and Waites. And because the question at hand does not concern the subject- matter jurisdiction of the trial court or this Court, I cannot conclude that this Court should sua sponte explore the matter. In addition, neither party has even mentioned this Court's 2012 decision in Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). In particular, Hood does not argue that, even if the arbitrability language at issue satisfies the "clear and unmistakable" standard articulated in First Options, the particular underlying substantive claims in this case should not be sent to the arbitrator for consideration of their arbitrability because they do not even "arguably" fall within the ambit of the arbitration agreement. See Blackmon, 99 So. 3d at 1198. That is, no issue is raised as to whether Hood's identity-theft claims fall within the universe of disputes to which the so-called arbitrability clause is to apply. I feel no compunction therefore to cast a vote in this case reflective of the position I took in my dissent in 75 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Blackmon, a position to which I continue to adhere. See Blackmon, 99 So. 3d at 1199 (Murdock, J., dissenting). 76

September 29, 2017

353649e1-780c-42fc-a712-7358c3147457

Ex parte Alfa Mutual Insurance Company.

N/A

1160536

Alabama

Alabama Supreme Court

REL: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1160536 _________________________ Ex parte Alfa Mutual Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Richard Holley v. Alfa Mutual Insurance Company) (Pickens Circuit Court, CV-16-900057) WISE, Justice. Alfa Mutual Insurance Company, the defendant below, filed a petition for a writ of mandamus requesting that this Court 1160536 direct the Pickens Circuit Court to vacate its order denying a motion to transfer the underlying action to the Tuscaloosa Circuit Court and to enter an order granting the motion. We grant the petition and issue the writ. Facts and Procedural History On February 20, 2016, Richard Holley, who resided in Pickens County, was involved in a motor-vehicle accident in Tuscaloosa County. The other vehicle was driven by David Craig Evans, who was uninsured. Emergency-medical-services personnel from NorthStar EMS in Tuscaloosa treated Holley at the scene and then transported him to DCH Regional Medical Center in Tuscaloosa. Law-enforcement personnel who were based in Tuscaloosa County also responded to the accident. After the accident, Holley received follow-up treatment from three medical providers in Tuscaloosa and one medical provider in Mississippi. Chris Evans, an agent for Alfa who had an office in Pickens County, had issued a personal automobile-insurance policy to Harry Michael Tilley, a resident of Pickens County. Shortly before the accident, Holley was added as an insured on 2 1160536 Tilley's policy. The policy included uninsured-motorist coverage for Holley. On July 18, 2016, Holley's attorney wrote Alfa a letter requesting $75,000 in uninsured-motorist benefits as compensation for injuries Holley suffered as a result of the accident. On August 2, 2016, Alfa sent a letter to Holley's attorney, refusing to pay the requested uninsured-motorist benefits and offering to settle Holley's claim for $10,000. Shortly thereafter, on August 11, 2016, Holley filed a complaint in the Pickens Circuit Court against Alfa, stating uninsured-motorist, breach-of-contract, and bad-faith claims based on Alfa's refusal to pay the requested uninsured- motorist benefits. On December 28, 2016, Alfa filed a motion to transfer the action to Tuscaloosa County based on the doctrine of forum non conveniens, as codified in § 6-3-21.1, Ala. Code 1975. On February 15, 2017, Holley filed a response opposing the motion to transfer. On February 16, 2017, the trial court denied the motion to transfer. This petition followed. Standard of Review "A petition for a writ of mandamus is the appropriate 'method for obtaining review of a denial 3 1160536 of a motion for a change of venue' pursuant to § 6–3–21.1. Ex parte National Sec. Ins. Co., 727 So. 2d 788, 789 (Ala. 1998). ... "'....' "'A party moving for a transfer under § 6–3–21.1 has the initial burden of showing, among other things, one of two factors: (1) that the transfer is justified based on the convenience of either the parties or the witnesses, or (2) that the transfer is justified "in the interest of justice."' Ex parte Indiana Mills & Mfg., Inc., 10 So. 3d 536, 539 (Ala. 2008). Although we review a ruling on a motion to transfer to determine whether the trial court exceeded its discretion in granting or denying the motion, id., where 'the convenience of the parties and witnesses or the interest of justice would be best served by a transfer, § 6–3–21.1, Ala. Code 1975, compels the trial court to transfer the action to the alternative forum.' Ex parte First Tennessee Bank Nat'l Ass'n, 994 So. 2d 906, 912 (Ala. 2008) (emphasis added)." Ex parte Wachovia Bank, N.A., 77 So. 3d 570, 573 (Ala. 2011). Discussion Alfa argues that the trial court exceeded its discretion in denying its motion to transfer the action from Pickens County to Tuscaloosa County. Specifically, it contends that Tuscaloosa County has a strong connection to the case because, among other things, the motor-vehicle accident that gave rise to Holley's claim occurred there. In contrast, Alfa asserts 4 1160536 that the case has "very little, if any," connection to Pickens County. In particular, it asserts: "The only connection to Pickens County is that 'a Pickens County resident was denied insurance benefits.' The Plaintiff, however, did not purchase the policy, did not request the issuance of the policy, did not pay any part of a premium on the policy, did not have the policy delivered to him, and was not involved 'in any way in the procurement, delivery to the insured, or payment for the policy.'" Therefore, Alfa asserts that the interest-of-justice prong of Alabama's forum non conveniens statute mandates a transfer to Tuscaloosa County. Section 6-3-21.1, Ala. Code 1975, provides, in pertinent part: "With respect to civil actions filed in an appropriate venue, any court of general jurisdiction shall, for the convenience of parties and witnesses, or in the interest of justice, transfer any civil action or any claim in any civil action to any court of general jurisdiction in which the action might have been properly filed and the case shall proceed as though originally filed therein." (Emphasis added.) "Historically, the plaintiff has had the initial choice of venue under the system established by the legislature for determining venue. Before the enactment of § 6–3–21.1 by the Alabama Legislature in 1987, a plaintiff's choice of venue could not be disturbed on the basis of convenience to the parties or the witnesses or in the interest of justice. 5 1160536 With the adoption of § 6–3–21.1, trial courts now have 'the power and the duty to transfer a cause when "the interest of justice" requires a transfer.' Ex parte First Family Fin. Servs., Inc., 718 So. 2d 658, 660 (Ala. 1998) (emphasis added). In First Family, this Court noted that an argument that trial judges have almost unlimited discretion in determining whether a case should be transferred under § 6–3–21.1 'must be considered in light of the fact that the Legislature used the word "shall" instead of the word "may" in § 6–3–21.1.' 718 So. 2d at 660. This Court has further held that 'Alabama's forum non conveniens statute is compulsory.' Ex parte Sawyer, 892 So. 2d 898, 905 n.9 (Ala. 2004)." Ex parte Autauga Heating & Cooling, LLC, 58 So. 3d 745, 748-49 (Ala. 2010). "The 'interest of justice' prong of § 6–3–21.1 requires 'the transfer of the action from a county with little, if any, connection to the action, to the county with a strong connection to the action.' Ex parte National Sec. Ins. Co., 727 So. 2d [788,] 790 [(Ala. 1998)]. Therefore, 'in analyzing the interest-of-justice prong of § 6–3–21.1, this Court focuses on whether the "nexus" or "connection" between the plaintiff's action and the original forum is strong enough to warrant burdening the plaintiff's forum with the action.' Ex parte First Tennessee Bank Nat'l Ass'n, 994 So. 2d 906, 911 (Ala. 2008). Additionally, this Court has held that 'litigation should be handled in the forum where the injury occurred.' Ex parte Fuller, 955 So. 2d 414, 416 (Ala. 2006). Further, in examining whether it is in the interest of justice to transfer a case, we consider 'the burden of piling court services and resources upon the people of a county that is not affected by the case and ... the interest of the people of a county to have a case that arises in their county tried close to public view in their 6 1160536 county.' Ex parte Smiths Water & Sewer Auth., 982 So. 2d 484, 490 (Ala. 2007)." Ex parte Indiana Mills & Mfg., Inc., 10 So. 3d 536, 540 (Ala. 2008). The parties do not dispute that the complaint was filed in an appropriate venue, namely, Pickens County. Likewise, they do not dispute that the action could properly have been filed in Tuscaloosa County.1 However, they do dispute whether the interest-of-justice prong of § 6-3-21.1 requires a transfer of the underlying case from Pickens County to Tuscaloosa County. 1With regard to venue of actions against corporations, § 6-3-7, Ala. Code 1975, provides, in pertinent part: "(a) All civil actions against corporations may be brought in any of the following counties: "(1) In the county in which a substantial part of the events or omissions giving rise to the claim occurred...; or "... "(3) In the county in which the plaintiff resided ... at the time of the accrual of the cause of action, if such corporation does business by agent in the county of the plaintiff's residence." 7 1160536 As Alfa points out in its brief, the Alabama Court of Civil Appeals addressed a factually similar case in which similar arguments were made in Ex parte Alfa Mutual Insurance Co., 142 So. 3d 728 (Ala. Civ. App. 2013). In Ex parte Alfa, Willie Kirk, a resident of Macon County, filed a complaint in the Macon Circuit Court against Alfa and various fictitiously named defendants, asserting claims that arose out of an automobile accident he had had with Melissa Nelson, who was alleged to be uninsured, in Lee County. After the accident, Kirk was treated at a hospital in Lee County and later received follow-up treatment from a number of medical-care providers located in Lee County. Alfa filed a motion to transfer the case to Lee County based on the doctrine of forum non conveniens; Kirk filed a response in opposition in which he asserted that "the gravamen of his claim was the insurer's alleged breach of the parties' insurance contract." 142 So. 3d at 729. The trial court denied that motion, and Alfa petitioned for a writ of mandamus. The Alabama Court of Civil Appeals granted Alfa's petition and issued the writ, reasoning, in relevant part: "In this case, substantially all the pertinent events occurring after the formation of the parties' 8 1160536 insurance contract that can be said to constitute the factual basis of the insured's claimed right to recover benefits under the uninsured-motorist coverage provisions of that contract occurred in Lee County. See Ex parte State Farm Mut. Auto. Ins. Co., 893 So. 2d 1111, 1115 (Ala. 2004) (uninsured-motorist-insurance claimants had the legal burden to demonstrate fault on the part of the uninsured motorist and the extent of damage stemming therefrom before the claimants could recover from their insurer under the pertinent policy; therefore, the act or omission underlying their claim occurred, and the claim arose, at the place of the automobile collision made the basis of the claimants' civil action against their insurer). In contrast, the insured was a resident of Macon County at the time his cause of action against the insurer accrued, and it is not disputed by the insurer that it does business by agent in Macon County. ".... "The insurer correctly notes in its petition that the 'interest of justice' prong of § 6–3–21.1 requires 'the transfer of [an] action from a county with little, if any, connection to the action, to the county with a strong connection to the action,' Ex parte National Sec. Ins. Co., 727 So. 2d 788, 790 (Ala. 1998), an inquiry that necessarily 'focuses on whether the "nexus" or "connection" between the plaintiff's action and the original forum is strong enough to warrant burdening the plaintiff's forum with the action.' Ex parte First Tennessee Bank Nat'l Ass'n, 994 So. 2d 906, 911 (Ala. 2008). We further note that, '[a]lthough it is not a talisman, the fact that the injury occurred in the proposed transferee county is often assigned considerable weight in an interest-of-justice analysis.' Ex parte Wachovia Bank, N.A., 77 So. 3d 570, 573–74 (Ala. 2011). 9 1160536 "The materials submitted by the insurer in support of its petition indicate a strong connection between the insured's claim and Lee County. The collision that forms the factual basis of the insured's claim occurred in Lee County, and the initial medical providers and responders who ministered to the insured did so in Lee County. Further, Nelson, the motorist alleged to have been at fault in that collision, resides in Lee County, and there is currently a parallel action pending in Lee County involving the insurer's claim for reimbursement against Nelson that will likely necessitate testimony from the same witnesses for resolution; thus, in the words of Tennessee Bank, the courts of Lee County can be said to already have been 'burden[ed]' by litigation concerning the collision. ... "The insured's filings in the Macon Circuit Court do not touch and concern the interest-of-justice prong of § 6–3–21.1 so much as they do the convenience-of-parties-and-witnesses prong. Regardless of whether any or all of the insured's current treating physicians are located in Jefferson County or in Lee County, their sole nexus with the insured's action is their treatment of the insured, which has not occurred in Macon County. Although the insurer does business by agent in Macon County and delivered the pertinent insurance policy to the insured in Macon County, the claim asserted by the insured is, as Ex parte State Farm indicates, one that is actually in the nature of a hypothecated tort claim against Nelson as to which the insurer is ostensibly responsible to pay. That hypothecated tort claim, like the insurer's parallel claim against Nelson that actually sounds in tort, is rooted in events that occurred in Lee County and is comparatively less intimately connected to Macon County and, thus, fails to warrant burdening Macon County's court services and resources. See Ex parte Indiana Mills & Mfg., Inc., 10 So. 3d 536, 540 and n.2 (Ala. 2008) (in which our supreme court granted 10 1160536 a petition seeking a transfer of a tort action from Macon County to Lee County when only one individual defendant out of five total defendants resided in Macon County and a second defendant did business there; in contrast, the automobile crash made the basis of the claim had occurred in Lee County and had been investigated by Lee County authorities). "Based upon the foregoing facts and authorities, we conclude that the Macon Circuit Court acted outside its discretion in denying the insurer's motion to transfer the insured's action from Macon County to Lee County to the extent that that court concluded that the interest of justice did not require the requested transfer." Ex parte Alfa Mut. Ins. Co., 142 So. 3d at 730-32. Based on the reasoning in Ex parte Alfa and the cases cited therein, Alfa has established that Tuscaloosa County has a stronger connection to the claims in this case than has Pickens County. The accident occurred in Tuscaloosa County. See Ex parte Wachovia Bank, N.A., supra, and Ex parte State Farm Mut. Auto. Ins. Co., 893 So. 2d 1111 (Ala. 2004). Also, law-enforcement personnel who responded to the accident worked in Tuscaloosa County; Holley was treated by emergency-medical- services personnel from Tuscaloosa at the scene of the accident; Holley was taken to a hospital in Tuscaloosa County after the accident; and Holley received follow-up treatment from three medical-care providers in Tuscaloosa County. 11 1160536 Further, both Holley and Evans worked in Tuscaloosa County, and Evans resided in Tuscaloosa County at the time the motion to transfer was filed. In contrast, Pickens County's only connections to the case were the fact that Holley is a resident of Pickens County and that the Alfa agent who issued the policy to Tilley was located in Pickens County. However, Holley did not originally purchase the policy, and his name was not on the original policy. Also, it appears that Holley did not pay any of the premiums for the policy.2 Even though there is not any indication that there is a parallel action pending in the Tuscaloosa Circuit Court at this time, as Alfa points out: "This Court has held that 'there can be no breach of an uninsured motorist contract, and therefore no bad faith, until the insured proves that he is legally entitled to recover.' Quick v. State Farm Mut. Auto. Ins. Co., 429 So. 2d 1033, 1035 (Ala. 1983)." Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557, 563 (Ala. 2005). Also, Holley's 2In his answer to the petition, Holley cites additional "facts" that allegedly support the trial court's ruling denying a transfer to Tuscaloosa County. However, because those "facts" were "contained in 'statements of counsel in motions, briefs, and arguments,' [they] cannot be considered 'evidentiary material' and thus will not be considered by this Court." Autauga Heating & Cooling, 58 So. 3d at 749-50. 12 1160536 "hypothecated tort claim ... is rooted in events that occurred in [Tuscaloosa] County and is comparatively less intimately connected to [Pickens] County and, thus, fails to warrant burdening [Pickens] County's court services and resources." Ex parte Alfa Mut. Ins. Co., 142 So. 3d at 731. Finally, we reiterate that, "[a]lthough it is not a talisman, the fact that the injury occurred in the proposed transferee county is often assigned considerable weight in an interest-of-justice analysis." Ex parte Wachovia Bank, N.A., 77 So. 3d at 573–74. Under these circumstances, Pickens County has only a very weak overall connection to the claims and Tuscaloosa County has a much stronger connection to the claims. Therefore, the interest-of-justice prong of the forum non conveniens statute requires that the action be transferred to Tuscaloosa County. Conclusion For the above-stated reasons, we conclude that the trial court exceeded its discretion in denying Alfa's motion for a change of venue based on the interest-of-justice prong of the forum non conveniens statute. Accordingly, we grant Alfa's petition for the writ of mandamus and direct the trial court, in the interest of justice, to vacate its order denying the 13 1160536 motion to transfer the action to the Tuscaloosa Circuit Court and to enter an order transferring the case from the Pickens Circuit Court to the Tuscaloosa Circuit Court. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Shaw, Main, Bryan, and Sellers, JJ., concur. Murdock, J., dissents. 14

September 1, 2017

789beeb7-2f7d-4cf3-8a49-26ec600c806a

Roger D. Firestone v. Carl Weaver

N/A

1151211

Alabama

Alabama Supreme Court

Rel: 08/11/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1151211 ____________________ Roger D. Firestone v. Carl Weaver Appeal from Coosa Circuit Court (CV-10-900025) On Application for Rehearing PARKER, Justice. This Court's opinion of May 12, 2017, is withdrawn, and the following is substituted therefor. Roger D. Firestone sued Carl Weaver, Charles Tooley ("Tooley"), L.C. Collins, Jr. ("L.C."), and Mickie Wayne 1151211 Collins ("Mickie") (hereinafter collectively referred to as "the defendants"), alleging that the defendants conspired to and did brutally assault and batter and attempt to murder Firestone and seeking damages. Firestone appeals from a summary judgment entered by the Coosa Circuit Court in favor of Weaver dismissing Firestone's claims against Weaver as barred by the applicable statutes of limitations.1 Facts and Procedural History Firestone's deposition testimony indicates that Firestone, Chuck Amberson, and Daryl Coleman frequented a hunting cabin they had built in Coosa County ("the hunting cabin"). According to Firestone's deposition testimony, Amberson and Coleman regularly smoked crystal methamphetamine at the hunting cabin, a supply of which they kept in "a hiding place somewhere" at the hunting cabin. In a statement Tooley gave the Coosa County Sheriff's Department after he was apprehended for the offense and after waiving his rights under Miranda v. Arizona, 384 U.S. 436 (1966), Tooley indicated that Weaver knew that there was "a 1As explained in greater detail below, this is not the first time these parties have appeared before this Court. See Weaver v. Firestone, 155 So. 3d 952 (Ala. 2013), and Ex parte Weaver (No. 1140946, July 13, 2015). 2 1151211 bunch of crystal meth" at the hunting cabin. Tooley said in his statement that Weaver took Tooley to the area where the hunting cabin was located to show him where the cabin was and urged Tooley to return to the cabin to steal the crystal methamphetamine. According to Tooley's statement, Weaver gave Tooley $600 "for expenses" and Tooley recruited L.C. and Mickie to help him steal the crystal methamphetamine. Firestone's deposition testimony indicates that, on May 16, 1995, Firestone, Amberson, and Coleman were at the hunting cabin when Tooley, L.C., and Mickie arrived. L.C. and Mickie restrained Firestone, Amberson, and Coleman and questioned them about the location of the crystal methamphetamine and any cash they may have had. Coleman gave L.C. and Mickie the crystal methamphetamine, and Firestone, Amberson, and Coleman gave L.C. and Mickie all the cash they had. According to Firestone's deposition testimony, L.C. and Mickie did not believe that Firestone, Amberson, and Coleman had given them all the crystal methamphetamine and cash in their possession. L.C. and Mickie then doused the hunting cabin and Firestone, Amberson, and Coleman with kerosene and set the hunting cabin, with Firestone, Amberson, and Coleman restrained inside, on 3 1151211 fire. Firestone, Amberson, and Coleman suffered substantial injuries as a result of being burned in the fire; Amberson and Coleman eventually died from their injuries. Tooley, L.C., and Mickie were eventually charged with various crimes arising out of the events described in Firestone's deposition testimony; all three men ultimately pleaded guilty to the charges in 2010. On February 23, 2000, D.B. Matson, a deputy state fire marshal employed by the Alabama Department of Insurance, created a report concerning the incident. Matson's report states that, on June 10, 1996, Christi Coleman Hicks, who was married to Coleman at the time of the incident, informed an Alabama Bureau of Investigation ("ABI") agent investigating the case that "she heard that L.C. ..., Stanley Tooley, and ... Tooley did the burning in Coosa County." Matson's report further indicates that Tooley told another individual "that he and his brother [Stanley] did the crime." Matson's report states that "Tooley was picked up by an undercover police officer ... and questioned about this incident." Firestone's deposition testimony indicates that, in 2007, Firestone's son told Firestone that he had heard rumors that 4 1151211 in 1995 Tooley had stolen the same amount of crystal methamphetamine that had been stolen from the hunting cabin on May 16, 1995. Firestone informed the ABI officers investigating the case what Firestone's son had told him concerning Tooley. Firestone's deposition testimony indicates that the ABI officers told him that they were going to investigate the information Firestone's son had heard concerning Tooley. Affidavit testimony of Eddie Whorton, Betty Cheney, Brian Farley, and Christi Coleman Hicks was presented by Weaver. Whorton's affidavit testimony states that he "was an acquaintance of ... Amberson and ... Firestone" and that, "in 1995, approximately five months after the incident [at the hunting cabin] which resulted in the deaths of ... Amberson and ... Coleman and injury to ... Firestone, I obtained information from a female friend that ... Tooley was one of the individuals that perpet[r]ated the deaths and injuries. I obtained pictures of ... Tooley taken at a wedding from this friend and took them to ... Firestone. I showed the pictures of ... Tooley to [Firestone] and he identified him as one of the assailants. I then contacted Roy Harbin, who was a local law enforcement officer and provided him with the information. I have knowledge that Roy Harbin talked to [Firestone] after this and even put ... Tooley in a line-up for ... Firestone." 5 1151211 In his deposition testimony, Firestone confirmed that in 1995 Whorton had shown him a picture of Tooley and that Whorton told Firestone that Tooley "knew something about" the incident. Firestone also confirmed in his deposition testimony that he had met with Roy Harbin and that Harbin had Firestone look at Tooley in a room to determine if Tooley was one of Firestone's assailants. Cheney's affidavit states that she was married to Firestone at the time of the incident but that they divorced in 1998. Cheney's affidavit further states: "3. Sometime between 1995 to 1996, ... Firestone was called in for a meeting with Roy Harbin for the purpose of attempting to identify ... Tooley from a lineup. Roy Harbin specifically questioned ... Firestone about ... Tooley's involvement. After the meeting, ... Firestone explained that he was not able to identify [Tooley]. In response, [Firestone] explained to me that Roy Harbin responded that ... Tooley was the guy who did it and he just let him go. "4. In late 1997 to spring 1998, I received a telephone call from a Kristy Hollingsworth. During this call, Ms. Holling[s]worth informed me that she knew what happened to [Firestone] in Coosa County. She gave me specific names of people that she claimed to be involved, including ... Tooley ..., L.C. ..., [and] Mickie .... The caller told me that it was ... Tooley who did it. ... She also said that ... Weaver was involved. ... I made contemporaneous hand-written notes of this phone conversation. 6 1151211 "5. At a later date, I passed along my notes to ... Firestone in anticipation of one of his meetings with the ABI investigators." Farley's affidavit states that he "was a close friend" of Coleman's and that he knew Firestone. Farley's affidavit states that he "had heard information that the perpetrators of this incident were Mickie ..., ... Tooley and L.C." Farley's affidavit further states that in 1995 he informed an ABI investigator of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. According to his affidavit testimony, Farley also informed Firestone while Firestone was in the hospital recovering from the injuries he suffered in the fire of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. Hicks's affidavit indicates that Farley also told her of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. Hicks's affidavit does not indicate that she passed this information along to Firestone. In August 2010, Tooley, L.C., and Mickie pleaded guilty to the attempted murder of Firestone. On August 20, 2010, 7 1151211 Firestone filed a complaint against the defendants and several fictitiously named parties, seeking damages on claims of conspiracy, the tort of outrage, assault and battery, and attempted murder. Although Weaver was not present at the hunting cabin, Firestone alleged that he organized and funded the incident. Recognizing that a question might exist as to whether his action was barred by the applicable statutes of limitations, Firestone averred in his complaint: "On August 9, 2010, Tooley, [Mickie], and [L.C.] pleaded guilty to attempted murder of [Firestone]. It was not until this date that [Firestone] discovered the identity of the [individuals] who had attacked him because of the fraudulent concealment of the conspiracy and the identity of the conspirators. [Firestone] avers that despite diligent efforts, he could not discover the identity of his attackers before August 9, 2010. [Firestone] has since August 9, 2010, further discovered the identity of Defendant [Carl] Weaver and his role in this matter. [Firestone] avers that none of the acts of [the defendants] are barred by the statute of limitations. [Firestone] avers that this action is brought against [these individuals] within the time allowed by Alabama law for bringing an action following discovery of facts which have been fraudulently concealed by defendants. [Firestone] further avers that any otherwise applicable statute of limitations has been equitably tolled until the reasonable efforts of [Firestone] to discover the identity of [these individuals] and that [Firestone] has brought this action in the time allowed by law following such discovery. [Firestone] further avers that no statute of limitations is applicable to this case under Alabama law because it is an action for 8 1151211 damages for maiming and attempted murder with the relevant facts of the identity of [the defendants] deliberately concealed as a part of a conspiracy by [the defendants] to maim and murder [Firestone] and others." On September 24, 2010, Weaver filed a motion to dismiss Firestone's complaint. On July 21, 2011, the circuit court denied Weaver's motion to dismiss. On the same day, the circuit court entered an order concerning Tooley and L.C., which stated: "[H]aving been served with process in this action, and the time for answering having passed, this action will be dismissed as to [Tooley and L.C.] unless [Firestone] shall, within 21 days, initiate default." The circuit court also entered a separate order noting that Mickie had died and dismissing him from the lawsuit; no motion requesting that a representative of Mickie's estate be substituted as a party had been filed at that time. On August 4, 2011, Firestone filed applications for default judgments against Tooley and L.C. On August 10, 2011, the circuit court entered an "order entering default," which states: "Default is hereby entered against defendants L.C. ... and ... Tooley. [Firestone] may submit a proposed order for consideration." The circuit court's August 10, 2011, order 9 1151211 did not assess damages against Tooley or L.C. and specifically requested that Firestone submit a proposed order doing so. After the circuit court denied Weaver's motion to dismiss, Weaver filed a motion for a permissive appeal pursuant to Rule 5, Ala. R. App. P. This Court granted Weaver permission to appeal the circuit court's denial of his motion to dismiss. Weaver v. Firestone, 155 So. 3d 952, 954 (Ala. 2013)("Weaver I"). In Weaver I, we stated the following concerning Weaver's motion to dismiss: "Weaver filed a motion to dismiss Firestone's complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P., and §§ 6–2–34 and 6–2–38, Ala. Code 1975.[2] In his motion, Weaver argued that Firestone's claims were barred by the applicable statutes of limitations and that no tolling provision precluded the application of the time-bars. Specifically, Weaver argued that neither the discovery rule of § 6–2–3, Ala. Code 1975, nor the doctrine of equitable tolling was applicable to Firestone's claims. "After conducting a hearing on Weaver's motion to dismiss, the trial court denied the motion. The trial court specifically noted that Firestone 'alleges in the complaint that he made diligent efforts to discover the identity of his assailants, 2Section 6-2-34, Ala. Code 1975, requires that an action "for any trespass to person or liberty, such as ... assault and battery," be commenced within six years. Section 6-2- 38(l), Ala. Code 1975, requires that "[a]ll actions for any injury to the person or rights of another not arising from contract and not specifically enumerated in this section must be brought within two years." 10 1151211 but could not do so until they pleaded guilty and implicated Weaver.'" 155 So. 3d at 956. On appeal, this Court determined that Firestone had "alleged facts that would support the conclusion that equitable tolling is applicable in the present case." 155 So. 3d at 968. Accordingly, this Court affirmed the circuit court's denial of Weaver's motion to dismiss, and the case proceeded in the circuit court. On February 5, 2015, Weaver filed a motion for a summary judgment. Weaver argued, as he did in his motion to dismiss, that Firestone's claims against him were barred by §§ 6–2–34 and 6–2–38(l), Ala. Code 1975. Weaver also argued in his summary-judgment motion that neither the discovery rule of § 6–2–3, Ala. Code 1975, nor the doctrine of equitable tolling applied to save Firestone's claims from the bar of the applicable statutes of limitations. Weaver argued that, even if the doctrine of equitable tolling applied, the statutes of limitations should have begun running when Firestone met with Harbin for the purpose of identifying Tooley as one of Firestone's assailants, i.e., in 1995 or 1996, or at the latest in 2007 -- when Firestone received information from his 11 1151211 son indicating that Tooley had been involved in the theft of the crystal methamphetamine from the hunting cabin and possibly in the assault and battery of Firestone. On May 19, 2015, the circuit court denied Weaver's summary-judgment motion. The circuit court determined that Firestone "was presented with evidence as would place a reasonable person on notice that Tooley was one of those who committed the assault on Firestone." Specifically, the circuit court determined that the information Firestone received from his son concerning Tooley's involvement "would place a reasonable person on notice as of 2007 (the year in which Firestone’s son presented him with the ... information regarding Tooley)." The circuit court further stated: "[T]his court determines that a reasonable person in the exercise of due diligence would have followed up on Firestone's son's 2007 information in an effort to confirm its accuracy. There is no indication that Firestone took any ... action other than to report this information to the Alabama Bureau of Investigation." Accordingly, the circuit court held that the six-year statute of limitations set forth in § 6-2-34, which the circuit court determined applied to all of Firestone's claims against Weaver, began to run on an unspecified day in 2007. The 12 1151211 circuit court concluded that Firestone's claims against Weaver were thus not barred by the applicable statute of limitations because Firestone filed his action against Weaver within six years of 2007. On June 5, 2015, Weaver filed a petition for a writ of mandamus with this Court challenging the denial of his summary-judgment motion. We denied Weaver's petition by order of the Court, without ordering answers and briefs. Ex parte Weaver (No. 1140946, July 13, 2015). On April 5, 2016, after conducting further discovery, Weaver filed a second motion for a summary judgment. In support of his second summary-judgment motion, Weaver submitted, among other things, the affidavits of Whorton, Cheney, Farley, and Hicks summarized earlier in this opinion. Weaver argued that the facts set forth in his evidentiary submissions were substantial evidence that Firestone had information in 1995 or 1996 that Tooley was involved in the incident at the hunting cabin. On May 16, 2016, Firestone filed a response to Weaver's summary-judgment motion. 13 1151211 On July 14, 2016, the circuit court granted Weaver's second summary-judgment motion. After summarizing the relevant evidence before it, the circuit court stated: "This Court finds that the foregoing facts 1) would place a reasonable person on notice that at least one of the named Defendants in this action was one of those persons who had committed the assault which is the basis of this action, 2) were presented to [Firestone] no later than 1996, and 3) are uncontroverted. "The previously tolled statute of limitations as to [Firestone's] claims against Defendants and fictitious parties, began to run no later than the end of 1996, expired no later than December 31, 2006, and [Firestone] did not file suit against any defendant until August 20, 2010. "It is therefore considered and ordered as follows: "1. [Weaver's] motion for summary judgment is granted and [Firestone's] claims against Defendant Carl Weaver [are] hereby dismissed with prejudice. "2. This order granting summary judgment in favor of Defendant Weaver and against [Firestone] renders all other pending motions moot, and all previous orders setting motion hearings are hereby withdrawn. "3. Defendant Weaver being the only represented Defendant in this action and the only Defendant to have filed any pleadings in this action, therefore, pursuant to authority of Rule 54(b)[, Ala. R. Civ. P.], there being no just reason for delay, the Court directs the entry of the foregoing as a final judgment." 14 1151211 Firestone appealed. Discussion Although neither party has raised the issue of the appropriateness of the circuit court's Rule 54(b), Ala. R. Civ. P., certification of its July 14, 2016, summary-judgment order, this Court may consider that issue ex mero motu because the issue whether a judgment or order is sufficiently final to support an appeal is a jurisdictional one. See, e.g., Robinson v. Computer Servicenters, Inc., 360 So. 2d 299, 302 (Ala. 1978) (noting that "the trial court cannot confer appellate jurisdiction upon this court through directing entry of judgment under Rule 54(b) if the judgment is not otherwise 'final'"). Rule 54(b) states, in pertinent part: "When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." This Court has recently explained the standard for reviewing Rule 54(b) certifications: 15 1151211 "'"If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment." Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007). "'Although the order made the basis of the Rule 54(b) certification disposes of the entire claim against [the defendant in this case], thus satisfying the requirements of Rule 54(b) dealing with eligibility for consideration as a final judgment, there remains the additional requirement that there be no just reason for delay. A trial court's conclusion to that effect is subject to review by this Court to determine whether the trial court exceeded its discretion in so concluding.' "Centennial Assocs. v. Guthrie, 20 So. 3d 1277, 1279 (Ala. 2009). Reviewing the trial court's finding in Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006), that there was no just reason for delay, this Court explained that certifications under Rule 54(b) are disfavored: "'This Court looks with some disfavor upon certifications under Rule 54(b). "'"It bears repeating, here, that '"[c]ertifications under Rule 54(b) should be entered only in exceptional cases and should not be entered routinely."' State v. Lawhorn, 830 So. 2d 720, 725 (Ala. 2002) (quoting Baker v. Bennett, 644 So. 2d 901, 903 (Ala. 1994), citing in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373 (Ala. 1987)). '"'Appellate review in a piecemeal fashion is not 16 1151211 favored.'"' Goldome Credit Corp. [v. Player, 869 So. 2d 1146, 1148 (Ala. Civ. App. 2003)] (quoting Harper Sales Co. v. Brown, Stagner, Richardson, Inc., 742 So. 2d 190, 192 (Ala. Civ. App. 1999), quoting in turn Brown v. Whitaker Contracting Corp., 681 So. 2d 226, 229 (Ala. Civ. App. 1996)) (emphasis [omitted])." "'Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004).' "In considering whether a trial court has exceeded its discretion in determining that there is no just reason for delay in entering a judgment, this Court has considered whether 'the issues in the claim being certified and a claim that will remain pending in the trial court "'are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results.'"' Schlarb, 955 So. 2d at 419–20 (quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987), and concluding that conversion and fraud claims were too intertwined with a pending breach-of-contract claim for Rule 54(b) certification when the propositions on which the appellant relied to support the claims were identical). See also Centennial Assocs., 20 So. 3d at 1281 (concluding that claims against an attorney certified as final under Rule 54(b) were too closely intertwined with pending claims against other defendants when the pending claims required 'resolution of the same issue' as issue pending on appeal); and Howard v. Allstate Ins. Co., 9 So. 3d 1213, 1215 (Ala. 2008) (concluding that the judgments on the claims against certain of the defendants had been improperly certified as final under Rule 54(b) because the pending claims against 17 1151211 the remaining defendants depended upon the resolution of common issues)." Lighting Fair, Inc. v. Rosenberg, 63 So. 3d 1256, 1263–64 (Ala. 2010). Firestone asserted his four claims (conspiracy, tort of outrage, assault and battery, and attempted murder) against each of the defendants and claimed that the defendants were "separately and severally" liable for the entirety of his damages. Firestone's claims against all the defendants arise out of the same set of facts. Although Tooley and L.C. have not filed a pleading in response to Firestone's complaint, any appeal they may file in the future from a judgment against them in this case would concern the same facts that are the basis of Firestone's claims against Weaver. This Court stated in Smith v. Slack Alost Development Services of Alabama, LLC, 32 So. 3d 556, 562-63 (Ala. 2009): "In Centennial Associates, Ltd.[ v. Guthrie, 20 So. 3d 1277 (Ala. 2009)], we stated that '"[i]t is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties."' 20 So. 3d at 1281 (quoting 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998)). Repeated appellate review of the same underlying facts would 18 1151211 be a probability in this case, and, in light of this Court's stated policy disfavoring appellate review in a piecemeal fashion, see Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004), we accordingly hold that the trial court exceeded its discretion in certifying the judgment entered against [one of the defendants] as final pursuant to Rule 54(b)." In the present case, there is a probability of "[r]epeated appellate review of the same underlying facts." Smith, 32 So. 3d at 562. It appears that the circuit court may yet enter a final default judgment against Tooley and L.C.3 Tooley and L.C. will then have an opportunity to 3The circuit court's August 10, 2011, order finding Tooley and L.C. in default for failing to file a responsive pleading is not a final judgment, but an "'interlocutory default judgment.'" Ex parte Family Dollar Stores of Alabama, Inc., 906 So. 2d 892, 896 (Ala. 2005)(quoting Ex parte Keith, 771 So. 2d 1018, 1019 (Ala. 1998)). In Ex parte Family Dollar, this Court provided the following explanation of the application of Rule 55, Ala. R. Civ. P., in such situations: "Rule 55, Ala. R. Civ. P., 'Default,' provides, in pertinent part, as follows: "'(a) Entry. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default. "'(b) Judgment. Judgment by default may be entered as follows: "'(1) By the Clerk. When the 19 1151211 plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the clerk upon request of the plaintiff and upon affidavit of the amount due shall enter judgment for that amount and costs against the defendant, if the defendant has been defaulted for failure to appear and if the defendant is not a minor or incompetent person. "'(2) By the Court. In all other cases the party entitled to a judgment by default shall apply to the court therefor.... If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury pursuant to the provisions of Rule 38. "'(c) Setting Aside Default. In its discretion, the court may set aside an entry of default at any time before judgment. The court may on its own motion set aside a judgment by default within thirty (30) days after the entry of the judgment. The court may also set aside a judgment by default on the motion of a 20 1151211 party filed not later than thirty (30) days after the entry of the judgment.' "Thus, Rule 55 envisions a two-step process pursuant to which the clerk of the court first enters the party's default and a 'judgment by default' is then entered, either by the clerk or the court, depending upon the nature of the claim. Pursuant to subsection (c), the court may set aside 'an entry of default' at any time, in its discretion, before a judgment by default is entered and may also set aside, under the time limitations specified in that subsection, the 'judgment by default.' Accordingly, it is probably helpful to talk in terms of an entry of 'default' and an entry of a 'judgment by default,' respectively, to differentiate between the two events. Rule 55(b)(2) provides that where a default has been entered, but 'in order to enable the court to enter judgment ..., it is necessary to ... determine the amount of damages ... the court may conduct such hearings ... as it deems necessary and proper....' This Court has referred to the interim 'judgment' entered in such a situation as 'an interlocutory default judgment.' Ex parte Keith, 771 So. 2d 1018, 1019 (Ala. 1998). 'A judgment by default with leave to prove damages is interlocutory and can be set aside at any time until entry of judgment on assessment of damages. It then becomes a final judgment.' Maddox v. Hunt, 281 Ala. 335, 339, 202 So. 2d 543, 545 (1967). 'A default judgment that reserves the assessment of damages is interlocutory and may be set aside at any time; once the trial court assesses damages on the default judgment, the judgment becomes final. Rule 55(c), Ala. R. Civ. P.; Maddox v. Hunt, 281 Ala. 335, 202 So. 2d 543 (1967).' Keith v. Moone, 771 So. 2d 1014, 1017 (Ala. Civ. App. 1997), rev'd on other grounds, Ex parte Keith, [771 So. 2d 1018 (Ala. 1998)]." 906 So. 2d at 896 (emphasis added). 21 1151211 appeal. Firestone's claims against them "are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results." Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987). We conclude that the piecemeal adjudication of the claims against the defendants poses an unreasonable risk of inconsistent results. Further, we are not ignorant of the fact that, until the claims against Tooley and L.C. are finally adjudicated, there remains the possibility that they may file a responsive pleading raising the affirmative defense of the statute of limitations.4 Assuming they do so, the facts regarding when Firestone's claims against Weaver accrued, when the applicable statute of limitations pertaining to Firestone's claims against Weaver began to run, and if the applicable statute of limitations pertaining to Firestone's claims against Weaver Until the circuit court enters a judgment assessing damages against Tooley and L.C., the circuit court may set aside its "interlocutory default judgment" at any time and allow Tooley and L.C. to litigate the claims against them. 4As noted in footnote 3, it is within the circuit court's discretion to set aside its "interlocutory default judgment" any time before it enters a final judgment of default. 22 1151211 were tolled would also be relevant to any statute-of- limitations defense asserted by Tooley and/or L.C. The issue whether Firestone's claims against Weaver are barred by the applicable statutes of limitations -- which is the issue raised in this Court -- is the same issue that could be raised in the circuit court by Tooley and/or L.C., if the circuit court were to set aside its entry of default and they were to file a responsive pleading asserting the affirmative defense of the statute of limitations. In such an event, "the issues in the claim being certified and a claim that will remain pending in the trial court '"are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results."'" Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006)(quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch, 514 So. 2d at 1374). Conclusion Based on the foregoing, we conclude that the circuit court exceeded is discretion in certifying the summary judgment in favor of Weaver as final. Because "[a] nonfinal judgment will not support an appeal," Dzwonkowski v. Sonitrol 23 1151211 of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004), Firestone's appeal must be dismissed. APPLICATION OVERRULED; OPINION OF MAY 12, 2017, WITHDRAWN; OPINION SUBSTITUTED; APPEAL DISMISSED. Stuart, C.J., and Bolin, Shaw, Wise, and Sellers, JJ., concur. 24

August 11, 2017

f402b66b-cd9e-4eaf-afcb-4ec8cadc1a6f

Aliant Bank v. Wrathell, Hunt & Associates, LLC

N/A

1150823

Alabama

Alabama Supreme Court

REL: 05/05/2017 REL: 08/25/2017 As modified on grant of rehearing [by substitution of pages 72-90]. Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1150822 ____________________ Aliant Bank, a Division of USAmeribank v. Four Star Investments, Inc., et al. ____________________ 1150823 ____________________ Aliant Bank, a Division of USAmeribank v. Wrathell, Hunt & Associates, LLC, and Pfil Hunt ____________________ 1150824 ____________________ Aliant Bank, a Division of USAmeribank v. Engineers of the South, LLC, and Tim Harbison Appeals from St. Clair Circuit Court (CV-12-900044) STUART, Chief Justice. Aliant Bank, a division of USAmeribank ("Aliant"), sued various individuals and business entities involved in a failed effort to develop the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The St. Clair Circuit Court ultimately entered a number of orders either dismissing Aliant's claims or entering a summary judgment in favor of the various defendants. Aliant has filed three appeals; we affirm in part and reverse in part in appeals no. 1150822 and no. 1150823 and affirm in appeal no. 1150824. 2 1150822, 1150823, 1150824 I. On August 15, 2007, Aliant closed a $2.3 million loan ("the Aliant loan") with Four Star Investments, Inc., a corporation that owned 197 acres of land in Odenville that Four Star Investments' president, Bobby R. Smith, Jr. ("Smith"), planned to develop into a subdivision to be known as Twelve Oaks. The proceeds of the Aliant loan were used both to pay off a previous loan on the Twelve Oaks property and to finance construction of the infrastructure for the subdivision. The Aliant loan was secured by a first-priority mortgage on the Twelve Oaks property and was also personally guaranteed by Smith, a contractor who had experience developing several other subdivisions in the St. Clair County area. Another company owned and operated by Smith, Twelve Oaks Properties, Inc., thereafter operated as the entity developing Twelve Oaks. During this same time frame, Smith was also seeking additional financing from other sources for the development of Twelve Oaks. He eventually came into contact with Pfil Hunt, a Mobile-based investment banker with experience setting up public-private partnerships between municipalities and developers. Hunt advised Smith that one option was to create, 3 1150822, 1150823, 1150824 pursuant to the Alabama Improvement District Act, § 11-99A-1 et seq., Ala. Code 1975, a type of public corporation known as an "improvement district" for which bonds could be issued and sold, thus providing immediate revenue for the construction of improvements benefiting the Twelve Oaks property. Those bonds would later be repaid by the end purchasers of the developed lots, who would be responsible for paying an annual assessment that ran with the property until the bonds were repaid. Smith ultimately elected to pursue that route, and throughout the fall of 2007 he worked with Hunt and Hunt's management company Wrathell, Hunt & Associates, LLC ("WHA"), to complete the planning of Twelve Oaks and to prepare a petition requesting that the Odenville town council formally create an improvement district that encompassed the Twelve Oaks property. As part of that process, Hunt directed Smith to Tim Harbison, an engineer with the engineering firm Engineers of the South, LLC ("EOS"), who, in November 2007, created an engineer's report detailing the feasibility of the planned Twelve Oaks subdivision. That report, based on figures provided by Smith, stated that it would cost $5,618,000 to complete the Twelve Oaks infrastructure, including roads, sidewalks, signage, street lighting, landscaping and irrigation, earthwork and a 4 1150822, 1150823, 1150824 series of lakes, water and sewage systems, a clubhouse and a swimming pool, park areas, and walking trails. Smith thereafter petitioned the Odenville town council to create the planned improvement district, and, on January 14, 2008, the Odenville town council adopted a resolution granting the petition and creating the Twelve Oaks Improvement District ("the District"). The District's board of directors consisted of Smith; Smith's brother Billy Smith, who was the partner with Smith in B&B Construction, Inc., a construction company that had worked on the Twelve Oaks property; and Fran Mize, a real-estate broker and another business partner of Smith's responsible for marketing Twelve Oaks (hereinafter referred to collectively as "the Board members"). The District subsequently hired WHA to manage the District and EOS as the official engineer for the District, and they thereafter worked toward preparing a bond issue and finding a buyer for the to- be-issued bonds. Ultimately, Allstate Insurance Company ("Allstate") agreed to purchase $4,395,000 worth of bonds issued by the District. In April 2008, the District petitioned the Odenville town council to adopt a resolution approving the assessments that would be used to secure and pay the bonds to be issued by the 5 1150822, 1150823, 1150824 District. In support of that petition, the District submitted the engineer's report prepared by Harbison and a methodology report prepared by WHA, which concluded that the $4,395,000 face value of the bonds would require a special assessment of $12,557.14 to be levied upon each of the 350 lots planned for Twelve Oaks, which assessment WHA recommended be payable at the rate of $1,318.67 per year for a 10-year period. The methodology report noted that the $4,395,000 bond issue would raise only $2,959,821 that would be available for the development of Twelve Oaks, because $993,870 of the bond proceeds would be set aside for capitalized interest and a debt-service reserve fund and the remainder of the bond proceeds would be paid out as costs and fees associated with the issuance of the bonds, which would be underwritten by another firm affiliated with Hunt –– Gardnyr Michael Capital. The methodology report also noted that an additional $2,658,179 would still be needed to finish the estimated $5,618,000 of infrastructure improvements needed to complete Twelve Oaks; however, the methodology report did not indicate where those funds would come from. The Odenville town council thereafter adopted a resolution setting the assessments at the 6 1150822, 1150823, 1150824 requested level, and the District then adopted its own resolution authorizing the issuance of the bonds. On June 6, 2008, the District filed a bond-validation petition in the St. Clair Circuit Court pursuant to § 11-81- 221, Ala. Code, which "allows a public corporation to 'determine its authority to issue ... obligations and the legality of all proceedings had or taken in connection therewith,' and 'the validity of the tax or other revenues or means provided for the payment thereof.'" Houston Cty. Econ. Dev. Auth. v. State, 168 So. 3d 4, 21 (Ala. 2014) (quoting § 11-81-221). On July 2, 2008, the trial court entered a final judgment confirming the validity and enforceability of the bonds and the assessments securing them. No appeal was filed, and it was thus established that the bonds and the assessments providing for their payment could "never be called in question in any court in this state." § 11-81-224, Ala. Code 1975. On July 14, 2008, Smith met with Doug Williamson, the Aliant officer responsible for the Aliant loan, and informed him that the bonds were ready to be issued but that the District could not proceed until Aliant executed a "mortgagee special assessment acknowledgment" that would subordinate Aliant's interest in the Twelve Oaks property to the interests 7 1150822, 1150823, 1150824 of the bondholders; Aliant alleges that this was the first time it was informed that it would be asked to subordinate its interest in the Twelve Oaks property. Williamson alleges that Smith and the District's attorney made various representations to him during that meeting and over the course of the next several days regarding the viability of Twelve Oaks and the controls that would be placed upon the use of the bond proceeds and that, based upon those and other representations made by Smith, as well as upon written representations made in the engineer's report prepared by Harbison and other materials prepared by WHA, he agreed to execute the mortgagee-special- assessment acknowledgment on behalf of Aliant, doing so on July 24, 2008. On July 31, 2008, the bonds were issued, and the bond proceeds were split into a series of trust accounts maintained by U.S. Bank, N.A., which, pursuant to the District's agreement with Allstate, had been selected to serve as trustee of those accounts. Pursuant to the terms of the trust indenture, the District could access the $2,959,821 available for the construction of improvements only upon filing a request for reimbursement and providing appropriate documentation describing the work that had been completed and 8 1150822, 1150823, 1150824 the costs that had been incurred; such requests then had to be signed and approved by both a District board member and Harbison or another EOS engineer. Unbeknownst to Aliant, however, Odenville had, on November 26, 2007 –– before the District had even been officially created –– adopted a resolution authorizing Twelve Oaks Properties, Inc., to be reimbursed from the future bond proceeds for improvements made to the Twelve Oaks property before the bonds were issued. In accordance with that resolution, Smith filed a request for reimbursement on behalf of Twelve Oaks Properties on August 8, 2008 –– eight days after the bonds were issued –– seeking $1,181,962 from the bond proceeds for work completed before the bonds were issued. Smith approved the request on behalf of the District, and, after Harbison approved the request as District engineer, the requested payment was made. On September 10, 2008, Smith submitted another request for reimbursement seeking $541,866, of which $306,951 was for work performed before the bonds were issued. That request was also approved by Harbison, and the bond proceeds were disbursed as requested. In the following months, virtually all the remaining bond proceeds were paid out, and by March 2010 only $9,500 9 1150822, 1150823, 1150824 remained. Aliant alleges that little progress was made at Twelve Oaks during this time. The trust accounts holding reserves were exhausted by late 2010 as well, and eventually neither the District nor Smith and his affiliated companies were able to make future payments on the bonds when they became due. In early 2011, Four Star Investments defaulted on the Aliant loan, and, on May 2, 2011, Aliant sued Four Star Investments and Smith alleging that they had breached the terms of their loan and guarantee agreements. On September 26, 2011, the trial court entered a $2,241,288 judgment in favor of Aliant in that action (hereinafter referred to as "the default action"). Aliant thereafter began conducting postjudgment discovery seeking to learn more about the assets of Four Star Investments and Smith. During that process, Aliant learned more details regarding the creation of the District, the development of Twelve Oaks, and how the bond proceeds had been used. On March 30, 2012, Aliant, based on the information it had discovered, filed another lawsuit asserting various claims related to the development of Twelve Oaks. As eventually amended, Aliant's final complaint asserted nine counts against various individuals and entities. Those defendants can be 10 1150822, 1150823, 1150824 categorized as follows: (1) "The Twelve Oaks defendants," including Four Star Investments, Twelve Oaks Properties, the District, Smith, Billy Smith, Mize, and B&B Construction; (2) Hunt and his management company WHA; (3) "the EOS defendants," including Harbison and his engineering firm EOS; and (4) Allstate and U.S. Bank.1 The gravamen of Aliant's claims is that those defendants combined to commit a number of wrongful acts that siphoned all equity from the Twelve Oaks development and that, while the defendants had individually profited from those acts, Aliant had been injured inasmuch as its security interest in the Twelve Oaks property had been rendered worthless because the property was now encumbered by assessments that had a total value in excess of the market value of the Twelve Oaks property. The defendants eventually all moved the trial court either to dismiss the claims asserted against them or to enter summary judgments in their favor. Through a number of orders entered between April 2015 and April 2016, the trial court dismissed some of the claims asserted by Aliant against Smith, 1Some individuals who had purchased lots in Twelve Oaks were also added as parties to the lawsuit at various times; however, the claims involving those parties are not relevant to these appeals. 11 1150822, 1150823, 1150824 Four Star Investments, Allstate, and U.S. Bank and entered summary judgments in favor of the defendants on all the remaining claims. Aliant subsequently filed four appeals with this Court: appeal no. 1150637 (challenging the judgments entered in favor of Allstate and U.S. Bank); appeal no. 1150822 (challenging the judgments entered in favor of the Twelve Oaks defendants); appeal no. 1150823 (challenging the judgments entered in favor of Hunt and WHA); and appeal no. 1150824 (challenging the judgment entered in favor of the EOS defendants). We consolidated the four appeals for the purpose of writing one opinion; however, the parties to appeal no. 1150637 subsequently settled their dispute, and that appeal has since been dismissed. II. The trial court disposed of each claim asserted by Aliant in this case either by dismissing the claim or by entering a summary judgment in favor of the defendant against which the claim was asserted; Aliant argues that the trial court erred in both respects. With regard to those claims that were dismissed, this Court has stated: "The appropriate standard of review of a trial court's [ruling on] a motion to dismiss is whether 'when the allegations of the complaint are viewed 12 1150822, 1150823, 1150824 most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief.' Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993); Raley v. Citibanc of Alabama/Andalusia, 474 So. 2d 640, 641 (Ala. 1985). This Court does not consider whether the plaintiff will ultimately prevail, but only whether the plaintiff may possibly prevail. Nance, 622 So. 2d at 299. A 'dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.' Nance, 622 So. 2d at 299; Garrett v. Hadden, 495 So. 2d 616, 617 (Ala. 1986); Hill v. Kraft, Inc., 496 So. 2d 768, 769 (Ala. 1986)." Lyons v. River Road Constr., Inc., 858 So. 2d 257, 260 (Ala. 2003). We review the summary judgments entered by the trial court under the following standard: "This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12." 13 1150822, 1150823, 1150824 Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004). III. Aliant's final amended complaint asserted nine counts, with each count including claims against multiple defendants. However, we note that Aliant has not, in its briefs to this Court, addressed the trial court's disposition of the first three asserted counts –– labeled "judicial foreclosure," "declaratory judgment and bill to quiet title," and "unjust enrichment" –– and Aliant has accordingly waived any argument that the trial court acted in error in its disposition of those counts. See Bogle v. Scheer, 512 So. 2d 1336, 1337 (Ala. 1987) ("The plaintiff filed a five-count complaint .... [O]n appeal he has argued only that a summary judgment was not proper on the conspiracy count (count four). Because issues not argued in brief are waived, ... our review is limited to whether the summary judgment was proper on the conspiracy 14 1150822, 1150823, 1150824 count.").2 We consider the rest of the counts asserted by Aliant in the order in which they were presented. Count four of Aliant's final amended complaint asserts negligence and breach-of-fiduciary-duty claims against WHA and the individual Board members –– Smith, Mize and Billy Smith. "The elements of a negligence claim are a duty, a breach of that duty, causation, and damage." Armstrong Bus. Servs., Inc. v. AmSouth Bank, 817 So. 2d 665, 679 (Ala. 2001) (citing AALAR, Ltd. v. Francis, 716 So. 2d 1141, 1144 (Ala. 1998)). Similarly, the elements of a breach-of-fiduciary-duty claim are the existence of a fiduciary duty, a breach of that duty, and damage suffered as a result of that breach. Regions Bank v. Lowrey, 101 So. 3d 210, 219 (Ala. 2012). Aliant alleges in its complaint that WHA and the Board members had a duty to 2It appears that counts one, two, and three of Aliant's final amended complaint were primarily directed to Allstate and determining the validity of the assessments securing the bonds issued by the District and Aliant's interest in the Twelve Oaks property in relation to any interest that Allstate might have. As explained supra, Aliant has settled its claims with Allstate, but, to the extent counts one, two, and three might assert claims against other defendants that are parties to these consolidated appeals, Aliant has waived those claims by failing to argue that the trial court erred in its disposition of them. 15 1150822, 1150823, 1150824 responsibly manage and oversee the District and that Aliant was damaged after they "breached their duties by, among other things, failing to exercise their independent professional judgment and analysis related to the feasibility of the [bond] issue, by failing to properly supervise and monitor the spending of the [bonds] on the premises, by failing to assure that the requisitions were proper and for work actually performed, by failing to properly monitor and supervise the construction of the promised improvements, by mismanaging the funds [so] that only a small portion of the promised improvements were completed, and by otherwise failing to carry out the responsibilities of their job." The determination whether a duty exists is generally a question of law for the court to decide. Ex parte BASF Constr. Chems., LLC, 153 So. 3d 793, 801-02 (Ala. 2013). With regard to Aliant's claims against the Board members, like the board of directors governing any corporate body the Board members had the duty to act with care and the duty to act with loyalty. See Massey v. Disc Mfg., Inc., 601 So. 2d 449, 456 (Ala. 1992) ("The corporate fiduciary duty is divided into two parts: (1) a duty of care; and (2) a duty of loyalty."). Although the board of directors of a typical for-profit corporation owe those duties to the corporation and its shareholders, see, e.g., Jones v. Ellis, 551 So. 2d 396, 401 (Ala. 1989), the District is a public corporation with no 16 1150822, 1150823, 1150824 shareholders. However, just as a for-profit corporation exists primarily to maximize profit for the benefit of its shareholders, the District exists primarily to benefit those owning property within its boundaries; accordingly, the Board members owe their duties to owners of property within the District. Inasmuch as Alabama is a "title theory" state, Aliant, which at all relevant times held a mortgage on the Twelve Oaks property, must be included among those to whom the Board members owed a duty of care and a duty of loyalty. See Maiden v. Federal Nat'l Mortg. Ass'n, 69 So. 3d 860, 865 (Ala. Civ. App. 2011) ("Alabama is a 'title theory' state; thus, when a person mortgages real property, the mortgagee obtains legal title to the real property ...."). Having held that the Board members did owe certain duties to Aliant, we also hold that Aliant met its burden of putting forth substantial evidence establishing that a genuine issue of material fact exists with regard to the other elements of its negligence and breach-of-fiduciary-duty claims against the Board members. The affidavit of Aliant's expert Marcus A. Watson in particular described the problematic nature of the actions taken by the Board members, especially in light of the fact that they were all related parties inasmuch as they 17 1150822, 1150823, 1150824 shared business interests in various entities involved in the development of Twelve Oaks. In their combined brief to this Court, the Twelve Oaks defendants do not argue that Aliant failed to submit substantial evidence establishing its negligence and breach- of-fiduciary-duty claims against the Board members. Rather, they argue that all the Twelve Oaks defendants were entitled to a summary judgment on all the claims asserted against them by Aliant on the basis of several affirmative defenses, specifically, immunity, res judicata and collateral estoppel, and the statute of limitations. In its order entering a summary judgment in favor of the Twelve Oaks defendants, the trial court in fact agreed that all the claims asserted by Aliant were barred by the doctrines of res judicata or collateral estoppel and by the statute of limitations. The trial court also cited those affirmative defenses when entering summary judgments in favor of the other defendants on the claims asserted in Aliant's final amended complaint. For the reasons that follow, we disagree that all of Aliant's claims are barred by the doctrines of res judicata and collateral estoppel and by the statute of limitations; the defendants' general arguments in this regard are without 18 1150822, 1150823, 1150824 merit. Nevertheless, there are specific facts relevant to some of the claims asserted against individual defendants such that those claims are barred by principles of immunity or the appropriate statute of limitations. Those exceptions are discussed in subsequent sections of this opinion; no affirmative defenses bar the negligence and breach-of- fiduciary duty claims asserted against the Board members, however, and our analysis of the general immunity, res judicata/collateral-estoppel, and statute-of-limitations arguments they make is equally applicable to the similar arguments made by the other defendants. The Board members first argue that they are entitled to immunity based on the Alabama Improvement District Act, which provides, in part: "Districts, the members of the board, its officers, and agents shall have the same immunity from liability as a municipality and its officers. No civil action shall be brought or maintained against the district or any director thereof for or on account of the negligence of a district or director or its or his or her agents, servants, or employees in or about the construction, acquisition, installation, maintenance, operation, superintendence, or management of any facility or other improvement owned, controlled, maintained, or managed by the district." 19 1150822, 1150823, 1150824 § 11-99A-7, Ala. Code 1975. Emphasizing the second sentence in this section, the Board members argue that no action in negligence can be brought against them based on their actions related to managing and operating the District. They further argue that § 11-47-190, Ala. Code 1975, which sets forth the immunity that applies to municipalities and their officers, operates to bar any action against them based on intentional torts as well; § 11-47-190 provides, in pertinent part: "No city or town shall be liable for damages for injury done to or wrong suffered by any person or corporation, unless such injury or wrong was done or suffered through the neglect, carelessness, or unskillfulness of some agent, officer, or employee of the municipality engaged in work therefor and while acting in the line of his or her duty ... and whenever the city or town shall be made liable for damages by reason of the unauthorized or wrongful acts or negligence, carelessness, or unskillfulness of any person or corporation, then such person or corporation shall be liable to an action on the same account by the party so injured." We disagree that these two statutes apply in this case to bar the claims asserted by Aliant in count four of its final amended complaint. Section 11-99A-7 is clear that the legislature intended an improvement district and its board members to have "the same immunity from liability as a municipality and its officers," and § 11-47-190 provides that a municipality can be sued for the negligent acts of its 20 1150822, 1150823, 1150824 agents and that, if a municipality is the subject of a lawsuit as a result of the negligence of an agent, "then such person ... shall be liable to an action on the same account by the party so injured." See, e.g., Morrow v. Caldwell, 153 So. 3d 764 (Ala. 2014) (recognizing that under § 11-47-190 a municipality can be sued based upon the negligence of its agent, while the agent can be sued in his or her individual capacity for both negligent and intentional acts). Reading these two statutes together, the sentence in § 11-99A-7 indicating that no claim can be pursued against a director of an improvement district "for or on account of the negligence of a district or director or its or his or her agents, servants, or employees" must operate only to bar a negligence claim from being asserted against a director based upon the negligence of some other party –– not the director's own negligence. This is consistent with how immunity is applied to cases involving municipal employees. See, e.g., Newton v. Town of Columbia, 695 So. 2d 1213, 1218 (Ala. Civ. App. 1997) ("[A] municipality's chief executive is not vicariously liable for the misconduct of his or her subordinates."). In this case, the Board members are being sued based on their own alleged wrongdoing, not the actions of each other or some 21 1150822, 1150823, 1150824 other agents. Accordingly, § 11-99A-7 does not bar the negligence and breach-of-fiduciary duty claims asserted by Aliant against the Board members. We next consider the Board members' argument that they are entitled to a summary judgment based on the doctrines of collateral estoppel and res judicata. The trial court agreed, stating in its order granting their motion for a summary judgment: "On May 2, 2011, Aliant filed suit previously in this court against codefendants [Smith] and Four Star [Investments] about the same loan they now complain about. On October 13, 2011, the court entered a judgment against Four Star [Investments] and [Smith] in the amount of $2,241,287.75 as a consequence of their default under the loan transactions. This order represents a final, binding adjudication of Aliant's claims concerning the loan on the Twelve Oaks property. Indeed, this court has previously held Aliant was estopped from bringing tort claims against [Smith]. "Collateral estoppel applies when '(1) an issue in a prior action was identical to the issue litigated in the present action; (2) the issue was actually litigated in the prior action; (3) resolution of the issue was necessary to the prior judgment; and (4) the same parties are involved in the two actions.' Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So. 2d 507, 520 (Ala. 2002). Here, (1) Aliant is suing over the very same issue –- [the Aliant loan]; (2) the loan was previously litigated to a final judgment; (3) resolution of the loan was necessary for the prior judgment; and (4) Aliant, Four Star [Investments], and [Smith] were all parties to both cases. Aliant is the same party 22 1150822, 1150823, 1150824 seeking to relitigate the same loan. See Whisman v. Alabama Power Co., 512 So. 2d 78, 82 (Ala. 1987) ('The party identity criterion does not require complete identity, but only that the party against whom res judicata is asserted was either a party or in privity with a party to the prior action ....'). Because the elements of collateral estoppel have been met, Aliant is estopped from prosecuting this suit over the very same loan. "Aliant's claims are precluded in this case. Aliant has already brought suit on this very same loan and obtained a judgment. Because Aliant seeks to relitigate the same issues as those in [the prior action], its claims are barred. "'If a claim, which arises out of a single wrongful act or dispute, is brought to a final conclusion on the merits, then all other claims arising out of that same wrongful act or dispute are barred, even if those claims are based on different legal theories or seek a different form of damages, unless the evidence necessary to establish the elements of the alternative theories varies materially from the evidence necessary for a recovery in the first action.' "Equity Resources Mgmt., Inc. v. Vinson, 723 So. 2d 634, 638 (Ala. 1998). "The prior judgment is res judicata. See Martin v. Cash Express, Inc., 60 So. 3d 236, 241 (Ala. 2010) ('[A] judgment or decree by consent is as conclusive between them and their privies as if the suit had been an adversary one and rendered after a trial on the facts.'); see Whisman v. Alabama Power Co., 512 So. 2d 78, 82 (Ala. 1987) ('The issue has been litigated and, if the defense is asserted, the prior litigation will preclude this issue from being relitigated.'). Since Aliant has already litigated its claim on the loan at issue and obtained a 23 1150822, 1150823, 1150824 judgment, it cannot now relitigate the issue under a different theory." This Court has explained that "[r]es judicata and collateral estoppel are two closely related, judicially created doctrines that preclude the relitigation of matters that have been previously adjudicated or, in the case of res judicata, that could have been adjudicated in a prior action." Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So. 2d 507, 516 (Ala. 2002). Essentially, the doctrine of collateral estoppel operates to bar the relitigation of issues actually litigated in a previous action, while the doctrine of res judicata bars the litigation of claims that were or could have been litigated in a previous action. Lee L. Saad, 851 So. 2d at 516-17. Aliant argues that neither doctrine has application here because, it says, the default action was limited to determining whether Four Star Investments had breached an agreement to repay a promissory note secured by a mortgage on the Twelve Oaks property and whether Smith had breached an accompanying agreement personally guaranteeing Four Star Investments' debt. Thus, Aliant argues, collateral estoppel does not apply because, it says, the issues surrounding the claims raised in the instant action –– such as 24 1150822, 1150823, 1150824 whether the Board members breached any duties they owed Aliant and whether any of the defendants made misrepresentations to Aliant –- were not litigated in the previous action, and, Aliant argues, res judicata does not apply because, it says, the claims asserted in the instant action were not and could not have been asserted in the previous action. We agree. With regard to collateral estoppel, the trial court and the Board members broadly identify the issue litigated in a prior action and the issue Aliant allegedly now seeks to relitigate as being the Aliant loan. However, although the Aliant loan is certainly a relevant part of both actions, it is not itself an "issue" that may be the subject of collateral estoppel. As explained in Lee L. Saad, collateral estoppel operates to prevent the relitigation of factual issues that have already been decided in a prior action. 851 So. 2d at 519. Thus, factual issues relating to the Aliant loan that were decided in the default action –– such as whether Four Star Investments had executed a valid promissory note with Aliant, whether Smith had personally guaranteed Four Star Investments' debt, and whether those agreements were breached –– cannot be relitigated in the instant or any other action; collateral estoppel precludes it. However, the factual issues 25 1150822, 1150823, 1150824 that must be resolved to decide the negligence, fraud, and other claims now asserted by Aliant against the Board members and other defendants in the instant action –- such as whether any duties were breached and whether any misrepresentations were made –– were undisputedly not considered in the default action; those issues simply were not relevant to whether Four Star Investments and Smith breached their loan and guarantee agreements. Inasmuch as the doctrine of collateral estoppel bars the relitigation only of "issues actually decided in a former action," it is without effect in this case. Leverette v. Leverette, 479 So. 2d 1229, 1237 (Ala. 1985) (emphasis added). We next turn to the Board members' argument that Aliant's claims against them are barred by the doctrine of res judicata. In essence, even though we have concluded that the factual issues relevant to Aliant's present claims were not actually decided in the default action, we must still determine whether Aliant could have asserted its present claims in the default action, thus putting those factual issues before the court at that time. See Dairyland Ins. Co. v. Jackson, 566 So. 2d 723, 725 (Ala. 1990) (explaining that res judicata will bar further litigation of "any claim that 26 1150822, 1150823, 1150824 was or could have been adjudicated in the prior action"). The Board members argue that the doctrine of res judicata bars Aliant's present claims "because the matters in the [instant] action involve the same wrongful act and dispute (i.e., non- payment of the [Aliant] loan) as was at issue in the first action. This is true regardless of what name or title that Aliant may use to describe its claims." The Twelve Oaks defendants' brief, pp. 30-31. Aliant, however, argues that the default action was essentially just a simple breach-of- contract case involving one wrongful act –– the failure to pay moneys owed by contract –– while the instant action encompasses entirely different claims based on other wrongs, such as the breaching of duties and the making of misrepresentations. Moreover, Aliant argues, it could not have asserted its present claims in the default action because, it alleges, it did not discover the facts supporting the present claims until after the default action was resolved. The elements of res judicata are (1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with substantial identity of the parties, and (4) with the same cause of action presented in both suits. Equity Res. 27 1150822, 1150823, 1150824 Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala. 1998) The only element now disputed by the parties is the fourth –– whether the cause of action in the instant case is the same as the cause of action in the default action. This Court has explained the factors relevant to making that determination: "The determination of whether the cause of action is the same in two separate suits depends on whether the issues in the two actions are the same and whether the same evidence would support a recovery for the plaintiff in both suits. Dominex, Inc. v. Key, 456 So. 2d 1047, 1054 (Ala. 1984). Stated differently, the fourth element is met when the issues involved in the earlier suit comprehended all that is involved in the issues of the later suit. Adams v. Powell, 225 Ala. 300, 142 So. 537 (1932)." Dairyland Ins., 566 So. 2d at 726. See also Chapman Nursing Home, Inc. v. McDonald, 985 So. 2d 914, 921 (Ala. 2007) (explaining that res judicata applies to all legal theories and claims arising out of the same nucleus of operative facts and that two causes of action are the same for res judicata purposes when the same evidence is applicable in both actions). In considering those factors, we cannot agree with the trial court that the claims now asserted by Aliant are essentially the same as the claim asserted by Aliant in the default action. The evidence that Aliant presented in the 28 1150822, 1150823, 1150824 default action indicated that Four Star Investments and Smith executed and subsequently breached agreements with Aliant and supported a recovery for Aliant on the breach-of-contract claims asserted in the default action. However, that evidence would not support and is not needed to prove Aliant's present claims of negligence, breach of fiduciary duties, fraud, conspiracy, and wantonness. Those claims are based on separate and distinct actions, not directly related to the Aliant loan, that were allegedly taken by the Board members and other defendants, and separate evidence is needed to establish those claims. For example, with regard to the negligence and breach-of-fiduciary-duty claims asserted against the Board members, that evidence would include evidence of the actions the Board members took in their official capacities and whether those actions were sufficient to fulfill the duties they owed Aliant. Accordingly, the doctrine of res judicata does not bar Aliant from asserting its present claims. Our conclusion that the doctrines of res judicata and collateral estoppel do not apply in this case is supported by this Court's decision in Benetton S.p.A. v. Benedot, Inc., 642 So. 2d 394 (Ala. 1994), a similar case in which it was alleged 29 1150822, 1150823, 1150824 that a previous action between parties in which a judgment was entered on a debt operated as res judicata to bar a subsequent action between the same parties. Benetton involved a dispute between the Italian clothing manufacturer Benetton and its United States subsidiary and sales representatives (hereinafter referred to collectively as "Benetton"), on the one hand, and Al-Ben, Inc., an Alabama company that had contracted with Benetton to operate certain Benetton stores in Alabama, on the other hand. 642 So. 2d at 396. Al-Ben had had a tumultuous relationship with Benetton from the beginning, alleging that Benetton failed to complete its obligations so that the stores could open when originally planned and that Benetton constantly sent it unordered and unwanted merchandise that had to be sold for a loss. Ultimately Al-Ben sued Benetton asserting claims of fraud, conspiracy, and breach of contract. Benetton separately sued the owners of Al-Ben in federal district court, alleging that the owners had personally guaranteed debt Al-Ben had incurred for merchandise received from Benetton, and Benetton ultimately obtained a judgment in its favor on this claim. 642 So. 2d at 397. Al-Ben thereafter was awarded $1,500,000 in the state-court action, and Benetton 30 1150822, 1150823, 1150824 appealed that judgment to this Court, arguing that Al-Ben's fraud, conspiracy, and breach-of-contract claims should have been barred by the doctrines of res judicata and/or collateral estoppel based on the earlier judgment entered by the federal district court. 642 So. 2d at 398-99. In rejecting Benetton's res judicata argument, this Court applied the "same-evidence" test discussed supra, stating: "We cannot say that the same cause of action is present in both actions. [Al-Ben's owners'] liability, through personal guarantees, for Al–Ben's debt based on unpaid invoices does not involve the issues of fraud, conspiracy, and breach of contract. The first action does not involve the issues raised in the second action, and the same evidence would not support a recovery for the plaintiffs in both actions. Therefore, the doctrine of res judicata does not bar Al–Ben's action against Benetton based on fraud, conspiracy, and breach of contract." Benetton, 642 So. 2d at 400. The Benetton Court also declined to apply the doctrine of collateral estoppel, noting that the federal district court had not decided any factual issues relevant to the state-court action because the federal district court had entered a judgment representing only the amount Al-Ben's owners conceded they owed; the federal district court had made no judgment on debt attributable to merchandise Al-Ben's owners claimed they had not wanted or ordered. Id. 31 1150822, 1150823, 1150824 Applying Benetton to the facts of this case, we note that Four Star Investments' and Smith's liability for the Aliant loan did not involve issues of negligence, breach of fiduciary duties, fraud, conspiracy, and wantonness. The default action did not involve the issues raised in the instant action, and the same evidence would not support a recovery for Aliant in both actions. Accordingly, the doctrine of res judicata does not bar the instant action. Moreover, because the Board members and other defendants have not identified any issue that was actually litigated in the default action that Aliant is seeking to relitigate in this action, the doctrine of collateral estoppel is inapplicable as well. Finally, the Board members also argue that Aliant's negligence and breach-of-fiduciary-duty claims against them are barred by the applicable statute of limitations. The trial court held, and the Board members argue, that Aliant suffered injury (1) when it closed the Aliant loan in August 2007; (2) when it agreed to subordinate its security interest in the Twelve Oaks property in July 2008; and (3) when the bond proceeds were disbursed to Smith, his companies, and others beginning in 2008. Accordingly, they argue, Aliant's tort claims accrued, at the latest, in 2008, and the 32 1150822, 1150823, 1150824 applicable two-year statute of limitations, see § 6-2-38(l), Ala. Code 1975, bars the claims now asserted inasmuch as Aliant did not initiate this action until March 2012. They further argue that Aliant was aware, at the time the bonds were issued, of the general process by which the bond proceeds would be disbursed and that Aliant knew that it could inspect the Twelve Oaks property to view construction progress at any time but apparently failed to do so; accordingly, they argue, Aliant should have been aware of its potential claims within that two-year period and it cannot rely on the discovery rule of § 6-2-3, Ala. Code 1975. See generally DGB, LLC v. Hinds, 55 So. 3d 218, 224 (Ala. 2010) (explaining that, pursuant to § 6-2-3, if a potential tort claim has been fraudulently concealed, the two-year statute of limitations generally applicable to such a claim will be tolled until the plaintiff discovers the fraud). Aliant disputes the trial court's conclusion and the Board members' argument that it suffered injury in 2008 and that the statute of limitations began to run at that time. Aliant argues that, although much of the malfeasance allegedly committed by the various defendants occurred during that time, Aliant remained unaware of that fact for several years, and it 33 1150822, 1150823, 1150824 suffered no legal injury until early 2011, when Four Star Investments defaulted on the Aliant loan. Aliant accordingly argues that § 6-2-3 applies and that its March 2012 complaint was timely. In support of its argument, Aliant relies heavily upon Bryant Bank v. Talmage Kirkland & Co., 155 So. 3d 231 (Ala. 2014), which it alleges mirrors this case. In that case, a bank relied upon an appraisal conducted in December 2007 valuing a property at $1,700,000 to issue a commercial mortgage loan that same month. 155 So. 3d at 233. After the borrower defaulted in October 2008, the bank ordered a new appraisal of the property from a different company, which concluded that the property was worth only $205,000. In July 2010, the bank sued the appraisers, alleging negligent misrepresentation and breach of contract. The appraisers thereafter successfully moved the trial court to enter a summary judgment in their favor on the negligent- misrepresentation claim, and the bank appealed that judgment to this Court. On appeal, the appraisers argued that the bank's claim accrued in December 2007 when the loan was made and that the bank's July 2010 complaint was accordingly filed outside the two-year limitations period. 155 So. 3d at 238. 34 1150822, 1150823, 1150824 The bank, however, argued that the claim did not accrue until "it incurred damage as a result of [the borrower's] default on the loan." 155 So. 3d at 237. This Court ultimately declined to affirm the summary judgment on the basis of the appraisers' statute-of-limitations argument, explaining: "No evidence was presented indicating that [the bank] had actual knowledge –– for more than two years before commencing this action –– that the appraisal was conducted in a negligent manner. Accordingly, [the bank's] negligent- misrepresentation claim accrued when a reasonable person would have discovered the fraud –– a question within the purview of the jury. Because a genuine issue of material fact exists as to when [the bank] discovered facts that would have caused a reasonable person to inquire and led to the discovery of the fraud giving rise to [the bank's] negligent-misrepresentation claim, the defendants were not entitled to a summary judgment on the basis that the statute of limitations had run on its negligent-misrepresentation claim. ..." Bryant Bank, 155 So. 3d at 238. There is likewise no evidence in this case establishing that Aliant had actual knowledge of the facts that form the basis of its claims at the time they were occurring. The Board members and other defendants argue that Aliant should have taken steps to discover those facts based on the lack of progress Aliant alleges it saw at Twelve Oaks during the time the bond proceeds were being depleted; however, Williamson 35 1150822, 1150823, 1150824 gave sworn testimony indicating that he concluded, based on the lack of construction activity he witnessed, that development had been temporarily put on hold during this time and that the bond proceeds were accordingly not being disbursed. Williamson further explained that Aliant had no role in the disbursement of the bond proceeds, which were held by U.S. Bank, as trustee, and were disbursed after requests for reimbursement were approved by EOS and the District, and that Aliant received no invoices and had no right to access the relevant bank records. Under these facts, the question of when Aliant's tort claims accrued is a question for the jury; a court cannot properly decide as a matter of law when a reasonable person should have discovered that claims had been fraudulently concealed unless the evidence is undisputed. See Bryant, 155 So. 3d at 237 (explaining that the issue of when a reasonable person would have discovered fraud is generally a question of fact for the jury that can be decided as a matter of law only when the facts are undisputed and the evidence supports but one conclusion). The summary judgment entered by the trial court in favor of the Board members on Aliant's negligence and breach-of-fiduciary-duty claims cannot 36 1150822, 1150823, 1150824 be affirmed on statute-of-limitations grounds and is due to be reversed. Count four of Aliant's complaint also asserts negligence and breach-of-fiduciary-duty claims against WHA. Aliant maintains that, like the Board members, WHA had a duty to responsibly manage and oversee the District and that it breached that duty in several respects noted above in the discussion of the similar claim made against the Board members. WHA argues that it had no fiduciary relationship with Aliant and that it owed no duty to Aliant –– fiduciary or otherwise. For the reasons that follow, we agree. With regard to Aliant's breach-of-fiduciary-duty claim against WHA, the trial court stated: "Aliant has also failed to establish that WHA owed it a fiduciary duty, as the facts indicate Aliant had no relationship, conversations, or communications with WHA. Without a relationship between WHA and Aliant a duty cannot be established much less a fiduciary duty. Aliant's own representative specifically testified that he was not aware of any relationship between [Aliant and] WHA much less a fiduciary relationship between the two entities. "In Alabama, a fiduciary or confidential relationship [has been] defined [as follows]: "'"'A confidential relationship is one in which one person occupies toward another such a position of adviser or counselor as 37 1150822, 1150823, 1150824 reasonably to inspire confidence that he will act in good faith for the other's interests, or when one person has gained the confidence of another and purports to act or advise with the other's interest in mind; where trust and confidence are reposed by one person in another who, as a result, gains an influence or superiority over the other; and it appears when the circumstances make it certain the parties do not deal on equal terms, but, on the one side, there is an overmastering influence, or, on the other, weakness, dependence, or trust, justifiably reposed; in both an unfair advantage is possible. It arises in cases in which confidence is reposed and accepted, or influence acquired, and in all the variety of relations in which dominion may be exercised by one person over another.'"' "DGB, LLC v. Hinds, 55 So. 3d 218, 233 (Ala. 2010) (quoting Bank of Red Bay v. King, 482 So. 2d 274, 284 (Ala. 1985), quoting in turn 15A C.J.S. Confidential (1967)). "Further, a fiduciary relationship is defined as: "'[a] relationship in which one person is under a duty to act for the benefit of another on matters within the scope of the relationship .... Fiduciary relationships usually arise in one of four situations: (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a 38 1150822, 1150823, 1150824 specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer.' "Swann v. Regions Bank, 17 So. 3d 1180, 1193 (Ala. Civ. App. 2008) (quoting Black's Law Dictionary, 1315 (8th. 2004)). "Aliant's corporate representatives testified that there was never any relationship between WHA and Aliant. Mr. [Craig] Wrathell[, the president] of WHA[,] also testified that he did not have any communications with Aliant. Since Aliant has not provided substantial evidence that WHA owed it a fiduciary duty, summary judgment is granted in WHA's favor on the breach-of-fiduciary-duty count." Aliant has identified no evidence that would refute the trial court's conclusion that Aliant had no relationship with WHA, much less a confidential or fiduciary relationship. Notably, this is not a case where we must determine whether the parties engaged in arm's length dealing or whether there was a fiduciary relationship; rather, it is undisputed that Aliant and WHA did not deal with each other at all –– there was no relationship between them. In light of this undisputed evidence, we agree with the trial court that WHA owed Aliant no fiduciary duties, and the summary judgment entered in favor of WHA on Aliant's breach-of-fiduciary-duties claim is accordingly due to be affirmed. We further note that, although Aliant in its brief cites several cases to support 39 1150822, 1150823, 1150824 its argument that WHA owed it a general duty of care, the alleged breach of which forms the basis of Aliant's negligence claim, it has cited no caselaw to support its argument that WHA owed it specific fiduciary duties. The final remaining claim asserted by Aliant in count four is its negligence claim against WHA. Aliant argues that it was injured as a result of WHA's alleged failure to act with care and skill in its role as manager of the District. WHA's duties as manager of the District were outlined in a management agreement between it and the District; however, it is undisputed that Aliant was not a party to that contract. Aliant accordingly acknowledges the general rule in Alabama that "where the charge of negligence is based upon breach of duty arising out a contractual relationship, no cause of action arises in favor of one not in privity to the contract." Federal Mogul Corp. v. Universal Constr. Co., 376 So. 2d 716, 724 (Ala. Civ. App. 1979). However, citing Berkel & Co. Contractors, Inc. v. Providence Hospital, 454 So. 2d 496 (Ala. 1984), and Cincinnati Insurance Cos. v. Barber Insulation, Inc., 946 So. 2d 441 (Ala. 2006), Aliant argues that it is entitled to rely on an exception to that general rule that applies when the defendant negligently performed its contract 40 1150822, 1150823, 1150824 with knowledge that others were relying on its proper performance. See also Williams v. Jackson Co., 359 So. 2d 798, 801 (Ala. Civ. App. 1978) ("Thus one who undertakes to perform a contract may be determined to owe a duty to others not privy to the contract to perform his obligations under the contract without negligent injury to such others. Such duty may arise from the foreseeability that such others may be injured by negligent performance, or duty may arise from the knowledge that others are relying upon a proper performance."). Inasmuch as Aliant's arguments are based primarily upon Providence Hospital and Barber, we begin with an analysis of those cases. Providence Hospital involved negligence claims against a hospital and its architect asserted by a subcontractor hired to install piling supports for an addition to the hospital.3 454 So. 2d at 499. The hospital's architect directed the subcontractor's construction of the piling supports, and, after the piling supports failed, the subcontractor sued, alleging that the hospital and its architect breached their duties of care in directing the construction. 454 So. 2d at 3The general contractor who had contracts with both the subcontractor and the hospital was not a party to the action. 41 1150822, 1150823, 1150824 500. After a summary judgment was entered in favor of the hospital, the subcontractor appealed to this Court, which reversed the summary judgment, explaining that the hospital did owe a duty of care to the subcontractor: "[The hospital] argues further that even if privity is not a defense, the facts disclosed that no duty was owed to [the subcontractor]. In deciding whether to impose a duty in a construction context, the trial court should analyze six factors: "'"(1)[T]he extent to which the transaction was intended to affect the other person; (2) the foreseeability of harm to him; (3) the degree of certainty that he suffered injury; (4) the closeness of the connection between the defendant's conduct and the injury; (5) the moral blame attached to such conduct; and (6) the policy of preventing future harm."' "Howe v. Bishop, 446 So. 2d 11 (Ala. 1984) (Torbert, C.J., concurring in the result), quoting from United Leasing Corp. v. Miller, 45 N.C. App. 400, 406–07, 263 S.E.2d 313, 318 (1980). Under this standard, [the hospital] clearly owes [the subcontractor] a duty to act reasonably in directing and approving pile construction work. The transaction was intended to affect [the subcontractor], and it was foreseeable that it would. The alleged harm is certain and directly connected to [the hospital's] conduct. Given the business relationship and lack of personal injury, the question of moral blame is not relevant in this case. The final factor, the policy of preventing future harm, also supports the finding of duty. [The hospital] could have averted the alleged loss either by not acting or by acting reasonably. This Court will impose liability on [the hospital] to require it to act responsibly. 42 1150822, 1150823, 1150824 "This argument for a legal duty is especially compelling because [the hospital] and its architect had the power through liquidated damages and other means to force [the subcontractor] to do as [the hospital] wished. The court in United States v. Rogers & Rogers, 161 F. Supp. 132, 136 (S.D. Cal. 1958), explained the responsibilities arising from unequal positions in the context of contractor and architect: "'Altogether too much control over the contractor necessarily rests in the hands of the supervising architect for him not to be placed under a duty imposed by law to perform without negligence his functions as they affect the contractor. The power of the architect to stop the work alone is tantamount to a power of economic life or death over the contractor. It is only just that such authority, exercised in such a relationship, carry commensurate legal responsibility.' "Under the circumstances, [the hospital] and its architect owed [the subcontractor] a duty to act reasonably in directing the pile work." Providence Hospital, 454 So. 2d at 502-03. Thus, in Providence Hospital, the Court determined that it was appropriate to find that a duty existed even in the absence of a contract. In contrast, in Barber this Court determined that no duty was owed where there was no privity between the parties. In Barber, a general contractor was hired to construct a lake house and, during the construction process, that general 43 1150822, 1150823, 1150824 contractor hired a subcontractor to install insulation in the walls. 946 So. 2d 442. Some time after the completed house was delivered to the homeowners, a pipe in the walls burst, causing extensive water damage, and the homeowners' insurance company subsequently sued the subcontractor responsible for installing the insulation, alleging negligence. After a summary judgment was entered in favor of the subcontractor, the insurance company appealed to this Court, which affirmed the summary judgment after concluding that the subcontractor owed no duty to the homeowners. 946 So. 2d at 449. The Barber Court reviewed Providence Hospital at length, distinguishing it as follows: "Prominent in the Court's analysis [in Providence Hospital] was the control the architect exercised over the subcontractor's work. [The subcontractor's] own contractual performance depended on the care exercised by the architect; that is, [the subcontractor] was relying on the architect, as the hospital's agent, to exercise due care in 'directing the pile work.' 454 So.2d at 503. "The element of reliance and the nature of the defendant are the features that most clearly distinguish Providence Hospital from this case. Providence Hospital simply represents the widely recognized rule that architects and similar design professionals may be liable in tort to persons with whom they are not in privity, when it is foreseeable that such persons would detrimentally rely on the professional's representations or performance. ... 44 1150822, 1150823, 1150824 ".... "[The insurance company's] contention that the [homeowners] relied on the contract between [the general contractor] and [the subcontractor] falls far short of the particularized reliance of the plaintiffs upon the architect ... in Providence Hospital .... Indeed, [one of the homeowners] testified by deposition that he had 'never heard' of [the subcontractor] prior to this litigation. In fact, it was [the general contractor] –– not [the homeowners] –– that relied on [the subcontractor]. The [homeowners] relied on [the general contractor], not [the subcontractor]. The absence of reliance and consideration of the six factors set forth in Providence Hospital militate against imposing liability on [the subcontractor]. ".... "In short, [the insurance company] has cited no persuasive authority for imposing on [the subcontractor] a duty to the [homeowners] arising out of its insulation subcontract with [the general contractor. Thus, the trial court did not err in entering a summary judgment for [the subcontractor]." Id. at 447-49. The instant case is more akin to Barber than it is to Providence Hospital. First, in Providence Hospital, the fact that the hospital's architect exercised authority over and directed the subcontractor's work was crucial to the Court's holding that the hospital owed the subcontractor a duty. In this case, Aliant seeks to impose a duty upon WHA; however, WHA was never in a position of control over Aliant. Rather, the entity that was in a position of control in this 45 1150822, 1150823, 1150824 case was the District. The District hired and paid WHA to provide management services, and, under the terms of the management agreement, the District could terminate its relationship with WHA for good cause at any time or for any reason whatsoever upon giving 60 days' written notice. Aliant played no part in that relationship. To paraphrase the Barber Court, the "particularized reliance" that was present in Providence Hospital simply does not exist in this case. 946 So. 2d at 448. When comparing the facts of the instant case to those in Barber, however, it is evident that a similar conclusion that no duty was owed is warranted. Just as the homeowners in Barber had no relationship with the subcontractor, it is undisputed that Aliant had no relationship with WHA. The District, not Aliant, relied upon WHA to provide management and administrative services. For these reasons, the trial court correctly concluded that WHA owed no duty to Aliant, and the summary judgment entered on the negligence claim asserted by Aliant against WHA in count four of its complaint is accordingly due to be affirmed. 46 1150822, 1150823, 1150824 IV. Count five of Aliant's final amended complaint asserts negligence and breach-of-fiduciary-duty claims against the EOS defendants. Aliant argues generally that the EOS defendants failed to perform the engineering services they were hired by the District to perform with the skill and care required by the recognized standards of the engineering profession. In its final amended complaint, Aliant specifically identifies the following ways in which the EOS defendants were alleged to have failed in their duties: "1) by failing to properly monitor and supervise the construction of the planned improvements; 2) by failing to monitor the use of the [bond] funds; 3) by failing to independently confirm that requisition requests submitted for reimbursement from bond funds contained invoices that had not been altered, were proper and/or were for work actually performed; 4) by relying upon representations of [Smith] about the progress of the development without independent knowledge or verification; 5) by failing to understand the development, including verification of which phases they were reviewing; 6) by submitting false and misleading progress reports about the actual progress of the development and implementation of the promised improvements; and 7) by otherwise failing to carry out their professional responsibilities." As the Board members and WHA argued with regard to the negligence and breach-of-fiduciary-duty claims asserted against them in count four of Aliant's final amended 47 1150822, 1150823, 1150824 complaint, the EOS defendants first argue that the summary judgment entered in their favor on the similar claims asserted against them should be affirmed on grounds of immunity, res judicata/collateral estoppel, and statute of limitations. In many respects, their arguments on these points are effectively the same arguments advanced by the Board members and rejected by this Court in Part III of this opinion; however, the facts underlying the EOS defendants' statute-of-limitations argument differ in one crucial respect that ultimately dictates a different result. This action was initiated by Aliant in March 2012. In that initial complaint, Aliant asserted claims against Four Star Investments, Twelve Oaks Properties, WHA, and the Board members. However, no claims were asserted against the EOS defendants at that time; notably, the complaint named no fictitious defendants either. Aliant did not assert any claims against the EOS defendants until October 29, 2014. Aliant argues that it did not discover the facts surrounding the EOS defendants' role in the alleged conspiracy surrounding the Twelve Oaks development until after it began discovery in this case and, more specifically, when it deposed Harbison in August 2014; however, the EOS defendants argue that Aliant, 48 1150822, 1150823, 1150824 had it been exercising reasonable diligence, should have known of the relevant facts at least when it initiated this lawsuit in March 2012 –– more than two years before it asserted its claims against the EOS defendants in October 2014 and, the EOS defendants argue, outside the period set forth in § 6-5- 221(a), Ala. Code 1975, which provides, in relevant part: "All civil actions in tort, contract, or otherwise against any ... engineer performing or furnishing the design, planning, specifications, testing, supervision, administration, or observation of any construction of any improvement on or to real property ... for the recovery of damages for: "(i) Any defect or deficiency in the design, planning, specifications, testing, supervision, administration, or observation of the construction of any such improvement ...; or "(ii) Damage to real or personal property caused by any such defect or deficiency; ... ".... "shall be commenced within two years next after a cause of action accrues or arises, and not thereafter. ..." Section 6-5-220(e), Ala. Code 1975, further provides that the two-year period described in § 6-5-221(a) begins to run "at the time the damage or injury is or in the exercise of reasonable diligence should have been first discovered, 49 1150822, 1150823, 1150824 whichever is earlier." In § 6-5-225(c), Ala. Code 1975, the legislature specifically stated that its intent in § 6-5- 221(a) was to apply the discovery rule of § 6-2-3, Ala. Code 1975, to actions against architects, engineers, and builders. As discussed in Part III, this Court explained in Bryant Bank that the question of when a reasonable person should have discovered a claim is generally a question of fact within the purview of the jury. 155 So. 3d at 238. Indeed, that question will be decided only as a matter of law when the facts are undisputed and the evidence warrants but one conclusion or, stated another way, when the evidence indicates that the plaintiff actually knew of facts that would have put a reasonable person on notice of the existence of a claim. 155 So. 3d at 237. The EOS defendants argue that this is precisely such a case inasmuch as, they argue, the evidence establishes that Aliant possessed information putting it on notice of the EOS defendants' alleged wrongful acts at least by October 29, 2012, two years before it actually asserted claims against them. In support of this argument, the EOS defendants emphasize that Four Star Investments defaulted on the Aliant loan in early 2011 and Aliant sued it and Smith alleging breach of his personal guaranty agreement in May 50 1150822, 1150823, 1150824 2011. In a deposition, Williamson testified that he had been monitoring the construction progress at Twelve Oaks and that, "[w]hen the note was not renewed and went into default, and then through the process of discovering additional information, I was shocked to discover that the entire proceeds of the bonds had been disbursed." Aliant thereafter obtained a judgment against Four Star Investments and Smith in August 2011. In December 2011, Aliant had the Twelve Oaks property appraised; in its March 2012 original complaint, Aliant asserts that it learned at that time that the promised improvements had not been made even though Smith and his companies were out of money with which to continue development and that the Twelve Oaks property now had a negative net value as a result of the assessments that encumbered it. During this same time, Aliant was conducting post- judgment discovery to assist it in collecting its August 2011 judgment, and it notified EOS pursuant to Rule 45(a)(3)(A), Ala. R. Civ. P., that it intended to issue EOS a subpoena requesting the production of all documents EOS had pertaining to the District, including "[a] complete accounting of every dollar spent and/or disbursed on Twelve Oaks by the [District] or [EOS] from the funds received from the bond issue 51 1150822, 1150823, 1150824 (including documents showing when, how much, for what, and to whom said disbursements were issued)." After Four Star Investments objected to the subpoena, Aliant filed a response, explaining: "11. While Aliant's suit claims against [Four Star Investments and Smith] involved a breach of promissory note, there was much more involved. Aliant was induced by [Four Star Investments and Smith] and other parties to subordinate its first mortgage position in favor of [the District bonds]. The funds from these bonds were to be used to fund the development of the infrastructure for the Twelve Oaks subdivision. ".... "13. It is unclear whether the funds advanced to [Four Star Investments and Smith] through the bonds were ever used in the subdivision. If there is any information in possession of any of the proposed subpoenaed parties which could be used to enhance Aliant's position or interest in the District property or lead to the discovery of additional information (including the location of any depository accounts and/or any alter egos of [Four Star Investments and Smith]) about [Four Star Investments' and Smith's] assets or the possible improper or fraudulent transfer thereof then Aliant is entitled to discover the same." The EOS defendants allege that no subpoena was ultimately issued to them but that they voluntarily delivered the requested materials to Aliant in March 2012 and that Aliant returned them that same month after making copies for its files. Included in those materials were all the reimbursement 52 1150822, 1150823, 1150824 requests and documents submitted by Smith and approved by Harbison. In March 2012, Aliant filed its initial complaint asserting claims against the Board members, WHA, and others and alleging that a substantial amount of the bond proceeds had been improperly disbursed to Twelve Oaks Properties without proper documentation. In the course of the discovery process relating to those claims, WHA, on October 4, 2012, responded to an Aliant interrogatory regarding its oversight of the progress of the Twelve Oaks development by stating that "[t]he progress of the development would be under the purview of the district engineer, who would coordinate with the developer. [WHA] does not deal with the daily activities or progress of the construction of the improvements."4 We also note that when U.S. Bank moved to intervene in this action in June 2012, it placed in the court record a copy of the engineer's report completed by Harbison in November 2007 and 4At some point, Aliant produced a copy of WHA's interrogatory responses for the EOS defendants. Notes, presumably made by the person who reviewed the responses on behalf of Aliant, were handwritten next to the responses, and the note next to WHA's response explaining that the progress of the development was "the purview of the district engineer" reads "Add Engineer?" 53 1150822, 1150823, 1150824 a copy of the reimbursement form that had to be completed before bond proceeds could be disbursed. This form was the same style as the completed reimbursement forms produced by the EOS defendants for Aliant in March 2012 and the form clearly indicates that no disbursement could be paid until an EOS engineer certified that the disbursement was for the Twelve Oaks project and was consistent with "(i) the applicable acquisition or construction contract; (ii) the plans and specifications for the portion of the project with respect to which such disbursement is being made; and (iii) the [November 2007] report of the consulting engineer." We agree with the EOS defendants that this evidence establishes beyond dispute that Aliant knew of the EOS defendants' alleged wrongful acts and role in the alleged conspiracy before October 29, 2012, and that its October 29, 2014, amended complaint asserting claims against them for the first time was accordingly untimely. Even though Aliant may not have known that the proceeds of the bonds had been improperly disbursed and misused when it initiated the default action and obtained a judgment against Four Star Investments and Smith in 2011, it certainly was aware of facts indicating as much when it filed its second lawsuit in March 2012, 54 1150822, 1150823, 1150824 because that initial complaint alleged that the various defendants "should have known that the requisition requests made for the bond funds were not for goods or services provided to the [Twelve Oaks development]." Aliant also had documents in its possession from at least March 2012 indicating that no bond proceeds could be disbursed unless EOS certified that the disbursal was proper and that Harbison had, in fact, approved the requests for reimbursement filed by Smith. Furthermore, it is undisputed that by March 2012 Aliant had knowledge of facts that had led it to conclude that Smith's reimbursement requests had improperly been approved and paid and that Aliant was aware that EOS's approval was required before any reimbursement could be paid and that Harbison had in fact provided that approval. Nevertheless, Aliant did not assert claims against the EOS defendants until October 29, 2014. This was more than two years after those claims had accrued, i.e., when, in the exercise of reasonable diligence, they should have been discovered, and we can accordingly conclude as a matter of law that all claims asserted by Aliant against the EOS defendants are barred by the statute of limitations set forth in § 6-5-221(a). See § 6-5-221(a) (explaining that the two-year statute of 55 1150822, 1150823, 1150824 limitations set forth therein applies to all civil actions "in tort, contract, or otherwise"); and Dickinson v. Land Developers Constr. Co., 882 So. 2d 291, 299 (Ala. 2003) (holding that the plaintiffs discovered a number of problems with their house more than two years before they filed their action against the builder and their claims arising from those problems were accordingly barred by § 6-5-221).5 5Aliant has argued that it did not discover the facts that form the basis of its claims against the EOS defendants until it deposed Harbison in August 2014 and when, in conjunction with that deposition, the EOS defendants produced an internal memorandum written by Harbison in June 2012 indicating that, in May 2012, Harbison had discovered that Smith had copied his signature to certain reimbursement forms that had been submitted and paid. Aliant argues that the EOS defendants suppressed this memorandum; the EOS defendants dispute that characterization, arguing that it did not exist when they voluntarily produced their Twelve Oaks records for Aliant in March 2012 and that they had received no further communications or request for information from Aliant until Aliant sought Harbison's deposition in the summer of 2014, at which time the memorandum was produced. We note only that, although this memorandum and Harbison's deposition may have revealed additional facts pertinent to Aliant's case, it is still undisputed that Aliant had knowledge of the facts that form the basis of its claims against the EOS defendants for more than two years before it formally asserted those claims. Aliant's claim accrued when it became privy to facts that would provoke inquiry in a person of reasonable prudence and that, if further investigated, would have led to the discovery of the EOS defendants' alleged deficient performance of their duties, not when Aliant became privy to all the facts surrounding the EOS defendants' alleged wrongdoing. Dickinson, 882 So. 2d at 299. 56 1150822, 1150823, 1150824 V. Count six of Aliant's final amended complaint asserts fraud claims against Four Star Investments, Twelve Oaks Properties, and B&B Construction based on invoices submitted for reimbursement by those companies for goods and services supposedly provided to the District. Aliant asserts that many of the claimed goods were never actually provided and claimed services were never actually rendered and that those companies' receipt of bond proceeds based on those invoices accordingly constitutes fraud. In its brief to this Court, Aliant quotes Harmon v. Motors Insurance Corp., 493 So. 2d 1370, 1373 (Ala. 1986), in which this Court recited the elements of a fraud claim: "(1) a false representation; "(2) concerning a material fact; "(3) reliance upon the false representation, and; "(4) damage as a proximate result." Aliant then proceeds to detail the evidence it submitted to the trial court indicating that the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction contain false representations concerning material facts before concluding that Aliant was damaged inasmuch as the paying of 57 1150822, 1150823, 1150824 the allegedly fraudulent invoices substantially exhausted the bond proceeds without providing any benefit to the Twelve Oaks development. However, although we agree that the evidence cited by Aliant constitutes substantial evidence that a false representation of a material fact was made, it is apparent, considering the whole of the evidence and Aliant's theory of the case, that Aliant never relied upon the misrepresentations in the allegedly fraudulent invoices. In Hunt Petroleum Corp. v. State, 901 So. 2d 1, 4-5 (Ala. 2004), this Court explained that reliance is an essential part of any fraud claim and detailed what kind of evidence is needed to establish the element of reliance: "The law of fraud is well-settled. 'An essential element of any fraud claim is that the plaintiff must have reasonably relied on the alleged misrepresentation.' Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143, 1160 (Ala. 2003). Section 6–5–101, Ala. Code 1975, provides that '[m]isrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party ... constitute legal fraud.' Thus, reliance in the form that the misrepresentation is 'acted on by the opposite party' is an essential element of fraud in Alabama. Liberty Nat'l Life Ins. Co. v. Allen, 699 So. 2d 138, 141 (Ala. 1997). ".... "Reliance requires that the misrepresentation actually induced the injured party to change its 58 1150822, 1150823, 1150824 course of action. See Restatement (Second) of Torts § 537 (1977) ('The recipient of a fraudulent misrepresentation can recover against its maker for pecuniary loss resulting from it if, but only if ... he relies on the misrepresentation in acting or refraining from action, and ... his reliance is justifiable.'); 9 Stuart M. Speiser et al., The American Law of Torts § 32:49 (Clark Boardman Callaghan 1992) ('It is a fundamental principle of the law of fraud throughout the United States, regardless of the form of relief sought, that in order to secure redress, the representee (person to whom or which the misrepresentation was made) must have relied upon the statement or representation as an inducement to his action or injurious change of position.'). "This Court has explained what constitutes legal reliance in Alabama: "'"To determine whether or not a misrepresentation was actually relied upon, whether it was a cause in fact of the damage, the sine qua non rule is often applied. If the plaintiff would not have acted on the transaction in question but for the misrepresentation, such misrepresentation was an actual cause of his loss. If he would have adopted the same course irrespective of the misrepresentation and would have sustained the same degree of damages anyway, it can not be said that the misrepresentation caused any damage, and the defendant will not be liable therefor."' "Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortgage Co., 390 So. 2d 601, 611 (Ala. 1980) (quoting Fowler V. Harper and Fleming James, Jr., The Law of Torts § 7.13 (1956)). See also Fisher v. Comer Plantation, Inc., 772 So. 2d 455, 466 (Ala. 2000) ('When deciding whether the plaintiff relied on a misrepresentation, the fact-finder must 59 1150822, 1150823, 1150824 consider whether the plaintiff would have chosen a different course but for the suppression of a material fact.'). Other states have adopted similar tests. ".... "Although the terminology varies from state to state, the underlying principle is the same –– for a plaintiff to state a fraud claim, he must show that a misrepresentation induced him to act in a way that he would not otherwise have acted, that is, that he took a different course of action because of the misrepresentation." It is undisputed in this case that Aliant never relied on or changed its course of action based on the false representations allegedly made in the identified invoices. Indeed, when asked in his deposition about Aliant's involvement in the process by which the bond proceeds were disbursed, Williamson stated that "[Aliant] had no knowledge of ... any of the disbursements in how those proceeds were used." In response to a subsequent question, Williamson further stated that "[Aliant] didn't have any access to what transpired with the disbursement of the proceeds of the bond issue. We didn't know when they were disbursed, who they were disbursed to, what was supposed to happen." This testimony is consistent with Aliant's position that it did not learn that the bond proceeds had been exhausted until Four Star 60 1150822, 1150823, 1150824 Investments defaulted on the Aliant loan in early 2011. In light of the undisputed fact that Aliant had no knowledge of the false representations allegedly made in the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction, it cannot have relied on those false representations. See Fisher v. Ciba Specialty Chems. Corp., Civil Action No. 03-0566-WS-B (S.D. Ala. Oct. 11, 2007) (not selected for publication in F. Supp. 2d) ("It is axiomatic that a plaintiff cannot show reliance (reasonable or otherwise) on a statement of which he or she is unaware."). In conclusion, if the false representations allegedly made in the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction support a cause of action for fraud, that cause of action must belong to some party other than Aliant. Aliant had no knowledge of the false representations and accordingly could not have taken, or refrained from taking, any action in reliance upon those representations. Inasmuch as reliance is a required element of any fraud claim, this lack of evidence is a sufficient basis upon which to affirm the summary judgment entered by the trial court in favor of Four Star Investments, Twelve Oaks 61 1150822, 1150823, 1150824 Properties, and B&B Construction on the fraud claims asserted by Aliant in count six of its amended complaint. We also note, however, that B&B Construction has claimed that Aliant's claims against it are barred by the statute of limitations. Had Aliant asserted no other claims against B&B Construction it would be unnecessary for us to address this issue; however, inasmuch as Aliant asserts conspiracy and additional fraud claims against B&B Construction in count seven of its final amended complaint, we address B&B Construction's statute-of-limitations argument. Aliant filed its initial complaint in March 2012; however, it did not designate any fictitious defendants in that complaint, and it did not designate B&B Construction as a defendant until it filed an amended complaint on October 29, 2014. Aliant's fraud and conspiracy claims against B&B Construction are all subject to a two-year statute of limitations. See § 6-2-3, Ala. Code 1975 ("In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his action."), and Garris v. A&M Forest Consultants, 62 1150822, 1150823, 1150824 Inc., 623 So. 2d 1035, 1039 (Ala. 1993) (noting that the plaintiff's claim was "barred by the statute of limitations for a conspiracy action, which is two years; § 6-2-38(l), Ala. Code 1975, as amended"). The question of when a reasonable person should have discovered a claim is generally a question of fact within the purview of the jury; however, that question may be decided as a matter of law when the facts are undisputed and the evidence warrants but one conclusion or, stated another way, when the evidence indicates that the plaintiff actually knew of facts that would have put a reasonable person on notice of the existence of the claim. Bryant Bank, 155 So. 3d at 237-38. In this case, the relevant facts are undisputed and require the conclusion that Aliant knew or reasonably should have known of its claims against B&B Construction at least when it filed its initial complaint in March 2012. Accordingly, the claims asserted against B&B Construction for the first time in October 2014 are untimely and are barred by the statute of limitations. In its March 2012 complaint, Aliant made the following allegations: "47. Upon information and belief, large sums of the funds received pursuant to the bonds were diverted and not used for their intended purposes. 63 1150822, 1150823, 1150824 Many were paid and/or transferred to entities wholly owned and controlled by Bobby Smith with little or no description of the actual goods or services purportedly rendered. ".... "54. [WHA], [Twelve Oaks Properties], and the District knew or should have known that the requisition requests made for the bond funds were not for goods or services provided to the premises. Said requests were either on their face not for the premises or were so vague that a reasonably prudent person in the defendants' position would have made further inquiry and/or sought additional details." Thus, Aliant acknowledges that it knew by March 2012 that a large amount of the bond proceeds had been paid out in reimbursements to entities "owned and controlled" by Smith. Aliant knew at that time that Smith had an ownership interest in B&B Construction, and it was in possession of the reimbursement requests indicating that bond proceeds had been claimed by B&B Construction. This information was sufficient to put Aliant on notice of its potential claims against B&B Construction, but Aliant nevertheless waited over two and a half years before filing an amended complaint asserting those claims. Because the statute of limitations for those claims was two years, however, they were untimely, and the summary judgment entered by the trial court in favor of B&B 64 1150822, 1150823, 1150824 Construction is accordingly due to be affirmed in all respects. VI. Count seven of Aliant's final amended complaint also asserts two species of fraud claims –– misrepresentation and suppression –– as well as conspiracy claims against Twelve Oaks Properties, the District, Four Star Investments, Smith, Mize, and Billy Smith, and Hunt and WHA.6 The gravamen of those claims is that the defendants conspired together and concocted a plan whereby the District was created and the bonds were issued for the purpose of enriching the defendants without regard to the fact that the plan virtually ensured the ultimate failure of the Twelve Oaks development. Aliant argues that a crucial part of this plan involved the defendants' convincing Aliant to execute the mortgagee- special-assessment acknowledgment that subordinated its interest in the Twelve Oaks property –– a requirement for the bonds to be issued –– and, Aliant argues, the defendants 6Count seven also asserts those claims against the EOS defendants and B&B Construction; however, for reasons already discussed, those claims are barred by the relevant statutes of limitations, and we accordingly need not address the specific allegations made against the EOS defendants and B&B Construction in the context of those claims. 65 1150822, 1150823, 1150824 accomplished that goal by making fraudulent misrepresentations and concealing and suppressing material facts. However, before we consider whether substantial evidence exists to support the fraud and conspiracy claims asserted by Aliant, we first address affirmative defenses claimed by two of the defendants named in this count. We first note that Aliant has identified the District itself as a defendant with regard to these claims. In Part III of this opinion we addressed the Twelve Oaks defendants' § 11-99A-7 immunity argument as it related to the negligence and breach-of-fiduciary-duty claims asserted against the Board members. Although we ultimately concluded that § 11-99A-7 did not shield the Board members from liability as to those claims, under the plain language of § 11-99A-7 and § 11-47- 190, we must nevertheless conclude that the District itself is entitled to immunity on the claims asserted against it by Aliant. Section 11-99A-7 expressly provides that an improvement district has "the same immunity ... as a municipality," and this Court has stated that § 11-47-190 "absolves a municipality from liability for the intentional torts of its agents." Altmayer v. City of Daphne, 613 So. 2d 366, 369 (Ala. 1993). The Altmayer Court specifically noted 66 1150822, 1150823, 1150824 that fraud claims were among those claims barred by § 11-47- 190, id.; conspiracy likewise is an intentional tort, and conspiracy claims are barred by § 11-47-190. See Grider v. Carver, 767 F. Supp. 2d 1246, 1251 (M.D. Ala. 2011) (noting that the plaintiffs' state conspiracy claim was an intentional tort). Inasmuch as § 11-99A-7 grants the District the same immunity to which a municipality would be entitled, the summary judgment entered by the trial court is due to be affirmed with regard to the claims asserted by Aliant against the District.7 Aliant has also named Hunt, a partner in WHA, as a defendant to the fraud and conspiracy claims asserted in count seven of its final amended complaint; Hunt argues that the claims asserted against him personally are barred by the statute of limitations because, although WHA was named as a defendant in Aliant's initial March 2012 complaint, Aliant did not amend its complaint to add him as a defendant until October 2014 –– more than two years later –– and thus, Hunt 7Aliant has also asserted a wantonness claim against the District in count eight of its amended complaint; that claim is also barred by § 11-99A-7. See Town of Loxley v. Coleman, 720 So. 2d 907, 909 (Ala. 1998) ("This Court has construed § 11–47–190 to exclude liability for wanton misconduct."). 67 1150822, 1150823, 1150824 argues, outside the two-year period allowed by § 6-2-38. The trial court agreed with Hunt, stating in its order entering a summary judgment in his favor: "[T]he undisputed evidence shows Aliant knew of Mr. Hunt and his role in the project in 2008, yet failed to name him in the 2012 suit. Aliant was aware that Mr. Hunt was working for Gardnyr Michael [Capital], the underwriter for the bonds, no later than July 10, 2008, the date of the validation order. ... Aliant knew of Mr. Hunt and Gardnyr Michael [Capital] at the outset of the bond deal in 2008." This Court will decide as a matter of law when a fraud claim accrued, that is, when "a person of reasonable prudence would have discovered the alleged fraud," only when the evidence is undisputed and allows but one conclusion. Bryant Bank, 155 So. 3d at 237. In this case, Hunt argues only that Aliant should have been aware of its fraud and conspiracy claims against him in 2008 because it undisputedly knew at that time that he was involved in the bond issue through his work for Gardnyr Michael Capital, the underwriter for the bonds. We disagree that this is a sufficient basis upon which to conclude as a matter of law that Aliant must have known of its claims against Hunt at that time. Hunt has cited this Court to no evidence establishing when Aliant knew of Hunt's involvement in any wrongdoing; it points only to evidence 68 1150822, 1150823, 1150824 establishing that Aliant knew Hunt was involved in the bond issue through his work at Gardnyr Michael Capital, the underwriter for the bonds. However, Aliant has not asserted any claims against or alleged any wrongdoing by Gardnyr Michael Capital; its claims against Hunt are based on wrongdoing he committed in his individual capacity or through his work at WHA. Hunt has not attempted to establish when Aliant should have been aware of that wrongdoing, and Aliant argues that this is an issue of fact for the jury. We cannot resolve this issue as a matter of law at this time, and we accordingly decline to affirm the summary judgment entered in favor of Hunt on that basis. We thus turn to the merits of Aliant's fraudulent- misrepresentation claims. "To establish a prima facie case of fraudulent misrepresentation, a plaintiff must show: (1) that the representation was false, (2) that it concerned a material fact, (3) that the plaintiff relied on the false representation, and (4) that actual injury resulted from that reliance." Boswell v. Liberty Nat'l Life Ins. Co., 643 So. 2d 580, 581 (Ala. 1994). As the basis for these claims, Aliant has identified alleged misrepresentations 1) orally made by Smith in his communications with Williamson and 2) contained 69 1150822, 1150823, 1150824 in written materials prepared by WHA. In an affidavit, Williamson described those misrepresentations and their impact on Aliant's decision to agree to subordinate its interest in the Twelve Oaks property as follows: "16. Over [a period of several months beginning in February 2008] Bobby Smith provided me with various documents related to the proposed bond deal, including, but not limited to, a term sheet and a financial analysis prepared by [Gardnyr Michael Capital], the engineer's report, a proposed budget analysis for the phase by phase development of the subdivision, as well as a draft of the methodology. "17. It was not until a meeting I had with Bobby Smith in mid-July 2008 that I was presented with the mortgagee special assessment acknowledgment for [Aliant] to sign. A true and correct copy of my July 14, 2008, memo is attached hereto. "18. I was assured by representations made by Bobby Smith and the various [District] and bond transaction documents referenced above that the bond proceeds would be used strictly for the development of the infrastructure for the remaining 270 undeveloped lots and a clubhouse and pool, that the funds' disbursement would be carefully controlled and monitored, and that there would be independent inspections to verify the expenditures purportedly made on the project. "19. A few days later I had a follow-up discussion with Bobby Smith and Heyward Hosch, District counsel, regarding additional requirements related to the bonds and whether there were any restrictions preventing [Aliant] and Bobby Smith from having agreements related to lot releases. "20. [Aliant] was satisfied based on my discussion with Mr. Hosch and Bobby Smith that in such 70 1150822, 1150823, 1150824 situation the bond fund spending could be halted or slowed. A true and correct copy of my July 21, 2008, memo is attached hereto. "21. At no time was it revealed to me that the parties intended to use any of the bond proceeds to pay any Bobby Smith-controlled entity (owner, developer, or otherwise) for work done or expense incurred before the bond issue. "22. Based on all of the above, Aliant executed the mortgagee special assessment acknowledgment on or about July 24, 2008. "23. If I had known that all of the equity built up in the development was going to be given back to the development with the first two draws, that there were not going to be controls over the disbursements of the bond funds, and that the progress of the development was not going to be carefully monitored by professionals, I would not have signed the mortgagee special assessment acknowledgment. "24. As of July 24, 2008, the infrastructure of phase I of the development was complete and eighty (80) lots of that phase [were] available for development. "25. I was told that the bond proceeds would be used to expand the subdivision so that an additional 270 lots (a total of 350) would be made available. "26. I had [no] idea that over one half of the total bond proceeds was going to be used to reimburse Bobby Smith and [Twelve Oaks Properties] for virtually all of the pre-bond issuance work, work which had been funded with money largely advanced by Aliant through [the Aliant loan]. "27. As of [January 27, 2016], with the exception of the club house and pool, the infrastructure is not measurably further along and there are no more completed and saleable lots available than existed 71 1150822, 1150823, 1150824 on the day I signed the [mortgagee special assessment] acknowledgment." In paragraph 18 of his affidavit, Williamson identified three representations allegedly made to him that Aliant now claims were false: (1) that the bond proceeds would be used only to develop the infrastructure for the remaining 270 undeveloped lots and a clubhouse and a pool; (2) that the disbursement of the bond proceeds would be carefully controlled and monitored; and (3) that there would be independent inspections to verify the expenditures claimed by Smith. This is sufficient to establish a prima facie case of fraudulent misrepresentation against Smith and Twelve Oaks Properties, the entity Smith is alleged to have been representing when making the oral misrepresentations. Accordingly, the summary judgment was improper as to those claims. However, Aliant has failed to support its claim that Hunt and WHA made those representations. In fact, a review of the documents identified in paragraph 16 of Williamson's affidavit that were prepared by Hunt and WHA reveals that they do not contain those representations. The party asserting a fraudulent-misrepresentation claim must support that claim with specific evidence of the alleged misrepresentations. [substituted p. 72] 1150822, 1150823, 1150824 See, e.g., Drummond Co. v. Walter Indus., 962 So. 2d 753, 787- 88 (Ala. 2006) (affirming a summary judgment entered on a fraud claim on the basis that the claimant "failed to identify the specific representations on which it based its fraud claim, to whom and by whom those communications were purportedly made, when they were purportedly made, and in what manner [the claimant] relied on the purported communications"). In the absence of any specific evidence indicating that Hunt or WHA made false representations upon which Aliant relied, the summary judgments entered by the trial court in favor of Hunt and WHA are due to be affirmed with respect to the fraudulent-misrepresentation claims asserted by Aliant. Aliant also argues that the misrepresentations allegedly made by Smith should support fraudulent-misrepresentation claims against Hunt, WHA, Four Star Investments, Mize, and Billy Smith because, it argues, they were all allegedly part of an overarching conspiracy. However, this argument evinces a misunderstanding of the conspiracy cause of action. If the finder of fact is ultimately convinced that Smith made fraudulent misrepresentations and that there was a conspiracy in which Hunt, WHA, Four Star Investments, Mize, and Billy [substituted p. 73] 1150822, 1150823, 1150824 Smith were participants, then Hunt, WHA, Four Star Investments, Mize, and Billy Smith may be held liable for Smith's fraudulent misrepresentations by being held liable for conspiracy, not fraudulent misrepresentation. This Court's decision in DGB is instructive. We noted in that case that the fraudulent-misrepresentation and fraudulent-suppression claims asserted against defendant Ray Jacobsen were properly dismissed, but a conspiracy claim asserted against Jacobsen based on allegations that other defendants worked together and with him "to knowingly misrepresent information and to conceal material facts" was nevertheless viable. DGB, 55 So. 3d at 231-34. We next consider the fraudulent-suppression claims asserted by Aliant. The gravamen of those claims is that the defendants knew that Smith was going to use the bulk of the bond proceeds to reimburse himself and his companies for work done before the bonds were issued and that the defendants concealed this fact from Aliant in order to induce it to sign the mortgagee-special-assessment acknowledgment. "The elements of a suppression claim are '(1) a duty on the part of the defendant to disclose facts; (2) concealment or nondisclosure of material facts by the defendant; (3) [substituted p. 74] 1150822, 1150823, 1150824 inducement of the plaintiff to act; (4) action by the plaintiff to his or her injury.'" Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So. 2d 883, 891 (Ala. 2005) (quoting Lambert v. Mail Handlers Benefit Plan, 682 So. 2d 61, 63 (Ala. 1996)). Aliant does not cite these elements anywhere in the briefs it filed in its appeals of the judgments entered in favor of the Twelve Oaks defendants and Hunt and WHA, but it cites Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortgage Co., 390 So. 2d 601, 616 (Ala. 1980), for the proposition that fraudulent suppression exists "where the defendant has special knowledge or means of knowledge not open to the plaintiff and is aware that the plaintiff is acting under a misapprehension as to facts which would be of importance to him and would probably affect his decision" and Bank of Red Bay v. King, 482 So. 2d 274, 284-85 (Ala. 1985), to suggest that fraudulent suppression might be found when a party knows that the plaintiff is relying on something that is not true. See Aliant's briefs in appeal no. 1150822, pp. 31- 33, and in appeal no. 1150823, pp. 29-31. The first element of a fraudulent-suppression claim that must be established is whether the defendant alleged to have concealed a material fact had a duty to disclose that fact to [substituted p. 75] 1150822, 1150823, 1150824 the plaintiff; this inquiry presents an issue of law to be determined by the court. Freightliner, 932 So. 2d at 891. To the extent Aliant addresses this element, it essentially argues that the various defendants owed it such a duty based solely on the fact that they knew that Aliant was unaware that the vast majority of the bond proceeds would be disbursed to reimburse Smith and his companies for work completed before the bonds were issued. See, e.g., Aliant's brief in appeal no. 1150823, p. 33 (arguing that the trial court erred in entering a summary judgment in favor of Hunt and WHA on the fraudulent-suppression claims asserted against them because the trial court failed to give effect to the law set forth in Shades Ridge Holding Co. and Bank of Red Bay, which, Aliant argues, "creat[ed] a duty for WHA to disclose the detail of the plan for the [District] by reason of their knowledge of Aliant's misapprehension"). We disagree that the defendants' knowledge that Aliant was unaware that the bond proceeds could be distributed for work performed before the bonds were issued was sufficient in itself to create a duty to disclose. This Court has explained the duty to disclose as follows: "A duty to communicate can arise from a confidential relationship between the plaintiff and the defendant, from the particular circumstances of the [substituted p. 76] 1150822, 1150823, 1150824 case, or from a request for information, but mere silence in the absence of a duty to disclose is not fraudulent. Dodd v. Nelda Stephenson Chevrolet, Inc., 626 So. 2d 1288 (Ala. 1993); Hardy v. Blue Cross & Blue Shield of Alabama, 585 So. 2d 29 (Ala.1991); King v. National Foundation Life Ins. Co., 541 So. 2d 502 (Ala. 1989); see, McGowan v. Chrysler Corp., 631 So. 2d 842 (Ala. 1993); § 6–5–102, Ala. Code 1975. ".... "This Court has stated that whether one has a duty to speak depends upon a fiduciary, or other, relationship of the parties, the value of the particular fact, the relative knowledge of the parties, and other circumstances of the case. Bama Budweiser of Montgomery, Inc. v. Anheuser–Busch Inc., 611 So. 2d 238 (Ala. 1992); Norman v. Amoco Oil Co., 558 So. 2d 903 (Ala. 1990); see § 6–5–102, Ala. Code 1975. When the parties to a transaction deal with each other at arm's length, with no confidential relationship, no obligation to disclose information arises when the information is not requested." Mason v. Chrysler Corp., 653 So. 2d 951, 954-55 (Ala. 1995) (emphasis added). Essentially, the primary factor to be considered when determining whether a duty to disclose exists is the nature of the relationship between the parties. See, e.g., Armstrong Bus. Servs., 817 So. 2d at 677 (noting that the Court begins its inquiry by considering whether the facts establish "a relationship sufficient to give rise to a duty to disclose"). A duty to disclose is more likely to be found where there is a special or confidential relationship between [substituted p. 77] 1150822, 1150823, 1150824 the parties, but a duty to disclose may still be found when the parties engage in an arm's length business transaction and there are special circumstances or when specific information is requested. Mason, 653 So. 2d at 954-55. However, it will be the rare situation and only under the most extreme special circumstances that a duty to disclose is imposed upon parties that have no relationship with each other. In this case, it is undisputed that Aliant had no relationship with Hunt and WHA. At most, the evidence in the record indicates that Hunt was a participant in one telephone call with an Aliant employee and the substance of that call is unknown. Based on this lack of a relationship –– much less a confidential relationship or even an arm's length business relationship –– we cannot conclude that Hunt and/or WHA owed Aliant a duty to disclose. Aliant has identified no special circumstances that warrant the imposition of such a duty; instead, it effectively assumes that such a duty existed solely because Hunt and WHA had greater knowledge than it and said nothing. However, "mere silence in the absence of a duty to disclose is not fraudulent." Mason, 653 So. 2d at 954. The summary judgment entered in favor of Hunt and WHA on the [substituted p. 78] 1150822, 1150823, 1150824 fraudulent-suppression claims asserted against them is due to be affirmed. With regard to the claims asserted against the various Twelve Oaks defendants, however, Aliant did have a business relationship with Smith. Aliant has alleged that Smith represented to it that the bond proceeds would be used to develop 270 additional lots in Twelve Oaks while allegedly knowing that he and/or his companies would actually receive the majority of the bond proceeds for work that had already been performed in association with the development of the first 80 lots. In CNH America, LLC v. Ligon Capital, LLC, 160 So. 3d 1195, 1202-03 (Ala. 2013), we explained that "'once a party elects to speak, he or she assumes a duty not to suppress or conceal those facts that materially qualify the facts already stated'" (quoting Freightliner, 932 So. 2d at 895). See also First Alabama Bank of Montgomery, N.A. v. First State Ins. Co., 899 F.2d 1045, 1056 (11th Cir. 1990) ("Finally, even if one is not under a duty to speak, if he decides to do so, 'he must make a full and fair disclosure,' without concealing any facts within his knowledge." (quoting Ellis v. Zuck, 409 F. Supp. 1151, 1158 (N.D. Ala. 1976), and citing Jackson Co. v. Faulkner, 55 Ala. App. 354, 315 So. 2d [substituted p. 79] 1150822, 1150823, 1150824 591 (1975))). Thus, once Smith represented how the bond proceeds would be used, he had a duty to make a full disclosure as to how those proceeds would be used. Aliant has submitted evidence indicating that Smith failed to fulfill that duty and instead concealed the truth about how the bond proceeds would be used, thus inducing Aliant to execute the mortgagee-special-assessment acknowledgment and resulting in subsequent injury to Aliant. Accordingly, the summary judgment entered on the fraudulent-suppression claims asserted against Smith and Twelve Oaks Properties is due to be reversed. Aliant has failed to establish that Mize or Billy Smith owed it a duty to disclose, however, and the summary judgments entered in favor of them on the fraudulent- suppression claims asserted by Aliant are due to be affirmed. Finally, inasmuch as we have held that Aliant has put forth substantial evidence supporting at least some of the fraudulent-misrepresentation and fraudulent-suppression claims asserted in count seven of its final amended complaint and that the trial court accordingly erred in entering a summary judgment against Aliant on those claims, we also hold that the trial court erred in entering a summary judgment against Aliant on the conspiracy claims it asserted against Smith, [substituted p. 80] 1150822, 1150823, 1150824 Twelve Oaks Properties, Four Star Investments, Mize, Billy Smith, Hunt, and WHA. Some of the defendants have argued that they cannot be found liable for conspiracy if they are not liable for the underlying wrong upon which the conspiracy claim is based; however, our holding in DGB refutes this argument. Although it is true that "[a] plaintiff alleging conspiracy must have a valid underlying cause of action," Callens v. Jefferson County Nursing Home, 769 So. 2d 273, 280 (Ala. 2000), it is not necessary that each alleged conspirator be the subject of an underlying cause of action, only that there be a valid cause of action against at least one of the alleged conspirators. See DGB, 55 So. 3d at 234 ("Because the [plaintiffs] have alleged valid underlying causes of action and because acts of coconspirators are attributable to each other, see [Ex parte] Reindel, [963 So. 2d 614, 621 (Ala. 2007),] the [plaintiffs] have stated a claim of civil conspiracy upon which relief may be granted against each of these defendants."). Thus, the defendants in this case may be liable for conspiracy even if they are not liable for the underlying fraud. VII. [substituted p. 81] 1150822, 1150823, 1150824 In count eight of its final amended complaint, Aliant asserts wantonness claims against Smith, Mize, Billy Smith, Twelve Oaks Properties, and WHA.8 Specifically, Aliant asserts that these defendants "undertook a duty to carefully and prudently spend and/or assure that the [bond proceeds] were spent in accordance with the bond documents to make the promised improvements" and that they "consciously and/or intentionally acted with reckless disregard to the consequences of their wrongful acts." We first note, however, that, although Aliant adequately explained the basis of its wantonness claim in its complaint, in its brief to this Court in appeal no. 1150822 challenging the judgment entered in favor of the Twelve Oaks defendants, Aliant has wholly failed to explain its wantonness claim or to cite any authority regarding wantonness. In J.K. v. UMS- Wright Corp., 7 So. 3d 300, 305-06 (Ala. 2008), we considered an argument that a trial court had erred in entering judgment 8Aliant also asserts wantonness claims against the EOS defendants and the District in count eight; however, as discussed supra, all claims against the EOS defendants are barred by the statute of limitations, and the District is protected by § 11-99A-7 immunity. [substituted p. 82] 1150822, 1150823, 1150824 on a wantonness claim where the appellants had similarly failed to support their argument: "Not only do [the appellants] not describe with any specificity conduct of the trustees that they consider to have been wanton, but they also fail to cite any statute or caselaw that defines wantonness, and they do not illustrate how the actions by the members of the board of trustees could satisfy any such definition. '"'Where an appellant fails to cite any authority, we may affirm, for it is neither our duty nor function to perform all the legal research for an appellant.'"' McCutchen Co. v. Media General, Inc., 988 So. 2d 998, 1004 (Ala. 2008) (quoting Henderson v. Alabama A & M Univ., 483 So. 2d 392, 392 (Ala. 1986), quoting in turn Gibson v. Nix, 460 So. 2d 1346, 1347 (Ala. Civ. App. 1984)). Because [the appellants] have not provided us with a standard against which to evaluate the trustees' allegedly wanton behavior ... the trial court's judgment on this issue is affirmed." Thus, by failing to adequately argue the issue, Aliant has effectively waived its argument that the trial court erred in entering summary judgment against it on the wantonness claims asserted against Smith, Mize, Billy Smith, and Twelve Oaks Properties. Bogle, 512 So. 2d at 1337. With regard to the wantonness claim asserted against WHA, we stated in Lemley v. Wilson, 178 So. 3d 834, 841-42 (Ala. 2015), that, "'[t]o establish wantonness, the plaintiff must prove that the defendant, with reckless indifference to the consequences, consciously and intentionally did some wrongful [substituted p. 83] 1150822, 1150823, 1150824 act or omitted some known duty.'" (Quoting Martin v. Arnold, 643 So. 2d 564, 567 (Ala. 1994).) Aliant has based its wantonness claims on the omission or breach of a known duty; however, we have already determined, supra in Part III, that WHA owed Aliant no duties. Moreover, Aliant's wantonness claims are premised on the allegation that the named defendants failed to make sure that the bond proceeds were properly spent; however, the documentary evidence in the record establishes that WHA had no role in approving the disbursement of bond proceeds. Disbursements had to be approved by EOS and the District's board of directors; WHA provided only administrative assistance in that process. Accordingly, the summary judgment entered in favor of WHA on the wantonness claim asserted against it in count eight of Aliant's final amended complaint is also due to be affirmed. VIII. In the last count of its final amended complaint, Aliant argues that Twelve Oaks Properties and WHA are liable for breach of contract. Aliant acknowledges that there is no contract between it and either Twelve Oaks Properties or WHA; however, it nevertheless argues that it was an intended third- party beneficiary of 1) a completion agreement between Twelve [substituted p. 84] 1150822, 1150823, 1150824 Oaks Properties and the District executed in conjunction with the bond issuance in which Twelve Oaks Properties took responsibility for completing the planned improvements at Twelve Oaks that were not funded by the bond proceeds; and 2) the management agreement between WHA and the District. In Swann v. Hunter, 630 So. 2d 374, 376 (Ala. 1993), this Court stated: "To recover in a breach-of-contract action, as a third-party beneficiary, the plaintiff must prove the following: (1) that the contracting parties intended, when they entered the contract, to bestow a direct, as opposed to an incidental, benefit upon a third party, (2) that the plaintiff was the intended third-party beneficiary of the contract, and (3) that the contract was breached. ..." Aliant argues that the completion agreement executed by Twelve Oaks Properties and the management contract executed by WHA were intended to benefit the owners of property in the District –– including Aliant inasmuch as it held a mortgage on the Twelve Oaks property –– and that Twelve Oaks Properties and WHA failed to fulfill their obligations under those contracts to the detriment of Aliant. Both the completion agreement and the management agreement were intended to bestow some benefit upon the District. Aliant argues, essentially, that, inasmuch as the [substituted p. 85] 1150822, 1150823, 1150824 District's raison d'etre is to provide improvements to the property within its borders, as the holder of an interest in such property it was an intended beneficiary of any contract that benefited the District. Twelve Oaks Properties and WHA rightfully do not dispute that Aliant had an interest in property within the District when those contracts were executed because it is undisputed that Aliant held a mortgage on the Twelve Oaks property at that time and "Alabama is a 'title theory' state; thus, when a person mortgages real property, the mortgagee obtains legal title to the real property and the mortgagor retains an equity of redemption." Maiden, 69 So. 3d at 865. However, Twelve Oaks Properties and WHA argue that Aliant's interest in the Twelve Oaks property at most made Aliant an incidental beneficiary to the cited contracts, not a direct beneficiary such that Aliant can sue for the breach of a contract. See Holley v. St. Paul Fire & Marine Ins. Co., 396 So. 2d 75, 80 (Ala. 1981) ("One who seeks recovery in contract as a third-party beneficiary must establish that the contract was intended for his direct, as opposed to incidental, benefit."). In its orders entering a summary judgment against Aliant on these claims, the trial [substituted p. 86] 1150822, 1150823, 1150824 court agreed, holding that Aliant was not an intended third- party beneficiary to either of the cited contracts. "[T]he determination of third-party-beneficiary status is a conclusion of law that we review de novo." Harris Moran Seed Co. v. Phillips, 949 So. 2d 916, 920 (Ala. Civ. App. 2006). For the reasons that follow, we agree with the holding of the trial court that Aliant was not an intended beneficiary to the cited contracts. Although those contracts were intended to benefit the District, even if we were to conclude that the parties to those contracts intended to bestow benefits upon the "owners" of property within the District as well, those benefits would run directly only to the party in possession of the property –– any benefit to the mortgagee would necessarily be incidental.9 Benefits and improvements 9In First Union National Bank of Florida v. Lee County Commission, 75 So. 3d 105, 113 (Ala. 2011), this Court explained how a mortgagee and a mortgagor are both in some sense "owners" of mortgaged property: "[The mortgagee's] argument presumes that legal title is the equivalent of absolute ownership of property, but that presumption is incorrect. See Alabama Home Mortgage Co. v. Harris, 582 So. 2d 1080, 1083–84 (Ala. 1991) (recognizing that there is no 'absolute owner' of property until there is a merger of equitable title and legal title). [The mortgagee's] interpretation of the term 'owner' in § 40–10–28[, Ala. Code 1975,] fails to consider the [substituted p. 87] 1150822, 1150823, 1150824 made to mortgaged property would not directly benefit the mortgagee until there is a merger of equitable title and legal title. At best, Aliant in this case would receive an incidental benefit from the cited contracts inasmuch as the property securing the Aliant loan would increase in value and Aliant's risk of loss in the event of default would decrease; however, this is far from a direct intended benefit that will support a third-party-beneficiary breach-of-contract claim. Accordingly, the trial court's judgments in favor of Twelve Oaks Property and WHA on the claims asserted against them in count nine of Aliant's amended complaint are due to be affirmed. IX. Aliant sued various individuals and business entities involved in developing the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' fact that when real property is mortgaged, only legal title passes to the mortgagee, and the mortgagor retains his or her other status as 'owner and holder of equitable title.' Sims v. Riggins, 201 Ala. 99, 103, 77 So. 393, 397 (1917) (the mortgagor is 'the owner and holder of the equitable title'). Until there has been a foreclosure, the mortgagor continues to 'own' the property. Alabama Home Mortgage, 582 So. 2d at 1083–84." [substituted p. 88] 1150822, 1150823, 1150824 conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The trial court ultimately entered judgments against Aliant and in favor of the defendants on all counts. We now affirm those judgments in part and reverse them in part. In appeal no. 1150822, we reverse the summary judgment entered by the trial court against Aliant (1) on the negligence and breach-of-fiduciary- duty claims asserted against the Board members in count four of Aliant's complaint; (2) on the fraudulent-misrepresentation and fraudulent-suppression claims asserted against Smith and Twelve Oaks Properties in count seven of Aliant's complaint; and (3) on the conspiracy claims asserted against Smith, Twelve Oaks Properties, Four Star Investments, Mize, and Billy Smith in count seven of Aliant's complaint. We affirm the summary judgment entered by the trial court against Aliant and in favor of the various Twelve Oaks defendants in all other respects. In appeal no. 1150823, we reverse the summary judgments entered against Aliant on the conspiracy claims asserted against Hunt and WHA in count seven of Aliant's complaint; however, we affirm those summary judgments with regard to all other claims asserted by Aliant against Hunt and [substituted p. 89] 1150822, 1150823, 1150824 WHA. Finally, in appeal no. 1150824, we affirm the summary judgment entered by the trial court against Aliant and in favor of the EOS defendants on all counts. 1150822 –– AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. 1150823 –– AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. 1150824 –– AFFIRMED. Bolin, Parker, Main, and Wise, JJ., concur. Shaw, J., concurs in the result. [substituted p. 90]

August 25, 2017

effaa23f-dcd7-4b78-b623-f75401758e38

Easterling v. Progressive Specialty Insurance Co.

N/A

1150833

Alabama

Alabama Supreme Court

REL:09/15/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1150833 _________________________ Hershel Eugene Easterling, individually and as personal representative of the Estate of Charlotte Easterling v. Progressive Specialty Insurance Company Appeal from Chilton Circuit Court (CV-15-900095) SHAW, Justice. Hershel Eugene Easterling, both individually and as the personal representative of the estate of Charlotte Easterling, appeals from a summary judgment in favor of Progressive Specialty Insurance Company ("Progressive") on his claims 1150833 seeking uninsured/underinsured-motorist ("UIM") benefits. We reverse and remand. Facts and Procedural History In December 2014, Hershel and his wife, Charlotte Easterling, were injured when their vehicle was rear-ended in Chilton County by a vehicle driven by Ashley Marie McCartney. In April 2015, the Easterlings sued McCartney in the Chilton Circuit Court, alleging that McCartney behaved negligently and/or wantonly at the time of the accident. The Easterlings' complaint also named Progressive, their insurer, as a defendant and included a count seeking to recover UIM benefits from Progressive. Following the filing of the underlying action, Charlotte died.1 Subsequently, an estate was opened and Hershel was appointed personal representative of Charlotte's estate. The trial court later granted Hershel's motion seeking to substitute himself, in that capacity, as a named plaintiff. 2 1The record suggests that there is a dispute as to whether Charlotte died of causes related to the subject motor-vehicle accident. 2We express no opinion on the viability of the claims Hershel asserts on behalf of Charlotte's estate. See generally Continental Nat'l Indem. Co. v. Fields, 926 So. 2d 1033 (Ala. 2005). 2 1150833 Before trial, McCartney filed a "Suggestion of Bankruptcy" informing the trial court of her initiation of bankruptcy proceedings3 and asserting, as a result, that, because the underlying action was allegedly "founded on a claim that a bankruptcy discharge would release," the instant case "should be ceased."4 In response, Progressive filed a motion and supporting brief requesting a summary judgment in its favor on Hershel's UIM claim. Specifically, Progressive argued that, under Alabama law, a plaintiff may seek to recover UIM benefits from his insurer only if the plaintiff is "legally entitled to recover damages" from the tortfeasor. 3McCartney's "Suggestion of Bankruptcy" fails to indicate whether she sought relief under Chapter 7 or Chapter 13 of the Bankruptcy Code. See Martin v. Cash Express, Inc., 60 So. 3d 236, 246 (Ala. 2010) ("'"Chapter 7 ... allows for the complete discharge of debts and ... [in] bankruptcy under Chapter 13 ... debts [are] discounted and repaid."'" (quoting De Leon v. Comcar Indus., Inc., 321 F.3d 1289, 1291 (11th Cir. 2003))). Elsewhere in the record, however, it is suggested, and not disputed, that McCartney's bankruptcy petition was filed under Chapter 7. 4See Gaddy v. SE Prop. Holdings, LLC, [No. 1140578, May 27, 2016] ___ So. 3d ___, ___ (Ala. 2016) ("The automatic stay prohibits the commencement or continuation of a judicial action or proceeding against the debtor or to recover a claim against the debtor that arose before the commencement of the bankruptcy case." (emphasis added)). 3 1150833 See § 32-7-23(a), Ala. Code 1975.5 Progressive contended that, because McCartney's bankruptcy filing "foreclose[d] [McCartney's] legal obligation to pay debts" -- including any judgment recovered against her by Hershel -- Hershel was not legally entitled to recover from McCartney in excess of McCartney's own liability-insurance policy limits and, thus, Hershel's claim for UIM benefits accordingly failed as a matter of law. 5This Code section provides, in full: "No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in subsection (c) of Section 32-7-6, under provisions approved by the Commissioner of Insurance for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, that the named insured shall have the right to reject such coverage; and provided further, that unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with the policy previously issued to him or her by the same insurer." 4 1150833 In support of its position, Progressive cited, and sought to have applied, the rationale of cases in which this Court has interpreted the phrase "legally entitled to recover" to prevent the recovery of UIM benefits, including a workers' compensation plaintiff's inability to recover from a co- employee and a plaintiff's inability to recover damages in excess of a statutory cap when the defendant is a governmental entity. See Kendall v. United Servs. Auto. Ass'n, 23 So. 3d 1119, 1125 (Ala. 2009) ("In this case, Kendall could recover no more than the statutory maximum of $100,000 in damages from the County under § 11–93–2, Ala. Code 1975. Because Kendall had already recovered the statutory maximum of $100,000, she was no longer 'legally entitled to recover' damages from the [tortfeasors]; therefore, she could not recover UIM benefits from her insurer."), and Ex parte Carlton, 867 So. 2d 332, 338 (Ala. 2003) ("The workers' compensation benefits Carlton received are his only remedy against his employer. ... Therefore, Carlton is not 'legally entitled to recover damages from the owner or operator of an uninsured vehicle'•as the plain language of § 32-7-23(a), Ala. Code 1975, or the clear and unambiguous provisions of his mother's State Farm policy 5 1150833 require. Thus, he may not recover uninsured-motorist benefits under the policy."). Progressive maintained that its reasoning was not contrary to the purpose behind Alabama's statute requiring UIM coverage but that it was, instead, part and parcel of the purported condition precedent to recovery under that statute, namely, "the legal entitlement to recover from the tortfeasor the amount sought from the [UIM] carrier." In his response to Progressive's motion, Hershel disagreed that the Bankruptcy Code operated to prevent recovery as Progressive alleged. According to him, "[t]he [B]ankruptcy [C]ode ... is not set up to protect ... [an] entity from payments which they are contractually obligated to pay through an agreement with an innocent third party." He further observed that, according to 11 U.S.C. § 524(e), "discharge of the debtor [in bankruptcy] does not affect the liability of any other entity ... for such debt." According to those principles, Hershel maintained that the authorities cited by Progressive were inapposite and that Progressive's summary-judgment motion was due to be denied. 6 1150833 Following a hearing,6 the trial court granted Progressive's motion based on the holding that, because of McCartney's Chapter 7 bankruptcy filing, "[Hershel could] no longer obtain a judgment that ... McCartney would be responsible for that would invoke the UM/UIM carrier to pay." The trial court, finding "no just reason for delay," certified its judgment as final pursuant to the requirements of Rule 54(b), Ala. R. Civ. P. Subsequently, Hershel filed a postjudgment motion requesting that the trial court "reconsider" its summary- judgment ruling. Before the trial court's disposition of that request, Hershel filed a notice of appeal to this Court. 7 Standard of Review "'"This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 6A transcript of the summary-judgment hearing was not included in the record on appeal. The record does, however, contain the transcript of the hearing on Hershel's subsequent postjudgment motion. 7As Hershel's brief suggests and the record on appeal confirms, it does not appear that the trial court entered an order disposing of Hershel's postjudgment motion. In any event, that motion would have been, 90 days after its filing, denied by operation of law and the premature notice of appeal held in abeyance until the disposition of the motion. See Rule 59.1, Ala. R. Civ. P.; Rule 4(a)(5), Ala. R. App. P. 7 1150833 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12. '[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assur. Co. of Fla., 547 So. 2d 870, 871 (Ala. 1989)."' "Prince v. Poole, 935 So. 2d 431, 442 (Ala. 2006) (quoting Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004))." Brown v. W.P. Media, Inc., 17 So. 3d 1167, 1169 (Ala. 2009). Additionally, "'[t]his Court reviews de novo a trial court's [application] of a statute, because only a question of law is presented.'" State Farm Mut. Auto. Ins. Co. v. Bennett, 974 8 1150833 So. 2d 959, 961 (Ala. 2007) (quoting Scott Bridge Co. v. Wright, 883 So. 2d 1221, 1223 (Ala. 2003)). Discussion The issue presented is whether the bankruptcy discharge of a UIM defendant prevents an injured plaintiff from being able to recover UIM benefits under the plaintiff's own insurance policy. Hershel contends that the trial court erred in answering the foregoing question in the affirmative and in entering a summary judgment in favor of Progressive. More specifically, according to Hershel, the reasoning advanced by Progressive and accepted by the trial court is both contrary to the effect of a bankruptcy discharge, as indicated by the Bankruptcy Code, and unsupported by Alabama law. In support of his position, Hershel cites authority, including In re Jet Florida Systems, Inc., 883 F.2d 970, 973 (11th Cir. 1989), for the proposition that a bankruptcy discharge protects only the filing debtor and "will not act to enjoin a creditor from taking action against another who also might be liable to the creditor," including, in particular, an insurer that may be secondarily liable. 9 1150833 Progressive, on the other hand, argues that the trial court's ruling was correct in that it represents a "logical extension" of this Court's interpretation of the phrase "legally entitled to recover" under § 32-7-23(a) as discussed in Kendall and Ex parte Carlton, supra. Progressive maintains that this case involves a similar impediment to Hershel's recovery of UIM benefits because, it argues, the automatic stay and ultimate discharge of a tortfeasor's personal liability for damages via bankruptcy proceedings effectively "forecloses the ... legal obligation to pay debts." (Progressive's brief, at p. 3.) Progressive further contends that Jet and other cases on which Hershel relies stand only for the well settled proposition that a plaintiff may, despite the tortfeasor's bankruptcy filing, proceed against the tortfeasor's own insurer but do not hold that the plaintiff may go beyond that permitted recovery and seek UIM benefits from the plaintiff's own insurer. "'This Court has held that "legally entitled to recover" means that "the insured must be able to establish fault on the part of the uninsured motorist, which gives rise to damages and must be able to prove the extent of those damages."' 10 1150833 "Ex parte Carlton, 867 So. 2d at 334 (emphasis omitted) (quoting LeFevre v. Westberry, 590 So. 2d 154, 157 (Ala. 1991), quoting in turn Quick v. State Farm Mut. Auto. Ins. Co., 429 So. 2d 1033, 1035 (Ala. 1983))." Frazier v. St. Paul Ins. Co., 880 So. 2d 406, 410 (Ala. 2003) (emphasis added). See also Walker v. GuideOne Specialty Mut. Ins. Co., 834 So. 2d 769, 772 (Ala. 2002) ("A motorist 'legally entitled to recover damages' under § 32-7-23 is one who presents facts sufficient to prove that the motorist was involved in an accident under circumstances that would entitle the motorist to uninsured-motorist coverage."). Applying the foregoing rationale, this Court in Kendall reiterated "that 'legally entitled to recover'•under the uninsured-motorist statute 'depends entirely on the merits of the insured's claim against the tortfeasor under the laws of the state.'"• 23 So. 3d at 1125 (quoting State Farm Mut. Auto. Ins. Co. v. Causey, 509 F. Supp. 2d 1026, 1030 (M.D. Ala. 2007) (emphasis added)). In Ex parte Carlton, we agreed that the plaintiff was unable to carry the burden of establishing legal liability of a co-employee where the co-employee was, by statute, "immune" from liability. Similarly, in Kendall, we likewise found that the injured plaintiff had already recovered damages amounting 11 1150833 to the maximum permitted by statute and was, therefore, not legally entitled to recover additional damages. Therefore, the plaintiffs' ability to establish the legal merits of their claims was, in some way, statutorily foreclosed. See Carlton, 867 So. 2d at 337 ("'[W]hether an insured is "legally entitled to recover" depends entirely on the merits of the insured's claim against a tortfeasor under the laws of the state.'") (quoting Hogan v. State Farm Mut. Auto. Ins. Co., 730 So. 2d 1157, 1159-60 (Ala. 1998) (Lyons, J., dissenting)); Kendall, 23 So. 3d at 1125 ("'Carlton ultimately stands for the proposition that "legally entitled to recover" depends entirely on the merits of the insured's claim against the tortfeasor under the laws of the state.'" (quoting Causey, 509 F. Supp. 2d at 1030)). See also State Farm Mut. Auto. Ins. Co. v. Griffin, 51 Ala. App. 426, 431, 286 So. 2d 302, 306 (Civ. App. 1973) ("In a direct action by the insured against the insurer, the insured has the burden of proving in this regard that the other motorist was uninsured, legally liable for damage to the insured, and the amount of this liability."). Thus, according to our caselaw, the phrase "legally entitled to recover" refers to the insured's ability 12 1150833 to prove the merits of the underlying tort claim against the UIM tortfeasor. The present case, however, is different from Kendall and from Carlton. Specifically, McCartney's bankruptcy filing limits, not a determination on the merits of McCartney's liability, but, instead, Hershel's ability to collect damages from McCartney once he successfully demonstrates the merits of his claims against her. "A primary goal of the Bankruptcy Code, to allow the 'honest but unfortunate' debtor to obtain a 'fresh start' through relief from his debts, is accomplished by the discharge. In re Krohn, 886 F.2d 123, 125 (6th Cir. 1989) (citing Local Loan Co. v. Hunt, 292 U.S. 234, 54 S. Ct. 695, 699, 78 L. Ed. 1230 (1934)); see also Meyers v. Internal Revenue Serv. (In re Meyers), 196 F.3d 622, 624 (6th Cir. 1999); In re Castle, 289 B.R. 882, 886 (Bankr. E.D. Tenn. 2003). In a Chapter 7 case, a debtor's assets are liquidated for the benefit of his or her creditors, and in return, the debtor's debts, or a portion thereof, are discharged. Krohn, 886 F.2d at 125. Although entry of a Chapter 7 debtor's discharge does not extinguish the debts, once the discharge has been entered, the debtor is no longer personally liable for any of the discharged debts. Castle, 289 B.R. at 886 (quoting Houston v. Edgeworth (In re Edgeworth), 993 F.2d 51, 53 (5th Cir. 1993)); see also In re Gibson, 172 B.R. 47, 49 (Bankr. W.D. Ark. 1994). "Once the debtor is granted a discharge, the 'discharge injunction' is triggered. Section 524 provides, in material part: 13 1150833 "'(a) A discharge in a case under this title— "'.... "'(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor ...[.] "'.... "'(e) Except as [otherwise] provided in ... this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.' "11 U.S.C.A. § 524. 'The purpose of such an injunction is to protect the debtor from suits to collect debts that have been discharged in bankruptcy.' Hendrix v. Page (In re Hendrix), 986 F.2d 195, 199 (7th Cir. 1993). Accordingly, once a Chapter 7 debtor has been granted a discharge, any creditor holding a discharged prepetition claim may not attempt to hold the debtor personally liable for that claim." In re Patterson, 297 B.R. 110, 112-13 (Bankr. E.D. Tenn. 2003) (footnote omitted). In enacting the Bankruptcy Code, "Congress sought to free the debtor of his personal obligations while ensuring that no one else reaps a similar benefit." Green v. Welsh, 956 F.2d 30, 33 (2d Cir. 1992) (citing 3 R. Babitt et al., Collier on 14 1150833 Bankruptcy ¶ 524.01 at 524-16 (15th ed. 1991)). The Bankruptcy Code is not violated by the continuation of an action to permit an injured plaintiff to proceed against a discharged debtor in order to ultimately recover against an insurer. See, e.g., In re Bracy, 449 F. Supp. 70, 71 (D. Mont. 1978) ("This court specifically holds that, if an insurance company is as a matter of state law liable to a plaintiff in a personal injury action, subsequent discharge of the assured in bankruptcy does not alter the obligation of the insurance company."). As indicated, the available authority appears to suggest a clear distinction between a plaintiff's "legal[] entitle[ment] to recover" based on a showing of a tortfeasor's nominal liability and the plaintiff's ability to legally collect the demonstrated damages from the tortfeasor/debtor, i.e., as Progressive notes in its brief, "[t]he plaintiff may not collect from the tortfeasor that files for bankruptcy at any time after the bankruptcy filing." (Progressive's brief, at p. 15.) See also, e.g., Gaddy v. SE Prop. Holdings, LLC, [Ms. 1140578, May 27, 2016] ___ So. 3d ___, ___ (Ala. 2016) ("After entry of the discharge, if one is granted, a discharge 15 1150833 injunction replaces the automatic stay with a permanent injunction against enforcement of all discharged debts." (citing 11 U.S.C. §§ 362, 524(a)(2); In re Goodfellow, 298 B.R. 358 (Bankr. N.D. Iowa 2003) (emphasis added))); In re Mann, 58 B.R. 953 (Bankr. W.D. Va. 1986)(finding that the intent of the § 524(a) injunction is to prohibit the collection of a debt determined to be a personal liability of the debtor and that the goals of bankruptcy would not be advanced by preventing a plaintiff from establishing the debtor's liability when such liability is a prerequisite to the plaintiff's recovery from her UIM insurer (emphasis added)); Hayden, 477 B.R. at 264 ("The entry of a discharge acts as a permanent injunction against litigation for the purpose of collecting a debt from the debtor or the debtor's property." (citing 11 U.S.C. § 727(b) (emphasis added))). This distinction appears to have been recognized in and, as Hershel correctly notes, the principles cited herein adopted in a majority of forums. See, Jet, supra; Edgeworth, 993 F.2d 53-54 (recognizing that the discharge injunction does not prevent a tort litigant from establishing the liability of the debtor in order to trigger the contractual obligation of an 16 1150833 insurer to make payment). See also In re Hendrix, 986 F.2d 195, 197 (7th Cir. 1993) (noting the near unanimity of cases as to the principle that the discharge injunction does not extend to bar suits only nominally against the debtor because the only relief sought is against the debtor's insurer); Underhill v. Royal, 769 F.2d 1426, 1431-32 (9th Cir. 1985) (stating that a bankruptcy court has no power to discharge the liabilities of a nondebtor); Green v. Welsh, 956 F.2d 30, 33 (2d Cir. 1992) ("Numerous courts, confronted with a tort claimant who seeks to proceed against a discharged debtor only for the purpose of recovering against an insurer, have relied on §§ 524(a) and 524(e) and the fresh start policy in concluding that the discharge injunction does not bar such a suit." (citations omitted)); In re Walker, 927 F.2d 1138, 1142 (10th Cir. 1991) (noting that § 524(e) "permits a creditor to bring or continue an action directly against the debtor for the purpose of establishing the debtor's liability when ... establishment of that liability is a prerequisite to recovery from another entity"); In re Patterson, 297 B.R. 110, 113 (Bankr. E.D. Tenn. 2003) ("'[T]he discharge of a chapter 7 debtor does not eradicate liability of third parties such as, 17 1150833 for example, contractually responsible insurance companies.... [Instead, the] discharge injunction ... is intended for the benefit of the debtor; it is not meant to affect the liability of third parties or to prevent establishing such liability through whatever means required.'" (quoting Simpson v. Rodgers (In re Rodgers), 266 B.R. 834, 836 (Bankr. W.D. Tenn. 2001))); In re Jason Pharm., Inc., 224 B.R. 315 (Bankr. D. Md. 1998) (permitting creditor, despite discharge of debt, to proceed nominally against the debtor in state court to establish creditor's right to recover from debtor's insurer); In re Mann, 58 B.R. at 959 ("[T]he provisions of § 524 do not prohibit the Movant from maintaining her pending action against the Debtor, who has received a discharge in Bankruptcy, in order to effectuate recovery under uninsured motorist coverage."); In re White Motor Credit Corp., 37 B.R. 631, 644-45 (Bankr. N.D. Ohio 1984) (permitting pending product-liability suits to continue despite confirmation of debtor's Chapter 11 plan on the ground that a future judgment would merely entitle the injured plaintiffs to insurance proceeds); Rowe v. Ford Motor Co., 34 B.R. 680 (Bankr. M.D. Ala. 1983) (holding that, although a medical-malpractice suit 18 1150833 could not be continued for purposes of collecting against the debtor, it could continue for purposes of determining the debtor's liability, because the plaintiff's right to recover under the plaintiff's own UIM coverage depended upon debtor's liability); Elliott v. Hardison, 25 B.R. 305, 307-08 (E.D. Va. 1982) (affirming grant of relief from automatic stay in order to permit state-court action to proceed where it was necessary for plaintiff, to recover under plaintiff's UIM policy, to establish the legal liability of the debtor as a prerequisite to collecting uninsured-motorist proceeds); In re McGraw, 18 B.R. 140, 143 (Bankr. W.D. Wis. 1982) (holding that, where the plaintiffs had agreed not to seek enforcement of judgment against the debtor, the § 524 injunction could be modified and litigation could continue with the debtor as a defendant for the limited purpose of determining liability); In re Honosky, 6 B.R. 667, 670 (Bankr. S.D. W.Va. 1980) (concluding that, although any liability to the plaintiff was dischargeable and nonrecoverable against the debtor personally, the § 524 injunction did not prohibit the plaintiff from proceeding with litigation to the extent of the debtor's insurance coverage); Wilkinson v. Vigilant Ins. Co., 236 Ga. 456, 456, 224 S.E.2d 19 1150833 167, 168 (1976) (holding that uninsured motorist's discharge in bankruptcy did not preclude the plaintiff-insured from recovering under the UIM provision of her policy); and Bauer, supra. But see Wilcox v. Anchor Wate Co., 164 P.3d 353, 359 (Utah 2007) (declining to apply Edgeworth's rationale based on a "disagree[ment] with its premise" and "align[ing] ... with those courts holding that the proceeds of insurance policies are part of the property of the debtor's estate" (citing In re Vitek, Inc., 51 F.3d 530, 534 n.17 (5th Cir. 1995))). Unlike the statutory limitations in Kendall and Carlton, supra, there is nothing preventing Hershel from establishing that he is legally entitled to recover from McCartney on the merits of his claims; instead, Hershel is merely barred, by operation of McCartney's bankruptcy discharge, from actually collecting demonstrated damages from her. See In re Hayden, 477 B.R. 260, 265-66 (Bankr. N.D. Ga. 2012) ("The Debtor's discharge does not eliminate the debtor's legal obligation for the debt. It simply enjoins collection activity if that collection activity is targeted at the Debtor, the Debtor's property, or property of the Debtor's bankruptcy estate." (citations omitted; emphasis added)); Bauer v. Consolidated 20 1150833 Underwriters, 518 S.W.2d 879, 880 (Tex. Civ. App. 1975) ("The insured's insolvency pertains only to the future collectibility of the judgment. The fact that he did not have funds available to him with which to pay a judgment entered against him would not relieve him of legal liability under the law."). Thus, Progressive is incorrect in its assertion that McCartney's bankruptcy discharge renders Hershel unable to satisfy the prerequisite of § 32-7-23 by proving the merits of his claim. (Progressive's brief, at p. 4.) The entry of a summary judgment in the present circumstances thus appears to conflict with the legislative policies underlying both Alabama's UIM statute and the Bankruptcy Code. See 11 U.S.C. § 524(e) ("[D]ischarge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt."); In re Bracy, 449 F. Supp. at 71 ("It seems clear that it is the policy of the law to discharge the bankrupt but not to release from liability those who are liable with him." (citing 1A Collier on Bankruptcy ¶ 16.15 (14th ed. 1976))). We therefore decline Progressive's invitation to extend the rationale of Carlton and Kendall, supra, to the present 21 1150833 circumstances. Essentially, the flaw in Progressive's logic is this: By virtue of her bankruptcy filing, McCartney has not been relieved of legal liability for the harm she caused Hershel; instead, Hershel may prove the merits of his claim but is merely prevented by law from seeking to collect damages from McCartney for that harm even after his legal entitlement to recover those damages has been established. See Hayden, 477 B.R. at 264 ("[A] creditor may establish the debtor's nominal liability for a claim solely for the purpose of collecting the debt from a third party, such as an insurer or guarantor."). Any injunction against proceeding directly against the debtor, therefore, in no way extends to Hershel's own insurer.8 See id. (explaining that, although the bankruptcy discharge enjoins further action against the debtor, "section 524(e) 'specifies that the debt still exists 8The Court is aware that, pursuant to Alabama caselaw, "in a direct action against an insurer for [uninsured-motorist] benefits '"the insurer [has] available, in addition to policy defenses, the substantive defenses that would have been available to the uninsured motorist."'" State Farm Mut. Auto. Ins. Co. v. Bennett, 974 So. 2d 959, 962 (Ala. 2007) (quoting State Farm's brief, quoting in turn cases). However, nothing in Progressive's filing in this Court suggests that, like the municipal-damages cap and the exclusivity of the workers' compensation remedy, a bankruptcy discharge is a substantive, as opposed to a procedural, defense. See, generally, id.; Rule 8(c), Ala. R. Civ. P. 22 1150833 and can be collected from any other entity that might be liable'" (quoting Edgeworth, 993 F.2d at 53)). Conclusion The trial court erred in entering a summary judgment in favor of Progressive on Hershel's UIM claim. We, therefore, reverse that judgment and remand this matter for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Parker, Murdock, Main, and Bryan, JJ., concur. Shaw, J., concurs specially. Sellers, J., dissents. 23 1150833 SHAW, Justice (concurring specially). I concur in the main opinion, which I authored. I write specially to respectfully respond to Justice Sellers's dissenting opinion. It is true that Ala. Code 1975, § 32-7-23(a), states that uninsured-motorist coverage extends to insureds "who are legally entitled to recover damages." Justice Sellers argues that this phrase refers to an insured's being able to "collect" damages from the tortfeasor and that here, under bankruptcy law, there can be no collection of damages from the bankrupt tortfeasor. The caselaw identified in the main opinion, however, has read the phrase "legally entitled to recover damages" to mean, not the ability merely to collect damages from the tortfeasor, but the ability to establish fault on the part of the tortfeasor and to determine the resulting damages. This reading has a long history: "One must, then, make a determination as to what the words, 'legally entitled to recover damages,' mean. They mean that the insured must be able to establish fault on the part of the uninsured motorist, which gives rise to damages, and must be able to prove the extent of those damages." 24 1150833 State Farm Mut. Auto. Ins. Co. v. Griffin, 51 Ala. App. 426, 431, 286 So. 2d 302, 306 (Ala. Civ. App. 1973). Since Griffin, this reading of the phrase "legally entitled to recover damages" has been consistently repeated by the appellate courts of this State: Quick v. State Farm Mut. Auto. Ins. Co., 429 So. 2d 1033, 1035 (Ala. 1983); Aetna Cas. & Sur. Co. v. Beggs, 525 So. 2d 1350, 1351 (Ala. 1988); LeFevre v. Westberry, 590 So. 2d 154, 157-58 (Ala. 1991) (citing numerous other jurisdictions with the same understanding of the same phrase); Harshaw v. Nationwide Mut. Ins. Co., 834 So. 2d 762, 764 (Ala. 2002); Ex parte Carlton, 867 So. 2d 332, 334 (Ala. 2003); Frazier v. St. Paul Ins. Co., 880 So. 2d 406, 410 (Ala. 2003); Johnson v. Coregis Ins. Co., 888 So. 2d 1231, 1234–35 (Ala. 2004); Ex parte State Farm Mut. Auto. Ins. Co., 893 So. 2d 1111, 1115 (Ala. 2004); Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557, 563 (Ala. 2005); State Farm Mut. Auto. Ins. Co. v. Smith, 956 So. 2d 1164, 1168 (Ala. Civ. App. 2006); State Farm Mut. Auto. Ins. Co. v. Bennett, 974 So. 2d 959, 962 (Ala. 2007); Ex parte Safeway Ins. Co. of Alabama, Inc., 990 So. 2d 344, 351 (Ala. 2008); Jenkins v. State Farm Mut. Auto. Ins. Co., 30 So. 3d 414, 417 (Ala. Civ. App. 2008); 25 1150833 McKinney v. Nationwide Mut. Fire Ins. Co., 33 So. 3d 1203, 1210 (Ala. 2009); Bailey v. Progressive Specialty Ins. Co., 72 So. 3d 587, 593 (Ala. 2011); Ex parte Safeway Ins. Co. of Alabama, 148 So. 3d 39, 42 (Ala. 2013); and Travelers Home & Marine Ins. Co. v. Gray, 171 So. 3d 3, 7–8 (Ala. 2014). By one definition, the word "recover" means "[t]o obtain (a judgment) in one's favor," Black's Law Dictionary 1466 (10th ed. 2014). One obtains a judgment in one's favor by proving one's case in court; proving one's case--in the very general sense--is done by establishing the opposing party's fault and the resulting damages. The phrase "legally entitled to recover damages," as interpreted by the above caselaw, is not a reference to the postjudgment acquisition of money owed under an existing award of damages, but is instead the acquisition of the award in the first place.9 9When there is some form of legal prohibition or immunity barring an action against a tortfeasor, then the insured cannot "obtain a judgment" in the first place. See generally Ex parte Carlton, 867 So. 2d at 338 (holding that because the insured's claim was barred by law, he was not "legally entitled to recover damages"), and Singleton v. Burchfield, 362 F. Supp. 2d 1291, 1297 (M.D. Ala. 2005) (holding that because the defendant tortfeasor had "absolute immunity" from suit, the plaintiffs were not "legally entitled to recover damages" for purposes of uninsured-motorist-insurance coverage). 26 1150833 In the instant case, as the various bankruptcy authorities cited in the main opinion note, Hershel Eugene Easterling is still "legally entitled" "to obtain [a judgment] in [his] favor" for his alleged injury despite the tortfeasor's bankruptcy. He is still entitled under bankruptcy law to prove the tortfeasor's fault and his own damages; he is just not able to collect those damages from the tortfeasor. 27 1150833 SELLERS, Justice (dissenting). I respectfully dissent. Section 32-7-23(a), Ala. Code 1975, mandates uninsured-motorist ("UM") insurance coverage for the protection of persons who are "legally entitled to recover damages" from owners or operators of uninsured motor vehicles; underinsured-motorist ("UIM") coverage, which is at issue here, is a subset of UM coverage. An insured is "legally entitled to recover" under his or her policy providing UM coverage only those damages the insured could legally recover in a direct action against the tortfeasor who harmed him or her. To be legally entitled to recover damages, a plaintiff must be able to "collect" damages from a defendant, not merely establish the defendant's liability for the harm. I view Ex parte Carlton, 867 So. 2d 332 (Ala. 2003), and its progeny as controlling in this respect. In Ex parte Carlton, this Court explained: "Pursuant to the Alabama Workers' Compensation Act, [an employee] may not recover from his co-employee for the co-employee's negligent or wanton conduct. The workers' compensation benefits [the employee] received are his only remedy against his employer. § 25–5–11, Ala. Code 1975. Therefore, [the employee] is not 'legally entitled to recover damages from the owner or operator of an uninsured vehicle' as the plain language of § 32–7–23(a), Ala. Code 1975, or the clear and unambiguous provisions 28 1150833 of his mother's State Farm policy require. Thus, he may not recover uninsured-motorist benefits under the policy." 867 So. 2d at 338. This Court emphasized in Ex parte Carlton that the language of § 32-7-23(a) was plain and unambiguous and that no judicial interpretation of the words of that statute was necessary. 867 So. 2d at 338. Since Ex parte Carlton, this Court has consistently held that the insured may seek to recover UIM benefits from his insurer only if the insured is legally entitled to recover damages from the tortfeasor. See, e.g., Kendall v. United Servs. Auto. Ass'n, 23 So. 3d 1119, 1120 (Ala. 2009)(holding that, because the insured had already recovered the statutory maximum of $100,000, she was no longer legally entitled to recover damages from the County or the tortfeasor and that, therefore, the insured could not recover UIM benefits from her insurer); and Continental Nat'l Indem. Co. v. Fields, 926 So. 2d 1033 (Ala. 2005)(holding that because an unfiled tort claim does not survive the death of the injured person entitled to assert the claim, see § 6-5-462, Ala. Code 1975, the estate was not legally entitled to recover UM benefits). See also Singleton v. Burchfield, 362 F. Supp. 2d 1291 (M.D. Ala. 2005)(holding 29 1150833 that insured could not recover UM benefits under his policy where he could not recover against the tortfeasor who was entitled to absolute immunity under the Federal Tort Claims Act and had been dismissed from case). In the specifics of this case, under the plain language of § 32-7-23(a), Hershel Eugene Easterling can seek UIM benefits against Progressive Specialty Insurance Company only if he was "legally entitled to recover damages" from Ashley McCartney. Because Hershel's ability to recover on any judgment in this case is foreclosed by McCartney’s bankruptcy proceedings, he cannot, under this Court's controlling authority, seek UIM benefits against Progressive. Accordingly, I would affirm the summary judgment in favor of Progressive. 30

September 15, 2017

2a307790-0d4b-4372-a02e-ca06207dc6d0

Marvin Franklin v. State of Alabama

N/A

1160828

Alabama

Alabama Supreme Court

Rel: December 8, 2017 STATE OF ALABAMA -- JUDICIAL DEPARTMENT THE SUPREME COURT OCTOBER TERM, 2017-2018 1160828 Marvin Franklin v. State of Alabama (Appeal from Elmore Circuit Court: CV-16-34). MAIN, Justice. AFFIRMED. NO OPINION. See Rule 53(a)(1) and (a)(2)(F), Ala. R. App. P. Stuart, C.J., and Bolin, Murdock, and Bryan, JJ., concur.

December 8, 2017

bfee242d-13ac-498d-86b5-a038a157e87e

Ex parte D.B. and K.S.

N/A

1160541

Alabama

Alabama Supreme Court

Rel: 09/22/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160541 ____________________ Ex parte D.B. and K.S. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: D.B. and K.S. v. K.S.B.) (Baldwin Juvenile Court, JU-10-321.03; Court of Civil Appeals, 2150850) BRYAN, Justice. 1160541 D.B. and K.S. petitioned this Court for a writ of certiorari seeking review of the judgment of the Court of Civil Appeals affirming, without an opinion, a custody- modification judgment awarding K.S.B. ("the mother") custody of her daughter ("the child"). D.B. v. K.S.B. (No. 2150850, February 3, 2017), ___ So. 3d ___ (Ala. Civ. App. 2017) (table). We granted the petition, and we reverse the judgment of the Court of Civil Appeals and remand the cause for further proceedings. Facts and Procedural History The child was born in April 2007. D.B., the child's maternal grandfather ("the grandfather"), and K.S., the child's maternal stepgrandmother ("the stepgrandmother") (the grandfather and stepgrandmother are hereinafter referred to collectively as "the grandparents"), petitioned for custody of the child after the mother telephoned the grandfather in May 2010 and asked him to come get the child because she was "being mean" to the child. The mother did not appear at the hearing on the grandparents' custody petition, and the juvenile court awarded custody of the child to the grandparents in August 2010. 2 1160541 On February 29, 2016, the mother filed a petition to modify custody. Based on the juvenile court's August 2010 custody judgment in favor of the grandparents, it is undisputed that, in order to succeed in her request to modify custody, the mother was required to meet the well settled custody-modification standard set forth in Ex parte McLendon, 455 So. 2d 863 (Ala. 1984): "'Where a parent has transferred to another [whether it be a non-parent or the other parent], the custody of h[er] infant child by fair agreement, which has been acted upon by such other person to the manifest interest and welfare of the child, the parent will not be permitted to reclaim the custody of the child, unless [s]he can show that a change of the custody will materially promote h[er] child's welfare.' "Greene v. Greene, 249 Ala. 155, 157, 30 So. 2d 444, 445 (1947), quoting the Supreme Court of Virginia, Stringfellow v. Somerville, 95 Va. 701, 29 S.E. 685, 687, 40 L.R.A. 623 (1898). "Furthermore, "'[This] is a rule of repose, allowing the child, whose welfare is paramount, the valuable benefit of stability and the right to put down into its environment those roots necessary for the child's healthy growth into adolescence and adulthood. The doctrine requires that the party seeking modification prove to the court's satisfaction that material changes affecting the child's welfare since the 3 1160541 most recent decree demonstrate that custody should be disturbed to promote the child's best interests. The positive good brought about by the modification must more than offset the inherently disruptive effect caused by uprooting the child. Frequent disruptions are to be condemned.' "Wood v. Wood, 333 So. 2d 826, 828 (Ala. Civ. App. 1976). "It is not enough that the parent show that she has remarried, reformed her lifestyle, and improved her financial position. Carter v. Harbin, 279 Ala. 237, 184 So. 2d 145 (1966); Abel v. Hadder, 404 So. 2d 64 (Ala. Civ. App. 1981). The parent seeking the custody change must show not only that she is fit, but also that the change of custody 'materially promotes' the child's best interest and welfare." 455 So. 2d at 865–66. The brief record from the hearing on the mother's petition to modify custody contains the following pertinent evidence, presented ore tenus. At the time of the hearing, the child was nine years old and had been living with the grandparents since she was three years old. In the six years the child had been in the custody of the grandparents, the mother had begun regularly visiting the child only four months before the hearing. According to the mother, during those four months, she and the child had developed "a pretty strong bond." 4 1160541 The mother presented evidence indicating that she had a history of mental illness and drug abuse, which led to her being unable to care for the child in 2010. After the mother asked the grandparents to care for the child, she was imprisoned for two years; she was released in 2012. The mother testified that she had been misdiagnosed as bipolar for several years but that she was now able to control her mental condition –- borderline personality disorder –- with medication. The mother further testified that she had been drug-free, other than medication for her mental condition, for six years preceding the hearing. In December 2014, the mother married Y.B., an Army veteran. Y.B. had been diagnosed with post-traumatic stress disorder, and, according to the mother, Y.B. receives treatment for that condition approximately once a year. The mother stated that Y.B. is supposed to seek treatment more often but they had "kind of slacked up on it." The mother and Y.B. live in a house Y.B. owns in Spanish Fort. The mother testified that she has two children in addition to the child and that both of those children live with her in the home she shares with Y.B. Her son, who was 11 years old at the time of the hearing, is autistic and had 5 1160541 lived with the mother for only one year before the hearing. The mother testified that her son was born in 2005, that she was involved in drugs at that time, and that she decided it was in her son's best interest for him to live with her mother, the son's maternal grandmother. The maternal grandmother and her husband adopted the son in 2007, but, beginning approximately one year before the hearing in the present case, the maternal grandmother and her husband allowed the son to begin living with the mother. The mother testified that the child and her son "have a wonderful relationship," that they are "elated" when they are together, and that "the love between ... them is very strong." The mother also has a six-month-old daughter with Y.B. The maternal grandmother testified that the mother had turned her life around after she was released from prison and that she had married a wonderful man, so she decided to let the son live with the mother and her husband on a trial basis. According to the maternal grandmother, that has worked out very well, and she thinks the mother would be able to care for another child in her home. 6 1160541 When asked why she believed it was in the best interest of the child for her to be awarded custody, the mother stated: "I think that ... a little girl needs her mother. I think that I can care for her and ... love her just as much as where she's been for the last six years. They have taken good care of her. I do not argue that. They have taken good care of her but I can take care of her as well. She is ... my daughter and I can take care of her." Additionally, she stated that the child has a good relationship with her siblings and that it would be better for the child to live with her siblings and her mother. The grandfather testified that, in the six years he and the stepgrandmother had had custody of the child, they had devoted all of their time and effort to caring for the child and the stepgrandmother had chosen not to return to work so she could stay home to care for the child. He stated that the mother did not ask to see the child after she was released from prison and that, though he offered, the mother did not come to live with him, the stepgrandmother, and the child after she was released from prison. The stepgrandmother testified that she had been married to the grandfather for 28 years and that they loved the child "to death." The stepgrandmother potty-trained the child after 7 1160541 the grandparents obtained custody, and she became actively involved in the child's schooling; she testified that she had taught "smart-board lessons" in the child's classroom, that she had been on all of the child's field trips in the past year, that she had served as "room mom" and an "assistant room mom," and that she had joined the PTA. The grandparents live in a neighborhood in Daphne where the child has friends and they take the child to church with them. The stepgrandmother stated that she had been diagnosed with breast cancer in March 2016. However, the record reveals only the following evidence on that subject: "[The grandparents' attorney]: Ma'am, in your health situation right now, can you describe that to the court? "[The stepgrandmother]: Well, I was diagnosed in March with breast cancer. I'm undergoing chemotherapy. And I finish in –- the tumor's shrinking. And I finish in August.[1] And I will be cured. "[The grandparents' attorney]: Has that in any way affected your ability to take care of [the child]? 1The stepgrandmother gave this testimony at a hearing conducted on June 15, 2016. 8 1160541 "[The stepgrandmother]: No, no. I have no side effects except no hair."2 On June 17, 2016, the juvenile court entered a final judgment awarding the mother custody of the child after finding that she had met the custody-modification standard set forth in Ex parte McLendon, and the court set forth a schedule for a gradual transfer of physical custody from the grandparents to the mother. The grandparents filed a postjudgment motion, arguing that the mother had presented insufficient evidence to meet her burden under Ex parte McLendon. At the hearing on their postjudgment motion, the juvenile court stated: "I am not going to vacate the order. I feel like ... the testimony bore out that the situation at the grandparents' home was not what it once was, that there's been some illness, that there's been some other things going on at the house that would make it such that, not only had mom's situation improved, but the grandparents' situation had diminished." (Emphasis added.) The grandparents appealed the juvenile court's custody- modification judgment, and the Court of Civil Appeals affirmed the judgment by issuing an order without an opinion pursuant 2The mother did not cross-examine the stepgrandmother. 9 1160541 to Rule 53, Ala. R. App. P. This Court granted the grandparents' petition for certiorari review to consider whether the Court of Civil Appeals' decision conflicts with Ex parte McLendon, supra. Discussion The grandparents contend that there was insufficient evidence to support the juvenile court's judgment and that the Court of Civil Appeals' affirmance of that judgment conflicts with Ex parte McLendon. In its no-opinion affirmance in this case, the Court of Civil Appeals cited, among other cases discussed herein, K.U. v. J.C., 196 So. 3d 265, 268-69 (Ala. Civ. App. 2015); the part of that case to which the pinpoint citation in the Court of Civil Appeals' no-opinion affirmance directs us provides, in pertinent part: "'"Where a parent has transferred to another [whether it be a nonparent or the other parent], the custody of his [or her] infant child by fair agreement, which has been acted upon by such other person to the manifest interest and welfare of the child, the parent will not be permitted to reclaim the custody of the child, unless he [or she] can show that a change of the custody will materially promote his [or her] child's welfare."' 10 1160541 "Greene v. Greene, 249 Ala. 155, 157, 30 So. 2d 444, 445 (1947) (quoting Stringfellow v. Somerville, 95 Va. 701, 29 S.E. 685, 687 (1898)). To meet that burden, the party petitioning for modification must prove to the satisfaction of the trial court (1) that the circumstances upon which the original judgment was based have changed, (2) that he or she is fit to act as a custodian for the child, and (3) that '"the positive good brought about by the modification ... more than offset[s] the inherently disruptive effect caused by uprooting the child."' Ex parte McLendon, 455 So. 2d 863, 865 (Ala. 1984) (quoting Wood v. Wood, 333 So. 2d 826, 828 (Ala. Civ. App. 1976)). On appeal, this court presumes the correctness of a judgment based upon evidence presented ore tenus. Ex parte Bryowsky, 676 So. 2d 1322, 1324 (Ala.1996). "'"[W]e will not reverse [the judgment] unless the evidence so fails to support the determination that it is plainly and palpably wrong, or unless an abuse of the trial court's discretion is shown. To substitute our judgment for that of the trial court would be to reweigh the evidence. This Alabama law does not allow."' "Ex parte Perkins, 646 So. 2d 46, 47 (Ala. 1994) (quoting Phillips v. Phillips, 622 So. 2d 410, 412 (Ala. Civ. App. 1993)). However, this court reviews the interpretation and application of the McLendon standard, which involve pure questions of law, de novo. Gallant v. Gallant, 184 So. 3d 387, 401 (Ala. Civ. App. 2014)." After a thorough review of the record, we agree with the grandparents that the Court of Civil Appeals' decision in this 11 1160541 case conflicts with the custody-modification standard set forth in Ex parte McLendon. Even if we assume that there was sufficient evidence to support a finding that there had been a material change in circumstances since the August 2010 custody judgment awarding custody to the grandparents and that the mother is now fit to have custody of the child, see K.U., supra, there was insufficient evidence to support a conclusion that a change in custody would materially promote the best interest and welfare of the child so that the positive good brought about by the modification would more than offset the inherently disruptive effect of the change in custody. Initially, we must address the emphasized part of the above-quoted statement made by the juvenile court at the hearing on the grandparents' postjudgment motion because it provides insight into the juvenile court's decision to modify custody and it explicitly provides the court's reasoning for denying the grandparents' postjudgment motion. The juvenile court refused to vacate the custody-modification judgment because it believed that the evidence indicated that, in addition to the stepgrandmother's "illness," there were "other things going on at the [grandparents'] house that would make 12 1160541 it such that ... the grandparents' situation had diminished." However, we have carefully reviewed the record in this case and we have found no evidence to support that conclusion. Indeed, the only evidence in the record indicating that something was "going on" at the grandparents' house was evidence indicating that the stepgrandmother was diagnosed with breast cancer shortly after the mother filed her petition to modify custody of the child. Thus, we are left to consider the evidence that was actually presented to the juvenile court and to determine whether that evidence supported the juvenile court's implicit conclusion, which is inherent in the court's finding that the mother met her burden pursuant to Ex parte McLendon, that a change in custody would materially promote the best interest and welfare of the child so that the positive good brought about by the change in custody would more than offset the inherently disruptive effect of the change. The mother, in her brief to this Court, argues that, in light of the evidence that the stepgrandmother had been diagnosed with cancer and that, if the mother was awarded custody, the child would have 13 1160541 the opportunity to live with her siblings,3 there was sufficient evidence to support the juvenile court's judgment. In support of its no-opinion order affirming the juvenile court's judgment, the Court of Civil Appeals cited Scroggins v. Templeton, 890 So. 2d 1017, 1022 (Ala. Civ. App. 2003). In that case, the father had custody of the parties' two children, who were eight and seven years old, and the mother petitioned to modify custody. The trial court determined that the mother met the McLendon standard based on the fact that, since he had been awarded custody, the father had become disabled and had had a negative change in temperament. The evidence indicated that the father had injured his back in a work-related accident and that this injury was having a negative impact on the children. For example, the father was no longer able to run, bend, or lift more than 10 pounds, and the children had been enlisted to do household chores the father was no longer able to do. Additionally, the mother presented evidence indicating that the children were "dirty 3Although it is clear from the record that the mother's 6-month-old daughter is the child's half sister, it is unclear whether the mother's 11-year-old son is the child's brother or half brother. 14 1160541 and unkempt," that the father's house was not clean, and that one child occasionally did not wear underwear when the child did not have time to do laundry. Scroggins, 890 So. 2d at 1020. The evidence also indicated that a family member had arranged to take the children to visit other family members for one week, but when they got to the father's house to pick up the children, the father would not allow the eight-year-old child to go on the trip because he needed her to help him; the father was unable physically to get up at that time. The father appealed the custody-modification judgment in favor of the mother, and the Court of Civil Appeals affirmed. The Court of Civil Appeals held that the Ex parte McLendon burden was satisfied because the evidence indicated that "the father's parenting skills were adversely affected by his disability," Scroggins, 890 So. 2d at 1022, while the mother had "remarried, obtained full-time employment, and moved into a new house close to the father and the children." 890 So. 2d at 1023. To the extent, if any, that the Court of Civil Appeals cited Scroggins in its no-opinion affirmance to support a conclusion that the juvenile court could have considered the 15 1160541 stepgrandmother's cancer diagnosis as the basis for concluding that a change in custody would materially promote the best interest and welfare of the child, under the circumstances presented in this case, the court erred. The present case is distinguishable from Scroggins because there is no evidence in the record indicating that the stepgrandmother's illness affected her ability to care for the child in any way. For all that appears in the record, the stepgrandmother was well on her way to completing her treatment, and hair loss was her only side effect. In fact, the mother failed to present any evidence indicating that the stepgrandmother's diagnosis affected the child in any way. Even if we assume that the juvenile court did not believe the stepgrandmother to be as healthy as she indicated she was, there is no evidence from which we could infer that, even under such circumstances, the best interest of the child would be materially promoted by changing custody because doing so would require removing the child from the home of the only stable parental figures she has ever known. The record indisputably shows that the grandparents, for all purposes, have been the child's parents for most of her life; the child 16 1160541 calls the stepgrandmother "mom," the grandparents have been actively involved in the child's schooling and her religious upbringing, and, in their own words, the child had become "the center of [their] life." On the other hand, the mother began regularly visiting the child, for the first time in six years, only four months before the juvenile court awarded her custody of the child. Surely, under such circumstances, evidence of a custodial "parent's" cancer diagnosis, in and of itself, is insufficient to support a conclusion that the best interest of the child would be materially promoted by a change in custody, especially where, as here, the child would be removed from a stable home and exemplary caretakers. Accordingly, we cannot conclude that evidence of the stepgrandmother's illness provided a basis for finding that the child's best interest would be materially promoted by a change in custody so as to overcome the inherently disruptive effect of the change. Regarding the child's ability to live in the same house as her siblings, we note that there is no evidence indicating that this is a situation where the child would have the opportunity to be reunited with siblings she once lived with. The mother's son was adopted by the maternal grandmother and 17 1160541 her husband around the same time the child was born, and there is no evidence in the record indicating that the child and the mother's son ever lived together in the same house. The Court of Civil Appeals also cited M.R.J. v. D.R.B., 34 So. 3d 1287, 1291-92 (Ala. Civ. App. 2009), in its no- opinion affirmance to support its judgment in this case. In M.R.J., the mother had custody of the parties' child, and the father petitioned to modify custody. The juvenile court awarded the father custody after concluding that he met the McLendon standard. The evidence indicated that the mother had moved approximately 12 times in 4 years, that she had left the child in a hotel unsupervised while she went to a Wal-Mart department store and stole diapers, that she failed to show up to visitation exchanges, and that she failed to apprise the father of her telephone number when it changed. The evidence indicated that the father, on the other hand, had been employed by the same company for two years, had lived in the same house for one year, and was able to provide for the child better than the mother could. In the part of M.R.J. to which the pinpoint citation in the Court of Civil Appeals' no- 18 1160541 opinion order in the present case directs us, the court stated: "[The father] also testified that the child gets along well with him, his wife, and the child's half siblings. Further, the father's wife testified that she does not work outside the home and that she will be available to care for the child full-time. Based on that evidence, the trial court could have determined that the 'change in custody will materially promote the child's best interests, and that the benefits of the change will more than offset the inherently disruptive effect caused by uprooting the child.' Adams[ v. Adams], 21 So. 3d [1247,] 1252 [(Ala. Civ. App. 2009)]." 34 So. 3d at 1291–92. After considering all the facts presented in this case, we must conclude that M.R.J. is distinguishable from the present case and does not support a conclusion that the evidence in this case was sufficient to support a finding that the best interest of the child would be materially promoted by a change of custody. Although there was evidence, like there was in M.R.J., indicating that the child gets along well with her siblings and that she loves them, unlike the overwhelming evidence presented in M.R.J., there is no evidence in the present case of any instability in the grandparents' home or any evidence indicating that the grandparents ever put the child in danger. To the contrary, the evidence indicated that 19 1160541 the grandparents were nothing short of model custodians for the child and that they indisputably provided the child with a safe, loving, and stable home. The facts in this case are remarkably similar to the facts in Ex parte McLendon. In that case, the mother agreed to allow the child's paternal grandparents to have custody of her child when the mother divorced the child's father, and the paternal grandparents had custody of the child for approximately five years. During that time, the mother had infrequent visits with the child, and it was undisputed that the paternal grandparents provided a good home for the child. At the time the mother petitioned to modify custody, she had remarried and was able to provide a stable home for the child; the mother and her new husband also had had a child together, the child's half sibling, who lived in their home. The circuit court entered an order modifying custody in favor of the mother, and the Court of Civil Appeals affirmed that order on appeal. This Court, however, reversed the Court of Civil Appeals' judgment. The Court noted that a natural parent loses his or her prima facie right to custody of his or her child "after a voluntary forfeiture of custody or a prior 20 1160541 decree removing custody from the natural parent and awarding it to a nonparent." Ex parte McLendon, 455 So. 2d at 865 (citing, among other cases, Ex parte Mathews, 428 So. 2d 58 (Ala. 1983)). After setting forth the applicable custody- modification standard, the Court stated: "We have examined the record carefully and conclude that the parties are equally capable of taking care of the child, and that both would provide her with a nurturing, loving home. The most that the mother has shown is that her circumstances have improved, and she is now able to provide for the child in the same manner in which the grandparents have been providing for her. She failed to show that changing the custody materially promotes the welfare and best interest of the child." 455 So. 2d at 866. The same is true in the present case. The mother conceded that the grandparents had taken good care of the child, and she expressed no concerns in the juvenile court regarding the grandparents as custodians of the child; the mother simply testified that she believed that she could take care of the child and love her just as well as the grandparents. Ex parte McLendon requires more. We are mindful, of course, of the deference owed to the juvenile court's judgment in light of the ore tenus standard 21 1160541 of review. See Ex parte Perkins, 646 So. 2d 46, 47 (Ala. 1994). However, for the reasons set forth above, we must conclude that "the evidence so fails to support" the juvenile court's judgment modifying custody of the child "that it is plainly and palpably wrong." K.U., 196 So. 2d at 268. Accordingly, that decision must be reversed. Conclusion The judgment of the Court of Civil Appeals affirming the juvenile court's judgment modifying custody of the child is reversed and the cause remanded for further proceedings. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Parker, Murdock, Shaw, Main, Wise, and Sellers, JJ., concur. 22

September 22, 2017

746b01fc-a3f1-4246-b6a3-b574a6d5e194

Mazda Motor Corporation v. Hurst

N/A

1140545

Alabama

Alabama Supreme Court

I N T H E S U P R E M E C O U R T O F A L A B A M A November 17, 2017 1140545 Mazda Motor Corporation v. Jon Hurst and Barbara Hurst, as parents of Natalie J. Hurst, deceased, and Sydney McLemore (Appeal from Jefferson Circuit Court, Bessemer Division: CV-12-900498). CERTIFICATE OF JUDGMENT WHEREAS, the ruling on the application for rehearing filed in this case and indicated below was entered in this cause on November 17, 2017: Application Overruled. No Opinion. Murdock, J. - Stuart, C.J., and Bolin, Parker, Main, Wise, Bryan, and Sellers, JJ., concur. Shaw, J., recuses himself. WHEREAS, the appeal in the above referenced cause has been duly submitted and considered by the Supreme Court of Alabama and the judgment indicated below was entered in this cause on July 7, 2017: Affirmed In Part; Reversed In Part; and Remanded. Murdock, J. - Stuart, C.J., and Bolin, Wise, and Sellers, JJ., concur. Parker, Main, and Bryan, JJ., concur in part, concur in the result in part, and dissent in part. Shaw, J., recuses himself. NOW, THEREFORE, pursuant to Rule 41, Ala. R. App. P., IT IS HEREBY ORDERED that this Court's judgment in this cause is certified on this date. IT IS FURTHER ORDERED that, unless otherwise ordered by this Court or agreed upon by the parties, the costs of this cause are hereby taxed as provided by Rule 35, Ala. R. App. P. I, Julia J. Weller, as Clerk of the Supreme Court of Alabama, do hereby certify that the foregoing is a full, true, and correct copy of the instrument(s) herewith set out as same appear(s) of record in said Court. Witness my hand this 17th day of November, 2017. Clerk, Supreme Court of Alabama

July 7, 2017

9fbacbd9-a177-4f67-b24b-4400515d2c51

Ex parte Alabama Department of Corrections.

N/A

1160413

Alabama

Alabama Supreme Court

REL: 08/25/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160413 ____________________ Ex parte Alabama Department of Corrections PETITION FOR WRIT OF MANDAMUS (In re: Jean Clowers and Scott Clowers v. Alabama Department of Corrections et al.) (Montgomery Circuit Court, CV-16-000004) SELLERS, Justice. The Alabama Department of Corrections ("ADOC") petitions this Court for a writ of mandamus directing the Montgomery 1160413 Circuit Court to enter an order dismissing, on the ground of sovereign immunity, Art. I, § 14, Ala. Const. 1901 (also referred to as State immunity), the claims asserted against it by Jean Clowers and Scott Clowers. Because ADOC has demonstrated a clear legal right to this relief, we grant the petition and issue the writ. On October 8, 2015, Jean Clowers sued ADOC, Isabella Cowan, and fictitiously named parties, seeking to recover damages for injuries she alleges she sustained as a result of a collision between a vehicle she was driving and an ADOC van driven by Cowan, who, at the time of the accident, was a work- release inmate in the custody of ADOC. Clowers alleged in her complaint that ADOC was vicariously liable for Cowan's alleged negligence and/or wantonness in running a red light and thus causing the accident. Clowers's husband, Scott, joined the action, claiming damages for loss of consortium. On May 10, 2016, ADOC filed a motion to dismiss the complaint on the basis that ADOC, as a State agency, is entitled to sovereign immunity under § 14. On January 10, 2017, the circuit court entered an order denying ADOC's motion to dismiss. This petition followed. 2 1160413 A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: "'(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.'" Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003)(quoting Ex parte BOC Grp., Inc., 823 So. 2d 1270, 1272 (Ala. 2001)). It is well established that "a court's failure to dismiss a case for lack of subject-matter jurisdiction based on sovereign immunity may properly be addressed by a petition for the writ of mandamus." Ex parte Alabama Dep't of Mental Health & Mental Retardation, 837 So. 2d 808, 810–11 (Ala. 2002). "A ruling on a motion to dismiss is reviewed without a presumption of correctness." Newman v. Savas, 878 So. 2d 1147, 1148–49 (Ala. 2003). The only issue for the Court's review is whether the circuit court erred in failing to dismiss the Clowerses' claims against ADOC on the basis of sovereign immunity. In Alabama Department of Corrections v. Montgomery County Commission, 11 So. 3d 189, 191-92 (Ala. 2008), this Court 3 1160413 stated the well established law regarding sovereign or State immunity: "Section 14, Ala. Const. 1901, provides: '[T]he State of Alabama shall never be made a defendant in any court of law or equity.' (Emphasis added.) 'The wall of immunity erected by § 14 is nearly impregnable.' Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002). Indeed, as regards the State of Alabama and its agencies, the wall is absolutely impregnable. Ex parte Alabama Dep't of Human Res., 999 So. 2d 891, 895 (Ala. 2008) ('Section 14 affords absolute immunity to both the State and State agencies.'); Ex parte Jackson County Bd. of Educ., 4 So. 3d 1099, 1102 (Ala. 2008) (same); Atkinson v. State, 986 So. 2d 408, 410–11 (Ala. 2007) (same); [In re] Good Hope [Contracting Co. v. Alabama Dep't of Transp., 978 So. 2d 17 (Ala. 2007)] (same); Ex parte Alabama Dep't of Transp., 764 So. 2d 1263, 1268 (Ala. 2000) (same); Mitchell v. Davis, 598 So. 2d 801, 806 (Ala. 1992) (same). 'Absolute immunity' means just that--the State and its agencies are not subject to suit under any theory. "'This immunity may not be waived.' Patterson, 835 So. 2d at 142. Sovereign immunity is, therefore, not an affirmative defense, but a 'jurisdictional bar.' Ex parte Alabama Dep't of Transp., 985 So. 2d 892, 894 (Ala. 2007). The jurisdictional bar of § 14 simply 'preclud[es] a court from exercising subject-matter jurisdiction' over the State or a State agency. Lyons v. River Road Constr., Inc., 858 So. 2d 257, 261 (Ala. 2003). Thus, a complaint filed solely against the State or one of its agencies is a nullity and is void ab initio. Ex parte Alabama Dep't of Transp. (In re Russell Petroleum, Inc. v. Alabama Dep't of Transp.), 6 So. 3d 1126 (Ala. 2008) .... Any action taken by a court without subject-matter jurisdiction--other than dismissing the action--is void. State v. Property at 2018 Rainbow Drive, 740 So. 2d 1025, 1029 (Ala. 1999)." 4 1160413 Because it is an agency of the State of Alabama, ADOC is entitled to absolute immunity under § 14 as to the claims asserted against it by the Clowerses. Therefore, the circuit court lacked jurisdiction over those claims. ADOC has established a clear legal right to the relief requested. Accordingly, we grant the petition for the writ of mandamus and direct the circuit court to dismiss the claims against ADOC based on the doctrine of sovereign immunity. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Shaw, Main, Wise, and Bryan, JJ., concur. 5

August 25, 2017

033b7c6f-320f-4c52-8b1c-111936059070

Jason S. Corley v. Valerie A. Richardson, in her capacity as president of Bishop State Community College

N/A

1160132

Alabama

Alabama Supreme Court

Rel: 07/21/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160132 ____________________ Jason S. Corley v. Valerie A. Richardson, in her capacity as president of Bishop State Community College Appeal from Mobile Circuit Court (CV-16-900244) PER CURIAM. AFFIRMED. NO OPINION. See Rule 53(a)(1) and (a)(2)(E), Ala. R. App. P. 1160132 Stuart, C.J., and Bolin, Wise, Bryan, and Sellers, JJ., concur. Murdock, J., concurs specially. Parker, Shaw, and Main, JJ., dissent. 2 1160132 MURDOCK, Justice (concurring specially). Jason S. Corley appeals from a Mobile Circuit Court's order dismissing his action against Valerie A. Richardson, in her capacity as president of Bishop State Community College ("BSCC"), on the basis of sovereign immunity. This Court affirms that order of dismissal, and I concur in that affirmance. The complaint in this case states: "7. [Corley] has been employed by [BSCC] since 1996. [Corley] was initially hired in 1996 as a part time employee to teach night courses. In 1999, [Corley] applied for and was hired to a full time day teaching position. "8. [Corley] agreed to an offer of employment approved by Dr. Yvonne Kennedy when it was presented to him by Marcella Simms on or about November 3, 1999. Dr. Yvonne Kennedy was [BSCC's] President and Marcella Simms was [BSCC's] Director of Human Resources at the time. "9. [Corley's] employment agreement provided that he would be placed at Level I/B on [BSCC's] Salary Schedule upon his hiring. The employment agreement also required that as a condition of employment, [Corley] was required to complete his associate degree within one year of his employment date. As soon as he completed the associate degree, he would be moved to Level I/A. "10. [Corley] completed his associate degree within the one year period and notified [BSCC] on August 9, 2000, that he should be moved to Level I/A on the Salary Schedule. [BSCC's] Technical Dean 3 1160132 also requested that [Corley] be moved to Level I/A on August 11, 2000. [BSCC] did nothing. 11. [Corley] worked at [BSCC] and requested to be moved to Level I/A for the next fifteen (15) years. [Corley] continuously made requests to [BSCC's] presidents, to Simms, and to others in central administration either on his own or through [BSCC's] Technical Dean, Dr. Harry Holloway. During these 15 years, there was no movement in [Corley's] placement on [BSCC's] Salary Schedule. [BSCC's] presidency transitioned from Dr. Yvonne Kennedy to Dr. James Lowe to a period of interim and acting presidents to Defendant Richardson. "12. Finally, on October 1, 2015, Defendant Richardson moved [Corley] from Level I/B to Level 1/A. "13. [Corley's] placement at Level I/A should have been made in 2000 following the completion of his associate degree. "14. [Richardson's] failure to move [Corley] was in breach of his employment agreement with [BSCC] and has resulted in [Corley] not being appropriately compensated." Corley sought "declaratory, mandamus, and injunctive relief ordering and requiring that [Richardson] pay [Corley] the compensation and employment benefits due him as if he had been placed at Level I/A since 2000." Richardson filed a motion to dismiss Corley's action on the ground of sovereign immunity. As noted, the circuit court granted Richardson's motion. 4 1160132 In considering a motion to dismiss for failure to state a claim upon which relief can be granted, the court views the allegations of the complaint in the plaintiff's favor and seeks to determine whether, in light of those allegations, the plaintiff could prove any set of circumstances that would entitle the plaintiff to relief. See, e.g., Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993). That said, nothing in Corley's complaint fairly can be read as alleging that BSCC entered into a 16-year employment agreement with Corley, i.e., an agreement for a term lasting from 1999 to at least 2015.1 Certainly, there is no express allegation to this effect in the complaint. Nor do I think such an arrangement -- as opposed to a series of annual or shorter term contracts -- can fairly be inferred from what is alleged, given Alabama law and common knowledge of practices in higher education. Yet, in 1If that is Corley's allegation, and BSCC breached his employment agreement in August 2000, and thereafter continued breaching his employment agreement until October 1, 2015, the statute of limitations would appear to preclude his recovering much of his alleged backpay. See Ala. Code 1975, § 6–2–34(9)(providing six-year statute of limitations for actions on simple contract); AC, Inc. v. Baker, 622 So. 2d 331, 334 (Ala. 1993); and Honea v. Raymond James Fin. Servs., Inc., [Ms. 1130590, June 30, 2017] ___ So. 3d ___, ___ (Ala. 2017)(Murdock, J., concurring in the result in case no. 1130655 and dissenting as to case no. 1130590)). 5 1160132 order for Corley to have made a viable allegation as a matter of contract law for the backpay he now claims (or at least the last six years of it, see note 1, supra), we would in fact have to assume that Corley and his counsel have filed a complaint in the courts of this State alleging that in 1999 BSCC entered a contract pursuant to which BSCC bound itself to employ Corley for a term of 16 years and that it further obligated itself to pay Corley at a certain rate of pay for a period of 15 continuous years. Even if we assumed this, the circuit court's judgment dismissing the complaint would still be proper (again, leaving aside any statute-of-limitations issue) because the 15 years of service at issue would not have been rendered under circumstances that fall within the exception to sovereign immunity discussed in cases such as State of Alabama Highway Department v. Milton Construction Co., 586 So. 2d 872 (Ala. 1991), and State Board of Administration v. Roquemore, 218 Ala. 120, 123-24, 117 So. 757, 760 (1928). Those cases involve the timely delivery to and acceptance by the State of goods or services as to which there is no dispute of conformity under the contract and as to which a sum certain is owed the vendor as a result, only 6 1160132 to have the State then -— i.e., after timely delivery of the conforming goods or services -— refuse payment to the vendor. The facts and circumstances of this case are the polar opposite of the circumstances in such cases. Specifically, even if we were to assume that in November 1999 BSCC promised that in 2000 it would change the terms under which Corley would be employed if by then he had obtained his associate degree, the fact is that BSCC did not change those terms. Corley obviously was fully aware of that fact; he alleges he continued throughout the ensuing 15 years to ask that his pay be changed. Nonetheless, even as BSCC continued to refuse to change his rate of pay, Corley continued to work for BSCC at the originally agreed-upon rate of pay. He continued to work for BSCC year after year, fully aware that BSCC was rejecting his calls to be paid at a higher rate. Importantly, then, according to the allegations of the complaint, BSCC's alleged breach occurred before Corley delivered all or most of the 15 years' worth of services in question, not after he delivered goods or services under an undisputed contract, as was the case in Milton and Roquemore.2 2Even if Corley were alleging that BSCC failed to enter into a new contract (or a series of new annual contracts) on 7 1160132 This, in other words, is not a case where the contracting party timely delivered, and the State accepted, conforming goods or services under contractual terms that are acknowledged or undisputed, only to thereafter breach the contract by simply "stiffing" the "vendor" after the fact. To the contrary, the "vendor" here, Corley, continued to deliver services year after year, fully aware that BSCC did not intend to pay him under the contractual terms he now alleges existed. This is not the narrow ministerial-duty exception carved out by Milton and Roquemore. Unlike the circumstances in Milton and Roquemore, BSCC made clear to Corley that it did not intend to pay him under the terms he alleges it agreed to, and BSCC made its intention known before he delivered the services for which he now seeks compensation under his employment agreement, not after as in Milton and Roquemore. Corley just chose to return to his work with the college year after year anyway -- for 15 years. the terms Corley claims he was entitled to, this case would be quite different from Roquemore and Milton just on that ground. 8 1160132 PARKER, Justice (dissenting). I respectfully dissent. The sole issue on appeal is whether Jason S. Corley's action against Valerie A. Richardson, in her capacity as president of Bishop State Community College ("BSCC"), is barred by the doctrine of State immunity. See § 14, Ala. Const. 1901. I dissent because I believe that Corley pleaded facts that, if true, would allow him to pursue his action against Richardson. Corley should be given the opportunity to engage in discovery and to prove the facts pleaded in his complaint. A brief recitation of the facts is necessary to make clear my position concerning this rather complicated area of the law. Corley set forth the following relevant facts in his complaint: "7. [Corley] has been employed by [BSCC] since 1996. [Corley] was initially hired in 1996 as a part time employee to teach night courses. In 1999, [Corley] applied for and was hired to a full time day teaching position. "8. [Corley] agreed to an offer of employment approved by Dr. Yvonne Kennedy when it was presented to him by Marcella Simms on or about November 3, 1999. Dr. Yvonne Kennedy was [BSCC's] President and Marcella Simms was [BSCC's] Director of Human Resources at the time. 9 1160132 "9. [Corley's] employment agreement provided that he would be placed at Level I/B on [BSCC's] Salary Schedule upon his hiring. The employment agreement also required that as a condition of employment, [Corley] was required to complete his associate degree within one year of his employment date. As soon as he completed the associate degree, he would be moved to Level I/A. "10. [Corley] completed his associate degree within the one year period and notified [BSCC] on August 9, 2000, that he should be moved to Level I/A on the Salary Schedule. [BSCC's] Technical Dean also requested that [Corley] be moved to Level I/A on August 11, 2000. [BSCC] did nothing. "11. [Corley] worked at [BSCC] and requested to be moved to Level I/A for the next fifteen (15) years. [Corley] continuously made requests to [BSCC's] presidents, to Simms, and to others in central administration either on his own or through [BSCC's] Technical Dean, Dr. Harry Holloway. During these 15 years, there was no movement in [Corley's] placement on [BSCC's] Salary Schedule. [BSCC's] presidency transitioned from Dr. Yvonne Kennedy to Dr. James Lowe to a period of interim and acting presidents to Defendant Richardson. "12. Finally, on October 1, 2015, Defendant Richardson moved [Corley] from Level I/B to Level I/A." On February 5, 2016, Corley sued Richardson. Corley's complaint sought "declaratory, mandamus, and injunctive relief ordering and requiring that [Richardson] pay [Corley] the compensation and employment benefits due him as if he had been placed at Level I/A since 2000." 10 1160132 On March 21, 2016, Richardson filed a motion to dismiss under Rule 12(b)(1), Ala. R. Civ. P., requesting that Corley's complaint be dismissed for lack of subject-matter jurisdiction. Specifically, Richardson argued that Corley's action is barred by the doctrine of State immunity because Corley requests as damages the payment of money, in the form of backpay, from a State entity. On August 25, 2016, Corley filed a response to Richardson's motion to dismiss. On September 30, 2016, the circuit court granted Richardson's motion and dismissed Corley's complaint for lack of subject-matter jurisdiction. Corley appealed. This Court today affirms that dismissal. It is significant to note the applicable standard of review in this case, which this Court set forth in Liberty National Life Insurance Co. v. University of Alabama Health Services Foundation, P.C., 881 So. 2d 1013, 1017 (Ala. 2003): "'The appropriate standard of review of a trial court's [ruling on] a motion to dismiss is whether "when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief." Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993); Raley v. Citibanc of Alabama/Andalusia, 474 So. 2d 11 1160132 640, 641 (Ala. 1985). This Court does not consider whether the plaintiff will ultimately prevail, but only whether the plaintiff may possibly prevail. Nance, 622 So. 2d at 299. A "dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." Nance, 622 So. 2d at 299; Garrett v. Hadden, 495 So. 2d 616, 617 (Ala. 1986); Hill v. Kraft, Inc., 496 So. 2d 768, 769 (Ala. 1986).' "Lyons v. River Road Constr., Inc., 858 So. 2d 257, 260 (Ala. 2003)." The issue before us is whether, when the facts are read in a light most favorable to him, Corley "may possibly prevail." This Court recently set forth the relevant applicable law in Alabama State University v. Danley, 212 So. 3d 112, 122-24 (Ala. 2016): "'Under Article 1, § 14, Alabama Constitution of 1901, "the State and its agencies have absolute immunity from suit in any court." Phillips v. Thomas, 555 So. 2d 81, 83 (Ala. 1989); see also Taylor v. Troy State University, 437 So. 2d 472, 474 (Ala. 1983). "This immunity extends to the state's institutions of higher learning."[3] Taylor, 437 So. 2d at 474; see Breazeale v. Board of Trustees of the University of South Alabama, 575 So. 2d 1126, 1128 (Ala. Civ. App. 1991). "State officers and employees, in their official 3This Court recognized BSCC as a State agency in State Board of Education v. Mullins, 31 So. 3d 91, 96 (Ala. 2009). 12 1160132 capacities and individually, are also absolutely immune from suit when the action is, in effect, one against the state." Phillips v. Thomas, 555 So. 2d at 83; see Taylor v. Troy State University, 437 So. 2d at 474.' "Williams v. John C. Calhoun Cmty. Coll., 646 So. 2d 1, 2 (Ala. 1994). "'"The wall of immunity erected by § 14 is nearly impregnable. Sanders Lead Co. v. Levine, 370 F. Supp. 1115, 1117 (M.D. Ala. 1973); Taylor v. Troy State Univ., 437 So. 2d 472, 474 (Ala. 1983); Hutchinson v. Board of Trustees of Univ. of Alabama, 288 Ala. 20, 24, 256 So. 2d 281, 284 (1971). This immunity may not be waived. Larkins v. Department of Mental Health & Mental Retardation, 806 So. 2d 358, 363 (Ala. 2001) ('The State is immune from suit, and its immunity cannot be waived by the Legislature or by any other State authority.'); Druid City Hosp. Bd. v. Epperson, 378 So. 2d 696 (Ala. 1979) (same); Opinion of the Justices No. 69, 247 Ala. 195, 23 So. 2d 505 (1945) (same); see also Dunn Constr. Co. v. State Bd. of Adjustment, 234 Ala. 372, 175 So. 383 (1937). 'This means not only that the state itself may not be sued, but that this cannot be indirectly accomplished by suing its officers or agents in their official capacity, when a result favorable to plaintiff would be 13 1160132 directly to affect the financial status of the state treasury.' State Docks Comm'n v. Barnes, 225 Ala. 403, 405, 143 So. 581, 582 (1932) (emphasis added); see also Southall v. Stricos Corp., 275 Ala. 156, 153 So. 2d 234 (1963)." "'Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002).' "Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867, 872–73 (Ala. 2004). "'Section 14 immunity is not absolute; there are actions that are not barred by the general rule of immunity. "'"[C]ertain actions are not barred by § 14. There are six general categories of actions that do not come within the prohibition of § 14: (1) actions brought to compel State officials to perform their legal duties; (2) actions brought to enjoin State officials from enforcing an unconstitutional law; (3) actions to compel State officials to perform ministerial acts; (4) actions brought against State officials under the Declaratory Judgments Act, Ala. Code 1975, § 6–6–220 et seq., seeking construction of a statute and its application in a given situation; (5) valid inverse condemnation actions brought against State officials in their representative capacity; and (6) actions for injunction or damages brought against State officials in their 14 1160132 representative capacity and individually where it was alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law. See Drummond Co. v. Alabama Dep't of Transp., 937 So. 2d 56, 58 (Ala. 2006) (quoting Ex parte Carter, 395 So. 2d 65, 68 (Ala. 1980)); Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831 (Ala. 2008) (holding that the e x c e p t i o n f o r declaratory-judgment actions applies only to actions against State officials). As we confirmed in Harbert, these 'exceptions' to sovereign immunity apply only to actions brought against State officials; they do not apply to actions against the State or against State agencies. See Alabama Dep't of Transp., 990 So. 2d at 840–41." "'Ex parte Alabama Dep't of Fin., 991 So. 2d 1254, 1256–57 (Ala. 2008). The sixth "exception" to § 14 immunity was restated in Ex parte Moulton, 116 So. 3d 1119, 1141 (Ala. 2013), as follows: "'"(6)(a) actions for injunction brought against State officials in their representative capacity where it is alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law, Wallace v. Board of Education of Montgomery County, 280 Ala. 635, 197 So. 2d 428 (1967), and (b) 15 1160132 actions for damages brought against State officials in their individual capacity where it is alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law, subject to the limitation that the action not be, in effect, one against the State. Phillips v. Thomas, 555 So. 2d 81, 83 (Ala. 1989)."' "Ex parte Hampton, 189 So. 3d 14, 17-18 (Ala. 2015). "'"These actions are sometimes referred to as 'exceptions' to § 14; however, in actuality these actions are simply not considered to be actions '"against the State" for § 14 purposes.' Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002). This Court has qualified those 'exceptions,' noting that '"[a]n action is one against the [S]tate when a favorable result for the plaintiff would directly affect a contract or property right of the State, or would result in the plaintiff's recovery of money from the [S]tate."' Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867, 873 (Ala. 2004) (quoting Shoals Cmty. Coll. v. Colagross, 674 So. 2d 1311, 1314 (Ala. Civ. App. 1995)) (emphasis added in Jones)." "'Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831, 840 (Ala. 2008).' 16 1160132 "Vandenberg v. Aramark Educ. Servs., Inc., 81 So. 3d 326, 332 (Ala. 2011). "'"To determine whether an action against a State officer is, in fact, one against the State, this Court considers "'"'whether "a result favorable to the plaintiff would directly affect a contract or property right of the State," Mitchell [v. Davis, 598 So. 2d 801, 806 (Ala. 1992)], whether the defendant is simply a "conduit" through which the plaintiff seeks recovery of damages from the State, Barnes v. Dale, 530 So. 2d 770, 784 (Ala. 1988), and whether "a judgment against the officer would directly affect the financial status of the State treasury," Lyons [v. River Road Constr., Inc.], 858 So. 2d [257] at 261 [(Ala. 2003)].' "'"Haley [v. Barbour County], 885 So. 2d [783] at 788 [(Ala. 2004)]. Additionally, '[i]n determining whether an action against a state officer is barred by § 14, the Court considers the nature of the suit or the relief demanded, not the character of the office of the person against whom the suit is brought.' Ex parte Carter, 395 So. 2d 65, 67–68 (Ala. 1980)."' "Ex parte Moulton, 116 So. 3d 1119, 1130–31 (Ala. 2013) (quoting Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831, 839–40 (Ala. 2008)). "As our caselaw demonstrates, § 14 provides absolute immunity from suit -- and thus liability -- for monetary damages based on state-law claims, not 17 1160132 only for the State but also for State officials acting in their official capacities. Ex parte Trawick, 959 So. 2d 51, 55 (Ala. 2006) (holding that '"[a] complaint seeking money damages against a State employee in his or her official capacity is considered a complaint against the State, and such a complaint is barred by ... § 14"' (quoting Ex parte Butts, 775 So. 2d 173, 177 (Ala. 2000))). ..." In summary, an action seeking money damages from the State is necessarily barred by § 14 immunity. However, an action seeking to compel a State official to perform a ministerial act, which may result in money being paid to the plaintiff, is not barred by § 14 immunity. This Court explained the rationale for this distinction in Alabama Department of Transportation v. Harbert International, Inc., 990 So. 2d 831, 845-46 (Ala. 2008)(abrogated on another ground): "[T]he trial court can generally, by writ of mandamus, order State officers in certain situations to pay liquidated damages or contractually specified debts. The payment of these certain, liquidated amounts would be only a ministerial act that State officers do not have the discretion to avoid. [Alabama Agric. & Mech. Univ. v.] Jones, 895 So. 2d [867,] 878–79 [(Ala. 2004)]; [State Bd. of Admin. v.] Roquemore, 218 Ala. [120,] 124, 117 So. [757,] 760 [(1928)]. Furthermore, although the payment of the funds 'may ultimately touch the State treasury,' Horn v. Dunn Bros., 262 Ala. 404, 410, 79 So. 2d 11, 17 (1955), the payment does not 'affect the financial status of the State treasury,' Lyons [v. River Road Constr., Inc.], 858 So. 2d [257,] 261 18 1160132 [(Ala. 2003)], because the funds 'do not belong to the State,' Alabama Dep't of Envtl. Mgmt. v. Lowndesboro, 950 So. 2d 1180, 1190 n. 6 (Ala. Civ. App. 2005) (two-judge opinion), and the State treasury 'suffers no more than it would' had the State officers originally performed their duties and paid the debts. Horn, 262 Ala. at 410, 79 So. 2d at 17. The trial court may not, however, award retroactive relief in the nature of unliquidated damages or compensatory damages, because such relief affects a property or contract right of the State. Stark [v. Troy State Univ., 514 So. 2d 46 (Ala. 1987)]; Williams [v. Hank's Ambulance Serv., Inc., 699 So. 2d 1230 (Ala. 1997)]; Roquemore; J.B. McCrary Co. v. Brunson, 204 Ala. 85, 86, 85 So. 396, 396 (1920) ('mandamus will not lie to compel the payment of unliquidated claims'); and Vaughan [v. Sibley, 709 So. 2d 482 (Ala. Civ. App. 1997)]." Corley argues that his complaint is not barred by § 14 because, he says, his complaint does not seek compensatory damages, but seeks a writ of mandamus ordering Richardson to perform a ministerial act. The ministerial act Corley seeks to compel Richardson to perform is the payment of a certain sum of money Corley says BSCC owes him. Corley argues that his complaint fits within the first and third "exceptions" to § 14 immunity, set forth above. In so arguing, Corley relies on State of Alabama Highway Department v. Milton Construction Co., 586 So. 2d 872 (Ala. 1991). This Court recently discussed Milton Construction in Danley: 19 1160132 "In Milton Construction, the plaintiff contracted with the State Highway Department to perform work on two interstate highways. 586 So. 2d at 875. It was undisputed that the plaintiff had provided the services it contracted to provide. Nevertheless, the State Highway Department withheld $534,000 it owed the plaintiff under the terms of the contract. The trial court entered a judgment against the State Highway Department for $534,000. On appeal, the State Highway Department argued that, on the basis of sovereign immunity, it could not be made to pay the judgment. 586 So. 2d at 875. In affirming the judgment, this Court stated: "'Once the Highway Department has legally contracted under state law for goods or services and accepts such goods or services, the Highway Department also becomes legally obligated to pay for the goods or services accepted in accordance with the terms of the contract. It follows that this obligation is not subject to the doctrine of sovereign immunity and is enforceable in the courts.' "586 So. 2d at 875 (emphasis added). Thus, because the State Highway Department had already received the benefits of its contract with the plaintiff, an action seeking to compel payment for the services was an action seeking to compel State officers to perform their legal duty, i.e., an action under the first 'exception' to § 14 immunity." Danley, 212 So. 3d at 126-27. I believe that Milton Construction is dispositive of this case. In the present case, when the facts are read in a light most favorable to Corley, as they must be under the applicable standard of review, they reveal the following: Corley entered 20 1160132 into an employment contract with BSCC on November 3, 1999. The contract provides that, until Corley obtained his associate degree, he be placed at Level I/B on BSCC's salary schedule. For the period from November 3, 1999, to August 8, 2000, Corley provided a service to BSCC, which BSCC accepted, and BSCC paid Corley for that service pursuant to the terms of the contract. The contract further requires Corley to obtain an associate degree. The employment contract provides that, once Corley obtained an associate degree, he would be moved from Level I/B to Level I/A on BSCC's salary schedule. On August 9, 2000, Corley obtained an associate degree. From that time forward, Corley continued to provide a service to BSCC pursuant to the terms of the contract; BSCC accepted the service provided by Corley. However, in contradiction to the terms of the contract as asserted by Corley in his complaint, BSCC refused to place Corley at Level I/A on BSCC's salary schedule. BSCC accepted Corley's service, but allegedly refused to compensate Corley according to the terms of the contract. On October 1, 2015, Richardson placed Corley at Level I/A on BSCC's salary schedule as required by the contract. 21 1160132 Like the plaintiff in Milton Construction, Corley filed an action to compel Richardson, a State official, to perform her legal duty. Reading the facts in a light most favorable to Corley, I believe that Corley's action may be one under the first "exception" to § 14 immunity. Based on the facts asserted by Corley in his complaint, the employment contract provided the legal duty Richardson was required to perform. According to Corley, the contract required BSCC to pay Corley in accordance with Level I/A of BSCC's salary schedule from August 9, 2000, to October 1, 2015. Corley provided a service to BSCC, which BSCC accepted. Under the terms of the contract, as asserted by Corley, Corley earned a salary commensurate with Level I/A of BSCC's salary schedule from August 9, 2000, to October 1, 2015. However, during that time, BSCC paid Corley a salary commensurate with Level I/B of BSCC's salary schedule. By accepting Corley's service, BSCC became legally obligated to pay a certain amount of money for that service in accordance with the terms of the contract as stated in Corley's complaint. Corley's action is one requesting that Richardson be required to perform her legal duty of paying Corley the specified amount of money BSCC is 22 1160132 legally obligated to pay Corley under the terms of the contract. In summary, "although the payment of the funds 'may ultimately touch the State treasury,' Horn v. Dunn Bros., 262 Ala. 404, 410, 79 So. 2d 11, 17 (1955), the payment does not 'affect the financial status of the State treasury,' Lyons [v. River Road Constr., Inc.], 858 So. 2d [257,] 261 [(Ala. 2003)], because the funds 'do not belong to the State,' Alabama Dep't of Envtl. Mgmt. v. Lowndesboro, 950 So. 2d 1180, 1190 n. 6 (Ala. Civ. App. 2005) (two-judge opinion), and the State treasury 'suffers no more than it would' had the State officers originally performed their duties and paid the debts. Horn, 262 Ala. at 410, 79 So. 2d at 17." Harbert International, 990 So. 2d at 845-46. Based on the facts asserted in Corley's complaint, the backpay Corley requests Richardson pay him are funds that do not belong to the State. Corley earned those funds by providing a service to BSCC, which BSCC accepted. According to the facts alleged in Corley's complaint, the terms of the contract specify exactly how much backpay Corley is entitled to and BSCC is obligated to pay. Accordingly, Corley has demonstrated that he may prevail in this case based on the facts asserted in his complaint. 23 1160132 SHAW, Justice (dissenting). I respectfully dissent. The material facts in this case are related above in Justice Parker's dissenting opinion; there is no need for me to repeat them all here. My reasons for dissenting are as follows. It appears to me that the motion to dismiss filed by Valerie A. Richardson, in her capacity as president of Bishop State Community College ("BSCC"), for lack of subject-matter jurisdiction advanced, under Rule 12(b)(1), Ala. R. Civ. P., a "facial" challenge to Jason S. Corley's complaint. "'Facial challenges, such as motions to dismiss for lack of standing at the pleading stage, "attack[] the factual allegations of the complaint that are contained on the face of the complaint." Al–Owhali [v. Ashcroft], 279 F. Supp. 2d [13,] 20 [(D.D.C. 2003)] (internal quotation marks and citation omitted). "If a defendant mounts a 'facial' challenge to the legal sufficiency of the plaintiff's jurisdictional allegations, the court must accept as true the allegations in the complaint and consider the factual allegations of the complaint in the light most favorable to the non-moving party." Erby [v. United States,] 424 F. Supp. 2d [180,] 181 [(D.D.C. 2006)]; see also I.T. Consultants [v. Pakistan], 351 F.3d [1184,] 1188 [(D.C. Cir. 2003)]. The court may look beyond the allegations contained in the complaint to decide a facial challenge, "as long as it still accepts the factual allegations in the complaint as true." Abu Ali [v. Gonzales,] 387 F. Supp. 2d [16,] 18 [(D.D.C. 2005)]; see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253–54 (D.C. Cir. 24 1160132 2005) ("At the pleading stage .... [w]hile the district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction, the court must still accept all of the factual allegations in the complaint as true." (internal citations and quotation marks omitted)).'" Ex parte Safeway Ins. Co. of Alabama, 990 So. 2d 344, 349 (Ala. 2008) (quoting Lindsey v. United States, 448 F. Supp. 2d 37, 43 (D.D.C. 2006)). We review the trial court's application of this standard and the resulting judgment "de novo," that is, with no presumption of correctness. See Hill v. Hill, 89 So. 3d 116, 117–18 (Ala. Civ. App. 2010). The complaint alleges that Corley's "employment agreement" with BSCC provided that he would be placed at "Level I/B" on the salary schedule, that he was "to complete his associate degree within one year of his employment date," and that, as "soon as he completed the associate degree, he would be moved to Level I/A." Corley alleged that he completed his associate degree and that, on August 9, 2000, he notified his employer of that fact and that "he should be moved to Level I/A on the Salary Schedule." However, his salary, he claims, was not adjusted until October 1, 2015. Corley alleged that his "placement at Level I/A should have 25 1160132 been made in 2000 following the completion of his associate degree" and that the failure to adjust his salary "was in breach of his employment agreement with [BSCC] and has resulted in [Corley] not being appropriately compensated." In the Rule 12(b)(1) motion to dismiss, Richardson assumed that Corley's employment agreement included the automatic salary adjustment alleged in the complaint. In his reply to the motion to dismiss, Corley noted that the allegations in his complaint must be accepted as true and argued that immunity under Ala. Const. 1901, Art. I, § 14, does not apply in this case under a very narrow "exception" to that immunity. That narrow "exception" was recently discussed in Woodfin v. Bender, [Ms. 1150797, March 31, 2017] ___ So. 3d ___ (Ala. 2017):4 mandamus relief is available to order a State official to perform a ministerial act. In my special writing in Woodfin, I noted: "'In limited circumstances the writ of mandamus will lie to require action of state officials. This is true where discretion is exhausted and that which remains to be done is a ministerial act.' McDowell–Purcell, Inc. v. Bass, 370 So. 2d 942, 944 (Ala. 1979). Under Alabama Department of 4Corley did not cite Woodfin, which was decided after the briefs in this case were filed, but the caselaw and legal theories applicable in this case are discussed in Woodfin. 26 1160132 Transportation v. Harbert International, Inc., 990 So. 2d 831 (Ala. 2008), and the numerous cases cited in it, ... when a plaintiff seeks payment of money from the State, the 'limited circumstances' in which a writ will lie to compel payment depends on whether the amount sought is 'certain' and the State's obligation to pay is 'undisputed.' If there is doubt as to those, the analysis ends and § 14 bars the action." ___ So. 3d at ___ (Shaw, J., concurring in the result). 5 Under the test provided in Safeway, supra, a court must accept as true the allegations in the complaint and consider the factual allegations in the complaint in the light most favorable to Corley. The complaint sought by writ of mandamus a payment of money Corley says he was owed. It must be accepted as true that there was an employment agreement providing for the automatic pay raise (Richardson does not dispute this), that the agreement was not honored, and that Corley was owed the money. Thus, the State's obligation to pay, for purposes of the complaint and motion to dismiss, appears "undisputed." A court cannot infer from the fact that Corley was not paid that a dispute existed; that would be an 5This is only a brief explanation of the principles involved; a more thorough discussion is found in Woodfin. 27 1160132 inference in favor of the nonmovant forbidden by the standard set forth in Safeway. Further, considering the allegations in the light most favorable to Corley, the amount sought was "certain": it was the difference between what he should have started to receive when he completed his associate degree and what he actually received up until the point his salary was corrected. At this point in the proceedings, there is nothing to suggest, like in Woodfin, that the amount sought is "uncertain" or that the State's obligation to pay is "disputed": "In the instant case, the parties dispute the proper interpretation of the new salary schedule at issue. In McDowell–Purcell, we held that a writ of mandamus will not lie to compel a State official 'to exercise his discretion and apply the ascertained facts or existing conditions under [a] contract so as to approve payment to [a plaintiff] according to [the plaintiff's] interpretation of the contract rather than his.' 370 So. 2d at 944. Here, the Board members have not exhausted their discretion, and they cannot be compelled to accept the plaintiffs' interpretation of the salary schedule. A suit against the State, i.e., the Board members in their official capacities, is untenable in this case." Woodfin, ___ So. 3d at ___ (Shaw, J., concurring in the result). 28 1160132 It might very well be that Richardson can produce evidence showing that State officials, in failing to initially adjust Corley's salary, had not exhausted their discretion, that the amount owed was uncertain, or that the obligation to pay was disputed, all of which would trigger § 14 immunity and bar a petition for a writ of mandamus. However, such issues are premature at this stage of the proceedings: this Court is called upon here to determine only if the complaint, when the allegations asserted therein are taken as true, established that the trial court had jurisdiction. The complaint appears to meet the minimal requirements to do so. I thus believe that the trial court's dismissal is due to be reversed, not affirmed; I therefore respectfully dissent. 29

July 21, 2017

d4c3140d-01eb-4bd0-8efe-4f22d5c24d3b

Nissan North America, Inc. v. Scott

N/A

1160656

Alabama

Alabama Supreme Court

REL: 08/11/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160656 ____________________ Nissan North America, Inc. v. Adrienne Scott Appeal from Montgomery Circuit Court (CV-16-901575) SELLERS, Justice. Nissan North America, Inc. ("Nissan"), appeals from an order of the Montgomery Circuit Court compelling it to arbitrate certain claims filed against it by Adrienne Scott ("Scott"). We reverse and remand. 1160656 Facts and Procedural History On July 16, 2015, Scott purchased from Jack Ingram Motors, Inc. ("Jack Ingram"), a new 2015 Nissan Juke automobile, which had been manufactured by Nissan. In connection with the sale of the vehicle, Scott signed an arbitration agreement that states, in relevant part: "Buyer/Lessee acknowledges and agrees that the vehicle Buyer/Lessee is purchasing or leasing from Dealer has traveled in interstate commerce. Buyer/Lessee thus acknowledges that the vehicle and other aspects of the sale, lease or financing transaction are involved in, affect, or have a direct impact upon interstate commerce. "Buyer/Lessee and Dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspect of the vehicle and its sale, lease, or financing shall be settled by binding arbitration by one arbitrator selected by the Dealer with consent of the Buyer/Lessee conducted pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. Section 1 et seq. Without limiting the generality of the foregoing, it is the intention of the Buyer/Lessee and the Dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease, or financing, and its condition, including disputes concerning the terms 2 1160656 and conditions of the sale, lease, or financing, the condition of the vehicle, any damage to the vehicle, the terms and conditions of any of the documents signed or given in connection with the sale, lease or financing, any representations, promises or omissions made in connection with negotiations for the sale, lease, or financing of the vehicle, or any terms, conditions, representations or omissions made in connection with the financing, leasing, credit life insurance, disability insurance, vehicle extended warranty or service contract or other products or services acquired as an incident to the sale, lease or financing of the vehicle. "Either party may demand arbitration by serving upon the other party a written demand for arbitration along with a statement of the matter in controversy. The Buyer/Lessee and the Dealer agree that the arbitration proceedings to resolve all such disputes shall he conducted in the city where the dealer's facility is located. ..." (Emphasis added.) On November 15, 2015, Scott took the vehicle to Jack Ingram after smelling fuel in the interior of the vehicle. Jack Ingram informed Scott that it did not detect the smell of fuel inside the vehicle, that it had inspected the fuel system of the vehicle, and that it found no leaks in the fuel system. Two days later, while Scott was driving the vehicle, it spontaneously caught fire. On November 22, 2016, Scott filed a complaint against Jack Ingram and Nissan, alleging that she had suffered 3 1160656 physical injuries as well as mental anguish as a result of the fire; that she had incurred medical expenses for her physical injuries; and that her vehicle was a total loss. Count one of the complaint sought damages against Nissan under the Alabama Extended Manufacturer's Liability Doctrine; count two of the complaint sought damages against Nissan for negligence and wantonness; count three of the complaint sought damages against both Nissan and Jack Ingram for breach of warranty; and count four of the complaint sought damages against Jack Ingram for negligence. On December 27, 2016, Jack Ingram moved to compel arbitration of the claims filed against it based on the arbitration agreement Scott had signed in connection with the sale of the vehicle. Scott filed a response indicating that, although she was willing to arbitrate her breach-of-warranty and negligence claims against Jack Ingram, she objected to litigating part of the case, i.e., her claims against Nissan, because, she said, "to do so would require all of the parties to incur extra expenses and could result in inconsistent judgments." She indicated in her response that she was willing to arbitrate the case or to litigate the case, but she 4 1160656 objected to having to do both. On February 22, 2017, the trial court entered an order holding that, "in the interest of judicial economy," the entire matter should be arbitrated. Nissan filed a motion to reconsider, which the trial court denied. Nissan appeals pursuant to Rule 4(d), Ala. R. App. P. Standard of Review "This Court's standard of review on an appeal from a trial court's order granting or denying a motion to compel arbitration is well settled. Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1141 (Ala. 2003). A direct appeal is the proper procedure by which to seek review of such an order, Rule 4(d), Ala. R. App. P., and this Court will review de novo the trial court's grant or denial of a motion to compel arbitration. Bowen, 879 So. 2d at 1141. The party seeking to compel arbitration has the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction involving interstate commerce. Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So. 2d 1129, 1132 (Ala. 2003). The party seeking to compel arbitration must present some evidence tending to establish its claim. Wolff Motor Co. v. White, 869 So. 2d 1129, 1131 (Ala. 2003). Once the moving party meets that initial burden, the party opposing arbitration has the burden of presenting evidence tending to show that the arbitration agreement is invalid or that it does not apply to the dispute in question. Bowen, 879 So. 2d at 1141. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1052–53 (Ala. 2007)." Alabama Title Loans, Inc. v. White, 80 So. 3d 887, 891-92 (Ala. 2011). 5 1160656 Discussion Initially, we note that Jack Ingram, the party seeking to compel arbitration, met its initial burden of proving the existence of an arbitration agreement and proving that the agreement evidenced a transaction involving interstate commerce. Accordingly, the burden then shifted to Scott to show that the arbitration agreement was invalid or that it did not apply to the dispute in question. Unique to this case is the fact that Scott does not oppose arbitration of her claims against Jack Ingram, the party seeking to compel arbitration. Rather, she "objects" to having to separately litigate her claims against Nissan because, she says, litigating those claims would "require all of the parties to incur extra expenses and could result in inconsistent judgments." The trial court agreed with Scott and compelled Nissan, a nonsignatory to the arbitration agreement, to arbitrate the claims asserted against it, citing "judicial economy" as the reason for its holding. Judicial economy, however, is not a proper basis for compelling arbitration against a nonsignatory. See, e.g., Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (1985) ("[T]he [Federal] Arbitration Act 6 1160656 requires district courts to compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums."). It is well established that "'"'[a]rbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'"'" Custom Performance, Inc. v. Dawson, 57 So. 3d 90, 97 (Ala. 2010) (quoting Central Reserve Life Ins. Co. v. Fox, 869 So. 2d 1124, 1127 (Ala. 2003), quoting in turn AT & T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 648 (1986), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). The general rule that nonsignatories to an arbitration agreement cannot be compelled to arbitrate their claims is subject to certain exceptions not applicable here. It is undisputed that Nissan was not a party to the arbitration agreement Scott signed in conjunction with the 7 1160656 sale of the vehicle, and, unlike Jack Ingram, Nissan did not seek to compel arbitration of the claims asserted against it. In Jack Ingram Motors, Inc. v. Ward, 768 So. 2d 362 (Ala. 1999), this Court discussed an arbitration agreement nearly identical to the arbitration agreement in this case and specifically addressed the issue whether a lessee's claims against the financial-services provider, a nonsignatory to the agreement, were subject to arbitration. In Ward, the lessee agreed to lease a vehicle from Jack Ingram, and, in conjunction with the lease, the lessee and Jack Ingram executed an arbitration agreement. The lessee thereafter sued Jack Ingram and the financial-services provider, alleging fraud, suppression, and wantonness in relation to an undisclosed acquisition fee included in his monthly lease payments; the lessee was not provided with any paperwork that would have placed him on notice that the acquisition fee would be included in his monthly payments. This Court affirmed the trial court's denial of the lessee's motion to compel arbitration against the financial-services provider, concluding that "[t]he arbitration provision is limited by its terms to disputes arising between the 'buyer/lessor' (Ward) 8 1160656 and the 'dealer' (Jack Ingram Motors). It is not broad enough to include [the financial-services provider]." 768 So. 2d at 364. Likewise, in the present case, the scope of the arbitration agreement is limited by its terms to disputes between the "Buyer/Lessee" (Scott) and the "Dealer" (Jack Ingram). Accordingly, the arbitration agreement precludes this Court from requiring Nissan to arbitrate the claims asserted against it. See also Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205, 1210 ("[T]he arbitration agreement in this case is specifically limited to the signing parties, namely, Yarbrough, as the purchaser, and Parkway, as the dealer. The language of the arbitration agreement is not broad enough to reach the manufacturer; therefore, DaimlerChrysler is not entitled to compel arbitration ...."). Conclusion Based on the foregoing, we conclude that the trial court exceeded its discretion by compelling Nissan to arbitrate the claims asserted against it by Scott. The trial court's order 9 1160656 is reversed, and the case is remanded for proceedings consistent with this opinion.1 REVERSED AND REMANDED. Stuart, C.J., and Parker, Shaw, and Wise, JJ., concur. 1We note that Scott, in her appellee's brief, no longer opposes arbitrating her claims against Jack Ingram and litigating her claims against Nissan, stating that "if Nissan wants to give Scott '2 bites at the apple,' she will take it." Thus, Scott takes no further position on the issue. 10

August 11, 2017

c08e482a-9d2c-4162-a956-a84933d2419b

Ex parte Action Auto Sales, Inc.

N/A

1160598, 1160598

Alabama

Alabama Supreme Court

rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1160598 _________________________ Ex parte Action Auto Sales, Inc. PETITION FOR WRIT OF MANDAMUS (In re: Action Auto Sales, Inc. v. Pine City Motors, LLC; L.M. Stewart; and Cathy Cargile) (Clarke Circuit Court, CV-15-35) SELLERS, Justice. Action Auto Sales, Inc. ("AAS"), has petitioned this court for a writ of mandamus directing the Clarke Circuit 1160598 Court ("the trial court") to vacate orders denying AAS's objection to L.M. Stewart and Cathy Cargile's notice of intent to serve subpoenas on nonparties Merchants Bank and accountant Eddie Nicholes and denying AAS's motion for a protective order and to issue an order granting its motion. We grant the petition and issue the writ. The materials before this court indicate the following. AAS, a financing company, made loans to Pine City Motors, LLC ("Pine City"), so that Pine City could purchase vehicles for resale. Pursuant to various financing agreements and promissory notes, AAS held security interests in the vehicles purchased by Pine City for resale. Stewart and Cargile purchased a vehicle from Pine City, which allegedly was encumbered by a security interest held by AAS. Stewart and Cargile suggest that, after they took possession of the vehicle, Pine City failed to satisfy its debt to AAS, and AAS or Pine City retained physical possession of the certificate of title for the vehicle. Thereafter, AAS sued Pine City, Stewart, and Cargile, requesting damages and a judgment directing Stewart and Cargile to return the vehicle to AAS. 2 1160598 Stewart and Cargile filed a counterclaim against AAS and a cross-claim against Pine City. Pointing to various Alabama statutes, Stewart and Cargile asserted that their rights in the vehicle are superior to AAS's and that AAS or Pine City improperly retained possession of the certificate of title for the vehicle. Stewart and Cargile also demanded compensatory and punitive damages, asserting theories of negligence and wantonness and conspiracy between AAS and Pine City. During the period at issue, Vivian Paul was the sole shareholder of AAS. Paul testified during deposition that, on occasion, she had personally loaned or contributed funds to AAS so that AAS could, in turn, make loans to Pine City. Paul testified that AAS used an account at Merchants Bank to facilitate loans to Pine City and that the funds Paul transferred to AAS were deposited into that account. Paul's testimony suggests that some of or all the transfers she made to AAS were not evidenced by promissory notes. She testified, however, that Nicholes, who worked as the accountant for AAS and for Paul personally, kept track of the loans and contributions Paul had made to AAS, as well as debts owed AAS by Pine City. Paul testified that she, too, 3 1160598 had kept records of her transactions with AAS on her personal computer but that, around the time Pine City defaulted on its obligations to AAS, Paul had obtained a new computer and was unable to access her records regarding the transactions on the new computer. According to Stewart and Cargile's answer to AAS's mandamus petition, however, "Paul acknowledged that Nicholes should have duplicate records of all the loan information that was stored on her old computer." After Paul's deposition, Stewart and Cargile filed notices of intent to serve subpoenas on Merchants Bank and Nicholes. The proposed subpoenas requested that those nonparties produce "[a]ny and all financial records for Vivian Paul, personally, or [AAS] and from Vivian Paul or [AAS] for the past five (5) years." AAS filed an objection to the proposed subpoenas and a motion for a protective order, seeking to limit production to only those records showing "cash contributions, injections or loans from Vivian Paul to [AAS]." AAS asserted that records relating solely to Paul's personal finances, and not to her transactions with AAS, should not be produced. 4 1160598 Following a hearing, the trial court denied AAS's requests to limit the scope of the proposed subpoenas, and AAS filed the present petition for a writ of mandamus. AAS asks this Court to direct the trial court to vacate its orders denying AAS's objection to the proposed subpoenas and its motion for a protective order. In support, AAS argues that records relating solely to Paul's personal finances that have no relation to her dealings with AAS are irrelevant and that their production would, without sufficient justification, invade Paul's privacy interests. This Court stayed the trial- court proceedings pending resolution of AAS's petition. 1 1The materials before this Court do not suggest that Paul herself filed an objection to the proposed subpoenas, and she has not joined in AAS's mandamus petition. Although Stewart and Cargile argue that the records in question are relevant and that Paul has no expectation of privacy in them, we have not been presented with persuasive argument that AAS, as a party, simply does not have "standing" to challenge the issuance of the nonparty subpoenas based on Paul's alleged privacy interests and the alleged irrelevancy of the information sought. See generally Rule 45(a)(3)(B), Ala. R. Civ. P. ("Any person or party may serve an objection to the issuance of a subpoena for production, inspection, copying, testing or sampling ...."); Rule 26(c), Ala. R. Civ. P. ("Upon motion by a party or by the person from whom discovery is sought, ... the court ... may make any order that justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ...."); and Ex parte Morris, 530 So. 2d 785 (Ala. 1988) (considering, and agreeing with, a party's argument that an order compelling that party's expert witnesses to produce tax records and other 5 1160598 "'Discovery matters are within the trial court's sound discretion, and this Court will not reverse a trial court's ruling on a discovery issue unless the trial court has clearly exceeded its discretion. Home Ins. Co. v. Rice, 585 So. 2d 859, 862 (Ala. 1991). Accordingly, mandamus will issue to reverse a trial court's ruling on a discovery issue only (1) where there is a showing that the trial court clearly exceeded its discretion, and (2) where the aggrieved party does not have an adequate remedy by ordinary appeal. The petitioner has an affirmative burden to prove the existence of each of these conditions.' "Ex parte Ocwen Fed. Bank, FSB, 872 So. 2d 810, 813 (Ala. 2003). "Moreover, this Court will review by mandamus only those discovery matters involving (a) the disregard of a privilege, (b) the ordered production of 'patently irrelevant or duplicative documents,' (c) orders effectively eviscerating 'a party's entire action or defense,' and (d) orders denying a party the opportunity to make a record sufficient for appellate review of the discovery issue. 872 So. 2d at 813–14." personal financial information impermissibly called for the production of information of limited probative value and invaded the nonparty witnesses' privacy interests). But see United States v. Idema, 118 F. App'x 740, 744 (4th Cir. 2005) (not selected for publication in the Federal Reporter) ("Ordinarily, a party does not have standing to challenge a subpoena issued to a nonparty unless the party claims some personal right or privilege in the information sought by the subpoena."). 6 1160598 Ex parte Meadowbrook Ins. Grp., Inc., 987 So. 2d 540, 547 (Ala. 2007). AAS relies primarily on Ex parte Morris, 530 So. 2d 785 (Ala. 1988). In Morris, a medical-malpractice action, the trial court entered an order compelling the plaintiff's expert witnesses to produce their income-tax records for the nine years preceding the trial date, as well as "personal financial records," which the Court did not describe in detail. Id. at 789. The defendants in that case sought the information in an effort to demonstrate bias on the part of the expert witnesses. The Court in Morris noted that some federal courts had recognized a "qualified privilege" for tax records, which "impos[ed] high standards of relevancy before parties will be ordered to reveal such records." 530 So. 2d at 788. Such a qualified privilege was, according to those courts, justified by "'the sensitive information contained [in tax records] and the public interest to encourage the filing by taxpayers of complete and accurate returns.'" Id. (quoting Mitsui & Co. v. Puerto Rico Water Res. Auth., 79 F.R.D. 72, 80 (D.P.R. 1978)). The Court also noted that the United States Court of Appeals 7 1160598 for the Third Circuit, in reviewing an order compelling nonparties to disclose their gross incomes, had observed: "'It can scarcely be denied that public exposure of one's wallet or purse is, in the abstract, an invasion of privacy. Nor can it be denied that private individuals have legitimate expectations of privacy regarding the precise amount of their incomes. Unless placed in issue, as in litigation, in a loan application, or when a federal statute or regulation may require publication of annual compensation, for instance, individuals employed in the private sector expect that the amount of their income need be divulged only to the taxing authorities, and to them with an expectation of confidentiality.'" 530 So. 2d at 788 (quoting DeMasi v. Weiss, 669 F.2d 114, 119 (3d Cir. 1982)). The Court in Morris noted that the defendants had access to other information they could use to demonstrate bias on the part of the expert witnesses: "Petitioner points out that [the defendants] took the depositions of both expert witnesses and had ample opportunities to delve into any subject matters concerning the case and that the [defendants] have at their disposal relevant information concerning both expert witnesses with respect to their hourly rates for testifying in cases, the number and names of states in which they have testified as experts, the number of depositions given as experts, and the approximate percentage of income received from medical-legal cases." 8 1160598 530 So. 2d at 787. The Court concluded that the prejudice to the witnesses outweighed the probative value of the records sought: "After weighing the liberal policy of the discovery rules against the emerging qualified privilege disfavoring disclosure of one's income tax records, we hold that petitioner's expert witnesses are not required to produce their income tax records. "The incremental value that such information would provide respondent for purposes of showing bias is substantially outweighed by the prejudice that would be imposed on a person not a party to the proceedings, and involving an issue that is not controlling. In essence, to require a non-party witness to produce all of his income tax records for nine years preceding trial would clearly be more prejudicial than probative." 530 So. 2d at 789.2 Accordingly, the Court issued a writ of mandamus and directed the trial court "to vacate the order compelling plaintiff's expert witnesses to produce their personal financial records and income tax returns for nine years preceding the date of trial." Id. Relying on Morris, the Court in Ex parte Alabama State University, 553 So. 2d 561 (Ala. 1989), issued a writ of mandamus and directed the trial court in that case to vacate an order compelling an official 2The Court was careful to note, however, that it was not "unmindful that such records would be discoverable in appropriate circumstances." Morris, 530 So. 2d at 789. 9 1160598 of Alabama State University, who had been sued in his official capacity, to produce personal tax returns and records relating to real property he owned. In issuing the writ, this Court noted that "[n]othing is found in the allegations of the complaint or in the depositions of the plaintiffs that could be interpreted to make [the official's] personal income or property records an issue." 553 So. 2d at 562. In the present case, AAS asserts that "Paul's personal financial documents are wholly irrelevant and immaterial to the claims at issue." Stewart and Cargile point to Rule 26(b), Ala. R. Civ. P., which "contemplates a broad right of discovery" and dictates that "[d]iscovery should be permitted if there is any likelihood that the information sought will aid the party seeking discovery in the pursuit of his claim or defense." Ex parte AMI W. Alabama Gen. Hosp., 582 So. 2d 484, 485 (Ala. 1991). Stewart and Cargile point out that the primary issue in this case is who holds superior rights in the vehicle. They assert that AAS claims that it holds superior rights based on its "funding of Pine City's floor planned vehicles and its security interest in the vehicles," and they claim 10 1160598 that "an investigation into the source of a party's funding may lead to the discovery of important evidence." AAS, however, has not objected to producing financial records that will show the source of AAS's funding. Rather, it objects to the production of Paul's financial records that have nothing to do with her transactions with AAS. Stewart and Cargile also rely on Paul's deposition testimony indicating that she lost access to records evidencing the loans and contributions she had made to AAS, which had been saved on her old personal computer, when she purchased and installed a new computer. As Stewart and Cargile assert, the transcript of the hearing on AAS's objection to the subpoenas and its motion for a protective order suggests that the trial court doubted the veracity of Paul's explanation, provided during her deposition, for losing the records. Stewart and Cargile argued to the trial court that Paul "was guilty of spoliation" and that, therefore, "her personal records [were] discoverable." This Court, however, fails to see how Paul's alleged concealment or disposal of records, even if established, makes her personal financial 11 1160598 information, unrelated to loans and contributions to AAS, relevant to the claims in the present case. Stewart and Cargile also point to precedent establishing the general proposition that "[w]hen a plaintiff has alleged fraud, discovery must necessarily be broader than in other cases; this is because of the heavy burden of proof imposed on one alleging fraud." Ex parte Horton, 711 So. 2d 979, 983 (Ala. 1998). That precedent suggests that, in a fraud case, broad discovery can lead to the uncovering of multiple instances of similar fraudulent conduct on a defendant's part, which might "show the existence of a plan or scheme, motive, or intent on the part of a defendant." Id. In the present case, however, Stewart and Cargile have not made fraud allegations against AAS that would justify requiring the production of Paul's personal financial records, unrelated to her transactions with AAS. We disagree with Stewart and Cargile's position that, "[i]n effect, the suspicious nature of Ms. Paul's loss of all AAS loan data stored on her computer gives rise to a broad investigatory right on behalf of Stewart and Cargile to conduct discovery into all of Ms. Paul's personal financial documentation for the past five years." 12 1160598 Stewart and Cargile also suggest that AAS's corporate veil might be pierced, and Paul held personally liable, because, they suggest, "AAS is merely a pass-through or shell for Ms. Paul personally." Along similar lines, they also point out that "[a] corporate agent who personally participates, albeit in his or her capacity as such agent, in a tort is personally liable for the tort." Sieber v. Campbell, 810 So. 2d 641, 645 (Ala. 2001). Ignoring the fact that Paul has not been sued, Stewart and Cargile's rationale for possibly holding her personally liable would be supported by records showing transactions between Paul and AAS or, possibly, transactions between Paul and Pine City, not Paul's personal financial information unrelated to those transactions. Finally, Stewart and Cargile assert that there is no bright-line constitutional, statutory, or common-law privilege protecting a person's financial information in the hands of third parties. Illustrating that point, they point to federal law that, they claim, allows financial institutions to "disclose a customer's non-public personal financial information in order to comply with a discovery request." 13 1160598 That there may not exist a bright-line privilege to refuse to disclose such information, however, does not abrogate this Court's holding in Morris. We issue the writ of mandamus and direct the trial court to vacate its orders denying AAS's objection to the proposed subpoenas and its motion for a protective order and to issue an order granting its motion, limiting the scope of discovery to transactions between Paul and AAS. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur. 14

September 1, 2017

b01bf5d0-8200-4efa-8a65-a012ccf60192

Ex parte Trenton Turner, Jr.

N/A

1160212

Alabama

Alabama Supreme Court

Rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160212 ____________________ Ex parte Trenton Turner, Jr., and Donna Turner PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: Trenton Turner, Jr., and Donna Turner v. Wells Fargo Bank, N.A., as Trustee for Carrington Mortgage Loan and Trust 2006-NC2 Asset-backed Pass-through Certificates) (Jefferson Circuit Court, CV-12-903740; Court of Civil Appeals, 2150320) PARKER, Justice. 1160212 Trenton Turner, Jr., and Donna Turner petitioned this Court for a writ of certiorari to review the Court of Civil Appeals' decision affirming a judgment entered by the Jefferson Circuit Court in favor of Wells Fargo Bank, N.A., as trustee for Carrington Mortgage Loan and Trust 2006-NC2 Asset-backed Pass-through Certificates ("Wells Fargo"), ejecting the Turners from real property located in Jefferson County ("the property"). See Turner v. Wells Fargo Bank, N.A., [Ms. 2150320, September 30, 2016] ___ So. 3d ___ (Ala. Civ. App. 2016). We granted certiorari review to consider whether the Court of Civil Appeals' decision conflicts with this Court's decision in Jackson v. Wells Fargo Bank, N.A., 90 So. 3d 168 (Ala. 2012). See Rule 39(a)(1)(D), Ala. R. App. P. For the following reasons, we conclude that the Court of Civil Appeals' decision in this case does conflict with Jackson, and we reverse its judgment. Facts and Procedural History The Court of Civil Appeals set forth the relevant facts and procedural history in Turner, supra, as follows: "In 2006, the Turners financed the purchase of the property by executing a promissory note ('the note') in favor of New Century Mortgage Corporation ('New Century'). Contemporaneously with the 2 1160212 execution of the note, the Turners executed a mortgage in favor of New Century on the property as security for repayment of the note. The mortgage was recorded in the Jefferson Probate Court ('the probate court'). "The mortgage contained the following provisions that are pertinent to this appeal: "'1. ... [I]f any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashiers check ...; or (d) Electronic Funds Transfer. "'.... "'22. Acceleration Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument. ... The notice shall specify (a) the default; (b) the action required to cure the default; (c) a date not less than 30 days from the date the notice is given to Borrower by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform the Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or 3 1160212 any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law.' "According to affidavit testimony, on July 1, 2007, New Century transferred and assigned the note and the mortgage to Wells Fargo. Carrington Mortgage Services, LLC ('Carrington'), served as the loan servicer for Wells Fargo. ... The assignment of the note and the mortgage was ultimately executed on February 1, 2012, and recorded in the probate court on February 15, 2012." Turner, ___ So. 3d at ___. There was subsequently a dispute concerning the Turners' obligation under the mortgage, and Wells Fargo sought to foreclose on the property. The Court of Civil Appeals set forth the remaining pertinent facts: "On November 30, 2011, Carrington sent a letter to the Turners notifying them of its intent to foreclose on the property, stating that the loan was in default ... and informing the Turners that the default could be cured by the Turners' tendering certified funds in the amount of $4,545.36. The letter further stated that "'[f]ailure to cure the delinquency within 30 days of the date of this letter may result in acceleration of the sums secured by the Deed of Trust or Mortgage and in the sale of the property. 4 1160212 "'You have the right to reinstate your loan after legal action has begun. You also have the right to assert in foreclosure, the non-existence of a default or any other defense to acceleration and foreclosure.' "No evidence was presented showing that the Turners responded to the letter. "On January 31, 2012, Trustee Management Company ('TMC'), on behalf of Wells Fargo, sent the Turners a notice of foreclosure sale stating that Wells Fargo had elected to accelerate the debt and notifying the Turners that the foreclosure sale was scheduled for February 27, 2012. The notice of the foreclosure sale was published in the Alabama Messenger newspaper on February 4, 2012, February 11, 2012, and February 18, 2012. "The foreclosure sale was conducted on February 27, 2012, and Wells Fargo was the highest bidder. On the same day, a foreclosure deed was executed conveying title to the property to Wells Fargo, and a corrected foreclosure deed correcting a typographical error was executed the same day. The foreclosure deed was recorded in the probate court on October 16, 2012. The Turners did not vacate the property after the foreclosure sale. "On November 14, 2012, Wells Fargo filed a complaint for ejectment against the Turners in the trial court. The Turners filed an answer on November 27, 2012, denying the ejectment claim and asserting certain defenses, including wrongful and unlawful foreclosure and that the notice of the foreclosure sale was defective." Turner, ___ So. 3d at ___. Ultimately, the trial court entered a summary judgment in favor of Wells Fargo, and the Turners appealed. 5 1160212 Standard of Review "Questions regarding the legal effect of unambiguous contractual provisions are questions of law, which are reviewed de novo. Bon Harbor, LLC v. United Bank, 53 So. 3d 82, 91 (Ala. 2010)." Jackson v. Wells Fargo Bank, N.A., 90 So. 3d at 171. Discussion The Turners argue that the Court of Civil Appeals' decision is in conflict with Jackson. The particular portion of the Court of Civil Appeals' decision that the Turners argue conflicts with Jackson states: "The Turners contend that Wells Fargo failed to give the Turners proper notice of foreclosure that is required pursuant to Section 22 of the mortgage, which states, in part, that such notice shall 'inform the Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale.' The Turners contend that the November 30, 2011, notice of intent to accelerate sent by Carrington failed to include this explicit language. They contend that, because they did not receive proper notice required by the mortgage, Wells Fargo was precluded from foreclosing on the property and that the foreclosure sale is void. "The November 30, 2011, notice stated, in pertinent part, that '[y]ou have the right to reinstate your loan after legal action has begun. You also have the right to assert in foreclosure, 6 1160212 the non-existence of a default or any other defense to acceleration and foreclosure.' "'Substantial performance of a contract does not contemplate exact performance of every detail but performance of all important parts.' Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So. 2d 216, 218 (Ala. 1982). The November 30, 2011, notice substantially complied with the notice requirement of Section 22, and, therefore, Wells Fargo, through Carrington, substantially complied with the requirements of that section of the mortgage by sending the notice that included the aforementioned language. Therefore, there was no genuine issue of material fact before the trial court to support the Turners' claim that the notice was defective." Turner, ___ So. 3d at ___. The Turners argue that the notice they received did not explicitly inform them of their right to bring a court action challenging the foreclosure. There is no question that the mortgage required Wells Fargo to notify the Turners of their right to bring a legal action; the mortgage states that Wells Fargo "shall further inform the Borrower of ... the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale." The Court of Civil Appeals determined that Wells Fargo's notice to the Turners, which undisputedly did not inform the Turners of this right, nevertheless substantially complied with the notice requirement set forth in the mortgage. The 7 1160212 Turners argue that Jackson requires strict compliance, not merely substantial compliance. We agree. In Jackson, the mortgagors "refinanced an existing loan on their home .... In so doing, they gave a mortgage on the property, which was subsequently assigned to the bank." 90 So. 3d at 169. The mortgage in Jackson included the same notice requirement as in the mortgage at issue in this case. The Jackson Court set forth the notice requirement, with the language relevant to the issue on appeal in that case emphasized, as follows: "'22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument .... The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate 8 1160212 payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law....' "(Emphasis added.)" 90 So. 3d at 169 (final emphasis added). The mortgagors eventually defaulted on the mortgage by failing to make the required payments. The mortgagors were sent the following notice, which was entitled "Notice of acceleration of promissory note and mortgage": "'YOU ARE HEREBY NOTIFIED that, pursuant to the terms of the Promissory Note and Mortgage dated the 11th day of February, 2005, to Mortgage Electronic Registration Systems, Inc. acting solely as nominee for The Mortgage Outlet, Inc., said mortgage having subsequently been transferred and assigned to [the trustee] and by virtue of default in the terms of said Note and Mortgage, [the trustee] hereby accelerates to maturity the entire remaining unpaid balance of the debt, including attorney's fees, accrued interest, and other lawful charges, and the amount due and payable as of this date is $37,040.27. This payoff amount may change on a daily basis. If you wish to pay off your mortgage, please call our office to obtain the updated figure. "'We are at this time commencing foreclosure under the terms of the Mortgage, and enclosed is a copy of the foreclosure notice to be published in the Mobile Press–Register. Please note that the 9 1160212 foreclosure sale is scheduled for August 15, 2008. If you wish to avoid losing the subject property, you must contact us immediately; otherwise, the foreclosure sale will take place as set forth in the publication notice, and we will take legal action to obtain possession of the subject property....' "(Capitalization in original; emphasis added.) The foreclosure sale occurred on August 15, 2008, as advertised. ..." 90 So. 3d at 170. The mortgagors subsequently sued the bank, alleging that the bank breached the mortgage by failing to give the mortgagors the notice they were due under the terms of the mortgage. The mortgagors argued that the bank was required to give them notice of the bank's intent to accelerate the debt due under the mortgage, but that the notice the mortgagors received instead notified them that the debt had already been accelerated. 90 So. 3d at 172. This Court agreed with the mortgagors. In so holding, this Court relied upon the following authorities: "Dewberry v. Bank of Standing Rock, 227 Ala. 484, 492, 150 So. 463, 469 (1933) ('[A] sale under the power [of sale] in a mortgage or trust deed must be conducted in strict compliance with the terms of the power.'); Bank of New Brockton v. Dunnavant, 204 Ala. 636, 638, 87 So. 105, 107 (1920) ('"In a court of law a power of sale is merely part of a legal 10 1160212 contract to be executed according to its terms."' (quoting Harmon v. Dothan Nat'l Bank, 186 Ala. 360, 369, 64 So. 621, 624 (1914))); Fairfax Cnty. Redev. & Hous. Auth. v. Riekse, 281 Va. 441, 446, 707 S.E.2d 826, 829 (2011) ('[T]he powers of the person foreclosing under a mortgage ... are limited and defined by the instrument under which he acts, and he has only such authority as is thus expressly conferred upon him, together with incidental and implied powers that are necessarily included therein.... Accordingly, the ... mortgagee must see that in all material matters he keeps within his powers, and must execute the trust in strict compliance therewith.')." 90 So. 3d at 173. This Court concluded that the bank's failure to give the mortgagors the notice they were due under the terms of the mortgage resulted "in failure of the acceleration, and, consequently, failure of the foreclosure sale." Id. In Jackson, as evidenced by its reliance on Dewberry v. Bank of Standing Rock, 227 Ala. 484, 150 So. 463 (1933), Bank of New Brockton v. Dunnavant, 204 Ala. 636, 87 So. 105 (1920), and Fairfax County Redevelopment & Housing Authority v. Riekse, 281 Va. 441, 707 S.E.2d 826 (2011), this Court held that a party seeking to institute foreclosure proceedings must do so in strict compliance with the terms of the mortgage. In the present case, Wells Fargo did provide the Turners with notice of its intent to accelerate the debt. However, 11 1160212 although required to do so under the terms of the mortgage, Wells Fargo failed to notify the Turners of their right to bring a court action challenging the foreclosure.1 1Another instructive case from a nonjudicial-foreclosure jurisdiction is Pinti v. Emigrant Mortgage Co., 472 Mass. 226, 33 N.E.3d 1213 (2015). In Pinti, the Supreme Judicial Court of Massachusetts held that a notice provision in a mortgage (nearly identical to the one at issue in this case) required strict compliance as a necessary component of the power of sale in the mortgage. The court explained that the improper notice, which informed the defaulting mortgagors only of their right "'to assert in any lawsuit for foreclosure and sale the nonexistence of a default or any other defense [they] may have to acceleration and foreclosure and sale,'" did not strictly comply with the terms of the mortgage because the notice did not inform the mortgagors of their right and need to initiate legal action to challenge the validity of the foreclosure. 472 Mass. at 237, 33 N.E.3d at 1222-23. This lack of notice is significant in a nonjudicial-foreclosure state, such as Alabama, because, as explained by the Pinti court, defaulting mortgagors "could be misled into thinking that they had no need to initiate a preforeclosure action against the mortgagee but could wait to advance a challenge or defense to foreclosure as a response to a lawsuit initiated by the mortgagee -- even though, as a practical matter, such a lawsuit would never be brought." 472 Mass. at 237, 33 N.E.3d at 1222. The court held that the subsequent foreclosure sale was void because the notice failed to strictly comply with the terms of the mortgage. 472 Mass. at 240–43, 33 N.E.3d at 1224-26. Under a nearly identical mortgage, the Supreme Judicial Court of Massachusetts determined that a notice informing the defaulting mortgagors simply of their right to assert the nonexistence of a default in any lawsuit concerning the 12 1160212 Wells Fargo argues that Jackson has no application in the present case because, it says, Jackson is distinguishable. Wells Fargo argues that Jackson should be limited to situations where no notice is given. For instance, in Jackson, the mortgagors were given no notice of the bank's intent to accelerate before the bank purported to accelerate the debt owed by the mortgagors. Wells Fargo argues that the present case is different because the Turners were given notice of the intent to accelerate, just not notice of all of their rights. We fail to see a distinction. Although the Turners were given notice of certain of their rights under the terms of the mortgage, they were given no notice of their right to bring a court action directly attacking the foreclosure.2 Jackson applies in this case and requires foreclosure was not sufficient to satisfy the terms of the mortgage but that the notice required that the defaulting mortgagors be informed of their right and need to initiate legal action to challenge the validity of the foreclosure. In the present case, the Turners were not even informed of their right to bring a court action to challenge the validity of the foreclosure. 2The Court of Civil Appeals explained the importance of a party receiving notice of his right to challenge a foreclosure by court action in Campbell v. Bank of America, N.A., 141 So. 3d 492, 494 (Ala. Civ. App. 2012), as follows: "An ejectment action following a nonjudicial 13 1160212 foreclosure, however, is not a 'foreclosure action,' and a defense in such an action asserting errors in the foreclosure process is a collateral attack on a foreclosure. See Dewberry v. Bank of Standing Rock, 227 Ala. 484, 493, 150 So. 463, 470 (1933) (characterizing the action in Jones v. Hagler, 95 Ala. 529, 10 So. 345 (1891), in which the plaintiff sought possession of certain property he had purchased from a trustee, who had sold the property pursuant to a power of sale in a deed of trust, and in which the defendant had asserted irregularities in the sale, as 'a statutory action in the nature of ejectment -- an indirect or collateral attack upon the foreclosure of real and personal property sold by a trustee, under the power [of sale in a deed of trust]' (some emphasis in original; some emphasis added)). Accord Pinkert v. Lamb, 215 Ark. 879, 883, 224 S.W.2d 15, 17 (1949) (stating that an ejectment action is a 'collateral attack by appellees on the ... foreclosure decree and sale ..., and the burden [is] on them to prove such defects therein as would render the sale and decree void'); Dime Sav. Bank, FSB v. Greene, 2002 Pa. Super. 392, 813 A.2d 893, 895 (2002) (stating that '[a]n ejectment action is a proceeding collateral to that under which the land was sold' and that, 'where it is claimed that [an] underlying default judgment [in a judicial-foreclosure action] is merely voidable, that claim will not be entertained because such a judgment can not be reached collaterally'). "In a direct attack on a foreclosure -- that is, an action seeking declaratory and injunctive relief to halt the foreclosure sale before it occurs, see, e.g., Ferguson v. Commercial Bank, 578 So. 2d 1234 (Ala. 1991); Bank of Red Bay v. King, 482 So. 2d 274 (Ala. 1985); and Woods v. SunTrust Bank, 81 So. 3d 357 (Ala. Civ. App. 2011), or an action to set aside the sale after it has occurred, see, e.g., Beal Bank, SSB v. Schilleci, 896 So. 2d 395 (Ala. 2004); Kelly v. Carmichael, 217 Ala. 534, 536, 117 So. 67, 14 1160212 strict compliance. The Court of Civil Appeals held that Wells Fargo "substantially complied with the notice requirement." Turner, ___ So. 3d at ___. The only authority relied upon by the Court of Civil Appeals in so concluding was this Court's decision in Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So. 2d 216 (Ala. 1982). Mac Pon is not a case concerning a mortgage contract but a contract for the construction of a building. The question in Mac Pon was whether the contractor had substantially performed its duty under the contract to "apply one coat of clear silicone sealer and one coat of latex paint." 423 So. 2d at 218. Mac Pon does not concern the issue presented in this case, which is whether a mortgagee is required to comply strictly with the terms of the mortgage in exercising its power to sell.3 69 (1928); and Browning v. Palmer, 4 So. 3d 524 (Ala. Civ. App. 2008) -- any circumstance in the foreclosure process that would render the foreclosure sale void or voidable may be asserted. In a proceeding involving a collateral attack on a foreclosure, however, only those circumstances that would render the foreclosure sale void may be raised as an affirmative defense." 3We note that Wells Fargo cites several cases setting forth general contract law. Like Mac Pon, however, none of those cases concerns the issue presented in this case. 15 1160212 The Turners have demonstrated that the above-quoted portion of the Court of Civil Appeals' decision is in conflict with Jackson. Wells Fargo failed to provide the Turners with proper notice under the mortgage. Accordingly, because Wells Fargo failed to comply with the requirements of the mortgage, the mortgage sale conducted on February 27, 2012, failed. See Jackson, 90 So. 3d at 173 (holding that a foreclosure sale failed to pass title to the purchaser because the mortgagee failed to strictly comply with the terms of the mortgage in giving notice to the defaulting mortgagor). Conclusion Based on the foregoing, we reverse the Court of Civil Appeals' judgment and remand the cause for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Shaw, Main, Wise, and Bryan, JJ., concur. Murdock, J., concurs in the result. Sellers, J., dissents. Jackson is controlling. 16 1160212 SELLERS, Justice (dissenting). I respectfully dissent. This Court granted Trenton Turner, Jr., and Donna Turner's petition for a writ of certiorari in order to consider their assertion that the Court of Civil Appeals' decision conflicts with Jackson v. Wells Fargo Bank, N.A., 90 So. 3d 168 (Ala. 2012). In Jackson, after the mortgagors had defaulted on their obligation to make payments on their mortgage loan, a representative of the mortgagee sent the mortgagors a letter notifying them that the mortgage debt had been accelerated. The mortgage agreement, however, provided that, before the mortgage debt could be accelerated, the mortgagee was required to provide the mortgagors with notice that they were in default, that the default could result in acceleration of the debt, and that the mortgagors had at least 30 days to cure the default. Accordingly, the mortgagors sued the mortgagee and its representative, alleging breach of the mortgage agreement. The trial court entered a summary judgment in favor of the defendants. On appeal, this Court pointed to an opinion of the Supreme Court of Texas for the following proposition: 17 1160212 "'Notice of intent to accelerate is necessary in order to provide the debtor an opportunity to cure his default prior to harsh consequences of acceleration and foreclosure. Proper notice that the debt has been accelerated, in the absence of a contrary agreement or waiver, cuts off the debtor's right to cure his default and gives notice that the entire debt is due and payable. See Faulk v. Futch, 147 Tex. 253, 214 S.W.2d 614 (1948). Notice that the debt has been accelerated, however, is ineffective unless preceded by proper notice of intent to accelerate. Allen Sales & Servicenter, Inc. v. Ryan, 525 S.W.2d 863 (Tex. 1975).'" 90 So. 3d at 172 (quoting Ogden v. Gibraltar Sav. Ass'n, 640 S.W.2d 232, 233-34 (Tex. 1982) (emphasis omitted)). The Court indicated that notice of the mortgagee's intent to accelerate the debt and of the mortgagors' opportunity to cure the default was a condition precedent to the mortgagee's ability to accelerate the debt: "[The mortgage] required the bank to give the [mortgagors] a notice -- before acceleration -- that it was considering an acceleration, upon the failure of certain conditions, in 'not less than 30 days' following the date of the notice. In other words, the debt could not be accelerated until at least 30 days had passed and the [mortgagors] were still in default. Under the language of this mortgage, without proper notice of intent to accelerate, acceleration fails and, consequently, so does the foreclosure sale." 18 1160212 Jackson, 90 So. 3d at 173. Thus, because the mortgagors in Jackson were given no notice that the mortgagee intended to accelerate the debt and that they had an opportunity to cure their default, the debt could not be accelerated, and the foreclosure was invalid. The majority in the present case acknowledges that the Turners were given notice of Wells Fargo Bank's intent to accelerate the debt and of their opportunity to cure their default. In my view, that circumstance distinguishes this case from Jackson. It is my further view that the Court of Civil Appeals correctly rejected the Turners' argument that Wells Fargo's failure to provide the Turners with the verbatim language, set out in the mortgage, regarding their right to bring an action in court rendered the foreclosure invalid. I believe that the Court of Civil Appeals properly relied on law regarding substantial compliance with contractual provisions. See Townsend v. Federal Nat'l Mortg. Ass'n, 923 F. Supp. 2d 828, 835-36 (W.D. Va. 2013) (considering an identical provision in a deed of trust and ruling that language in a notice informing mortgagors that they had "'the right to argue that [they] did keep [their] promises and agreements under the [mortgage 19 1160212 documents], and to present any other defenses that [they] may have,'" but omitting language regarding the right to "'bring a court action,'" did not render a nonjudicial foreclosure invalid, stating that "specific language used to convey to borrowers what rights they have is not material to the essential purposes of a deed of trust"). In my opinion, the correspondence to the Turners put them on notice of their responsibility to cure their default and that, if they did not, the debt would be accelerated and the mortgage foreclosed upon. I would affirm the judgment of the Court of Civil Appeals. 20

September 1, 2017

a8dafb74-12fb-455e-9317-ad80c261c89d

Ex parte Altapointe Health Systems, Inc.

N/A

1160544

Alabama

Alabama Supreme Court

Rel: 09/08/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160544 ____________________ Ex parte Altapointe Health Systems, Inc., and Altapointe Healthcare Management, LLC PETITION FOR WRIT OF MANDAMUS (In re: Jim Avnet, father and next friend of Hunter Avnet, an incompetent person v. Altapointe Health Systems, Inc., and Altapointe Healthcare Management, LLC) (Mobile Circuit Court, CV-16-900514) MAIN, Justice. 1160544 Altapointe Health Systems, Inc., and Altapointe Healthcare Management, LLC (hereinafter referred to collectively as "Altapointe"), petition for a writ of mandamus directing the Mobile Circuit Court to vacate its order compelling Altapointe to respond to certain discovery requests and to enter a protective order in its favor in an action pending against it. We grant the petition in part and deny it in part. I. Facts and Procedural History On March 13, 2016, Jim Avnet, as father and next friend of Hunter Avnet, sued Altapointe Health Systems, Inc., and Altapointe Healthcare Management, LLC, in the Mobile Circuit Court. Altapointe operates group homes for adults suffering from mental illness. Avnet asserted that Hunter, a resident at one of Altapointe's group homes, was assaulted by another resident, Kerdeus Crenshaw. Avnet alleged that Hunter was attacked by Crenshaw with a blunt object and was stabbed numerous times in the head with a kitchen knife. Hunter sustained serious injuries as a result of the attack. Avnet asserted various claims of negligence and wantonness against Altapointe, including claims that Altapointe failed to comply 2 1160544 with various unspecified regulations and guidelines designed to protect Hunter's safety and that Altapointe was negligent or wanton in hiring, training, and supervising its employees. Along with his complaint, Avnet served Altapointe with written discovery requests. Avnet's discovery requests sought the total amount of Altapointe's liability-insurance coverage limits; information regarding prior claims or lawsuits against Altapointe alleging personal injury or assault at the home; information concerning whether Altapointe was aware of any previous "aggressive acts" by Crenshaw; and information and documents regarding Altapointe's own investigation of the incident. Altapointe objected to Avnet's discovery requests, contending that the information and documents requested were protected by certain discovery privileges. With regard to the request for its insurance limits and information regarding prior claims, Altapointe contended that the discovery was barred by provisions of the Alabama Medical Liability Act, § 6-5-480 et seq., Ala. Code 1975, and § 6-5-540 et seq., Ala. Code 1975 ("the AMLA") –- specifically, § 6-5-548(d), Ala. Code 1975, and § 6-5-551, Ala. Code 1975. Section 6-5-548(d) 3 1160544 bars discovery of "[t]he limits of liability insurance coverage available to a health care provider." Section 6-5- 551 prohibits a party from conducting discovery "with regard to any other act or omission." With regard to the interrogatory as to whether Altapointe had knowledge of prior "aggressive acts" by Crenshaw, Altapointe contended that it could not respond to the interrogatory without violating the psychotherapist-patient privilege. See § 34-26-2, Ala. Code 1975; Rule 503, Ala. R. Evid. Finally, Altapointe argued that discovery of information and documents related to Altapointe's own investigation into the incident was precluded by the quality-assurance privilege of § 22-21-8, Ala. Code 1975. Avnet then moved to compel production of the discovery objected to by Altapointe. Altapointe opposed the motion to compel and moved for a protective order. On March 21, 2017, following a hearing, the trial court entered an order granting Avnet's motion to compel and denying Altapointe's motion for a protective order. The trial court ordered Altapointe to provide the requested discovery within 10 days of the order. This petition followed. II. Standard of Review 4 1160544 "'Mandamus is an extraordinary remedy and will be granted only when there is "(1) a clear legal right in the petitioner to the order sought, (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so, (3) the lack of another adequate remedy, and (4) properly invoked jurisdiction of the court." Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala. 1991). In Ex parte Ocwen Federal Bank, FSB, 872 So. 2d 810 (Ala. 2003), this Court announced that it would no longer review discovery orders pursuant to extraordinary writs. However, we did identify four circumstances in which a discovery order may be reviewed by a petition for a writ of mandamus. Such circumstances arise (a) when a privilege is disregarded, see Ex parte Miltope Corp., 823 So. 2d 640, 644-45 (Ala. 2001) .... The burden rests on the petitioner to demonstrate that its petition presents such an exceptional case--that is, one in which an appeal is not an adequate remedy. See Ex parte Consolidated Publ'g Co., 601 So. 2d 423, 426 (Ala. 1992).' "Ex parte Dillard Dep't Stores, Inc., 879 So. 2d 1134, 1136-37 (Ala. 2003)." Ex parte Fairfield Nursing & Rehabilitation Ctr., L.L.C., 22 So. 3d 445, 447 (Ala. 2009). III. Analysis Altapointe first contends that the trial court erred in compelling discovery relating to Altapointe's liability- insurance coverage limits and prior claims. Specifically, it 5 1160544 argues that that information is protected from discovery by two provisions of the AMLA. Section 6-5-548(d) bars discovery of "[t]he limits of liability insurance coverage available to a health care provider," and § 6-5-551 bars discovery "with regard to any other act or omission." To determine whether those provisions preclude the discovery sought, we must make a threshold determination as to whether Avnet's claims fall under the AMLA. The AMLA applies "[i]n any action for injury or damages or wrongful death, whether in contract or in tort, against a health care provider for breach of the standard of care." § 6-5-548(a), Ala. Code 1975. There is no dispute that Altapointe is a "health-care provider" as that term is defined by the AMLA. Nevertheless, the AMLA does not apply to all claims against health-care providers arising out of the relationship between the health-care provider and the patient. Ex parte Addiction & Mental Health Servs., Inc., 948 So. 2d 533 (Ala. 2006). "'[T]he [AMLA] applies "only to medical- malpractice actions," Mock v. Allen, 783 So. 2d 828, 832 (Ala. 2000), "in the context of patient-doctor and patient- hospital relationships." Thomasson [v. Diethelm], 457 So. 2d [397,] 399 [(Ala. 6 1160544 1984)]. By definition, a "medical- malpractice action" is one for redress of a "medical injury." See 6-5-540 (purpose of the [AMLA] is to regulate actions for "alleged medical injury") (emphasis added [in Taylor]); see also Ala. Code 1975, § 6- 5-549.1 (same).'" Addiction & Mental Health Servs., 948 So. 2d at 535 (quoting Taylor v. Smith, 892 So. 2d 887, 893 (Ala. 2004)). Recently, in Ex parte Vanderwall, 201 So. 3d 525, 537 (Ala. 2015), this Court reviewed a case in which a physical therapist was alleged to have sexually assaulted a patient by inappropriately touching the patient's genitals and breasts during a physical-therapy appointment. It was undisputed that there was no therapeutic or medical reason for the therapist to have touched the patient in such a manner. In Vanderwall, this Court explored the text and interpretative history of the AMLA and concluded that the AMLA was not applicable to the claim and, thus, did not provide the physical therapist relief from discovery of information relating to other acts or omissions on the part of the physical therapist. In reaching this conclusion we overruled the "place and time" rule previously applied this Court.1 We concluded: "[I]t is clear 1In Vanderwall, we reasoned: 7 1160544 that the AMLA is not just concerned with who committed the alleged wrongful conduct or when and where that conduct occurred, but also with whether the harm occurred because of the provision of medical services." 201 So. 3d at 537-38. In this case, Hunter is alleged to have suffered a violent and unprovoked attack by a fellow resident of the group home in which he lived. The gravamen of Avnet's complaint is that Altapointe negligently and wantonly failed to safeguard Hunter from such an attack. There are no express allegations of medical negligence. Rather, Altapointe's contention that the AMLA applies to Avnet's claims relies "Vanderwall has asked us to apply an interpretation of the AMLA from cases that exalt a broad reading of the statute over the plain text. Mock [v. Allen, 783 So. 2d 828 (Ala. 2000),] and O'Rear [v. B.H., 69 So. 3d 106 (Ala. 2011),] posit that the legislature intended the AMLA to apply to any action in which the alleged injury was inflicted by a medical provider at the same place and time as medical treatment, rather than applying only to actions in which the alleged injury occurred because of medical treatment. ... We do not believe the legislature intended for the protections afforded under the AMLA to apply to health-care providers who are alleged to have committed acts of sexual assault; such acts do not, by any ordinary understanding, come within the ambit of 'medical treatment' or 'providing professional services.'" 201 So. 3d at 536-37. 8 1160544 solely on the fact that the attack occurred in its facility. Altapointe summarizes its argument as follows: "Hunter Avnet's mental illness prevented him from being able to independently live and care for himself, hence his residency at [the group home]. The attack on Hunter Avnet occurred during his residency. Thus, Hunter Avnet's injuries, and subsequent legal claims, arose out the rendition of healthcare services." (Altapointe's petition, at 13.) Altapointe's contention, however, merely applies the discredited "time and place" argument to the facts of this case; it has submitted no actual evidence linking the violent assault on Hunter to his medical care. Because there is no evidence before us that would permit us to conclude that the assault on Hunter was somehow linked to the administration of medical care or professional services by Altapointe, we cannot say that the AMLA applies to Avnet's claims. Accordingly, Altapointe has not established a clear legal right to an order limiting discovery under the above provisions of the AMLA. Next, we turn to the Altapointe's contention that it was entitled to a protective order from the discovery sought related to any prior aggressive acts by Crenshaw on the basis of the psychotherapist-patient privilege. In his written 9 1160544 discovery request to Altapointe, Avnet propounded the following interrogatory: "Prior to the incident made the basis of this lawsuit, were the Defendants aware of any prior aggressive acts of K[e]rdeus Crenshaw based on any reports, incarcerations, arrests, convictions, treatments, or other similar incidences at any location?" Altapointe objected to this interrogatory on the ground that to answer it would violate the psychotherapist-patient privilege. In essence, Altapointe argues that, because all of its knowledge of Crenshaw stems from the patient-provider relationship, answering Avnet's interrogatory would necessarily violate the psychotherapist-patient privilege. This argument, however, is based on an overbroad definition of the privilege. The psychotherapist-patient privilege is intended to protect confidential relations and communications between a patient and his or her psychotherapist. We have described the privilege and its underlying public policy as follows: "The psychotherapist-patient privilege, as adopted by the legislature, provides, in pertinent part, that 'the confidential relations and communications between licensed psychologists, licensed psychiatrists, or licensed psychological technicians and their clients are placed upon the same basis as those provided by law between attorney 10 1160544 and client, and nothing in this chapter shall be construed to require any such privileged communication to be disclosed.' Ala. Code 1975, § 34-26-2. Rule 503, Ala. R. Evid., 'Psychotherapist- Patient Privilege,' provides further explication of this privilege, providing, in pertinent part: "'(b) General Rule of Privilege. A patient has a privilege to refuse to disclose and to prevent any other person f r o m d i s c l o s i n g c o n f i d e n t i a l communications, made for the purposes of diagnosis or treatment of the patient's mental or emotional condition, including alcohol or drug addiction, among the patient, the patient's psychotherapist, and persons who are participating in the diagnosis or treatment under the direction of the psychotherapist, including members of the patient's family. "'(c) Who May Claim the Privilege. The privilege may be claimed by the patient, the patient's guardian or conservator, or the personal representative of a deceased patient. The person who was the psychotherapist at the time of the communication is presumed to have authority to claim the privilege but only on behalf of the patient. "'....' ".... "'The strength of the public policy on which the statutory psychotherapist-patient privilege is based has been well recognized by this Court. It follows that the privilege is not easily outweighed by competing interests.' Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 504 (Ala. 1993). 11 1160544 The Court has explained the public policy that supports the privilege as follows: "'Statutes such as § 34-26-2 are intended to inspire confidence in the patient and encourage him in making a full disclosure to the physician as to his symptoms and condition, by preventing the physician from making public information that would result in humiliation, embarrassment, or disgrace to the patient, and are thus designed to promote the efficacy of the physician's advice or treatment. The exclusion of the evidence rests in the public policy and is for the general interest of the community. See 81 Am. Jur. 2d Witnesses § 231 at 262 (1976); Annot., 44 A.L.R.3d 24 Privilege, in Judicial or Quasi-judicial Proceedings, Arising from Relationship Between Psychiatrist or Psychologist and Patient (1972). "'"[A] psychiatrist must have his patient's confidence or he cannot help him. 'The psychiatric patient confides more utterly than anyone else in the world. He exposes to the therapist not only what his words directly express; he lays bare his entire self, his dreams, his fantasies, his sins, and his shame. Most p a t i e n t s w h o u n d e r g o psychotherapy know that this is what will be expected of them, and that they cannot get help except on that condition. ... It would be too much to expect them to do so if they knew that all they say -- and all that the psychiatrist learns from what 12 1160544 they say -- may be revealed to the whole world from a witness stand.'" "'Taylor v. United States, 222 F.2d 398, 401 (D.C. Cir. 1955), quoting Guttmacher and Weihofen, Psychiatry and The Law (1952), p. 272.' "Ex parte Rudder, 507 So. 2d 411, 413 (Ala. 1987)." Ex parte Northwest Alabama Mental Health Ctr., 68 So. 3d 792, 796-97 (Ala. 2011). Unlike Northwest Alabama Mental Health Center, in which the plaintiff sought production of all of a patient's mental- health records, Avnet's request in this case is much narrower.2 Avnet seeks to know whether Altapointe had knowledge of any prior "aggressive" actions by Crenshaw. It is, of course, possible that Altapointe has knowledge of such actions acquired through confidential communications with Crenshaw made during the course of Crenshaw's treatment or diagnosis. In that case, such knowledge would be protected by the psychotherapist-patient privilege. But it is also 2Before Altapointe filed this petition, Avnet formally withdrew his request for production of Altapointe's file on Crenshaw and informed counsel for Altapointe in writing that he did not seek Crenshaw's medical records and did not consider such records responsive to any of his discovery requests. 13 1160544 possible that Altapointe had knowledge of prior incidents of violence or aggression that it did not acquire in confidence. Rule 503, Ala. R. Evid., defines a "confidential communication" for the purposes of the psychotherapist-patient privilege as follows: "A communication is 'confidential' if not intended to be disclosed to third persons other than those present to further the interest of the patient in the consultation, examination, or interview, or persons reasonably necessary for the transmission of the communication, or persons who are participating in the diagnosis and treatment under the direction of the psychotherapist, including members of the patient's family." Thus, by definition, a patient's interactions with a third party (other than those described by the rule) are not a "confidential communications" with a psychotherapist. Thus, it follows that a mental-health provider's independent knowledge of a patient's assault on a third party cannot be considered as resulting from a confidential communication protected by the psychotherapist-patient privilege. By way of example, Altapointe presumably knows of Crenshaw's assault of Hunter because it happened in its facility to one of its residents, and not because (or at least not solely because) it was confidentially relayed to Altapointe by Crenshaw in the 14 1160544 course of his treatment. Thus, its knowledge of that event is not the result of a protected confidential communication. Likewise, if Altapointe has knowledge of other such incidents it learned of outside of its confidential comminations and relations with Crenshaw, its knowledge of such incidents is discoverable. Thus, based on the above, we reject Altapointe's blanket contention that all information within its knowledge pertaining to Crenshaw is protected by the psychotherapist- patient privilege. Whether any particular information responsive to Avnet's interrogatory concerning Crenshaw is protected by the psychotherapist-patient privilege is an issue that may be further addressed by the trial court upon a properly supported motion for a protective order. Based on the materials and arguments now before this Court, however, Altapointe has not established a clear legal right to relief from Avnet's discovery under the psychotherapist-patient privilege. Finally, Altapointe argues that the incident reports it prepared in the wake of the Crenshaw's assault on Hunter are 15 1160544 "quality-assurance" materials protected from disclosure by § 22-21-8.3 Section 22-21-8 provides, in part: "(a) Accreditation, quality assurance and similar materials as used in this section shall include written reports, records, correspondence, and materials concerning the accreditation or quality assurance or similar function of any hospital, clinic, or medical staff. The confidentiality established by this section shall apply to materials prepared by an employee, advisor, or consultant of a hospital, clinic, or medical staff and to materials prepared by an employee, advisor or consultant of an accrediting, quality assurance or similar agency or similar body and to any individual who is an employee, advisor or consultant of a hospital, clinic, medical staff or accrediting, quality assurance or similar agency or body. "(b) All accreditation, quality assurance credentialling and similar materials shall be held in confidence and shall not be subject to discovery or introduction in evidence in any civil action against a health care professional or institution arising out of matters which are the subject of evaluation and review for accreditation, quality assurance and similar function, purposes, or activities. No person involved in preparation, evaluation or review of accreditation, quality assurance or similar materials shall be permitted or required to testify in any civil action as to any evidence or other matters produced or presented during the course of preparation, evaluation, or review of such materials or as to any finding, recommendation, evaluation, opinion, or other action 3We note that § 22-21-8 is a statute generally applicable to hospitals and health-care facilities and is not a part of the AMLA. 16 1160544 of such accreditation, quality assurance or similar function or other person involved therein. ..." This Court has given § 22-21-8 a broad interpretation.4 See, e.g., Fairfield Nursing, 22 So. 3d at 452 (noting that the language of § 22-21-8 does not require the existence of a quality-assurance committee or limit the privilege to materials created by such a committee); Ex parte Krothapalli, 762 So. 2d 836, 839 (Ala. 2000) (noting the "broad language used by the Legislature" in the title to the act that became § 22-21-8). Nevertheless, the party asserting the quality- assurance privilege has the burden of proving its applicability as well as the prejudicial effect of disclosing the information in question. Ex parte Coosa Valley Health Care, Inc., 789 So. 2d 208, 219 (Ala. 2000) (noting that, with regard to § 22-21-8, "the burden of proving that a privilege exists and proving the prejudicial effect of disclosing the information is on the party asserting the privilege"). In Fairfield Nursing, a long-term-care facility sought mandamus relief from an order compelling production of incident reports related to the alleged wrongful death of a 4Avnet has not asked this Court to revisit its interpretation of § 22-21-8. 17 1160544 patient. In support of its assertion of the quality-assurance privilege, the facility offered two identically worded affidavits from its executive director and director of nursing, which stated: "'Incident reports and witness statements concerning residents are not kept in the ordinary course of business, nor do they become a part of the resident medical chart. ... Incident reports and witness statements are created for quality assurance purposes. The creation of the reports and the gathering of statements are needed to guarantee the high quality of care for all residents. ... The confidentiality of the incident reports and witness statements is needed to keep investigations of incidents at the facility candid and open. Production of incident reports and witness statements to those outside the facility would be detrimental to the quality of care provided for all residents.'" 22 So. 3d at 448. We held in Fairfield Nursing that this evidence was sufficient to support application of the quality- assurance privilege. In Ex parte Qureshi, 768 So. 2d 374 (Ala. 2000), a patient sued her doctor and the hospital at which the doctor was credentialed alleging medical malpractice. The patient sought discovery from the hospital concerning the doctor's qualifications. The hospital objected to the discovery under § 22-21-8 and provided an affidavit from the chairman of its 18 1160544 credentialing committee. The chairman testified that the documents responsive to the discovery request were part of the hospital's credentialing file on the doctor; that it was essential that the materials gathered by the hospital be kept confidential, so as to ensure that physicians applying for hospital staff privileges would provide complete and accurate information about their qualifications; and that if the materials were not kept confidential, "'physicians and health care institutions from whom materials are requested in the credentialing process would be less inclined to provide frank and open criticisms of physician applicants where warranted.'" 768 So. 2d at 376. Based on this evidence, we held that the trial court erred in compelling production of the responsive documents. In this case, Altapointe submitted the affidavit of Sherill Alexander, a registered nurse employed as Altapointe's corporate compliance officer, to support its claim of a quality-assurance privilege.5 Alexander testified: 5Avnet contends that the affidavit was untimely under Rule 6(d), Ala. R. Civ. P., because it was submitted the night before the hearing on Avnet's motion to compel and Altapointe's motion for a protective order. Nothing in the petition or attachments, however, indicates that Avnet objected to the affidavit or that the trial court excluded the 19 1160544 "3. In the aftermath of the unexpected attack on Mr. Avnet, Altapointe, through its Performance Improvement Committee, of which I am a member, directed a group of employees to investigate the incident to determine the factors that caused the incident, and whether adequate safeguards were in place or whether there needs to be additional safeguards implemented or put into place to prevent future incidents from reoccurring. As a result of the investigation, we generated a 'Confidential Incident Report.' "4. The process of the investigation, the interviews conducted and the interview reports/summaries, and the 'Confidential Incident Report' itself were made for the purpose of quality assurance. "5. The investigation process, the interviews and interview summaries, and the Incident report are created to guarantee the high quality of care for all patients/consumers. "6. Confidentiality is essential to ensure that we gather complete and accurate information. "7. These documents do not become part of the consumers'/patients' medical chart, and are used solely for the purposes of quality assurance and improvement." This testimony is precisely the type of evidence we have previously held to be sufficient to establish the existence of the quality-assurance privilege. Accordingly, we hold that Altapointe sufficiently established the application of the affidavit. Thus, we presume that the trial court considered Alexander's affidavit. See Ex parte McKenzie, 37 So. 3d 128, 131 n.1 (Ala. 2009). 20 1160544 privilege. Thus, the incident reports and related documents created by Altapointe's Performance Improvement Committee in response to the incident are not subject to discovery pursuant to § 22-21-8. V. Conclusion Altapointe has offered sufficient evidence demonstrating that it is entitled to the quality-assurance privilege provided in § 22-21-8 as to Avnet's request for information and documents relating to Altapointe's own investigation of the incident. Accordingly, the petition for writ of mandamus is granted as to that request. As to the remaining requests, however, Altapointe has not sufficiently established that the discovery protections of the AMLA or the psychotherapist- patient privilege apply. Thus, as to those requests, the petition is denied. PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED. Bolin, Parker, and Wise, JJ., concur. Bryan, J., concurs in the result. Shaw and Sellers, JJ., concur in part and dissent in part. Murdock, J., concurs in part, concurs in the result in part, and dissents in part. Stuart, C.J., recuses herself. 21 1160544 SHAW, Justice (concurring in part and dissenting in part). As to the rulings of the main opinion on the psychotherapist-patient privilege and the quality-assurance privilege in Ala. Code 1975, § 22-21-8, I concur. As to the portion of the main opinion discussing the applicability of the Alabama Medical Liability Act ("the AMLA")6 in this case, I respectfully dissent. In discussing whether the AMLA applies in this case, the main opinion in part relies on the decision in Ex parte Vanderwall, 201 So. 3d 525 (Ala. 2015). I dissented from that decision, but I do not believe that it commands the result in this case. It states: "[T]he AMLA is not just concerned with who committed the alleged wrongful conduct or when and where that conduct occurred, but also with whether the harm occurred because of the provision of medical services." 201 So. 3d at 537. Not only does Ex parte Vanderwall acknowledge that "when and where" the wrongful conduct occurs is relevant, the analysis can also look to whether harm occurred because of the provision of medical 6See Ala. Code 1975, § 6-5-480 et seq. and § 6-5-540 et seq. 22 1160544 services. To me, all of those factors are relevant in the instant case. In its petition for a writ of mandamus, Altapointe7 argues as follows: "'The Legislature declared that it enacted the AMLA in response to increasing health-care costs caused by "the increasing threat of legal actions for alleged medical injury."' Ex parte Vanderwall, 201 So. 3d 525, 537 (Ala. 2015)(quoting Ala. Code § 6-5-540 (1975) (citations omitted)). Thus, the AMLA will apply to actions against healthcare providers alleging a 'breach of the standard of care.' Ala. Code § 6-5-540 (1975). A breach of the standard of care is defined as the 'fail[ure] to exercise such reasonable, care, skill and diligence as other similarly situated health care providers in the same general line of practice, ordinarily have and exercise in a like case.' Ala. Code § 6-5-548 (1975). This Court has interpreted the AMLA to apply to 'conduct that is, or that is reasonably related to, the provision of health-care services allegedly resulting in a medical injury.' Ex parte Vanderwall, 201 So. 3d at 537 (citations omitted). "Here, the standard of care applicable to Altapointe is to provide residential and mental health care in accordance with other similarly situated residential mental health facilities. Providing residential care was an integral part of the medical care that Hunter Avnet received while at Country Wood Court Group Home. Hunter Avnet's mental illness prevented him from being able to independently live and care for himself, hence his residency at Country Wood. The attack on Hunter 7As does the main opinion, I use the name "Altapointe" to refer collectively to the petitioners Altapointe Health Systems, Inc., and Altapointe Healthcare Management, LLC. 23 1160544 Avnet occurred during his residency. Thus, Hunter Avnet's injuries, and subsequent legal claims, arose out of the rendition of healthcare services. "Avnet himself characterizes the claims against Altapointe as based upon the 'fail[ure] to provide a reasonably safe environment at the Country Wood Court Group Home.' The very purpose of Country Wood is to provide residential care in conjunction with mental health services. Thus, providing a safe residential environment is both the basis of the applicable standard of care and Avnet's Complaint. "Importantly, as part of Avnet's claims, he is asserting that Altapointe knew or should have known that Kerdeus Crenshaw was violent, and thus should have prevented the unexpected attack. In fact, Avnet claims that 'the remainder of the [discovery] requests are clearly tailored to discover factual information concerning this event and what Altapointe knew about Kerdeus Crenshaw's potential for violence.' In fact, Avnet has gone as far as to request: "'A complete copy of the resident file of K[e]rdeus Crenshaw, including but not limited to: write-ups, disciplinary reports, disciplinary actions, hospitalizations, list of medicines, therapeutic notes, progression notes, interview notes, therapy notes, and any other type of report, memo, or note, that in any way touches or concerns K[e]rdeus Crenshaw.' "The only source for Altapointe's alleged knowledge about Crenshaw can only come from Crenshaw's medical records/mental health treatment. Thus, Avnet's own allegations point to one logical conclusion: that the AMLA applies to this action. "... This case implicates the provision of medical services to the actual plaintiff within the 24 1160544 context of a patient-hospital (or residential facility) relationship. ... Moreover, Avnet's injury actually occurred during the provision of healthcare services." Altapointe's petition, at 12-15 (citations to exhibits omitted).8 Altapointe is not arguing that the AMLA applied, as the main opinion states, "solely on the fact that the attack occurred in its facility," ___ So. 3d at ___, but also because the duty it allegedly breached was the failure to provide a reasonably safe environment at the facility, i.e., to properly house mental-health patients in a mental-health facility.9 It seems to me that how residents of mental-health facilities are housed, supervised, and protected from harming themselves or others involves the "provision of medical services." Ex parte Vanderwall, 201 So 3d at 537. Altapointe was not operating a hotel; it was operating a residential mental-health facility. Crenshaw was not a guest; he was a patient. A decision 8These arguments were made nearly verbatim in the trial court. 9The Court's application in this case of both the psychotherapist-patient privilege and Ala. Code 1975, § 22-21- 8, demonstrates that there was no dispute that Crenshaw was receiving psychological care and that the "group home" was a medical facility. 25 1160544 regarding whether the residents posed a danger to themselves or others, and how those residents should be housed to prevent such danger, involves a medical/psychological determination, not the decision of a layperson. The main opinion states: "Because there is no evidence before us that would permit us to conclude that the assault on Hunter was somehow linked to the administration of medical care or professional services by Altapointe, we cannot say that the AMLA applies to Avnet's claims." ___ So. 3d at ___. If the main opinion's holding is indeed based solely on a perceived failure to produce evidence, then the decision in this case is limited and should not be read broadly as adopting a blanket rule prohibiting the application of the AMLA in cases alleging tortious acts committed by mental- health patients under the care of a medical provider. 26 1160544 SELLERS, Justice (concurring in part and dissenting in part). I concur in the holding of the main opinion that the psychotherapist-patient privilege is not so comprehensive as to exclude all knowledge the operators of a home for mentally disabled persons might learn about a patient. I agree that to the extent a health-care provider has information, not learned in confidence, such information is not subject to the privilege. I also concur in the holding that incident reports prepared for quality-assurance are not discoverable. However, I dissent from the main opinion insofar as it allows the plaintiff to discover the limits of liability insurance. I believe that, once it is established that a defendant is a health-care provider, then § 6-5-548, Ala. Code 1975, bars discovery of insurance limits. Notwithstanding that the act that is the subject of litigation may not have been related to the provision of medical services, once a threshold determination is made that the defendant is a health-care provider, insurance limits are not discoverable. 27 1160544 MURDOCK, Justice (concurring in part, concurring in the result in part, and dissenting in part). As to the holding of the Court that the Alabama Medical Liability Act, § 6-5-480 et seq. and § 6-5-540 et seq., Ala. Code 1975 ("the AMLA"), is not applicable in this case, I concur in the result. I concur in that portion of the main opinion discussing the psychotherapist-patient privilege. I respectfully dissent as to the holding of the Court that certain documents qualify for quality-assurance protection under § 22-21-8, Ala. Code 1975. As to the AMLA issue, I write separately only to note that §§ 6-5-548 and 6-5-551, Ala. Code 1975, apply to "health care providers." Section 6-5-542, Ala. Code 1975, defines a "health care provider" as a "a medical practitioner, dental practitioner, medical institution, physician, dentist, hospital, or other health care provider as those terms are defined in Section 6-5-481." Section 6-5-481(1), Ala. Code 1975, defines "medical practitioner" as one "licensed to practice medicine or osteopathy," while § 6-5-481(8) defines "other health care provider" as "[a]ny professional corporation or any person employed by physicians, dentists, or hospitals who are directly involved in the delivery of health 28 1160544 care services." I am unsure how the defendants in this case qualify as "health care providers" under these definitions. 29

September 8, 2017

77cde907-05b8-4aac-9241-f57ed6edb778

Ex parte Jimmy Williams, Jr.

N/A

1131160

Alabama

Alabama Supreme Court

REL: 08/25/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1131160 ____________________ Ex parte Jimmy Williams, Jr. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Jimmy Williams, Jr. v. State of Alabama) (Montgomery Circuit Court, CC-98-2385.60; Court of Criminal Appeals, CR-12-1862) On Remand from the United States Supreme Court1 1The United States Supreme Court's order remanding this case was issued on March 7, 2016; this Court was not notified of the remand until June 1, 2017. 1131160 STUART, Chief Justice. The United States Supreme Court has vacated this Court's earlier judgment in this case, see Ex parte Williams, 183 So. 3d 220 (Ala. 2015), affirming the judgment of the Alabama Court of Criminal Appeals, Williams v. State, 183 So. 3d 198 (Ala. Crim. App. 2014), and has remanded the case for our further consideration in light of Montgomery v. Louisiana, 577 U.S. ___, 136 S.Ct. 718 (2016). Williams v. Alabama, ___ U.S. ___, 136 S.Ct. 1365 (2016). Jimmy Williams, Jr., was convicted of murder made capital because it was committed during a robbery in the first degree, see § 13A-5-40(a)(2), Ala. Code 1975; the offense was committed when Williams was 15 years old. The trial court sentenced Williams to life imprisonment without the possibility of parole -- the only possible sentence and one that was mandatory. In June 2013, Williams petitioned the Montgomery Circuit Court, pursuant to Rule 32, Ala. R. Crim. P., for a new sentencing hearing, asserting that his life-without-the- possibility-of-parole sentence was unconstitutional and unlawful in light of the United States Supreme Court's 2 1131160 decision in Miller v. Alabama, ___ U.S. ___, 132 S.Ct. 2455 (2012). In Miller, the Supreme Court held that a mandatory sentence of life imprisonment without the possibility of parole for a juvenile defendant violates the prohibition of cruel and unusual punishment in the Eighth Amendment to the United States Constitution. In his Rule 32 petition, Williams reasoned that, because he was a juvenile at the time he committed the offense and because his sentence of life imprisonment without the possibility of parole was mandatory, his sentence was unconstitutional and illegal and he was entitled to a new sentencing hearing. The circuit court, the Court of Criminal Appeals, and this Court disagreed, each holding that Williams was not entitled to a new sentencing hearing because the rule in Miller did not apply retroactively to cases such as Williams's, which were final when Miller was decided. See Ex parte Williams, 183 So. 3d at 230-31; Williams v. State, 183 So. 3d at 218; and the Montgomery Circuit Court's order dismissing Williams's Rule 32 petition, Williams v. State, CC-1998-2385.60 (July 22, 2013). Williams petitioned the United States Supreme Court for certiorari review of this Court's decision. 3 1131160 After this Court decided Ex parte Williams and while Williams's petition for certiorari review was pending in that Court, the United States Supreme Court issued its opinion in Montgomery, which clarified its holding in Miller, stating that "Miller announced a substantive rule that is retroactive in cases on collateral review." 577 U.S. at ___, 136 S.Ct. at 732. The United States Supreme Court, in light of its decision in Montgomery, then granted Williams's petition for a writ of certiorari, vacated this Court's judgment, and remanded the case for further consideration. Upon receiving notice of the Supreme Court's order, this Court ordered the parties to submit briefs addressing the impact of Montgomery on Williams's case. Williams and the State have filed a joint brief agreeing that, in light of the United States Supreme Court's decisions in Miller and Montgomery, the judgment of the Court of Criminal Appeals affirming the circuit court's dismissal of Williams's Rule 32 petition must be vacated and the case ultimately remanded to the circuit court for further proceedings. Given the United States Supreme Court's holding 4 1131160 in Montgomery that the rule of Miller applies retroactively to cases on collateral review, Williams is entitled to a new sentencing hearing. Because of this Court's inadvertent delay in addressing the United States Supreme Court's remand order, the clarification in Montgomery that the rule of law in Miller applies retroactively to cases on collateral review, and the parties' agreement that Williams is entitled to the relief sought in his Rule 32 petition –- i.e., a new sentencing hearing -- we vacate the judgment of the Court of Criminal Appeals and remand this case directly to the circuit court for proceedings consistent with Miller and Montgomery. JUDGMENT VACATED AND CASE REMANDED. Bolin, Parker, Murdock, Shaw, Main, Wise, Bryan, and Sellers, JJ., concur. 5

August 25, 2017

062f652c-93e0-4c21-a847-62862c41adb7

Family Security Credit Union v. David Moore

N/A

1151003

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

c11a2689-8efd-44da-a88b-8f866b38a579

Managed Health Care Administration, Inc. v. Blue Cross & Blue Shield of Alabama

N/A

1151099

Alabama

Alabama Supreme Court

Rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1151099 ____________________ Managed Health Care Administration, Inc., and Alabama Psychiatric Services, P.C. v. Blue Cross and Blue Shield of Alabama Appeal from Jefferson Circuit Court (CV-15-901979) PER CURIAM. Managed Health Care Administration, Inc. ("MHCA"), and Alabama Psychiatric Services, P.C. ("APS") (hereinafter collectively referred to as "the plaintiffs"), appeal the 1151099 Jefferson Circuit Court's denial of their motion to compel Blue Cross and Blue Shield of Alabama ("Blue Cross") to arbitrate MHCA's and APS's claims against Blue Cross and Blue Cross's counterclaims against the plaintiffs. We reverse and remand. Facts and Procedural History This case involves several contracts between various parties, some of whom are not parties to this appeal. Generally, beginning in 1986, Blue Cross contracted with APS, a subsidiary of MHCA, to provide mental-health services to Blue Cross's insureds. In 1991, Blue Cross's contract with APS was transferred to MHCA. In 1995, Blue Cross and MHCA entered into a new contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds ("the 1995 contract"). In 2006, Blue Cross and MHCA entered into yet another contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds ("the 2006 contract"). The 2006 contract included the following arbitration provision: "Any disputes arising out of or relating to this Agreement shall be submitted to Arbitration in 2 1151099 accordance with the rules of the American Arbitration Association then in effect, and the award rendered by the arbitrators shall be binding as between the parties and judgments on such award may be entered in any court having jurisdiction thereof." The affidavit testimony of Edward Harris, Blue Cross's vice president of business development, states: "In late 2012, Blue Cross decided to replace MHCA, as its behavioral health benefits management vendor, with New Directions Behavioral Health, L.L.C." To that end, on September 23, 2013, Blue Cross and New Directions Behavioral Health, L.L.C. ("New Directions"), entered into a contract in which New Directions agreed to "arrange for the provision of all Covered Services to Members in accordance with the terms and conditions set forth in this Agreement" ("the Blue Cross-New Directions 2013 contract"). The Blue Cross-New Directions 2013 contract recognizes that Blue Cross "has utilized for years and is currently using [MHCA] and its subsidiary [APS] to provide its Members with behavioral health and substance use treatment." The Blue Cross-New Directions 2013 contract delegates to New Directions certain of Blue Cross's obligations to its insureds. In turn, the Blue Cross-New Directions 2013 contract permits New Directions to sub-delegate those 3 1151099 delegated duties to a third party. The affidavit testimony of Harris states that Blue Cross asked New Directions to sub- delegate to MHCA certain of New Directions' delegable duties. The Blue Cross-New Directions 2013 contract includes an extensive dispute-resolution process that applies to "any dispute between [Blue Cross] and New Directions arising out of or related to this Agreement or the Parties' rights under this Agreement," which includes the following arbitration provision: "[T]he Parties will refer the matter to binding arbitration pursuant to the Commercial Rules of the American Arbitration Association ('AAA'). Each Party will select one arbitrator and a third arbitrator will be selected by the two designated arbitrators. If there is no agreement on the third arbitrator, the President of the AAA will select the third arbitrator. A majority decision by the arbitrators and umpire will be final and binding on both Parties. Judgment may be entered upon the final decision of the arbitrators in any court having jurisdiction. The cost of the arbitration will be paid as determined by the arbitrators." On October 1, 2013, pursuant to the authority granted it under the Blue Cross-New Directions 2013 contract and at the request of Blue Cross, New Directions entered into a contract which MHCA in which New Directions sub-delegated to MHCA certain of New Directions' obligations under the Blue Cross- 4 1151099 New Directions 2013 contract ("the New Directions-MHCA 2013 contract"). Specifically, New Directions sub-delegated to MHCA its responsibility to manage the network of service providers that had been used to provide mental-health services to Blue Cross's insureds since 1986. The New Directions-MHCA 2013 contract includes an extensive dispute-resolution process that applies to "any dispute arising out of or related to this Agreement or the Parties' rights under this Agreement," which includes the following arbitration provision: "[T]he Parties will refer the matter to binding arbitration pursuant to the Commercial Rules of the American Arbitration Association ('AAA'). Each Party will select one arbitrator and a third arbitrator will be selected by the two designated arbitrators. If there is no agreement on the third arbitrator, the President of the AAA will select the third arbitrator. A majority decision by the arbitrators and umpire will be final and binding on both Parties. Judgment may be entered upon the final decision of the arbitrators in any court having jurisdiction. The cost of the arbitration will be paid as determined by the arbitrators." Harris's affidavit testimony states that, "once the [Blue Cross-New Directions 2013 contract] and the [New Directions- MHCA 2013 contract] were executed, Blue Cross and MHCA terminated the [1995 contract and the 2006 contract] by mutual agreement." 5 1151099 Thereafter, a disagreement arose concerning the amount of compensation MHCA was to receive for its services. On May 15, 2015, the plaintiffs sued Blue Cross and several fictitiously named defendants alleging fraudulent misrepresentation, fraudulent suppression, breach of an implied contract, and promissory estoppel; the plaintiffs amended their initial complaint on November 4, 2015. The plaintiffs made their first discovery request of Blue Cross in August 2015. Blue Cross did not produce the requested Blue Cross-New Directions 2013 contract until March 23, 2016. On April 1, 2016, Blue Cross filed an amended answer to the plaintiffs' complaint and counterclaims against MHCA alleging unjust enrichment and breach of the 2006 contract. On May 16, 2016, MHCA filed a motion to dismiss Blue Cross's counterclaims. On June 8, 2016, the plaintiffs filed with the American Arbitration Association ("AAA") a demand for arbitration based on the arbitration provisions in the 2006 contract and in the New Directions-MHCA 2013 contract. On June 9, 2016, the plaintiffs filed in the circuit court a motion to stay the proceedings in the circuit court and to compel arbitration of 6 1151099 all the pending claims and counterclaims based on the arbitration provisions in the 2006 contract and in the New Directions-MHCA 2013 contract. The plaintiffs argued in their motion to compel arbitration that "the full extent of the contractual relationship between [Blue Cross] and New Directions is now known and it is clear that [Blue Cross] is bound to the terms of the [New Directions-MHCA 2013 contract] (including the [alternative dispute resolution] provision) even though it is not a signatory to the agreement." On June 22, 2016, Blue Cross filed a motion in opposition to the plaintiffs' motion to compel arbitration. Blue Cross asserted the following relevant arguments: that the circuit court, not the arbitrator, had the authority to determine whether a contract requiring arbitration between the parties exists; that Blue Cross "is not bound by the [New Directions- MHCA 2013 contract and that], therefore, no contract exists that requires Blue Cross to arbitrate"; that the plaintiffs waived their right to arbitration by substantially invoking the litigation process; and that the arbitration provision in the 2006 contract "is not applicable to Blue Cross'[s] counterclaim because that provision did not survive the contract's termination." The plaintiffs argued that the 7 1151099 issues raised by Blue Cross were for the arbitrator to decide, not the circuit court. On July 1, 2016, Blue Cross filed a motion for a preliminary injunction requesting that the circuit court "prohibit [the plaintiffs] from further prosecuting the arbitration proceeding they filed against Blue Cross until the arbitrability of the claims asserted therein is finally decided as to Blue Cross." On July 5, 2016, Blue Cross amended its motion to request that the circuit court enter a permanent injunction against the plaintiffs. On July 8, 2016, following a hearing, the circuit court entered the following order denying the plaintiffs' motion to compel arbitration: "[Blue Cross] did not sign the [New Directions- MHCA 2013 contract], which contains an arbitration clause that, by its terms, applies only to MHCA and New Directions. Gadsden Budweiser Distrib. Co. v. Holland, 807 So. 2d 528, 530 (Ala. 2001). [Blue Cross] is not claiming any benefit under that agreement. Custom Performance, Inc. v. Dawson, 57 So. 3d 90, 97-98 (Ala. 2010). [Blue Cross] did sign a now terminated contract, the 2006 ... [c]ontract, which contained an arbitration clause[;] however, that clause did not survive termination. Even if it did, [the] plaintiffs' claims do not arise out of or relate to that agreement. Moreover, [the] plaintiffs, who filed this action in this court instead of with [the] AAA, ... have taken substantial amounts of discovery, including a number 8 1151099 of depositions, and waited until after the discovery cutoff, two days before their deadline to disclose experts, four months before the trial date, and after certain adverse rulings to seek to arbitrate their claims. This constituted a substantial invocation of the litigation process and a waiver of any right to arbitrate. Paw Paw's Camper City, Inc., v. Hayman, 973 So. 2d 344, 348-49 (Ala. 2007). After carefully observing the live testimony of [Blue Cross's] witness, Michael Velezis, regarding, among other things, the extent to which [the] plaintiffs have invoked litigation in this forum, and the lack of any facts that would support a finding that Blue Cross is bound as a nonsignatory to the [New Directions-MHCA 2013 contract], and considering the other evidence in the record, the court finds his testimony credible and is persuaded that it would prejudice [Blue Cross] to shift this case to arbitration at this time. [Blue Cross] is not required to arbitrate [the] plaintiffs' claims or [Blue Cross's] counterclaims." The circuit court also granted Blue Cross's request for a permanent injunction. The plaintiffs appealed. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a 9 1151099 transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Oper. Co., LLC v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). Further, we review the circuit court's entry of a permanent injunction de novo. Sycamore Mgmt. Grp., LLC v. Coosa Cable Co., 42 So. 3d 90, 93 (Ala. 2010) (citing TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1241 (Ala. 1999)). Discussion The plaintiffs argue that there are two agreements calling for arbitration of the claims and the counterclaims. The plaintiffs argue that the arbitration provisions in the 2006 contract and the New Directions-MHCA 2013 contract require that the parties arbitrate their claims. The circuit court determined that neither of the arbitration provisions 10 1151099 required Blue Cross to arbitrate the claims at issue in this case. The plaintiffs argue that the arbitration provision in the 2006 contract requires that the claims between the parties be arbitrated. The plaintiffs have demonstrated the existence of the 2006 contract and that it evidences transactions affecting interstate commerce. The burden of proof then shifted to Blue Cross to present evidence that the arbitration provision in the 2006 contract does not apply to the dispute between the plaintiffs and Blue Cross. The circuit court denied the plaintiffs' motion to compel arbitration based on the arbitration provision in the 2006 contract because the circuit court found that the arbitration provision "did not survive termination" of the 2006 contract. The circuit court further found that, even if the plaintiffs did have a right to arbitration, the plaintiffs waived that right by substantially invoking the litigation process. On appeal, the plaintiffs argue that the circuit court erred in determining the above issues of arbitrability because the parties agreed in the 2006 contract that such issues would be decided by an arbitrator. The plaintiffs are correct. 11 1151099 In Ex parte Shamrock Food Service, Inc., 514 So. 2d 921 (Ala. 1987), a case relied upon by the plaintiffs, the question before this Court was whether a dispute over the termination of an agreement between two parties was within the scope of the agreement's arbitration provision. The arbitration provision at issue in Ex parte Shamrock stated: "'In the event of any dispute(s) in regard to matters stated herein, which may not be resolved mutually between the parties hereto, such matters shall be referred to a Board of Arbitration.... If the two so named cannot agree on a third member, the Director of the Federal Mediation and Conciliation Service shall be requested to name the third member.... The decision of the majority of the members of the Board of Arbitration shall be final and binding upon both parties to the Agreement.'" 514 So. 2d at 921. This Court held: "Clearly, under the broad provisions of the arbitration clause, the issue of whether the contract has been terminated must be submitted to arbitration." Id. at 922. Essentially, this Court determined that the parties agreed that such an arbitrability question was to be decided by the arbitrator, not the circuit court. In the present case, the arbitration provision in the 2006 contract provides, in pertinent part: "Any disputes arising out of or relating to this Agreement shall be submitted to Arbitration in accordance with the rules of the 12 1151099 American Arbitration Association then in effect ...." Concerning similar language in an arbitration provision, this Court stated in Bugs "R" Us, LLC v. McCants, [Ms. 1150650, Nov. 18, 2016] ___ So. 3d ___, ___ (Ala. 2016): "In Anderton [v. The Practice-Monroeville, P.C., 164 So. 3d 1094 (Ala. 2014)], this Court determined that the incorporation into an arbitration provision of the commercial arbitration rules of ... the AAA[] constituted clear and unmistakable evidence of the parties' intent to submit issues of arbitrability to the arbitrator. See 164 So. 3d at 1101–02. This Court reiterated this conclusion in Federal Insurance Co. v. Reedstrom, 197 So. 3d 971, 976 (Ala. 2015): "'Like the arbitration agreement in Anderton [v. The Practice–Monroeville, P.C., 164 So. 3d 1094 (Ala. 2014)], the arbitration provision in this case provides that any arbitration proceedings will be conducted "pursuant to the then-prevailing commercial arbitration rules of the American Arbitration Association." The relevant commercial arbitration rule, Rule 7(a), expressly provides, in its current form, that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim." See Chris Myers Pontiac–GMC, Inc. v. Perot, 991 So. 2d 1281, 1284 (Ala. 2008) (noting that we may take judicial notice of the commercial arbitration rules of the American Arbitration Association even when they do not appear in the record). Thus, pursuant to Rule 7(a), ... 13 1151099 the question of whether [the defendant] has waived its right to enforce the arbitration provision ... ha[s] been delegated to the arbitrators, and the arbitrators, not the trial court, must decide th[i]s[] threshold issue[].' "The arbitration provision in this case provides, in pertinent part: '[A]ny claim ... shall be resolved by neutral binding arbitration by the American Arbitration Association, under the rules of the AAA in effect at the time the claim is filed ....' Rule 7(a) of the AAA Commercial Rules provides: 'The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or the arbitrability of any claim or counterclaim.' Rule 7(b) provides, in pertinent part: 'The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part.' Therefore, the arbitration provision in this case shows an intent by the parties to submit issues of arbitrability to the arbitrator." (Emphasis added; footnotes omitted.) As is made clear in Bugs "R" Us, under the broad language in the arbitration provision in the 2006 contract, the arbitrability issues whether the arbitration provision in the 2006 contract has been terminated and whether MHCA waived its right to arbitration are issues for the arbitrator, not the circuit court. See also Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So. 2d 1129, 1133 (Ala. 2003)("Questions of 14 1151099 arbitrability include those relating to the scope, interpretation, and application of the arbitration agreement, Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 132 (Ala. 2002), as well as the issue whether a party has waived its right to demand arbitration by 'substantially invok[ing] the litigation process.' Hales v. ProEquities, Inc., [885] So. 2d [100], [105] (Ala. 2003)."). The circuit court erred in that it improperly determined issues of arbitrability, which the parties had contractually agreed to submit to an arbitrator. The plaintiffs also state that the circuit court held that, even if the arbitration provision in the 2006 contract survived the termination of the 2006 contract, the plaintiffs' "claims do not arise out of or relate to that agreement." The plaintiffs argue that this, too, is an issue of arbitrability to be decided by the arbitrator and that the circuit court erred in determining this arbitrability issue. The plaintiffs are correct. In First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), the United States Supreme Court concluded that, if parties to a contract agreed to submit the question of arbitrability itself to arbitration, then the arbitrator 15 1151099 should decide issues related to that question. As set forth above, the arbitration provision in the 2006 contract specifically incorporates the Commercial Rules of the AAA. Rule 7(a) of the AAA Commercial Rules provides: "The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim." The broad language of Rule 7(a) is clear and unmistakable evidence that the parties agreed that the arbitrator, not the circuit court, would decide issues of jurisdiction and scope of the arbitration provision in the 2006 contract. Therefore, we conclude that the circuit court erred in determining that the parties' claims and counterclaims do not arise out of the 2006 contract; that is an issue for the arbitrator to decide. In fact, we note that Blue Cross specifically alleges in one of its counterclaims that MHCA breached the 2006 contract. Blue Cross recognizes this fact in its brief and argues that its breach-of-contract counterclaim is the only claim that could possibly arise out of the 2006 contract. Blue Cross then states that it "hereby abandons its counterclaim for 16 1151099 breach of the [2006 contract]." Blue Cross's brief, at pp. 68-69. However, as stated above, it is for the arbitrator, not the courts, to determine whether the claims asserted by the parties are within the scope of the 2006 contract. Further, we note that Blue Cross's expressed intention in its brief before this Court to "abandon its counterclaim" does not operate as an actual dismissal of Blue Cross's breach-of- contract counterclaim. See Rule 41(c), Ala. R. Civ. P. We conclude that the plaintiffs have demonstrated that they have a right to arbitration. The circuit court erred in denying the plaintiffs' motion to compel arbitration, and we reverse the circuit court's judgment denying the plaintiffs' motion to compel arbitration in its entirety. Our conclusion that the plaintiffs are entitled to arbitration of the parties' claims under the arbitration provision in the 2006 contract pretermits discussion of the parties' arguments concerning the arbitration provision in the New Directions- MHCA 2013 contract.1 1Blue Cross argues that the arbitrator cannot consider which contract, the 2006 contract or the New Directions-MHCA 2013 contract, the parties' claims arise under because the circuit court has already determined that all but Blue Cross's breach-of-contract counterclaim arise under the New Directions-MHCA 2013 contract. However, we reverse the 17 1151099 Further, based on its conclusion that the plaintiffs did not have a right to arbitrate the parties' claims, the circuit court granted a permanent injunction enjoining the plaintiffs from arbitrating the parties' claims. Our conclusion that the plaintiffs do have a right to arbitrate the parties' claims removes the basis of the circuit court's permanent injunction. Thus, we also reverse the circuit court's permanent injunction against the plaintiffs. Conclusion Based on the foregoing, we reverse the circuit court's judgment and its permanent injunction and remand the matter for the circuit court to enter an order granting the plaintiffs' motion to compel arbitration and staying the proceedings pending the outcome of that arbitration. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Shaw, Main, and Bryan, JJ., concur. Parker and Murdock, JJ., dissent. Wise and Sellers, JJ., recuse themselves. entirety of the circuit court's order denying the plaintiffs' motion to compel arbitration. Therefore, upon reversing the circuit court's order, there is no judicial determination of that issue. That is an issue for the arbitrator to decide. 18 1151099 PARKER, Justice (dissenting). I respectfully dissent. My dissent is based on the reasoning set forth in Justice Murdock's dissent in Federal Insurance Co. v. Reedstrom, 197 So. 3d 971, 979-81 (Ala. 2015)(Murdock, J., dissenting), which I joined. In short, I do not believe that a general reference in an arbitration provision to the Commercial Rules of the American Arbitration Association is "clear and unmistakable evidence" that the parties agreed to have an arbitrator, not the circuit court, decide all issues of arbitrability. 19

September 1, 2017

bbf2b076-0715-4849-a1e2-cc637d1c4be9

Ex parte Phillip D. Odom, et al.

N/A

1160620

Alabama

Alabama Supreme Court

Rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160620 ____________________ Ex parte Phillip D. Odom et al. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: Robert Diercks and Carin Diercks v. Phillip D. Odom et al.) (Escambia Circuit Court, CV-15-900029; Court of Civil Appeals, 2151011) MAIN, Justice. 1160620 Robert Diercks and Carin Diercks, residents of a subdivision located in Escambia County, purchased a vacant lot in the subdivision located directly behind their house and began construction of a garage on the lot. A group of homeowners in the subdivision ("the plaintiffs")1 sued the Dierckses in the Escambia Circuit Court, contending that construction of the garage violated various restrictive covenants applicable to the lot. The trial court agreed. It entered a summary judgment in favor of the plaintiffs, enjoined the Dierckses from further construction on the garage, and ordered the removal of what had been constructed on the lot. On direct appeal, the Court of Civil Appeals reversed the judgment of the trial court, finding that the trial court had not properly applied the restrictive covenants. We granted certiorari to review that decision. For the following reasons, we reverse and remand. I. Facts and Procedural History The Second Alexander Heights Subdivision ("the subdivision") is located within the City of Brewton. The lots 1Phillip D. Odom, Linda Joy Odom, James Steven White, Gregory Wayne White, Kimberly Gibson White, Jason R. Castleberry, and Renee P. Ryan. 2 1160620 in the subdivision are subject to the following restrictive covenants: "KNOW ALL MEN BY THESE PRESENTS: That Hines Realty Company, Inc., a corporation, the owner of Second Alexander Heights Addition to Escambia County, Alabama, a subdivision, as shown by plat of said subdivision recorded in Plat Book 5, Page 153, in the Office of the Judge of Probate of Escambia County, Alabama, do hereby adopt the following Protective Covenants with reference to the property located in said subdivision: "1. Land Use and Building Type. "A. Single family dwellings only and accessory structures customarily incidental to this use. "B. All accessory structures must be of the same design and constructed of the same materials as the main dwelling house. "C. The carports and garages must not open on or face toward the front of the lot. "2. Size and Location of Structure. "A. Dwelling house to contain a minimum of 1,700 square feet of living space exclusive of carport, garage and/or open porches. "B. House to be located on lot in accordance with zoning regulations of the City of Brewton, Alabama. "3. Building lot to be a minimum of 100 feet in width at the front building line with the exception of Lots #17, #18, and #27." 3 1160620 The main thoroughfare through the subdivision is Brooks Boulevard. Brooks Boulevard runs through the subdivision in roughly the shape of a circle, which is divided into northern and southern halves by Robin Drive. Building lots are located on both sides of Brooks Boulevard and Robin Drive. The Dierckses home is located on lot 47, which they purchased in 1993. Lot 47 fronts the north side of Robin Drive. In 2010, the Dierckses purchased lot 58, an unimproved lot located directly behind their home. Lot 58 fronts the south side of the northern half of Brooks Boulevard. In 2013, the Dierckses began efforts to construct a garage on lot 58. They hired a contractor and applied for a building permit for the structure. The application for a building permit, however, was denied by the City of Brewton on the basis that a city ordinance prohibits an accessory building from being located on a lot by itself. A city official met with the Dierckses and recommended that they combine lot 58 with their adjacent lot. On May 29, 2014, the Dierckses conveyed lots 47 and 58 to themselves in a combined metes and bounds description, subject to the restrictive covenants. The Dierckses also had the two 4 1160620 lots combined into a single parcel for taxation purposes at the Escambia County tax assessor's office. The Dierckses, however, did not seek to have the subdivision formally "replatted" or to amend the existing plat. On June 2, 2014, the City of Brewton issued the Dierckses a building permit for the garage, and the Dierckses moved forward with construction. It is undisputed that the garage, once completed, will open onto and face Brooks Boulevard. On October 20, 2014, before the garage was completed, the City of Brewton halted construction of the garage on the basis that it was in violation of a city ordinance that limited the height of accessory structures to a maximum height of 15 feet. While the Dierckses were pursuing a variance to the height ordinance, the plaintiffs filed this lawsuit.2 The lawsuit contended that the construction of the garage violated the restrictive covenants applicable to all lots in the subdivision and sought injunctive relief halting further construction of the garage and the removal of the completed portion of the garage. 2The request for a variance was denied by the City of Brewton. The Dierckses' appeal of that determination remains pending. 5 1160620 In February 2016, the plaintiffs moved for a summary judgment. They argued that (1) the garage violated restrictive covenant 1.A. because the garage was not an accessory structure to a single-family dwelling located on lot 58; (2) that it violated covenant 1.C. because it faced the front of lot 58; (3) that it violated covenant 2.A. because the garage was not a dwelling house containing a minimum of 1,700 square feet of living space; (4) that it violated covenant 2.B. because the garage was in violation of the City of Brewton's building-height zoning ordinance; and (5) that it violated covenant 3 because the front boundary line of lot 58 is only 78.5 feet wide. The Dierckses responded that the garage did not violate any of the restrictive covenants because, they argued, lots 47 and 58 had been validly combined into a single lot for the purposes of applying the restrictive covenants. For example, they argued that the garage did not violate the prohibition in covenant 1.C. of garages facing the front of the lot because, they asserted, the consolidation of the lots "effectively shifted the 'back' of the parcel to that portion which faces 6 1160620 Brooks Boulevard." They also asserted equitable defenses, which are not raised on appeal. On May 6, 2016, the trial court entered a summary judgment in favor of the plaintiffs and against the Dierckses. It concluded that no material facts were in dispute and that the plaintiffs were entitled to a judgment as a matter of law. The trial court concluded that "[t]he [Dierckses]' conveying to themselves Lots 47 and 58 by the deed dated May 29, 2014, does not avoid the application of the protective covenants to Lot 58." The trial court held that the garage violated covenants 1.A., 1.C., 2.A., 2.B., and 3. It enjoined the Dierckses from further construction and ordered them to remove the existing portion of the garage before August 1, 2016. The Dierckses appealed. The trial court stayed its order pending appeal. The Court of Civil Appeals reversed the judgment of the trial court. Diercks v. Odom, [Ms. 2151011, April 7, 2017] __ So. 3d ___ (Ala. Civ. App. 2017). Relying on Hoffman v. Tacon, 293 Ala. 684, 309 So. 2d 917 (1979), the majority concluded that, because the restrictive covenants did not expressly forbid the combination of adjacent lots, the 7 1160620 Dierckses had indeed validly combined lots 47 and 58. The majority opinion reasoned: "In its judgment, the trial court, primarily by treating lot 58 as a separate lot from lot 47 and by viewing the structure as the lone structure on lot 58, determined that the structure violated the restrictive covenants. However, as we have held, the Dierckses validly combined the lots, and the question for adjudication should have been whether the construction of the structure on the combined lot violated the restrictive covenants." Diercks v. Odom, ___ So. 3d at ___. The court, therefore, remanded the case for the trial court to reconsider its judgment in light of its holding.3 Presiding Judge Thompson issued a dissenting opinion in which Judge Thomas concurred. He reasoned: "Among other things, the undisputed evidence indicates that ... the front of the [garage] opens onto the front of lot 58, which runs along Brooks Boulevard, in violation of 'protective covenant' 1.C. of the subdivision. That covenant provides that 'carports and garages must not open on or face toward the front of the lot.' 3The Court of Civil Appeals also held that the trial court erred in concluding that the height of the garage violated covenant 2.B., which provides that the "house [is] to be located on the lot in accordance with zoning regulations of the City of Brewton, Alabama." The court explained -- in our opinion, convincingly -- that the plain language of covenant 2.B. applied only to the location of the house on a lot, and "does not regulate the height of accessory buildings by requiring compliance with local zoning regulations or otherwise." __ So. 3d at ___. 8 1160620 ".... "The restrictive covenants governing the subdivision ensure that houses and detached structures within the subdivision are built in compliance with the zoning ordinance and that the subdivision has a cohesive appearance. The effect of the covenants is to prohibit open garages and carports from being seen from the street and to prevent detached accessory buildings from detracting from the appearance of the neighborhood. The structure the Dierckses intend to build clearly violates at least some of the restrictive covenants at issue." Diercks v. Odom, ___ So. 3d at ____ (Thompson, P.J., dissenting). We granted certiorari to review the judgment of the Court of Civil Appeals. II. Standard of Review "Because we are reviewing the Court of Civil Appeals' reversal of a summary judgment, our review is de novo. 'On certiorari review, this Court accords no presumption of correctness to the legal conclusions of the intermediate appellate court. Therefore, we must apply de novo the standard of review that was applicable in the Court of Civil Appeals.' Ex parte Toyota Motor Corp., 684 So. 2d 132, 135 (Ala. 1996). 'The law is well established that a de novo standard applies to appellate review of a trial court's summary judgment.' Ex parte Patel, 988 So. 2d 957, 959 (Ala. 2007) (citing Ex parte Fort James Operating Co., 895 So. 2d 294 (Ala. 2004))." Ex parte City of Mobile, 37 So. 3d 150, 152 (Ala. 2009). 9 1160620 III. Analysis The Court of Civil Appeals concluded that, because the Dierckses had combined their two lots, the trial court was required to apply the restrictive covenants to the Dierckses' parcel as though it were a single lot. The court reversed the judgment of the trial court and remanded the case for the trial court to reconsider its judgment. In Hall v. Gulledge, 274 Ala. 105, 109-10, 145 So. 2d 794, 798 (1962), we discussed the nature of restrictive covenants: "'"Where the owner of a tract of land adopts a general scheme for its improvement, dividing it into lots, and conveying these with uniform restrictions as to the purposes for which the lands may be used, such restrictions create equitable easements in favor of the owners of the several lots, which may be enforced in equity by any one of such owners. Such restrictions are not for the benefit of the grantor only, but for the benefit of all purchasers. The owner of each lot has as appurtenant to his lot a right in the nature of an easement upon the other lots, which he may enforce in equity. 10 1160620 "'"Whether such restriction creates a right which inures to the benefit of purchasers is a question of intention, and to create such right it must appear from the terms of the grant, or f r o m t h e s u r r o u n d i n g circumstances, that the grantor intended to create an easement in favor of the purchaser."' "We further stated [in Scheuer v. Britt, 118 So. 2d 658, 659-60 (Ala. 1928)]: "'In such cases the equitable right to enforce such mutual covenants is rested on the fact that the building scheme forms an inducement to buy, and becomes a part of the consideration. The buyer submits to a burden upon his lot because of the fact that a like burden is imposed on his neighbor's lot, operating to the benefit of both, and carries a mutual burden resting on the seller and the purchasers.' "Quoting from the opinion in the same case on a former appeal it was noted: "'"Where a defined district is platted and publicly offered as a restricted district, the restrictive clauses in the several deeds are construed as mutual covenants, each lot subject to a servitude or easement in favor of all the others, including unsold lots of the grantor in the same plat. Such servitude being appurtenant to and running with the land, any subsequent purchaser of the lot within the plat, with notice of 11 1160620 the easement thereon, takes it subject thereto, as between himself and other lot owners ...."'" In this case, there is no dispute that the subdivision was developed pursuant to a common scheme and that all the lots in subdivision were subject to the restrictive covenants. Nor is there any question that the servitudes imposed by the restrictive covenants attached to lot 58 at the time the subdivision became subject to the restrictive covenants. Likewise it is agreed that the property within lot 58, as designated in the subdivision plat, remains subject to the restrictive covenants. The question, rather, is one of interpretation. Specifically, how to interpret those covenants attaching to the property platted as lot 58 in light of the Dierckses' combination of lot 58 and lot 47 into a single parcel. Concerning the construction of restrictive covenants, we have said: "[A]ll doubts must be resolved against the restriction and in favor of free and unrestricted use of property. However, effect will be given to the manifest intent of the parties when that intent is clear and the restrictions are confined to a lawful purpose within reasonable bounds, and rights created by covenants have not been relinquished or 12 1160620 otherwise lost. Wisneiwski v. Starr, 393 So. 2d 488 (Ala. 1980). Furthermore, restrictive covenants are to be construed according to the intent of the parties in the light of the terms of the restriction and surrounding circumstances known to the parties. Kennedy v. Henley, 293 Ala. 657, 309 So. 2d 435 (1975)." Hines v. Heisler, 439 So. 2d 4, 5-6 (Ala. 1983). As an initial matter, we agree that, generally, lots can be combined and re-subdivided.4 See, e.g., Hoffman, 309 So. 2d at 685-86 (residential lot could be re-subdivided where re- subdivision was not expressly prohibited and did not violate any existing restrictive covenants). Nevertheless, we agree with the view that, absent an express provision of the covenants permitting a combined lot to be treated as a single lot for the purposes of applying the restrictive covenants, as was the case in Marengo Hills, Inc. v. Watson, 368 So. 2d 856, 857 (Ala. 1979),5 the property at issue must always conform 4Here we note that these terms are not synonymous with "replatting," which generally refers to the formal amendment or replacement of an approved subdivision plat. 5The covenant in Marengo Hills provided that "[n]othing herein contained shall prevent a purchaser from purchasing two or more adjoining lots for the purpose of constructing a dwelling on the composite area thereof, in which the entire area shall be treated as one residential building lot for the purpose of these restrictive covenants ...." 368 So. 2d at 857. 13 1160620 with the covenants as they originally attached to the property. See Claremont Prop. Owners Ass'n, Inc. v. Gilboy, 142 N.C. App. 282, 288, 542 S.E.2d 324, 328 (2001) ("[T]he property may be combined or re-subdivided into different lots for purposes of ownership or convenience, but, absent a provision in the covenants to the contrary, the property must always conform to the servitudes created by the covenants as they originally attached to the property."). Applying these principals to the matter before us, we recognize that at least one covenant is violated by the construction of the garage. Covenant 1.C. provides that "carports and garages must not open on or face toward the front of the lot." There is no ambiguity in this provision when applied to lot 58 alone –- the "front" of the lot obviously refers to the side fronting Brooks Boulevard. See, e.g., Smith v. Ledbetter, 961 So. 2d 141, 145 (Ala. Civ. App. 2006) (defining the term "fronts" used in a restrictive covenant as meaning the lot frontage abutting a street or highway); Rhinehart v. Leitch, 107 Conn. 400, 140 A. 763 (1928) ("When used of a lot with a house upon it, ['front'] means that portion of the lot abutting upon the street toward 14 1160620 which the house faces. So when used of a bare lot, by transposition of significance, it is that side toward which, in ordinary circumstances, a house, when built, will most likely face ...."). The Dierckses argue that their combination of lot 58, which fronts Brooks Boulevard, with lot 47, which fronts Robin Drive, creates an ambiguity as to which side of the combined lot is the "front." They contend that, consistent with the rules of construction, this ambiguity must be resolved in their favor.6 We cannot agree. Restrictive covenants must "'be construed according to the intent of the parties in light of the terms of the 6The Dierckses also argue that, if the term "front" is construed only to refer to the side of lot 58 facing Brooks Boulevard, then the lot is unusable in its entirety because lot 58 only has 78.5 feet of frontage on Brooks Boulevard and covenant 3 requires that a building lot must be "a minimum of 100 feet in width at the front building line." (Emphasis added.) This argument, however, confuses the front lot line with the front building line, which typically references the place on the lot where the front of the building is constructed, and may correspond with a setback requirement. See "building line," Black's Law Dictionary 235 (10th ed. 2014) (building line "is often referred to as a setback requirement"). Given the wedge shape of lot 58, it appears that covenant 3 would pose no restriction to building on lot 58 so long as the front building line is set back to a point on the lot where the lot width is at least 100 feet. We note that the record does not indicate the width of lot 58 at the front building line of the garage. 15 1160620 restriction and surrounding circumstances known to the parties.'" Riverchase Homeowners Prot. Ass'n, Inc. v. City of Hoover, 531 So. 2d 645, 647 (Ala. 1988) (quoting Hines, 439 So. 2d at 5-6). Thus, we must apply the covenant as originally intended by the parties at the time the covenant was created. In this case, it is clear that the intent of the covenant was to prohibit a garage or carport located on lot 58 from opening onto Brooks Boulevard. The Dierckses may not unilaterally reverse the meaning of this covenant by the subsequent combination of the two lots into a single parcel. Thus, the Dierckses' garage violates the restrictive covenant prohibiting garages and carports from opening onto the front of the lot. This conclusion finds support in caselaw from other jurisdictions. For example, in Ingle v. Stubbins, 240 N.C. 382, 82 S.E.2d 388 (1954), the North Carolina Supreme Court determined that the combination of two lots and re-subdivision of those lots into three lots was not prohibited by the applicable covenants but that nothing authorized a change in the original "front" line of the lots for the purposes of applying the restrictive covenants. In Ingle, two adjacent 16 1160620 lots, lots 10 and 11, in a residential subdivision were originally platted to front Bueno Street. Lot 10, however, was a corner lot, and had frontage on Plaid Street, which was considered a side street. The lots were subject to a restrictive covenant that provided that no building shall be located nearer than 50 feet to the "front" line. The owner of the lots re-divided the property to form three adjacent lots facing Plaid Street. The defendant purchased one of the three lots, the corner lot with frontage on both Bueno and Plaid Streets, and sought to construct a house facing Plaid Street. The side of the house, however, was set back only 30.5 feet from Bueno Street. The court held that the terms "front" and "side" as used in the restrictive covenant "means the front and side as each existed at the time the covenant was made." 240 N.C. at 389, 82 S.E.2d at 394. Thus, the court concluded that the proposed location of the house would violate the restrictive covenant prohibiting a building from being located nearer than 50 feet from the "front" line, i.e., Bueno Street. The court stated: "[T]here is nothing in the covenants that authorizes the change of original front line in respect to requirements as to building set back distances." 240 N.C. at 17 1160620 289, 82 S.E.2d at 394. See also Fawn Lake Maint. Comm'n v. Abers, 149 Wash. App. 318, 324-25, 202 P.3d 1019, 1022-23 (2009) (holding that property owners could not unilaterally modify their homeowners' fee obligations under the subdivision covenants by combining their two adjacent lots into one); Claremont Prop. Owners Ass'n, 142 N.C. App. at 289, 542 S.E.2d at 329 (holding that the restrictive covenants intended to fix a road-maintenance-fee obligation to each lot upon creation of the lot by recorded plat and that the combining of lots would not alter the fee obligations); and Tear v. Mosconi, 239 Mich. 242, 244, 214 N.W. 123, 124 (1927) ("A builder may not treat the side line of the lot as a front line, and by so doing avoid the restrictions."). Because the construction of the garage to open onto Brooks Boulevard violates restrictive covenant 1.C., the trial court correctly entered a summary judgment as to that issue. Thus, to the extent that the Court of Civil Appeals' decision is to the contrary, that decision is reversed, and we remand this case for further proceedings consistent with the principles discussed above. We pretermit discussion as to the remaining restrictive covenants. 18 1160620 IV. Conclusion The judgment of the Court of Civil Appeals is reversed, and the case is remanded for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Parker, Shaw, Wise, Bryan, and Sellers, JJ., concur. Murdock, J., concurs in the result. 19

September 1, 2017

4784e6ce-bcc5-4e7a-8788-3f28af6d0d62

Ex parte Midsouth Paving, Inc.

N/A

1160504

Alabama

Alabama Supreme Court

Rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160504 ____________________ Ex parte Midsouth Paving, Inc. PETITION FOR WRIT OF MANDAMUS (In re: Barbara M. Hodge, as administratrix of the Estate of Katie-Elizabeth Hope Vann, and Sue Davis, as parent and next friend of Valorie Eicher, a minor, Tristan Eicher, a minor, and Cody Ballinger, a minor v. Rennie D. Jackson et al.) ____________________ 1160505 ____________________ Ex parte Rennie D. Jackson PETITION FOR WRIT OF MANDAMUS (In re: Barbara M. Hodge, as administratrix of the Estate of Katie-Elizabeth Hope Vann, and Sue Davis, as parent and next friend of Valorie Eicher, a minor, Tristan Eicher, a minor, and Cody Ballinger, a minor v. Rennie D. Jackson et al.) ____________________ 1160517 ____________________ Ex parte United Services Automobile Association PETITION FOR WRIT OF MANDAMUS (In re: Barbara M. Hodge, as administratrix of the Estate of Katie-Elizabeth Hope Vann, and Sue Davis, as parent and next friend of Valorie Eicher, a minor, Tristan Eicher, a minor, and Cody Ballinger, a minor v. Rennie D. Jackson et al.) ____________________ 1160563 ____________________ Ex parte Schaeffler Group USA, Inc., and Gelco Corporation PETITION FOR WRIT OF MANDAMUS (In re: Barbara M. Hodge, as administratrix of the Estate of Katie-Elizabeth Hope Vann, and Sue Davis, as parent and next friend of Valorie Eicher, a minor, Tristan Eicher, a minor, and Cody Ballinger, a minor 2 v. Rennie D. Jackson et al.) (Hale Circuit Court, CV-16-900034) PARKER, Justice. Midsouth Paving, Inc. ("Midsouth"), Rennie D. Jackson, United Services Automobile Association ("USAA"), and Schaeffler Group USA, Inc. ("Schaeffler"), and Gelco Corporation ("Gelco") (hereinafter collectively referred to as "the defendants") separately petition this Court for writs of mandamus directing the Hale Circuit Court to vacate its order denying the defendants' motions for a change of venue and to enter an order transferring the action filed against the defendants by Barbara M. Hodge, as the administratrix of the estate of Katie-Elizabeth Hope Vann, and Sue Davis, as parent and next friend of Valorie Eicher, a minor, Tristan Eicher, a minor, and Cody Ballinger, a minor (hereinafter collectively referred to as "the plaintiffs"), to the Tuscaloosa Circuit Court. We grant the petitions and issue the writs. Facts and Procedural History On December 6, 2015, Valorie Eicher, a resident of Hale County, was driving a vehicle north on Interstate 59 through Tuscaloosa County. Katie-Elizabeth Hope Vann, Tristan Eicher, 3 1160504, 1160505, 1160517, 1160563 and Cody Ballinger, all also residents of Hale County, were passengers in the vehicle Valorie was driving. Jackson, an employee of Schaeffler and a resident of Tuscaloosa County, was also driving a vehicle, owned by Gelco, north on Interstate 59 in the lane next to the vehicle being driven by Valorie. Jackson made an improper lane change, which forced Valorie to drive her vehicle partially off the interstate. Valorie lost control of her vehicle as she attempted to drive the vehicle back onto the interstate. Ultimately, the vehicle Valorie was driving overturned and rolled approximately two and one-half times, ejecting all the occupants from the vehicle. All the occupants in the vehicle driven by Valorie sustained injuries; Vann died at the scene of the accident as a result of the injuries she incurred. Deandra Bland, a Mississippi resident, witnessed the accident. Valorie, Tristan, and Ballinger were transported from the scene of the accident to DCH Regional Medical Center, which is located in Tuscaloosa County, by Northstar EMS, Inc. ("Northstar"), which has its principal place of business in Tuscaloosa County. Bradley Bible, Susan Gault, and Tyler Kelley, employees of Northstar, responded to the scene of the 4 1160504, 1160505, 1160517, 1160563 accident and helped in transporting Valorie, Tristan, and Ballinger to DCH Regional Medical Center; all live and work in Tuscaloosa County. Vann's body was transported to the Alabama Department of Forensic Sciences' morgue, which is located in Tuscaloosa County. Orlander Marbury and Jason Vice, Alabama State Troopers employed by the Alabama Law Enforcement Agency ("ALEA"), were two of the officers who investigated the accident. Vice's affidavit testimony indicates that he lives in Tuscaloosa County. Marbury's and Vice's affidavits state that "[a]ll of the State Troopers that investigated this accident are based out of the ALEA Post located in Tuscaloosa County, Alabama." Jamaine Isaac, a supervisor at the Tuscaloosa County ALEA post, indicated in his affidavit testimony that the State Troopers stationed at the Tuscaloosa County ALEA post "are assigned to cover and investigate incidents and accidents in several counties." The parties have not directed this Court's attention to any evidence indicating that the State Troopers stationed at the Tuscaloosa County ALEA post do any work in Hale County. 5 1160504, 1160505, 1160517, 1160563 At the time of the accident, Midsouth was performing construction work in an area on Interstate 59 in Tuscaloosa County that encompassed the scene of the accident. Michael Patterson and Bret Thornton are employed by Midsouth; they were the managers of the Midsouth construction project in Tuscaloosa County. Patterson resides in Tuscaloosa County. Patterson's and Thornton's affidavits state that "[a]ll physical evidence [they are] aware of relating to this accident is located in Tuscaloosa County." Midsouth, USAA, and Schaeffler also conducted business in Hale County unrelated to the work Midsouth was conducting in Tuscaloosa County at the scene of the accident. On May 15, 2016, the plaintiffs sued the defendants in the Hale Circuit Court. Subsequently, all the defendants filed motions for a change of venue, arguing that the doctrine of forum non conveniens necessitated the transfer of the case from the Hale Circuit Court to the Tuscaloosa Circuit Court. On September 20, 2016, the plaintiffs filed a response to the defendants' motions for a change of venue. 6 1160504, 1160505, 1160517, 1160563 On February 22, 2017, the Hale Circuit Court entered the following order denying the defendants' motions for a change of venue: "This matter comes before the court on the various motions to transfer this case from the Circuit Court of Hale County, Alabama, to the Circuit Court of Tuscaloosa County, Alabama. No party has raised or challenged the propriety of venue in Hale County, and the court finds that Hale County, Alabama, is a proper venue for this case. The only issue raised for consideration within the pending motions is a transfer of venue pursuant to the doctrine of forum non conveniens. "The ... defendants filed separate motions to transfer venue on forum non conveniens grounds, and the plaintiffs filed a consolidated response to those motions on September 20, 2016. Defendant Mid-South Paving filed a motion to strike addressing various evidentiary submissions filed with the plaintiffs’ response brief. The plaintiffs were granted leave to respond to the motion to strike and filed their response and accompanying submissions on January 31, 2017. Upon consideration of those written submissions, as well as the oral arguments made to the court on the motions to transfer, the court finds that the defendants did not establish that Tuscaloosa County is significantly more convenient than Hale County for the litigation of this case, nor have the defendants established that the interests of justice warrant a transfer to Tuscaloosa County. Accordingly, the court hereby DENIES the defendants’ motions to transfer this matter to Tuscaloosa County on the grounds of forum non conveniens." (Capitalization in orignal.) Standard of Review 7 1160504, 1160505, 1160517, 1160563 "'The proper method for obtaining review of a denial of a motion for a change of venue in a civil action is to petition for the writ of mandamus. Lawler Mobile Homes, Inc. v. Tarver, 492 So. 2d 297, 302 (Ala. 1986). "Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995). "When we consider a mandamus petition relating to a venue ruling, our scope of review is to determine if the trial court [exceeded] its discretion, i.e., whether it exercised its discretion in an arbitrary and capricious manner." Id. Our review is further limited to those facts that were before the trial court. Ex parte American Resources Ins. Co., 663 So. 2d 932, 936 (Ala. 1995).'" Ex parte Southeast Alabama Timber Harvesting, LLC, 94 So. 3d 371, 373 (Ala. 2012) (quoting Ex parte National Sec. Ins. Co., 727 So.2d 788, 789 (Ala. 1998)). Discussion The defendants argue that the Hale Circuit Court exceeded its discretion in denying their motions for a change of venue. The defendants argue that the action should be transferred to the Tuscaloosa Circuit Court under Alabama's forum non conveniens statute, § 6-3-21.1(a), Ala. Code 1975. Section 6-3-21.1(a) states, in pertinent part: 8 1160504, 1160505, 1160517, 1160563 "With respect to civil actions filed in an appropriate venue, any court of general jurisdiction shall, for the convenience of parties and witnesses, or in the interest of justice, transfer any civil action or any claim in any civil action to any court of general jurisdiction in which the action might have been properly filed and the case shall proceed as though originally filed therein." This Court explained the application of § 6-3-21.1(a) in Ex parte Tier 1 Trucking, LLC, [Ms. 1150740, Sept. 30, 2016] ___ So. 3d ___, ___ (Ala. 2016): "[C]oncerning whether an action should be transferred under § 6–3–21.1, this Court has stated: "'"A party moving for a transfer under § 6–3–21.1 has the initial burden of showing, among other things, one of two factors: (1) that the transfer is justified based on the convenience of either the parties or the witnesses, or (2) that the transfer is justified 'in the interest of justice.'" Ex parte Indiana Mills & Mfg., Inc., 10 So. 3d 536, 539 (Ala. 2008). Although we review a ruling on a motion to transfer to determine whether the trial court exceeded its discretion in granting or denying the motion, id., where "the convenience of the parties and witnesses or the interest of justice would be best served by a transfer, § 6–3–21.1, Ala. Code 1975, compels the trial court to transfer the action to the alternative forum." Ex parte First Tennessee Bank Nat'l Ass'n, 994 So. 2d 906, 912 (Ala. 2008) (emphasis added).' "Ex parte Wachovia Bank, N.A., 77 So. 3d 570, 573 (Ala. 2011). 9 1160504, 1160505, 1160517, 1160563 "'"The purpose of the doctrine of forum non conveniens is to 'prevent the waste of time, energy, and money and also to protect witnesses, litigants, and the public against unnecessary expense and inconvenience.'" Ex parte Perfection Siding, Inc., 882 So. 2d 307, 312 (Ala. 2003) (quoting Ex parte New England Mut. Life Ins. Co., 663 So. 2d 952, 956 (Ala. 1995)). We note that "litigation should be handled in the forum where the injury occurred" and that "one of the fundamental purposes of the doctrine of forum non conveniens is to spare witnesses the unnecessary inconvenience associated with testifying in a distant forum." Ex parte Sawyer, 892 So. 2d 898, 904 (Ala. 2004).' "Ex parte Kane, 989 So. 2d 509, 512 (Ala. 2008). "'"The 'interest of justice' prong of § 6–3–21.1 requires 'the transfer of the action from a county with little, if any, connection to the action, to the county with a strong connection to the action.' Ex parte National Sec. Ins. Co., 727 So. 2d [788,] 790 [(Ala. 1998)]. Therefore, 'in analyzing the interest-of-justice prong of § 6–3–21.1, this Court focuses on whether the "nexus" or "connection" between the plaintiff's action and the original forum is strong enough to warrant burdening the plaintiff's forum with the action.' Ex parte First Tennessee Bank Nat'l Ass'n, 994 So. 2d 906, 911 (Ala. 2008). Additionally, this Court has held that 'litigation should be handled in 10 1160504, 1160505, 1160517, 1160563 the forum where the injury occurred.' Ex parte Fuller, 955 So. 2d 414, 416 (Ala. 2006). Further, in examining whether it is in the interest of justice to transfer a case, we consider 'the burden of piling court services and resources upon the people of a county that is not affected by the case and ... the interest of the people of a county to have a case that arises in their county tried close to public view in their county.' Ex parte Smiths Water & Sewer Auth., 982 So. 2d 484, 490 (Ala. 2007)."' "Ex parte Quality Carriers, Inc., 183 So. 3d 937, 942 (Ala. 2015) (quoting Ex parte Indiana Mills & Mfg., Inc., 10 So. 3d 536, 540 (Ala. 2008)). "'Although it is not a talisman, the fact that the injury occurred in the proposed transferee county is often assigned c o n s i d e r a b l e w e i g h t i n a n interest-of-justice analysis. See Ex parte Autauga Heating & Cooling, LLC, 58 So. 3d 745, 748 (Ala. 2010) ("'[T]his Court has held that "litigation should be handled in the forum where the injury occurred."'" (quoting Ex parte Indiana Mills, 10 So. 3d at 540)); Ex parte McKenzie Oil, Inc., 13 So. 3d 346, 349 (Ala. 2008) (same).' "Ex parte Wachovia, 77 So. 3d at 573–74." The defendants argue that this action should be transferred under either the convenience or the interest-of- justice prong of § 6–3–21.1. However, the defendants' primary 11 1160504, 1160505, 1160517, 1160563 argument is that the interest-of-justice prong of § 6–3–21.1 necessitates the transfer of this case from the Hale Circuit Court to the Tuscaloosa Circuit Court. In so arguing, the defendants rely primarily upon Ex parte Tier 1, supra. The facts considered by this Court in Ex parte Tier 1 are remarkably similar to those presented in the present case. In Ex parte Tier 1, a vehicle driven by Jimmy Lee Mixon, a resident of Wilcox County, collided with a tractor-trailer owned by Tier 1 Trucking, LLC ("Tier 1"), and driven by a Tier 1 employee, who was a resident of Conecuh County; the accident occurred in Conecuh County. Mixon was transported by a company located in Conecuh County to a medical facility located in Conecuh County to receive medical treatment for the injuries he sustained in the accident. The accident was investigated by a local law-enforcement agency located in Conecuh County. Tier 1 conducted some business in Wilcox County, but its principal office was located in Florida. Mixon and his wife sued Tier 1 and its employee in the Wilcox Circuit Court. Tier 1 and the employee filed a motion to transfer the action from the Wilcox Circuit Court to the Conecuh Circuit Court under § 6-3-21.1(a). The Wilcox Circuit 12 1160504, 1160505, 1160517, 1160563 Court denied the motion to transfer. Tier 1 and the employee then petitioned this Court for a writ of mandamus directing the Wilcox Circuit Court to vacate its order denying the motion for a change of venue and to enter an order transferring the action to the Conecuh Circuit Court. In granting Tier 1 and the employee's petition and issuing the requested writ, this Court provided the following commentary on Alabama law pertaining to the interest-of- justice prong: "On multiple occasions, this Court has found that a venue where the accident occurred, where a party resides, and where other witnesses reside has a much stronger connection to the action than a venue where the only connection with the action is that a party resides there and a defendant does some business there. See, e.g., Ex parte Kane, 989 So. 2d 509, 513 (Ala. 2008) (requiring transfer of a personal-injury action for 'both the convenience of the parties and witnesses and the interest of justice' from a venue where the plaintiff resided and where the defendant automobile-liability insurer had done some business to a venue where the accident occurred and where the alleged tortfeasor, the investigating officer, and all the other witnesses that had been identified resided); Ex parte Wayne Farms, LLC, 210 So. 3d 586 (Ala. 2016) (holding that the interest of justice required transfer of a personal-injury action from a venue where an individual defendant resided and where the corporate defendant did some business to a venue where the accident occurred, where the plaintiffs resided, where most of the emergency personnel who responded to accident were located, where one plaintiff 13 1160504, 1160505, 1160517, 1160563 received medical treatment, and where all interactions and business transactions between the corporate defendant and the plaintiffs occurred); Ex parte Autauga Heating & Cooling, LLC, 58 So. 3d 745 (Ala. 2010) (holding that the interest of justice required transfer of a personal-injury action from a venue where one of the defendants resided and where the corporate defendant 'may have some business connections' to a venue where the accident occurred, where the plaintiff resided, and where the emergency medical technician who responded to the accident resided). "On one occasion, in Ex parte J & W Enterprises, 150 So. 3d 190 (Ala. 2014), this Court held that, under the specific facts of that case, the interest-of-justice prong of the forum non conveniens statute did not warrant transfer to the venue where the accident occurred. However, in that particular case, unlike in the present case, none of the parties lived in the venue where the accident occurred, the injured plaintiff did not receive medical treatment in that venue, and no eyewitnesses were located in that venue. Furthermore, both defendants were located in the venue where the action was filed, and the plaintiff resided outside Alabama." Ex parte Tier 1, ___ So. 3d at ___. This Court then provided the following analysis of the facts before it: "In the present case, the only connections to Wilcox County are that [Mixon and his wife] reside there and that Tier 1 has conducted some business there that was not related to this action. The undisputed facts show that the accident occurred in Conecuh County, that one of the defendants resides in Conecuh County, and that law-enforcement personnel in Conecuh County carried out the investigation of the accident. Furthermore, there is evidence indicating that [Mixon] received medical 14 1160504, 1160505, 1160517, 1160563 treatment in Conecuh County. Under our prior decisions construing § 6–3–21.1, this Court gives great weight to the fact that the accident occurred in Conecuh County and to the fact that no material events occurred in Wilcox County. Further, other than [Mixon and his wife], no potential witnesses who reside in Wilcox County have been identified. ... Also, although the affidavit of the police officer who investigated the accident stated that it would not be inconvenient for him to travel to Wilcox County, he is employed by a local police department located in Conecuh County that is tasked with serving the people of Conecuh County, and his investigation occurred in Conecuh County." ___ So. 3d at ___. Based on the above analysis, this Court concluded: "There is no reason to burden the people of Wilcox County with the use of their court services and other resources for a case that predominately affects another county, and we recognize the interest of the people of Conecuh County to have a case that arose in their county tried close to public view in their county. Wilcox County, with its weak connection to the case, should not be burdened with an action that arose in Conecuh County, with its strong connection to the case, simply because the plaintiffs reside in Wilcox County and the corporate defendant has done some business there. See Ex parte Autauga Heating & Cooling, 58 So. 3d at 750 (stating that '[t]his Court sees no need to burden Montgomery County, with its weak connection to the case, with an action that arose in Elmore County simply because the individual defendant resides in Montgomery County and the corporate defendant does some business there'). Therefore, under § 6–3–21.1, the trial court is compelled to transfer the case to Conecuh County. See, e.g., Ex parte Wachovia, 77 So. 3d at 573." 15 1160504, 1160505, 1160517, 1160563 ___ So. 3d at ___. The present case presents a similar factual scenario to the one presented in Ex parte Tier 1. Tuscaloosa County has a strong connection to this case. Most significantly, the accident, which resulted in Vann's death and injuries to Valorie, Tristan, and Ballinger, occurred in Tuscaloosa County. Vann's body was transported to a morgue located in Tuscaloosa County. Valorie, Tristan, and Ballinger received medical care in Tuscaloosa County for injuries sustained in the accident. The parties have not directed this Court's attention to any evidence indicating that Valorie, Tristan, or Ballinger received medical treatment in Hale County. The Northstar medical workers who transported Valorie, Tristan, and Ballinger from the scene of the accident to DCH Regional Medical Center all live and work in Tuscaloosa County. Northstar has its principal place of business in Tuscaloosa County.1 Although the officers who investigated the scene of 1We note that the plaintiffs argue that "Tuscaloosa County did not employ or pay for the services and resources provided by" Northstar. The plaintiffs' assertion is based solely on the fact that Northstar is a private company. Nevertheless, the plaintiffs have not directed this Court's attention to any evidence supporting their assertion that Tuscaloosa County did not pay Northstar for its services. 16 1160504, 1160505, 1160517, 1160563 the accident are employed by ALEA, a State agency, they are stationed at an ALEA post located in Tuscaloosa County. One of the investigating officers resides in Tuscaloosa County; the parties have not directed this Court's attention to any evidence indicating that any of the investigating officers reside in Hale County. Although some of the defendants have conducted business in Hale County, that business is unrelated to the facts of this case. One of Midsouth's managers over the Midsouth construction project that encompassed the scene of the accident resides in Tuscaloosa County and works in Tuscaloosa County daily. Hale County has a weak connection to this case. Its only connections to this case are that the plaintiffs reside in Hale County and that some of the defendants have done business there unrelated to this case. As stated in Ex parte Tier 1: "There is no reason to burden the people of [Hale] County with the use of their court services and other resources for a case that predominately affects another county, and we recognize the interest of the people of [Tuscaloosa] County to have a case that arose in their county tried close to public view in their county. [Hale] County, with its weak connection to the case, should not be burdened with an action that arose in [Tuscaloosa] County, with its strong connection to the case, 17 1160504, 1160505, 1160517, 1160563 simply because the plaintiffs reside in [Hale] County and [some of] the ... defendant[s] ha[ve] done some business there." ___ So. 3d at ___. Accordingly, based on the reasoning and authorities set forth in Ex parte Tier 1, under § 6–3–21.1, the Hale Circuit Court is compelled to transfer the case to the Tuscaloosa Circuit Court. We note that the plaintiffs argue that Ex parte First Family Financial Services, Inc., 718 So. 2d 658 (Ala. 1998), prevents the Hale Circuit Court from transferring the case to the Tuscaloosa Circuit Court. The portion of Ex parte First Family relied upon by the plaintiffs states: "'[W]hen the trial judge determines that a plaintiff is guilty of "forum shopping" and that the chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems, the statute provides that the trial court "shall" transfer the cause.'" 718 So. 2d at 660 (quoting Ex parte Gauntt, 677 So. 2d 204, 221 (Ala. 1996) (Maddox, J., dissenting)). The plaintiffs appear to argue that, in order to have the case transferred under the interest-of-justice prong, the defendants are required to demonstrate that the plaintiffs had engaged in forum shopping and "that litigation 18 1160504, 1160505, 1160517, 1160563 of this matter in Hale County would inappropriately or adversely affect Hale County's legal or administrative process." The plaintiffs argue that the defendants failed to demonstrate either. However, in Ex parte First Tennessee Bank National Ass'n, 994 So. 2d 906, 911 (Ala. 2008), this Court discounted the notion that a trial court's use of the interest-of-justice prong under § 6-3-21.1 first requires a finding that the plaintiff engaged in forum shopping. This Court stated: "[N]othing in [Ex parte] First Family [Financial Services, Inc., 718 So. 2d 658 (Ala. 1998),] limits a trial court's use of the interest-of-justice prong under § 6–3–21.1, Ala. Code 1975, to instances in which the trial court determines that a plaintiff has engaged in forum shopping. Instead, it appears from our caselaw that in analyzing the interest-of-justice prong of § 6–3–21.1, this Court focuses on whether the 'nexus' or 'connection' between the plaintiff's action and the original forum is strong enough to warrant burdening the plaintiff's forum with the action. See Ex parte Kane, 989 So. 2d [509,] 512 [(Ala. 2008)] ('"[T]he 'interest of justice' require[s] the transfer of the action from a county with little, if any, connection to the action, to the county with a strong connection to the action."' (quoting [Ex parte] National Sec. Ins. Co., 727 So. 2d [788,] 790 [(Ala. 1998)])). See also Ex parte Independent Life & Accident Ins. Co., 725 So. 2d 955, 957 (Ala. 1998) ('From what is before this Court, therefore, it appears that this case has no nexus with Lowndes County that would justify burdening that county with the trial of this case.'). In this case, [the 19 1160504, 1160505, 1160517, 1160563 defendant] moved the Jefferson Circuit Court to transfer the action under § 6–3–21.1 on the basis that the interest of justice warranted the transfer; thus, the court rightly applied the 'nexus' or 'connection' analysis." As did the Court in Ex parte First Tennessee Bank, we have applied the nexus or connection analysis and determined that the Hale Circuit Court exceeded its discretion in denying the defendants' request to transfer the action to the Tuscaloosa Circuit Court. The plaintiffs' argument that the defendants must demonstrate that the plaintiffs engaged in forum shopping and that litigation of this matter in the Hale Circuit Court would inappropriately or adversely affect the Hale Circuit Court's legal or administrative process is without merit. Lastly, we note that the defendants also argue that the transfer of this case from the Hale Circuit Court to the Tuscaloosa Circuit Court is justified based on the convenience of the parties and the witnesses. We pretermit discussion of that argument based on our conclusion that the transfer is required under the interest-of-justice prong of § 6-3-21.1. Conclusion 20 1160504, 1160505, 1160517, 1160563 The defendants have demonstrated a clear legal right to writs of mandamus directing the Hale Circuit Court to vacate its order denying the defendants' motions for a change of venue and to enter an order transferring this action to the Tuscaloosa Circuit Court. 1160504 -- PETITION GRANTED; WRIT ISSUED. 1160505 -- PETITION GRANTED; WRIT ISSUED. 1160517 -- PETITION GRANTED; WRIT ISSUED. 1160563 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Shaw, Wise, and Bryan, JJ., concur. Main and Sellers, JJ., concur in the result. 21

September 1, 2017

5fcd98f5-99e0-4560-bbfc-318093ff63be

Wells Fargo Bank, N.A. v. National Bank of Commerce

N/A

1150992

Alabama

Alabama Supreme Court

REL: 06/30/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150992 ____________________ Wells Fargo Bank, N.A. v. National Bank of Commerce Appeal from Jefferson Circuit Court (CV-12-901247) MURDOCK, Justice. Wells Fargo Bank, N.A. ("Wells Fargo"), appeals from the Jefferson Circuit Court's denial of its claim for attorney fees against National Bank of Commerce ("NBC"). We affirm the judgment of the circuit court. 1150992 I. Facts The claim at issue in this appeal stems from a lawsuit concerning the deposit of a check issued on June 18, 2009, by Jennifer Champion, treasurer of Jefferson County, in the amount of $178,916.42 in settlement of claims made in Winston v. Jefferson County, Case No. CV-07-2297, a class-action lawsuit concerning excess tax bids. The check was drawn on Jefferson County's account with Wachovia Bank, N.A., a predecessor to Wells Fargo, and it was jointly payable to the order of Carl Prewitt, Debra Prewitt, Renasant Bank, and Moore Oil Co., Inc. ("Moore Oil").1 After the check was issued, it was mailed to the Prewitts at their home in Trussville, and it was received by Debra Prewitt. On June 22, 2009, the check was stamped "for deposit only," and it was deposited to an account in the name of Liberty Investing, LLC ("Liberty Investing"), at Red Mountain Bank, a predecessor to NBC, using a remote scanner that was provided by NBC's predecessor to Creative Edge Landscaping, 1The property involved in the excess tax bid was originally owned by the Prewitts, who financed the purchase through a note and mortgage from Renasant Bank. Moore Oil purchased the note and mortgage in 2007. 2 1150992 Inc. ("Creative Edge").2 It is undisputed that the check was deposited without endorsements and that the Prewitts were not signatories on the Liberty Investing account. After NBC's predecessor accepted the check and credited the Liberty Investing account, it presented the check to Wells Fargo's predecessor for payment. Wells Fargo's predecessor paid the check and debited Jefferson County's account. The Prewitts received the proceeds of the check over time through a series of withdrawals and transfers from the Liberty Investing account. In 2011, Moore Oil became aware of the check, and by a letter dated September 14, 2011, it demanded that Jefferson County pay Moore Oil the amount of the check because, Moore Oil contended, it was entitled to the proceeds of the check. Wells Fargo asserts that Jefferson County then "contacted Wells Fargo, seeking repayment" of the check. In contrast, NBC asserts that Jefferson County has not "made a demand to Wells Fargo for reimbursement of the proceeds from the check." 2A remote-deposit agreement existed between NBC's predecessor and Creative Edge. Liberty Investing and Creative Edge were owned by the same person, Edward Parker. Apparently the Prewitts' son-in-law, Shea Mitchell, was an employee for one of Parker's businesses. 3 1150992 Neither party, however, provides record support for these assertions concerning the treasurer's actions.3 On October 13, 2011, Wells Fargo sent a letter to NBC asserting that NBC's predecessor had breached its presentment warranty under § 7-4-208, Ala. Code 1975, by accepting the check for payment without proper endorsements and then presenting it for payment to Wells Fargo's predecessor. On October 26, 2011, NBC sent a response to Wells Fargo in which it asserted that "applicable Alabama law precludes any recovery by Wells Fargo based on a presentment warranty against NBC for any funds paid under this check." On April 20, 2012, Moore Oil filed an action in the Jefferson Circuit Court against the Prewitts, Wells Fargo, and NBC, alleging that each of the defendants was liable for conversion of the check. On May 3, 2012, Wells Fargo sent a letter to NBC demanding that it defend and indemnify Wells Fargo in the action filed by Moore Oil. On May 9, 2012, NBC sent a response in which it declined to defend or to indemnify 3In its reply in support of its motion for a summary judgment, Wells Fargo stated that "[t]he Jefferson County Treasurer is not asserting any claim against Wells Fargo." 4 1150992 Wells Fargo, citing the reasons provided in its previous letter to Wells Fargo. On May 30, 2012, Wells Fargo answered Moore Oil's complaint, denying liability for conversion of the check, and it filed cross-claims against both NBC and the Prewitts for indemnity and money had and received and cross-claims solely against NBC for breach of warranty and unjust enrichment. On June 18, 2012, NBC answered Moore Oil's complaint, denying liability for conversion of the check, and it filed cross-claims and third-party claims against Liberty Investing, Creative Edge, the Prewitts, Edward Parker, and Shea and Amanda Mitchell, including claims alleging contractual indemnity, common-law indemnity, breach of contract, breach of transfer warranty, fraud, and fraudulent suppression based on the wrongful deposit of the check in violation of NBC's predecessor's remote-deposit-account agreements. Moore Oil subsequently amended its complaint several times to assert claims against Liberty Investing, Creative Edge, Parker, and Shea Mitchell alleging conversion and conspiracy and seeking prejudgment interest. On August 12, 2013, the circuit court granted a motion to stay the action 5 1150992 pending this Court's ruling in First United Security Bank v. McCollum, 178 So. 3d 372 (Ala. 2014). The trial court returned the action to its active docket by order dated October 30, 2014. On April 29, 2015, Wells Fargo moved for a partial summary judgment against NBC. On May 22, 2015, NBC filed its response in opposition to the motion. Wells Fargo filed a reply in support of its motion on May 27, 2015. On September 25, 2015, Moore Oil filed a motion for a partial summary judgment on its claims against NBC, Wells Fargo, Liberty Investing, Creative Edge, the Prewitts, and Shea Mitchell. Both Wells Fargo and NBC opposed the motion on the ground that Moore Oil was not entitled to the proceeds of the check. On November 9, 2015, the circuit court issued an order in which it entered a partial summary judgment in favor of Moore Oil on its conversion claims against Wells Fargo, NBC, the Prewitts, and Shea Mitchell, stating: "The Plaintiff's Motion for Partial Summary Judgment is granted in part. The plaintiff's claims against defendants National Bank of Commerce and Wells Fargo Bank, N.A., under Ala. Code §§ 7-3-420 and 7-3-310 [are] granted. Judgment against these defendants on this claim will be entered. 6 1150992 Additionally, the plaintiff's motion with regard to its conversion claims against defendants Carlton Prewitt, Debra Prewitt and Shea Mitchell is granted. In all other respects, plaintiff's motion is denied." In the same order, the circuit court granted in part Wells Fargo's motion for a summary judgment against NBC, stating: "The Motion for Partial Summary Judgment, filed by Wells Fargo, N.A, against co-defendant National Bank of Commerce is granted in part. The court finds that NBC is legally obligated to indemnify Wells Fargo against any demand of the plaintiff herein against Wells Fargo. The court denies Wells Fargo's request for attorneys’ fees." (Emphasis added.) According to NBC, following the circuit court's November 9, 2015, order, Moore Oil, NBC, Parker, Creative Edge, and Liberty Investing entered into a settlement agreement resolving the claims between them. Wells Fargo did not participate in the settlement. On April 28, 2016, the circuit court entered an order in which it observed that "[b]y separate orders entered today, several defendants have been dismissed from this action." The circuit court requested that the parties inform it as to whether any other disposition was required in the case. On 7 1150992 May 9, 2016, the circuit court entered an order dismissing all remaining claims in the action with prejudice. Wells Fargo subsequently filed this appeal from the circuit court's November 9, 2015, order, specifically challenging the denial of its claim for attorney fees. II. Standard of Review "Whether to award or to deny attorney fees lies within the sound discretion of the trial court. On appeal, the trial court's ruling on that question is subject to reversal only upon a showing of abuse of discretion." Battle v. City of Birmingham, 656 So. 2d 344, 347 (Ala. 1995). We note that Wells Fargo contends that our standard of review should be de novo because it bases its right to attorney fees on the interpretation of a statute. As will become apparent from our analysis, however, Wells Fargo actually relies upon the application of certain rules of special equity to sustain its claim. The question whether a rule of equity "'will be [invoked] rests in the sound discretion of the chancellor.'" Ex parte Green, 58 So. 3d 135, 156 (Ala. 2010) (Murdock, J., concurring specially in part and dissenting in part) (quoting 8 1150992 with approval Yuba Consolidated Gold Fields v. Kilkeary, 206 F.2d 884, 889 (9th Cir. 1953)). III. Analysis Wells Fargo contends that NBC should be required to reimburse Wells Fargo for the attorney fees it incurred in defending against the action brought by Moore Oil because § 7- 4-208, Ala. Code 1975, gives a drawee bank a right to reimbursement of its "expenses" when a presenting bank violates the presentment warranty.4 It argues that, in this situation, the term "expenses" must be interpreted to include attorney fees. The issue presented is one of first impression for this Court. Section 7-4-208, Ala. Code 1975, concerns presentment warranties. It provides: "(a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the draft in good faith that: 4Wells Fargo concedes that NBC is not responsible for attorney fees Wells Fargo expended in pursuit of its indemnity claim against NBC and claims against other parties in the action. 9 1150992 "(1) The warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft; "(2) The draft has not been altered; and "(3) The warrantor has no knowledge that the signature of the purported drawer of the draft is unauthorized. "(b) A drawee making payment may recover from a warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft (i) breach of warranty is a defense to the obligation of the acceptor, and (ii) if the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from a warrantor for breach of warranty the amounts stated in this subsection. "(c) If a drawee asserts a claim for breach of warranty under subsection (a) based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under Section 7-3-404 or 7-3-405[, Ala. Code 1975,] or the drawer is precluded under Section 7-3-406 or 7-4-406[, Ala. Code 1975,] from asserting against the drawee the unauthorized indorsement or alteration. 10 1150992 "(d) If (i) a dishonored draft is presented for payment to the drawer or an indorser or (ii) any other item is presented for payment to a party obliged to pay the item, and the item is paid, the person obtaining payment and a prior transferor of the item warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the item, a person entitled to enforce the item or authorized to obtain payment on behalf of a person entitled to enforce the item. The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach. "(e) The warranties stated in subsections (a) and (d) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim. "(f) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach." (Emphasis added.) This Court has explained that this section "places a duty on the collecting bank [NBC] to ensure that the indorsements on a check are not forgeries, and the collecting bank is held to warrant the genuineness of the indorsements. If the collecting bank breaches this warranty, then it is liable to the drawee bank [Wells Fargo] for the amount of the check. The rationale of this section is that the first bank in the collection chain ... is in a better position to ensure that the one presenting the check has good title than are 11 1150992 subsequent banks or the payor bank. Further, there is no duty on the drawee bank to discover an indorsement forgery in the context of payment of a check to a collecting bank." Union Bank & Trust Co. v. Elmore Cty. Nat'l Bank, 592 So. 2d 560, 562 (Ala. 1991). The "Alabama Comment" to § 7-4-208 states: "See the Alabama Comment to Section 3-411 for the issue as to when attorney's fees are recoverable." Section 7-3-411, Ala. Code 1975, concerns the refusal to pay cashier's checks, teller's checks, and certified checks. Subsection (b) of § 7-3-411 contains language similar to subsection (b) of § 7-4-208, providing: "(b) If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check, (ii) stops payment of a teller's check, or (iii) refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages." (Emphasis added.) Official Comment 2 to § 7-3-411 explains: "2. The term 'obligated bank' refers to the issuer of the cashier's check or teller's check and the acceptor of the certified check. If the obligated bank wrongfully refuses to pay, it is 12 1150992 liable to pay for expenses and loss of interest resulting from the refusal to pay. There is no express provision for attorney's fees, but attorney's fees are not meant to be necessarily excluded. They could be granted because they fit within the language 'expenses ... resulting from the nonpayment.' In addition the bank may be liable to pay consequential damages if it has notice of the particular circumstances giving rise to the damages." (Emphasis added.) In contrast to the Official Comment to § 7-3-411, the Alabama Comment to § 7-3-411 states: "Official Comment 2 states that there is no express provision for attorney's fees, but such fees are not meant to be necessarily excluded. The current rule in Alabama is that in the absence of a statute, contract or recognized equitable grounds, there is no right to recover attorney's fees from the opposing party either as cost or damages. Hartford Accident And Indemnity Company v. Cosby, 277 Ala. 596, 173 So. 2d 585 (1965); Mason v. City of Albertville, 276 Ala. 68, 158 So. 2d 924 (1963); Inland Mutual Insurance Company v. Hightower, 274 Ala. 52, 145 So. 2d 422 (1962); Cincinnati Insurance Company v. City of Talladega, 342 So. 2d 331 (Ala. 1977)." (Emphasis added.) Wells Fargo contends that the Alabama Comment to § 7-3-411 simply explains that attorney fees are recoverable by a drawee bank "to the extent permitted under Alabama law." It further argues that Wells Fargo's situation in this case 13 1150992 falls into two recognized equitable grounds for attorney-fee recovery under Alabama law: "(1) where a warrantor owes the warrantee indemnity and (2) 'where the natural and probable consequences of the defendant's wrongful act causes the plaintiff to become involved in litigation with a third person.'" Wells Fargo's first ground for its claimed right to recover attorney fees is that an indemnitee is entitled to such a recovery. In Stone Building Co. v. Star Electrical Contractors, Inc., 796 So. 2d 1076 (Ala. 2000), the Court provided a detailed explanation of the parameters of this equitable exception to the Alabama rule that attorney fees are not recoverable: "'We are aware that it appears to be well settled in other jurisdictions that an indemnitee is entitled to recover, as part of the damages, reasonable attorney fees which it is compelled to pay as a result of suits against it in reference to the matter against which it is indemnified. 42 C.J.S. Indemnity § 13(d) (1968). The indemnification of attorney fees is, however, subject to certain limitations. For instance, the allowance of attorney fees is limited to the defense of the claim indemnified against and does not extend to services rendered in establishing the right of indemnity. 41 Am. Jur. 2d Indemnity § 36 (1955); See, e.g., United General Ins. 14 1150992 Co. v. Crane Carrier Co., 695 P.2d 1334 (Okla. 1984); [E.C.] Ernst, [Inc. v. Manhatten Constr. Co., 551 F.2d 1026 (5th Cir. 1977)]. "'Furthermore, there is considerable authority holding that an indemnitee is precluded from recovering attorney fees where the indemnitee has been required to defend accusations which encompass his own separate wrongful acts. See, e.g., Farr v. Armstrong Rubber Co., 288 Minn. 83, 179 N.W.2d 64 (1970); Piedmont Equipment Co. v. Eberhard Mfg. Co., 99 Nev. 523, 665 P.2d 256 (1983). In other words, indemnification, including attorney fees, is allowed where one is defending claims predicated solely upon another defendant's negligence; however, where one is defending for his own benefit, an award of attorney fees will not be allowed.'" 796 So. 2d at 1091-92 (quoting with approval Jack Smith Enters. v. Northside Packing Co., 569 So. 2d 745, 746 (Ala. Civ. App. 1990)) (emphasis added). Wells Fargo argues that, because the circuit court concluded that it was entitled to indemnity from NBC, it follows that Wells Fargo is also entitled to attorney fees from NBC for defending the claim Moore Oil brought against Wells Fargo. It concedes that "no Alabama court has expressly ruled in applying an indemnity theory to breach of presentment warranties," but it cites cases from other jurisdictions that 15 1150992 have applied the exception to such situations. See, e.g., Perkins State Bank v. Connolly, 632 F.2d 1306, 1316 (5th Cir. 1980); Bagby v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 491 F.2d 192, 198 n.9 (8th Cir. 1974); and First Virginia Bank-Colonial v. Provident State Bank, 582 F. Supp. 850, 852 (D. Md. 1984). Wells Fargo also contends it is entitled to recover attorney fees because it has been recognized that "where the natural and proximate consequences of the defendant's wrongful act cause[] the plaintiff to become involved in litigation with a third person, attorneys' fees and other expenses incurred in such litigation may be recovered as damages. 22 Am. Jur. 2d, Damages, § 166, p. 235; 25 C.J.S. Damages § 50, p. 787. "In order to recover attorneys' fees against a defendant in a tort suit, the following elements are necessary: "(1) The plaintiff must have incurred attorneys' fees in the prosecution or defense of a prior action. "(2) The litigation must have been against a third party and not against the defendant in the present action. "(3) The plaintiff must have become involved in such litigation because of some tortious act of the defendant. 45 A.L.R.2d 1183." 16 1150992 Highlands Underwriters Ins. Co. v. Eleganté Inns, Inc., 361 So. 2d 1060, 1066 (Ala. 1978). Wells Fargo argues that it meets the requirements of this principle of recovery. It says that the only reason it became embroiled in the action brought by Moore Oil was that NBC refused "to pay the funds necessary to satisfy the claim made by Moore Oil in October 2011" when Wells Fargo asked NBC to do so. The litigation for which Wells Fargo seeks compensation was brought by a third party, i.e., Moore Oil. Wells Fargo also notes that it has been observed that the "prior-action" requirement is met where the two actions are part of the same underlying case. See Wood v. Oil Sec. Life Ins. Co., 643 F.2d 1209, 1218 (5th Cir. 1981) (observing that in Highlands Underwriters an action for reformation of the insurance policy and an action against the insurance agent alleging negligent endorsement of the same insurance policy were consolidated for trial). Before we specifically examine whether the equitable exceptions to Alabama's general rule under which Wells Fargo seeks to travel are applicable, we must note a threshold difficulty with Wells Fargo's argument as a whole. Wells 17 1150992 Fargo claims an unequivocal right to attorney fees based on a statute that simply is not explicit about such a right. The only language in § 7-4-208 that speaks to this issue in any respect states: "In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach." § 7-4-208(b). In other words, § 7-4-208 contains no express provision for the recovery of attorney fees. The right to such a recovery is left to implication based on interpretation of comments to Uniform Commercial Code provisions. As this Court has observed: "'Though the official comments are a valuable aid in construction, they have not been enacted by the legislature and are not necessarily representative of legislative intent.'" Pinigis v. Regions Bank, 977 So. 2d 446, 455 (Ala. 2007) (quoting Simmons v. Clemco Indus., 368 So. 2d 509, 514 (Ala. 1979)). In contrast, as NBC observes, Alabama's version of the Uniform Commercial Code contains several sections that do expressly provide for an award of attorney fees. See Ala. Code 1975, § 7-4A-305(e) (providing for recovery of "reasonable attorney's fees" upon failure to execute payment order); § 7-5-111(e) (noting that "reasonable attorney's fees 18 1150992 and other expenses of litigation may be awarded" under Article 5 dealing with letters of credit); § 7-9A-607(d) (stating that a secured party may deduct from the collections reasonable expenses "including reasonable attorney's fees and legal expenses"); § 7-7-601(a) (stating the court may order payment of bailee's "reasonable costs and attorney's fees"); § 7-4A-404(b) (noting that "reasonable attorney's fees" are recoverable if demand for interest is made and refused); and § 7-4A-211(f) (authorizing award of "reasonable attorney's fees" upon cancellation of payment order). It is axiomatic that the best evidence of legislative intent is the language of a statute itself. The legislature expressly provided for the recovery of attorney fees in several provisions of Alabama's version of the Uniform Commercial Code, but it did not do so in § 7-4-208. Instead, Wells Fargo asks us to infer such a right based upon inconclusive statutory language and comments upon that language that restate Alabama's general rule that attorney fees are not recoverable. As to the commentary on the statute, Wells Fargo offers the only possible construction favorable to its position. 19 1150992 But, although is true that, if the Alabama Comment to § 4-3- 411 is read in isolation, it could be interpreted to be stating that attorney fees are recoverable where Alabama law allows for such recovery, reading the commentary to § 4-3-411 as a whole puts the Alabama Comment in a different light. The Official Comment to § 4-3-411 opens the door to allowing attorney fees under the auspices of the term "expenses"; the Alabama Comment follows that observation with a terse statement of Alabama law on the subject. The result is that the Alabama Comment comes across as pushing back against the position in the Official Comment through its emphasis on this State's adherence to the traditional American Rule concerning attorney fees. Beyond all of this, Wells Fargo's situation does not qualify for the equitable exceptions it seeks to invoke. With regard to the rule expressed in Stone Building Co. concerning indemnitees being entitled to recovery of attorney fees, Wells Fargo left out of its iteration of the rule the caveat that "'an indemnitee is precluded from recovering attorney fees where the indemnitee has been required to defend accusations which encompass his own separate wrongful acts.'" Stone Bldg. 20 1150992 Co., 796 So. 2d at 1092 (quoting Jack Smith Enters., 569 So. 2d at 746). Moore Oil brought claims asserting conversion against both NBC and Wells Fargo. Specifically with regard to Wells Fargo, Moore Oil alleged that "Wells Fargo made payment on the Check without Moore's consent or indorsement" and that "Wells Fargo is liable to Moore for conversion of the Check." Wells Fargo had to defend itself in the Moore Oil action because of its own allegedly wrongful conduct. In fact, the circuit court ruled in Moore Oil's favor with regard to its claim against Wells Fargo. Wells Fargo protests that this should not matter because the circuit court concluded that NBC had to indemnify Wells Fargo, but where the circuit court ultimately placed financial liability in the action does not change the fact that Wells Fargo was not "'defending claims predicated solely upon [NBC's] negligence.'" Stone Bldg. Co., 796 So. 2d at 1092 (quoting Jack Smith Enters., 569 So. 2d at 746). Accordingly, this equitable exception does not apply here. A similar difficulty prevents application of the equitable rule expressed in Highlands Underwriters concerning instances "where the natural and proximate consequences of the 21 1150992 defendant's wrongful act cause[] the plaintiff to become involved in litigation with a third person." Highlands Underwriters, 361 So. 2d at 1066. For that rule to apply, "[t]he plaintiff must have become involved in such litigation because of some tortious act of the defendant." Id. It is true that NBC failed to ensure that the check was properly endorsed before it accepted the check, an act that was integral in the chain of events that led to conversion of the check. But Moore Oil filed a separate conversion claim against Wells Fargo because Wells Fargo simply relied upon NBC's presentation of the check, and it paid the check without making any inquiry about whether it was properly endorsed. Wells Fargo would not have become involved in Moore Oil's suit apart from its own actions. Accordingly, the equitable rule expressed in Highlands Underwriters also is not applicable here. In sum, Wells Fargo's claim for reimbursement of attorney fees expended in defense of the claim brought by Moore Oil lacks support in the statutory scheme and in the comments on the statute at issue. Furthermore, neither of the "special equity" rules under which Wells Fargo claims entitlement to 22 1150992 reimbursement of its attorney fees is applicable in this situation. Therefore, we cannot say that the circuit court erred in denying Wells Fargo's claim for reimbursement of its attorney fees. IV. Conclusion Based on the foregoing, we conclude that the circuit court's judgment denying Wells Fargo's claim for attorney fees is due to be affirmed. AFFIRMED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 23

June 30, 2017

f3d50d95-a2f1-483b-9517-2bbf21eb5a7f

Ex parte The City of Selma.

N/A

1160469

Alabama

Alabama Supreme Court

REL: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1160469 _________________________ Ex parte City of Selma PETITION FOR WRIT OF MANDAMUS (In re: Gregory Pettaway v. Santander Consumer USA, Inc., et al.) (Dallas Circuit Court, CV-11-900113) WISE, Justice. The City of Selma ("the City"), a defendant below, filed a petition for a writ of mandamus requesting that this Court 1160469 direct the Dallas Circuit Court to enter a summary judgment in its favor, based on State-agent immunity, as to claims Gregory Pettaway filed against it. We grant the petition and issue the writ. Facts and Procedural History Pettaway financed the purchase of a 2006 Nissan Armada sport-utility vehicle. Subsequently, Santander Consumer USA, Inc. ("Santander"), took over the loan. It appears that Santander contracted with Par North America, Inc. ("Par"), to handle repossessions for it and that Par used Central Alabama Recovery Systems ("CARS") to carry out the actual repossessions. At around 4:30 a.m. on November 22, 2010, two men from CARS came to Pettaway's residence and told him that they were there to repossess the vehicle. By the time Pettaway got dressed and walked outside, the men had already hooked the Armada up to the tow truck and lifted it. Pettaway objected and telephoned the Selma Police Department; Officer Jonathan Fank responded to the call. After Officer Fank told Pettaway that the repossession was a civil matter and that he could not do anything because the vehicle was already hooked up to the 2 1160469 tow truck, Pettaway again called the Selma Police Department to ask that Officer Fank's supervisor come to the scene. Officer Willie Calhoun, a senior officer, arrived and looked at the paper the men from CARS had, noted how far behind in payments the paper indicated that Pettaway was, and told the men to take the vehicle. He also told Pettaway to get any of his personal belongings out of the vehicle before the men towed it away, and Pettaway did. On May 23, 2011, Pettaway filed a complaint in the Dallas Circuit Court against Santander, Par, CARS, and the City.1 He stated conversion, negligence, wantonness, and trespass claims. Although he stated conversion, negligence, wantonness, and trespass claims, Pettaway admitted that his only complaint against the City was that the officers told the repossession men to take the vehicle.2 On June 2, 2011, the City filed an answer in which it admitted that officers were called to the scene at Pettaway's request to keep the peace but denied the remaining allegations 1The claims against Santander were resolved through arbitration, and the claims against CARS and Par were dismissed by a joint stipulation of the parties. 2In the complaint, Pettaway incorrectly identified the responding officers as Officers Smyly and Benjamin. 3 1160469 as to the actions of its officers. It also raised the affirmative defense of immunity, including "immunity pursuant to § 6-5-338(b), Ala. Code 1975." On June 28, 2011, the City filed a motion for a summary judgment. On August 24, 2011, Pettaway filed a response and an objection to the City's motion, but he did not present any evidence in support of his response. On January 13, 2014, the City filed a supplement to its motion for a summary judgment, adding as a ground an assertion that the City was entitled to State-agent immunity pursuant to § 6-5-338 and Ex parte Cranman, 792 So. 2d 392 (Ala. 2000). The City supported the supplement with a brief, an affidavit from Officer Fank, and Pettaway's deposition testimony. Pettaway did not respond to the City's supplement. The trial court conducted a hearing on the motion for a summary judgment.3 On February 20, 2017, it denied the motion. This petition followed. Standard of Review "'While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion for summary 3Neither party has provided a transcript of the hearing for this Court's review. 4 1160469 judgment grounded on a claim of immunity is reviewable by petition for writ of mandamus.' Ex parte Rizk, 791 So. 2d 911, 912 (Ala. 2000). A writ of mandamus is an extraordinary remedy available only when there is: '(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.' Ex parte BOC Group, Inc., 823 So. 2d 1270, 1272 (Ala. 2001)." Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003). Also, "whether review of the denial of a summary-judgment motion is by a petition for a writ of mandamus or by permissive appeal, the appellate court's standard of review remains the same. If there is a genuine issue as to any material fact on the question whether the movant is entitled to immunity, then the moving party is not entitled to a summary judgment. Rule 56, Ala. R. Civ. P. In determining whether there is a material fact on the question whether the movant is entitled to immunity, courts, both trial and appellate, must view the record in the light most favorable to the nonmoving party, accord the nonmoving party all reasonable favorable inferences from the evidence, and resolve all reasonable doubts against the moving party, considering only the evidence before the trial court at the time it denied the motion for a summary judgment. Ex parte Rizk, 791 So. 2d 911, 912 (Ala. 2000)." Ex parte Wood, 852 So. 2d 705, 708 (Ala. 2002). Discussion The City argues that the trial court erroneously denied its motion for a summary judgment. Specifically, it contends that, at the time of the incident that formed the basis for 5 1160469 Pettaway's complaint, Officers Fank and Calhoun were performing discretionary functions within the line and scope of their law-enforcement duties and that, therefore, they would be entitled to State-agent immunity. The City also asserts that none of the exceptions to State-agent immunity apply to this case. Therefore, it concludes that it is entitled to immunity based on the discretionary-function immunity that is afforded to police officers by § 6-5-338 and on State-agent immunity pursuant to Ex parte Cranman, 792 So. 2d 392 (Ala. 2000). Pettaway sued the City based on the actions of its officers, but he did not sue Officers Fank and Calhoun individually. "It is well established that, if a municipal peace officer is immune pursuant to § 6–5–338(a), then, pursuant to § 6–5–338(b), the city by which he is employed is also immune. Section 6–5–338(b) provides: 'This section is intended to extend immunity only to peace officers and governmental units or agencies authorized to appoint peace officers.' (Emphasis added.) See Ex parte City of Gadsden, 781 So. 2d 936, 940 (Ala. 2000). On the other hand, if the statute does not shield the officer, it does not shield the city. Borders v. City of Huntsville, 875 So. 2d 1168, 1183 (Ala. 2003)." 6 1160469 Howard v. City of Atmore, 887 So. 2d 201, 211 (Ala. 2003). Therefore, if Officers Fank and Calhoun would be entitled to immunity under § 6-5-338, then the City is entitled to immunity. In Ex parte City of Midfield, 161 So. 3d 1158, 1163-64 (Ala. 2014), this Court recognized: "'Section 6–5–338(a)[, Ala. Code 1975,] provides: "'"Every peace officer, except constables, who is employed or appointed pursuant to the Constitution or statutes of this state ... and whose duties prescribed by law, or by the lawful terms of their employment or appointment, include the enforcement of, or the investigation and reporting of violations of, the criminal laws of this state, and who is empowered by the laws of this state to execute warrants, to arrest and to take into custody persons who violate, or who are lawfully charged by warrant, indictment, or other lawful process, with violations of, the criminal laws of this state, shall at all times be deemed to be officers of this state, and as such shall have immunity from tort liability arising out of his or her conduct in performance of any discretionary function within 7 1160469 the line and scope of his or her law enforcement duties." "'The restatement of State-agent immunity as set out by this Court in Ex parte Cranman, [792 So. 2d 392 (Ala. 2000)], governs the determination of whether a peace officer is entitled to immunity under § 6–5–338(a). Ex parte City of Tuskegee, 932 So. 2d 895, 904 (Ala. 2005). This Court, in Cranman, stated the test for State-agent immunity as follows: "'"A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'".... "'"(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, l a w - e n f o r c e m e n t officers' arresting or attempting to arrest persons; ... "'".... "'"Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity 8 1160469 "'"(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or "'"(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a m i s t a k e n interpretation of the law." "'Cranman, 792 So. 2d at 405. Because the scope of immunity for law-enforcement officers set forth in § 6–5–338(a) was broader than category (4) of the restatement adopted in Cranman, this Court, in Hollis v. City of Brighton, 950 So. 2d 300, 309 (Ala. 2006), expanded and modified category (4) of the Cranman test to read as follows: "'"'A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'"'.... 9 1160469 "'"'(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, l a w - e n f o r c e m e n t officers' arresting or attempting to arrest persons, or serving as peace officers under circumstances entitling such officers to immunity pursuant to § 6–5–338(a), Ala. Code 1975.'" "'Hollis, 950 So. 2d at 309. Additionally: "'"'This Court has established a "burden-shifting" process when a party raises the defense of State-agent immunity.' Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006). A State agent asserting State-agent immunity 'bears the burden of demonstrating that the plaintiff's claims arise from a function that would entitle the State agent to immunity.' 946 So. 2d at 452. Should the State agent make such a showing, the burden then shifts to the plaintiff to show that one of the two categories of exceptions to State-agent immunity recognized in Cranman is applicable. ..."' "Ex parte City of Montgomery, 99 So. 3d [282,] 291–94 [(Ala. 2012)] (quoting Ex parte Kennedy, 992 So. 2d 1276, 1282–83 (Ala. 2008))." 10 1160469 In Ex parte Kennedy, 992 So. 3d 1276, 1282-83 (Ala. 2008), this Court stated: "The exception being argued here is that 'the State agent acted willfully, maliciously, fraudulently, in bad faith, or beyond his or her authority.' [Ex parte Estate of Reynolds,] 946 So. 2d [450,] 452 [(Ala. 2006)]. One of the ways in which a plaintiff can show that a State agent acted beyond his or her authority is by proffering evidence that the State agent failed '"to discharge duties pursuant to detailed rules or regulations, such as those stated on a checklist."' Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003) (quoting Ex parte Butts, 775 So. 2d [173,] 178 [(Ala. 2000)])." It is undisputed that Officers Fank and Calhoun are "peace officers" for purposes of § 6–5–338(a) and that their alleged misconduct occurred while they were performing a discretionary law-enforcement function -- i.e., preventing a breach of the peace. Therefore, based on Ex parte Cranman, as modified by Hollis v. City of Brighton, 950 So. 2d 300 (Ala. 2006), the City satisfied its burden of establishing that the officers would be entitled to State-agent immunity. Because the City established that the officers would be entitled to State-agent immunity, the burden then shifted to Pettaway to establish that "'one of the two categories of exceptions to State-agent immunity recognized in Cranman is applicable.'" Ex parte City of Montgomery, 99 So. 3d 282, 293 11 1160469 (Ala. 2012)(quoting Ex parte Kennedy, 992 So. 2d at 1282). In his complaint, Pettaway alleged that "Defendant City of Selma acted improperly through its Officers ... in order[ing] Plaintiff's vehicle to be taken. All acts were done wantonly, recklessly and maliciously." However, after the City presented evidence showing that the officers would be entitled to State-agent immunity, Pettaway did not present any evidence, much less substantial evidence, to create a genuine issue of material fact as to whether Officers Fank and Calhoun "'failed "'to discharge duties pursuant to detailed rules or regulations, such as those stated on a checklist,'"'" Ex parte City of Montgomery, 99 So. 3d at 294 (quoting other cases), or acted willfully, maliciously, fraudulently, in bad faith, beyond their authority, or under a mistaken interpretation of the law. In fact, Pettaway did not offer any argument or evidence in response to the City's supplemental motion for a summary judgment, which included its immunity arguments. Because Pettaway has not demonstrated that one of the exceptions to State-agent immunity under Ex parte Cranman applies under the facts of this case, Officers Fank and Calhoun would be entitled to State-agent immunity. Based on this Court's 12 1160469 holding in Howard, supra, the City is likewise entitled to immunity. Conclusion For the above-stated reasons, we conclude that the City has established that it has a clear legal right to a summary judgment in its favor based on State-agent immunity pursuant to § 6-5-338 and Ex parte Cranman. Accordingly, we grant the City's petition for a writ of mandamus and direct the trial court to vacate its order denying the City's motion for a summary judgment and to enter a summary judgment for the City. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Shaw, Main, Bryan, and Sellers, JJ., concur. Murdock, J., concurs in the result. 13

September 1, 2017

e0c6b05d-6f50-4fc8-a0f3-41eff3ab444d

Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar

N/A

1160435

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160335 ____________________ Locklear Automotive Group, Inc. v. Brad Hubbard Appeal from Tuscaloosa Circuit Court (CV-16-900716) ____________________ 1160336 ____________________ Locklear Automotive Group, Inc. v. Jeremy Averette Appeal from Tuscaloosa Circuit Court (CV-16-900683) ____________________ 1160337 ____________________ Locklear Automotive Group, Inc. v. Carol Fuller Appeal from Tuscaloosa Circuit Court (CV-16-901091) ____________________ 1160375 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Appeal from Bibb Circuit Court (CV-16-900098) ____________________ 1160435 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Appeal from Bibb Circuit Court (CV-16-900081) ____________________ 1160436 ____________________ Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Appeal from Bibb Circuit Court (CV-16-900074) ____________________ 1160437 ____________________ Locklear Automotive Group, Inc. v. Dorothea Williams Appeal from Bibb Circuit Court (CV-16-900073) MURDOCK, Justice. Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. 3 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes. I. Facts All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an 4 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC." The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters 5 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. 6 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about 7 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: _______________" (Capitalization in original; emphasis omitted; and emphasis added.) In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle- identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by 8 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case. A. Case no. 1160435: Jeffery Lollar and Betsy Lollar Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD. Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided 9 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information. The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.1 They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated 1The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 10 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017. On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 11 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Dodge Ram 3500 truck2 from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft. On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.3 He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; 2There is an immaterial discrepancy between Hood's complaint and the arbitration agreement on the year of the purchased vehicle, i.e., whether it was a 2015 or 2016 model. 3The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 12 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references. Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER," a signature of a dealer representative on a line designated "DEALER," and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC." 13 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC," and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified: "3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay. "4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document. "5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion." The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that 14 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER," the signature of a representative of the "DEALER," the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows: 15 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for -- because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate." Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration. C. Case no. 1160335: Brad Hubbard On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal 16 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 information. In early 2016, Hubbard discovered that he was the victim of identity theft. On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion. On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) 17 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated: "This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See 18 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So. 3d 27 (Ala. 2012). "Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED." (Capitalization in original.) Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.4 D. Case no. 1160336: Jeremy Averette On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft. On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On 4On February 8, 2017, this Court by order consolidated this appeal with case no. 1160336 and case no. 1160337 for purposes of filing the record and briefing. 19 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration. On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to 20 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration. E. Case no. 1160337: Carol Fuller On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft. 21 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD. On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying 22 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. F. Case no. 1160436: Elizabeth Booth On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft. On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity 23 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the order entered in Fuller's case, but it was issued by a different circuit judge. 24 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. G. Case no. 1160437: Dorothea Williams On January 13, 2016, Dorothea Williams purchased a 2016 Chrysler 200 automobile from Locklear CJD. In the course of doing so, she signed the arbitration agreement. At that time, Williams also completed a credit application and provided Locklear CJD with personal information. In February 2016, Williams was notified by the Northport Police Department that she had been the victim of identity theft. On October 6, 2016, Williams filed her complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 25 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 2016, Williams filed a response in opposition to the motion to compel. On January 23, 2017, Williams filed a supplemental response to the motion. In her response, Williams -- as did Hubbard, Averette, Fuller, and Booth -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Williams. Williams did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion. On February 1, 2017, the trial court granted the motion to compel as to Locklear CJD but denied it as to Locklear Group. Except for the name of the plaintiff, the order was substantively the same as the orders entered in the Fuller and Booth cases. It was issued by the same circuit judge who decided Booth's case. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. II. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: 26 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). 27 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 III. Analysis A. Case no. 1160335: Brad Hubbard; case no. 1160336: Jeremy Averette; case no. 1160337: Carol Fuller; case no. 1160436: Elizabeth Booth; and case no. 1160437: Dorothea Williams The arguments by the parties in the Hubbard, Averette, Fuller, Booth, and Williams cases are identical,5 and so we will address them together. As we observed in the rendition of the facts, the trial courts in those cases determined that the arbitration agreement "is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.'" It was on this premise that the trial courts concluded that the plaintiffs' claims against Locklear CJD must be arbitrated but that their claims against Locklear Group were not subject to arbitration because Locklear Group was not a signatory to the arbitration agreement. None of the plaintiffs in this group of appeals objected to arbitration of their claims against Locklear CJD. 5Hubbard, Averette, Fuller, Booth, and Williams are all represented by the same attorneys, and the argument sections of their appellee briefs are substantively very similar. 28 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1. Who Decides the Arbitrability of the Claims Against Locklear Group? We have stated that "[t]he question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme Court's terminology, simply 'arbitrability')." Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094, 1101 (Ala. 2014). "A court decides issues of substantive arbitrability '[u]nless the parties clearly and unmistakably provide otherwise.'" Id. (quoting AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986)). On appeal, Locklear Group contends that clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability exists in the arbitration agreement. Specifically, it cites the following language in the arbitration agreement: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: ... the terms of this agreement and all clauses herein contained, their breadth and scope, ... shall be submitted to BINDING ARBITRATION ...." 29 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (Capitalization in original; emphasis added.) In support of this contention, Locklear Group observes that in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), this Court evaluated an arbitration agreement that contained identical language as to arbitrability. Specifically, "[t]he single-page arbitration agreement provide[d] that the arbitrator decides 'the terms of this agreement and all clauses herein contained, their breadth and scope.'" 826 So. 2d at 132. The McGrue Court concluded that "[t]he language of the arbitration agreement is clear and unmistakable evidence indicating that McGrue and Jim Burke intended to arbitrate the question of arbitrability." Id. Likewise, in Ex parte Waites, 736 So. 2d 550 (Ala. 1999), the Court examined an arbitration agreement that contained the same language on arbitrability: "The arbitration provision included in the contract entered into by the parties states that the parties agree to arbitrate any disputes 'resulting from or arising out of the sale transaction entered into (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope ....'" 736 So. 2d at 552. The Waites Court concluded that "[t]his language expresses a clear intent to submit to arbitration the 30 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 issue of arbitrability." Id. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1054–55 (Ala. 2007) (concluding that an arbitration agreement that provided that the parties agreed to arbitrate "'all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, [and] the validity and scope of this Arbitration Provision'" "demonstrates that the parties intended to arbitrate whether the agreement applies to 'any disputes that arose from their relationship'"). For their part, the plaintiffs in these five appeals do not directly challenge the Locklear Group's position that language in the arbitration agreement sufficiently expresses an intention to arbitrate issues of arbitrability. Instead, they argue that Locklear Group did not sufficiently assert this position in the trial courts and that, therefore, it cannot serve as a basis for reversing the trial courts' orders. The plaintiffs observe that all of Locklear Group's motions to compel arbitration (which are substantially identical in all the cases before us) 31 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "consisted of six pages and fourteen numbered paragraphs. The motions contained only one sentence on the topic of who should decide disputes concerning the scope of the arbitration agreements. Specifically, the last sentence of paragraph 10 of the motions states[:] 'Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator.' This sentence was not followed by a citation to any legal authority." The plaintiffs in these five appeals note that "[t]his Court has long held that it 'will not hold a trial court to be in error unless that court has been apprised of its alleged error and has been given the opportunity to act thereon.'" Moultrie v. Wall, 172 So. 3d 828, 840 (Ala. 2015) (quoting Sea Calm Shipping Co. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990)). They argue that the solitary sentence in the motions to compel was not sufficient to apprise the trial courts that arbitrability issues -- including Locklear Group's ability, as a nonsignatory, to enforce the arbitration agreement -- had to be decided by the arbitrator. The plaintiffs contend that the sentence is a quintessential example of an "undelineated general proposition[] not supported by sufficient authority or argument." White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). The plaintiffs cite multiple cases in 32 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 which this Court concluded that a solitary reference to an argument in a motion before the trial court was not sufficient to raise the issue sought to be raised on appeal. See, e.g., Knight v. Alabama Power Co., 580 So. 2d 576, 578 (Ala. 1991) (noting that "except for the one sentence requesting the trial court to adopt the doctrine of comparative negligence, Knight presented nothing in the way of argument on that issue. ... This issue was not sufficiently argued to the trial court ...."); TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1243 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173 (Ala. 2008) (holding that an unsuccessful bidder for a public contract could not argue on appeal that the invitation to bid was ambiguous because it "did not raise this argument in the trial court" where "[t]he only mention of ambiguity TFT made at trial came in one sentence of TFT's trial brief"); and Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So. 2d 73, 81 (Ala. 2002) (observing that the plaintiff's only argument regarding the applicability of a six-year statute of limitations was one sentence in a three-page motion and concluding that "[i]t can hardly be said that [the plaintiff] 33 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 has presented this argument to the trial court and opposing parties so as to give them an opportunity to address this issue"). In the Booth and Williams appeals, Locklear Group responds that, in addition to the sentence in its motion to compel arbitration, it also raised the issue of arbitrability in the hearings on those motions.6 Booth and Williams have filed motions to strike Locklear Group's references and arguments to statements it might have made in the hearings in the Booth and Williams cases, observing that no transcript of those hearings was made and so there is no evidence in the record concerning what was argued in those hearings. Booth and Williams further observe that Locklear Group could have submitted a statement under Rule 10(d), Ala. R. App. P., recounting its recollection of what was argued in the hearings if it had wanted those statements to be included as evidence before this Court, but it failed to do so.7 Finally, Booth 6Locklear Group does not argue that it presented the arbitrability argument in the hearings in the Hubbard, Averette, and Fuller cases. 7Rule 10(d), Ala. R. App. P., states, in part: "If no report of the evidence or proceedings at a hearing or trial was made, or if a transcript is unavailable, the appellant may 34 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Williams cite multiple cases in which this Court has refused to allow a party unilaterally to alter or supplement the record through statements in an appellate brief. See, e.g., Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So. 3d 124, 134 (Ala. 2011) (noting that "because the hearing in this case was not transcribed, nothing presented at that hearing may form the basis for reversing the trial court's denial of Parker's motion to compel arbitration"); Bechtel v. Crown Cent. Petroleum Corp., 451 So. 2d 793, 795 (Ala. 1984) (observing that the appellant "states that estoppel was raised in oral argument at the hearing on the motion for summary judgment. However, no transcription of that hearing is included in the record. This court is limited to a review of the record alone and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel."). In its responses to the motions to strike, Locklear Group admits that "there is no record of the oral argument," that "no steps were taken to create a statement of what occurred at the hearing[s]," and that Booth and Williams "correctly prepare a statement of the evidence or proceedings from the best available means, including the appellant's recollection." 35 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 present[] the case law on this issue." Accordingly, we grant the motions to strike Locklear Group's references to arguments it allegedly made in the hearings on its motions to compel arbitration in the Booth case and the Williams case. Thus, as in the Hubbard, Averette, and Fuller cases, the only reference to arbitrability in the trial courts in the Booth and Williams cases was the single statement in Locklear Group's motion to compel arbitration. We agree with the plaintiffs that Locklear Group's solitary statement in its motion to compel arbitration that the arbitrator should decide the arbitrability of the claims against it was not sufficient to apprise the trial court that Locklear Group was relying on that argument. The first three numbered paragraphs in the motion set out facts relevant to the issue of arbitration, including quotations of substantial portions of the arbitration agreement. The next three paragraphs argued that the transaction at issue affected interstate commerce. The following four paragraphs -- including paragraph 10, which contains the one sentence referencing arbitrability of the arbitration issue -- argued that the language of the arbitration agreement was broad 36 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 enough to include the subject matter of the underlying claims asserted by the plaintiffs. Paragraph 10 stated: "Arbitration contracts cannot be singled out and be subjected to any different or more stringent rules of construction than other contracts. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996). As plainly demonstrated by its language, the arbitration agreement in this case is sufficiently broad in scope to require arbitration of all disputes relating to: "'the resolution of any dispute arising out of, relating to, resulting from or concerning any contracts or agreements ... entered into by the parties, all alleged representation, promises and covenants, issues concerning compliance with any state or federal law or regulation ...[,] any matters taking place either before or after the parties entered into this agreement ...[,] the terms of this agreement and all clauses herein contained, their breadth and scope ...' "(Exhibit A). The present case clearly arises out of and relates to the Plaintiff's purchase of the [vehicle] at issue, events taking place before and after the parties entered into the agreement, the dealership's compliance with state and/or federal law or regulations and alleged misrepresentations and/or omissions of Locklear in connection therewith. Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator." The next paragraph argued that courts have a duty under the Federal Arbitration Act to "rigorously enforce agreements to 37 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrate." The final few paragraphs stated the relief Locklear Group requested (i.e., that the trial court "should compel the Plaintiff to submit his dispute to binding arbitration, ... and all Court actions, including discovery, should be stayed pending arbitration") without any reference to having the arbitrator decide the issue of arbitrability. When the motion to compel arbitration is read as a whole, it is clear that Locklear Group did not articulate why the question of the arbitrability of the claims against it should be submitted to the arbitrator. Its overriding argument was devoted to the merits of the issue whether the arbitration agreement is broad enough to encompass the plaintiffs' underlying claims against Locklear Group even though Locklear Group was not a signatory to the arbitration agreement, not to the proposition that the arbitrator, and not the court, should decide this issue. Except for the brief reference in paragraph 10, Locklear Group never mentioned arbitration of the arbitrability issue anywhere in its motion, including in its paragraphs specifying the relief it was requesting from the trial courts. Locklear Group's single, unsupported, and unexplained sentence in this regard contrasts sharply with its 38 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 relatively fulsome discussion in its motion as to the breadth of the language of the arbitration agreement and how this language was sufficient to entitle Locklear Group to arbitrate the plaintiffs' underlying claims (not to mention the contrast with the Locklear Group's thoroughly explained position on the subject of arbitrability in its brief on appeal to this Court). Indeed, by focusing essentially all of its attention on whether the language of the arbitration agreement was broad enough to cover the plaintiffs' claims against it, Locklear Group suggested that that was the dispositive issue and that it was for trial court to decide it.8 Locklear Group contends that the fact that it argued to the trial courts that the scope of the arbitration agreement was broad enough to cover claims asserted by the plaintiffs and that it also mentioned the arbitrability of that issue constituted the presentation of two arguments in the 8A fair question exists, albeit one we need not address further, as to whether the trial courts' error could be said to have been invited under the circumstances. A party "'"may not predicate an argument for reversal on 'invited error,' that is, 'error into which he has led or lulled the trial court.'"'" White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d at 1057 (quoting Mobile Infirmary Med. Ctr. v. Hodgen, 884 So. 2d 801, 808 (Ala. 2003), quoting other cases). 39 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 alternative. The plaintiffs note, however, that the arguments "were not framed as alternative arguments." Instead, the arbitrability statement is tacked as an afterthought to Locklear Group's central claim that emphasized the broad scope of the arbitration agreement. Based on the foregoing, we conclude that, in the Hubbard, Averette, Fuller, Booth, and Williams cases, Locklear Group waived the issue whether the arbitration agreement by its terms assigns the issue of the arbitrability of the plaintiffs' claims against Locklear Group to the arbitrator for decision. 2. The Arbitrability of the Plaintiffs' Claims Against Locklear Group Having concluded that it was for the courts to decide the arbitrability of the underlying claims made by Hubbard, Averette, Fuller, Booth, and Williams against Locklear Group, we now consider whether the trial courts correctly decided that issue. Whether they did so turns on the proper application of the so-called "equitable-estoppel exception" to the general rule that an arbitration agreement binds only the signatories to that agreement. 40 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 a. The Exception to Equitable Estoppel for "Party Specific" Language Locklear Group argues that, despite the fact that it is not a signatory to the arbitration agreement, the plaintiffs "are equitably estopped from arguing that their claims against Locklear Group are not subject to arbitration." "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision. Ex parte Stamey, 776 So. 2d 85, 88–89 (Ala. 2000). One of the key exceptions to this rule is the theory of equitable estoppel, under which a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are '"'intimately founded in and intertwined with'"' the underlying contract obligations. Stamey, 776 So. 2d at 89 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), quoting in turn McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984))." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). This Court has, however, crafted an exception to this equitable-estoppel exception: "Where 'the language of the arbitration provisions limited arbitration to the signing parties,' this Court has not allowed the claims against the nonsignatories to be arbitrated." Id. at 380-81 (quoting Stamey, 776 So. 2d at 89). In other words, 41 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "[i]f an arbitration agreement is written in broad language so that it applies to '[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract,' Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998) (emphasis added), or even in slightly narrower language so that it applies to 'ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS CONTRACT OR THE PARTIES THERETO,' Stamey, 776 So. 2d at 91 (capitalization in original; emphasis added), this Court will proceed to determine whether arbitration may be compelled under the doctrine of equitable estoppel. "Conversely, if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, this Court's inquiry is at an end, and we will not permit arbitration of claims against the nonsignatory. See Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 131 (Ala. 2002) (affirming the trial court's order denying a nonsignatory's motion to compel arbitration where the arbitration agreement was between 'you [a signatory plaintiff] and us [a signatory defendant] or our employees, agents, successors or assigns') (bracketed language added); Ex parte Lovejoy, 790 So. 2d 933, 938 (Ala. 2000) (issuing a writ of mandamus directing a trial court to enter an order denying a nonsignatory's motion to compel arbitration where the arbitration provision was limited to 'all disputes or controversies between you [Lovejoy] and us [Allen Motor Company and its assignees]') (bracketed language and emphasis in original); First Family Fin. Servs. v. Rogers, 736 So. 2d 553, 560 (Ala. 1999) (reversing a trial court's order granting a nonsignatory's motion to compel arbitration where 'you [the plaintiffs] and we [First Family]' agreed to arbitrate and the arbitration provision elsewhere stated that it applied to 'all claims and disputes between you [the plaintiffs] and us [First Family],' 42 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and furthermore stated that it applied to 'any claim or dispute ... between you [the plaintiff] and any of our [First Family's] employees or agents, any of our affiliate corporations, and any of their employees or agents') (bracketed language and emphasis in original); and Med Center Cars[, Inc. v. Smith], 727 So. 2d [9] at 19 [(Ala. 1998)] (affirming a trial court's order denying nonsignatories' motions to compel arbitration where the arbitration provisions were limited to disputes and controversies 'BETWEEN BUYER AND SELLER') (capitalization in original)." 934 So. 2d at 381. The plaintiffs in this group of appeals contend that the arbitration agreement was limited to controversies between the signatories -- Locklear CJD and each plaintiff -- and thus that Locklear Group, as a nonsignatory, cannot enforce the arbitration agreement against the signatory plaintiffs. The plaintiffs highlight references in the arbitration agreement to "any party" or "the undersigned" or "the dealer." The trial courts' orders did the same. In this regard, the trial courts' orders set out the following passage, which they attribute to the arbitration agreement: "'In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the 43 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties .... shall be submitted to BINDING ARBITRATION.'" (Capitalization in original; ellipses supplied by the trial courts.) The plaintiffs argue that "[c]ontract language cannot get much more 'party specific' than [that found in the arbitration agreements]. There is no hint that the agreements are intended to cover claims against nonsignatories." The plaintiffs in particular emphasize a passage of the arbitration agreement that states that "the undersigned customer[s] and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." About this passage, the plaintiffs state: "Even aside from all the other party-specific language in the agreements, this language makes it clear that the agreements were intended to control disputes between and among the signatories, with no indication whatsoever that the agreements control any other dispute." 44 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 As Locklear Group observes, however, neither the plaintiffs nor the trial courts fully and accurately quote the operative language of the arbitration agreement. First, as to the sentence of the arbitration agreement emphasized by the plaintiffs, that sentence actually states in full as follows: "In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." Obviously, the purpose of this statement is simply to address which of two arbitration agreements would control disputes between the parties if the parties have entered into more than one such agreement related to the subject transactions. As to the above-quoted passage from the trial courts' orders, that passage conflates two separate sentences from the arbitration agreement. The first sentence, which in the arbitration agreement ends within the portion of the passage for which the trial courts substituted an ellipses, actually reads in its entirety as follows: 45 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." This sentence merely states that "the undersigned and the dealer ... stipulate and agree" that the transactions and agreements "are regulated by the laws of the United States of America" and that "agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." In short, this sentence does nothing more than express the agreement of the 46 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 parties that federal arbitration law is applicable to the arbitration agreement. The second sentence, part of which the trial courts added to the above-quoted passage following the ellipses, is in fact the operative part of the agreement for present purposes. But that sentence actually begins as follows: "The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) 47 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Contrary to the suggestion by the trial courts, this sentence in the arbitration agreement clearly is not "party specific" in the sense described in Mark Dodge, but, as emphasized, actually professes to be applicable to "all disputes" arising from the transaction and related matters. There is no language in this passage that restricts the disputes covered by the arbitration agreement to claims between the parties.9 The operative arbitration language in the arbitration agreement is similar to the language in the arbitration agreement in Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998), which provided that "'[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract ... shall be resolved by 9We note that Hubbard, Averette, Fuller, Booth, and Williams -- unlike the Lollars and Hood -- do not contend that the substantive nature of their identity-theft claims, rather than the nature of the parties against whom those claims are made, is such that the language of the arbitration agreement is not broad enough to encompass those claims. Such a contention would be difficult for Hubbard, Averette, Fuller, Booth, and Williams to maintain, given that they did not oppose Locklear CJD's motion for arbitration of the plaintiffs' similar identity-theft claims against it, which motion was based on the same substantive arbitration-agreement language. 48 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 binding arbitration.'" The Napier Court concluded that this language was "broad enough to encompass Napier and Godfrey's claims against [nonsignatories] Foremost and Manning." Id. at 53. The operative arbitration language in the arbitration agreement in these cases is also nearly identical to the language in the arbitration agreement at issue in Volkswagen Group of America, Inc. v. Williams, 64 So. 3d 1062, 1064 (Ala. Civ. App. 2010), which provided: "'The undersigned agree that all disputes ... resulting from or arising out of or relating to or concerning the transaction entered into ... shall be submitted to BINDING ARBITRATION ....'" In Williams, the Court of Civil Appeals disagreed with the plaintiff's contention that "the arbitration clause at issue is 'party specific.' The clause, rather, speaks to 'all disputes ... resulting from or arising out of or relating to or concerning the transaction,' a formulation that closely parallels the broad language recognized by the Alabama Supreme Court in Smith v. Mark Dodge, Inc., 934 So. 2d 375 (Ala. 2006), as authorizing a nonsignatory to assert a right to compel arbitration through application of equitable estoppel ...." Id. at 1065. 49 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 To reiterate, when "references [in arbitration provisions] to the parties specifically limited the claims that would be arbitrable under those provisions," the Court has concluded that the arbitration provisions "'are not broad enough to encompass claims against the nonsignatories.'" Ex parte Stamey, 776 So. 2d 85, 90 (Ala. 2000) (quoting Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9, 19 (Ala. 1998)). On the other hand, this Court also has held that, when an arbitration provision "contained no references to the parties that would impose a limitation on what claims would be arbitrated," the arbitration provision was broad enough to include claims that were related to the contract because the language was sufficient to indicate that "the party resisting arbitration ha[d] assented to the submission of claims against nonparties -- claims that otherwise would fall within the scope of the arbitration provision -- to arbitration." Stamey, 776 So. 2d at 89. Like the arbitration provisions in Napier and Williams, the operative arbitration language in the arbitration agreement is not limited to claims between the parties. Accordingly, Locklear Group has cleared this hurdle to the invocation of the doctrine of equitable estoppel 50 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 against Hubbard, Averette, Fuller, Booth, and Williams. We turn then to the central issue -- whether the plaintiffs' claims against Locklear Group, a nonsignatory, are sufficiently intertwined with their claims against Locklear CJD, a signatory. b. Sufficient Intertwining to Invoke Estoppel As noted, a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are "intimately founded in and intertwined with" the underlying contract obligations. Stamey, 776 So. 2d at 89. Smith v. Mark Dodge, Inc., 934 So. 2d at 380. In Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534 (Ala. 2008), this Court summarized the intertwining analysis provided in Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003): "In Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003), Blair Fulmer entered into a contract with SCI Alabama Funeral Services, Inc. ('SCI-Alabama'), for the provision of funeral and cremation services for his deceased mother. The contract included an arbitration provision. After Fulmer was given a vase that was supposed to have contained his mother's remains but allegedly did not, Fulmer sued SCI-Alabama and Service Corporation International ('SCI'), SCI-Alabama's parent corporation. The defendants filed a motion to compel arbitration, which the trial court denied. The defendants appealed. 51 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "SCI argued that, even though it was not a signatory to the contract containing the arbitration agreement, 'Fulmer's claims against the signatory defendant, SCI-Alabama, are so "intertwined" with his claims against SCI that arbitration of all of Fulmer's claims, including those against SCI, is appropriate.' 883 So. 2d at 634. After noting Stamey's two-part test, this Court addressed the first part, which relates to whether the claims against the nonsignatory defendant are intertwined with the claims against the signatory defendant. Finding that prong satisfied, this Court wrote: "'Here, Fulmer's claims against SCI are clearly "intimately founded in and intertwined with" his claims against SCI-Alabama.... All of Fulmer's claims arise from the same set of facts. Virtually none of Fulmer's claims makes a distinction between the alleged bad acts of SCI (the parent corporation) and those of SCI-Alabama (its subsidiary); rather, the claims are asserted as if SCI and SCI-Alabama acted in concert.' "883 So. 2d at 634." 988 So. 2d at 543. Just as in Fulmer, all of the plaintiffs' claims against Locklear Group in these cases are "intimately founded in" the same facts as are their claims against Locklear CJD. The plaintiffs' complaints make virtually no distinction between the bad acts of Locklear Group and those of Locklear CJD. Indeed, when the plaintiffs' complaints described purchasing 52 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their vehicles, they stated that they "dealt with Locklear [CJD] and/or Defendant Locklear [Group] employee[s]" and "[t]he Defendant Locklear [CJD] and/or Defendant Locklear [Group] ran a credit check on" each plaintiff. Every claim the plaintiffs asserted against Locklear CJD they also asserted against Locklear Group, and those claims were asserted as if Locklear CJD and Locklear Group had acted in concert, as if the latter was responsible for the acts of the former, and/or as if those persons who acted for one also acted for the other. Therefore, we conclude that the plaintiffs' claims against Locklear Group as a nonsignatory to the arbitration agreement are "intimately founded in and intertwined with" the underlying contract obligations and with the plaintiffs' contract-related claims against the signatory to the arbitration agreement, Locklear CJD, so that the doctrine of equitable estoppel is applicable. Based on the foregoing, Locklear Group can enforce the arbitration agreement against Hubbard, Averette, Fuller, Booth, and Williams; the trial courts in this group of cases erred in denying Locklear Group's motions to compel arbitration. 53 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 B. Case no. 1160435: Jeffery Lollar and Betsy Lollar As to the Lollars, Locklear CJD and Locklear Group argue that they met their prima facie burden so as to enforce the arbitration agreement, having filed a joint motion in support of which they submitted a contract calling for arbitration and uncontradicted evidence that the transaction affected interstate commerce. They also note that it is undisputed that the Lollars filed no response to their joint motion and supporting evidence. Accordingly, they contend that the trial court had no alternative but to grant their motion to compel arbitration and that it erred in not doing so. In support of their position, Locklear CJD and Locklear Group cite a passage from this Court's opinion Ex parte Greenstreet, Inc., 806 So. 2d 1203 (Ala. 2001): "We hold that once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce, the burden of persuasion shifts to the party opposing arbitration. If that party presents no evidence in opposition to a properly supported motion to compel arbitration, then the trial court should grant the motion to compel arbitration." 806 So. 2d at 1209 (emphasis added). 54 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The Lollars acknowledge that they failed to file a response to the motion to compel arbitration. They assert that failing to do so was an oversight that occurred because their counsel was expecting the trial court to set the motion to compel for a hearing just as it had done in two similar cases (one of which is before us in these appeals, case no. 1160375 -- Hood). Instead, in this case the trial court did not set a hearing; it simply entered an order denying arbitration before the Lollars filed a response. In an apparent attempt to rectify this oversight, the Lollars attach to their brief on appeal their own affidavits and a copy of what they contend was the actual arbitration agreement they signed. Locklear CJD and Locklear Group have rejoined with a motion to strike the attachments to the Lollars' brief as well as all references in their brief to those documents. As they note, this Court cannot consider evidence that is not part of the record on appeal. "'"[A]ttachments to briefs are not considered part of the record and therefore cannot be considered on appeal."' Morrow v. State, 928 So. 2d 315, 320 n. 5 (Ala. Crim. App. 2004) (quoting Huff v. State, 596 So. 2d 16, 19 (Ala. Crim. App. 1991)). Further, we 55 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 cannot consider evidence that is not contained in the record on appeal because this Court's appellate review '"is restricted to the evidence and arguments considered by the trial court."' Ex parte Old Republic Sur. Co., 733 So. 2d 881, 883 n.1 (Ala. 1999) (quoting Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ...)." Roberts v. NASCO Equip. Co., 986 So. 2d 379, 385 (Ala. 2007). Locklear CJD and Locklear Group are correct. We do not consider the evidence submitted by the Lollars on appeal or their arguments based on that evidence because that evidence and those arguments were not presented to the trial court; accordingly, we grant the motion to strike that evidence. Contrary to Locklear CJD and Locklear Group's argument, however, the Lollars' lack of response does not end our inquiry. It is true that, "once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce," the burden shifts to the nonmoving party to show otherwise. Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). It is likewise true that this Court has said that, "[i]f th[e nonmoving] party presents no evidence in opposition to a properly supported motion to compel arbitration, then the 56 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 trial court should grant the motion to compel arbitration." Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). Implicit in this standard is that we must evaluate whether the motion to compel arbitration does make a "prima facie showing" that the parties entered into an agreement to arbitrate the dispute in question and that this showing was "properly supported" by evidence of such an agreement. As we have otherwise recently expressed in another case in which the party opposing arbitration failed to present evidence in the trial court: "[U]nless on its face the arbitration provision is not valid or does not apply to the dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous." Family Sec. Credit Union v. Etheredge, [Ms. 1151000, May 19, 2017] ___ So. 3d ___ , ___ (Ala. 2017) (emphasis added). The arbitration agreement states: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into ... shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) There is no question that the arbitration agreement is broadly worded (a fact we have relied 57 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 upon in the appeals in the Booth, Williams, Hubbard, Averette, and Fuller cases in concluding that the nonsignatory, Locklear Group, could enforce the agreement against those plaintiffs). And "'where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract,'" as does this one, "'that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 505 (Ala. 1999) (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). But as stated, this broader application still is one that is tied to "the contract" to which reference is made, i.e., claims "'"arising out of or relating to" the contract,'" per the language at issue in Green Tree, for example. Or, in the case of the language at issue here, disputes "resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into." See also State v. Lorillad Tobacco, 1 So. 3d 1, 9 (Ala. 2008) (quoting Kenworth of Dothan, Inc. v. Bruner–Wells Trucking, Inc., 745 So. 2d 271, 275 (Ala. 1999)) (noting that, "[f]or a dispute to relate to the subject matter 58 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 of the arbitration provision, 'there must be some legal and logical nexus' between the dispute and the [subject matter of the] arbitration provision"). In this particular case, the parties agreed to arbitrate matters "relating to ... the transaction entered into," which was the Lollars' purchase of a 2009 Dodge Ram truck on May 28, 2013. According to the uncontradicted allegations of the complaint, the personal information of the Lollars' that was wrongly disseminated in connection with their identity-theft claims was provided to Locklear CJD in December 2015 during a visit to the dealership that was not related to the purchase of the 2009 Dodge Ram truck. On the face of the arbitration agreement, its terms do not apply to the interaction of the Lollars and the defendants that occurred in 2015. The 2013 vehicle purchase to which the 2013 arbitration agreement refers and relates is one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) is, quite simply, an unrelated matter. 59 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The situation is similar to one presented in Capitol Chevrolet & Imports, Inc. v. Payne, 876 So. 2d 1106 (Ala. 2003). In that case, Jean Payne purchased a used 1997 Cadillac Catera automobile from Capitol Chevrolet & Imports, Inc. ("Capitol"), on September 6, 2001. The arbitration agreement Payne signed in connection with the purchase had language similar to the arbitration agreement in this case: "'Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration ....'" 876 So. 2d at 1107. The Court described the facts involved in Payne's claims against Capitol as follows: "In September 2002, Payne sued Capitol and a Capitol salesperson, Jason Golden, alleging fraud and conversion. According to Payne's complaint, 60 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 approximately one month after she purchased the Catera, she returned the Catera to Capitol in reliance on Golden's representation that Capitol had a willing buyer for the vehicle. Payne relinquished possession of the Catera to Capitol and stopped making payments on the car. Payne alleged that Golden, while acting in the line and scope of his employment with Capitol, misrepresented to her that Capitol had a buyer for the Catera, and that, when Payne relinquished the Catera to Capitol in reliance on that misrepresentation, Golden converted the Catera for his personal use. Payne's complaint alleged that, as a result of the misrepresentation, she lost the use of her vehicle, suffered severe mental anguish, and suffered an adverse credit rating once she stopped making payments on the Catera." 876 So. 2d at 1107–08. The Court concluded that Payne's claims were not related to her purchase of the Catera and therefore were not subject to the arbitration agreement. "We do not believe that the plain language of the arbitration agreement would lead one to assume or understand that the agreement covered the claims alleged in Payne's complaint -- a later fraudulent misrepresentation, unrelated to the original sale of the vehicle, resulting in the conversion of the vehicle. The present dispute involves alleged subsequent tortious conduct on the part of Capitol and its agent that is not close enough in relation to the initial sale of the Catera to be covered by the language of the arbitration agreement." 876 So. 2d at 1110 (emphasis added). 61 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 In this case, as in Payne, the plain language of the arbitration agreement, which relates to the 2013 transaction, does not lead one to understand that the 2015 identity-theft claims would be covered under the agreement. We noted in Kenworth of Dothan that, "[i]n order for a dispute to be characterized as arising out of or relating to the subject matter of the [transaction], and therefore subject to arbitration, the language of the arbitration provision must reasonably apply to the dispute." 745 So. 2d at 275. In response to the clear disconnect between the transaction to which the arbitration agreement relates and the separate matters at issue in this action, Locklear CJD and Locklear Group do not really explain how the arbitration agreement is broad enough to encompass the Lollars' identity- theft claims. Instead, they attempt to rely upon the arbitrability clause in the arbitration agreement (i.e., the clause providing that the arbitrator is to decide disputes over the arbitrability of the parties' underlying substantive dispute) in an effort to avoid this issue. But the difficulty with this is the same one that existed in the Booth, Williams, Hubbard, Averette, and Fuller cases. That is, this issue was 62 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 not presented to the trial court in such a manner as to preserve it for later appellate review. For the reasons already stated in our discussion of those other cases, we cannot reverse the trial court's order on that basis. Because the arbitration agreement on its face does not apply to the Lollars' claims, we conclude that the trial court did not err in denying the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. C. Case no. 1160375: Anthony Hood The final appeal before us involves the joint motion to compel arbitration filed by Locklear CJD and Locklear Group in response to the complaint filed by Anthony Hood. Locklear CJD and Locklear Group contend that they presented a prima facie case in support of their motion to compel arbitration, i.e., that they introduced a contract calling for arbitration and produced evidence showing that the transaction affected interstate commerce. They argue that the trial court erred in determining the scope of the arbitration agreement because the arbitration agreement contained an arbitrability clause reflecting an agreement to allow the arbitrator to decide any arbitrability issues. 63 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's first response to these arguments is that the version of the arbitration agreement Locklear CJD and Locklear Group submitted to the trial court "is invalid and unenforceable because the agreement is fabricated and was not signed by [Hood] and the issue is for the Court to decide, not the arbitrator." "'[A] party who contests the existence of a contract containing an arbitration provision cannot be compelled to arbitrate that threshold issue because an arbitrator derives his authority solely from the parties' agreement. Only a court can resolve the question whether a contract exists.'" Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1053-54 (Ala. 2007) (quoting Edward D. Jones & Co. v. Ventura, 907 So. 2d 1035, 1040 (Ala. 2005)). Hood's position is meritless. As detailed in the rendition of the facts, Hood alleged in his complaint and reiterated in his response to the joint motion to compel arbitration that he purchased a 2016 Dodge Ram 3500 truck from Locklear CJD in December 2015. He also admitted in his response that he signed a "Pre-Dispute Arbitration Agreement" with Locklear CJD. Hood alleged in his response and in his supporting affidavit that the only difference between the 64 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 version of the arbitration agreement he signed and the one Locklear CJD and Locklear Group submitted with their joint motion to compel arbitration was that in the latter version "[t]he words 'Locklear Chrysler Jeep Dodge, LLC'" had been added near the bottom of the agreement in a different typeset than that of the rest of the agreement. Indeed, the version of the arbitration agreement Hood attached to his brief contains all the elements contained in the version attached to the defendants' joint motion to compel arbitration except the printed words "Locklear Chrysler Jeep Dodge, LLC" typed or printed above the "DEALER" signature line. Thus, Hood admits that he signed the arbitration agreement that contains the substantive language quoted in this opinion; he admits the agreement was signed by someone on behalf of the "DEALER," which he admits to be Locklear CJD; and he admits that the agreement contained an exact description of the vehicle he purchased. Even if the allegation that Locklear CJD and/or Locklear Group added the words "Locklear Chrysler Jeep Dodge, LLC" to the arbitration agreement after Hood signed the agreement is accepted as true, we are given no basis on which to conclude 65 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that this is a material alteration to the agreement for purposes of Hood's underlying claims. This Court has stated that in order to determine whether an alteration is material we should inquire: "Did the interposed matter make the 'instrument speak a language different in legal effect from that which it originally spoke, which carries with it some change in the rights, interests, or obligations of the parties?'" Benton v. Clemmons, 157 Ala. 658, 660, 47 So. 582, 583 (1908). See also 3B C.J.S. Alteration of Instruments § 4 (2017) ("In general, for the alteration of an instrument to be 'material,' the alteration must be such as to change the legal effect of the instrument."). In this instance, the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC" changed none of the obligations of the parties to the arbitration agreement. Hood knew and admitted that he was signing an arbitration agreement with Locklear CJD in connection with his purchase of a vehicle. A representative of the dealership signed the agreement. The terms of that agreement were not changed in any degree by the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC." Accordingly, the arbitration agreement was not "fabricated," 66 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Hood's argument does not defeat the arbitration of Hood's underlying claims.10 Like the Lollars, Hood also contends that his identity- theft allegations are not within the scope of the arbitration agreement because they do not "result[] from, aris[e] out of, relat[e] to or concern[] the transaction entered into," i.e., the purchase of a vehicle from Locklear CJD, which is the object of the arbitration agreement. In response, as in the Lollars' case (and the Hubbard, Averette, Fuller, Booth, and Williams cases), Locklear CJD and Locklear Group counter that there is a clause in the arbitration agreement that provides for the arbitrator to determine the scope of the arbitration agreement. Unlike all the other appeals before us, however, in this case not only was there a hearing on the motion to compel arbitration, but also that hearing was transcribed and the transcript submitted as part of the record on appeal. 10In an effort to provide an alternative ground for affirmance of the trial court's order as to Locklear Group, Hood also makes a "nonsignatory" argument similar to that made by first group of plaintiffs discussed above. This argument by Hood fails for the same reasons as did the similar argument by those other plaintiffs. See discussion, supra. 67 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 According to that transcript, Hood's counsel argued as follows to the trial court: "[O]ur argument is that somebody at the dealership was being allowed to [take customers' personal information] and then sell [their] identities out on the black market[, which] doesn't have anything to do with buying a car." In response, counsel for Locklear CJD and Locklear Group stated: "And our response to that specific argument is, first, we believe that the arbitration agreement is broad enough in scope to cover these. But, more importantly, we don't even get to that issue here before you, your Honor. The arbitration agreement clearly provides that the issue of scope and breadth arbitrability is for the arbitrator to decide, not this trial court. So whether or not the claims being asserted fall within the scope of the arbitration agreement is for the arbitrator to decide based on the plain and unambiguous language in the arbitration agreement. Plus, it applies for AAA rules, and there [are] Alabama Supreme Court cases that clearly state that, that in and of itself also shows an intent based on those rules to allow the arbitrator to decide the issue of scope and breadth. So that is something that the arbitrator is to determine and not this court." Thus, in Hood's case, Locklear CJD and Locklear Group clearly and explicitly argued to the trial court that there was an arbitrability clause in the arbitration agreement and that the import of the clause was that the issue whether 68 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's identity-theft claims were covered by the arbitration agreement was for the arbitrator to decide, not the trial court. Therefore, the effect of the arbitrability clause is properly before us in this appeal. Hood's first response to Locklear CJD and Locklear Group's invocation of the arbitrability clause is to contend that "clear and unmistakable evidence that [Hood] and [the] Locklear Defendants agreed to arbitrate the issue of arbitrability does not exist because a valid arbitration agreement does not exist." This argument relies upon Hood's assertion, which we just rejected, that the arbitration agreement was fabricated. Because we have concluded that a valid arbitration agreement was submitted by Locklear CJD and Locklear Group, the arbitrability clause cannot be ignored on that basis. Hood next contends that the "Locklear Defendants arguably waived a 'First Options clause' argument because this argument was not presented in their initial Motion to Compel Arbitration with the trial court or in oral argument on the 69 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 same."11 As we have already recounted, however, Locklear CJD and Locklear Group clearly and explicitly presented its arbitrability-clause argument to the trial court in the hearing on their joint motion to compel arbitration. Hood also argues that the arbitrability clause in the arbitration agreement is "wholly diverse from the "'First Options clause' in [Smith v.] Mark Dodge[, Inc., 934 So. 2d 375 (Ala. 2006)]." Hood notes that the arbitrability clause in Smith stated: "'[Smith] and [Mark Dodge] further agree that any question regarding whether a particular controversy is subject to arbitration shall be decided by the Arbitrator.'" 934 So. 2d at 378. Hood argues that "[t]he explicit language in Mark Dodge stating 'whether a particular controversy is subject to arbitration shall be decided by the Arbitrator' is clearly missing from [the] Locklear Defendants' fabricated arbitration agreement." In their principal brief, Locklear CJD and Locklear Group do not contend that the arbitrability clause in the arbitration agreement is similar in wording to the 11Hood's reference to a "First Options clause" is a reference to the discussion of arbitrability clauses in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). 70 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrability clause in Smith. Instead, they argue correctly that the arbitrability-clause language in the arbitration agreement is identical to language in arbitration agreements analyzed by this Court in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999).12 As Locklear CJD and Locklear Group observe, this Court in McGrue and Waites held that the arbitrability clauses in those arbitration agreements constituted clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability. In his brief to this Court, Hood addresses McGrue and Waites, but only by contending that they are distinguishable from the present case on the ground that "neither [McGrue nor Waites] disputed the validity of the underlying arbitration agreements." As we already have concluded, however, Hood's contention that the arbitration agreement was "fabricated" must be rejected. The fact remains, then, that in McGrue and Waites this Court concluded that language identical to that contained in the arbitration agreement was sufficient to warrant submission of issues of arbitrability to the 12See discussion, supra. 71 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrator. Hood offers no other reason why McGrue and Waites would not be dispositive of the present case. IV. Conclusion Based on the foregoing analysis, we affirm the order of the trial court in the Lollars' appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. We reverse the trial courts' orders in Hubbard's, Averette's, Fuller's, Booth's, and Williams's appeals, which denied the motions to compel arbitration as to Locklear Group, and in Hood's appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group; those causes are remanded for the trial courts to enter orders granting those motions. 72 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1160335 -- REVERSED AND REMANDED. 1160336 -- REVERSED AND REMANDED. 1160337 -- REVERSED AND REMANDED. 1160435 -- MOTION TO STRIKE GRANTED; AFFIRMED. 1160436 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. 1160437 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 1160375 -- REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. Murdock, J., concurs specially. 73 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MURDOCK, Justice (concurring specially in case no. 1160375). As the main opinion explains, Anthony Hood responds to the invocation by Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc., of this Court's decisions in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999), but he does so by arguing only that those cases involved no issue as to the validity of the underlying arbitration agreements, whereas, according to Hood, the underlying arbitration agreement in this case is invalid (the rejection of the latter proposition by the main opinion being a position with which I agree). Hood does not, for example, attempt to argue that the language of the arbitrability provision at issue here is materially different from that held to be sufficient in McGrue and Waites. Neither does Hood argue that we should overrule McGrue and Waites. And, although I confess concerns as to the sufficiency of the language here to meet the "clear and unmistakable" test articulated in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), other than pointing out that the language used here is "diverse" from the more explicit language employed in First Options, Hood does not 74 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 offer a sufficient explication of the asserted insufficiency so as to compel a reexamination of McGrue and Waites. And because the question at hand does not concern the subject- matter jurisdiction of the trial court or this Court, I cannot conclude that this Court should sua sponte explore the matter. In addition, neither party has even mentioned this Court's 2012 decision in Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). In particular, Hood does not argue that, even if the arbitrability language at issue satisfies the "clear and unmistakable" standard articulated in First Options, the particular underlying substantive claims in this case should not be sent to the arbitrator for consideration of their arbitrability because they do not even "arguably" fall within the ambit of the arbitration agreement. See Blackmon, 99 So. 3d at 1198. That is, no issue is raised as to whether Hood's identity-theft claims fall within the universe of disputes to which the so-called arbitrability clause is to apply. I feel no compunction therefore to cast a vote in this case reflective of the position I took in my dissent in 75 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Blackmon, a position to which I continue to adhere. See Blackmon, 99 So. 3d at 1199 (Murdock, J., dissenting). 76

September 29, 2017

66b43376-f8bf-410e-a912-1d2d1b617bbe

Ex parte Allstate Property and Casualty Insurance Company.

N/A

1150511

Alabama

Alabama Supreme Court

REL:05/05/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1150269 _________________________ Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Elizabeth Rebecca Zajic v. Kimberly D. Payne and Allstate Property and Casualty Insurance Company) (Madison Circuit Court, CV-12-901575) ________________________ 1150511 Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Danielle Carter v. Alvin Lee Walker and Allstate Property and Casualty Insurance Company) (Macon Circuit Court, CV-13-900170) 1151266 Ex parte GEICO Indemnity Company PETITION FOR WRIT OF MANDAMUS (In re: Rasheena Harris-Williams v. Frederick Chamberlin IV and GEICO Indemnity Company) (Jefferson Circuit Court, CV-15-900013) SHAW, Justice. In these three matters, Allstate Property and Casualty Insurance Company ("Allstate") and GEICO Indemnity Company ("GEICO") separately petition this Court for a writ of mandamus. The petitions seek writs directing the Madison, Macon, and Jefferson Circuit Courts to vacate their respective orders purporting to allow separate parties who have 2 1150269, 1150511, 1151266 underinsured-motorist ("UIM") insurance with Allstate or GEICO to enter into, without the applicable insurer's consent, settlement agreements with an alleged underinsured tortfeasor. In case no. 1150269, we dismiss the petition as untimely filed. In case no. 1150511 and case no. 1151266, we grant the petitions and issue the writs. Facts and Procedural History Each of these matters resulted from separate automobile accidents between either an Allstate or a GEICO insured with UIM coverage and allegedly underinsured tortfeasors. In each case, it appears undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. Case No. 1150269 On November 1, 2012, Elizabeth Rebecca Zajic filed in the Madison Circuit Court a complaint against Kimberly D. Payne, alleging that the two had been involved in an automobile accident on November 1, 2010, in which Payne had acted 3 1150269, 1150511, 1151266 negligently and wantonly. Zajic also included a claim against her insurer, Allstate, seeking to recover UIM benefits. Thereafter, Payne's liability insurer offered to tender the entire $50,000 available under Payne's policy limits in exchange for a full release of Payne's liability. Pursuant to the procedure outlined by this Court in Lambert v. State Farm Mutual Automobile Insurance Co., 576 So. 2d 160, 167 (Ala. 1991), Zajic notified Allstate of the settlement offer and sought its consent to settle. Allstate, however, declined to consent; instead, as also permitted by Lambert, Allstate opted to advance the $50,000 to Zajic. Allstate then opted out of participation in further proceedings determining Payne's liability and Zajic's damages. Approximately 10 months after Allstate opted out, Payne filed a "Motion to Enforce Settlement and for Pro Tanto Dismissal of Defendant, Kimberly D. Payne." In her motion, Payne, citing Lambert, among other authorities, argued that "the only permissible reason for a UIM carrier to advance or front the tortfeasor's liability limits is to preserve subrogation." Payne, citing Pennsylvania National Mutual Casualty Insurance Co. v. Bradford, 164 So. 3d 537 (Ala. 4 1150269, 1150511, 1151266 2014), and Hardin v. Metlife Auto & Home Insurance Co., 982 So. 2d 522 (Ala. Civ. App. 2007), further argued that Allstate had, after advancing the money in Zajic's case, failed to file either a subrogation cross-claim or a separate action against Payne, and that the applicable statute of limitations had, by that time, expired on any such action. Thus, Payne contended: "As [Zajic] originally reached a settlement agreement with ... Payne, to accept her policy limits of $50,000.00 and to release and dismiss ... Payne from [the] case, and because the only delay was an alleged subrogation claim by ... [Allstate] which no longer exists as a matter of law, the original settlement agreement ... should not be prevented from proceeding forward." In response, Allstate argued, among other things, that, despite the expiration of the statute of limitations on direct actions it might have against Payne, under Bradford and pursuant to the terms of the policy, it retained certain reimbursement rights to any funds Zajic might obtain from Payne in excess of the liability policy. After a hearing and over Allstate's objection, the trial court, on October 20, 2015, granted Payne's motion. More specifically, the trial court directed that the parties "effectuate the settlement" and submit appropriate pleadings seeking to dismiss the claims against Payne. In response, 5 1150269, 1150511, 1151266 Allstate filed, on November 4, 2015, a motion requesting that the trial court "alter, amend, or vacate" its order. The trial court denied that motion by order entered the following day. Following the denial of its motion seeking relief from that order, Allstate filed the instant petition for a writ of mandamus on December 16, 2015. Case No. 1150511 As the result of an automobile accident that occurred in Tuskegee on August 5, 2013, Danielle Carter sued, in the Macon Circuit Court, the alleged tortfeasor, Alvin Lee Walker. Carter's complaint also included a count against Allstate, her UIM insurer, pursuant to which Carter, who alleged that Walker was underinsured, sought to recover UIM benefits under her own policy. Walker's liability insurer subsequently made a $25,000 policy-limits offer to settle Carter's claims against Walker. Carter notified Allstate of the settlement offer; Allstate refused to consent to the settlement and, pursuant to the Lambert guidelines, instead elected to advance Carter $25,000. In addition, on May 12, 2014, Allstate obtained leave from the trial court to opt out of further participation in the litigation. 6 1150269, 1150511, 1151266 Over one year later, in September 2015, Walker filed a motion seeking "enforcement" of the original settlement offer and his dismissal from the action. In his motion, Walker noted that, despite the fact that "the only permissible reason for a UIM carrier to 'front' liability limits is to preserve subrogation," Allstate had not filed either a cross-claim or a separate subrogation action against him; thus, according to Walker, because the statute of limitations applicable to any such claim against him had expired with no action by Allstate, the settlement offer was due to be "enforced." Citing Bradford, Allstate responded that, although the statute of limitations might foreclose the right of a UIM insurer to maintain a direct action against the tortfeasor for recovery of amounts paid to its insured, the insurer had other means to seek reimbursement if the UIM insured obtained amounts from the tortfeasor in excess of the liability policy. On January 7, 2016, the trial court ordered the parties to effectuate settlement of Carter's claims against Walker and dismissed Walker with prejudice. The trial court further noted: "The case will remain pending only against the underinsured motorist carrier, Allstate ...." Allstate 7 1150269, 1150511, 1151266 responded with the instant petition for a writ of mandamus, which was filed on February 17, 2016. Case No. 1151266 On October 22, 2013, Rasheena Harris-Williams was, while driving a vehicle insured under a policy issued by GEICO, injured as the result of an automobile accident in Birmingham. Harris-Williams filed, in the Jefferson Circuit Court, a complaint against the alleged tortfeasor, Frederick Chamberlin IV. The complaint did not name GEICO as a party. Thereafter, Harris-Williams placed GEICO on notice, in light of the amount of Chamberlin's policy limits, of her intent to also seek UIM benefits under the GEICO policy. Harris-Williams also notified GEICO that Chamberlin's insurer had extended a $25,000 policy-limits offer to settle her claims against Chamberlin in exchange for Chamberlin's dismissal and that bills related to her medical treatment already exceeded $20,000. Harris-Williams requested that GEICO consent to the settlement or advance funds in the amount of the settlement offer. GEICO declined to consent and, instead, remitted the requested amount, stating that it reserved its right of 8 1150269, 1150511, 1151266 subrogation and to pursue reimbursement of the advanced settlement. In May 2016, Harris-Williams amended her complaint to add GEICO as a named defendant and to formally assert a claim for UIM benefits. In June 2016, Chamberlin filed a motion seeking "enforcement" of the settlement offer to Harris-Williams and the dismissal of all claims against him. More specifically, Chamberlin argued, as in the above cases, that preservation of its subrogation rights was the only "permissible" reason for GEICO's decision and that, pursuant to Bradford and Hardin, supra, the two-year statute of limitations applicable to any subrogation claim against him had expired without action by GEICO. Thus, according to Chamberlin, "[t]he settlement agreement is due to be enforced in its entirety and upon payment of $25,000.00 by [his insurer], [he was] due to be released and dismissed from this case, with prejudice." The trial court, over GEICO's claim that Bradford and Hardin concerned only the filing of "new actions" and were, thus, inapposite, granted, on August 2, 2016, Chamberlin's motion in all respects and dismissed Chamberlin as a defendant. Following the denial of its motion requesting that the trial 9 1150269, 1150511, 1151266 court "reconsider" that decision, GEICO filed the instant petition for a writ of mandamus on September 13, 2016. This Court subsequently ordered answers and briefs in all three cases and, considering that the issues presented are identical, has consolidated them for the purpose of writing a single opinion. Standard of Review As discussed in more detail below, in Lowe v. Nationwide Insurance Co., 521 So. 2d 1309, 1310 (Ala. 1988), this Court "set out the rights of a UIM carrier when its insured is involved in litigation" as including the right to "'elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court).'" Ex parte Geico Cas. Co., 58 So. 3d 741, 743 (Ala. 2010) (quoting Lowe, 521 So. 2d at 1310). In the instant cases, by attempting to enforce settlement agreements between the insureds and the alleged underinsured tortfeasors and dismissing the tortfeasors from these actions, the trial courts have left the UIM carriers as the sole defendants, regardless of their desire to opt out of participation at 10 1150269, 1150511, 1151266 trial. It is well settled that "[a] petition for a writ of mandamus is the appropriate means for challenging a trial court's refusal to grant a UIM carrier the right to opt out of litigation pursuant to Lowe." 58 So. 3d at 743. See also Ex parte Aetna Cas. & Sur. Co., 708 So. 2d 156 (Ala. 1998) (issuing a writ of mandamus directing the trial court to set aside an order compelling a UIM insurer to participate at trial). The standard for the issuance of the requested writs is also well settled: "'"Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995). The question of subject-matter jurisdiction is reviewable by a petition for a writ of mandamus. Ex parte Flint Constr. Co., 775 So. 2d 805 (Ala. 2000).' "Ex parte Liberty Nat'l Life Ins. Co., 888 So. 2d 478, 480 (Ala. 2003)." Ex parte Progressive Specialty Ins. Co., 31 So. 3d 661, 663 (Ala. 2009). 11 1150269, 1150511, 1151266 Discussion I. Timeliness Although not raised by any of the parties to these proceedings, this Court must first consider whether these petitions were timely filed. The Court of Civil Appeals in Ex parte Hoyt, 984 So. 2d 424, 425-26 (Ala. Civ. App. 2007), explained: "'The presumptively reasonable time within which to file a petition for a writ of mandamus is the time in which an appeal may be taken.'• Norman v. Norman, 984 So. 2d 427, 429 (Ala. Civ. App. 2007). In the present case, the petition was filed 68 days after the trial court had entered its order [challenged by the mandamus petition]. Accordingly, the petition was filed outside of the presumptively reasonable 42-day period. '[A] motion to [alter, amend, or vacate] [does] not work to extend that presumptively reasonable time within which the [petitioner] could have filed a petition for a writ of mandamus.' Norman, 984 So. 2d at 429; see also Ex parte Onyx Waste Servs., 979 So. 2d [833,] 834 [(Ala. Civ. App. 2007)]. '"[U]nlike a postjudgment motion following a final judgment, a motion to reconsider an interlocutory order does not toll the presumptively reasonable time period that a party has to petition an appellate court for a writ of mandamus."'• Norman, 984 So. 2d at 429 (quoting Ex parte Onyx Waste Servs., 979 So. 2d at 834). "'When a petition for a writ of mandamus has not been filed within a presumptively reasonable time, the petition "shall include a statement of circumstances constituting good cause for the appellate court to consider the petition, 12 1150269, 1150511, 1151266 notwithstanding that it was filed beyond the presumptively reasonable time." Rule 21(a)(3), Ala. R. App. P. "The filing of such a statement in support of an untimely petition for a writ of mandamus is mandatory." Ex parte Fiber Transp., L.L.C., 902 So. 2d 98, 100 (Ala. Civ. App. 2004) (citing Ex parte Pelham Tank Lines, Inc., 898 So. 2d 733, 736 (Ala. 2004), and Ex parte Troutman Sanders[, LLP], 866 So. 2d [547,] at 550 [(Ala. 2003)]).' "Ex parte Onyx Waste Servs., 979 So. 2d at 835. "The petitioner in this case did not include a 'statement of circumstances constituting good cause for the appellate court to consider the petition, notwithstanding that it was filed beyond the presumptively reasonable time.'• Rule 21(a)(3), Ala. R. App. P. 'Therefore, because the petition was not filed within a presumptively reasonable time and no statement constituting good cause for this court to consider the petition was filed, we must dismiss the petition.'• Ex parte Onyx Waste Servs., 979 So. 2d at 835." 984 So. 2d 424-25. See Ex parte Troutman Sanders, LLP, 866 So. 2d 547, 549-50 (Ala. 2003) (noting that the effect of a Rule 59(e), Ala. R. Civ. P., motion in tolling the time to file an appeal is applicable to final judgments and holding that a motion to reconsider a nonfinal, interlocutory order does not toll the time for filing a petition for a writ of mandamus seeking review of such order). 13 1150269, 1150511, 1151266 In case no. 1150269, as in Hoyt, Allstate filed its petition more than 42 days after the trial court had entered the order purporting to grant Payne's motion seeking to "enforce" the settlement agreement. In fact, Allstate's petition was filed on the 57th day following entry of that order. As was true in Hoyt, Allstate's motion to alter, amend, or vacate that interlocutory order did not toll the time for filing a petition for writ of mandamus in this Court. In addition, the petition does not include, as contemplated by Rule 21(a)(3), Ala. R. App. P., a statement explaining Allstate's failure to file the petition within the 42-day period contemplated by that rule. In consideration of those circumstances, the petition was not filed within the presumptively reasonable time; therefore, it is due to be dismissed. See Hoyt, supra; Troutman Sanders, 866 So. 2d at 549. In case no. 1150511 and case no. 1151266, both petitions were timely filed within 42 days of the trial court's orders 14 1150269, 1150511, 1151266 purporting to enforce the settlement agreements.1 Those matters are, thus, properly before this Court. II. Case No. 1150511 and Case No. 1151266 In Lowe, the Court considered the following question of first impression: "Whether an insured may file a claim for underinsured motorist coverage against his or her own insurer in the same lawsuit with the insured's claim against the alleged underinsured motorist ...." 521 So. 2d at 1309. We noted: "Three separate, underlying considerations are essential to our disposition of this first-impression case: 1) that of protecting the right of the insurer to know of, and participate in, the suit; 2) that of protecting the right of the insured to litigate all aspects of his claim in a single suit ...; and 3) that of protecting the liability phase of the trial from the introduction of extraneous and corrupting influences, namely, evidence of insurance ...." Id. This Court ultimately held that all the foregoing concerns were accommodated by the following procedure: "A plaintiff is allowed either to join as a party defendant his own liability insurer in a suit against the underinsured motorist or merely to give it notice of the filing of the action against the 1As noted above, GEICO filed a motion to reconsider, but nevertheless filed its petition within 42 days of the trial court's order purporting to grant the motion to enforce the settlement. 15 1150269, 1150511, 1151266 motorist and of the possibility of a claim under the underinsured motorist coverage at the conclusion of the trial. If the insurer is named as a party, it would have the right, within a reasonable time after service of process, to elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court). Under either election, the insurer would be bound by the factfinder's decisions on the issues of liability and damages. If the insurer is not joined but merely is given notice of the filing of the action, it can decide either to intervene or to stay out of the case." 521 So. 2d at 1310. Subsequently, in Lambert, the Court considered "the right of an insured to settle with a tort-feasor, and to give the tort-feasor a complete release without getting the consent of the insured's carrier of underinsured motorist coverage to the settlement." 576 So. 2d at 161. Noting "the 'twilight zone' that [an insured] is placed in when the underinsured motorist insurance carrier does not want to give its consent to settle, or wants to protect its subrogation rights," Lambert "attempt[ed] to provide a road map for everyone concerned to follow." 576 So. 2d at 165. That "road map" included the following "general rules": 16 1150269, 1150511, 1151266 "(1) The insured, or the insured's counsel, should give notice to the underinsured motorist insurance carrier of the claim under the policy for underinsurance benefits as soon as it appears that the insured's damages may exceed the tortfeasor's limits of liability coverage. "(2) If the tort-feasor's liability insurance carrier and the insured enter into negotiations that ultimately lead to a proposed compromise or settlement of the insured's claim against the tort-feasor, and if the settlement would release the tort-feasor from all liability, then the insured, before agreeing to the settlement, should immediately notify the underinsured motorist insurance carrier of the proposed settlement and the terms of any proposed release. "(3) At the time the insured informs the underinsured motorist insurance carrier of the tort-feasor's intent to settle, the insured should also inform the carrier as to whether the insured will seek underinsured motorist benefits in addition to the benefits payable under the settlement proposal, so that the carrier can determine whether it will refuse to consent to the settlement, will waive its right of subrogation against the tort-feasor, or will deny any obligation to pay underinsured motorist benefits. If the insured gives the underinsured motorist insurance carrier notice of the claim for underinsured motorist benefits, as may be provided for in the policy, the carrier should immediately begin investigating the claim, should conclude such investigation within a reasonable time, and should notify its insured of the action it proposes with regard to the claim for underinsured motorist benefits. "(4) The insured should not settle with the tort-feasor without first allowing the underinsured motorist insurance carrier a reasonable time within 17 1150269, 1150511, 1151266 which to investigate the insured's claim and to notify its insured of its proposed action. "(5) If the uninsured motorist insurance carrier refuses to consent to a settlement by its insured with the tort-feasor, or if the carrier denies the claim of its insured without a good faith investigation into its merits, or if the carrier does not conduct its investigation in a reasonable time, the carrier would, by any of those actions, waive any right to subrogation against the tort-feasor or the tort-feasor's insurer. "(6) If the underinsured motorist insurance carrier wants to protect its subrogation rights, it must, within a reasonable time, and, in any event before the tort-feasor is released by the carrier's insured, advance to its insured an amount equal to the tort-feasor's settlement offer." 576 So. 2d at 167. Finally, Lambert explained that the foregoing "guidelines should be applied with the understanding that the purpose of consent-to-settle clauses in the uninsured/underinsured motorist insurance context is to protect the underinsured motorist insurance carrier's subrogation rights against the tort-feasor, as well as to protect the carrier against the possibility of collusion between its insured and the tortfeasor's liability insurer at the carrier's expense." Id. In these two remaining petitions, Allstate and GEICO (hereinafter collectively referred to as "the insurers") contend that they are entitled to mandamus relief on the 18 1150269, 1150511, 1151266 ground that they, in all respects, complied with the procedural requirements established by this Court in Lowe and in Lambert, supra, and that they, therefore, possessed a clear legal right to have their liability to pay UIM benefits, if any, determined by a jury whose verdict would not be influenced by evidence of insurance coverage. According to the insurers, the trial courts' actions in ordering the subject settlements to be enforced over their objections, and the tortfeasors to be dismissed, thus leaving the insurers as the only remaining defendants, deprived them of that right. The respondents counter that, contrary to the insurers' claims, the trial courts' actions did not deprive the insurers of any legal right because, at the time the settlements were enforced, the insurers' subrogation claims against the tortfeasors had been extinguished by the expiration of the applicable limitations period –- a claim that, at least according to Walker, is "the practical and logical result of this Court's decision in Bradford." (Case no. 1150511, Walker's answer, at p. 8.) We disagree. It is undisputed that, at all times pertinent hereto, the insurers complied, to the very "letter of the law," with the 19 1150269, 1150511, 1151266 Court's dictates in Lowe and Lambert, as set out above. Specifically, Allstate and GEICO, after receiving notice of a settlement offer but declining to consent, which right was secured by the respective contracts between the insurers and their insureds, properly advanced an amount equal to the tortfeasor's respective settlement offer. Further, Allstate ultimately exercised the available option of opting out of further participation in the litigation2 in order to prevent mention of "its potential involvement." Despite that compliance, the actions of the trial courts in attempting to order that the settlements be effected and the tortfeasors dismissed have essentially nullified the insurers' legal right both to withhold consent to settlement and to opt out of further proceedings. In essence, despite the insurers' payment of the funds necessary to enjoin the insureds' consummation of the tortfeasors' offered settlements, the insurers were, nonetheless, ultimately forced to accept the exact settlement to which they had previously declined to consent. Further, as a result of the trial courts' attempted 2There appears to be no suggestion that, in any of the three cases, the consent of the respective insurer was unreasonably withheld or that Allstate did not "opt out" within a reasonable time. 20 1150269, 1150511, 1151266 dismissal of the tortfeasors, the insurers –- each of which would be the sole remaining defendant in each case –- are being denied the right to opt out of further proceedings and to avoid mention of their involvement in the case. 3 The respondents argue that this circumstance resulted from the insurers' own inaction, namely, the failure of the insurers to timely file either cross-claims or separate subrogation actions against the tortfeasors. More specifically, citing Bradford and Hardin, it is contended that once the statute of limitations on a direct subrogation action by the insurers against the tortfeasors has expired, "[t]here would be no viable legal means by which the [insurers] could collect against the [tortfeasors]." (Case no. 1151266, 3GEICO was added as a defendant in May 2016, and Chamberlin's motion seeking "enforcement" of the settlement offer was made the next month. Thus, it does not appear that GEICO had yet had the opportunity to "opt out" of the proceedings within a reasonable time. See Ex parte Electric Ins. Co., 164 So. 3d 529, 531 (Ala. 2014) (holding that an insurer's decision to opt out, which was nearly two years after the complaint was filed and after participation in discovery, was made within a reasonable time), and Ex parte Edgar, 543 So. 2d 682, 685 (Ala. 1989) ("Logically, the insurer would not want to withdraw from the case too early, before it could determine, through the discovery process, whether it would be in its best interest to do so."). The trial court's order essentially denies GEICO the ability to do so, despite the fact that GEICO has complied with the procedures in Lowe and Lambert. 21 1150269, 1150511, 1151266 Chamberlin's answer, at p. 10.) As this Court recently explained in Bradford, however, "insurers need not file a direct action against the tortfeasor to protect their rights of reimbursement ... [but] may obtain reimbursement from the insured's recovery against the tortfeasor." 164 So. 3d at 540.4 Indeed, as Justice Murdock noted in his special concurrence in Bradford, having advanced the tortfeasor's policy limits to its insured, "[the insurer] is now the beneficial owner of 'the case' against [the tortfeasor]," and, as such, "has the right to control the prosecution of that case." 164 So. 3d at 541 (Murdock, J., concurring specially). Thus, it is of no consequence that the timing for filing a direct action by the insurers against the tortfeasors has expired. The respondents correctly point to Bradford, 164 So. 3d at 539, Hardin, 982 So. 2d at 526, and related authorities as establishing that the statute of limitations begins to run against a subrogated insurer at the same time it begins to run 4GEICO was not made a party in the action until after the applicable limitations period had expired. Additionally, in case no. 1150269, which we are dismissing as untimely filed, Zajic's complaint against Payne and Allstate was filed the day the statute of limitations expired, making it virtually impossible for Allstate to file a timely direct subrogation action against Payne. 22 1150269, 1150511, 1151266 against the insured. See also Home Ins. Co. v. Stuart-McCorkle, Inc., 291 Ala. 601, 607-08, 285 So. 2d 468, 472-73 (1973). However, that well settled principle is clearly applicable only insofar as it prevents an insurer from "fil[ing] some new claim in its own name against [the tortfeasor] after the statute of limitations has expired." Bradford, 164 So. 3d at 541 (Murdock, J., concurring specially) (emphasis added).5 As noted in Lambert: "This Court has held that the insurer's duty to defend is more extensive than its duty to pay. See Universal Underwriters Ins. Co. v. Youngblood, 549 So. 2d 76 (Ala. 1989); United States Fidelity & Guar. Co. v. Armstrong, 479 So. 2d 1164 (Ala. 1985); and Samply v. Integrity Ins. Co., 476 So. 2d 79 (Ala. 1985). Therefore, the liability insurer's duty to defend the tort-feasor could extend beyond that moment when the underinsured motorist insurance carrier elected to pay to its insured the amount offered by the tort-feasor's liability insurer." 576 So. 2d at 167-68. 5We are likewise unpersuaded by Chamberlin's claim that mere "'fronting' of the settlement money did not create a vehicle for actual subrogation recovery" but, instead, that "the additional step of a timely Crossclaim or a timely separate lawsuit is necessary." (Case no. 1151266, Chamberlin's answer, at p. 9.) Notably, Chamberlin includes no citation to authority in support of that contention, which appears to be directly contradicted by Bradford and the authority cited therein. 23 1150269, 1150511, 1151266 Because the insurers, in following the express directives of this Court, have been deprived of their contractual rights as well as the benefit of the procedures set forth in Lowe and Lambert, we conclude that they have demonstrated a clear legal right to the requested relief. We, therefore, in case no. 1150511 and case no. 1151266, direct the applicable circuit court to vacate its respective order purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. 1150269 -- PETITION DISMISSED. Stuart, C.J., and Bolin, Parker, Main, Wise, and Bryan, JJ., concur. Murdock, J., dissents. 1150511 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 1151266 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 24

May 5, 2017

9955ec2f-0fe2-48d3-a00a-cdb158e284ae

Brooks v. RPM Cranes, LLC

N/A

1150028

Alabama

Alabama Supreme Court

Rel: 06/16/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150018 ____________________ CraneWorks, Inc., et al. v. RPM Cranes, LLC, and Muhammad Wasim Ali ____________________ 1150028 ____________________ Russell Brooks et al. v. RPM Cranes, LLC, and Muhammad Wasim Ali Appeals from Jefferson Circuit Court (CV-15-902765) PER CURIAM. CraneWorks, Inc. ("CraneWorks"), and its owners, David Upton ("David") and Steve Upton ("Steve"), and Russell Brooks, Rick Yates, and Casey Markos (all hereinafter collectively referred to as "the defendants") filed two appeals challenging the entry by the Jefferson Circuit Court ("the trial court") of a permanent injunction against them and in favor of RPM Cranes, LLC ("RPM"), and Muhammad Wasim Ali, the owner of RPM. We reverse the trial court's judgment and remand the case. Facts and Procedural History The basic facts underlying these appeals are well summarized in the "Findings of Fact" in the trial court's final order of August 25, 2015.1 "Based on the information presented by the parties via affidavit and live testimony, the court makes the following findings of fact: "A. The Creation of RPM "The Plaintiff, Muhammad Wasim Ali ('Dr. Ali')[2], is the sole owner of RPM Cranes, LLC ('RPM'). Defendants Russell (Rusty) Brooks ('Brooks') and Rick Yates ('Yates'), along with RPM's current General Manager Patrick Watson 1We note that the defendants in their appellate briefs to this Court do not take issue with the trial court's summary of the facts and, in fact, quote extensively from it. RPM and Ali have not filed appellee's briefs in these appeals. 2Ali is a medical doctor. 2 1150018, 1150028 ('Watson'), all of whom testified at the hearing, started RPM in 2008 with financial backing from Dr. Ali (who was not present at the hearing). Neither Dr. Ali nor Watson had any prior experience in or knowledge of the crane industry. By contrast, Brooks and Yates had many years of experience in the crane industry, having previously worked for both Birmingham Steel and CraneWorks. Brooks and Yates had many contacts in the crane industry and brought those contacts with them to RPM. Brooks served as RPM's Operations Manager and Yates was its Sales Manager. "B. Brooks'[s] and Yates'[s] Employment Agreements "When the company began, Brooks and Yates understood they would become equity owners of the company within five (5) years. Prior to the expiration of that five (5) year period, however, Dr. Ali demanded they either buy in to the company at a cost of one million dollars ($1,000,000.00) each or remain employees of the company. Without the resources to make such an investment, Brooks and Yates agreed to remain with RPM as employees. At that time, RPM presented them with employment agreements that contained restrictive covenants pertaining to competition. "[RPM and Ali] attached copies of Brooks'[s] and Yates'[s] employment agreements to their Complaint as Exhibits B and C. The employment agreements i n c l u d e d , i n t e r a l i a , a n o n - competition/non-solicitation provision limiting Brooks and Yates from working for a competing business for a period of two years and prohibiting Brooks and Yates from soliciting RPM's customers served within twenty-four (24) months prior to the date their employment with RPM ended. "The employment agreements also included RPM's commitment to provide employee benefits to Brooks 3 1150018, 1150028 and Yates in the same manner provided to all other employees. Watson testified that most RPM employees are union members and that RPM is obligated to make contributions to the union, on behalf of the union employees, for the employees’ health and pension benefits. During his employment with RPM, Brooks was a union member and relied on RPM to make contributions to his health and pension plans via the union. At the request of RPM, Yates withdrew from the union in 2011. With his union withdrawal came RPM's responsibility (admitted by Watson on cross-examination) to pay for Yates'[s] health and pension benefits, in the same way RPM paid for Watson's health and pension benefits. RPM did not pay for Yates'[s] pension benefits for a period of nineteen (19) months -- from August 29, 2011 through April 9, 2013 -- resulting in zero contributions to Yates'[s] pension for that entire period. "C. Markos'[s] Employment With RPM "Defendant, Casey Markos ('Markos'), was hired at RPM in 2008 as an oiler, later became a crane operator, and became a salesperson in 2013. Per Markos, Watson asked him to sign a non-compete agreement when Markos became a salesperson in 2013, and Markos declined. Watson testified that he witnessed Markos sign the agreement, but admits that neither he nor RPM have the original agreement bearing Markos'[s] signature. Instead, [RPM and Ali] have presented as Exhibit D to the Complaint a copy of an agreement that appears (even to Markos) to bear Markos'[s] signature. Markos testified that he does not know how his signature was affixed to the non-compete [agreement] and is emphatic that he did not sign the document. "Watson admits that nothing was offered to Markos in exchange for signing the non-compete [agreement], and the purported agreement does not state that any consideration was provided. The agreement that Markos allegedly signed contains a 4 1150018, 1150028 different restriction than the one in Brooks'[s] and Yates'[s] employment agreements, and prohibits 'Employee' from working for any company 'engaged in the business of rental.' Exhibit D to the Complaint does not specify that Markos was restricted from working in the crane rental business. Like Brooks, Markos was a union member during his employment with RPM, relying on RPM to make contributions to the union for his health and pension benefits. "D. Events Leading to the Resignation of Brooks, Markos, and Yates "In 2015, a number of incidents occurred that led Brooks, Markos, and Yates to believe that RPM was in financial and reputational disarray and to fear that the company would soon close its doors. The men testified (via live testimony and affidavit) that company credit cards were declined on a number of occasions, including credit cards needed to provide fuel for cranes that were located at existing job sites. Salespeople and operators used their personal credit cards to either fuel machinery or pay for overnight hotel stays while on out-of-town jobs. Salespeople were instructed not to spend money on company marketing (including lunches, a primary way salespeople maintain contact with their customers and learn of future crane opportunities). "In March 2015, Dr. Ali was arrested on federal drug charges, and he was indicted the following month. As part of the indictment, some RPM assets and bank accounts were seized and/or frozen. On June 1, 2015, RPM filed for Chapter 11 bankruptcy protection, where [RPM] remains today.[3] Dr. Ali's 3We note that the automatic-stay provision in the Bankruptcy Code, 11 U.S.C. § 362, applies only to "the commencement or continuation ... of a judicial ... action or proceeding against the debtor." (Emphasis added.) The action underlying these appeals was filed by RPM. 5 1150018, 1150028 arrest and indictment, as well as RPM's bankruptcy, received media attention, and Brooks, Markos, and Yates received questions from concerned customers about these incidents. "In mid-June 2015, Brooks, Markos, and Yates learned RPM had not made payments to the union for the health and pension benefits of any of RPM’s union employees, including but not limited to Brooks and Markos, since at least February 2015. RPM admits that it did not make these payments despite its obligation to do so. Approximately six crane operators then resigned their employment with RPM. Brooks, Markos, and Yates knew that a lack of crane operators would result in an inability to service client crane needs. That fact, compounded with the financial problems RPM was experiencing (Yates'[s] last four paychecks were drawn from four different banks), as well as the reputational issues associated with Dr. Ali's arrest and indictment, and the company's bankruptcy petition, led Brooks, Markos, and Yates to feel they had no choice but to leave RPM. RPM had not made required payments to Yates'[s] pension plan, nor had it made required contributions to the union for Brooks'[s] and Markos'[s] health and pension benefits. Brooks, Markos, and Yates feared that the company's financial condition would cause it to close its doors at any moment, leaving them without a job and unable to pay their bills and support their families. These employees further believed their personal reputations in the crane industry had been and would continue to be damaged by their affiliation with RPM, and they needed to ensure that the customers with whom they had developed relationships over many years in the industry received proper service. Accordingly, Brooks and Yates submitted their resignations on June 16, 2015 and Markos submitted his resignation the following day. All three men were hired by CraneWorks, where Brooks and Yates had worked prior to starting RPM." 6 1150018, 1150028 On July 15, 2015, RPM and Ali sued the defendants, alleging that Brooks, Yates, and Markos had violated their employment agreements by going to work for CraneWorks and that CraneWorks' hiring of Brooks, Yates, and Markos likewise violated those employment agreements. David and Steve were named as defendants by virtue of their ownership of CraneWorks. RPM and Ali sought monetary damages and injunctive relief. Along with their complaint, RPM and Ali filed a motion for a temporary restraining order ("TRO") and a request for a preliminary injunction. Following an ex parte hearing on the motion, the trial court granted the request for a TRO on July 16, 2015. The order stated, in pertinent part, that "[t]he [d]efendants are hereby temporarily restrained and enjoined from contacting, in any manner whatsoever, any of the former or current clients of RPM." CraneWorks filed a motion to dissolve the TRO in which it observed, among other things, that counsel for RPM and Ali had informed counsel for CraneWorks that RPM and Ali did not intend to obtain a TRO against CraneWorks. RPM and Ali did not dispute that assertion. 7 1150018, 1150028 On July 23, 2015, the trial court entered an order modifying the TRO to clarify that it did not apply to CraneWorks, David, or Steve but that it remained in place as to Brooks, Yates, and Markos. The trial court also set a date for a hearing on RPM and Ali's request for a preliminary injunction. On August 19, 2015, the trial court held a hearing on the motion for a preliminary injunction in which it accepted evidentiary submissions and heard testimony from Patrick Watson, RPM's general manager, and from Brooks, Yates, and Markos. During the hearing, when counsel for CraneWorks indicated that he wanted to cross-examine Watson, counsel for RPM and Ali objected: "[Counsel for RPM and Ali]: Your Honor, if I may, counsel represents CraneWorks. "THE COURT: Is CraneWorks a party? "[Counsel for RPM and Ali]: CraneWorks on this is no longer involved, because we did away with their TRO on them. "THE COURT: So CraneWorks isn't being -- is CraneWorks a party to the complaint? "[Counsel for RPM and Ali]: To the complaint, yes, sir. "THE COURT: All right. Well, they -- 8 1150018, 1150028 "[Counsel for RPM and Ali]: As far as that involves this at the last meeting we had, the order did away with them being involved with any of the TRO or the restraining order at all. "THE COURT: Yeah. Response? "[Counsel for CraneWorks]: Your Honor, if he wants to dismiss all claims against CraneWorks and the owners, the Uptons; then I don't need to be at this hearing. But right now we're being sued by this company. Our employees are currently being restrained from doing work for us. "THE COURT: All right. Have you got questions concerning the TRO or preliminary injunction? "[Counsel for CraneWorks]: I have a few follow-[up] questions for Mr. Watson. "THE COURT: Go right ahead." On August 25, 2015, the trial court entered the order from which we have already quoted the findings of fact. In the "Legal Analysis" portion of that order, the trial court reviewed each of the elements of a preliminary injunction under separate headings. The first heading states: "Plaintiffs Did Not Prove Irreparable Injury." In this section, the trial court observed: "With respect to the enforcement of noncompetition agreements against a former salesperson, the Alabama Supreme Court has adopted a rebuttable presumption of irreparable injury where the employer can establish three prima facie elements: (1) the 9 1150018, 1150028 existence of a valid noncompetition agreement, (2) a protectable interest of the employer, (3) and a violation of the former employee salesperson's noncompetition agreement by 'actively competing with his or her former employer in the same geographic area.' Ormco [Corp. v. Johns], 869 So. 2d [1109,] 1118-19 [(Ala. 2003)]. Plaintiffs have not met this burden." The trial court then examined each of the three prima facie elements of irreparable injury presumed to stem from a noncompetition agreement. The trial court concluded that RPM and Ali "have not demonstrated the existence of valid noncompetition agreements." With respect to Yates and Brooks, the trial court reasoned: "By failing to pay for Yates'[s] pension benefits and failing to make contributions to Brooks'[s] health and pension plans via the union, RPM breached the employment agreements with Brooks and Yates and did not provide the consideration necessary to support the agreement." As for the agreement with Markos, the trial court stated: "Markos expressly denies signing the document attached as Exhibit D to the Complaint, and [RPM and Ali] have been unable to produce the original document. "Even if Markos signed the document attached as Exhibit D to [RPM and Ali's] Complaint, it fails for lack of consideration. Not only does the agreement itself fail to list any consideration provided by 10 1150018, 1150028 RPM to Markos in exchange for the non-competition agreement, but both Markos and Watson confirmed that nothing was offered to Markos as an inducement to sign the agreement." The trial court further concluded that the noncompetition agreement between Markos and RPM "violates Ala. Code [1975,] § 8-1-1, as a restraint on trade" because it was not limited to a geographic area and it prohibited Markos from working for any company "engaged in the business of rental," rather than restricting him from working for other "crane rental" businesses, which was the only type of rental services RPM offered. As to the second element necessary for irreparable injury to be presumed based on a noncompetition agreement, the trial court concluded that RPM and Ali "presented no evidence of any protectable interest. Indeed, [RPM and Ali] offered no testimony or other evidence that any of the customers served by the company were developed during [Brooks's, Yates's, and Markos's] employment with RPM, using RPM resources. The only testimony on this topic was from Yates, who, without cross-examination by [RPM and Ali], testified that he had preexisting contacts and customers that he brought with him to RPM, and that Yates and Brooks taught Dr. Ali and Watson about the crane business not vice versa. ... Here, [RPM and Ali] have not established that they have a protectable interest in customers served by Brooks, Markos, and/or Yates, nor that they have a unique or substantial right that warrants protection." 11 1150018, 1150028 The trial court further noted that, "[e]ven if [RPM and Ali] had established irreparable injury, Brooks, Markos and Yates rebutted that assertion via evidence showing alternate reasons for such injury," namely "Ali's indictment, RPM's bankruptcy, or because the company no longer had sufficient crane operators to provide necessary services." The trial court also observed that "the undisputed affidavits submitted in this case demonstrate that customers in need of crane rental services often select their rental company based on the availability of a specific piece of needed equipment, not solely on a relationship with a particular company or salesperson." Despite all the evidence against finding any protectable interest on the part of RPM and Ali, at the end of the trial court's discussion of irreparable injury, the trial court stated: "[I]t does stand to reason that since [Brooks, Markos, and Yates] helped to create RPM ..., then some of the clients were developed as a result of [Brooks's, Markos's, and Yates's] relationship with RPM .... Therefore, RPM ... does show a minuscule protectable interest." 12 1150018, 1150028 Continuing with the next element required for establishing the need for a preliminary injunction, the trial court's heading states: "[RPM and Ali] Have an Adequate Remedy at Law." In this section, the trial court observed: "The only testimony presented as to [RPM and Ali's] alleged damage was Watson's testimony that RPM allegedly lost 'millions' of dollars since the departures of Brooks, Markos, and Yates. [RPM and Ali] offered no proof of such loss, nor have they established that said loss was solely, or even in part, attributable to Brooks, Markos, and Yates'[s] departure. More importantly, if, as [RPM and Ali] claim, their only damage is monetary, then they have an adequate remedy at law and an injunction is not appropriate. ... To the extent [RPM and Ali] have been damaged in any other way, they have not offered evidence to so demonstrate, and have therefore failed to meet their burden of establishing an inadequate remedy at law." The next heading in the trial court's order states: "[RPM and Ali] Do Not Have a Reasonable Chance of Success on the Merits." In this section of the order, the trial court reasoned that because of "the invalidity of Markos'[s] alleged non-competition agreement and RPM's breach of its own obligations under the other two employment agreements, [RPM and Ali] cannot demonstrate a reasonable chance of success on the merits." 13 1150018, 1150028 The final heading of the trial court's order states: "The Hardship Imposed on Brooks, Markos, and Yates Would Unreasonably Outweigh the Benefit Accruing to [RPM and Ali]." In this section, the trial court noted: "Brooks, Markos, and Yates testified that the crane industry is what they know and what they have spent their careers learning. Prohibiting them from working in the crane industry would, effectively, prohibit them from working, resulting in financial burdens on these men and their families. ... Defendants Brooks, Markos, and Yates live paycheck to paycheck. Their trade is a single industry. To prohibit them from working (particularly when there are alternative methods of redress for any potential violation of any valid agreement) would impose an undue burden that cannot be surpassed by [RPM and Ali's] articulation of any alleged monetary damage." In spite of all the foregoing analysis, at the conclusion of its order the trial court entered a permanent injunction in favor of RPM and Ali and against the defendants. In pertinent part, the injunction provided: "For the foregoing reasons, [RPM and Ali's] motion for preliminary injunction is hereby GRANTED, but only as follows: "1. The Defendants are hereby permanently restrained and enjoined from contacting, in any way whatsoever, any of those clients which are now clients of RPM Cranes. "2. This permanent injunction does not extend to enjoining or restraining the aforementioned clients from becoming clients of Crane[W]orks of their own 14 1150018, 1150028 volition; but, rather extends only to enjoin and restrain Crane[W]orks or its employees and assigns, from contacting in any way whatsoever, the aforementioned clients. "3. The limitations this court previously imposed on Defendants Brooks, Markos, and Yates via the entry of a Temporary Restraining Order (and its amendment) are now expired and expressly lifted, except as delineated in Paragraph 2 above. ".... "5. This case is hereby DISMISSED with prejudice. Costs taxed as paid." (Capitalization in original.) CraneWorks, David, and Steve, on the one hand, and Brooks, Markos, and Yates, on the other, filed separate timely appeals from the trial court's August 25, 2015, order. This Court consolidated those appeals for the purpose of writing one opinion. Standard of Review "'The applicable standard of review [of an order granting injunctive relief] depends on whether the trial court entered a preliminary injunction or a permanent injunction. A preliminary injunction is reviewed under an abuse-of-discretion standard, whereas a permanent injunction is reviewed de novo.' TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1241–42 (Ala. 1999); see also Smith v. Madison County Comm'n, 658 So. 2d 422, 423 n. 1 (Ala. 1995)." 15 1150018, 1150028 Weeks v. Wolf Creek Indus., Inc., 941 So. 2d 263, 271 (Ala. 2006). Although the trial court analyzed RPM and Ali's motion for an injunction as seeking a preliminary injunction, the restrictions placed upon the defendants constitute a permanent injunction. Therefore, our standard of review is de novo. Discussion The defendants' arguments are straightforward and compelling. The defendants observe that, in its order, the trial court concluded that none of the elements required for a preliminary injunction favored RPM and Ali. The trial court's order explained in detail that RPM and Ali failed to demonstrate 1) that they had sustained an irreparable injury; 2) that they had an adequate remedy at law; 3) that they had a likelihood of success on the merits; and 4) and that the hardships imposed by an injunction upon Brooks, Yates, and Markos "unreasonably outweigh[ed]" the benefits that would accrue to RPM and Ali. Every aspect of the trial court's order favored the defendants, yet the trial court granted RPM and Ali's request for an injunction. The trial court's order provides no basis for imposing any injunction -- preliminary or permanent -- against the defendants. See TFT, Inc. v. 16 1150018, 1150028 Warning Sys., Inc., 751 So. 2d 1238, 1242 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173, 1176 (Ala. 2008)("The elements required for a preliminary injunction and the elements required for a permanent injunction are substantially similar, except that the movant must prevail on the merits in order to obtain a permanent injunction, while the movant need only show a likelihood of success on the merits in order to obtain a preliminary injunction. Pryor v. Reno, 998 F. Supp. 1317 (M.D. Ala. 1998)."). Moreover, concerning CraneWorks and David and Steve specifically, the actions of the trial court with respect to the TRO as well as the above-quoted statements by RPM and Ali's counsel during the course of the hearing on the motion for a preliminary injunction indicated that RPM and Ali did not intend to seek an injunction against CraneWorks, David, or Steve. Because no contractual obligation existed between RPM and CraneWorks, David, or Steve, there also was no legal basis for imposing an injunction against CraneWorks, David, or Steve. 17 1150018, 1150028 Beyond all of this, the defendants observe that the injunction order itself fails to comply with Rule 65(d)(2), Ala. R. Civ. P., which provides: "(2) Every order granting an injunction shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise." Specifically, the defendants note that the order does not provide any reasons why an injunction should be imposed upon them; instead, it does the opposite by stating an extensive number of reasons why RPM and Ali's request for an injunction should fail. They also observe that the injunction is not specific in its scope. The order states that the defendants are "permanently restrained and enjoined from contacting, in any way, whatsoever, any of those clients which are now clients of RPM Cranes." The order fails, however, to specify which clients are included in the injunction. Trey Fulton, chief financial officer of CraneWorks, testified by affidavit that CraneWorks did not know who RPM's clients were or which 18 1150018, 1150028 of its clients were not also clients of CraneWorks. RPM and Ali introduced no evidence as to who RPM's clients were or whether it had developed any clients of its own that Yates and Brooks did not bring onboard as a result of their previous jobs with other entities. In other words, the injunction is broad and vague rather than "specific in [its] terms." Conclusion Based on the foregoing, we reverse the trial court's order and remand the matter for further proceedings consistent with this opinion. 1150018 -- REVERSED AND REMANDED. 1150028 -- REVERSED AND REMANDED. Stuart, C.J., and Parker, Shaw, Wise, and Sellers, JJ., concur. 19

June 16, 2017

75f58bd4-08d3-41c5-a778-d8e14f8b57b2

Rape v. Poarch Band of Creek Indians, et al.

N/A

1111250

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1111250 ____________________ Jerry Rape v. Poarch Band of Creek Indians et al. Appeal from Montgomery Circuit Court (CV-11-901485) MURDOCK, Justice. The Court today decides three appeals involving similar issues of Indian tribal sovereign immunity and subject-matter jurisdiction arising out of actions filed by various plaintiffs against the Poarch Band of Creek Indians ("the 1111250 Tribe"), and business entities wholly owned by the Tribe, and, in two of these cases, including this one, individual defendants. In addition to the present case, the Court today addresses the appeals before us in Harrison v. PCI Gaming Authority, [Ms. 1130168, September 29, 2017] ___ So. 3d ___ (2017), and Wilkes v. PCI Gaming Authority, [Ms. 1151312, September 29, 2017] ___ So. 3d ___ (2017). In each case, the circuit court granted a motion to dismiss the claims against the Tribe and its related business entities on one of those two grounds. In the present case, Jerry Rape appeals from the Montgomery Circuit Court's dismissal of his action alleging breach of contract and various tort claims against the Tribe, PCI Gaming Authority, Creek Indian Enterprises, LLC, and Creek Casino Montgomery ("Wind Creek Casino" or "Wind Creek") (hereinafter referred to collectively as "the tribal defendants") and casino employees James Ingram and Lorenzo Teague and fictitiously named defendants. Because the plaintiff has no viable path to relief, we affirm. 2 1111250 I. Facts and Procedural History On November 19, 2010, Rape and his wife visited Wind Creek Casino. At approximately 8:00 p.m., Rape inserted five dollars into a machine the complaint describes as an "electronic bingo gaming machine." The complaint alleges that "during a ... spin bet," the machine indicated a winning jackpot in the approximate amount of $459,000. Immediately thereafter, the machine indicated a payout multiplier of approximately $918,000, followed by an indication of a second payout multiplier of approximately $1,377,015.30. Several noises, lights, and sirens were activated when the machine displayed the payout amount. The screen then displayed a prompt to "call an attendant to verify winnings." Rape alleged that at that point he was approached and congratulated by casino employees and patrons and that one casino employee said to him: "[D]on't let them cheat you out of it."1 Rape alleged that the machine printed out a ticket containing the winning amount of $1,377,015.30 but that representatives of Wind Creek Casino took possession of the ticket and refused to return it to him. Rape was then taken 1The complaint does not provide the name of the employee who allegedly made this statement to Rape. 3 1111250 by tribal officials or casino employees into "a back room," where they discussed how Rape's winnings would be paid, mentioning the possibility of a structured payout over a period of 20 to 30 years. Those officials then instructed Rape that he had to wait outside the room while they "called PCI" to confirm his winnings. Rape alleged that he was made to wait into the early morning hours with no information provided to him, even though he saw several individuals entering and leaving the room, presumably to discuss the situation. Rape also stated that casino employees shut down and barricaded the machine in question so that it could not be patronized by other customers of Wind Creek Casino. At 6:00 a.m. on November 20, 2010, Rape went home for a time before returning to Wind Creek Casino at approximately 11:00 a.m. In his complaint, Rape stated that, at approximately 9:00 p.m. on November 20, he "was taken into a small room in the rear of [Wind Creek Casino] by casino and/or tribal officials, where he was told, in a threatening and intimidating manner, that the machine in question 'malfunctioned,' and that [Rape] did not win the jackpot of $1,377,015.30. [Rape] was given a copy of an 'incident report,' and left [Wind Creek Casino] 4 1111250 empty-handed approximately 24 hours after winning the jackpot." On November 16, 2011, Rape sued the defendants in the Montgomery Circuit Court. He alleged claims of breach of contract; unjust enrichment; misrepresentation; suppression; civil conspiracy; negligence and/or wantonness; negligent hiring, training, and/or supervision; respondeat superior; and spoliation of evidence. For each claim, Rape requested damages in the amount of the jackpot he had allegedly won at Wind Creek Casino on November 19, 2010. On January 20, 2012, the defendants filed a motion to dismiss Rape's complaint. All the defendants argued that the claims against them were barred by the doctrine of sovereign immunity and that the Tribe's court had exclusive adjudicative, or subject-matter, jurisdiction of any claim. On April 12, 2012, the circuit court held a hearing on the motion. On May 2, 2012, the circuit court entered a two-word order: "Granted. Dismissed." Rape filed a timely appeal. II. Standard of Review "In Newman v. Savas, 878 So. 2d 1147 (Ala. 2003), this Court set forth the standard of review of a ruling on a motion to dismiss for lack of subject-matter jurisdiction: 5 1111250 "'A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002). Furthermore, in reviewing a ruling on a motion to dismiss we will not consider whether the pleader will ultimately prevail but whether the pleader may possibly prevail. Nance, 622 So. 2d at 299.' "878 So. 2d at 1148–49." Hall v. Environmental Litig. Grp., P.C., 157 So. 3d 876, 879 (Ala. 2014). III. Discussion A. Introduction This case presents two intertwined issues: (i) the adjudicative jurisdiction, or what usually is referred to as simply the "subject-matter jurisdiction," of the tribal and state courts over the underlying dispute and (ii) the alleged sovereign immunity of the tribal defendants. Both issues are grounded in the same fundamental principles regarding the nature of sovereignty and in corollary notions as to the reach of a sovereign's adjudicative authority and the extent of its immunity, as discussed in Part B, infra. 6 1111250 Rape argues that the Tribe was not formally "recognized" at the time of Congress's enactment of the "Indian Reorganization Act of 1934," 25 U.S.C. § 461 et seq. ("the IRA"),2 and that, therefore, under the United States Supreme Court's holding in Carcieri v. Salazar, 555 U.S. 379, 381 (2009), the Tribe cannot demonstrate a right to self- governance and sovereign immunity. Similarly, in an amicus brief in this appeal, the State of Alabama argues that the Tribe has not shown that it was both "recognized" and "under federal jurisdiction" in 1934 and that, therefore, it has no "tribal lands" validly removed from state political and adjudicative jurisdiction under the terms of the IRA.3 (The same arguments are made by the plaintiff in Harrison as to both the question of subject-matter jurisdiction and sovereign immunity and by the plaintiff in Wilkes insofar as the arguments in that case relate to immunity.) 2The text of the IRA has been transferred to 25 U.S.C. § 5101 et seq., but to avoid confusion with the citations in many cases we refer to the original section numbers of applicable provisions. 325 U.S.C. §§ 465 and 478 (now §§ 5108 and 5129) of the IRA authorize the federal government to take lands into trust for "recognized Indian tribe[s] now under Federal jurisdiction," with "now" being held in Carcieri v. Salazar, 555 U.S. at 388, to mean 1934. 7 1111250 The tribal defendants focus on the holding in Carcieri as one they contend is limited to the question whether the United States government could properly take land into trust. They contend that the answer to this question has no bearing on the issue of tribal sovereign immunity. That said, the tribal defendants in this case (as in Harrison) argue vigorously that the land on which the claims arose was land that was properly taken into trust under the terms of the IRA and thereby properly removed from the political jurisdiction of the State of Alabama. According to the tribal defendants, this fact alone means that the Tribe's court has exclusive adjudicative, or subject-matter, jurisdiction over the dispute. B. Attributes of Sovereignty and Sovereign Authority As to the issue of sovereignty and of jurisdiction over Indian tribes and tribal lands, the Supreme Court has stated: "Generalizations on this subject have become particularly treacherous. The conceptual clarity of Mr. Chief Justice Marshall's view in Worcester v. Georgia, 6 Pet. 515, 556-561 (1832), has given way to more individualized treatment of particular treaties and specific federal statutes, including statehood enabling legislation, as they, taken together, affect the respective rights of States, Indians, and the Federal Government. ... The upshot has been the repeated statements of this Court to the effect that, even on reservations, state laws may be applied unless such application 8 1111250 would interfere with reservation self-government or would impair a right granted or reserved by federal law." Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148 (1973) (emphasis added). Given the import of our decisions in the three appeals we decide today, and the case-by-case approach described by the United States Supreme Court, we think it important to undergird our review and application of Supreme Court precedents with a clear understanding of the fundamental nature and attributes of sovereignty and sovereign immunity. Most fundamentally, of course, sovereignty is the power to govern -- the power of a government to regulate the affairs of men. As to a matter over which a government has no regulatory authority, it is not sovereign. Black's Law Dictionary 1631 (10th ed. 2014) defines "state sovereignty" as "[t]he right ... to self-government; the supreme authority exercised by each state." See, e.g., United States v. Wheeler, 435 U.S. 313, 320 (1978)("[I]t is a State's own sovereignty which is the origin of its [governmental] power."); see also United States v. Curtiss-Wright Exp. Corp., 299 U.S. 304, 316-17 (1936) ("A political society cannot endure without a supreme will somewhere."). 9 1111250 Second, the power of the sovereign is the power both to make law (sometimes itself referred to as "regulatory authority") and to adjudicate disputes arising under that law, those two powers necessarily being codependent and coextensive. See, e.g., Nevada v. Hicks, 533 U.S. 353, 357-58 (2001) ("A tribal court's adjudicative authority is, at most, only as broad as the tribe's regulatory authority."); Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997) ("As to nonmembers ... a tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction ...."). Third, sovereignty corresponds with, and is a function of, authority over some portion of the earth's surface -- some "territory." It is not freestanding. "[F]ull and absolute territorial jurisdiction ... [is] the attribute of every sovereign." The Schooner Exch. v. McFaddon, 11 U.S. (7 Cranch) 116, 137 (1812). As the Restatement (Third) of Foreign Relations Law § 201 (1987) explains, "[u]nder international law, a state is an entity that has a defined territory and a permanent population, under the control of its own government, and that engages in, or has the capacity to 10 1111250 engage in, formal relations with other such entities." (Emphasis added.) "On [a] transfer of territory [between two sovereigns], ... the relations of the inhabitants ... with their former sovereign are dissolved, and new relations are created between them, and the government which has acquired their territory." American Ins. Co. v. 356 Bales of Cotton, 26 U.S. (1 Pet.) 511, 542-43 (1828). Fourth, the very reason for the existence of sovereign immunity is to facilitate the sovereignty of the sovereign. Thus, it is the essential nature of sovereign immunity that it is coextensive with the sovereignty it serves; by nature it operates only within the physical boundaries and the regulatory and adjudicatory boundaries of that sovereignty. "It is 'inherent in the nature of sovereignty not to be amenable' to suit without consent." The Federalist No. 81, p. 511 (Alexander Hamilton) (B. Wright ed. 1961). See Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 169 n.18 (1982) (discussing "sovereign immunity" as an "attribute[] of sovereignty"). Explaining that it is "[s]overeignty" itself that "implies immunity from lawsuits," the Court in Michigan v. Bay Mills Indian Community, ___ U.S. ___, ___, 134 S.Ct. 11 1111250 2024, 2030 (2014), described immunity as a "core aspect of sovereignty" and, moreover, as a "'necessary corollary to ... sovereignty and self-governance." (Quoting Three Affiliated Tribes of Fort Berthold Reservation v. World Eng'g, P.C., 476 U.S. 877, 890 (1986) (emphasis added).) Fifth, as corollary to the principle that sovereign immunity is coextensive with the sovereignty it serves, so too sovereign immunity naturally exists only in the courts that themselves derive from and serve that same sovereignty, and that thus operate within the same physical and regulatory boundaries that define that sovereignty. That is, historically and by its fundamental nature, sovereign immunity is and has been limited to the courts of the sovereign itself -- courts formed by the government and located within the territory over which the government served by the doctrine is sovereign. See Black's Law Dictionary 868 (10th ed. 2014) (defining "sovereign immunity" as "1. A government's immunity from being sued in its own courts without its consent"). In Alden v. Maine, 527 U.S. 706 (1999), the United States Supreme Court explained: "In [Nevada v.] Hall[, 440 U.S. 410 (1979)], we considered whether California could subject Nevada 12 1111250 to suit in California's courts and determined the Constitution did not bar it from doing so. We noted that '[t]he doctrine of sovereign immunity is an amalgam of two quite different concepts, one applicable to suits in the sovereign's own courts and the other to suits in the courts of another sovereign.' 440 U.S., at 414. We acknowledged that '[t]he immunity of a truly independent sovereign from suit in its own courts has been enjoyed as a matter of absolute right for centuries. Only the sovereign's own consent could qualify the absolute character of that immunity,' ibid., that 'the notion that immunity from suit is an attribute of sovereignty is reflected in our cases,' id., at 415, and that '[t]his explanation adequately supports the conclusion that no sovereign may be sued in its own courts without its consent,' id., at 416. We sharply distinguished, however, a sovereign's immunity from suit in the courts of another sovereign: "'[B]ut [this explanation] affords no support for a claim of immunity in another sovereign's courts. Such a claim necessarily implicates the power and authority of a second sovereign; its source must be found either in an agreement, express or implied, between the two sovereigns, or in the voluntary decision of the second to respect the dignity of the first as a matter of comity.' Ibid." 527 U.S. at 738.4 4The attributes of sovereignty and sovereign immunity discussed in this section underlie Justice Stevens's special writings in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991), and Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751 (1998), and Justice Thomas's compelling analysis in Bay Mills. See Bay Mills, ___ U.S. at ___, 134 S.Ct. at 2045 (Thomas, J., 13 1111250 With these foundational principles in mind, we turn to the case before us. C. Analysis The trial court in the present case dismissed the action without providing a rationale for its decision. It simply entered a copy of the defendants' motion to dismiss on which it wrote: "Granted. Dismissed." We can affirm the trial court's order of dismissal if it can be upheld on either of the two jurisdictional grounds presented in the defendants' motions, namely (i) the alleged lack of adjudicative, or subject-matter, jurisdiction of the court itself or (ii) the asserted sovereign immunity of the tribal defendants. See generally Liberty Nat'l Life Ins. Co. v. University of Alabama Health Servs. Found., P.C., 881 So. 2d 1013, 1020 (Ala. 2003). The State, in its amicus brief, suggests that it would be more appropriate to begin with the more fundamental, and threshold, issue of adjudicative, or subject-matter, jurisdiction. In June of this year, the United States Supreme Court issued its opinion in Lewis v. Clarke, ___ U.S. ___, 137 S.Ct. 1285 (2017). Under Lewis, regardless of what we might decide dissenting). 14 1111250 as to the issue of sovereign immunity in relation to the tribal defendants, the individual defendants, being sued in their individual capacity, would not be entitled to tribal immunity simply because they were employed by the tribe or acting within the scope of that employment. See Lewis, ___ U.S. at ___, 137 S.Ct. at 1289. On that basis, we would have to reach the issue of the court's subject-matter jurisdiction in any event, i.e., at least for purposes of resolving the claims against the individual defendants. Consequently, and consistent with the State's suggestion that subject-matter jurisdiction is the more threshold question in any event, we turn first to the issue of subject-matter jurisdiction. The issue presented is whether jurisdiction over this dispute resides in the tribal courts to the exclusion of the state courts. In 2008, the United States Supreme Court reiterated that a tribe's sovereign authority is unique, with limitations as to both (i) its territorial reach and (ii) the subject matter and persons to which it extends: "For nearly two centuries now, we have recognized Indian tribes as 'distinct, independent political communities,' Worcester v. Georgia, 6 Pet. 515, 559 (1832), qualified to exercise many of the powers and prerogatives of self-government, see United States v. Wheeler, 435 U.S. 313, 322–323 15 1111250 (1978). We have frequently noted, however, that the 'sovereignty that the Indian tribes retain is of a unique and limited character.' Id., at 323. It centers [i] on the land held by the tribe and [ii] on tribal members within the reservation. See United States v. Mazurie, 419 U.S. 544, 557 (1975) (tribes retain authority to govern 'both their members and their territory,' subject ultimately to Congress) ...." Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 327 (2008) (emphasis added). In Hicks, supra, the Supreme Court, in an opinion authored by Justice Scalia, held that, even though the claims at issue there occurred within the boundaries of an Indian reservation: (1) a tribal court did not have jurisdiction to adjudicate trespass and other tort claims arising from the actions of state officials while executing process on reservation lands in relation to a crime that occurred off reservation and (2) a tribal court did not have authority to adjudicate § 1983 claims arising from those same actions occurring on the reservation. The Supreme Court explained that "[t]he principle of Indian law central to this aspect of the case is our holding in Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997): 'As to nonmembers ... a tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction.'" 16 1111250 533 U.S. at 357-58 (emphasis added). As the Supreme Court more fully explained elsewhere in Hicks: "Respondents' contention that tribal courts are courts of 'general jurisdiction' is also quite wrong. A state court's jurisdiction is general, in that it 'lays hold of all subjects of litigation between parties within its jurisdiction, though the causes of dispute are relative to the laws of the most distant part of the globe.' [The Federalist No. 82 (Alexander Hamilton)] at 493 [(C. Rossiter ed. 1961)]. Tribal courts, it should be clear, cannot be courts of general jurisdiction in this sense, for a tribe's inherent adjudicative jurisdiction over nonmembers is at most only as broad as its legislative jurisdiction."5 5The Hicks Court further explained: "[Tribal courts] differ from traditional American courts in a number of significant respects. To start with the most obvious one, it has been understood for more than a century that the Bill of Rights and the Fourteenth Amendment do not of their own force apply to Indian tribes. See Talton v. Mayes, 163 U.S. 376, 382-385 (1896); F. Cohen, Handbook of Federal Indian Law 664-665 (1982 ed.) (hereinafter Cohen) ('Indian tribes are not states of the union within the meaning of the Constitution, and the constitutional limitations on states do not apply to tribes'). Although the Indian Civil Rights Act of 1968 (ICRA) makes a handful of analogous safeguards enforceable in tribal courts, 25 U.S.C. § 1302, 'the guarantees are not identical,' Oliphant [v. Suquamish Indian Tribe], 435 U.S. [191], 194 [(1978)], and there is a 'definite trend by tribal courts' toward the view that they 'ha[ve] leeway in interpreting' the ICRA's due process and equal protection clauses and 'need not follow the U.S. Supreme Court precedents "jot-for-jot,"' Newton, 17 1111250 533 U.S. at 367 (emphasis added). As to the subject matter and persons to which tribal regulatory authority extends, the United States Supreme Court has consistently recognized that, absent congressional involvement, Indian tribes retain regulatory authority over Tribal Court Praxis: One Year in the Life of Twenty Indian Tribal Courts, 22 Am. Indian L. Rev. 285, 344, n. 238 (1998). In any event, a presumption against tribal-court civil jurisdiction squares with one of the principal policy considerations underlying Oliphant, namely, an overriding concern that citizens who are not tribal members be 'protected ... from unwarranted intrusions on their personal liberty,' 435 U.S. at 210 (emphasis added). "Tribal courts also differ from other American courts (and often from one another) in their structure, in the substantive law they apply, and in the independence of their judges. Although some modern tribal courts 'mirror American courts' and 'are guided by written codes, rules, procedures, and guidelines,' tribal law is still frequently unwritten, being based instead 'on the values, mores, and norms of a tribe and expressed in its customs, traditions, and practices,' and is often 'handed down orally or by example from one generation to another.' Melton, Indigenous Justice Systems and Tribal Society, 79 Judicature 126, 130-131 (1995). The resulting law applicable in tribal courts is a complex 'mix of tribal codes and federal, state, and traditional law,' National American Indian Court Judges Assn., Indian Courts and the Future 43 (1978), which would be unusually difficult for an outsider to sort out." Hicks, 533 U.S. at 383-85 (emphasis added). 18 1111250 "internal and social relations" on Indian land, sometimes expressed as tribes having "attributes of sovereignty over both their members and their territory." United States v. Mazurie, 419 U.S. 544, 557 (1975) (emphasis added). "Indian tribes are 'distinct, independent political communities, retaining their original natural rights' in matters of local self-government. Worcester v. Georgia, 6 Pet. 515, 559 (1832); see United States v. Mazurie, 419 U.S. 544, 557 (1975); F. Cohen, Handbook of Federal Indian Law 122–123 (1945). Although no longer 'possessed of the full attributes of sovereignty,' they remain a 'separate people, with the power of regulating their internal and social relations.' United States v. Kagama, 118 U.S. 375, 381–382 (1886). See United States v. Wheeler, 435 U.S. 313 (1978). They have power to make their own substantive law in internal matters, see Roff v. Burney, 168 U.S. 218 (1897) (membership); Jones v. Meehan, 175 U.S. 1, 29 (1899) (inheritance rules); United States v. Quiver, 241 U.S. 602 (1916) (domestic relations), and to enforce that law in their own forums, see, e. g., Williams v. Lee, 358 U.S. 217 (1959)." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55-56 (1978) (emphasis added) (holding that a tribal court had exclusive jurisdiction over a dispute arising from an Indian tribe's denial of tribal membership to the children of certain female tribal members). Accordingly, as to matters arising on Indian lands, "[t]he sovereignty retained by tribes includes 'the power of regulating their internal and social 19 1111250 relations,' United States v. Kagama, 118 U.S. 375, 381-382 (1886), cited in United States v. Wheeler, 435 U.S. 313, 322 (1978). A tribe's power to prescribe the conduct of tribal members has never been doubted, and our cases establish that 'absent governing Acts of Congress,' a State may not act in a manner that 'infringed on the right of reservation Indians to make their own laws and be ruled by them.' McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 171-172 (1973), quoting Williams v. Lee, 358 U.S. 217, 219-220 (1959)." New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 332-33 (1983). Thus, a tribe has the right to regulate its own "internal and social relations" on a reservation -- i.e., the "right of reservation Indians to make their own laws and be ruled by them" -- except as a "governing Act of Congress" may otherwise prescribe. As Justice Scalia, writing for the Court in Hicks, further explained: "Indian tribes' regulatory authority over nonmembers is governed by the principles set forth in Montana v. United States, 450 U.S. 544 (1981), which we have called the 'pathmarking case' on the subject, Strate [v. A-1 Contractors, 520 U.S. 438, 445 (1997)]. In deciding whether the Crow Tribe could regulate hunting and fishing by nonmembers on land held in fee simple by nonmembers [within a reservation], Montana observed that, under our decision in Oliphant v. Suquamish Tribe, 435 U.S. 191 (1978), tribes lack criminal jurisdiction over nonmembers. Although, it continued, 'Oliphant only determined inherent tribal authority in criminal matters, the principles on which it relied support 20 1111250 the general proposition that the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.' 450 U.S., at 565 (footnote omitted). Where nonmembers are concerned, the 'exercise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of the tribes, and so cannot survive without express congressional delegation.' Id., at 564 (emphasis added). ".... "In Strate, we explained that what is necessary to protect tribal self-government and control internal relations can be understood by looking at the examples of tribal power to which Montana referred: tribes have authority '[to punish tribal offenders,] to determine tribal membership, to regulate domestic relations among members, and to prescribe rules of inheritance for members,' 520 U.S., at 459 (brackets in original), quoting Montana, supra, at 564. These examples show, we said, that Indians have '"the right ... to make their own laws and be ruled by them,"' 520 U.S., at 459, quoting Williams v. Lee, 358 U.S. 217, 220 (1959). See also Fisher v. District Court of Sixteenth Judicial Dist. of Mont., 424 U.S. 382, 386 (1976) (per curiam) ('In litigation between Indians and non-Indians arising out of conduct on an Indian reservation, resolution of conflicts between the jurisdiction of state and tribal courts has depended, absent a governing Act of Congress, on whether the state action infringed on the right of reservation Indians to make their own laws and be ruled by them' (internal quotation marks and citation omitted)). Tribal assertion of regulatory authority over nonmembers must be connected to that right of the Indians to make their own laws and be governed by them." 533 U.S. at 358-61 (footnote omitted; some emphasis added). 21 1111250 In Strate v. A-1 Contractors, 520 U.S. 438 (1997), to which the Hicks Court referred, the Court noted the State's authority to regulate conduct on a State highway right-of-way located on a reservation. Based largely on this fact, the Court held that adjudicative authority over an accident occurring on the highway was not part of the tribe's "self- governance": "The second exception to Montana [v. United States'] general rule [against tribal-court jurisdiction over nonmembers] concerns conduct that 'threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.' 450 U.S. [544], at 566 [(1981)]. Undoubtedly, those who drive carelessly on a public highway running through a reservation endanger all in the vicinity, and surely jeopardize the safety of tribal members. But if Montana's second exception requires no more, the exception would severely shrink the rule. ... ".... "... Key to its proper application ... is the [Montana] Court's preface: 'Indian tribes retain their inherent power [to punish tribal offenders,] to determine tribal membership, to regulate domestic relations among members, and to prescribe rules of inheritance for members.... But [a tribe's inherent power does not reach] beyond what is necessary to protect tribal self-government or to control internal relations.' 450 U.S., at 564. Neither regulatory nor adjudicatory authority over the state highway accident at issue is needed to preserve 'the right of reservation Indians to make their own laws 22 1111250 and be ruled by them.' Williams [v. Lee], 358 U.S. [217], at 220 [(1959)]." Strate, 520 U.S. at 457-59 (emphasis added). "Our cases make clear that the Indians' right to make their own laws and be governed by them does not exclude all state regulatory authority on the reservation. State sovereignty does not end at a reservation's border. Though tribes are often referred to as 'sovereign' entities, it was 'long ago' that 'the Court departed from Chief Justice Marshall's view that "the laws of [a State] can have no force" within reservation boundaries. Worcester v. Georgia, 6 Pet. 515, 561 (1832),' White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 141 (1980). 'Ordinarily,' it is now clear, 'an Indian reservation is considered part of the territory of the State.' U.S. Dept. of Interior, Federal Indian Law 510, and n.1 (1958), citing Utah & Northern R. Co. v. Fisher, 116 U.S. 28 (1885); see also Organized Village of Kake v. Egan, 369 U.S. 60, 72 (1962). "That is not to say that States may exert the same degree of regulatory authority within a reservation as they do without. To the contrary, the principle that Indians have the right to make their own laws and be governed by them requires 'an accommodation between the interests of the Tribes and the Federal Government, on the one hand, and those of the State, on the other.' Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134, 156 (1980); see also id., at 181 (opinion of Rehnquist, J.). 'When on-reservation conduct involving only Indians is at issue, state law is generally inapplicable, for the State's regulatory interest is likely to be minimal and the federal interest in encouraging tribal self-government is at its strongest.' Bracker, supra, at 144. When, however, state interests outside the reservation are implicated, States may regulate the activities even 23 1111250 of tribe members on tribal land, as exemplified by our decision in Confederated Tribes [in 1980]." Hicks, 533 U.S. at 361-62 (footnote omitted; emphasis added). Based on the foregoing, the proposition that the tribal court had exclusive adjudicative, or subject-matter, jurisdiction turns on two elements. The first is whether the dispute arose within territory, i.e., on land, that is properly within the political jurisdiction of the Tribe. The second is whether the dispute concerns a subject and persons over which the tribal court has regulatory authority, either because it concerns tribal or internal relations or because Congress has otherwise so stated. As to whether the present claims arose on land under the political jurisdiction of the Tribe rather than the State, it appears that genuine questions are raised regarding the status of the Tribe in 1934 and, accordingly, whether the Tribe was eligible to have land taken out of the political jurisdiction of the State of Alabama under the taking-in-trust provisions of the IRA. See note 3, supra (discussing the IRA and Carcieri's construction of it). It is undisputed that the Tribe had not formed as a discrete political entity at that time and that there existed little in the way of 24 1111250 organizational parameters until well after 1934. It likewise is undisputed that the Tribe did not obtain formal recognition by the federal government until 1984. In the Tribe's own submission to the Department of Interior in 1983 by which, for the first time, it sought that recognition, the Tribe states that it had "no formal political organization ... in the nineteenth century, nor in much of the 20th century." If this is the case, it is difficult to see how it can be said that a tribe existed that was "under federal jurisdiction" in 1934. Further, in 1937, shortly after IRA was enacted, the Bureau of Indian Affairs prepared a list of 258 tribes that were "recognized" at that time; the Tribe was not on that list. See Letter from Secretary of Interior John Collier to Chairman, Committee on Indian Affairs, E. Thomas, March 18, 1937: List of Indian Tribes Under the Indian Reorganization Act.6 Thus, even if the Tribe, though not possessing a formal 6Although the Supreme Court in Carcieri stated that some tribes were wrongly left off that list, 555 U.S. at 398, it also has been said that, "[a]s a practical matter, this can be said to be the constructive 'list' of Indian tribes recognized by the United States in 1934." W. Quinn, Federal Acknowledgment of American Indian Tribes: The Historical Development of a Legal Concept, 34 Am. J. Legal Hist. 331, 356 (also cited in Carcieri). 25 1111250 structure in 1934, could be said in some, perhaps inchoate, sense,7 to have been "under federal jurisdiction" in 1934, it is difficult to conclude that the Tribe was formally "recognized" by the federal government at that time. The United States Supreme Court has not decided whether the temporal limitation recognized in Carcieri applies only to the "under-federal-jurisdiction" requirement, or also to the recognition requirement. Although three Justices (Breyer, Souter, and Ginsburg) have suggested that it applies only to the under-federal-jurisdiction prong of the test, this position has been taken in special writings by those Justices; it has not yet been adopted by a majority of the Court. We note again the specific language of the IRA at issue: "recognized Indian tribe now under federal jurisdiction." 7It has been said that "every Indian tribe could be considered 'under Federal jurisdiction' in some sense," Confederated Tribes of Grand Ronde Cmty. of Oregon v. Jewell, 830 F.3d 552, 564 (D.C. Cir. 2016), but embracing that sense would undermine the essential purpose of the IRA's effort to place a limitation on the tribes that would qualify for the government's willingness to take additional lands in trust for their benefit. Clearly, the language at issue was meant as some kind of limiting principle. See also Carcieri, 555 U.S. at 392 (noting the petitioner's position that the IRA was intended to be "limited to tribes under federal jurisdiction at that time because they were the tribes who [had] lost their lands" under the government's previous allotment policy). 26 1111250 This phrase must be read as a whole, with both parts taking meaning from the other. Indeed, the simplest explanation for this structure (and one consistent with the aforesaid statutory purpose) would seem to be that Congress was describing a fixed universe of tribes possessed of the necessary attributes described in the IRA at the time of its adoption. See note 7, supra. That is, it reasonably may be put that the phrase simply means that singular and fixed group of tribes that, as "recognized ... tribe[s]," were "under federal jurisdiction" at the specified date. Moreover, grammatically, in the phrase "recognized Indian tribe now under federal jurisdiction," the adjectival phrase "now under federal jurisdiction" does not modify the term "tribe." It modifies the term "recognized Indian tribe." One may ask therefore how it is that an Indian tribe could have been a "recognized ... tribe ... under federal jurisdiction" on the prescribed date, unless it first was a "recognized ... tribe" on that date. The tribal defendants contend that the challenge by Rape to the removal of the land from the political jurisdiction of the State of Alabama must be brought within the confines of 27 1111250 the Administrative Procedure Act ("APA"), 5 U.S.C. § 702, and its six-year statute of limitations, both of which were held to be bars to the State's action in Alabama v. PCI Gaming Authority, 801 F.3d 1278, 1291-92 (11th Cir. 2015). But, of course, in contrast to the State of Alabama in that case, the plaintiff here was not given notice of the taking into trust when it occurred, had no reason to take notice of it, and certainly had no reason to challenge it at that time, considerations that were key to the decision of the United States Court of Appeals for the Eleventh Circuit (even as it pretermitted discussion of other potential obstacles to the State's action). See 801 F.3d at 1291-93. Compare, e.g. Big Lagoon Rancheria v. California, 741 F.3d 1032, 1042–43 (9th Cir. 2014), overruled on reh'g en banc, 789 F.3d 947 (9th Cir. 2015) (quoting Wind River Mining Corp. v. United States, 946 F.2d 710, 715 (9th Cir. 1991)) (distinguishing between procedural APA challenges and substantive claims). Compare Wind River (allowing a challenge outside of an APA proceeding and beyond the six-year statute of limitations prescribed by the APA and beyond the APA's six-year statute of limitations 28 1111250 to a federal agency's commitment of land to a watershed- protection program). Ultimately, it is not necessary for this Court to resolve the foregoing issue. In Michigan v. Bay Mills Indian Community, 695 F.3d 406 (6th Cir. 2012), aff'd and remanded, ___ U.S. ___, 134 S. Ct. 2024 (2014), the United States Court of Appeals for the Sixth Circuit described a "Catch-22" that made it unnecessary to decide a similar issue: "That said, we acknowledge the irony of this case: Bay Mills, the defendant here, alleges that the Vanderbilt casino is located on 'Indian lands' -- in which case [25 U.S.C.] § 2710(d)(7)(A)(ii) would supply federal jurisdiction. Thus, the plaintiffs say, the district court should cut to the chase and determine whether the Vanderbilt casino is, in fact, located on Indian lands. But that leads to the second Article III defect in the plaintiffs' claims: there is no possibility of redressing their injury by means of a § 2710(d)(7)(A)(ii) claim. See Lujan [v. Defenders of Wildlife], 504 U.S. [555] at 561 [(1992)]. As the case comes to us here, a determination whether the Vanderbilt casino is located on Indian lands would be purely advisory: if the Vanderbilt casino is not located on Indian lands, there is no jurisdiction for the plaintiffs' claims ...." 695 F.3d at 412-13. In the present case, we find ourselves in a comparable "Catch-22." Were we to conclude that the lands on which the wrongs occurred were not properly taken into trust and 29 1111250 therefore were not properly considered "Indian country," this would mean that those lands remain fully within the political jurisdiction of the State of Alabama. The activity out of which Rape's claim arose, however, was gambling. If it occurred on land within the regulatory and adjudicative jurisdiction of the State of Alabama, that activity was illegal. Specifically, that land is located in Elmore County and, therefore, is not located in one of the counties in Alabama where even the game commonly and traditionally known as bingo is permitted. See State v. $223,405.86, 203 So. 3d 816, 849 (Ala. 2016) (appendix listing local amendments legalizing the game commonly and traditionally known as "bingo" in selected localities); Article IV, § 65, Ala. Const. 1901 (generally prohibiting games of chance in Alabama); Code of Alabama 1975, Title 13A, Ch. 12, Art. 2 (to like effect). It is well established that this Court will not aid a plaintiff seeking to recover under an illegal contract but, instead, will simply leave the parties where it finds them. Thus, in Thompson v. Wiik, Reimer & Sweet, 391 So. 2d 1016 (Ala. 1980), this Court affirmed the trial court's order dismissing the plaintiff's claims and explained: 30 1111250 "As a general principle, a party may not enforce a void or illegal contract either at law or in equity. 17 C.J.S. Contracts § 272, pp. 1188-95 (1963). "The effect of the illegality of a contract is summarized in Corpus Juris Secundum: "'No principle of law is better settled than that a party to an illegal contract cannot come into a court of law and ask to have his illegal objects carried out; nor can he set up a case in which he must necessarily disclose an illegal purpose as the groundwork of his claim. The rule is expressed in the maxims, Ex dolo malo non oritur actio, and In pari delicto potior est conditio defendentis. The law in short will not aid either party to an illegal agreement; it leaves the parties where it finds them.' "17 C.J.S. Contracts § 272, p. 1188 (1963)." 391 So. 2d at 1020. "'"[C]ontracts specially prohibited by law, or the enforcement of which violated a law, or the making of which violated the law ... [are] void and nonenforceable ... (and) Whenever a party requires the aid of an illegal transaction to support his case, he cannot recover."'" Lucky Jacks Entm't Ctr., LLC v. Jopat Bldg. Corp., 32 So. 3d 565, 569 n.3 (Ala. 2009) (quoting Bankers & Shippers Ins. Co. of New York v. Blackwell, 255 Ala. 360, 366, 51 So. 2d 498, 502 (1951), 31 1111250 quoting in turn Ellis v. Batson, 177 Ala. 313, 318, 58 So. 193, 194 (1912))). See, e.g., Macon Cty. Greyhound Park, Inc. v. Hoffman, [Ms. 1141273, Dec. 23, 2016] ___ So. 3d ___, ___ (Ala. 2016) (declining to provide requested relief because "[t]his Court has repeatedly held that electronic-bingo games, such as those at issue in these cases, constitute illegal gambling in Alabama" and, "[a]ccordingly, the arbitration provision itself would constitute a void contract because it is, at least in part, based on illegal gambling consideration"). And as indicated, this principle applies whether the claim framed by a plaintiff sounds in contract or in tort; either way, a plaintiff cannot recover on a claim that depends upon or requires the aid of an illegal contract. Ingraham v. Foster, 31 Ala. 123, 127 (1857) (fraud claim). "'Related claims based on causes of action other than contract, including negligence, also cannot be pursued if they arise out of the performance of the illegal contract.'" King v. Riedl, 58 So. 3d 190, 195 (Ala. Civ. App. 2010) (quoting IPSCO Steel (Alabama), Inc. v. Kvaerner U.S., Inc., (No. Civ. A. 01–0730–CG–C, May 25, 2005) (S.D. Ala. 2005) (not reported in 32 1111250 F. Supp. 2d)). See also White v. Miller, 718 So. 2d 88, 90 (Ala. Civ. App. 1998) (disallowing claims for "fraud and deceit" grounded in an illegal contract). "A person cannot maintain a cause of action if, in order to establish it, he must rely in whole or in part on an illegal or immoral act or transaction to which he is a party. 1 Corpus Juris Secundum, Actions, page 996, § 13; 1 Corpus Juris page 957, § 52. An analogy is presented with respect to an illegal contract, where the plaintiff fails if, in order to prove his case, he must resort to such contract. 13 Corpus Juris, page 503, section 445, 17 C.J.S., Contracts, § 276. These principles apply whether the cause of action is in contract or in tort. 1 Corpus Juris Secundum, Actions, page 999, § 13." Hinkle v. Railway Express Agency, 242 Ala. 374, 378, 6 So. 2d 417, 421 (1942). "'Moreover, this Court has held that "[a] person cannot maintain a cause of action if, in order to establish it, he must rely in whole or in part on an illegal or immoral act or transaction to which he is a party." Limestone Creek Developers, LLC v. Trapp, 107 So. 3d 189, 193 (Ala. 2012) (quoting Ex parte W.D.J., 785 So.2d 390, 393 (Ala. 2000), quoting in turn Hinkle, 242 Ala. at 378, 6 So. 2d at 421). "[S]uch a rule derives principally ... [']from a desire to see that those who transgress the moral or criminal code shall not receive aid from the judicial branch of 33 1111250 government.'" Oden v. Pepsi Cola Bottling Co. of Decatur, 621 So. 2d 953, 955 (Ala. 1993) (quoting Bonnier v. Chicago, B.&Q. R.R., 351 Ill. App. 34, 51, 113 N.E.2d 615, 622 (1953)). This defect is so fundamental that we may raise the issue ex mero motu. See, e.g., Limestone Creek Developers, 107 So. 3d at 194 (observing that "the policy behind this principle has been deemed to be of such importance that contracts found to violate the law will not be enforced even if ... the defaulting party failed to properly plead the affirmative defense of illegality. Brown v. Mountain Lakes Resort, Inc., 521 So. 2d 24, 26 (Ala. 1988) ('"'It is the rule ... in Alabama and a few other jurisdictions to not enforce a contract in violation of the law and to deny the plaintiff the right to recover upon a transaction contrary to public policy, even if the invalidity of the contract or transaction be not specially pleaded and is developed by the defendant's evidence.'"' (quoting National Life & Accident Ins. Co. v. Middlebrooks, 27 Ala. App. 247, 249, 170 So. 84, 86 (1936), quoting in turn Shearin v. Pizitz, 208 Ala. 244, 246, 94 So. 92, 93 (1922)))."); City of Ensley v. J.E. Hollingsworth & Co., 170 Ala. 396, 413, 54 So. 95, 100–01 (1909) (explaining 34 1111250 that in cases involving contracts that are "void as violative of a statute or because offensive to public policy" -- in contrast to actions based on contracts that are void for another reason -- "no action can arise out of the transaction for any purpose"). Thus, similar to the plaintiff in Bay Mills, Rape ultimately could receive no relief based on the fact that his claims arose on land not properly considered Indian country, because that very fact would create its own bar to relief from this Court. We turn therefore to the second element applicable to a determination of tribal-court jurisdiction, and in turn state-court jurisdiction, namely whether that dispute is a matter of internal or tribal relations or, alternatively, is a dispute specially consigned to the regulatory authority of a tribe by Congress. Again, as the United States Supreme Court has explained: "[T]he inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.' [Montana v. United States,] 450 U.S. [544], at 565 [(1981)] (footnote omitted). Where nonmembers are concerned, the 'exercise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of the tribes, and so cannot survive without express 35 1111250 congressional delegation.' Id., at 564 (emphasis added). ".... "In Strate [v. A-1 Contractors, 520 U.S. 438 (1997)], we explained that what is necessary to protect tribal self-government and control internal relations can be understood by looking at the examples of tribal power to which Montana referred: tribes have authority '[to punish tribal offenders,] to determine tribal membership, to regulate domestic relations among members, and to prescribe rules of inheritance for members,' 520 U.S., at 459 (brackets in original), quoting Montana, supra, at 564. These examples show, we said, that Indians have '"the right ... to make their own laws and be ruled by them,"' 520 U.S., at 459, quoting Williams v. Lee, 358 U.S. 217, 220 (1959)." Hicks, 533 U.S. at 358-59, 360-61 (footnote omitted; some emphasis added). There is no "express congressional delegation" to Indian tribes of the authority to regulate or adjudicate contract and tort disputes generally that involve a nonmember. Compare 18 U.S.C. § 1153 (commonly known as "the Major Crimes Act") (establishing federal jurisdiction over 13 enumerated felonies committed by "[a]ny Indian ... against the person or property of another Indian or other person ... within the Indian country" except where such offense is "not defined and punished by Federal law" in which case it "shall be defined 36 1111250 and punished in accordance with the laws of the State in which such offense was committed"). At first blush, therefore, it might appear that we are left with the same examples the Hicks Court used to measure whether the activity out of which this dispute arises is a matter within the ambit of "tribal self- government and ... internal relations," i.e., a matter as to which tribes "have the right to make their own laws and be governed by them." And if that be the case, the dispute here does not appear to involve internal tribal affairs of the nature described by the Supreme Court in Hicks. The present dispute does, however, arise out of an activity -- gambling on (what we assume for present purposes is) Indian land -- as to which there is a "congressional enactment." See Indian Gaming Regulatory Act ("IGRA"), Pub.L. 100–497, § 2, Oct. 17, 1988, 102 Stat. 2467, codified at 25 U.S.C. § 2701 et seq. Of course, in one sense, this legislation is not an "express congressional delegation" to the Tribe of regulatory authority. Instead, Congress itself has made the decision as to whether and what forms of gambling will be available to a tribe. See id. As to those forms of gambling Congress has in fact authorized a tribe to elect, 37 1111250 however, it can be assumed that it intended a tribe to exercise such secondary regulatory authority as is reasonably necessary to implement such election and, in that regard, to adjudicate any disputes arising out of that activity. That said, Congress has not authorized all forms of gambling on Indian reservations. To the contrary, it specifically has prohibited some. That is, Congress specifically has denied to tribes the right to "regulate," or to "self-govern" as to, certain forms of gambling. And as to a form of gambling not otherwise specifically authorized or prohibited under IGRA, whether the tribe has authority to "regulate" the same depends, under 25 U.S.C. § 2701(5), on whether it is a form of gambling "not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity." (Emphasis added.) The description in the complaint of the activity out of which Rape's claims arise suggests a form of gambling as to which the applicable congressional enactments have not delegated express regulatory authority to the Tribe, but, instead, a form of gambling, the regulation of which may be 38 1111250 "specifically prohibited" by those enactments. Sections 2703(7) and 2710(b) of IGRA delegate to tribes the authority to engage in or "regulate" certain forms of gambling as "Class II" gaming if the State permits that type of gaming elsewhere in the State. One of the forms of gambling allowed under this condition is the game "commonly known as bingo," 25 U.S.C. § 2703(7)(A)(i), a concept this Court has examined repeatedly and at great length.8 Although the federal statute may accommodate certain electronic aids more freely than does Alabama law, see 25 U.S.C. § 2703(7)(A)(i), other fundamental attributes of "the game of chance commonly known as bingo" are not altered by the statute.9 In any event, insofar as applicable here, IGRA expressly and specifically prohibits "electronic or electromechanical facsimiles of any game of 8See, e.g., State v. $223,405.86, 203 So. 3d 816, 830, 834-45 (Ala. 2016) (discussing elements and characteristics of "bingo" under various local amendments); Houston Cty. Econ. Dev. Auth. v. State, 168 So. 3d 4, 9-18 (Ala. 2014); and State v. Greenetrack, Inc., 154 So. 3d 940, 943-46, 959-60 (Ala. 2014). 9Compare State v. Greenetrack, Inc., 154 So. 3d at 959-60 (explaining that a statutory allowance for "an 'electronic marking machine' [does not] obviate[] all the other criteria" of the game commonly and traditionally known as bingo). 39 1111250 chance or slot machines of any kind." 25 U.S.C. § 2703(7)(B)(ii). Where a federal enactment does not specifically authorize a given form of gambling on Indian land, and even prohibits it, we see no basis for treating disputes between tribal members and nonmembers arising out of that activity any differently than any other dispute arising out of activity on tribal lands not the subject of an "express congressional delegation." Under that circumstance, the above-discussed criteria outlined by the Supreme Court for disputes arising on Indian lands between two nonmembers or between a tribal member and a nonmember would apply.10 10Nor do we find the Court's 1959 decision in Williams v. Lee, 358 U.S. 217, 223 (1959), to be contrary to the latter point. Although it involved a suit by a nonmember seeking to collect a business debt from a tribal member, which the Court held to be within the tribal court's jurisdiction, the nonmember was the owner and operator of a permanent general store licensed for operation on the reservation (out of which the debt arose) and, thus, had subjected himself to tribal laws in the same manner as any tribal member choosing to reside or own a business in Indian country. Application of general tribal law and adjudicatory authority in that context was necessary if the tribe was to have a right to engage in "self-governance," i.e., "to make their own laws and be ruled by them." See generally Hicks, supra. Cf. Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 139 (1982) (holding that a tribe may exercise its sovereign taxing authority as to "petitioners [who] avail themselves of the 'substantial privilege of carrying on business' on the reservation," comparing them to a nonmember who takes up "residence" on 40 1111250 At this juncture, however, the record in this case is not adequate to permit a determination as to whether the activity out of which Rape's claims arose is a form of gambling as to which the applicable congressional enactments have delegated express regulatory authority to the Tribe, or one "specifically prohibited" by those enactments. We do not find it necessary to consider further either the question itself, or the possibility of a remand to address it, because, much like the question of the status of the tribal land, neither answer that might be achieved would allow us to provide Rape the relief he seeks. On the one hand, if the dispute here arises from activity determined to be "permitted by Federal law" and thus to be the subject of a congressional delegation of "regulatory authority" to the Tribe, then disputes arising out of the same tribal land). The alternative would mean that the subject- matter (versus personal) jurisdiction of a court over a dispute between a member and a nonmember would depend on who sues whom first and, furthermore, would be an unworkable paradigm in a dispute entailing multiple counterclaims, cross- claims, and/or third-party claims between various combinations of members and nonmembers. Ultimately, however, for purposes of this case, because the record does not reveal whether the individual defendants are or are not tribal members, we must consider whether the judgment of dismissal was appropriate assuming we have here a dispute only between nonmembers. 41 1111250 would, as noted, likewise be a legitimate adjudicative matter for the Tribe, and the circuit court's dismissal of Rape's claims would have been proper on that basis. But conversely, even if it were to be determined that the gaming at issue were illegal under the provisions of IGRA and therefore not the subject of an "express congressional delegation" of regulatory authority to the Tribe, it would be that very illegality that would also prevent our state courts from providing relief to Rape under the principles discussed previously. Under the unique circumstances of this case, therefore, there is no analytical path to an award of relief for Rape. Accordingly, we must affirm the circuit court's judgment of dismissal. IV. Conclusion For the foregoing reasons, the judgment of dismissal in the present case is affirmed. AFFIRMED. Bolin, Parker, and Wise, JJ., concur. Stuart, C.J., and Main and Bryan, JJ., concur in the result. Shaw and Sellers, JJ., recuse themselves. 42

September 29, 2017

107db5a0-2700-445e-bea8-b092b5b6f570

Locklear Automotive Group, Inc. v. Brad Hubbard

N/A

1160335

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160335 ____________________ Locklear Automotive Group, Inc. v. Brad Hubbard Appeal from Tuscaloosa Circuit Court (CV-16-900716) ____________________ 1160336 ____________________ Locklear Automotive Group, Inc. v. Jeremy Averette Appeal from Tuscaloosa Circuit Court (CV-16-900683) ____________________ 1160337 ____________________ Locklear Automotive Group, Inc. v. Carol Fuller Appeal from Tuscaloosa Circuit Court (CV-16-901091) ____________________ 1160375 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Appeal from Bibb Circuit Court (CV-16-900098) ____________________ 1160435 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Appeal from Bibb Circuit Court (CV-16-900081) ____________________ 1160436 ____________________ Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Appeal from Bibb Circuit Court (CV-16-900074) ____________________ 1160437 ____________________ Locklear Automotive Group, Inc. v. Dorothea Williams Appeal from Bibb Circuit Court (CV-16-900073) MURDOCK, Justice. Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. 3 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes. I. Facts All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an 4 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC." The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters 5 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. 6 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about 7 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: _______________" (Capitalization in original; emphasis omitted; and emphasis added.) In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle- identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by 8 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case. A. Case no. 1160435: Jeffery Lollar and Betsy Lollar Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD. Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided 9 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information. The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.1 They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated 1The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 10 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017. On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 11 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Dodge Ram 3500 truck2 from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft. On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.3 He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; 2There is an immaterial discrepancy between Hood's complaint and the arbitration agreement on the year of the purchased vehicle, i.e., whether it was a 2015 or 2016 model. 3The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 12 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references. Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER," a signature of a dealer representative on a line designated "DEALER," and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC." 13 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC," and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified: "3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay. "4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document. "5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion." The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that 14 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER," the signature of a representative of the "DEALER," the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows: 15 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for -- because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate." Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration. C. Case no. 1160335: Brad Hubbard On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal 16 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 information. In early 2016, Hubbard discovered that he was the victim of identity theft. On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion. On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) 17 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated: "This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See 18 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So. 3d 27 (Ala. 2012). "Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED." (Capitalization in original.) Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.4 D. Case no. 1160336: Jeremy Averette On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft. On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On 4On February 8, 2017, this Court by order consolidated this appeal with case no. 1160336 and case no. 1160337 for purposes of filing the record and briefing. 19 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration. On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to 20 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration. E. Case no. 1160337: Carol Fuller On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft. 21 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD. On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying 22 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. F. Case no. 1160436: Elizabeth Booth On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft. On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity 23 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the order entered in Fuller's case, but it was issued by a different circuit judge. 24 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. G. Case no. 1160437: Dorothea Williams On January 13, 2016, Dorothea Williams purchased a 2016 Chrysler 200 automobile from Locklear CJD. In the course of doing so, she signed the arbitration agreement. At that time, Williams also completed a credit application and provided Locklear CJD with personal information. In February 2016, Williams was notified by the Northport Police Department that she had been the victim of identity theft. On October 6, 2016, Williams filed her complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 25 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 2016, Williams filed a response in opposition to the motion to compel. On January 23, 2017, Williams filed a supplemental response to the motion. In her response, Williams -- as did Hubbard, Averette, Fuller, and Booth -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Williams. Williams did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion. On February 1, 2017, the trial court granted the motion to compel as to Locklear CJD but denied it as to Locklear Group. Except for the name of the plaintiff, the order was substantively the same as the orders entered in the Fuller and Booth cases. It was issued by the same circuit judge who decided Booth's case. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. II. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: 26 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). 27 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 III. Analysis A. Case no. 1160335: Brad Hubbard; case no. 1160336: Jeremy Averette; case no. 1160337: Carol Fuller; case no. 1160436: Elizabeth Booth; and case no. 1160437: Dorothea Williams The arguments by the parties in the Hubbard, Averette, Fuller, Booth, and Williams cases are identical,5 and so we will address them together. As we observed in the rendition of the facts, the trial courts in those cases determined that the arbitration agreement "is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.'" It was on this premise that the trial courts concluded that the plaintiffs' claims against Locklear CJD must be arbitrated but that their claims against Locklear Group were not subject to arbitration because Locklear Group was not a signatory to the arbitration agreement. None of the plaintiffs in this group of appeals objected to arbitration of their claims against Locklear CJD. 5Hubbard, Averette, Fuller, Booth, and Williams are all represented by the same attorneys, and the argument sections of their appellee briefs are substantively very similar. 28 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1. Who Decides the Arbitrability of the Claims Against Locklear Group? We have stated that "[t]he question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme Court's terminology, simply 'arbitrability')." Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094, 1101 (Ala. 2014). "A court decides issues of substantive arbitrability '[u]nless the parties clearly and unmistakably provide otherwise.'" Id. (quoting AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986)). On appeal, Locklear Group contends that clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability exists in the arbitration agreement. Specifically, it cites the following language in the arbitration agreement: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: ... the terms of this agreement and all clauses herein contained, their breadth and scope, ... shall be submitted to BINDING ARBITRATION ...." 29 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (Capitalization in original; emphasis added.) In support of this contention, Locklear Group observes that in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), this Court evaluated an arbitration agreement that contained identical language as to arbitrability. Specifically, "[t]he single-page arbitration agreement provide[d] that the arbitrator decides 'the terms of this agreement and all clauses herein contained, their breadth and scope.'" 826 So. 2d at 132. The McGrue Court concluded that "[t]he language of the arbitration agreement is clear and unmistakable evidence indicating that McGrue and Jim Burke intended to arbitrate the question of arbitrability." Id. Likewise, in Ex parte Waites, 736 So. 2d 550 (Ala. 1999), the Court examined an arbitration agreement that contained the same language on arbitrability: "The arbitration provision included in the contract entered into by the parties states that the parties agree to arbitrate any disputes 'resulting from or arising out of the sale transaction entered into (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope ....'" 736 So. 2d at 552. The Waites Court concluded that "[t]his language expresses a clear intent to submit to arbitration the 30 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 issue of arbitrability." Id. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1054–55 (Ala. 2007) (concluding that an arbitration agreement that provided that the parties agreed to arbitrate "'all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, [and] the validity and scope of this Arbitration Provision'" "demonstrates that the parties intended to arbitrate whether the agreement applies to 'any disputes that arose from their relationship'"). For their part, the plaintiffs in these five appeals do not directly challenge the Locklear Group's position that language in the arbitration agreement sufficiently expresses an intention to arbitrate issues of arbitrability. Instead, they argue that Locklear Group did not sufficiently assert this position in the trial courts and that, therefore, it cannot serve as a basis for reversing the trial courts' orders. The plaintiffs observe that all of Locklear Group's motions to compel arbitration (which are substantially identical in all the cases before us) 31 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "consisted of six pages and fourteen numbered paragraphs. The motions contained only one sentence on the topic of who should decide disputes concerning the scope of the arbitration agreements. Specifically, the last sentence of paragraph 10 of the motions states[:] 'Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator.' This sentence was not followed by a citation to any legal authority." The plaintiffs in these five appeals note that "[t]his Court has long held that it 'will not hold a trial court to be in error unless that court has been apprised of its alleged error and has been given the opportunity to act thereon.'" Moultrie v. Wall, 172 So. 3d 828, 840 (Ala. 2015) (quoting Sea Calm Shipping Co. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990)). They argue that the solitary sentence in the motions to compel was not sufficient to apprise the trial courts that arbitrability issues -- including Locklear Group's ability, as a nonsignatory, to enforce the arbitration agreement -- had to be decided by the arbitrator. The plaintiffs contend that the sentence is a quintessential example of an "undelineated general proposition[] not supported by sufficient authority or argument." White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). The plaintiffs cite multiple cases in 32 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 which this Court concluded that a solitary reference to an argument in a motion before the trial court was not sufficient to raise the issue sought to be raised on appeal. See, e.g., Knight v. Alabama Power Co., 580 So. 2d 576, 578 (Ala. 1991) (noting that "except for the one sentence requesting the trial court to adopt the doctrine of comparative negligence, Knight presented nothing in the way of argument on that issue. ... This issue was not sufficiently argued to the trial court ...."); TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1243 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173 (Ala. 2008) (holding that an unsuccessful bidder for a public contract could not argue on appeal that the invitation to bid was ambiguous because it "did not raise this argument in the trial court" where "[t]he only mention of ambiguity TFT made at trial came in one sentence of TFT's trial brief"); and Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So. 2d 73, 81 (Ala. 2002) (observing that the plaintiff's only argument regarding the applicability of a six-year statute of limitations was one sentence in a three-page motion and concluding that "[i]t can hardly be said that [the plaintiff] 33 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 has presented this argument to the trial court and opposing parties so as to give them an opportunity to address this issue"). In the Booth and Williams appeals, Locklear Group responds that, in addition to the sentence in its motion to compel arbitration, it also raised the issue of arbitrability in the hearings on those motions.6 Booth and Williams have filed motions to strike Locklear Group's references and arguments to statements it might have made in the hearings in the Booth and Williams cases, observing that no transcript of those hearings was made and so there is no evidence in the record concerning what was argued in those hearings. Booth and Williams further observe that Locklear Group could have submitted a statement under Rule 10(d), Ala. R. App. P., recounting its recollection of what was argued in the hearings if it had wanted those statements to be included as evidence before this Court, but it failed to do so.7 Finally, Booth 6Locklear Group does not argue that it presented the arbitrability argument in the hearings in the Hubbard, Averette, and Fuller cases. 7Rule 10(d), Ala. R. App. P., states, in part: "If no report of the evidence or proceedings at a hearing or trial was made, or if a transcript is unavailable, the appellant may 34 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Williams cite multiple cases in which this Court has refused to allow a party unilaterally to alter or supplement the record through statements in an appellate brief. See, e.g., Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So. 3d 124, 134 (Ala. 2011) (noting that "because the hearing in this case was not transcribed, nothing presented at that hearing may form the basis for reversing the trial court's denial of Parker's motion to compel arbitration"); Bechtel v. Crown Cent. Petroleum Corp., 451 So. 2d 793, 795 (Ala. 1984) (observing that the appellant "states that estoppel was raised in oral argument at the hearing on the motion for summary judgment. However, no transcription of that hearing is included in the record. This court is limited to a review of the record alone and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel."). In its responses to the motions to strike, Locklear Group admits that "there is no record of the oral argument," that "no steps were taken to create a statement of what occurred at the hearing[s]," and that Booth and Williams "correctly prepare a statement of the evidence or proceedings from the best available means, including the appellant's recollection." 35 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 present[] the case law on this issue." Accordingly, we grant the motions to strike Locklear Group's references to arguments it allegedly made in the hearings on its motions to compel arbitration in the Booth case and the Williams case. Thus, as in the Hubbard, Averette, and Fuller cases, the only reference to arbitrability in the trial courts in the Booth and Williams cases was the single statement in Locklear Group's motion to compel arbitration. We agree with the plaintiffs that Locklear Group's solitary statement in its motion to compel arbitration that the arbitrator should decide the arbitrability of the claims against it was not sufficient to apprise the trial court that Locklear Group was relying on that argument. The first three numbered paragraphs in the motion set out facts relevant to the issue of arbitration, including quotations of substantial portions of the arbitration agreement. The next three paragraphs argued that the transaction at issue affected interstate commerce. The following four paragraphs -- including paragraph 10, which contains the one sentence referencing arbitrability of the arbitration issue -- argued that the language of the arbitration agreement was broad 36 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 enough to include the subject matter of the underlying claims asserted by the plaintiffs. Paragraph 10 stated: "Arbitration contracts cannot be singled out and be subjected to any different or more stringent rules of construction than other contracts. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996). As plainly demonstrated by its language, the arbitration agreement in this case is sufficiently broad in scope to require arbitration of all disputes relating to: "'the resolution of any dispute arising out of, relating to, resulting from or concerning any contracts or agreements ... entered into by the parties, all alleged representation, promises and covenants, issues concerning compliance with any state or federal law or regulation ...[,] any matters taking place either before or after the parties entered into this agreement ...[,] the terms of this agreement and all clauses herein contained, their breadth and scope ...' "(Exhibit A). The present case clearly arises out of and relates to the Plaintiff's purchase of the [vehicle] at issue, events taking place before and after the parties entered into the agreement, the dealership's compliance with state and/or federal law or regulations and alleged misrepresentations and/or omissions of Locklear in connection therewith. Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator." The next paragraph argued that courts have a duty under the Federal Arbitration Act to "rigorously enforce agreements to 37 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrate." The final few paragraphs stated the relief Locklear Group requested (i.e., that the trial court "should compel the Plaintiff to submit his dispute to binding arbitration, ... and all Court actions, including discovery, should be stayed pending arbitration") without any reference to having the arbitrator decide the issue of arbitrability. When the motion to compel arbitration is read as a whole, it is clear that Locklear Group did not articulate why the question of the arbitrability of the claims against it should be submitted to the arbitrator. Its overriding argument was devoted to the merits of the issue whether the arbitration agreement is broad enough to encompass the plaintiffs' underlying claims against Locklear Group even though Locklear Group was not a signatory to the arbitration agreement, not to the proposition that the arbitrator, and not the court, should decide this issue. Except for the brief reference in paragraph 10, Locklear Group never mentioned arbitration of the arbitrability issue anywhere in its motion, including in its paragraphs specifying the relief it was requesting from the trial courts. Locklear Group's single, unsupported, and unexplained sentence in this regard contrasts sharply with its 38 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 relatively fulsome discussion in its motion as to the breadth of the language of the arbitration agreement and how this language was sufficient to entitle Locklear Group to arbitrate the plaintiffs' underlying claims (not to mention the contrast with the Locklear Group's thoroughly explained position on the subject of arbitrability in its brief on appeal to this Court). Indeed, by focusing essentially all of its attention on whether the language of the arbitration agreement was broad enough to cover the plaintiffs' claims against it, Locklear Group suggested that that was the dispositive issue and that it was for trial court to decide it.8 Locklear Group contends that the fact that it argued to the trial courts that the scope of the arbitration agreement was broad enough to cover claims asserted by the plaintiffs and that it also mentioned the arbitrability of that issue constituted the presentation of two arguments in the 8A fair question exists, albeit one we need not address further, as to whether the trial courts' error could be said to have been invited under the circumstances. A party "'"may not predicate an argument for reversal on 'invited error,' that is, 'error into which he has led or lulled the trial court.'"'" White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d at 1057 (quoting Mobile Infirmary Med. Ctr. v. Hodgen, 884 So. 2d 801, 808 (Ala. 2003), quoting other cases). 39 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 alternative. The plaintiffs note, however, that the arguments "were not framed as alternative arguments." Instead, the arbitrability statement is tacked as an afterthought to Locklear Group's central claim that emphasized the broad scope of the arbitration agreement. Based on the foregoing, we conclude that, in the Hubbard, Averette, Fuller, Booth, and Williams cases, Locklear Group waived the issue whether the arbitration agreement by its terms assigns the issue of the arbitrability of the plaintiffs' claims against Locklear Group to the arbitrator for decision. 2. The Arbitrability of the Plaintiffs' Claims Against Locklear Group Having concluded that it was for the courts to decide the arbitrability of the underlying claims made by Hubbard, Averette, Fuller, Booth, and Williams against Locklear Group, we now consider whether the trial courts correctly decided that issue. Whether they did so turns on the proper application of the so-called "equitable-estoppel exception" to the general rule that an arbitration agreement binds only the signatories to that agreement. 40 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 a. The Exception to Equitable Estoppel for "Party Specific" Language Locklear Group argues that, despite the fact that it is not a signatory to the arbitration agreement, the plaintiffs "are equitably estopped from arguing that their claims against Locklear Group are not subject to arbitration." "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision. Ex parte Stamey, 776 So. 2d 85, 88–89 (Ala. 2000). One of the key exceptions to this rule is the theory of equitable estoppel, under which a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are '"'intimately founded in and intertwined with'"' the underlying contract obligations. Stamey, 776 So. 2d at 89 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), quoting in turn McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984))." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). This Court has, however, crafted an exception to this equitable-estoppel exception: "Where 'the language of the arbitration provisions limited arbitration to the signing parties,' this Court has not allowed the claims against the nonsignatories to be arbitrated." Id. at 380-81 (quoting Stamey, 776 So. 2d at 89). In other words, 41 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "[i]f an arbitration agreement is written in broad language so that it applies to '[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract,' Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998) (emphasis added), or even in slightly narrower language so that it applies to 'ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS CONTRACT OR THE PARTIES THERETO,' Stamey, 776 So. 2d at 91 (capitalization in original; emphasis added), this Court will proceed to determine whether arbitration may be compelled under the doctrine of equitable estoppel. "Conversely, if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, this Court's inquiry is at an end, and we will not permit arbitration of claims against the nonsignatory. See Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 131 (Ala. 2002) (affirming the trial court's order denying a nonsignatory's motion to compel arbitration where the arbitration agreement was between 'you [a signatory plaintiff] and us [a signatory defendant] or our employees, agents, successors or assigns') (bracketed language added); Ex parte Lovejoy, 790 So. 2d 933, 938 (Ala. 2000) (issuing a writ of mandamus directing a trial court to enter an order denying a nonsignatory's motion to compel arbitration where the arbitration provision was limited to 'all disputes or controversies between you [Lovejoy] and us [Allen Motor Company and its assignees]') (bracketed language and emphasis in original); First Family Fin. Servs. v. Rogers, 736 So. 2d 553, 560 (Ala. 1999) (reversing a trial court's order granting a nonsignatory's motion to compel arbitration where 'you [the plaintiffs] and we [First Family]' agreed to arbitrate and the arbitration provision elsewhere stated that it applied to 'all claims and disputes between you [the plaintiffs] and us [First Family],' 42 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and furthermore stated that it applied to 'any claim or dispute ... between you [the plaintiff] and any of our [First Family's] employees or agents, any of our affiliate corporations, and any of their employees or agents') (bracketed language and emphasis in original); and Med Center Cars[, Inc. v. Smith], 727 So. 2d [9] at 19 [(Ala. 1998)] (affirming a trial court's order denying nonsignatories' motions to compel arbitration where the arbitration provisions were limited to disputes and controversies 'BETWEEN BUYER AND SELLER') (capitalization in original)." 934 So. 2d at 381. The plaintiffs in this group of appeals contend that the arbitration agreement was limited to controversies between the signatories -- Locklear CJD and each plaintiff -- and thus that Locklear Group, as a nonsignatory, cannot enforce the arbitration agreement against the signatory plaintiffs. The plaintiffs highlight references in the arbitration agreement to "any party" or "the undersigned" or "the dealer." The trial courts' orders did the same. In this regard, the trial courts' orders set out the following passage, which they attribute to the arbitration agreement: "'In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the 43 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties .... shall be submitted to BINDING ARBITRATION.'" (Capitalization in original; ellipses supplied by the trial courts.) The plaintiffs argue that "[c]ontract language cannot get much more 'party specific' than [that found in the arbitration agreements]. There is no hint that the agreements are intended to cover claims against nonsignatories." The plaintiffs in particular emphasize a passage of the arbitration agreement that states that "the undersigned customer[s] and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." About this passage, the plaintiffs state: "Even aside from all the other party-specific language in the agreements, this language makes it clear that the agreements were intended to control disputes between and among the signatories, with no indication whatsoever that the agreements control any other dispute." 44 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 As Locklear Group observes, however, neither the plaintiffs nor the trial courts fully and accurately quote the operative language of the arbitration agreement. First, as to the sentence of the arbitration agreement emphasized by the plaintiffs, that sentence actually states in full as follows: "In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." Obviously, the purpose of this statement is simply to address which of two arbitration agreements would control disputes between the parties if the parties have entered into more than one such agreement related to the subject transactions. As to the above-quoted passage from the trial courts' orders, that passage conflates two separate sentences from the arbitration agreement. The first sentence, which in the arbitration agreement ends within the portion of the passage for which the trial courts substituted an ellipses, actually reads in its entirety as follows: 45 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." This sentence merely states that "the undersigned and the dealer ... stipulate and agree" that the transactions and agreements "are regulated by the laws of the United States of America" and that "agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." In short, this sentence does nothing more than express the agreement of the 46 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 parties that federal arbitration law is applicable to the arbitration agreement. The second sentence, part of which the trial courts added to the above-quoted passage following the ellipses, is in fact the operative part of the agreement for present purposes. But that sentence actually begins as follows: "The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) 47 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Contrary to the suggestion by the trial courts, this sentence in the arbitration agreement clearly is not "party specific" in the sense described in Mark Dodge, but, as emphasized, actually professes to be applicable to "all disputes" arising from the transaction and related matters. There is no language in this passage that restricts the disputes covered by the arbitration agreement to claims between the parties.9 The operative arbitration language in the arbitration agreement is similar to the language in the arbitration agreement in Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998), which provided that "'[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract ... shall be resolved by 9We note that Hubbard, Averette, Fuller, Booth, and Williams -- unlike the Lollars and Hood -- do not contend that the substantive nature of their identity-theft claims, rather than the nature of the parties against whom those claims are made, is such that the language of the arbitration agreement is not broad enough to encompass those claims. Such a contention would be difficult for Hubbard, Averette, Fuller, Booth, and Williams to maintain, given that they did not oppose Locklear CJD's motion for arbitration of the plaintiffs' similar identity-theft claims against it, which motion was based on the same substantive arbitration-agreement language. 48 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 binding arbitration.'" The Napier Court concluded that this language was "broad enough to encompass Napier and Godfrey's claims against [nonsignatories] Foremost and Manning." Id. at 53. The operative arbitration language in the arbitration agreement in these cases is also nearly identical to the language in the arbitration agreement at issue in Volkswagen Group of America, Inc. v. Williams, 64 So. 3d 1062, 1064 (Ala. Civ. App. 2010), which provided: "'The undersigned agree that all disputes ... resulting from or arising out of or relating to or concerning the transaction entered into ... shall be submitted to BINDING ARBITRATION ....'" In Williams, the Court of Civil Appeals disagreed with the plaintiff's contention that "the arbitration clause at issue is 'party specific.' The clause, rather, speaks to 'all disputes ... resulting from or arising out of or relating to or concerning the transaction,' a formulation that closely parallels the broad language recognized by the Alabama Supreme Court in Smith v. Mark Dodge, Inc., 934 So. 2d 375 (Ala. 2006), as authorizing a nonsignatory to assert a right to compel arbitration through application of equitable estoppel ...." Id. at 1065. 49 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 To reiterate, when "references [in arbitration provisions] to the parties specifically limited the claims that would be arbitrable under those provisions," the Court has concluded that the arbitration provisions "'are not broad enough to encompass claims against the nonsignatories.'" Ex parte Stamey, 776 So. 2d 85, 90 (Ala. 2000) (quoting Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9, 19 (Ala. 1998)). On the other hand, this Court also has held that, when an arbitration provision "contained no references to the parties that would impose a limitation on what claims would be arbitrated," the arbitration provision was broad enough to include claims that were related to the contract because the language was sufficient to indicate that "the party resisting arbitration ha[d] assented to the submission of claims against nonparties -- claims that otherwise would fall within the scope of the arbitration provision -- to arbitration." Stamey, 776 So. 2d at 89. Like the arbitration provisions in Napier and Williams, the operative arbitration language in the arbitration agreement is not limited to claims between the parties. Accordingly, Locklear Group has cleared this hurdle to the invocation of the doctrine of equitable estoppel 50 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 against Hubbard, Averette, Fuller, Booth, and Williams. We turn then to the central issue -- whether the plaintiffs' claims against Locklear Group, a nonsignatory, are sufficiently intertwined with their claims against Locklear CJD, a signatory. b. Sufficient Intertwining to Invoke Estoppel As noted, a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are "intimately founded in and intertwined with" the underlying contract obligations. Stamey, 776 So. 2d at 89. Smith v. Mark Dodge, Inc., 934 So. 2d at 380. In Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534 (Ala. 2008), this Court summarized the intertwining analysis provided in Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003): "In Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003), Blair Fulmer entered into a contract with SCI Alabama Funeral Services, Inc. ('SCI-Alabama'), for the provision of funeral and cremation services for his deceased mother. The contract included an arbitration provision. After Fulmer was given a vase that was supposed to have contained his mother's remains but allegedly did not, Fulmer sued SCI-Alabama and Service Corporation International ('SCI'), SCI-Alabama's parent corporation. The defendants filed a motion to compel arbitration, which the trial court denied. The defendants appealed. 51 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "SCI argued that, even though it was not a signatory to the contract containing the arbitration agreement, 'Fulmer's claims against the signatory defendant, SCI-Alabama, are so "intertwined" with his claims against SCI that arbitration of all of Fulmer's claims, including those against SCI, is appropriate.' 883 So. 2d at 634. After noting Stamey's two-part test, this Court addressed the first part, which relates to whether the claims against the nonsignatory defendant are intertwined with the claims against the signatory defendant. Finding that prong satisfied, this Court wrote: "'Here, Fulmer's claims against SCI are clearly "intimately founded in and intertwined with" his claims against SCI-Alabama.... All of Fulmer's claims arise from the same set of facts. Virtually none of Fulmer's claims makes a distinction between the alleged bad acts of SCI (the parent corporation) and those of SCI-Alabama (its subsidiary); rather, the claims are asserted as if SCI and SCI-Alabama acted in concert.' "883 So. 2d at 634." 988 So. 2d at 543. Just as in Fulmer, all of the plaintiffs' claims against Locklear Group in these cases are "intimately founded in" the same facts as are their claims against Locklear CJD. The plaintiffs' complaints make virtually no distinction between the bad acts of Locklear Group and those of Locklear CJD. Indeed, when the plaintiffs' complaints described purchasing 52 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their vehicles, they stated that they "dealt with Locklear [CJD] and/or Defendant Locklear [Group] employee[s]" and "[t]he Defendant Locklear [CJD] and/or Defendant Locklear [Group] ran a credit check on" each plaintiff. Every claim the plaintiffs asserted against Locklear CJD they also asserted against Locklear Group, and those claims were asserted as if Locklear CJD and Locklear Group had acted in concert, as if the latter was responsible for the acts of the former, and/or as if those persons who acted for one also acted for the other. Therefore, we conclude that the plaintiffs' claims against Locklear Group as a nonsignatory to the arbitration agreement are "intimately founded in and intertwined with" the underlying contract obligations and with the plaintiffs' contract-related claims against the signatory to the arbitration agreement, Locklear CJD, so that the doctrine of equitable estoppel is applicable. Based on the foregoing, Locklear Group can enforce the arbitration agreement against Hubbard, Averette, Fuller, Booth, and Williams; the trial courts in this group of cases erred in denying Locklear Group's motions to compel arbitration. 53 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 B. Case no. 1160435: Jeffery Lollar and Betsy Lollar As to the Lollars, Locklear CJD and Locklear Group argue that they met their prima facie burden so as to enforce the arbitration agreement, having filed a joint motion in support of which they submitted a contract calling for arbitration and uncontradicted evidence that the transaction affected interstate commerce. They also note that it is undisputed that the Lollars filed no response to their joint motion and supporting evidence. Accordingly, they contend that the trial court had no alternative but to grant their motion to compel arbitration and that it erred in not doing so. In support of their position, Locklear CJD and Locklear Group cite a passage from this Court's opinion Ex parte Greenstreet, Inc., 806 So. 2d 1203 (Ala. 2001): "We hold that once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce, the burden of persuasion shifts to the party opposing arbitration. If that party presents no evidence in opposition to a properly supported motion to compel arbitration, then the trial court should grant the motion to compel arbitration." 806 So. 2d at 1209 (emphasis added). 54 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The Lollars acknowledge that they failed to file a response to the motion to compel arbitration. They assert that failing to do so was an oversight that occurred because their counsel was expecting the trial court to set the motion to compel for a hearing just as it had done in two similar cases (one of which is before us in these appeals, case no. 1160375 -- Hood). Instead, in this case the trial court did not set a hearing; it simply entered an order denying arbitration before the Lollars filed a response. In an apparent attempt to rectify this oversight, the Lollars attach to their brief on appeal their own affidavits and a copy of what they contend was the actual arbitration agreement they signed. Locklear CJD and Locklear Group have rejoined with a motion to strike the attachments to the Lollars' brief as well as all references in their brief to those documents. As they note, this Court cannot consider evidence that is not part of the record on appeal. "'"[A]ttachments to briefs are not considered part of the record and therefore cannot be considered on appeal."' Morrow v. State, 928 So. 2d 315, 320 n. 5 (Ala. Crim. App. 2004) (quoting Huff v. State, 596 So. 2d 16, 19 (Ala. Crim. App. 1991)). Further, we 55 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 cannot consider evidence that is not contained in the record on appeal because this Court's appellate review '"is restricted to the evidence and arguments considered by the trial court."' Ex parte Old Republic Sur. Co., 733 So. 2d 881, 883 n.1 (Ala. 1999) (quoting Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ...)." Roberts v. NASCO Equip. Co., 986 So. 2d 379, 385 (Ala. 2007). Locklear CJD and Locklear Group are correct. We do not consider the evidence submitted by the Lollars on appeal or their arguments based on that evidence because that evidence and those arguments were not presented to the trial court; accordingly, we grant the motion to strike that evidence. Contrary to Locklear CJD and Locklear Group's argument, however, the Lollars' lack of response does not end our inquiry. It is true that, "once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce," the burden shifts to the nonmoving party to show otherwise. Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). It is likewise true that this Court has said that, "[i]f th[e nonmoving] party presents no evidence in opposition to a properly supported motion to compel arbitration, then the 56 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 trial court should grant the motion to compel arbitration." Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). Implicit in this standard is that we must evaluate whether the motion to compel arbitration does make a "prima facie showing" that the parties entered into an agreement to arbitrate the dispute in question and that this showing was "properly supported" by evidence of such an agreement. As we have otherwise recently expressed in another case in which the party opposing arbitration failed to present evidence in the trial court: "[U]nless on its face the arbitration provision is not valid or does not apply to the dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous." Family Sec. Credit Union v. Etheredge, [Ms. 1151000, May 19, 2017] ___ So. 3d ___ , ___ (Ala. 2017) (emphasis added). The arbitration agreement states: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into ... shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) There is no question that the arbitration agreement is broadly worded (a fact we have relied 57 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 upon in the appeals in the Booth, Williams, Hubbard, Averette, and Fuller cases in concluding that the nonsignatory, Locklear Group, could enforce the agreement against those plaintiffs). And "'where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract,'" as does this one, "'that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 505 (Ala. 1999) (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). But as stated, this broader application still is one that is tied to "the contract" to which reference is made, i.e., claims "'"arising out of or relating to" the contract,'" per the language at issue in Green Tree, for example. Or, in the case of the language at issue here, disputes "resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into." See also State v. Lorillad Tobacco, 1 So. 3d 1, 9 (Ala. 2008) (quoting Kenworth of Dothan, Inc. v. Bruner–Wells Trucking, Inc., 745 So. 2d 271, 275 (Ala. 1999)) (noting that, "[f]or a dispute to relate to the subject matter 58 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 of the arbitration provision, 'there must be some legal and logical nexus' between the dispute and the [subject matter of the] arbitration provision"). In this particular case, the parties agreed to arbitrate matters "relating to ... the transaction entered into," which was the Lollars' purchase of a 2009 Dodge Ram truck on May 28, 2013. According to the uncontradicted allegations of the complaint, the personal information of the Lollars' that was wrongly disseminated in connection with their identity-theft claims was provided to Locklear CJD in December 2015 during a visit to the dealership that was not related to the purchase of the 2009 Dodge Ram truck. On the face of the arbitration agreement, its terms do not apply to the interaction of the Lollars and the defendants that occurred in 2015. The 2013 vehicle purchase to which the 2013 arbitration agreement refers and relates is one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) is, quite simply, an unrelated matter. 59 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The situation is similar to one presented in Capitol Chevrolet & Imports, Inc. v. Payne, 876 So. 2d 1106 (Ala. 2003). In that case, Jean Payne purchased a used 1997 Cadillac Catera automobile from Capitol Chevrolet & Imports, Inc. ("Capitol"), on September 6, 2001. The arbitration agreement Payne signed in connection with the purchase had language similar to the arbitration agreement in this case: "'Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration ....'" 876 So. 2d at 1107. The Court described the facts involved in Payne's claims against Capitol as follows: "In September 2002, Payne sued Capitol and a Capitol salesperson, Jason Golden, alleging fraud and conversion. According to Payne's complaint, 60 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 approximately one month after she purchased the Catera, she returned the Catera to Capitol in reliance on Golden's representation that Capitol had a willing buyer for the vehicle. Payne relinquished possession of the Catera to Capitol and stopped making payments on the car. Payne alleged that Golden, while acting in the line and scope of his employment with Capitol, misrepresented to her that Capitol had a buyer for the Catera, and that, when Payne relinquished the Catera to Capitol in reliance on that misrepresentation, Golden converted the Catera for his personal use. Payne's complaint alleged that, as a result of the misrepresentation, she lost the use of her vehicle, suffered severe mental anguish, and suffered an adverse credit rating once she stopped making payments on the Catera." 876 So. 2d at 1107–08. The Court concluded that Payne's claims were not related to her purchase of the Catera and therefore were not subject to the arbitration agreement. "We do not believe that the plain language of the arbitration agreement would lead one to assume or understand that the agreement covered the claims alleged in Payne's complaint -- a later fraudulent misrepresentation, unrelated to the original sale of the vehicle, resulting in the conversion of the vehicle. The present dispute involves alleged subsequent tortious conduct on the part of Capitol and its agent that is not close enough in relation to the initial sale of the Catera to be covered by the language of the arbitration agreement." 876 So. 2d at 1110 (emphasis added). 61 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 In this case, as in Payne, the plain language of the arbitration agreement, which relates to the 2013 transaction, does not lead one to understand that the 2015 identity-theft claims would be covered under the agreement. We noted in Kenworth of Dothan that, "[i]n order for a dispute to be characterized as arising out of or relating to the subject matter of the [transaction], and therefore subject to arbitration, the language of the arbitration provision must reasonably apply to the dispute." 745 So. 2d at 275. In response to the clear disconnect between the transaction to which the arbitration agreement relates and the separate matters at issue in this action, Locklear CJD and Locklear Group do not really explain how the arbitration agreement is broad enough to encompass the Lollars' identity- theft claims. Instead, they attempt to rely upon the arbitrability clause in the arbitration agreement (i.e., the clause providing that the arbitrator is to decide disputes over the arbitrability of the parties' underlying substantive dispute) in an effort to avoid this issue. But the difficulty with this is the same one that existed in the Booth, Williams, Hubbard, Averette, and Fuller cases. That is, this issue was 62 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 not presented to the trial court in such a manner as to preserve it for later appellate review. For the reasons already stated in our discussion of those other cases, we cannot reverse the trial court's order on that basis. Because the arbitration agreement on its face does not apply to the Lollars' claims, we conclude that the trial court did not err in denying the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. C. Case no. 1160375: Anthony Hood The final appeal before us involves the joint motion to compel arbitration filed by Locklear CJD and Locklear Group in response to the complaint filed by Anthony Hood. Locklear CJD and Locklear Group contend that they presented a prima facie case in support of their motion to compel arbitration, i.e., that they introduced a contract calling for arbitration and produced evidence showing that the transaction affected interstate commerce. They argue that the trial court erred in determining the scope of the arbitration agreement because the arbitration agreement contained an arbitrability clause reflecting an agreement to allow the arbitrator to decide any arbitrability issues. 63 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's first response to these arguments is that the version of the arbitration agreement Locklear CJD and Locklear Group submitted to the trial court "is invalid and unenforceable because the agreement is fabricated and was not signed by [Hood] and the issue is for the Court to decide, not the arbitrator." "'[A] party who contests the existence of a contract containing an arbitration provision cannot be compelled to arbitrate that threshold issue because an arbitrator derives his authority solely from the parties' agreement. Only a court can resolve the question whether a contract exists.'" Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1053-54 (Ala. 2007) (quoting Edward D. Jones & Co. v. Ventura, 907 So. 2d 1035, 1040 (Ala. 2005)). Hood's position is meritless. As detailed in the rendition of the facts, Hood alleged in his complaint and reiterated in his response to the joint motion to compel arbitration that he purchased a 2016 Dodge Ram 3500 truck from Locklear CJD in December 2015. He also admitted in his response that he signed a "Pre-Dispute Arbitration Agreement" with Locklear CJD. Hood alleged in his response and in his supporting affidavit that the only difference between the 64 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 version of the arbitration agreement he signed and the one Locklear CJD and Locklear Group submitted with their joint motion to compel arbitration was that in the latter version "[t]he words 'Locklear Chrysler Jeep Dodge, LLC'" had been added near the bottom of the agreement in a different typeset than that of the rest of the agreement. Indeed, the version of the arbitration agreement Hood attached to his brief contains all the elements contained in the version attached to the defendants' joint motion to compel arbitration except the printed words "Locklear Chrysler Jeep Dodge, LLC" typed or printed above the "DEALER" signature line. Thus, Hood admits that he signed the arbitration agreement that contains the substantive language quoted in this opinion; he admits the agreement was signed by someone on behalf of the "DEALER," which he admits to be Locklear CJD; and he admits that the agreement contained an exact description of the vehicle he purchased. Even if the allegation that Locklear CJD and/or Locklear Group added the words "Locklear Chrysler Jeep Dodge, LLC" to the arbitration agreement after Hood signed the agreement is accepted as true, we are given no basis on which to conclude 65 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that this is a material alteration to the agreement for purposes of Hood's underlying claims. This Court has stated that in order to determine whether an alteration is material we should inquire: "Did the interposed matter make the 'instrument speak a language different in legal effect from that which it originally spoke, which carries with it some change in the rights, interests, or obligations of the parties?'" Benton v. Clemmons, 157 Ala. 658, 660, 47 So. 582, 583 (1908). See also 3B C.J.S. Alteration of Instruments § 4 (2017) ("In general, for the alteration of an instrument to be 'material,' the alteration must be such as to change the legal effect of the instrument."). In this instance, the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC" changed none of the obligations of the parties to the arbitration agreement. Hood knew and admitted that he was signing an arbitration agreement with Locklear CJD in connection with his purchase of a vehicle. A representative of the dealership signed the agreement. The terms of that agreement were not changed in any degree by the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC." Accordingly, the arbitration agreement was not "fabricated," 66 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Hood's argument does not defeat the arbitration of Hood's underlying claims.10 Like the Lollars, Hood also contends that his identity- theft allegations are not within the scope of the arbitration agreement because they do not "result[] from, aris[e] out of, relat[e] to or concern[] the transaction entered into," i.e., the purchase of a vehicle from Locklear CJD, which is the object of the arbitration agreement. In response, as in the Lollars' case (and the Hubbard, Averette, Fuller, Booth, and Williams cases), Locklear CJD and Locklear Group counter that there is a clause in the arbitration agreement that provides for the arbitrator to determine the scope of the arbitration agreement. Unlike all the other appeals before us, however, in this case not only was there a hearing on the motion to compel arbitration, but also that hearing was transcribed and the transcript submitted as part of the record on appeal. 10In an effort to provide an alternative ground for affirmance of the trial court's order as to Locklear Group, Hood also makes a "nonsignatory" argument similar to that made by first group of plaintiffs discussed above. This argument by Hood fails for the same reasons as did the similar argument by those other plaintiffs. See discussion, supra. 67 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 According to that transcript, Hood's counsel argued as follows to the trial court: "[O]ur argument is that somebody at the dealership was being allowed to [take customers' personal information] and then sell [their] identities out on the black market[, which] doesn't have anything to do with buying a car." In response, counsel for Locklear CJD and Locklear Group stated: "And our response to that specific argument is, first, we believe that the arbitration agreement is broad enough in scope to cover these. But, more importantly, we don't even get to that issue here before you, your Honor. The arbitration agreement clearly provides that the issue of scope and breadth arbitrability is for the arbitrator to decide, not this trial court. So whether or not the claims being asserted fall within the scope of the arbitration agreement is for the arbitrator to decide based on the plain and unambiguous language in the arbitration agreement. Plus, it applies for AAA rules, and there [are] Alabama Supreme Court cases that clearly state that, that in and of itself also shows an intent based on those rules to allow the arbitrator to decide the issue of scope and breadth. So that is something that the arbitrator is to determine and not this court." Thus, in Hood's case, Locklear CJD and Locklear Group clearly and explicitly argued to the trial court that there was an arbitrability clause in the arbitration agreement and that the import of the clause was that the issue whether 68 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's identity-theft claims were covered by the arbitration agreement was for the arbitrator to decide, not the trial court. Therefore, the effect of the arbitrability clause is properly before us in this appeal. Hood's first response to Locklear CJD and Locklear Group's invocation of the arbitrability clause is to contend that "clear and unmistakable evidence that [Hood] and [the] Locklear Defendants agreed to arbitrate the issue of arbitrability does not exist because a valid arbitration agreement does not exist." This argument relies upon Hood's assertion, which we just rejected, that the arbitration agreement was fabricated. Because we have concluded that a valid arbitration agreement was submitted by Locklear CJD and Locklear Group, the arbitrability clause cannot be ignored on that basis. Hood next contends that the "Locklear Defendants arguably waived a 'First Options clause' argument because this argument was not presented in their initial Motion to Compel Arbitration with the trial court or in oral argument on the 69 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 same."11 As we have already recounted, however, Locklear CJD and Locklear Group clearly and explicitly presented its arbitrability-clause argument to the trial court in the hearing on their joint motion to compel arbitration. Hood also argues that the arbitrability clause in the arbitration agreement is "wholly diverse from the "'First Options clause' in [Smith v.] Mark Dodge[, Inc., 934 So. 2d 375 (Ala. 2006)]." Hood notes that the arbitrability clause in Smith stated: "'[Smith] and [Mark Dodge] further agree that any question regarding whether a particular controversy is subject to arbitration shall be decided by the Arbitrator.'" 934 So. 2d at 378. Hood argues that "[t]he explicit language in Mark Dodge stating 'whether a particular controversy is subject to arbitration shall be decided by the Arbitrator' is clearly missing from [the] Locklear Defendants' fabricated arbitration agreement." In their principal brief, Locklear CJD and Locklear Group do not contend that the arbitrability clause in the arbitration agreement is similar in wording to the 11Hood's reference to a "First Options clause" is a reference to the discussion of arbitrability clauses in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). 70 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrability clause in Smith. Instead, they argue correctly that the arbitrability-clause language in the arbitration agreement is identical to language in arbitration agreements analyzed by this Court in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999).12 As Locklear CJD and Locklear Group observe, this Court in McGrue and Waites held that the arbitrability clauses in those arbitration agreements constituted clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability. In his brief to this Court, Hood addresses McGrue and Waites, but only by contending that they are distinguishable from the present case on the ground that "neither [McGrue nor Waites] disputed the validity of the underlying arbitration agreements." As we already have concluded, however, Hood's contention that the arbitration agreement was "fabricated" must be rejected. The fact remains, then, that in McGrue and Waites this Court concluded that language identical to that contained in the arbitration agreement was sufficient to warrant submission of issues of arbitrability to the 12See discussion, supra. 71 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrator. Hood offers no other reason why McGrue and Waites would not be dispositive of the present case. IV. Conclusion Based on the foregoing analysis, we affirm the order of the trial court in the Lollars' appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. We reverse the trial courts' orders in Hubbard's, Averette's, Fuller's, Booth's, and Williams's appeals, which denied the motions to compel arbitration as to Locklear Group, and in Hood's appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group; those causes are remanded for the trial courts to enter orders granting those motions. 72 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1160335 -- REVERSED AND REMANDED. 1160336 -- REVERSED AND REMANDED. 1160337 -- REVERSED AND REMANDED. 1160435 -- MOTION TO STRIKE GRANTED; AFFIRMED. 1160436 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. 1160437 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 1160375 -- REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. Murdock, J., concurs specially. 73 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MURDOCK, Justice (concurring specially in case no. 1160375). As the main opinion explains, Anthony Hood responds to the invocation by Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc., of this Court's decisions in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999), but he does so by arguing only that those cases involved no issue as to the validity of the underlying arbitration agreements, whereas, according to Hood, the underlying arbitration agreement in this case is invalid (the rejection of the latter proposition by the main opinion being a position with which I agree). Hood does not, for example, attempt to argue that the language of the arbitrability provision at issue here is materially different from that held to be sufficient in McGrue and Waites. Neither does Hood argue that we should overrule McGrue and Waites. And, although I confess concerns as to the sufficiency of the language here to meet the "clear and unmistakable" test articulated in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), other than pointing out that the language used here is "diverse" from the more explicit language employed in First Options, Hood does not 74 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 offer a sufficient explication of the asserted insufficiency so as to compel a reexamination of McGrue and Waites. And because the question at hand does not concern the subject- matter jurisdiction of the trial court or this Court, I cannot conclude that this Court should sua sponte explore the matter. In addition, neither party has even mentioned this Court's 2012 decision in Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). In particular, Hood does not argue that, even if the arbitrability language at issue satisfies the "clear and unmistakable" standard articulated in First Options, the particular underlying substantive claims in this case should not be sent to the arbitrator for consideration of their arbitrability because they do not even "arguably" fall within the ambit of the arbitration agreement. See Blackmon, 99 So. 3d at 1198. That is, no issue is raised as to whether Hood's identity-theft claims fall within the universe of disputes to which the so-called arbitrability clause is to apply. I feel no compunction therefore to cast a vote in this case reflective of the position I took in my dissent in 75 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Blackmon, a position to which I continue to adhere. See Blackmon, 99 So. 3d at 1199 (Murdock, J., dissenting). 76

September 29, 2017

6af9cde6-eb7a-4c0d-8746-85e73a5cf8c9

Honea v. Raymond James Financial Services, Inc.

N/A

1130590, 1130655

Alabama

Alabama Supreme Court

REL:06/30/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1130590 _________________________ Kathryn L. Honea v. Raymond James Financial Services, Inc., and Bernard Michaud _________________________ 1130655 _________________________ Raymond James Financial Services, Inc., and Bernard Michaud v. Kathryn L. Honea Appeals from Jefferson Circuit Court (CV-06-1896) 1130590; 1130655 PER CURIAM. In case no. 1130590, Kathryn L. Honea appeals from the denial of her motion to vacate an arbitration award entered in favor of Raymond James Financial Services, Inc. ("Raymond James"), and Bernard Michaud, an employee of Raymond James (hereinafter referred to collectively as "RJFS"). We affirm in part, reverse in part, and remand. In case no. 1130655, RJFS appeals the trial court's denial of its motion to dismiss for lack of jurisdiction; that appeal is dismissed. Facts and Procedural History Beginning in 1997, Honea opened several investment accounts with Raymond James. Honea and Raymond James executed a "client agreement" that included an arbitration provision. The arbitration provision stated, in pertinent part: "Arbitration disclosures: "Arbitration is final and binding on the parties. "The parties are waiving their right to seek remedies in court, including the right to trial by jury. ".... "Arbitration and Dispute Resolution: (a) In a dispute or controversy, either arising in the future or in existence now, between me and you (including your officers, directors, employees or agents and 2 1130590; 1130655 the introducing broker, if applicable) we agree to first endeavor to settle the dispute in an amicable manner by mediation at the request of either party. Thereafter, any unsettled dispute or controversy will be resolved by arbitration. ... "(b) We agree that in any arbitration the arbitrators will resolve the dispute in accordance with applicable law and will be required to furnish us with a written decision which must explain the reasons for their decision. ... "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." On March 30, 2006, Honea filed a complaint in the Jefferson Circuit Court asserting that she had opened four accounts with Raymond James and that Michaud had acted as her financial advisor as to those accounts. She asserted that she had deposited approximately $1,200,000 in those accounts. She alleged that RJFS engaged in "abusive brokerage practices" in that her investments were not diversified, "were far too risky," and "were of poor quality." She claimed that, as a result of RJFS's actions, she lost $1,050,000. She thus sought damages for breach of contract, breach of fiduciary 3 1130590; 1130655 duty, negligence, wantonness, fraud, and violations of the Alabama Securities Act. Honea closed her accounts with Raymond James in April 2006. Subsequently, Raymond James filed a motion to compel arbitration. The motion asserted that Honea did not oppose arbitration. The trial court granted the motion, and arbitration commenced. Michaud joined the arbitration proceedings. The arbitration panel dismissed Honea's breach-of- fiduciary-duty, negligence, wantonness, fraud, and Alabama Securities Act claims and proceeded to hear the breach-of- contract claims. On January 3, 2008, the arbitration panel entered an award in favor of RJFS. The arbitration panel found that "Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the arbitration panel "denied" Honea's breach-of-contract claims, stating that they were "barred by the applicable statutes of limitations." On January 14, 2008, Honea filed in the Jefferson Circuit Court a pleading entitled "Motion to Vacate Arbitration 4 1130590; 1130655 Award." See Horton Homes, Inc. v. Shaner, 999 So. 2d 462, 467 (Ala. 2008) (discussing the process for appealing an arbitration award under Ala. Code 1975, § 6-6-15, and noting, among other things, that "[a] party seeking review of an arbitration award is required to file a motion to vacate" that award). She alleged that the arbitration award "manifest[ed] a disregard of the law" by holding that her breach-of-contract claims were barred by the statute of limitations. See Birmingham News Co. v. Horn, 901 So. 2d 27, 50 (Ala. 2004) (noting that, in an appeal of an arbitration award under Ala. Code 1975, § 6-6-15, a "manifest disregard of the law" was a ground available for reviewing the award), overruled by Hereford v. D.R. Horton, Inc., 13 So. 3d 375, 381 (Ala. 2009) ("[W]e hereby overrule our earlier statement in Birmingham News that manifest disregard of the law is a ground for vacating, modifying, or correcting an arbitrator's award ...."). Additionally, Honea, citing Ala. Code 1975, § 6-6-14, challenged the impartiality of the chairman of the arbitration panel. See § 6-6-15 (providing that, in an "appeal" of an arbitration award, "the court shall set aside the award for one or more of the causes specified in Section 6-6-14 ...."), and § 6-6-14 (providing that an arbitration award is final 5 1130590; 1130655 "unless the arbitrators are guilty of fraud, partiality, or corruption in making it"). What occurred next is described in this Court's previous decision in Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"): "The trial court originally scheduled a hearing for Honea's motion to vacate the arbitration award for March 28, 2008; however, for reasons including the difficulty the parties had in obtaining a transcript of the arbitration proceedings, that hearing was repeatedly continued. On October 17, 2008, Honea filed an additional motion with the trial court asking it to conduct a de novo review of the arbitration award pursuant to paragraph (c) of the arbitration provision in the client agreement, quoted supra, which specifically authorized such a review by the trial court if 'the arbitrators do not award damages and the amount of [the client's] loss of principal exceeds $100,000.' On October 31, 2008, RJFS filed its response, citing Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), for the propositions (1) that manifest disregard of the law is not a valid ground for seeking the vacatur of an arbitration award; and (2) that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ('the FAA'), provides the exclusive grounds for seeking judicial review of arbitration awards in Alabama and parties may not expand those grounds by contract to provide for de novo judicial review of such awards. RJFS also repeated its argument that there was no evidence indicating that any of the arbitrators were biased in favor of RJFS. "On November 7, 2008, the trial court held a hearing on Honea's motion to vacate the arbitration award. ... On July 20, 2009, the trial court issued an order concluding that Honea was entitled to a de 6 1130590; 1130655 novo review of the arbitration award .... The trial court accordingly vacated the award that had been entered in favor of RJFS and scheduled a future status conference for the purpose of setting the matter for trial. On August 27, 2009, RJFS filed this appeal. See Rule 71B(g), Ala. R. Civ. P." 55 So. 3d at 1163-64. In Raymond James I, RJFS argued that the trial court could vacate the arbitration award only if one of the grounds specified in 9 U.S.C. § 10(a) of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), was established. This Court noted that, under the Supreme Court's decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), the grounds enumerated in § 10 of the FAA were the only grounds upon which an arbitration award could be vacated under the FAA. However, Honea argued that an arbitration award may also be vacated on grounds outside those enumerated in 9 U.S.C. § 10 of the FAA if those other grounds were recognized by state law. This Court agreed with Honea. Specifically, part (c) of the arbitration provision in this case, as quoted above, states: "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if 7 1130590; 1130655 the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." This Court held: "[T]he holding of Hall Street is applicable only in a federal court and ... the provision providing for de novo review of the arbitration award by the trial court is enforceable under state law .... However, because the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the parties, its judgment is nevertheless reversed and the cause is remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." Raymond James I, 55 So. 3d at 1170. On remand, the trial court conducted a de novo review of the arbitration award, vacated the award, and entered a judgment in favor of Honea in the amount of $1,169,113.35. RJFS appealed to this Court. In Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013) ("Raymond James II"), this Court held that the trial court lacked jurisdiction because the award had not been entered as a judgment of the court. Specifically, under § 6-6-15, either party may appeal to the circuit court 8 1130590; 1130655 from an arbitration award. A notice of the appeal must be filed with the clerk of the circuit court where the underlying action is pending. Thereafter, "the clerk or register shall enter the award as the judgment of the court." Furthermore, prior caselaw required that an arbitration award must be entered as a judgment before the circuit court could consider a motion to vacate it: "'"In Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008), this Court made clear that a judgment entered by the circuit clerk on an arbitration award pursuant to § 6-6-15, Ala. Code 1975, 'does not become a final appealable judgment until the circuit court has had an opportunity to consider a motion to vacate filed by a party seeking review of the arbitration award.' 999 So. 2d at 467. Furthermore, as this Court observed in Jenks v. Harris, 990 So. 2d 878, 882 (Ala. 2008), the trial court's order on such a motion is void unless the circuit clerk has first entered the arbitration award as the judgment of the court. "'"...." "'We find no indication in the record that the clerk of the Shelby Circuit Court entered the arbitrator's order as the judgment of that court as required under § 6-6-15, Ala. Code 1975; thus, there is no 9 1130590; 1130655 final judgment from which Parham can appeal. Accordingly, the trial court's February 6, 2008, order is void and is hereby vacated, and this appeal is dismissed. See Harvey v. City of Oneonta, 715 So. 2d 779, 781 (Ala. 1998) ("A judgment of a court without jurisdiction is void. An appeal will not lie from a void judgment." (citing, among other cases, Luken v. BancBoston Mortgage Corp., 580 So. 2d 578 (Ala. 1991))).'" Raymond James II, 141 So. 3d at 1013-14 (quoting Parham v. American Bankers Ins. Co. of Florida, 24 So. 3d 1102, 1103-04 (Ala. 2009), quoting in turn Championcomm.net of Tuscaloosa, Inc. v. Morton, 12 So. 3d 1197, 1199-1200 (Ala. 2009) (emphasis added in Raymond James II)). There was no indication in the record that the arbitration award had ever been entered as a judgment of the trial court. Both sides acknowledged that that was the case. Given that "undisputed fact," we held that the trial court lacked jurisdiction to review the award on remand after Raymond James I. Therefore, we vacated the trial court's judgment as void, noted that a void judgment would not support an appeal, and dismissed the appeal. Raymond James II, 141 So. 3d at 1014-15. Thereafter, the case returned to the trial court. On October 15, 2013, seven days after this Court issued the 10 1130590; 1130655 certificate of judgment in Raymond James II, Honea filed in the trial court a motion for the circuit clerk to enter the arbitration award as a judgment of that court and also filed a notice of appeal from the arbitration award. The circuit clerk then entered the award on October 17. The notice of appeal sought review pursuant to Rule 71B, Ala. R. Civ. P. That rule, which became effective on February 1, 2009, provides the procedure for appealing an arbitration award and supersedes the procedures in § 6-6-15. See Committee Comments to Rule 71B. Honea's filings included a copy of the arbitration award and a copy of materials from the arbitration proceeding. She subsequently filed a motion to vacate the arbitration award and for a de novo review. RJFS responded with a motion to dismiss and an opposition to the motion to vacate, arguing, among other things, that the trial court lacked jurisdiction. Honea filed a reply, which she later supplemented. The trial court ultimately held a hearing on January 17, 2014. At that hearing, the trial court indicated that it would first consider the jurisdictional issues raised by RJFS and would consider the "merits" of the motion to vacate at a later time. 11 1130590; 1130655 On February 21, 2014, pursuant to "Rule 60(b)," Ala. R. Civ. P., Honea filed a motion for relief from judgment. In it, she suggested that her motion to vacate had been denied by operation of law on January 20, 2014, pursuant to Rule 59.1, Ala. R. Civ. P.1 Honea sought relief from that denial, arguing that it was the consequence of mistake, inadvertence, surprise, or excusable neglect. On February 25, 2014, the trial court purported to deny RJFS's motion to dismiss. On February 28, Honea filed a notice of appeal (case no. 1130590). RJFS subsequently filed a notice of appeal from the denial of its motion to dismiss (case no. 1130655). The trial court then set a hearing for a de novo review of the arbitration award. Honea filed a motion in this Court requesting a stay of the proceedings in the trial court, which this Court granted. 1Rule 59.1 states: "No postjudgment motion filed pursuant to Rules 50, 52, 55, or 59 shall remain pending in the trial court for more than ninety (90) days, unless with the express consent of all the parties, which consent shall appear of record ...." 12 1130590; 1130655 Analysis I. Case No. 1130655 RJFS appeals from the trial court's denial of its motion to dismiss. As mentioned above and discussed more thoroughly below, Honea's motion to vacate was denied by operation of law on January 20, 2014, more than a month before the trial court issued its order purporting to deny RJFS's motion to dismiss. When a postjudgment motion is denied by operation of law, the trial court "is 'without jurisdiction to enter any further order in [the] case after that date.' Ex parte Davidson, 782 So. 2d 237, 241 (Ala. 2000). Any order entered after the trial court loses jurisdiction is void. Id." Ex parte Limerick, 66 So. 3d 755, 757 (Ala. 2011). Further, "a void order will not support an appeal." Beam v. Taylor, 149 So. 3d 571, 577 (Ala. 2014). Additionally, an interlocutory denial of a motion to dismiss generally is not appealable unless this Court has granted permission to appeal under Rule 5, Ala. R. App. P. See, e.g., American Suzuki Motor Corp. v. Burns, 81 So. 3d 320, 321 (Ala. 2011); Conseco Fin. Corp. v. Sharman, 828 So. 2d 890, 894 (Ala. 2001); and Robinson v. Computer Servicenters, Inc., 360 So. 2d 299 (Ala. 1978). Because the trial court did not have jurisdiction to deny the motion to 13 1130590; 1130655 dismiss and because the denial of a motion to dismiss is also generally not appealable, RJFS's appeal (case no. 1130655) is due to be dismissed. Nevertheless, RJFS makes several arguments challenging the trial court's jurisdiction. A lack of subject-matter jurisdiction on the part of the trial court, in turn, impacts the appellate jurisdiction of this Court. See MPQ, Inc. v. Birmingham Realty Co., 78 So. 3d 391, 394 (Ala. 2011) ("'A judgment entered by a court lacking subject-matter jurisdiction is absolutely void and will not support an appeal; an appellate court must dismiss an attempted appeal from such a void judgment.'" (quoting Vann v. Cook, 989 So. 2d 556, 559 (Ala. Civ. App. 2008))). Therefore, before proceeding further, this Court must determine whether the trial court had jurisdiction. RJFS contends that the trial court lacked jurisdiction because, it says, Honea failed to satisfy various requirements of § 6-6-15 for initiating an appeal of an arbitration award under that Code section. Section 6-6-15 states, in pertinent part: "Either party may appeal from an [arbitration] award under this division. Notice of the appeal to the appropriate appellate court shall be filed 14 1130590; 1130655 within 10 days after receipt of notice of the award and shall be filed with the clerk or register of the circuit court where the action is pending .... The notice of appeal, together with a copy of the award, signed by the arbitrators or a majority of them, shall be delivered with the file of papers or with the submission, as the case may be, to the court to which the award is returnable; and the clerk or register shall enter the award as the judgment of the court." First, RJFS contends that Honea did not file a notice of appeal until October 15, 2013, after the decision in Raymond James II, which was over five years after the arbitration award was issued and well past the period specified in § 6-6- 15. Thus, RJFS maintains, the arbitration appeal in this case was untimely filed. Honea, on the other hand, argues that her January 14, 2008, "Motion to Vacate Arbitration Award" was sufficient to constitute a notice of appeal for purposes of § 6-6-15. We agree with Honea. This Court "treat[s] a pleading and any other filing according to its substance, rather than its form or its style." Ex parte Bender Shipbuilding & Repair Co., 879 So. 2d 577, 584 (Ala. 2003). A notice of appeal, in the context of the Alabama Rules of Appellate Procedure, "shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name 15 1130590; 1130655 the court to which the appeal is taken." Rule 3(c), Ala. R. App. P. Honea's January 14, 2008, motion to vacate specifies that information. Further, we note that this Court has construed a motion to vacate an arbitration award as a notice of appeal for purposes of Rule 71B, which superseded § 6-6-15. Guardian Builders, LLC v. Uselton, 130 So. 3d 179, 182 (Ala. 2013). See also J.L. Loper Constr. Co. v. Findout Partnership, LLP, 55 So. 3d 1152 (Ala. 2010).2 Thus, we 2RJFS argues that under the authority of Moss v. Upchurch, 278 Ala. 615, 79 So. 2d 741 (1965), a party must strictly comply with the requisites of § 6-6-15 and that the Court in that case refused to accept a motion to vacate an arbitration award as a notice of appeal. Moss, however, is inapposite. In that case, a party sought to confirm an arbitration award under what is now Ala. Code 1975, § 6-6-12. The opposing parties filed pleas in abatement, which were overruled. Those parties then appealed to this Court. In dismissing the appeal, this Court noted that an award filed under the predecessor to § 6-6-12 did not become an appealable judgment and that that Code section provided no means for an appeal. 278 Ala. at 618-19, 79 So. 2d at 743. Instead, the means to appeal an arbitration award were found in what is now § 6-6- 15, and "[the] [a]ppellants did not invoke the aid of [the predecessor to § 6-6-15]." 278 Ala. at 619, 79 So. 2d at 744. The Court went on to state in dicta that the predecessor to § 6-6-15 contained "certain mandates" that must be met, and noted that there was no compliance with the predecessor to § 6-6-15 in that case because, among other things, "no notice of appeal was given." 278 Ala. at 619, 79 So. 2d at 745. Moss does not hold that a motion to vacate an arbitration award could not be considered a notice of appeal for purposes of § 6-6-15--the predecessor to that Code section had not been invoked at all. Thus, Moss is not authority on that point. 16 1130590; 1130655 conclude that, in substance, Honea's January 14, 2008, motion to vacate was a notice of appeal of the arbitration award. In Horton Homes, supra, this Court recognized that Rule 4, Ala. R. App. P., "expand[ed] the statutory time period for taking an appeal of an arbitrator's award from 10 days from the date of receipt of notice of the award to 42 days from that date" and that a party seeking review of an arbitration award "is required to file a motion to vacate" that award. 999 So. 2d at 466, 467. Here, Honea, within 42 days of the award, filed in the action pending in circuit court a motion to vacate that award, and such motions, this Court has recognized, can constitute a notice of appeal. Therefore, we hold that Honea timely filed a notice of appeal for purposes of § 6-6-15. RJFS also contends that Honea, contrary to the requirements of § 6-6-15, did not file "a copy of the [arbitration] award" with her January 14, 2008, filings. RJFS contends that the filing of a copy of the award is a requisite for review under § 6-6-15 and that Honea's failure to comply with the requirement is a jurisdictional defect. Although it appears from the record that a copy of the arbitration award was not included with Honea's motion to 17 1130590; 1130655 vacate, RJFS included a copy of the award with its February 14, 2008, response to Honea's January 14, 2008, motion to vacate the award. This was within the 42-day period required by § 6-6-15, as modified by Rule 4, Ala. R. App. P. Setting aside the issue whether a timely filing of a copy of the arbitration award is actually a jurisdictional requirement under § 6-6-15, it appears that the trial court nevertheless timely received a copy of the arbitration award, and there is no argument presented to this Court suggesting that, in this context, there is a material difference between Honea's filing the copy or the trial court's receiving it from another party. Thus, we hold that there is no merit to this argument. Finally, RJFS contends that the arbitration award was not entered as a judgment of the trial court until October 17, 2013, after this Court's judgment in Raymond James II and over five years after Honea filed the January 14, 2008, motion to vacate. This, RJFS contends, was untimely and, as a result, the trial court did not obtain jurisdiction over Honea's appeal of the arbitration award. As this Court noted in Raymond James II, the clerk's entry of an arbitration award under § 6-6-15 as a judgment of the circuit court is a jurisdictional requisite. However, the 18 1130590; 1130655 Code section does not specify a time in which this should occur. Additionally, this requirement that the arbitration award be entered was a duty of the circuit clerk and not an action Honea could perform. Finally, in numerous cases where it was found that the circuit clerk had failed to enter an arbitration award, this Court, rather than ordering a dismissal of the action, instead remanded the case for the circuit clerk to perform this duty. Raymond James II; supra; Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d 639, 642–43 (Ala. 2009) ("Because a conditional judgment was never entered on the arbitration award by the circuit clerk, we have no alternative but to dismiss the appeal. ... However, ... we hereby direct the appropriate circuit clerk ... to enter the arbitration award as the judgment of the court. Following the entry of that conditional judgment, Dawsey ... should follow the procedures set forth in Rule 71B, Ala. R. Civ. P. ..."); and Horton Homes, supra. We see no authority for the proposition that the circuit clerk's failure to enter the award as required by § 6-6-15 until October 2013 denies the trial court jurisdiction in the instant case. Therefore, we see no merit in RJFS's argument. 19 1130590; 1130655 We hold that the trial court had jurisdiction over Honea's motion to vacate the arbitration award. II. Case No. 1130590 In case no. 1130590, Honea contends that the trial court erred in allowing the motion to vacate the arbitration award to be denied by operation of law. In Horton Homes, supra, this Court held that a motion to vacate filed in an appeal of an arbitration award under § 6-6-15 is in the nature of a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate a judgment; additionally, such a motion is subject to Rule 59.1, Ala. R. Civ. P., which deems that certain postjudgment motions are denied by operation of law if they are not disposed within 90 days: "Rule 59(e), Ala. R. Civ. P., provides that a party has 30 days after the entry of judgment to file a motion to alter, amend, or vacate that judgment. Accordingly, borrowing from the spirit of Rule 59(e), we hold that a party desiring judicial review of an arbitration award pursuant to § 6–6–15 must file in the appropriate circuit court a motion to alter, amend, vacate, or set aside the award within 30 days of filing the notice of appeal of the arbitration award and the clerk's entry of the conditional judgment based thereon. If that motion is timely filed, the circuit court shall then have 90 days, unless that time is extended by the consent of all the parties, to dispose of the motion. See Ala. R. Civ. P. 59.1 ('A failure by the trial court to dispose of any pending post-judgment motion within [90 days], or any extension thereof, shall 20 1130590; 1130655 constitute a denial of such motion as of the date of the expiration of the period.')." Horton Homes, 999 So. 2d at 468 (footnote omitted). See Ace Title Loan, Inc. v. Crump, 14 So. 3d 94 (Ala. 2009), and Waverlee Homes, Inc. v. McMichael, 855 So. 2d 493, 495 (Ala. 2003) (deeming a motion to vacate a judgment entered on an arbitration award to be a motion under Rule 59(e) and denied by operation of law pursuant to Rule 59.1).3 Further, under Rule 71B, which replaced the procedure in § 6-6-15 and provides the procedure for appealing an arbitration award, a party challenging an arbitration award may file a motion to vacate under Rule 59, Ala. R. Civ. P., and such motions have been deemed by this Court to be denied by operation of law under Rule 59.1. See Terminix Int'l Co. v. Scott, 142 So. 3d 512, 525 (Ala. 2013). Honea argues that it was error for the trial court to allow her motion to vacate to be denied by operation of law. Specifically, in Raymond James I, this Court, pursuant to the terms of the arbitration agreement, directed the trial court 3There is no legal argument presented in the briefs on appeal contending that the time to rule on the motion to vacate was extended by the consent of the parties, as provided in Rule 59.1. 21 1130590; 1130655 to conduct a de novo review of the arbitration award. We stated that, under the arbitration agreement, "[p]resumably, the trial court is to review the evidence presented at the arbitration proceeding and make its own findings of fact and conclusions of law and enter a judgment accordingly. It is without dispute that the trial court did not purport to undertake such a review in this case because the transcript and exhibits were apparently never submitted to the trial court for consideration and are not a part of the record. ... Accordingly, the order entered by the trial court vacating the arbitration award in favor of RJFS must be reversed and the cause remanded for the trial court to conduct the de novo review contemplated by the arbitration provision. ... "...[B]ecause the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the parties, its judgment is nevertheless reversed and the cause is remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." Raymond James I, 55 So. 3d 1170. As noted in Raymond James II, the trial court conducted such a review and entered a judgment in favor of Honea. 141 So. 3d at 1014. However, the trial court never obtained jurisdiction to vacate the arbitration award because it had not been first entered as a judgment. 141 So. 3d at 1015. Honea contends that, after Raymond James II, the trial court was required to conduct another de novo review pursuant 22 1130590; 1130655 to the appellate mandate in Raymond James I; however, after the decision in Raymond James II, she argues, the trial court did not "expressly" consider the merits of Honea's motion. Instead, the motion was denied by operation of law pursuant to Rule 59.1. Thus, Honea contends, the trial court violated the appellate mandate of Raymond James I, and the denial is void.4 See Ex parte DuBose Constr. Co., 92 So. 3d 49, 58 (Ala. 2012) (holding that an order by a trial court that was outside the scope of an appellate mandate was void).5 It is unclear what additional consideration or review was required by the trial court--it had, after remand in Raymond James I, already conducted the mandated de novo review of the arbitration award, vacated the award, and entered a judgment 4Honea notes that a denial of her motion is a completely different result from the trial court's previous judgment, despite the fact that the substantive issues did not change in the intervening two years. Although a hearing was held on the motion to vacate, it was clear that the trial court heard only RJFS's arguments as to whether it had jurisdiction to proceed and did not consider the merits of Honea's motion to vacate. In fact, the trial court later scheduled a second hearing to hear Honea's motion. As noted above, that hearing was stayed by this Court at Honea's request. 5In Ex parte DuBose Construction, the trial court was directed by the Court of Civil Appeals to enter an order making specific findings of fact. The trial court instead dismissed the case. This Court held that the dismissal violated the appellate mandate and was thus void. 23 1130590; 1130655 in favor of Honea. Although RJFS subsequently argued that the trial court lost jurisdiction, it does not appear that any substantive facts or legal issues underlying any de novo review had changed or were different. In fact, Honea, in her motion for a de novo review filed after Raymond James II, noted that the trial court had already conducted a de novo review, had entered a judgment for Honea on "the precise issues now before the Court," and that the matter was "now ripe for adjudication." Thus, it does not appear that the trial court was required to undertake any new or additional actions to accomplish the mandate. In any event, the trial court did not enter a ruling on the motion to vacate, and it was denied by operation of Rule 59.1. Generally, a trial court's failure to rule on a post- judgment motion--resulting in a denial by operation of law pursuant to Rule 59.1--is, alone, not reversible error. Howard v. McMillian, 480 So. 2d 1251, 1252 (Ala. Civ. App. 1985) (holding that "[a]ny type of failure to rule upon such a motion during such period of time is adequate to bring Rule 59.1 into operation" and that an appellate court "will not place a trial court in error for its failure to rule upon a motion for a new trial within ninety days from its filing"), 24 1130590; 1130655 and Russell v. Russell, 610 So. 2d 391, 392 (Ala. Civ. App. 1992) ("Rule 59.1 ... provides that a post-judgment motion that is not ruled upon by the trial court within 90 days of filing is deemed denied. Failure to rule does not amount to an abuse of discretion."). The operation of Rule 59.1 "constitutes a denial of the motion," Williamson v. Fourth Ave. Supermarket, Inc., 12 So. 3d 1200, 1204 (Ala. 2009), and the motion is "deemed denied." Matador Holdings, Inc. v. HoPo Realty Invs., L.L.C., 77 So. 3d 139, 145 (Ala. 2011). See also Forehand v. Forehand, 680 So. 2d 380, 381 (Ala. Civ. App. 1996) ("The failure of the trial court to timely address such a motion constitutes a denial of the motion."). No distinction is made between a failure to rule that is deliberate and a failure to rule that is inadvertent. Ex parte Johnson Land Co., 561 So. 2d 506, 508 (Ala. 1990) ("[T]he operation of Rule 59.1 makes no distinction based upon whether the failure to rule appears to be 'inadvertent [or] deliberate ... [or] any other type of failure.'" (quoting Howard v. McMillian, 480 So. 2d 1251, 1252 (Ala. Civ. App. 1985))). Further, this Court "reviews the denial of a post-judgment motion by operation of law in the same manner as if the trial court had denied the motion by an order." King 25 1130590; 1130655 Motor Co. v. Wilson, 612 So. 2d 1153, 1157 (Ala. 1992). Given that allowing the operation of Rule 59.1 cannot per se be error, that the operation of the rule constitutes a denial of the motion, that there is no distinction between a deliberate failure to rule and an inadvertent failure to rule, and that a Rule 59.1 denial is treated no differently than an express denial, the trial court's failure in the instant case to rule on Honea's motion to vacate, and the resulting denial of the motion by operation of law, is, under Alabama law, treated no differently than if the trial court had expressly denied the motion. In the instant case, our decision in Raymond James I directed the trial court to rule on the motion to vacate based on its de novo review of the record in the arbitration proceedings. That instruction was followed, but the resulting judgment setting aside the award and entering an award for Honea was declared void in Raymond James II. After Raymond James II, there was nothing more for the trial court to do in relation to the de novo review but to enter a ruling: there was no change in the facts or substantive law; it was not necessary to again review the same record; all that was required was to rule on the motion. The ruling here--a Rule 26 1130590; 1130655 59.1 denial by operation of law--is treated no differently from an express, deliberate order by the trial court denying the motion after its de novo review. To treat it differently would create a distinction between a Rule 59.1 denial (either inadvertent or deliberate) and a denial by an express order; to do so would be to review the Rule 59.1 denial in a different manner than "if the trial court had denied the motion by an order." King Motor Co., 612 So. 2d at 1157.6 The motion was ruled upon; therefore, we cannot presume that the trial court violated the appellate mandate of Raymond James I. Honea also argues that the trial court erred in not holding a hearing on her motion to vacate. Under Rule 59(g), a party is entitled to a hearing on a Rule 59(e) motion if such a hearing is requested.7 "Rule 59(g), Ala. R. Civ. P., 6Even if the trial court's allowing the motion to be denied by operation of law had been inadvertent, it would be contrary to the above caselaw to treat that failure to rule differently from a situation where the trial court conducted a de novo review, decided that the motion to vacate should be denied, and then deliberately allowed the motion to be denied by operation of law instead of by express order. Unlike Ex parte DuBose Construction, no particular findings of fact were required to be included in any denial of the motion. 7Rule 59(g) states: 27 1130590; 1130655 provides that motions filed pursuant to Rule 59(e) 'shall not be ruled upon until the parties have had opportunity to be heard thereon.' In other words, 'when a hearing is requested pursuant to Rule 59(g), the trial court errs in not granting a hearing.'" Ware v. Deutsche Bank Nat'l Trust Co., 75 So. 3d 1163, 1172 (Ala. 2011) (quoting Unicare, Inc. v. Hood, 823 So. 2d 1252, 1253 (Ala. 2001)). Further, "[a] trial court's failure to conduct a hearing is error." Dubose v. Dubose, 964 So. 2d 42, 46 (Ala. Civ. App. 2007). These principles apply in both an express denial of a postjudgment motion and a denial by operation of law. Further, in Terminix International Co. v. Scott, supra, this Court specifically applied those principles in the context of a denial by operation of law of a motion to vacate an arbitration award. Nevertheless, the failure to conduct a hearing under Rule 59(g) is not always a reversible error: "Presentation of any post-trial motion to a judge is not required in order to perfect its making, nor is it required that an order continuing any such motions to a date certain be entered. All such motions remain pending until ruled upon by the court (subject to the provisions of Rule 59.1), but shall not be ruled upon until the parties have had opportunity to be heard thereon." 28 1130590; 1130655 "Although it is error for the trial court not to grant such a hearing, this error is not necessarily reversible error. For example, if an appellate court determines that there was no probable merit to the motion, it may affirm based on the harmless-error rule. See Rule 45, Ala. R. App. P.; and Kitchens v. Maye, 623 So. 2d 1082, 1088 (Ala. 1993) ('failure to grant a hearing on a motion for new trial pursuant to Rule 59(g) is reversible error only if it "probably injuriously affected substantial rights of the parties"')." Flagstar Enters., Inc. v. Foster, 779 So. 2d 1220, 1221 (Ala. 2000). Therefore, in the instant case, we must determine whether there was "probable merit" in Honea's motion to vacate that would have entitled her to a hearing. Terminix, 142 So. 3d at 524; Flagstar Enters., Inc., 779 So. 2d at 1221; and Dubose v. Dubose, 964 So. 2d at 46 ("When there is probable merit to the motion, the error cannot be considered harmless."). On appeal, Honea contends that there was "probable merit" to her motion to vacate the arbitration award because, she says, the arbitration panel erroneously concluded that her breach-of-contract claims were barred by the statute of limitations. Specifically, she argues that her claims were not barred because: (1) they "sounded in trust," and the statute of limitations for such claims would not have accrued until the time she closed her accounts, which was after her 29 1130590; 1130655 lawsuit was filed, and (2) her breach-of-contract claims accrued within the six-year statutory limitations period for such actions. Honea argues that the arbitration panel erroneously concluded that her claims were barred by the statute of limitations because, she says, her claims "sounded in trust," and such claims would accrue, and the statute of limitations would not begin to run, until she closed her accounts in April 2006, after her complaint was filed in March 2006. See McCormack v. AmSouth Bank, N.A., 759 So. 2d 538, 542 (Ala. 1999) (discussing authority holding that the statute of limitations does not run between trustees and beneficiaries so long as the trust relationship exists). Under this theory, Honea contends that there is "probable merit" in her claim that the arbitration panel erred in concluding that her claims against RJFS were time-barred. RJFS, however, argues that Honea is unable to demonstrate that the accounts in this case were a trust. "This Court has held consistently that no particular form of words is required to create a trust, but that any instrument in writing signed by the parties, or party, at the time of the trust's creation, or subsequently, will suffice, if the nature, subject matter, and objects of the trust and 30 1130590; 1130655 manifested with reasonable certainty by the instrument." Jones v. Ellis, 551 So. 2d 396, 399 (Ala. 1989). The intent of the parties to create a trust must be manifested and proven: "There is no trust unless an intention to create one is manifested. ... The burden of proof is on the party seeking to establish the existence of the trust and that burden is to present clear and definite evidence, without reasonable doubt as to the existence of the trust." Osborn v. Empire Life Ins. Co. of America, 342 So. 2d 763, 765 (Ala. 1977). Furthermore, to create a trust, the settlor cannot retain title to the property of the trust: "'A conveyance in trust is incomplete unless the settlor has passed the title to the property to the trustee by delivery of the subject matter of the trust or of an instrument of transfer. On the other hand, if the conveyance in trust is completed by such delivery, the trust is not incomplete merely because the settlor reserves power to revoke or to alter the trust. There is sufficient surrender of control over the property if the settlor transfers the title to it to the trustee, even though he reserves power to undo what he has done. The surrender of control is sufficient even though the settlor reserves power to reassume the control.'" Coosa River Water, Sewer & Fire Prot. Auth. v. SouthTrust Bank of Alabama, N.A., 611 So. 2d 1058, 1062 (Ala. 1993) (quoting 1 William F. Fratcher, Scott on Trusts § 37 (1987)). 31 1130590; 1130655 Additionally, although a settlor can retain power over the administration of the trust, that power cannot amount to "ownership" of the trust estate: "'[W]here the powers retained by the settlor amount, in cumulative effect, to ownership of the trust estate, with such control over the administrative functions of the trustee as to make of him simply the settlor's representative, no valid trust is established.'" Coosa River, 611 So. 2d at 1062 (quoting 76 Am. Jur. 2d Trusts § 29 (1992)). RJFS contends that there is no "probable merit" in any claim that there is clear and definite evidence that a trust was created in this case. In both her initial brief and reply brief, Honea's argument on appeal that her brokerage account amounted to a trust is that she "relinquished control of her funds" and "sole investment authority" to RJFS. RJFS, on the other hand, argues that it did not have "sole control" over the alleged trust property. Specifically, RJFS points to a document titled "Discretionary Client Agreement," which appears to be part of the contractual agreement in this case. It states in paragraph 8 that "[Raymond James] [i]s authorized to follow the instructions of [Honea] in every respect concerning [Honea's] account." RJFS also cites to portions of 32 1130590; 1130655 the record indicating that Honea directed Michaud to make certain trades with account funds. RJFS also contends that there was no manifest intention to create a trust. In May 1997, Honea executed a "New Account Form." This form contains an area titled "Account Classification" that has several boxes from which to select. One box was for a "Trust" account; however, it was not selected by Honea.8 Additionally, in the Discretionary Client Agreement, Michaud is appointed by Honea as her "Investment Manager." Those documents, RJFS argues, indicate that there was no intent to create a trust and, instead, that "Honea's discretionary account created a typical agency relationship." Finally, RJFS argues that Honea has not met her burden in establishing that title to investments was transferred to Raymond James and points to documents in the record that an account was instead titled in Honea's name. Further, paragraph 3 of the Discretionary Client Agreement states that the "manager" of the account "shall assume all investment duties with respect" to the assets held in the account and may take any action deemed appropriate, "with or without the 8In fact, it does not appear from the copy of the form in the record that any boxes were selected. 33 1130590; 1130655 consent of the client." However, the manager was "not authorized to withdraw any monies or securities from the account." RJFS presents evidence indicating that Honea retained some control over the accounts, that there was no manifest intent to create a trust, and that RJFS did not obtain title to the trust property. Therefore, Honea has not demonstrated "probable merit" in her argument that the statute of limitations applicable to actions on trusts applies in her case; thus, she has not demonstrated that she was entitled to a hearing on that issue. Therefore, we conclude that, in this regard, the trial court's failure to conduct a hearing under Rule 59(g) was harmless. Flagstar Enters., Inc., 779 So. 2d 1121. As to whether Honea demonstrated potential merit in her breach-of-contract claims, the analysis provided by both sides in their briefs is limited. Honea argues that her complaint, filed in March 2006, was filed within the six-year statutory limitations period as to any claims that accrued after March 2000. See Ala. Code 1975, § 6-2-34(9) (providing generally for a six-year statute of limitations in an action on a 34 1130590; 1130655 contract). Honea cites to the following provision in the client agreement: "Applicable Regulations: (a) I understand and agree that every transaction in my account is subject to the rules or customs in effect at the time of the transaction which, by the terms of the rule or custom, applies to the transaction. These rules or customs include state and federal laws, rules and regulations established by state or federal agencies, the Constitution, rules, customs and usages of the applicable exchange, association, market or clearinghouse or customs and usages of individuals transacting business on the applicable exchange, market or clearinghouse." (Emphasis added.) Under this provision, Honea contends that the rules of the Financial Industry Regulatory Association, Inc. ("FINRA"), applied to every transaction by RJFS in this case. Honea states in her brief that Michaud had "a duty to know Honea, her knowledge, her background in securities, and her goals" and that his "[r]ecommendations for trades were required to be made based on that knowledge." According to Honea, in 1997 RJFS and Michaud created an investor profile that inaccurately characterized her as having extensive investment experience with stocks, bonds, and mutual funds when, in fact, Honea maintains, that characterization was untrue. Further, she could not recall Michaud ever discussing 35 1130590; 1130655 with her investment terms such as "growth," "high risk," "speculation," or "risk tolerance," and they did not discuss trading on margin. She further asserts that she never gave Michaud authority to put her portfolio "at risk" and that "he never advised her that he would engage in a high-risk strategy." The arbitration panel apparently agreed that Michaud had failed to properly "know" his client. It stated: "The Panel makes an express finding that Respondent Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the panel held that Honea's breach-of-contract claims were "all barred by the applicable statutes of limitations." On the other hand, RJFS argues that those claims were, as the arbitration panel found, untimely and that any breach of contract occurred more than six years before the complaint was filed. Specifically, RJFS points to evidence indicating that Honea's expert testified that her account was "unsuitable" in February 1999. Additionally, as noted above, Honea claims that RJFS created an erroneous investor profile in 1997. Thus, according to RJFS, those purported breaches of the 36 1130590; 1130655 contract occurred before March 2000, despite the fact that more harm resulted after March 2000. See AC, Inc. v. Baker, 622 So. 2d 331, 335 (Ala. 1993) ("The statute of limitations on a contract action runs from the time a breach occurs rather than from the time actual damage is sustained."). Nevertheless, RJFS points out, Honea waited until 2006 to file her action. To the extent that RJFS's breaches of its contractual duties were related to Michaud's failure to know Honea, the creation of an inappropriate investor profile, and an "unsuitable" account, it would appear such breaches occurred, and the statute of limitations began to run, long before March 2000. Thus, Honea has not demonstrated "probable merit" on those claims for purposes of a hearing under Rule 59(g), and the denial of the motion on those claims--without a hearing-- is affirmed. Honea further appears to contend, however, that RJFS also breached its contractual duties by making unauthorized or improper trades, that some of those trades occurred after March 2000, and that such activity constituted separate breaches of its duties. Specifically, her statement of facts notes that, after March 2000, Michaud improperly traded 37 1130590; 1130655 extensively on margin, which Honea contends made her losses much worse. Honea also claims that her account lost funds after March 2000 because of subsequent excessive, overly aggressive, and high-risk trading, as well as improper diversification. Honea, quoting expert testimony from the arbitration proceeding, states: "Under the standards and duties applicable to brokers, even on 'discretionary' authorization, 'a broker cannot make a recommendation [for a trade] that's unsuitable even if it's what the customer says that's what they want.' Michaud's duty as a broker was to determine whether Honea's portfolio and its holdings were suitable for Honea; that duty was constant." (Citations omitted.) Honea contends that she is seeking damages specifically for claims related to actions by RJFS that occurred after March 30, 2000. RJFS maintains, citing Catrett v. Baldwin County Electric Membership Corp., 996 So. 2d 196, 202 (Ala. 2008), that Alabama law does not recognize a "continuing contract" exception to the statute of limitations; thus, according to RJFS, "the multiple transactions in Honea's accounts constitute one alleged breach of contract." It argues: 38 1130590; 1130655 "Alabama law is clear: '[i]f there is a single assent to a whole transaction involving several things or acts, there is only one contract....' AC, Inc. v. Baker, 622 So. 2d 331, 334 (Ala. 1993) (internal quotation marks omitted). A single Client Agreement applies to Honea's discretionary account with Raymond James." Further, as noted above, RJFS argued in its brief that the evidence demonstrated that breaches alleged by Honea occurred before March 2000. RJFS also contends that Honea knew of her investment losses and the types of investments in her accounts at the latest in February 2000 when she received her January account statement reflecting a loss of over $300,000. Although it is true that one contract appears to govern this case and that RJFS breached its duties by failing to properly understand Honea's investment knowledge before March 2000, Honea contends that allegedly improper transactions--the excessive use of margin and overly aggressive, high-risk trading occurring after March 2000--represent independent breaches of the FINRA rules. Those claims accrued within the six-year limitations period before her complaint was filed. Further, any knowledge by Honea of her losses does not mean that the trading activity was proper. Thus, to the extent that any transactions after March 2000 would be considered separate breaches of contract unrelated to the failure to 39 1130590; 1130655 properly know Honea, her holdings, or her investment experience, or setting up an "unsuitable" account, Honea has demonstrated probable merit--for purposes of a Rule 59(g) hearing--that those claims would not be barred by the statute of limitations. Honea also claims that Raymond James failed to properly supervise Michaud. She argues that under the FINRA rules Raymond James was required to supervise Michaud and that, although Raymond James approved Michaud for discretionary trading only as to mutual funds, Michaud nonetheless subsequently traded high-risk stocks in Honea's accounts. RJFS points to evidence indicating that Michaud was approved for discretionary trading in 1996 and that a supervisor failed to review Michaud's trading in 1997, which would have occurred more than six years before the case was filed. However, nothing before us suggests that any purported failure by Raymond James to supervise Michaud that occurred after March 2000 would be barred by the statute of 40 1130590; 1130655 limitations; thus, Honea demonstrated probable merit to warrant a hearing under Rule 59(g) on this claim.9 Conclusion Honea has demonstrated that, in relation to the certain breach-of-contract claims identified above, she is entitled to a Rule 59(g) hearing on her motion to vacate the arbitration award; thus, in case no. 1130590, we affirm in part, reverse in part, and remand for proceedings consistent with this opinion. Further, for the reasons stated above, RJFS's appeal in case no. 1130655 is dismissed. 1130590--AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. Stuart, C.J., and Bolin, Parker, Bryan, and Sellers, JJ., concur. Shaw, J., concurs specially. Murdock, Main, and Wise, JJ., dissent. 9In holding that Honea, for purposes of Rule 59(g), demonstrated probable merit on some her claims, this Court should not be construed to express any opinion on the substantive merit of those claims. 41 1130590; 1130655 1130655--APPEAL DISMISSED. Stuart, C.J., and Bolin, Parker, Bryan, and Sellers, JJ., concur. Shaw, J., concurs specially. Murdock, Main, and Wise, JJ., concur in the result. 42 1130590; 1130655 SHAW, Justice (concurring specially). I concur in the main opinion. I write specially to respond to Justice Murdock's dissenting opinion. First, let this be abundantly clear: the appellant in case no. 1130590, Kathryn L. Honea, has in no way been deprived of the opportunity to have a de novo review of the arbitration award at issue in this case after this Court's remand to the trial court in Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013) ("Raymond James II"). In fact, Honea specifically asked for such de novo review in her subsequently filed motion to vacate the arbitration award. If there is any error in the denial of that motion, she could have, in this very appeal, directly challenged that denial on the merits.10 W h e t h e r t h e arbitration provision in this case provides simply for an appeal of an arbitration award or for an "independent, judicial adjudication," as Justice Murdock contends, is of no 10As noted in the main opinion, Honea's only arguments as to the merits were found in a narrow argument related to whether she was entitled to a hearing on her postjudgment motion. 43 1130590; 1130655 consequence. ___ So. 3d at ___. Honea has twice had the opportunity for a "de novo review" of the arbitration award directed by this Court's prior decision in Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"), specifically, in the proceedings following this Court's decision in Raymond James I and in the proceedings following Raymond James II. Nevertheless, I will briefly discuss the issue. Justice Murdock contends that the arbitration provision provides a "special avenue" for the circuit court to perform an "independent, judicial adjudication as to Honea's claims based on that court's de novo review of the record." ___ So. 3d at ___, ___. I disagree. I believe that what is called for in this case is an appeal of the arbitration award with a de novo standard of review; I believe so because: (1) a party cannot seek judicial review of an arbitration award absent statutory authority, and such authority calls for an "appeal"; (2) the arbitration provision at issue in this case waives the right to seek remedies in court; and (3) the arbitration provision calls for what it describes as an "appeal." 44 1130590; 1130655 This Court long ago stated: "In the absence of a statute authorizing it, an appeal, writ of error, or other revisory remedy, will not lie to any court from the award of arbitrators." Collins v. Louisville & Nashville R.R., 70 Ala. 533, 533 (1881). The Court in Collins noted, however, that, under § 3547 of the Code of 1876, now codified as Ala. Code 1975, § 6-6-15, an arbitration award could be entered as a judgment of the trial court, set aside, and then appealed. Id. As we later explained: "Th[e] method of appeal for review of an award as provided in [Title 7, § 843 of the 1940 Code, which is the successor to § 3547 of the 1876 Code, and is now § 6-6-15], is exclusive at law; it precludes all other challenges at law if notice has been given as mandated by said section." Moss v. Upchurch, 278 Ala. 615, 620, 179 So. 2d 741, 745 (1965) (emphasis added). Thus, presumably, for a court to exercise "review" of an arbitration award, there must exist statutory authority, and that authority is § 6-6-15. In Horton Homes, Inc. v. Shaner, 999 So. 2d 462, 467 (Ala. 2008), this Court discussed the process for appealing an arbitration award under § 6-6-15 and 45 1130590; 1130655 noted, among other things, that "[a] party seeking review of an arbitration award is required to file a motion to vacate" that award after it has been entered as a judgment of the trial court.11 Honea and Raymond James Financial Services, Inc. ("Raymond James"), had agreed to arbitrate any claims between them instead of pursuing a remedy in court. The arbitration provision states: "The parties are waiving their right to seek remedies in court, including the right to trial by jury." The arbitration provision further provides: "A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." 11Rule 71B, Ala. R. Civ. P., now controls appeals from arbitration awards. It supersedes Ala. Code 1975, § 6-6-15, which previously controlled arbitration appeals and which, in Raymond James II, this Court held applied in this case, a case that originated before the adoption of Rule 71B. 46 1130590; 1130655 (Emphasis added.) The express agreement is that the parties have waived judicial remedies, i.e., they cannot file an action "in court." This is contrary to any notion that the arbitration provision provides for an "independent, judicial adjudication" by a "court" to settle the disagreement between them. ___ So. 3d at ___ (Murdock, J., concurring in the result in case no. 1130655 and dissenting in case no. 1130590). Further, according to the arbitration provision, the parties may have the circuit court "enter judgment" on the resulting arbitration award; this is just what § 6-6-15 and caselaw required in appeals from an arbitration award. The provision also provides that the parties then may "appeal" that judgment under certain circumstances if they so choose. If such an "appeal" takes place, then the reviewing court examines the record ("the transcript and exhibits of the arbitration hearing") of the arbitration proceeding. A standard of review for such "appeal" is provided--de novo. That this process is an "appeal" is demonstrated by the fact that the circuit court, as in any other "appeal," reviews the record and does not have a new trial or allow the parties to present evidence. 47 1130590; 1130655 See generally Raymond James I (reversing the trial court's order setting for trial Honea's challenge to the arbitration award and directing the trial court instead to conduct a de novo review). I submit that the language in the arbitration provision constitutes an agreement to waive the parties' traditional judicial remedies, to have an arbitrator decide their claims, to have the subsequent arbitration award entered as a judgment of the circuit court, and, if there is a challenge to the arbitration award, to allow an "appeal" to be heard by the circuit court by a de novo consideration of the record. These post-arbitration-award procedures set out in the arbitration provision comply with the statutory scheme set out in § 6-6-15. Nothing in the arbitration provision suggests an attempt to create procedures outside those of the arbitration- award appeal process provided by law. I submit that the scheme found in the arbitration provision is completely contrary to allowing what Justice Murdock describes as a "new, independent adjudication" by a court or a "right to obtain, in substitution for the arbitration award, an independent 48 1130590; 1130655 judgment of the circuit court." ___ So. 3d at ___, ___ (emphasis omitted). To say that what is described in this "appeal" as a de novo review of the record--as the arbitration provision describes it--is not really an appeal but a "new, independent adjudication" "to obtain, in substitution for the arbitration award, an independent judgment of the circuit court," id., which remedy by a court the parties were actually waiving, is to "mistakenly perceive[]" the express terms of the arbitration agreement. ___ So. 3d at ___. Justice Murdock states that "Honea never attempted to file an appeal of the arbitration award under the standards and procedures provided in §§ 6-6-14 and -15." ___ So. 3d at ___. I respectfully disagree; as discussed in the main opinion, that is exactly what Honea filed on January 14, 2008. That filing makes no claim that Honea was seeking an independent adjudication; instead, she moved to vacate the award, which was the standard way parties initiated an arbitration appeal under § 6-6-15. Horton Homes, 999 So. 2d at 467 ("A party seeking review of an arbitration award [under § 6-6-15] is required to file a motion to vacate ...."). The 49 1130590; 1130655 motion to vacate even cited grounds under § 6-6-14--that the arbitration panel was biased. Such a ground for setting aside an arbitration award is specifically stated in § 6-6-15, which incorporates § 6-6-14. Honea also contended that the arbitration panel that decided her claims "exhibited a manifest disregard of the law," a ground for an arbitration appeal under §§ 6-6-14 and -15 previously recognized by the decision in Birmingham News Co. v. Horn, 901 So. 2d 27 (Ala. 2004). But see Hereford v. D.R. Horton, Inc., 13 So. 3d 375, 381 (Ala. 2009) (overruling Birmingham News on this issue). Thus, Honea's January 14, 2008, motion to vacate clearly sought review of the arbitration award under the statutory authority of § 6-6-15 and by the procedures for such a challenge provided by caselaw, all of which is consistent with the language of the arbitration provision.12 12Justice Murdock states that Honea attempted "to fit" the "'holes' prescribed by § 6-6-15" "in the wake" of Raymond James II. ___ So. 3d at ___. But as can be seen above, she specifically attempted to "fit" these "holes" in her very first post-arbitration filing, namely, "from the beginning," years before Raymond James II was decided. ___ So. 3d at ___. 50 1130590; 1130655 It is true that the trial court had jurisdiction over the initial lawsuit filed by Honea in the trial court. This makes no difference when it comes to § 6-6-15: that Code section explicitly recognizes that an action might first be filed in court before the arbitration occurs and thus directs that the notice of appeal from the arbitration award is to be filed in the court "where the action is pending." § 6-6-15. See also Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d 639, 641–42 (Ala. 2009) (noting that, although a trial court had jurisdiction over a case it stayed pending arbitration, the parties must still subsequently comply with § 6-6-15 in an appeal). I do not accept the idea that the arbitration provision here calls for a review of the arbitration award under "common law" and, thus, that the provided statutory procedures in § 6- 6-15 governing appeals for what the arbitration provision here describes as an "appeal" do not apply. For this to occur, it appears that a party need only disclaim the applicability of § 6-6-15 (or now Rule 71B, Ala. R. Civ. P.) and rely on language in the arbitration agreement specifying a post- 51 1130590; 1130655 arbitration-award procedure to support the idea that there is no "appeal" under § 6-6-15 or Rule 71B even if the language designates the procedure as an "appeal." Such a holding would drastically rewrite the law governing arbitration appeals. To provide that final arbitration awards may be "intercept[ed]," ___ So. 3d at ___ n. 24, in undefined common-law challenges that fall outside the very specific strictures and procedures of § 6-6-15 or Rule 71B, and without any statutory authority, would render great uncertainty in the finality of arbitrations. Because Honea's post-arbitration actions initiated an appeal under § 6-6-15, Raymond James II correctly held that the arbitration award had to be entered as the judgment of the trial court before it could be vacated. There is a great deal of authority requiring this result, and that authority at times casts this as an issue of a lack of "jurisdiction" even if the trial court had jurisdiction over the initial action that was subsequently sent to arbitration. See, e.g., Parham v. American Bankers Ins. Co. of Florida, 24 So. 3d 1102, 1104 (Ala. 2009) (discussing a trial court's inability to set aside 52 1130590; 1130655 an arbitration award without first entering the award as a judgment of the court under § 6-6-15 as a lack of "subject- matter jurisdiction"); Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d at 641–42 ("[N]otwithstanding the fact that the trial court had jurisdiction over the case when it stayed the case pending arbitration, ... the same trial court lacked jurisdiction to subsequently rule on a motion to vacate the resulting arbitration award until the circuit clerk entered the arbitration award as the judgment of the court."); Championcomm.net of Tuscaloosa, Inc. v. Morton, 12 So. 3d 1197 (Ala. 2009) (same); Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008); and Jenks v. Harris, 990 So. 2d 878 (Ala. 2008). In any event, even if the holding in Raymond James II was incorrect--and I submit that it was not--that is ultimately of no consequence because, after that decision, Honea was placed in the very same position she was in the day she filed her first motion to vacate the arbitration award on January 14, 2008, and the day after this Court's previous decision in Raymond James I, which directed a de novo review. In other 53 1130590; 1130655 words, after Raymond James II, Honea asked for her de novo review. Nothing in Raymond James II required otherwise or impacted her ability to do so.13 13Raymond James II addressed what must occur under § 6-6- 15, a Code section that has been superseded. Any precedent found in that decision will have little, if any, application in the future. Justice Murdock argues that the ex mero motu setting aside of Raymond James II is supported by Ex parte Discount Foods, Inc., 789 So. 2d 842 (Ala. 2001). That case set aside a plurality opinion whose "precedential value" was "questionable at best." 789 So. 2d at 845. Further, the plurality decision had been sub silentio disapproved in a subsequent decision. But Justice Murdock does not simply suggest that we overrule a prior decision and direct the trial court to apply new or corrected law, as was the case in Discount Foods; instead, he suggests that the entire procedural history of the case be rewound for a judicial mulligan. That is completely unnecessary--there were already two such second chances for a de novo review after Raymond James I and again after Raymond James II. 54 1130590; 1130655 MURDOCK, Justice (concurring in the result in case no. 1130655 and dissenting in case no. 1130590). These cases comes to us on appeal for the third time from the Jefferson Circuit Court. The October 2013 judgment at issue in these cases resulted from the recording, or entry, by the circuit court clerk of the 2008 arbitration award that had previously been rejected by that same circuit court in both Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"), and Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013)("Raymond James II"). This entry occurred as a consequence of this Court's decision in Raymond James II and does not represent the de novo review of the 2008 arbitration decision to which Kathryn L. Honea is entitled. Because I believe Raymond James II was erroneously decided, I would overrule that decision and reinstate the judgment the circuit court entered based on the de novo review it conducted on remand from Raymond James I. For this reason, I respectfully dissent as to the Court's decision in Honea's appeal, case no. 1130590. That said, because the majority of the Court declines to take this approach and instead proceeds to discuss 55 1130590; 1130655 the merits of the statute-of-limitations issues relating to Honea's claims, I will extend this writing to do so as well. I concur in the result as to the dismissal of the cross- appeal of Raymond James Financial Services, Inc. ("Raymond James"), and its employee, Bernard Michaud (hereinafter referred to collectively as "RJFS"), case no. 1130655, and to the denial of RJFS's motion to dismiss Honea's appeal. I. Arbitration "Appeal" Procedures A. Facts and Procedural History In May 1997, Honea opened multiple investment accounts with Raymond James. Honea and Raymond James signed a client agreement, which provided that all disputes between them would be submitted to arbitration. However, the arbitration agreement also contained the following provision: "(b) We agree that in any arbitration the arbitrators will resolve the dispute in accordance with applicable law and will be required to furnish us with a written decision which must explain the reasons for their decision. ... "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the 56 1130590; 1130655 arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." (Emphasis added.) 1. Original Circuit Court Proceedings On March 30, 2006, after losing significant assets as a result of RJFS's allegedly wrongful brokerage practices, Honea sued RJFS in the Jefferson Circuit Court. Honea alleged violations of the Alabama Securities Act and sought damages for breach of contract, breach of fiduciary duty, negligence, wantonness, and fraud. On April 7, 2006, RJFS filed an "Unopposed Motion to Compel Arbitration" of Honea's claims. In that motion, RJFS requested that the circuit court "enter an order compelling arbitration of this dispute and staying further proceedings in this action until arbitration has been completed" and alleged that Honea "[did] not oppose the relief requested in this motion." (Emphasis added.) The circuit court entered an order granting RJFS's motion. The order states: "[T]he Unopposed Motion to Compel Arbitration filed by [RJFS] is hereby GRANTED and all parties herein are hereby ORDERED to submit this cause to binding 57 1130590; 1130655 Arbitration and file an Arbitration Report herein at the completion of said Arbitration detailing all findings and awards of the Arbitrator so this cause may be disposed of at said time. All proceedings in this cause are hereby STAYED pending said Arbitration." (Capitalization in original; emphasis added.) The circuit court's order did not specify a time within which the parties were obligated to file the described report, other than "at the completion of" the arbitration; nor is it clear that separate reports by each party were required in order satisfy the court's directive. Further, the order did not by its terms require that the parties submit an actual copy of the award. On January 3, 2008, the arbitration panel unanimously entered an award in favor of RJFS. On January 14, 2008, Honea filed with the circuit court a "Motion to Vacate the Arbitration Award." The motion to vacate detailed the findings and awards of the arbitrators and included allegations that the arbitrators had "manifest[ly] ... 58 1130590; 1130655 disregard[ed] the law."14 Honea's filing subsequently was described by the circuit court as follows: "The Motion to Vacate contained various statements positively identifying the judgment, i.e., the award, appealed from, properly named the 'appellees,' and was filed in the appropriate court. The motion to vacate also contained various quotes from the Award and referenced the Award as Exhibit A thereto. The clerk's record, however, does not contain the exhibits referenced in the motion to vacate, including the Award." On February 14, 2008, RJFS filed a response to Honea's filing in the circuit court. RJFS made no objection to any alleged failure or insufficiency of Honea's filing relative to the post-arbitration filing requirements imposed upon both parties by the circuit court's order. Nor did RJFS complain that Honea should be proceeding under some different, statutory, post-arbitration filing requirements that Honea's filing did not satisfy. Instead, RJFS simply responded on the merits to Honea's filing. Specifically, RJFS filed a written opposition in which it argued merely that the arbitrators had properly applied the law and that, even if they had not, any 14Honea's motion to vacate also sought an order authorizing discovery as to the alleged bias of one of the arbitrators. 59 1130590; 1130655 error did not justify a vacatur of the award because the error did not rise to the level of "manifest disregard of the law." Furthermore, RJFS itself submitted to the circuit court as part of its filing a complete copy of the arbitration award. The award itself is rather brief and, consistent with the description of its terms set out in Honea's filing, reads, in material part, as follows: "Claimant's claims for violation of § 8-6-19 of the Alabama Securities Act; statutory and common law fraud; breach of fiduciary duty; negligence; fraud; and wantonness are dismissed with prejudice. "Claimant's claim for breach of contract is denied. The Panel makes an express finding that Respondent Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in Claimant's account. However, Claimant's claims are all barred by the applicable statutes of limitations. ".... "Any and all claims for relief not specifically addressed herein, including Claimant's requests for punitive damages and attorneys' fees, are denied." As the circuit court later noted, the arbitration award itself, therefore, has been of record since February 14, 2008. 60 1130590; 1130655 On February 27, 2008, the circuit court responded to the parties' post-arbitration filings with the following order: "The parties having orally announced to the Court their inability to be prepared to argue the Motion to Vacate Arbitration Award previously filed herein and set for hearing before the undersigned ... due to the difficulty in securing a written transcript of the proceedings before the Arbitrator, the Order entered by this Court setting the hearing ... is hereby withdrawn and held for naught and the said hearing is hereby cancelled. The Plaintiff and Defendants are hereby ORDERED and DIRECTED to file with the Court a written request for status conference within ten (10) days upon receipt of the transcribed transcription of the proceedings before the Arbitrator." (Capitalization in original.) On October 17, 2008, Honea filed a "Submission in Support of Vacatur of Arbitration Award." In the submission, Honea argued that she was "entitled to a de novo review of the arbitration award made between the parties hereto before this Court" based on the contractual provision quoted above. Honea attached a copy of the arbitration award as an exhibit to her submission. On October 31, 2008, RJFS filed a response to Honea's submission. In addition to restating the arguments from its response to Honea's motion to vacate, RJFS argued that, 61 1130590; 1130655 despite the provisions in the parties' arbitration agreement providing for de novo review, Honea was not entitled to such a review in light of the United States Supreme Court's decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008). Honea filed a reply to RJFS's response, arguing that, in light of the de novo-judicial-review provision agreed to by Honea and Raymond James as part of their arbitration agreement, RJFS had forgone the right to rely on the exclusivity provisions of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), as discussed in Hall Street. Honea contended that Hall Street did not preclude such a waiver, nor did it preclude such review of an arbitration award as may be available under state law. Honea further contended that, if the judicial-review provision of the parties' arbitration agreement was void, the entire arbitration agreement must fail because such review was an "important consideration" for the agreement. See Ex parte Warren, 718 So. 2d 45, 48 (Ala. 1998)("[W]here it is clear that a specific failed term of an arbitration agreement is not 62 1130590; 1130655 an ancillary logistical concern but, rather, is as important a consideration as the arbitration agreement itself, a court will not sever the failed term from the rest of the agreement and the entire arbitration provision will fail."). On July 20, 2009, the circuit court entered an order citing the parties' arbitration agreement and concluding that Honea was entitled to de novo review by the court as provided in that agreement. The circuit court explained in its order: "[T]he Supreme Court made it clear that its opinion in Hall Street 'addressed ... only ... the scope of the expeditious judicial review under §§ 9, 10 and 11 of the FAA, deciding nothing about other possible avenues for judicial enforcement of arbitration awards.' Hall Street, supra. 128 S. Ct., at 1407. "The Supreme Court went on to note the exceptions of state statutory and common law that may permit review. Id. Thus, the FAA does not preempt state law regarding proceedings to enforce or vacate arbitration awards. It applies only to proceedings under §§ 9, 10 and 11 of the FAA. "Here, because neither party has sought expeditious judicial enforcement under §§ 9, 10 and 11 of the FAA, the issue addressed in Hall Street, the Court must consider Alabama law. The Alabama Arbitration Act provides for the review of arbitration awards essentially on the same grounds as the FAA. Thus, neither the FAA nor the Alabama Act would permit judicial review of an arbitration award. The Alabama arbitration statute does not preempt Alabama common law. In fact, the statute 63 1130590; 1130655 expressly reserves arbitration at common law. (See Ala. Code [1975,] § 6-6-16). As noted, the Supreme Court in Hall Street also stated that state common law may allow for review." The circuit court thus concluded that the provision for de novo review by the circuit court, as agreed to by RJFS and Honea in the same agreement that provided for any arbitration at all, was enforceable under the common law according to its terms. Further, the circuit court concluded that, "[e]ven if the FAA did provide the exclusive grounds for the enforcement of arbitration awards, defendants have waived their right, and are estopped, to rely on the FAA's review provision. ... By providing for appeal rights in the Agreement that are not included in FAA, defendants expressed their intention not to rely on the review rights provided by the FAA, and thus have waived their right to rely on the FAA." The circuit court also stated: "[T]he very provision that provided for arbitration of this dispute in the first place also provided for de novo review in this Court in the event of certain possible outcomes of the arbitration, one of which occurred here. Defendants moved to compel arbitration based on such arbitration provision, attaching the entire arbitration provision to its motion to compel arbitration. Defendants then obtained an order compelling arbitration based on such provision, but now ask this Court not to enforce all the rights thereunder. Estoppel operates to prevent such results." 64 1130590; 1130655 (Emphasis added.) And, the circuit court further concluded, "the arbitration provision ... formed one integrated provision of the Agreement. Because it is only one integrated provision, if any part thereof is to be severed, the entire arbitration provision is to be severed. ... To strike the review provision but to keep the other parts of the arbitration provision would thwart the object of the agreement to arbitrate." Finally, the circuit court stated that the arbitration award was due to be vacated because the arbitration was not conducted pursuant to the applicable arbitration rules of the National Association of Securities Dealers. The circuit court's order concludes: "Accordingly, it is hereby ORDERED and ADJUDGED as follows: "1. That the arbitration award made between the parties hereto is hereby vacated; and "2. A Status Conference is hereby set before the undersigned on AUGUST 28, 2009, at 10:00 a.m., to establish a schedule of deadlines for the entry of a Scheduling Order and Trial Setting, consistent with this Order." (Capitalization in original.) 2. Raymond James I RJFS appealed to this Court to challenge the circuit court's setting of the dispute for a trial. Significantly, 65 1130590; 1130655 RJFS argued that the parties' contract for de novo circuit court review of the arbitration award in certain categories of cases could not be enforced because it was preempted by the FAA, 55 So. 3d at 1164-68, and, if not that, then by § 6-6-14, Ala. Code 1975, 55 So. 3d at 1168. Both the FAA and § 6-6-14 provide for relief from an arbitration award only on very limited and narrow grounds. In the case of § 6-6-14, our legislature provided for review only on grounds of "fraud, partiality, or corruption" and, in a companion statute, § 6-6-15, Ala. Code 1975, provided a mechanism for seeking relief from an appellate court on those grounds.15 This Court rejected both of RJFS's arguments in Raymond James I. We specifically held that the arbitration provision 15Section 6-6-15 begins by stating that "[e]ither party may appeal from an award under this division" and then explains that a "[n]otice of appeal to the appropriate appellate court shall be filed" in the applicable circuit court. Upon such a filing, the arbitration award was to be "enter[ed] ... as the judgment of the court" and thereafter could be reviewed on appeal in the appellate court, "unless within 10 days the court shall set aside the award for one or more of the causes specified in Section 6-6-14." Section 6-6- 15 was superseded effective February 1, 2009, by Rule 71B, Ala. R. Civ. P. See Committee Comments to Rule 71B. 66 1130590; 1130655 agreed to by the parties, including specifically the provision for de novo review by the circuit court under certain defined circumstances, was enforceable in accordance with its terms under Alabama law. Raymond James I, 55 So. 3d at 1169. We reversed the judgment of the circuit court, however, because it scheduled a trial instead of simply conducting "a de novo review of the transcript and exhibits of the arbitration hearing and ... enter[ing] a judgment based on that review" as required by the parties' agreement. 55 So. 3d at 1170. The holding of this Court in Raymond James I remains germane to the proper disposition of this dispute at the present time. It is worthy of repeating here, not only because of its explanation of Honea's entitlement to a de novo review by the circuit court, but because it reveals the absence of any challenge by RJFS to the manner or timing of Honea's post-arbitration filing in the circuit court. As Justice Stuart wrote for the Court at that time: "The gravamen of RJFS's argument on appeal is that an Alabama court can vacate an arbitration award deciding a dispute involving interstate commerce and subject to the FAA only if one of the following grounds for vacatur enumerated in § 10(a) of the FAA is clearly established: 67 1130590; 1130655 "'(1) where the award was procured by corruption, fraud, or undue means; "'(2) where there was evident partiality or corruption in the arbitrators, or either of them; "'(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or "'(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.' "In support of this argument, RJFS cites Hall Street [Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008)], in which the Supreme Court of the United States considered the issue whether parties could, consistent with the FAA, expand by contract the grounds for judicial review of an arbitration award beyond those enumerated in § 10 of the FAA and answered that question in the negative. Honea, however, argues that the holding of Hall Street does not apply to this case. ".... "It is accordingly clear that, post-Hall Street, the specific grounds enumerated in § 10 of the FAA are the only grounds upon which an arbitration award may be vacated under the FAA. However, Honea argues that an arbitration award may nevertheless be vacated upon grounds outside those enumerated in § 68 1130590; 1130655 10 of the FAA if those other grounds are authorized by state statute or by common law. The Supreme Court of the United States expressly recognized this possibility in Hall Street ... "'....' "... Honea accordingly argues that even though agreements providing for the expanded judicial review of arbitration awards may not be enforceable under the FAA, they are nevertheless enforceable under Alabama common law because Alabama courts have consistently held that general contract law requires that arbitration agreements be enforced as written. This principle was explained by this Court in Bowater Inc. v. Zager, 901 So. 2d 658, 667–68 (Ala. 2004): "'Section 3 of the FAA provides that, when a party to pending litigation successfully moves to compel arbitration, the trial court shall stay the proceeding "until such arbitration has been had in accordance with the terms of the agreement." Section 4 of the FAA likewise provides, in a situation where there is no pending litigation and a party desiring to compel arbitration petitions a court "for an order directing that such arbitration proceed in the manner provided for in [the] agreement," that "the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." Section 5 provides that "[i]f in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed...." 69 1130590; 1130655 "'"Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, see Mitsubishi [Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614], at 628 [(1985)], so too may they specify by contract the rules under which that arbitration will be conducted.... By permitting the courts to 'rigorously enforce' such agreements according to their terms, see [Dean Witter Reynolds Inc. v.] Byrd, [470 U.S. 213], at 221 [(1985)], we give effect to the contractual rights and expectations of the parties, without doing violence to the policies behind ... the FAA." "'Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989). "'"...." "'....' "RJFS refutes Honea's argument on this point by arguing, first, that the FAA -- not Alabama common law -- governs the review of this arbitration award .... ".... 70 1130590; 1130655 "Moreover, RJFS argues that, even if this Court does accept Honea's argument and apply the common law, the end result would be the same. Section 6–6–14, Ala. Code 1975, provides that an arbitration award in Alabama is final unless there is evidence of 'fraud, partiality, or corruption in making it,' and this Court has declared that this statute 'is but declaratory of the common-law rule on the subject.' Fuerst v. Eichberqer, 224 Ala. 31, 33, 138 So. 409, 410 (1931). Thus, RJFS argues, courts reviewing arbitration awards under Alabama common law or statute are limited to the three grounds enumerated in § 6–6–14, which grounds it argues are even more narrow than those in § 10 of the FAA, and, it further argues, courts may not therefore engage in de novo review even if the parties have contractually agreed to such review. It is therefore ultimately immaterial, RJFS argues, whether the arbitration award in this case is reviewed pursuant to the FAA, the [Alabama Arbitration Act], or the common law. For the reasons that follow, we disagree. "In [Birmingham News Co. v.] Horn, [901 So. 2d 27 (Ala. 2004)], we made clear that Alabama courts should apply § 10 of the FAA when moved to vacate or to confirm arbitration awards, even though § 10 was facially applicable only to federal district courts. 901 So. 2d at 46. However, we refrained from holding that § 10 constituted substantive law that we were required by the FAA to apply in state court proceedings, stating that it was unnecessary to 'stumble over the distinction between substantive law and procedural law' because we had already adopted § 10 'as applicable to an appeal of an arbitration award in this state, and we see no need to retreat from that position.' 901 So. 2d at 46–47. However, in Hall Street, the Supreme Court of the United States acknowledged that state statutory or common law might permit arbitration 71 1130590; 1130655 awards to be reviewed under standards different from those enumerated in § 10, thus effectively stating that § 10 represents procedural as opposed to substantive law. We are accordingly at liberty to decide whether to apply § 10 in state court proceedings on motions to vacate or to confirm an arbitration award. We have heretofore done so; however, this case presents us with the situation we implicitly recognized in Horn in which there are good and sufficient reasons 'to retreat from that position.' 901 So. 2d at 46–47. Under the Alabama common law, courts must rigorously enforce contracts, including arbitration agreements, according to their terms in order to give effect to the contractual rights and expectations of the parties. See, e.g., Bowater, supra. Applying that principle in this case requires us to give effect to the provision in the arbitration agreement authorizing a court having jurisdiction to conduct a de novo review of the award entered as a result of arbitration proceedings conducted pursuant to that same agreement." 55 So. 3d at 1164-1169 (some emphasis original; some emphasis added; footnotes omitted). Thus, in Raymond James I, we concluded that "the provision [of the parties' arbitration agreement] providing for de novo review of the arbitration award by the trial court is enforceable under state law." 55 So. 3d at 1170. We then explained that, "because the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the 72 1130590; 1130655 parties, its judgment [had to be] reversed and the cause ... remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." 55 So. 3d at 1179. 3. In the Circuit Court on Remand from Raymond James I On remand, the circuit court complied with this Court's mandate in Raymond James I. The circuit court conducted the de novo review called for by the parties' arbitration agreement and required by this Court's decision in Raymond James I. On November 3, 2011, the circuit court entered a thorough 27-page "Order and Final Judgment" that included detailed findings of fact (with references to the testimony and exhibits presented during the proceeding before the arbitrators), discussed pertinent law, and explained the basis for its independent, judicial adjudication in favor of Honea and against RJFS as to Honea's claims. Specifically, the circuit court's November 2011 order vacated the arbitration award and entered a judgment in favor of Honea and against RJFS in the amount of $1,169,113.35 as compensatory damages for "breach of contract, breach of 73 1130590; 1130655 fiduciary duty, breach of the Alabama Securities Act, fraud, negligence, and wantonness." The order denied Honea's request for punitive damages and attorney fees, and taxed costs against RJFS. In part, the circuit court's November 2011, judgment reads as follows: "As shown above, this Court is in full accord with the [Arbitration] Panel's finding that RJFS breached its duties to HONEA and that such breach proximately caused HONEA's damages. The Panel erred, however, in finding that HONEA's claims are barred by the statutes of limitations. This action was filed on March 30, 2006. The trust relationship between RJFS and HONEA tolled the running of the limitation periods until HONEA's accounts were closed in 2006. ... Thus, all claims are timely. ... [T]he contract claim is governed by a six-year limitations period meaning, of course, that all claims arising after March 30, 2000 were timely." (Capitalization in original.) RJFS filed a notice of appeal, giving rise to Raymond James II. 4. Raymond James II In Raymond James II, this Court never reached the arguments made by the parties regarding the merits of the independent adjudication that had been made on remand by the circuit court pursuant to our mandate in Raymond James I. Instead, following RJFS's filing of its notice of appeal in 74 1130590; 1130655 Raymond James II, the clerk of this Court issued an order for the parties to show cause as to why that appeal should not be dismissed for lack of jurisdiction in light of the Court's pre-Raymond James I decisions in Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008)(clarifying the process of appealing an arbitration award), and Championcomm.net of Tuscaloosa. Inc. v. Morton, 12 So. 3d 1197, 1200 (Ala. 2009)(explaining Horton Homes), among other cases. The parties filed responses to the show-cause order. RJFS argued that this Court should vacate the circuit court's judgment vacating the arbitration award and that RJFS's appeal should be dismissed for lack of jurisdiction "because of the circuit clerk's apparent failure to enter the arbitration award as the judgment of the circuit court, as required by both Ala. R. Civ. P. 71B and its predecessor, Ala. Code [1975,] § 6-6-15." (Emphasis added.)16 As noted above (see note 15, supra, and accompanying text), § 6-6-15 provided a process by which an arbitration award could be subjected to appellate review on the grounds 16As noted above, § 6-6-15 was supplanted effective February 1, 2009, by Rule 71B, Ala. R. Civ. P. See Committee Comments to Rule 71B. See note 15, supra. 75 1130590; 1130655 prescribed in § 6-6-14. This process included the entry of the arbitration award as the judgment of the circuit court in order to put that award in a form amenable to such review. In response to this Court's show-cause order, RJFS contended for the first time that the circuit court lacked subject-matter jurisdiction to consider the post-arbitration "return" made by Honea to the circuit court in 2008. This, despite the fact that that 2008 filing was made by Honea in an action (a) Honea had duly commenced in that court some two years earlier and (b) from which the order for arbitration, including a requirement that the parties file a "return" to the circuit court following the completion of arbitration, had emanated. Ignoring those aspects, RJFS, following the lead provided by the order of this Court's clerk, posited, for the first time, that Honea's filing in the circuit court after the entry of the arbitration award did not qualify as a timely or proper filing under § 6-6-15. RJFS made this argument notwithstanding the lack of any expression of concern in this regard by it in Raymond James I and, to the contrary, its express representation to the circuit court that "'[w]e don't 76 1130590; 1130655 believe that a conditional judgment is required here or the entry of a conditional judgment is required here.'" Order of Trial Court, February 25, 2014, following Raymond James II (emphasis added). More particularly, RJFS made this argument in the face of the fact that the post-arbitration filing Honea made in the circuit court was not one by which Honea sought appellate court review of the arbitration award on the limited statutory grounds provided by § 6-6-14, nor one by which Honea sought to invoke § 6-6-14's tandem procedural statute, § 6-6- 15, in an effort to initiate such an appeal. Instead, it was a "return" to the circuit court that Honea made (a) in an effort to comply with directive for such a return included in that court's order sending the case to arbitration in the first place and (b) in order to obtain a new and independent judicial adjudication based on the specially contracted-for de novo review by the circuit court under the parties' arbitration agreement. See Raymond James I, supra. In response to RJFS's new position, Honea offered three alternative grounds for not dismissing the appeal: "This appeal should not be dismissed because (i) § 6-6-15 does not apply to this 'common law' 77 1130590; 1130655 arbitration proceeding, (ii) the case can be remanded to the circuit court for entry of judgment on the arbitration award without dismissing the appeal under the teachings of Foster v. Greer & Sons, 446 So. 2d 605 (Ala. 1984), and/or (iii) the failure to enter the arbitration award as the judgment of the court is a 'clerical error' which can be corrected pursuant to Rule 60(a), Ala. R. Civ. P., during the pendency of this appeal." And, Honea added: "Alternatively, in the event of dismissal of this appeal, precedent of this Court and fundamental principles of due process and equal protection require that Honea be given the right to invoke the arbitration award appeal process anew. (Ex post facto application of [such] a judicial decision [would] implicate[] the due process clause. Hunt v. Tucker, 875 F. Supp. 1487 (N.D. Ala. 1995), aff'd 93 F.3d 73[5 (11th Cir. 1996)]). This is so because of the confusing and unsettled nature of arbitration award appeal process at the time Honea filed her motion to vacate in the circuit court, i.e., January 14, 2008. Such condition of the law led (i) this Court to revamp the appeal process, and (ii) to the eventual amendment of Rule 71, Ala. R. Civ. P., effective February 1, 2009. The standard procedure for this Court in like cases has been to allow the appeal process to begin anew. See, e.g. Horton Homes, Inc. v. William Shaner H & S Homes, L.L.C., 999 So. 2d 462 (Ala. 2008), and Jenks v. Harris, 990 So. 2d 878 (Ala. 2008)."17 17In addition, responding to references by RJFS to Rule 71B along with § 6-6-15, Honea noted, "Rule 71B ... became effective in February 2009, more than a year after Honea initiated her appeal in the circuit court. Thus, it does not apply here and was not made an issue in the Show Cause Order." 78 1130590; 1130655 After receiving the parties' respective responses to our show-cause order, this Court dismissed RJFS's appeal. Specifically, the opinion in Raymond James II accepted the position urged by RJFS that this Court lacked jurisdiction over the appeal because "the arbitration award to RJFS was not entered as a judgment of the trial court as required by § 6-6- 15, Ala. Code 1975." Raymond James II, 141 So. 3d at 1015. According to the opinion, "the trial court lacked subject- matter jurisdiction" to review the award; therefore, the judgment it had entered in favor of Honea on remand from Raymond James I would not sustain an appeal. Id. 5. In the Circuit Court Following Dismissal of the Appeal in Raymond James II In an effort to proceed in a manner consistent with this Court's stated rationale in Raymond James II, Honea filed in the circuit court a "Motion for Clerk to Enter Judgment on Arbitration Award."18 The motion requested that the Jefferson 18Although this Court's opinion in Raymond James II invoked § 6-6-15, which was the statutory scheme for appealing an arbitration award in effect in 2008 when the arbitration award was entered, in 2013, when this Court remanded the case in Raymond James II, § 6-6-15 had been supplanted by Rule 71B, Ala. R. Civ. P., which became effective on February 1, 2009. Honea referenced Rule 71B in her post-Raymond James II filings 79 1130590; 1130655 Circuit Court clerk enter judgment on the January 2008 arbitration award, which she attached as an exhibit to the motion. Contemporaneously with the filing of her motion, and likewise in an apparent effort to proceed consistently with our decision in Raymond James II, Honea filed a "notice of appeal." She attached as exhibits to this notice a copy of the arbitration award and "a disk containing the record from the arbitration proceedings." On October 16, 2013, the Jefferson Circuit Court clerk entered a "Judgment," stating: "Pursuant to Ala. Code, 1975, Sections 6-6-12 and/or 6-6-15; and Rules 71B and/or 71C of the Alabama Rules of Civil Procedure, the Arbitrator's Award of January 3, 2008 (attached hereto), is hereby entered as a judgment of the Court. Court costs are taxed to the Defendant pursuant to Administrative Order 08-0011, dated March 24, 2008." On October 22, 2013, Honea filed a "Motion for De Novo Review of, and to Vacate, Arbitration Award." She cited Raymond James I for the proposition that she was entitled to a de novo review of the arbitration award pursuant to the common law and, specifically, the agreement setting the terms in the circuit court. 80 1130590; 1130655 pursuant to which the parties had agreed to arbitrate their dispute in the first place. Honea's motion continued: "This Court has previously (i) conducted the de novo review, (ii) vacated the arbitration award, and (iii) entered judgment for Honea, on the precise issues now before the Court, but such judgment has now been vacated by the Supreme Court of Alabama on the basis that the clerk had not first entered judgment on the arbitration award. Such error has now been cured. Accordingly, this matter is now ripe for adjudication." (References to exhibits omitted.) On October 24, 2013, RJFS filed a motion in the circuit court asking that court to dismiss Honea's post-Raymond James II filing. RJFS argued that Rule 71B now imposes a 30- day time limit (from receipt of notice of the arbitration award) for filing a "notice of appeal" and that, therefore, Honea's filing was untimely. As a result of this untimeliness, RJFS argued, Honea had waived her right to review of the arbitration award by the circuit court. Beyond any alleged waiver, however, RJFS went further to argue that the alleged untimeliness of Honea's filing meant that the circuit court actually lacked subject-matter jurisdiction over Honea's action. 81 1130590; 1130655 Honea responded to RJFS's motion. Deferring to the ruling of this Court in Raymond James II that § 6-6-15 was applicable, Honea argued that her motion was timely and that "principles of equity, due process, and equal protection prohibit the retroactive application of either (i) Rule 71B which was enacted after Honea began the appeal process, or (ii) court decisions rendered after Honea moved to vacate the arbitration award." Honea also noted that, "[i]n Jenks v. Harris, 990 So. 2d 878 (Ala. 2008), the Alabama Supreme Court, quoting from an earlier order entered in the case, stated 'the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15, Ala. Code (1975)[,] is far from clear,' 990 So. 2d, at 882. Thus, even though it dismissed the earlier appeal for lack of jurisdiction, the Court ordered that the appeal process start anew in the circuit court. (Id.) In Horton Homes v. Shaner, 999 So. 2d 462 (Ala. 2008), the Alabama Supreme Court again noted that the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15 is far from clear. 999 So. 2d at 464. Once again, the Court in Horton Homes permitted the appeal process to begin anew in the Circuit Court. "Both Jenks and Horton Homes were decided after Honea filed her motion to vacate in the Circuit Court. In a like circumstance, the Alabama Court of Civil Appeals, instead of finding waiver, permitted the appeal process to begin anew in the circuit court because the procedure for appealing arbitration awards was unclear at the time of the tenants' initial appeal, and the law was 82 1130590; 1130655 subsequently changed following that appeal. Hurst v. Eagles Landing IV, Ltd., 20 So. 3d 143 (Ala. Civ. App. 2009). In accord is Tuscaloosa Chevrolet, Inc. v. Guyton, 41 So. 3d 95 (Ala. Civ. App. 2009). "Accordingly, well-established, controlling precedent requires this Court to permit Honea to begin anew the appeal process." Honea later filed a supplement to her response, adding that "Honea had, in fact, complied with requirements of Ala. Code [1975,] § 6-6-15, at the time that she filed her motion to vacate on January 14, 2008. In that regard, § 6-6-15 requires that either party may appeal from an arbitration award when an action is pending, by filing with the circuit clerk a notice of appeal in the appropriate appellate court within 10 days after receipt of notice of the award. The notice of appeal, together with a copy of the award, shall then be delivered with the file and the clerk shall enter the award as judgment of the clerk. Honea complied with such statute by filing her motion to vacate in the circuit court within 10 days of her receipt of the award and attaching thereto the arbitration award. "The fact that Honea's motion to vacate can also serve as the notice of appeal is clear. A notice of appeal is reviewed for substance, not form. Ex parte P&H Const[r]. Co., Inc., 723 So. 2d 45 (Ala. 1998)."19 Honea further noted that "neither § 6-6-15 nor Rule 71B provides for any default or waiver of appeal rights for the 19Honea notes that "the award was received on January 3, 2008, and the motion to vacate was filed on January 14, 2008, a Monday." 83 1130590; 1130655 failure of the circuit clerk to enter judgment on the award in a timely fashion." On February 21, 2014, Honea filed a motion for relief from judgment, invoking Rule 60(b), Ala. R. Civ. P. Although the circuit court never ruled on Honea's October 2013 "Motion for De Novo Review of, and to Vacate, Arbitration Award," Honea noted that "[i]f the 90 day limitation set forth in Rule 59.1[, Ala. R. Civ. P.,] applies to these proceedings or was not otherwise tolled, Honea's Motion to Vacate was denied by operation of law on January 20, 2014." On February 25, 2014, the circuit court entered an order concluding that Honea had timely filed her January 2008 motion to vacate and denying RJFS's motion to dismiss. In its order, the circuit court stated: "On January 14, 2008, Honea filed a Motion to Vacate Arbitration Award ('Motion to Vacate') in the circuit court. The Motion to Vacate contained various statements positively identifying the judgment, i.e., the award, appealed from, properly named the 'appellees,' and was filed in the appropriate court. The motion to vacate also contained various quotes from the Award and referenced the Award as Exhibit A thereto. The clerk's record, however, does not contain the exhibits referenced in the motion to vacate, including the Award. 84 1130590; 1130655 "On February 14, 2008, Raymond James filed its Opposition to the Motion to Vacate and attached a copy of the Award thereto. Thus, the arbitration award itself has been of record since February 14, 2008. Thereafter, Honea's Motion to Vacate was further briefed and then heard by this Court. During a hearing on Honea's right to de novo review, this Court inquired of the parties as to whether the clerk should enter judgment on the award. Raymond James' position [in 2008] was, 'We don't believe that a conditional judgment is required here or the entry of a conditional judgment is required here.' Transcript, pp. 68, November 7, 2008. Thereafter, by Order dated July 20, 2009, this Court granted Honea's Motion to Vacate and scheduled the de novo review as provided in the ... Agreement." (Emphasis added.)20 20The order also states: "During the pendency of this case, the Alabama Supreme Court decided Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008), and Jenks v. Harris, 990 So. 2d 878 (2008), wherein the Alabama Supreme Court recognized that the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15, Ala. Code (1975), was far from clear. Jenks, supra, 990 So. 2d, at 882. In response, Rule 71B of the Alabama Rules of Civil Procedure was adopted, effective February 1, 2009, to establish the method for filing appeals from an arbitration award. "As stated, Honea had, on January 14, 2008, moved to vacate the award. In addition, on October 15, 2013, in response to the dismissal of Raymond James' appeal to the Supreme Court [in Raymond James II], Honea filed a notice of appeal of the award and 85 1130590; 1130655 Based on "the briefs of the parties, arguments of counsel, and the review of the record," the circuit court concluded in its February 2014 order that Honea had complied with the requirements of § 6-6-15 in her January 2008 filing in that court. In addition to the foregoing explanation of its ruling, the circuit court added that, under § 6-6-15, "only the notice of appeal[, not the arbitration award itself,] is required to be filed within 10 days. Such omission was, at most, a defect in the notice of appeal which results in dismissal only if prejudice can be shown. Raymond James, however, cannot show, nor has even argued, any prejudice resulting therefrom. Thus, Honea complied with such statute by filing her Motion to Vacate with the a motion for the clerk to enter judgment on the award. On October 16, 2013, the clerk entered judgment on the award. On October 22, 2013, Honea moved to vacate the award. On October 24, 2013, Raymond James moved to dismiss the appeal. The hearing on Raymond James' motion to dismiss Honea's appeal was set for November 8, 2013. Thereafter, Raymond James moved to continue the hearing, and Honea consented thereto. Thereafter, the hearing was reset for, and held on, January 17, 2013. At the conclusion of the hearing, the parties requested until January 24, 2014, to file supplemental briefs and until February 7, 2014 to submit proposed orders. Due [to] weather conditions and other factors, the parties agreed to extend the time for filing briefs until February 7, 2014, and to submit proposed orders to February 19, 2014." (Emphasis added.) 86 1130590; 1130655 clerk within 10 days of the service of the award. As to the timeliness of seeking to have judgment entered on the award, there is no timetable for the clerk to enter judgment on the award. Even Rule 71B enacted after Honea had filed her appeal, provides no timetable for entry of the award. It does recite that judgment should be entered 'promptly', but neither § 6-6-15 nor Rule 71B provides for any default or waiver of appeal rights for the failure of the circuit clerk to enter judgment on the award in a timely fashion. "Moreover, the arbitration award appeal process of Rule 71B cannot be applied to this case. Retrospective legislation is not favored by the courts and a statute will not be construed as retrospective unless language used in enactment is so clear that there can be no other possible construction." (Emphasis added.) The circuit court also stated that "appellate court precedent and fundamental principles of due process, equal protection, and equity require that Honea be given the right to continue the arbitration award appeal process." (Emphasis added.) On March 19, 2014, the circuit court entered an order purporting to schedule a hearing on Honea's October 2013 "Motion for De Novo Review of, and to Vacate, Arbitration Award." On April 10, 2014, this Court ordered the circuit court to stay the proceedings until the appeals were resolved. 87 1130590; 1130655 Honea appeals from the October 2013 order of the circuit court adopting the 2008 arbitration award as its own judgment in an effort to respond to this Court's decision in Raymond James II. RJFS cross-appeals the circuit court's order denying its motion to dismiss and files a separate motion in this Court under Rule 27, Ala. R. App. P., to dismiss Honea's appeal. B. Discussion RJFS's cross-appeal and its motion to dismiss Honea's appeal raise issues of subject-matter jurisdiction based on the decision in Raymond James II and require this Court to review and to reexamine the holding in that case regarding subject-matter jurisdiction. RJFS asserts that, following our dismissal of the appeal in Raymond James II, the circuit court erred in finding that Honea had filed an adequate and timely notice of appeal under § 6-6-15, Ala. Code 1975, and that the circuit clerk had timely entered the arbitration award as the judgment of the court.21 Thus, according to RJFS, Honea made 21Although RJFS seeks to ground both of these particular assertions in the decision of this Court in Raymond James II, the decision to dismiss the appeal in that case provides no basis for either assertion. The opinion in Raymond James II 88 1130590; 1130655 "incurably defective efforts ... to appeal th[e] award, [and therefore] the circuit court never had subject matter jurisdiction." In support of its argument, RJFS relies upon this Court's decision in Raymond James II and, consistent with that decision, asserts that Honea's "appeal" to the circuit court was not "perfected pursuant to the time and manner prescribed in the controlling statute" and thus must be dismissed. LeFlore v. State ex rel. Moore, 288 Ala. 310, 313, 260 So. 2d 581, 583 (1972). The fundamental problem with RJFS's argument -- and for that matter with the overall posture of this case at the present time -- is twofold. The first problem is the notion that any alleged errors by Honea as to the filing she made in the circuit court after the completion of arbitration implicated the subject-matter jurisdiction of the circuit did not address the timeliness of Honea's filing in the circuit court. The sole basis for that decision was the fact that the circuit court had not entered an order incorporating the arbitration award as its own judgment. See 141 So. 3d at 1014-15. And as to this latter issue, the decision was based solely on the absence of such a judgment; this Court did not have before it, and it did not address, any issue as to time limits that might or might not be applicable to the entry by the circuit court of such a judgment. See id. 89 1130590; 1130655 court. The second problem with RJFS's position is the notion that Honea's attempt to exercise her right to "'de novo' review" under the arbitration agreement was the same as an "appeal" under Alabama's arbitration statutes, § 6-6-1 et seq., Ala. Code 1975. As to the first issue, this Court has described subject- matter jurisdiction as follows: "Subject-matter jurisdiction concerns a court's power to decide certain types of cases. Woolf v. McGaugh, 175 Ala. 299, 303, 57 So. 754, 755 (1911) ('"By jurisdiction over the subject-matter is meant the nature of the cause of action and of the relief sought."' (quoting Cooper v. Reynolds, 77 U.S. (10 Wall.) 308, 316, 19 L.Ed. 931 (1870))). That power is derived from the Alabama Constitution and the Alabama Code. See United States v. Cotton, 535 U.S. 625, 630-31, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (subject-matter jurisdiction refers to a court's 'statutory or constitutional power' to adjudicate a case)." Ex parte Seymour, 946 So. 2d 536, 538 (Ala. 2006). Upon careful reflection, it appears that this Court mistakenly perceived a jurisdictional defect and raised that issue ex mero motu in Raymond James II. The circuit court acquired subject-matter jurisdiction over Honea's action when she filed her complaint and initiated this action on March 30, 90 1130590; 1130655 2006. And the circuit court's jurisdiction over Honea's action continues until finally terminated by an order from that court or the equivalent of such an order by operation of law, e.g., Rule 59.1, Ala. R. Civ. P. The fact that the circuit court ordered the parties to arbitrate their dispute pursuant to their arbitration agreement did not divest the circuit court of subject-matter jurisdiction over Honea's action. That order merely stayed the circuit court's immediate exercise of its jurisdiction over Honea's action pending the decision of the arbitrators. And, in fact, that order specifically instructed the parties to make a return to circuit court by "fil[ing] an Arbitration Report herein at the completion of said Arbitration detailing all findings and awards of the Arbitrator so this cause may be disposed of at said time." (Emphasis added.) Moreover, the decision in Raymond James II failed to take account of the fact that, from the beginning, Honea never attempted to file an appeal of the arbitration award under the standards and procedures provided in §§ 6-6-14 and -15. What Honea did following arbitration was to make a return to the 91 1130590; 1130655 circuit court as had been ordered by that court and then ask that court to enter a new, independent adjudication based on a de novo review by it of the evidence pursuant to the express terms of the parties' arbitration agreement and pursuant to the terms of the circuit court's order that sent that case to arbitration and that contemplated its return to that court based on that agreement. It is true that, in the wake of our decision in Raymond James II, both Honea and the circuit court sought, and Honea continues to seek, to fit the parties' January and February 2008 filings into the "holes" prescribed by § 6-6-15. But, all of Honea's attempts to persuade the circuit court, and now this Court, that her filings in early 2008 satisfied the post- arbitration filing requirements described in § 6-6-15 (and all of the circuit court's findings as to whether Honea's filings would satisfy the filing requirements described in § 6-6-15) were forced by the erroneous holding in Raymond James II that such statutory prerequisites were applicable in this case. But that holding failed to take proper account of the fact that, from the outset, Honea did not seek to appeal the 92 1130590; 1130655 arbitrators' award pursuant to Alabama's limited statutory standards and procedures. Instead, from the outset, Honea sought to have the circuit court conduct its own de novo review and, based on that review, to make its own, independent adjudication of the parties dispute and enter an entirely new "award," or "judgment," reflecting that adjudication.22 In other words, from the beginning Honea sought simply to pursue the special avenue de novo review by the circuit court of certain categories of disputes between her and RJFS as expressly agreed to by those parties in their arbitration agreement. It is well settled, as we held in Raymond James I, that courts "'enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms,' and 'parties are generally free to structure their arbitration agreements as they see fit.' Volt Information Sciences, Inc. [v. Board of Trustees of Leland Stanford Junior Univ.], 489 U.S. [468,] 478–79, 109 S. Ct. 1248 [(1989)]." 22This new judgment by the court, not being an arbitration award, would in turn be subject to the normal rules of procedure, including the provisions for postjudgment motions and the normal mechanisms for subsequent appellate review. 93 1130590; 1130655 Homes of Legend, Inc. v. McCollough, 776 So. 2d 741, 746 (Ala. 2000). And, this Court will "presume that the parties intended what they stated and will enforce the contract as written." Id. In the present case, it is undisputed that the award at issue was made by arbitrators in a case that fell within one of the categories of circumstances that prevented that award from being binding and that triggered a right to a de novo adjudication of the parties' dispute by the circuit court (albeit by taking advantage of the evidentiary record developed in the course of the arbitration process). And we have been directed to no state law that precludes parties from agreeing to such a review, i.e., one that is different from that provided by the arbitration provisions of § 6-6-1 et seq., Ala. Code 1975, as to some or all the disputes that might arise between them. To the contrary, Ala. Code 1975, § 6-6-16, provides that "[n]othing contained in this division shall prevent any person or persons from settling any matters of controversy by a reference to arbitration at common law."23 23The fact that, absent an agreement otherwise, a party who prevails in an arbitration proceeding pursuant to § 6-6-1 94 1130590; 1130655 In short, the parties' arbitration agreement itself gave either party the right to obtain, in substitution for the arbitration award, an independent judgment of the circuit court based upon "a 'de novo' review" by the circuit court of the testimony and exhibits produced at the arbitration hearing. Honea timely invoked that right, and no law deprives the parties of the ability to contract for such a right. The circuit court never lacked subject-matter jurisdiction to conduct a review of the evidence and to enter an independent judicial judgment as agreed to by the parties, particularly in a case that was originally filed in that court, that was merely stayed by that court while the dispute was considered by the arbitrators, and that was sent to those arbitrators by that same court based solely upon an arbitration agreement that by its terms limited the types of disputes and outcomes as to which any resulting arbitration award would be binding. Honea sought merely to make a return of the case to the et seq. may file an arbitration award in a pending action such that the award "has the force and effect of a judgment, upon which execution may issue as in other cases," Ala. Code 1975, § 6-6-12, is not relevant under the circumstances before us. The parties did enter into such an agreement here. 95 1130590; 1130655 circuit court pursuant to the terms of the circuit court's own order (a) providing for such return in accordance with the parties' agreement and (b) contemplating the eventual disposition of the parties' dispute by the circuit court in accordance with the terms of that agreement.24 Section 12-2-13, Ala. Code 1975, expressly provides that "[t]he Supreme Court, in deciding each case when there is a conflict between its existing opinion and any former ruling in the case, must be governed by what, in its opinion, at that time is law, without any regard to such former ruling on the law by it." It is now well established that "[s]ection 12-2-13 abrogates the common law rule that principles decided 24Put differently, the purpose of the parties' arbitration agreement was to enable either party, if dissatisfied with certain arbitration awards, to intercept such an award and to seek instead a different, independent "award" from the circuit court. Nothing in the parties' agreement required, and it would make little sense to require (and it would elevate form over substance to deprive Honea of relief based on a failure of), the circuit court to enter as its "own judgment" an award that the parties have agreed will not stand because one of the parties has invoked its right to obtain from that same court a different -- de novo -- judgment. And it would put the circuit court in the position of "jumping" through the procedural "hoop" of entering a certain judgment as its own and then conducting a de novo review of the same matter. 96 1130590; 1130655 and rulings made on appeal, however erroneous, are the 'law of the case'•and govern the appellate court on a subsequent appeal in the same case." Papastefan v. B & L Constr. Co. of Mobile, 385 So. 2d 966, 967 (Ala. 1980). This Court "is not barred from re-examination of a previous ruling upon a subsequent appeal of the same case" where justice requires that it correct a previous mistake. Id. See also, e.g., Ex parte Vest, 181 So. 3d 1049 (Ala. 2015)(correcting this Court's mistake as to the denial of an earlier petition for a writ of certiorari). This principle has been applied by this Court in the context of disputes over arbitration and in particular where, like here, a previous decision of this Court failed to give proper effect to the terms of the parties' arbitration agreement. In Ex parte Discount Foods, Inc., 789 So. 2d 842 (Ala. 2001) ("Discount Foods II"), this Court determined that the Court's own opinion in Ex parte Discount Foods, Inc., 711 So. 2d 992 (Ala. 1998)("Discount Foods I"), had been in error. As we explained in Discount Foods II: "This Court is not required under the doctrine of 'law of the case' to adhere to the decision in 97 1130590; 1130655 Discount Foods I. Generally, the law-of-the-case doctrine provides that when a court decides upon a rule of law, that rule should continue to govern the same issues in subsequent stages in the same case. The purpose of the doctrine is to bring an end to litigation by foreclosing the possibility of repeatedly litigating an issue already decided. See Murphy v. FDIC, 208 F.3d 959 (11th Cir. 2000); see, also, Blumberg v. Touche Ross & Co., 514 So. 2d 922 (Ala. 1987). However, the law-of-the case doctrine does not in all circumstances require rigid adherence to rulings made at an earlier stage of a case. The doctrine directs a court's discretion; it does not limit a court's power. The law-of-the-case doctrine is one of practice or court policy, not of inflexible law, and it will be disregarded when compelling circumstances call for the redetermination of a point of law on a prior appeal; and this is particularly true when the court is convinced that its prior decision is clearly erroneous or where an intervening or contemporaneous change in the law has occurred by an overruling of former decisions or when such a change has occurred by new precedent established by controlling authority. See State v. Whirley, 530 So. 2d 861 (Ala. Crim. App. 1987), rev'd on other grounds, 530 So. 2d 865 (Ala. 1988); Callahan v. State, 767 So. 2d 380 (Ala. Crim. App. 1999); Murphy v. FDIC, supra; United States v. Escobar–Urrego, 110 F.3d 1556 (11th Cir. 1997); Heathcoat v. Potts, 905 F.2d 367 (11th Cir. 1990). The decision in Discount Foods I failed to give effect to the parties' contractual intent, as evidenced by the plain language of the arbitration provision; it, therefore, was clearly erroneous." 789 So. 2d at 846 n. 4 (emphasis added). 98 1130590; 1130655 Based on the foregoing, this Court should overrule Raymond James II and vacate the October 2013 judgment entered by the circuit court as a consequence of that decision. The circuit court has twice attempted to vacate the arbitrators' award and to enter a judgment on the merits in favor of Honea and against RJFS. The latter attempt was made after the circuit court had conducted the de novo review prescribed by the parties' agreement –- and approved in Raymond James I. That attempt was thwarted by the decision in Raymond James II. I respectfully submit that we should recognize that decision as erroneous, overrule it, and reinstate the circuit court's de novo judgment entered on remand from Raymond James I. 25 The main opinion, however, chooses the different tack of (1) leaving in place the decision in Raymond James II and its results –- namely the voiding of the November 2011 judgment that clearly reflected the circuit court's independent, judicial adjudication as to Honea's claims based on that court's de novo review of the record –- (2) upholding the 25Alternatively, we could remand this case to the circuit court to allow it the opportunity to reinstate its judgment entered in response to Raymond James I. 99 1130590; 1130655 October 2013 judgment (a) that, unlike a typical trial court judgment, became the judgment of the circuit court only due to the sui generis dictates of § 6-6-15 and the holding in Raymond James II that those dictates were applicable and (b) that is directly contrary to the November 2011 judgment, and yet (3) concluding that Honea still has received the benefit of a de novo review. I submit that Raymond James II complicated and made uncertain a case that was, at least by comparison, uncomplicated at the time of our decision in Raymond James I. And today's decision, in my view, takes us yet another step away from the clarity of Raymond James I. I believe we should reverse field and return to our decision in Raymond James I. It certainly appears that the denial by operation of law under Rule 59.1, Ala. R. Civ. P., of Honea's motion to vacate the October 2013 judgment was due to an oversight by the circuit court. See Part I.A.5., supra. In any event, because the issue put to the circuit court in Honea's postjudgment motion was her entitlement to a de novo decision by the circuit court, and because I believe the denial of that motion 100 1130590; 1130655 by operation of law erroneously denied Honea the de novo review to which she was entitled, I would vacate the judgment of the circuit court on that ground and reinstate the de novo judgment entered by the circuit court on remand from Raymond James I.26 Because this approach does not reflect the view of a majority of the Court, however, and because the main opinion 26Alternatively, as noted, this Court could remand the case to the circuit court to allow it the opportunity to reinstate the judgment it entered on remand from Raymond James I. In either event, this Court should (1) examine this issue with the aid of the briefs filed by the parties in Raymond James II (of which this Court may take judicial notice), which briefs more fully address the merits of the statute-of- limitations issue itself than do the briefs in the current appeal (which focus primarily on the error of the circuit court in allowing Honea's postjudgment motion to be denied by operation of law) and/or (2) allow the parties to file supplemental briefs more fully addressing the merits of the circuit court's de novo judgment (including particularly the statute-of-limitations issue). I note that almost the entirety of the argument presented by RJFS in its brief as the appellant in Raymond James II was devoted to the merits-based issue of the statute of limitations. The merits of this issue similarly was the focus of Honea's brief as the appellee in Raymond James II, engendering over 20 pages of argument. In contrast, the briefs filed by the parties in this current appeal do not contain a similar full-throated discussion of the merits of this issue, but instead address it only briefly in relation to whether the circuit court's failure to conduct a hearing on Honea's postjudgment motion was harmless error under the probability-of-merit standard. 101 1130590; 1130655 proceeds to address those merits, specifically the statute-of- limitations issue, I will do so as well. II. Statute of Limitations I agree with the majority's conclusions that the fiduciary relationship between RJFS and Honea was not that of a trustee and beneficiary of an express trust and that the special rule applicable to the tolling of the statute of limitations that was in place before 2006 as to such a beneficiary's claims is inapplicable to Honea's claims.27 Accordingly, the two-year statute of limitations applicable to Honea's breach-of-fiduciary-duty claims bars those claims. As to Honea's breach-of-contract claim, Honea is correct that AC, Inc. v. Baker, 622 So. 2d 331, 334 (Ala. 1993), clearly supports her argument that claims alleging breaches of 27Before the enactment of § 19-3B-1005, Ala. Code 1975 (Act No. 2006-216), the two-year statute of limitations for claims alleging breach of fiduciary duty as to a trustee began "'to run once the fiduciary relationship [wa]s terminated and possession of trust property by the trustee becomes adverse.'" Tonsmeire v. AmSouth Bank, 659 So. 2d 601, 604 (Ala. 1995)(quoting and adopting the trial court's order). Under § 19-3B-1005(a), "[a] beneficiary may not commence a proceeding against a trustee for breach of trust more than two years after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust." 102 1130590; 1130655 contract that occurred after March 30, 2000, were not barred by the six-year statute of limitations applicable to contract actions. See Ala. Code 1975, § 6-2-34(9). The plaintiffs in Baker filed their action on September 4, 1991, against Leon C. Baker, a tax attorney; S. David Johnston, a certified public accountant; and Johnston, Joyce & Wiginton ("JJW"), the accounting firm in which Johnston was a partner. The cause of action as to Johnston and JJW arose out of errors they allegedly made in preparing tax returns for the plaintiffs from 1981 through 1985. This Court noted that "[e]ach plaintiff contends that it purchased [equipment from a business owned by Coleman Leasing Corporation, a business owned by Baker,] solely in reliance on promises made by Johnston, JJW, and Baker that ownership of the equipment would provide legitimate tax deductions, through depreciation and interest expenses, to reduce each plaintiff's tax liability for the years 1981 through 1985." 622 So. 2d at 332. "In 1986, the Internal Revenue Service ('IRS') and the Alabama Department of Revenue audited the plaintiffs' tax returns and disallowed the income tax deductions related to the computer equipment for all of the years 1981 through 1985." Id. This Court specifically noted that, unlike the 103 1130590; 1130655 tax returns for the years 1981 through 1984, the 1985 tax return was filed on April 15, 1986, within six years from the date the plaintiffs filed their complaint. Id. at n.2. On appeal from a summary judgment entered in favor of Johnston and JJW, this Court considered "the propriety of the trial court's holding that the six-year statute of limitations barred the plaintiffs' breach of contract claims, except those claims based on the 1985 tax returns." Id. at 334 (emphasis added). In particular, the Court was concerned "with an issue of first impression in this State: whether the nature of the plaintiffs' agreements, as either entire contracts or separate contracts, impacts on the running of the statute of limitations." Id. In discussing the import of the distinction between how the statute of limitations would apply in the context of "separate contracts," a position urged by Johnston and JJW, this Court stated: "If the agreements in this case constituted several, separate annual agreements under which Johnston and JJW prepared and reviewed the plaintiffs' tax returns from 1981 to 1985, then a breach of contract action accrued on each contract, individually, for purposes of the six-year limitations period, when performance under each contract was complete. Under this interpretation of 104 1130590; 1130655 the parties' contractual relationships, the trial court's judgment would be affirmed, because the statute of limitations would bar all of the plaintiffs' breach of contract claims except the claims based on the 1985 tax returns." 622 So. 2d at 334 (citations omitted). In contrast to the position taken by Johnston and JJW, this Court noted that "each plaintiff contends that the accounting services performed by Johnston and JJW from 1981 to 1986 and related to deductions taken on computer equipment should be treated as services rendered under an entire contract, spanning continuously from 1981 to 1986. Further, we infer from each plaintiff's argument that each is contending that if its relationship with Johnston and JJW constituted an entire contract, then the six-year limitations periods for its breach of contract action would not begin to run until April 15, 1986, when the last returns claiming deductions were filed." Id. (emphasis added). The Baker Court continued: "Although this Court has never addressed a continuing contract argument such as the one the plaintiffs in this case touch upon, several courts have recognized a 'continuing contract' doctrine for determining when a breach of contract action on an entire contract accrues for limitations purposes. This doctrine has been applied most often to cases concerning payment for performance of services, to determine when the plaintiff's right to sue for payment occurred. "However, this is not an action seeking compensation for services rendered; rather, [the plaintiffs] seek recovery for harm incurred from allegedly erroneous tax advice. An application of 105 1130590; 1130655 the 'continuing contract' doctrine to this case would toll the running of the limitations period until the last time the plaintiffs acted upon the defendants' advice. Further, although this Court has never applied a 'continuing contract'•doctrine, it has recognized, in certain situations, a 'continuing tort'• doctrine that operates to toll the running of the limitations period in tort cases until the date that the last injury occurred. However, this Court has expressly limited 'recovery for a continuous tort ... to those damages that occurred within the period of limitations.'• [Continental Cas. Ins. Co. v.] McDonald, 567 So. 2d [1208,] 1216 [(Ala. 1990)](citing Garrett [v. Raytheon Co.], 368 So. 2d [516,] 521 [(Ala. 1979)]; see American Mutual Liability Ins. Co. v. Agricola Furnace Co., 236 Ala. 535, 183 So. 677 (1938); Howell v. City of Dothan, 234 Ala. 158, 174 So. 624 (1937). Too, despite the possibilities presented by the plaintiffs' continuing contract argument, this case presents no compelling reason that would dissuade us from placing a similar limitation upon a 'continuing contract'•action, limiting it to those breaches that occurred during the six years before the action was filed. We, therefore, decline to apply a 'continuing contract'•doctrine at this time." 622 So. 2d at 334-35 (emphasis added; footnotes omitted). In other words, the Baker Court declined to definitively decide whether it should recognize a "continuing-contract" theory because, even under such a theory, the Court would have "limit[ed] it to those breaches that occurred during the six years before the action was filed." Id. Baker in no way 106 1130590; 1130655 supports the conclusion that application of a continuing- contract theory bars recovery for breaches that occur less than six years before the action was filed so long as similar breaches occurred more than six years before the action was filed.28 28The position discussed in Baker is consistent with the general rule applicable to actions based on a defendant's breach of a contract under which that defendant has a continuing duty of performance. As explained in 54 C.J.S. Limitations of Actions § 199 (2010): "The right of action for breach of a continuing covenant accrues from day to day as long as the breach continues, and where a contract provides for continuing performance over a period of time, each breach may begin the running of the statute anew such that accrual occurs continuously. Consequently, the fact that a portion of the claim is barred by the statute of limitations will not prevent a recovery for the part which has not become barred at the time suit is filed. On the other hand, the continuing claims doctrine does not apply to a claim based on a single distinct event which has ill effects that continue to accumulate over time." (Footnotes omitted; emphasis added.) The plaintiffs in Baker were attempting to argue that Johnston and JJW's preparation of their yearly tax returns reflected not just a contract under which Johnston and JJW had a continuing duty, but an indivisible contract for services such that the limitations period would not begin to run until all services under the contract had been provided or the contract otherwise terminated. The rule in such a case is 107 1130590; 1130655 Also, in addressing the Baker plaintiffs' alternative argument, the Baker Court stated: "[T]he plaintiffs argue that the limitations period applicable to their breach of contract claims did not commence running until the IRS in 1986 disallowed their deductions related to the computer equipment. Admittedly, the plaintiffs did not incur any actual damage until the IRS disallowed their deductions; however, the incurring of actual damages marks the commencement point for the running of the two-year limitations period applicable to professional malpractice actions. See Leighton Ave. Office Plaza, Ltd. v. Campbell, 584 So. 2d 1340 (Ala. 1991); Stephens[ v. Creel], 429 So. 2d [278,] 281 [(Ala. 1983)]. The statute of limitations on a contract action runs from the time a breach occurs rather than from the time actual damage is sustained. Stephens, 429 So. 2d at 280. "Accordingly, although the plaintiffs have made well reasoned and able presentations of authority supporting their claimed right to pursue a remedy for all of the contracts allegedly breached by Johnston and JJW, we conclude that the trial court properly held that the only claims not barred by the statute of limitations were the plaintiffs' breach that "the limitations period usually does not commence until the contract is fully performed unless one party refuses to fulfill the contract or prevents the other party from performing." 54 C.J.S. Limitations of Actions § 199 (2010)(footnote omitted). The Baker Court correctly rejected the plaintiffs' attempt to characterize their agreement with Johnston and JJW as being indivisible, because even were it to address the agreement as a "continuing contract," the statute of limitations would bar plaintiffs' recovery as to the only claims at issue -- those based on breaches that occurred more than six years before the filing of their actions. 108 1130590; 1130655 of contract claims based on their 1985 tax returns. Therefore, we affirm the summary judgment for Johnston and JJW as to the plaintiffs' breach of contract claims against them." Baker, 622 So. 2d at 335 (emphasis added; footnote omitted). In other words, the Baker Court did not conclude that because the same type of breach (taking an improper deduction for the purchased computer equipment) had occurred in tax returns filed before the 1985 return, the Baker plaintiffs' cause of action must fail in its entirety. The Baker Court merely concluded that the statute of limitations applicable to each breach began when that breach occurred, rather than when actual damages from that breach were incurred. In the present case, Honea cites us to pertinent portions of the record that reflect that RJFS was actively and aggressively executing trades in her account after March 30, 2000, and that those trades were in breach of RJFS's duties to her. The present case is not one in which the purchases in Honea's account and in violation of RJFS's duties to her were all made before March 30, 2000, and the losses as to those purchases merely did not occur until after March 30, 2000. 109 1130590; 1130655 Also, as RJFS noted at the outset of the arbitration proceeding: "The account suffered a monthly loss in November 2000 of $404,949 and an additional loss of $352,626 in February 2001. At the end of February 2001 the cumulative loss in the account stood at $676,199. It is undeniable that [Honea] was on inquiry notice no later than March 2001 of her claims against RJFS (upon receipt of her February 2001 statement) given that her account had lost over 90% of its value in a four month period. Notwithstanding this fact, [Honea] waited over five years to bring the present claim." (Emphasis omitted; emphasis added.) RJFS further noted that, "[a]t the end of October 2000, the account had a positive gain of $74,521. Thus, the account lost approximately $750,000 in value in the span of four months." Although it is true that Honea's account suffered considerable losses (and some gains) before March 30, 2000, as to purchases and sales of securities in violation of RJFS's duties to Honea that also occurred before March 30, 2000, the record fully supports the conclusion that some of the losses that occurred in Honea's account after March 30, 2000, were the result of breaches of duty that also occurred after March 30, 2000. The fact that earlier breaches of RJFS's duties 110 1130590; 1130655 might have given rise to earlier causes of action did not preclude the subsequent breaches from also giving rise to distinct causes of action, namely yet another purchase of an unsuitable investment, yet another excessive trade, yet another improper use of margin, etc.29 This Court rightly refuses to reject Honea's claims as to damages she incurred from those "breaches that occurred during 29For example, based on an account summary for the account in which Honea suffered most of her losses, in April 2000 Honea deposited $300,000 into the account. Honea had previously deposited $850,000 into the account between May 1997 and August 1999. As of March 31, 2000, the investments in the account were valued at $1,293,234. After Honea made the April 2000 deposit, funds from the account were used over the next several months to purchase numerous technology stocks, on margin, for an account that was already significantly overweighted in technology stocks. According to Honea's expert witness, both the weighting of the account and the use of margin during the period in question were in breach of RJFS's duties to Honea. The account thereafter lost 90% of its value, by RJFS's own admission. Even without considering continuing sale and reinvestment decisions made after March 30, 2000, as to funds deposited before March 30, 2000, how was it possible for RJFS to breach its duties as to the investment of the aforementioned $300,000 in deposited funds before they were actually deposited? Viewed from another angle, the value of Honea's account on March 31, 2000, the first day of the six-year statute-of- limitations window applicable to the March 30, 2006, commencement of her lawsuit, was $1,293,234, while less than a year later, on February 28, 2001, the value of the account had diminished to $78,257. 111 1130590; 1130655 the six years before the action was filed" merely because other breaches occurred more than six years before the action was filed. Wise, J., concurs. 112

June 30, 2017

06d34438-2eb6-423c-ae58-9cf297eb7955

Raymond James Financial Services, Inc., and Bernard Michaud v. Kathryn L. Honea

N/A

1130655

Alabama

Alabama Supreme Court

REL:06/30/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1130590 _________________________ Kathryn L. Honea v. Raymond James Financial Services, Inc., and Bernard Michaud _________________________ 1130655 _________________________ Raymond James Financial Services, Inc., and Bernard Michaud v. Kathryn L. Honea Appeals from Jefferson Circuit Court (CV-06-1896) 1130590; 1130655 PER CURIAM. In case no. 1130590, Kathryn L. Honea appeals from the denial of her motion to vacate an arbitration award entered in favor of Raymond James Financial Services, Inc. ("Raymond James"), and Bernard Michaud, an employee of Raymond James (hereinafter referred to collectively as "RJFS"). We affirm in part, reverse in part, and remand. In case no. 1130655, RJFS appeals the trial court's denial of its motion to dismiss for lack of jurisdiction; that appeal is dismissed. Facts and Procedural History Beginning in 1997, Honea opened several investment accounts with Raymond James. Honea and Raymond James executed a "client agreement" that included an arbitration provision. The arbitration provision stated, in pertinent part: "Arbitration disclosures: "Arbitration is final and binding on the parties. "The parties are waiving their right to seek remedies in court, including the right to trial by jury. ".... "Arbitration and Dispute Resolution: (a) In a dispute or controversy, either arising in the future or in existence now, between me and you (including your officers, directors, employees or agents and 2 1130590; 1130655 the introducing broker, if applicable) we agree to first endeavor to settle the dispute in an amicable manner by mediation at the request of either party. Thereafter, any unsettled dispute or controversy will be resolved by arbitration. ... "(b) We agree that in any arbitration the arbitrators will resolve the dispute in accordance with applicable law and will be required to furnish us with a written decision which must explain the reasons for their decision. ... "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." On March 30, 2006, Honea filed a complaint in the Jefferson Circuit Court asserting that she had opened four accounts with Raymond James and that Michaud had acted as her financial advisor as to those accounts. She asserted that she had deposited approximately $1,200,000 in those accounts. She alleged that RJFS engaged in "abusive brokerage practices" in that her investments were not diversified, "were far too risky," and "were of poor quality." She claimed that, as a result of RJFS's actions, she lost $1,050,000. She thus sought damages for breach of contract, breach of fiduciary 3 1130590; 1130655 duty, negligence, wantonness, fraud, and violations of the Alabama Securities Act. Honea closed her accounts with Raymond James in April 2006. Subsequently, Raymond James filed a motion to compel arbitration. The motion asserted that Honea did not oppose arbitration. The trial court granted the motion, and arbitration commenced. Michaud joined the arbitration proceedings. The arbitration panel dismissed Honea's breach-of- fiduciary-duty, negligence, wantonness, fraud, and Alabama Securities Act claims and proceeded to hear the breach-of- contract claims. On January 3, 2008, the arbitration panel entered an award in favor of RJFS. The arbitration panel found that "Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the arbitration panel "denied" Honea's breach-of-contract claims, stating that they were "barred by the applicable statutes of limitations." On January 14, 2008, Honea filed in the Jefferson Circuit Court a pleading entitled "Motion to Vacate Arbitration 4 1130590; 1130655 Award." See Horton Homes, Inc. v. Shaner, 999 So. 2d 462, 467 (Ala. 2008) (discussing the process for appealing an arbitration award under Ala. Code 1975, § 6-6-15, and noting, among other things, that "[a] party seeking review of an arbitration award is required to file a motion to vacate" that award). She alleged that the arbitration award "manifest[ed] a disregard of the law" by holding that her breach-of-contract claims were barred by the statute of limitations. See Birmingham News Co. v. Horn, 901 So. 2d 27, 50 (Ala. 2004) (noting that, in an appeal of an arbitration award under Ala. Code 1975, § 6-6-15, a "manifest disregard of the law" was a ground available for reviewing the award), overruled by Hereford v. D.R. Horton, Inc., 13 So. 3d 375, 381 (Ala. 2009) ("[W]e hereby overrule our earlier statement in Birmingham News that manifest disregard of the law is a ground for vacating, modifying, or correcting an arbitrator's award ...."). Additionally, Honea, citing Ala. Code 1975, § 6-6-14, challenged the impartiality of the chairman of the arbitration panel. See § 6-6-15 (providing that, in an "appeal" of an arbitration award, "the court shall set aside the award for one or more of the causes specified in Section 6-6-14 ...."), and § 6-6-14 (providing that an arbitration award is final 5 1130590; 1130655 "unless the arbitrators are guilty of fraud, partiality, or corruption in making it"). What occurred next is described in this Court's previous decision in Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"): "The trial court originally scheduled a hearing for Honea's motion to vacate the arbitration award for March 28, 2008; however, for reasons including the difficulty the parties had in obtaining a transcript of the arbitration proceedings, that hearing was repeatedly continued. On October 17, 2008, Honea filed an additional motion with the trial court asking it to conduct a de novo review of the arbitration award pursuant to paragraph (c) of the arbitration provision in the client agreement, quoted supra, which specifically authorized such a review by the trial court if 'the arbitrators do not award damages and the amount of [the client's] loss of principal exceeds $100,000.' On October 31, 2008, RJFS filed its response, citing Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), for the propositions (1) that manifest disregard of the law is not a valid ground for seeking the vacatur of an arbitration award; and (2) that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ('the FAA'), provides the exclusive grounds for seeking judicial review of arbitration awards in Alabama and parties may not expand those grounds by contract to provide for de novo judicial review of such awards. RJFS also repeated its argument that there was no evidence indicating that any of the arbitrators were biased in favor of RJFS. "On November 7, 2008, the trial court held a hearing on Honea's motion to vacate the arbitration award. ... On July 20, 2009, the trial court issued an order concluding that Honea was entitled to a de 6 1130590; 1130655 novo review of the arbitration award .... The trial court accordingly vacated the award that had been entered in favor of RJFS and scheduled a future status conference for the purpose of setting the matter for trial. On August 27, 2009, RJFS filed this appeal. See Rule 71B(g), Ala. R. Civ. P." 55 So. 3d at 1163-64. In Raymond James I, RJFS argued that the trial court could vacate the arbitration award only if one of the grounds specified in 9 U.S.C. § 10(a) of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), was established. This Court noted that, under the Supreme Court's decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), the grounds enumerated in § 10 of the FAA were the only grounds upon which an arbitration award could be vacated under the FAA. However, Honea argued that an arbitration award may also be vacated on grounds outside those enumerated in 9 U.S.C. § 10 of the FAA if those other grounds were recognized by state law. This Court agreed with Honea. Specifically, part (c) of the arbitration provision in this case, as quoted above, states: "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if 7 1130590; 1130655 the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." This Court held: "[T]he holding of Hall Street is applicable only in a federal court and ... the provision providing for de novo review of the arbitration award by the trial court is enforceable under state law .... However, because the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the parties, its judgment is nevertheless reversed and the cause is remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." Raymond James I, 55 So. 3d at 1170. On remand, the trial court conducted a de novo review of the arbitration award, vacated the award, and entered a judgment in favor of Honea in the amount of $1,169,113.35. RJFS appealed to this Court. In Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013) ("Raymond James II"), this Court held that the trial court lacked jurisdiction because the award had not been entered as a judgment of the court. Specifically, under § 6-6-15, either party may appeal to the circuit court 8 1130590; 1130655 from an arbitration award. A notice of the appeal must be filed with the clerk of the circuit court where the underlying action is pending. Thereafter, "the clerk or register shall enter the award as the judgment of the court." Furthermore, prior caselaw required that an arbitration award must be entered as a judgment before the circuit court could consider a motion to vacate it: "'"In Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008), this Court made clear that a judgment entered by the circuit clerk on an arbitration award pursuant to § 6-6-15, Ala. Code 1975, 'does not become a final appealable judgment until the circuit court has had an opportunity to consider a motion to vacate filed by a party seeking review of the arbitration award.' 999 So. 2d at 467. Furthermore, as this Court observed in Jenks v. Harris, 990 So. 2d 878, 882 (Ala. 2008), the trial court's order on such a motion is void unless the circuit clerk has first entered the arbitration award as the judgment of the court. "'"...." "'We find no indication in the record that the clerk of the Shelby Circuit Court entered the arbitrator's order as the judgment of that court as required under § 6-6-15, Ala. Code 1975; thus, there is no 9 1130590; 1130655 final judgment from which Parham can appeal. Accordingly, the trial court's February 6, 2008, order is void and is hereby vacated, and this appeal is dismissed. See Harvey v. City of Oneonta, 715 So. 2d 779, 781 (Ala. 1998) ("A judgment of a court without jurisdiction is void. An appeal will not lie from a void judgment." (citing, among other cases, Luken v. BancBoston Mortgage Corp., 580 So. 2d 578 (Ala. 1991))).'" Raymond James II, 141 So. 3d at 1013-14 (quoting Parham v. American Bankers Ins. Co. of Florida, 24 So. 3d 1102, 1103-04 (Ala. 2009), quoting in turn Championcomm.net of Tuscaloosa, Inc. v. Morton, 12 So. 3d 1197, 1199-1200 (Ala. 2009) (emphasis added in Raymond James II)). There was no indication in the record that the arbitration award had ever been entered as a judgment of the trial court. Both sides acknowledged that that was the case. Given that "undisputed fact," we held that the trial court lacked jurisdiction to review the award on remand after Raymond James I. Therefore, we vacated the trial court's judgment as void, noted that a void judgment would not support an appeal, and dismissed the appeal. Raymond James II, 141 So. 3d at 1014-15. Thereafter, the case returned to the trial court. On October 15, 2013, seven days after this Court issued the 10 1130590; 1130655 certificate of judgment in Raymond James II, Honea filed in the trial court a motion for the circuit clerk to enter the arbitration award as a judgment of that court and also filed a notice of appeal from the arbitration award. The circuit clerk then entered the award on October 17. The notice of appeal sought review pursuant to Rule 71B, Ala. R. Civ. P. That rule, which became effective on February 1, 2009, provides the procedure for appealing an arbitration award and supersedes the procedures in § 6-6-15. See Committee Comments to Rule 71B. Honea's filings included a copy of the arbitration award and a copy of materials from the arbitration proceeding. She subsequently filed a motion to vacate the arbitration award and for a de novo review. RJFS responded with a motion to dismiss and an opposition to the motion to vacate, arguing, among other things, that the trial court lacked jurisdiction. Honea filed a reply, which she later supplemented. The trial court ultimately held a hearing on January 17, 2014. At that hearing, the trial court indicated that it would first consider the jurisdictional issues raised by RJFS and would consider the "merits" of the motion to vacate at a later time. 11 1130590; 1130655 On February 21, 2014, pursuant to "Rule 60(b)," Ala. R. Civ. P., Honea filed a motion for relief from judgment. In it, she suggested that her motion to vacate had been denied by operation of law on January 20, 2014, pursuant to Rule 59.1, Ala. R. Civ. P.1 Honea sought relief from that denial, arguing that it was the consequence of mistake, inadvertence, surprise, or excusable neglect. On February 25, 2014, the trial court purported to deny RJFS's motion to dismiss. On February 28, Honea filed a notice of appeal (case no. 1130590). RJFS subsequently filed a notice of appeal from the denial of its motion to dismiss (case no. 1130655). The trial court then set a hearing for a de novo review of the arbitration award. Honea filed a motion in this Court requesting a stay of the proceedings in the trial court, which this Court granted. 1Rule 59.1 states: "No postjudgment motion filed pursuant to Rules 50, 52, 55, or 59 shall remain pending in the trial court for more than ninety (90) days, unless with the express consent of all the parties, which consent shall appear of record ...." 12 1130590; 1130655 Analysis I. Case No. 1130655 RJFS appeals from the trial court's denial of its motion to dismiss. As mentioned above and discussed more thoroughly below, Honea's motion to vacate was denied by operation of law on January 20, 2014, more than a month before the trial court issued its order purporting to deny RJFS's motion to dismiss. When a postjudgment motion is denied by operation of law, the trial court "is 'without jurisdiction to enter any further order in [the] case after that date.' Ex parte Davidson, 782 So. 2d 237, 241 (Ala. 2000). Any order entered after the trial court loses jurisdiction is void. Id." Ex parte Limerick, 66 So. 3d 755, 757 (Ala. 2011). Further, "a void order will not support an appeal." Beam v. Taylor, 149 So. 3d 571, 577 (Ala. 2014). Additionally, an interlocutory denial of a motion to dismiss generally is not appealable unless this Court has granted permission to appeal under Rule 5, Ala. R. App. P. See, e.g., American Suzuki Motor Corp. v. Burns, 81 So. 3d 320, 321 (Ala. 2011); Conseco Fin. Corp. v. Sharman, 828 So. 2d 890, 894 (Ala. 2001); and Robinson v. Computer Servicenters, Inc., 360 So. 2d 299 (Ala. 1978). Because the trial court did not have jurisdiction to deny the motion to 13 1130590; 1130655 dismiss and because the denial of a motion to dismiss is also generally not appealable, RJFS's appeal (case no. 1130655) is due to be dismissed. Nevertheless, RJFS makes several arguments challenging the trial court's jurisdiction. A lack of subject-matter jurisdiction on the part of the trial court, in turn, impacts the appellate jurisdiction of this Court. See MPQ, Inc. v. Birmingham Realty Co., 78 So. 3d 391, 394 (Ala. 2011) ("'A judgment entered by a court lacking subject-matter jurisdiction is absolutely void and will not support an appeal; an appellate court must dismiss an attempted appeal from such a void judgment.'" (quoting Vann v. Cook, 989 So. 2d 556, 559 (Ala. Civ. App. 2008))). Therefore, before proceeding further, this Court must determine whether the trial court had jurisdiction. RJFS contends that the trial court lacked jurisdiction because, it says, Honea failed to satisfy various requirements of § 6-6-15 for initiating an appeal of an arbitration award under that Code section. Section 6-6-15 states, in pertinent part: "Either party may appeal from an [arbitration] award under this division. Notice of the appeal to the appropriate appellate court shall be filed 14 1130590; 1130655 within 10 days after receipt of notice of the award and shall be filed with the clerk or register of the circuit court where the action is pending .... The notice of appeal, together with a copy of the award, signed by the arbitrators or a majority of them, shall be delivered with the file of papers or with the submission, as the case may be, to the court to which the award is returnable; and the clerk or register shall enter the award as the judgment of the court." First, RJFS contends that Honea did not file a notice of appeal until October 15, 2013, after the decision in Raymond James II, which was over five years after the arbitration award was issued and well past the period specified in § 6-6- 15. Thus, RJFS maintains, the arbitration appeal in this case was untimely filed. Honea, on the other hand, argues that her January 14, 2008, "Motion to Vacate Arbitration Award" was sufficient to constitute a notice of appeal for purposes of § 6-6-15. We agree with Honea. This Court "treat[s] a pleading and any other filing according to its substance, rather than its form or its style." Ex parte Bender Shipbuilding & Repair Co., 879 So. 2d 577, 584 (Ala. 2003). A notice of appeal, in the context of the Alabama Rules of Appellate Procedure, "shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name 15 1130590; 1130655 the court to which the appeal is taken." Rule 3(c), Ala. R. App. P. Honea's January 14, 2008, motion to vacate specifies that information. Further, we note that this Court has construed a motion to vacate an arbitration award as a notice of appeal for purposes of Rule 71B, which superseded § 6-6-15. Guardian Builders, LLC v. Uselton, 130 So. 3d 179, 182 (Ala. 2013). See also J.L. Loper Constr. Co. v. Findout Partnership, LLP, 55 So. 3d 1152 (Ala. 2010).2 Thus, we 2RJFS argues that under the authority of Moss v. Upchurch, 278 Ala. 615, 79 So. 2d 741 (1965), a party must strictly comply with the requisites of § 6-6-15 and that the Court in that case refused to accept a motion to vacate an arbitration award as a notice of appeal. Moss, however, is inapposite. In that case, a party sought to confirm an arbitration award under what is now Ala. Code 1975, § 6-6-12. The opposing parties filed pleas in abatement, which were overruled. Those parties then appealed to this Court. In dismissing the appeal, this Court noted that an award filed under the predecessor to § 6-6-12 did not become an appealable judgment and that that Code section provided no means for an appeal. 278 Ala. at 618-19, 79 So. 2d at 743. Instead, the means to appeal an arbitration award were found in what is now § 6-6- 15, and "[the] [a]ppellants did not invoke the aid of [the predecessor to § 6-6-15]." 278 Ala. at 619, 79 So. 2d at 744. The Court went on to state in dicta that the predecessor to § 6-6-15 contained "certain mandates" that must be met, and noted that there was no compliance with the predecessor to § 6-6-15 in that case because, among other things, "no notice of appeal was given." 278 Ala. at 619, 79 So. 2d at 745. Moss does not hold that a motion to vacate an arbitration award could not be considered a notice of appeal for purposes of § 6-6-15--the predecessor to that Code section had not been invoked at all. Thus, Moss is not authority on that point. 16 1130590; 1130655 conclude that, in substance, Honea's January 14, 2008, motion to vacate was a notice of appeal of the arbitration award. In Horton Homes, supra, this Court recognized that Rule 4, Ala. R. App. P., "expand[ed] the statutory time period for taking an appeal of an arbitrator's award from 10 days from the date of receipt of notice of the award to 42 days from that date" and that a party seeking review of an arbitration award "is required to file a motion to vacate" that award. 999 So. 2d at 466, 467. Here, Honea, within 42 days of the award, filed in the action pending in circuit court a motion to vacate that award, and such motions, this Court has recognized, can constitute a notice of appeal. Therefore, we hold that Honea timely filed a notice of appeal for purposes of § 6-6-15. RJFS also contends that Honea, contrary to the requirements of § 6-6-15, did not file "a copy of the [arbitration] award" with her January 14, 2008, filings. RJFS contends that the filing of a copy of the award is a requisite for review under § 6-6-15 and that Honea's failure to comply with the requirement is a jurisdictional defect. Although it appears from the record that a copy of the arbitration award was not included with Honea's motion to 17 1130590; 1130655 vacate, RJFS included a copy of the award with its February 14, 2008, response to Honea's January 14, 2008, motion to vacate the award. This was within the 42-day period required by § 6-6-15, as modified by Rule 4, Ala. R. App. P. Setting aside the issue whether a timely filing of a copy of the arbitration award is actually a jurisdictional requirement under § 6-6-15, it appears that the trial court nevertheless timely received a copy of the arbitration award, and there is no argument presented to this Court suggesting that, in this context, there is a material difference between Honea's filing the copy or the trial court's receiving it from another party. Thus, we hold that there is no merit to this argument. Finally, RJFS contends that the arbitration award was not entered as a judgment of the trial court until October 17, 2013, after this Court's judgment in Raymond James II and over five years after Honea filed the January 14, 2008, motion to vacate. This, RJFS contends, was untimely and, as a result, the trial court did not obtain jurisdiction over Honea's appeal of the arbitration award. As this Court noted in Raymond James II, the clerk's entry of an arbitration award under § 6-6-15 as a judgment of the circuit court is a jurisdictional requisite. However, the 18 1130590; 1130655 Code section does not specify a time in which this should occur. Additionally, this requirement that the arbitration award be entered was a duty of the circuit clerk and not an action Honea could perform. Finally, in numerous cases where it was found that the circuit clerk had failed to enter an arbitration award, this Court, rather than ordering a dismissal of the action, instead remanded the case for the circuit clerk to perform this duty. Raymond James II; supra; Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d 639, 642–43 (Ala. 2009) ("Because a conditional judgment was never entered on the arbitration award by the circuit clerk, we have no alternative but to dismiss the appeal. ... However, ... we hereby direct the appropriate circuit clerk ... to enter the arbitration award as the judgment of the court. Following the entry of that conditional judgment, Dawsey ... should follow the procedures set forth in Rule 71B, Ala. R. Civ. P. ..."); and Horton Homes, supra. We see no authority for the proposition that the circuit clerk's failure to enter the award as required by § 6-6-15 until October 2013 denies the trial court jurisdiction in the instant case. Therefore, we see no merit in RJFS's argument. 19 1130590; 1130655 We hold that the trial court had jurisdiction over Honea's motion to vacate the arbitration award. II. Case No. 1130590 In case no. 1130590, Honea contends that the trial court erred in allowing the motion to vacate the arbitration award to be denied by operation of law. In Horton Homes, supra, this Court held that a motion to vacate filed in an appeal of an arbitration award under § 6-6-15 is in the nature of a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate a judgment; additionally, such a motion is subject to Rule 59.1, Ala. R. Civ. P., which deems that certain postjudgment motions are denied by operation of law if they are not disposed within 90 days: "Rule 59(e), Ala. R. Civ. P., provides that a party has 30 days after the entry of judgment to file a motion to alter, amend, or vacate that judgment. Accordingly, borrowing from the spirit of Rule 59(e), we hold that a party desiring judicial review of an arbitration award pursuant to § 6–6–15 must file in the appropriate circuit court a motion to alter, amend, vacate, or set aside the award within 30 days of filing the notice of appeal of the arbitration award and the clerk's entry of the conditional judgment based thereon. If that motion is timely filed, the circuit court shall then have 90 days, unless that time is extended by the consent of all the parties, to dispose of the motion. See Ala. R. Civ. P. 59.1 ('A failure by the trial court to dispose of any pending post-judgment motion within [90 days], or any extension thereof, shall 20 1130590; 1130655 constitute a denial of such motion as of the date of the expiration of the period.')." Horton Homes, 999 So. 2d at 468 (footnote omitted). See Ace Title Loan, Inc. v. Crump, 14 So. 3d 94 (Ala. 2009), and Waverlee Homes, Inc. v. McMichael, 855 So. 2d 493, 495 (Ala. 2003) (deeming a motion to vacate a judgment entered on an arbitration award to be a motion under Rule 59(e) and denied by operation of law pursuant to Rule 59.1).3 Further, under Rule 71B, which replaced the procedure in § 6-6-15 and provides the procedure for appealing an arbitration award, a party challenging an arbitration award may file a motion to vacate under Rule 59, Ala. R. Civ. P., and such motions have been deemed by this Court to be denied by operation of law under Rule 59.1. See Terminix Int'l Co. v. Scott, 142 So. 3d 512, 525 (Ala. 2013). Honea argues that it was error for the trial court to allow her motion to vacate to be denied by operation of law. Specifically, in Raymond James I, this Court, pursuant to the terms of the arbitration agreement, directed the trial court 3There is no legal argument presented in the briefs on appeal contending that the time to rule on the motion to vacate was extended by the consent of the parties, as provided in Rule 59.1. 21 1130590; 1130655 to conduct a de novo review of the arbitration award. We stated that, under the arbitration agreement, "[p]resumably, the trial court is to review the evidence presented at the arbitration proceeding and make its own findings of fact and conclusions of law and enter a judgment accordingly. It is without dispute that the trial court did not purport to undertake such a review in this case because the transcript and exhibits were apparently never submitted to the trial court for consideration and are not a part of the record. ... Accordingly, the order entered by the trial court vacating the arbitration award in favor of RJFS must be reversed and the cause remanded for the trial court to conduct the de novo review contemplated by the arbitration provision. ... "...[B]ecause the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the parties, its judgment is nevertheless reversed and the cause is remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." Raymond James I, 55 So. 3d 1170. As noted in Raymond James II, the trial court conducted such a review and entered a judgment in favor of Honea. 141 So. 3d at 1014. However, the trial court never obtained jurisdiction to vacate the arbitration award because it had not been first entered as a judgment. 141 So. 3d at 1015. Honea contends that, after Raymond James II, the trial court was required to conduct another de novo review pursuant 22 1130590; 1130655 to the appellate mandate in Raymond James I; however, after the decision in Raymond James II, she argues, the trial court did not "expressly" consider the merits of Honea's motion. Instead, the motion was denied by operation of law pursuant to Rule 59.1. Thus, Honea contends, the trial court violated the appellate mandate of Raymond James I, and the denial is void.4 See Ex parte DuBose Constr. Co., 92 So. 3d 49, 58 (Ala. 2012) (holding that an order by a trial court that was outside the scope of an appellate mandate was void).5 It is unclear what additional consideration or review was required by the trial court--it had, after remand in Raymond James I, already conducted the mandated de novo review of the arbitration award, vacated the award, and entered a judgment 4Honea notes that a denial of her motion is a completely different result from the trial court's previous judgment, despite the fact that the substantive issues did not change in the intervening two years. Although a hearing was held on the motion to vacate, it was clear that the trial court heard only RJFS's arguments as to whether it had jurisdiction to proceed and did not consider the merits of Honea's motion to vacate. In fact, the trial court later scheduled a second hearing to hear Honea's motion. As noted above, that hearing was stayed by this Court at Honea's request. 5In Ex parte DuBose Construction, the trial court was directed by the Court of Civil Appeals to enter an order making specific findings of fact. The trial court instead dismissed the case. This Court held that the dismissal violated the appellate mandate and was thus void. 23 1130590; 1130655 in favor of Honea. Although RJFS subsequently argued that the trial court lost jurisdiction, it does not appear that any substantive facts or legal issues underlying any de novo review had changed or were different. In fact, Honea, in her motion for a de novo review filed after Raymond James II, noted that the trial court had already conducted a de novo review, had entered a judgment for Honea on "the precise issues now before the Court," and that the matter was "now ripe for adjudication." Thus, it does not appear that the trial court was required to undertake any new or additional actions to accomplish the mandate. In any event, the trial court did not enter a ruling on the motion to vacate, and it was denied by operation of Rule 59.1. Generally, a trial court's failure to rule on a post- judgment motion--resulting in a denial by operation of law pursuant to Rule 59.1--is, alone, not reversible error. Howard v. McMillian, 480 So. 2d 1251, 1252 (Ala. Civ. App. 1985) (holding that "[a]ny type of failure to rule upon such a motion during such period of time is adequate to bring Rule 59.1 into operation" and that an appellate court "will not place a trial court in error for its failure to rule upon a motion for a new trial within ninety days from its filing"), 24 1130590; 1130655 and Russell v. Russell, 610 So. 2d 391, 392 (Ala. Civ. App. 1992) ("Rule 59.1 ... provides that a post-judgment motion that is not ruled upon by the trial court within 90 days of filing is deemed denied. Failure to rule does not amount to an abuse of discretion."). The operation of Rule 59.1 "constitutes a denial of the motion," Williamson v. Fourth Ave. Supermarket, Inc., 12 So. 3d 1200, 1204 (Ala. 2009), and the motion is "deemed denied." Matador Holdings, Inc. v. HoPo Realty Invs., L.L.C., 77 So. 3d 139, 145 (Ala. 2011). See also Forehand v. Forehand, 680 So. 2d 380, 381 (Ala. Civ. App. 1996) ("The failure of the trial court to timely address such a motion constitutes a denial of the motion."). No distinction is made between a failure to rule that is deliberate and a failure to rule that is inadvertent. Ex parte Johnson Land Co., 561 So. 2d 506, 508 (Ala. 1990) ("[T]he operation of Rule 59.1 makes no distinction based upon whether the failure to rule appears to be 'inadvertent [or] deliberate ... [or] any other type of failure.'" (quoting Howard v. McMillian, 480 So. 2d 1251, 1252 (Ala. Civ. App. 1985))). Further, this Court "reviews the denial of a post-judgment motion by operation of law in the same manner as if the trial court had denied the motion by an order." King 25 1130590; 1130655 Motor Co. v. Wilson, 612 So. 2d 1153, 1157 (Ala. 1992). Given that allowing the operation of Rule 59.1 cannot per se be error, that the operation of the rule constitutes a denial of the motion, that there is no distinction between a deliberate failure to rule and an inadvertent failure to rule, and that a Rule 59.1 denial is treated no differently than an express denial, the trial court's failure in the instant case to rule on Honea's motion to vacate, and the resulting denial of the motion by operation of law, is, under Alabama law, treated no differently than if the trial court had expressly denied the motion. In the instant case, our decision in Raymond James I directed the trial court to rule on the motion to vacate based on its de novo review of the record in the arbitration proceedings. That instruction was followed, but the resulting judgment setting aside the award and entering an award for Honea was declared void in Raymond James II. After Raymond James II, there was nothing more for the trial court to do in relation to the de novo review but to enter a ruling: there was no change in the facts or substantive law; it was not necessary to again review the same record; all that was required was to rule on the motion. The ruling here--a Rule 26 1130590; 1130655 59.1 denial by operation of law--is treated no differently from an express, deliberate order by the trial court denying the motion after its de novo review. To treat it differently would create a distinction between a Rule 59.1 denial (either inadvertent or deliberate) and a denial by an express order; to do so would be to review the Rule 59.1 denial in a different manner than "if the trial court had denied the motion by an order." King Motor Co., 612 So. 2d at 1157.6 The motion was ruled upon; therefore, we cannot presume that the trial court violated the appellate mandate of Raymond James I. Honea also argues that the trial court erred in not holding a hearing on her motion to vacate. Under Rule 59(g), a party is entitled to a hearing on a Rule 59(e) motion if such a hearing is requested.7 "Rule 59(g), Ala. R. Civ. P., 6Even if the trial court's allowing the motion to be denied by operation of law had been inadvertent, it would be contrary to the above caselaw to treat that failure to rule differently from a situation where the trial court conducted a de novo review, decided that the motion to vacate should be denied, and then deliberately allowed the motion to be denied by operation of law instead of by express order. Unlike Ex parte DuBose Construction, no particular findings of fact were required to be included in any denial of the motion. 7Rule 59(g) states: 27 1130590; 1130655 provides that motions filed pursuant to Rule 59(e) 'shall not be ruled upon until the parties have had opportunity to be heard thereon.' In other words, 'when a hearing is requested pursuant to Rule 59(g), the trial court errs in not granting a hearing.'" Ware v. Deutsche Bank Nat'l Trust Co., 75 So. 3d 1163, 1172 (Ala. 2011) (quoting Unicare, Inc. v. Hood, 823 So. 2d 1252, 1253 (Ala. 2001)). Further, "[a] trial court's failure to conduct a hearing is error." Dubose v. Dubose, 964 So. 2d 42, 46 (Ala. Civ. App. 2007). These principles apply in both an express denial of a postjudgment motion and a denial by operation of law. Further, in Terminix International Co. v. Scott, supra, this Court specifically applied those principles in the context of a denial by operation of law of a motion to vacate an arbitration award. Nevertheless, the failure to conduct a hearing under Rule 59(g) is not always a reversible error: "Presentation of any post-trial motion to a judge is not required in order to perfect its making, nor is it required that an order continuing any such motions to a date certain be entered. All such motions remain pending until ruled upon by the court (subject to the provisions of Rule 59.1), but shall not be ruled upon until the parties have had opportunity to be heard thereon." 28 1130590; 1130655 "Although it is error for the trial court not to grant such a hearing, this error is not necessarily reversible error. For example, if an appellate court determines that there was no probable merit to the motion, it may affirm based on the harmless-error rule. See Rule 45, Ala. R. App. P.; and Kitchens v. Maye, 623 So. 2d 1082, 1088 (Ala. 1993) ('failure to grant a hearing on a motion for new trial pursuant to Rule 59(g) is reversible error only if it "probably injuriously affected substantial rights of the parties"')." Flagstar Enters., Inc. v. Foster, 779 So. 2d 1220, 1221 (Ala. 2000). Therefore, in the instant case, we must determine whether there was "probable merit" in Honea's motion to vacate that would have entitled her to a hearing. Terminix, 142 So. 3d at 524; Flagstar Enters., Inc., 779 So. 2d at 1221; and Dubose v. Dubose, 964 So. 2d at 46 ("When there is probable merit to the motion, the error cannot be considered harmless."). On appeal, Honea contends that there was "probable merit" to her motion to vacate the arbitration award because, she says, the arbitration panel erroneously concluded that her breach-of-contract claims were barred by the statute of limitations. Specifically, she argues that her claims were not barred because: (1) they "sounded in trust," and the statute of limitations for such claims would not have accrued until the time she closed her accounts, which was after her 29 1130590; 1130655 lawsuit was filed, and (2) her breach-of-contract claims accrued within the six-year statutory limitations period for such actions. Honea argues that the arbitration panel erroneously concluded that her claims were barred by the statute of limitations because, she says, her claims "sounded in trust," and such claims would accrue, and the statute of limitations would not begin to run, until she closed her accounts in April 2006, after her complaint was filed in March 2006. See McCormack v. AmSouth Bank, N.A., 759 So. 2d 538, 542 (Ala. 1999) (discussing authority holding that the statute of limitations does not run between trustees and beneficiaries so long as the trust relationship exists). Under this theory, Honea contends that there is "probable merit" in her claim that the arbitration panel erred in concluding that her claims against RJFS were time-barred. RJFS, however, argues that Honea is unable to demonstrate that the accounts in this case were a trust. "This Court has held consistently that no particular form of words is required to create a trust, but that any instrument in writing signed by the parties, or party, at the time of the trust's creation, or subsequently, will suffice, if the nature, subject matter, and objects of the trust and 30 1130590; 1130655 manifested with reasonable certainty by the instrument." Jones v. Ellis, 551 So. 2d 396, 399 (Ala. 1989). The intent of the parties to create a trust must be manifested and proven: "There is no trust unless an intention to create one is manifested. ... The burden of proof is on the party seeking to establish the existence of the trust and that burden is to present clear and definite evidence, without reasonable doubt as to the existence of the trust." Osborn v. Empire Life Ins. Co. of America, 342 So. 2d 763, 765 (Ala. 1977). Furthermore, to create a trust, the settlor cannot retain title to the property of the trust: "'A conveyance in trust is incomplete unless the settlor has passed the title to the property to the trustee by delivery of the subject matter of the trust or of an instrument of transfer. On the other hand, if the conveyance in trust is completed by such delivery, the trust is not incomplete merely because the settlor reserves power to revoke or to alter the trust. There is sufficient surrender of control over the property if the settlor transfers the title to it to the trustee, even though he reserves power to undo what he has done. The surrender of control is sufficient even though the settlor reserves power to reassume the control.'" Coosa River Water, Sewer & Fire Prot. Auth. v. SouthTrust Bank of Alabama, N.A., 611 So. 2d 1058, 1062 (Ala. 1993) (quoting 1 William F. Fratcher, Scott on Trusts § 37 (1987)). 31 1130590; 1130655 Additionally, although a settlor can retain power over the administration of the trust, that power cannot amount to "ownership" of the trust estate: "'[W]here the powers retained by the settlor amount, in cumulative effect, to ownership of the trust estate, with such control over the administrative functions of the trustee as to make of him simply the settlor's representative, no valid trust is established.'" Coosa River, 611 So. 2d at 1062 (quoting 76 Am. Jur. 2d Trusts § 29 (1992)). RJFS contends that there is no "probable merit" in any claim that there is clear and definite evidence that a trust was created in this case. In both her initial brief and reply brief, Honea's argument on appeal that her brokerage account amounted to a trust is that she "relinquished control of her funds" and "sole investment authority" to RJFS. RJFS, on the other hand, argues that it did not have "sole control" over the alleged trust property. Specifically, RJFS points to a document titled "Discretionary Client Agreement," which appears to be part of the contractual agreement in this case. It states in paragraph 8 that "[Raymond James] [i]s authorized to follow the instructions of [Honea] in every respect concerning [Honea's] account." RJFS also cites to portions of 32 1130590; 1130655 the record indicating that Honea directed Michaud to make certain trades with account funds. RJFS also contends that there was no manifest intention to create a trust. In May 1997, Honea executed a "New Account Form." This form contains an area titled "Account Classification" that has several boxes from which to select. One box was for a "Trust" account; however, it was not selected by Honea.8 Additionally, in the Discretionary Client Agreement, Michaud is appointed by Honea as her "Investment Manager." Those documents, RJFS argues, indicate that there was no intent to create a trust and, instead, that "Honea's discretionary account created a typical agency relationship." Finally, RJFS argues that Honea has not met her burden in establishing that title to investments was transferred to Raymond James and points to documents in the record that an account was instead titled in Honea's name. Further, paragraph 3 of the Discretionary Client Agreement states that the "manager" of the account "shall assume all investment duties with respect" to the assets held in the account and may take any action deemed appropriate, "with or without the 8In fact, it does not appear from the copy of the form in the record that any boxes were selected. 33 1130590; 1130655 consent of the client." However, the manager was "not authorized to withdraw any monies or securities from the account." RJFS presents evidence indicating that Honea retained some control over the accounts, that there was no manifest intent to create a trust, and that RJFS did not obtain title to the trust property. Therefore, Honea has not demonstrated "probable merit" in her argument that the statute of limitations applicable to actions on trusts applies in her case; thus, she has not demonstrated that she was entitled to a hearing on that issue. Therefore, we conclude that, in this regard, the trial court's failure to conduct a hearing under Rule 59(g) was harmless. Flagstar Enters., Inc., 779 So. 2d 1121. As to whether Honea demonstrated potential merit in her breach-of-contract claims, the analysis provided by both sides in their briefs is limited. Honea argues that her complaint, filed in March 2006, was filed within the six-year statutory limitations period as to any claims that accrued after March 2000. See Ala. Code 1975, § 6-2-34(9) (providing generally for a six-year statute of limitations in an action on a 34 1130590; 1130655 contract). Honea cites to the following provision in the client agreement: "Applicable Regulations: (a) I understand and agree that every transaction in my account is subject to the rules or customs in effect at the time of the transaction which, by the terms of the rule or custom, applies to the transaction. These rules or customs include state and federal laws, rules and regulations established by state or federal agencies, the Constitution, rules, customs and usages of the applicable exchange, association, market or clearinghouse or customs and usages of individuals transacting business on the applicable exchange, market or clearinghouse." (Emphasis added.) Under this provision, Honea contends that the rules of the Financial Industry Regulatory Association, Inc. ("FINRA"), applied to every transaction by RJFS in this case. Honea states in her brief that Michaud had "a duty to know Honea, her knowledge, her background in securities, and her goals" and that his "[r]ecommendations for trades were required to be made based on that knowledge." According to Honea, in 1997 RJFS and Michaud created an investor profile that inaccurately characterized her as having extensive investment experience with stocks, bonds, and mutual funds when, in fact, Honea maintains, that characterization was untrue. Further, she could not recall Michaud ever discussing 35 1130590; 1130655 with her investment terms such as "growth," "high risk," "speculation," or "risk tolerance," and they did not discuss trading on margin. She further asserts that she never gave Michaud authority to put her portfolio "at risk" and that "he never advised her that he would engage in a high-risk strategy." The arbitration panel apparently agreed that Michaud had failed to properly "know" his client. It stated: "The Panel makes an express finding that Respondent Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the panel held that Honea's breach-of-contract claims were "all barred by the applicable statutes of limitations." On the other hand, RJFS argues that those claims were, as the arbitration panel found, untimely and that any breach of contract occurred more than six years before the complaint was filed. Specifically, RJFS points to evidence indicating that Honea's expert testified that her account was "unsuitable" in February 1999. Additionally, as noted above, Honea claims that RJFS created an erroneous investor profile in 1997. Thus, according to RJFS, those purported breaches of the 36 1130590; 1130655 contract occurred before March 2000, despite the fact that more harm resulted after March 2000. See AC, Inc. v. Baker, 622 So. 2d 331, 335 (Ala. 1993) ("The statute of limitations on a contract action runs from the time a breach occurs rather than from the time actual damage is sustained."). Nevertheless, RJFS points out, Honea waited until 2006 to file her action. To the extent that RJFS's breaches of its contractual duties were related to Michaud's failure to know Honea, the creation of an inappropriate investor profile, and an "unsuitable" account, it would appear such breaches occurred, and the statute of limitations began to run, long before March 2000. Thus, Honea has not demonstrated "probable merit" on those claims for purposes of a hearing under Rule 59(g), and the denial of the motion on those claims--without a hearing-- is affirmed. Honea further appears to contend, however, that RJFS also breached its contractual duties by making unauthorized or improper trades, that some of those trades occurred after March 2000, and that such activity constituted separate breaches of its duties. Specifically, her statement of facts notes that, after March 2000, Michaud improperly traded 37 1130590; 1130655 extensively on margin, which Honea contends made her losses much worse. Honea also claims that her account lost funds after March 2000 because of subsequent excessive, overly aggressive, and high-risk trading, as well as improper diversification. Honea, quoting expert testimony from the arbitration proceeding, states: "Under the standards and duties applicable to brokers, even on 'discretionary' authorization, 'a broker cannot make a recommendation [for a trade] that's unsuitable even if it's what the customer says that's what they want.' Michaud's duty as a broker was to determine whether Honea's portfolio and its holdings were suitable for Honea; that duty was constant." (Citations omitted.) Honea contends that she is seeking damages specifically for claims related to actions by RJFS that occurred after March 30, 2000. RJFS maintains, citing Catrett v. Baldwin County Electric Membership Corp., 996 So. 2d 196, 202 (Ala. 2008), that Alabama law does not recognize a "continuing contract" exception to the statute of limitations; thus, according to RJFS, "the multiple transactions in Honea's accounts constitute one alleged breach of contract." It argues: 38 1130590; 1130655 "Alabama law is clear: '[i]f there is a single assent to a whole transaction involving several things or acts, there is only one contract....' AC, Inc. v. Baker, 622 So. 2d 331, 334 (Ala. 1993) (internal quotation marks omitted). A single Client Agreement applies to Honea's discretionary account with Raymond James." Further, as noted above, RJFS argued in its brief that the evidence demonstrated that breaches alleged by Honea occurred before March 2000. RJFS also contends that Honea knew of her investment losses and the types of investments in her accounts at the latest in February 2000 when she received her January account statement reflecting a loss of over $300,000. Although it is true that one contract appears to govern this case and that RJFS breached its duties by failing to properly understand Honea's investment knowledge before March 2000, Honea contends that allegedly improper transactions--the excessive use of margin and overly aggressive, high-risk trading occurring after March 2000--represent independent breaches of the FINRA rules. Those claims accrued within the six-year limitations period before her complaint was filed. Further, any knowledge by Honea of her losses does not mean that the trading activity was proper. Thus, to the extent that any transactions after March 2000 would be considered separate breaches of contract unrelated to the failure to 39 1130590; 1130655 properly know Honea, her holdings, or her investment experience, or setting up an "unsuitable" account, Honea has demonstrated probable merit--for purposes of a Rule 59(g) hearing--that those claims would not be barred by the statute of limitations. Honea also claims that Raymond James failed to properly supervise Michaud. She argues that under the FINRA rules Raymond James was required to supervise Michaud and that, although Raymond James approved Michaud for discretionary trading only as to mutual funds, Michaud nonetheless subsequently traded high-risk stocks in Honea's accounts. RJFS points to evidence indicating that Michaud was approved for discretionary trading in 1996 and that a supervisor failed to review Michaud's trading in 1997, which would have occurred more than six years before the case was filed. However, nothing before us suggests that any purported failure by Raymond James to supervise Michaud that occurred after March 2000 would be barred by the statute of 40 1130590; 1130655 limitations; thus, Honea demonstrated probable merit to warrant a hearing under Rule 59(g) on this claim.9 Conclusion Honea has demonstrated that, in relation to the certain breach-of-contract claims identified above, she is entitled to a Rule 59(g) hearing on her motion to vacate the arbitration award; thus, in case no. 1130590, we affirm in part, reverse in part, and remand for proceedings consistent with this opinion. Further, for the reasons stated above, RJFS's appeal in case no. 1130655 is dismissed. 1130590--AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. Stuart, C.J., and Bolin, Parker, Bryan, and Sellers, JJ., concur. Shaw, J., concurs specially. Murdock, Main, and Wise, JJ., dissent. 9In holding that Honea, for purposes of Rule 59(g), demonstrated probable merit on some her claims, this Court should not be construed to express any opinion on the substantive merit of those claims. 41 1130590; 1130655 1130655--APPEAL DISMISSED. Stuart, C.J., and Bolin, Parker, Bryan, and Sellers, JJ., concur. Shaw, J., concurs specially. Murdock, Main, and Wise, JJ., concur in the result. 42 1130590; 1130655 SHAW, Justice (concurring specially). I concur in the main opinion. I write specially to respond to Justice Murdock's dissenting opinion. First, let this be abundantly clear: the appellant in case no. 1130590, Kathryn L. Honea, has in no way been deprived of the opportunity to have a de novo review of the arbitration award at issue in this case after this Court's remand to the trial court in Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013) ("Raymond James II"). In fact, Honea specifically asked for such de novo review in her subsequently filed motion to vacate the arbitration award. If there is any error in the denial of that motion, she could have, in this very appeal, directly challenged that denial on the merits.10 W h e t h e r t h e arbitration provision in this case provides simply for an appeal of an arbitration award or for an "independent, judicial adjudication," as Justice Murdock contends, is of no 10As noted in the main opinion, Honea's only arguments as to the merits were found in a narrow argument related to whether she was entitled to a hearing on her postjudgment motion. 43 1130590; 1130655 consequence. ___ So. 3d at ___. Honea has twice had the opportunity for a "de novo review" of the arbitration award directed by this Court's prior decision in Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"), specifically, in the proceedings following this Court's decision in Raymond James I and in the proceedings following Raymond James II. Nevertheless, I will briefly discuss the issue. Justice Murdock contends that the arbitration provision provides a "special avenue" for the circuit court to perform an "independent, judicial adjudication as to Honea's claims based on that court's de novo review of the record." ___ So. 3d at ___, ___. I disagree. I believe that what is called for in this case is an appeal of the arbitration award with a de novo standard of review; I believe so because: (1) a party cannot seek judicial review of an arbitration award absent statutory authority, and such authority calls for an "appeal"; (2) the arbitration provision at issue in this case waives the right to seek remedies in court; and (3) the arbitration provision calls for what it describes as an "appeal." 44 1130590; 1130655 This Court long ago stated: "In the absence of a statute authorizing it, an appeal, writ of error, or other revisory remedy, will not lie to any court from the award of arbitrators." Collins v. Louisville & Nashville R.R., 70 Ala. 533, 533 (1881). The Court in Collins noted, however, that, under § 3547 of the Code of 1876, now codified as Ala. Code 1975, § 6-6-15, an arbitration award could be entered as a judgment of the trial court, set aside, and then appealed. Id. As we later explained: "Th[e] method of appeal for review of an award as provided in [Title 7, § 843 of the 1940 Code, which is the successor to § 3547 of the 1876 Code, and is now § 6-6-15], is exclusive at law; it precludes all other challenges at law if notice has been given as mandated by said section." Moss v. Upchurch, 278 Ala. 615, 620, 179 So. 2d 741, 745 (1965) (emphasis added). Thus, presumably, for a court to exercise "review" of an arbitration award, there must exist statutory authority, and that authority is § 6-6-15. In Horton Homes, Inc. v. Shaner, 999 So. 2d 462, 467 (Ala. 2008), this Court discussed the process for appealing an arbitration award under § 6-6-15 and 45 1130590; 1130655 noted, among other things, that "[a] party seeking review of an arbitration award is required to file a motion to vacate" that award after it has been entered as a judgment of the trial court.11 Honea and Raymond James Financial Services, Inc. ("Raymond James"), had agreed to arbitrate any claims between them instead of pursuing a remedy in court. The arbitration provision states: "The parties are waiving their right to seek remedies in court, including the right to trial by jury." The arbitration provision further provides: "A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." 11Rule 71B, Ala. R. Civ. P., now controls appeals from arbitration awards. It supersedes Ala. Code 1975, § 6-6-15, which previously controlled arbitration appeals and which, in Raymond James II, this Court held applied in this case, a case that originated before the adoption of Rule 71B. 46 1130590; 1130655 (Emphasis added.) The express agreement is that the parties have waived judicial remedies, i.e., they cannot file an action "in court." This is contrary to any notion that the arbitration provision provides for an "independent, judicial adjudication" by a "court" to settle the disagreement between them. ___ So. 3d at ___ (Murdock, J., concurring in the result in case no. 1130655 and dissenting in case no. 1130590). Further, according to the arbitration provision, the parties may have the circuit court "enter judgment" on the resulting arbitration award; this is just what § 6-6-15 and caselaw required in appeals from an arbitration award. The provision also provides that the parties then may "appeal" that judgment under certain circumstances if they so choose. If such an "appeal" takes place, then the reviewing court examines the record ("the transcript and exhibits of the arbitration hearing") of the arbitration proceeding. A standard of review for such "appeal" is provided--de novo. That this process is an "appeal" is demonstrated by the fact that the circuit court, as in any other "appeal," reviews the record and does not have a new trial or allow the parties to present evidence. 47 1130590; 1130655 See generally Raymond James I (reversing the trial court's order setting for trial Honea's challenge to the arbitration award and directing the trial court instead to conduct a de novo review). I submit that the language in the arbitration provision constitutes an agreement to waive the parties' traditional judicial remedies, to have an arbitrator decide their claims, to have the subsequent arbitration award entered as a judgment of the circuit court, and, if there is a challenge to the arbitration award, to allow an "appeal" to be heard by the circuit court by a de novo consideration of the record. These post-arbitration-award procedures set out in the arbitration provision comply with the statutory scheme set out in § 6-6-15. Nothing in the arbitration provision suggests an attempt to create procedures outside those of the arbitration- award appeal process provided by law. I submit that the scheme found in the arbitration provision is completely contrary to allowing what Justice Murdock describes as a "new, independent adjudication" by a court or a "right to obtain, in substitution for the arbitration award, an independent 48 1130590; 1130655 judgment of the circuit court." ___ So. 3d at ___, ___ (emphasis omitted). To say that what is described in this "appeal" as a de novo review of the record--as the arbitration provision describes it--is not really an appeal but a "new, independent adjudication" "to obtain, in substitution for the arbitration award, an independent judgment of the circuit court," id., which remedy by a court the parties were actually waiving, is to "mistakenly perceive[]" the express terms of the arbitration agreement. ___ So. 3d at ___. Justice Murdock states that "Honea never attempted to file an appeal of the arbitration award under the standards and procedures provided in §§ 6-6-14 and -15." ___ So. 3d at ___. I respectfully disagree; as discussed in the main opinion, that is exactly what Honea filed on January 14, 2008. That filing makes no claim that Honea was seeking an independent adjudication; instead, she moved to vacate the award, which was the standard way parties initiated an arbitration appeal under § 6-6-15. Horton Homes, 999 So. 2d at 467 ("A party seeking review of an arbitration award [under § 6-6-15] is required to file a motion to vacate ...."). The 49 1130590; 1130655 motion to vacate even cited grounds under § 6-6-14--that the arbitration panel was biased. Such a ground for setting aside an arbitration award is specifically stated in § 6-6-15, which incorporates § 6-6-14. Honea also contended that the arbitration panel that decided her claims "exhibited a manifest disregard of the law," a ground for an arbitration appeal under §§ 6-6-14 and -15 previously recognized by the decision in Birmingham News Co. v. Horn, 901 So. 2d 27 (Ala. 2004). But see Hereford v. D.R. Horton, Inc., 13 So. 3d 375, 381 (Ala. 2009) (overruling Birmingham News on this issue). Thus, Honea's January 14, 2008, motion to vacate clearly sought review of the arbitration award under the statutory authority of § 6-6-15 and by the procedures for such a challenge provided by caselaw, all of which is consistent with the language of the arbitration provision.12 12Justice Murdock states that Honea attempted "to fit" the "'holes' prescribed by § 6-6-15" "in the wake" of Raymond James II. ___ So. 3d at ___. But as can be seen above, she specifically attempted to "fit" these "holes" in her very first post-arbitration filing, namely, "from the beginning," years before Raymond James II was decided. ___ So. 3d at ___. 50 1130590; 1130655 It is true that the trial court had jurisdiction over the initial lawsuit filed by Honea in the trial court. This makes no difference when it comes to § 6-6-15: that Code section explicitly recognizes that an action might first be filed in court before the arbitration occurs and thus directs that the notice of appeal from the arbitration award is to be filed in the court "where the action is pending." § 6-6-15. See also Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d 639, 641–42 (Ala. 2009) (noting that, although a trial court had jurisdiction over a case it stayed pending arbitration, the parties must still subsequently comply with § 6-6-15 in an appeal). I do not accept the idea that the arbitration provision here calls for a review of the arbitration award under "common law" and, thus, that the provided statutory procedures in § 6- 6-15 governing appeals for what the arbitration provision here describes as an "appeal" do not apply. For this to occur, it appears that a party need only disclaim the applicability of § 6-6-15 (or now Rule 71B, Ala. R. Civ. P.) and rely on language in the arbitration agreement specifying a post- 51 1130590; 1130655 arbitration-award procedure to support the idea that there is no "appeal" under § 6-6-15 or Rule 71B even if the language designates the procedure as an "appeal." Such a holding would drastically rewrite the law governing arbitration appeals. To provide that final arbitration awards may be "intercept[ed]," ___ So. 3d at ___ n. 24, in undefined common-law challenges that fall outside the very specific strictures and procedures of § 6-6-15 or Rule 71B, and without any statutory authority, would render great uncertainty in the finality of arbitrations. Because Honea's post-arbitration actions initiated an appeal under § 6-6-15, Raymond James II correctly held that the arbitration award had to be entered as the judgment of the trial court before it could be vacated. There is a great deal of authority requiring this result, and that authority at times casts this as an issue of a lack of "jurisdiction" even if the trial court had jurisdiction over the initial action that was subsequently sent to arbitration. See, e.g., Parham v. American Bankers Ins. Co. of Florida, 24 So. 3d 1102, 1104 (Ala. 2009) (discussing a trial court's inability to set aside 52 1130590; 1130655 an arbitration award without first entering the award as a judgment of the court under § 6-6-15 as a lack of "subject- matter jurisdiction"); Dawsey v. Raymond James Fin. Servs., Inc., 17 So. 3d at 641–42 ("[N]otwithstanding the fact that the trial court had jurisdiction over the case when it stayed the case pending arbitration, ... the same trial court lacked jurisdiction to subsequently rule on a motion to vacate the resulting arbitration award until the circuit clerk entered the arbitration award as the judgment of the court."); Championcomm.net of Tuscaloosa, Inc. v. Morton, 12 So. 3d 1197 (Ala. 2009) (same); Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008); and Jenks v. Harris, 990 So. 2d 878 (Ala. 2008). In any event, even if the holding in Raymond James II was incorrect--and I submit that it was not--that is ultimately of no consequence because, after that decision, Honea was placed in the very same position she was in the day she filed her first motion to vacate the arbitration award on January 14, 2008, and the day after this Court's previous decision in Raymond James I, which directed a de novo review. In other 53 1130590; 1130655 words, after Raymond James II, Honea asked for her de novo review. Nothing in Raymond James II required otherwise or impacted her ability to do so.13 13Raymond James II addressed what must occur under § 6-6- 15, a Code section that has been superseded. Any precedent found in that decision will have little, if any, application in the future. Justice Murdock argues that the ex mero motu setting aside of Raymond James II is supported by Ex parte Discount Foods, Inc., 789 So. 2d 842 (Ala. 2001). That case set aside a plurality opinion whose "precedential value" was "questionable at best." 789 So. 2d at 845. Further, the plurality decision had been sub silentio disapproved in a subsequent decision. But Justice Murdock does not simply suggest that we overrule a prior decision and direct the trial court to apply new or corrected law, as was the case in Discount Foods; instead, he suggests that the entire procedural history of the case be rewound for a judicial mulligan. That is completely unnecessary--there were already two such second chances for a de novo review after Raymond James I and again after Raymond James II. 54 1130590; 1130655 MURDOCK, Justice (concurring in the result in case no. 1130655 and dissenting in case no. 1130590). These cases comes to us on appeal for the third time from the Jefferson Circuit Court. The October 2013 judgment at issue in these cases resulted from the recording, or entry, by the circuit court clerk of the 2008 arbitration award that had previously been rejected by that same circuit court in both Raymond James Financial Services, Inc. v. Honea, 55 So. 3d 1161 (Ala. 2010) ("Raymond James I"), and Raymond James Financial Services, Inc. v. Honea, 141 So. 3d 1012 (Ala. 2013)("Raymond James II"). This entry occurred as a consequence of this Court's decision in Raymond James II and does not represent the de novo review of the 2008 arbitration decision to which Kathryn L. Honea is entitled. Because I believe Raymond James II was erroneously decided, I would overrule that decision and reinstate the judgment the circuit court entered based on the de novo review it conducted on remand from Raymond James I. For this reason, I respectfully dissent as to the Court's decision in Honea's appeal, case no. 1130590. That said, because the majority of the Court declines to take this approach and instead proceeds to discuss 55 1130590; 1130655 the merits of the statute-of-limitations issues relating to Honea's claims, I will extend this writing to do so as well. I concur in the result as to the dismissal of the cross- appeal of Raymond James Financial Services, Inc. ("Raymond James"), and its employee, Bernard Michaud (hereinafter referred to collectively as "RJFS"), case no. 1130655, and to the denial of RJFS's motion to dismiss Honea's appeal. I. Arbitration "Appeal" Procedures A. Facts and Procedural History In May 1997, Honea opened multiple investment accounts with Raymond James. Honea and Raymond James signed a client agreement, which provided that all disputes between them would be submitted to arbitration. However, the arbitration agreement also contained the following provision: "(b) We agree that in any arbitration the arbitrators will resolve the dispute in accordance with applicable law and will be required to furnish us with a written decision which must explain the reasons for their decision. ... "(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the 56 1130590; 1130655 arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a 'de novo' review of the transcript and exhibits of the arbitration hearing." (Emphasis added.) 1. Original Circuit Court Proceedings On March 30, 2006, after losing significant assets as a result of RJFS's allegedly wrongful brokerage practices, Honea sued RJFS in the Jefferson Circuit Court. Honea alleged violations of the Alabama Securities Act and sought damages for breach of contract, breach of fiduciary duty, negligence, wantonness, and fraud. On April 7, 2006, RJFS filed an "Unopposed Motion to Compel Arbitration" of Honea's claims. In that motion, RJFS requested that the circuit court "enter an order compelling arbitration of this dispute and staying further proceedings in this action until arbitration has been completed" and alleged that Honea "[did] not oppose the relief requested in this motion." (Emphasis added.) The circuit court entered an order granting RJFS's motion. The order states: "[T]he Unopposed Motion to Compel Arbitration filed by [RJFS] is hereby GRANTED and all parties herein are hereby ORDERED to submit this cause to binding 57 1130590; 1130655 Arbitration and file an Arbitration Report herein at the completion of said Arbitration detailing all findings and awards of the Arbitrator so this cause may be disposed of at said time. All proceedings in this cause are hereby STAYED pending said Arbitration." (Capitalization in original; emphasis added.) The circuit court's order did not specify a time within which the parties were obligated to file the described report, other than "at the completion of" the arbitration; nor is it clear that separate reports by each party were required in order satisfy the court's directive. Further, the order did not by its terms require that the parties submit an actual copy of the award. On January 3, 2008, the arbitration panel unanimously entered an award in favor of RJFS. On January 14, 2008, Honea filed with the circuit court a "Motion to Vacate the Arbitration Award." The motion to vacate detailed the findings and awards of the arbitrators and included allegations that the arbitrators had "manifest[ly] ... 58 1130590; 1130655 disregard[ed] the law."14 Honea's filing subsequently was described by the circuit court as follows: "The Motion to Vacate contained various statements positively identifying the judgment, i.e., the award, appealed from, properly named the 'appellees,' and was filed in the appropriate court. The motion to vacate also contained various quotes from the Award and referenced the Award as Exhibit A thereto. The clerk's record, however, does not contain the exhibits referenced in the motion to vacate, including the Award." On February 14, 2008, RJFS filed a response to Honea's filing in the circuit court. RJFS made no objection to any alleged failure or insufficiency of Honea's filing relative to the post-arbitration filing requirements imposed upon both parties by the circuit court's order. Nor did RJFS complain that Honea should be proceeding under some different, statutory, post-arbitration filing requirements that Honea's filing did not satisfy. Instead, RJFS simply responded on the merits to Honea's filing. Specifically, RJFS filed a written opposition in which it argued merely that the arbitrators had properly applied the law and that, even if they had not, any 14Honea's motion to vacate also sought an order authorizing discovery as to the alleged bias of one of the arbitrators. 59 1130590; 1130655 error did not justify a vacatur of the award because the error did not rise to the level of "manifest disregard of the law." Furthermore, RJFS itself submitted to the circuit court as part of its filing a complete copy of the arbitration award. The award itself is rather brief and, consistent with the description of its terms set out in Honea's filing, reads, in material part, as follows: "Claimant's claims for violation of § 8-6-19 of the Alabama Securities Act; statutory and common law fraud; breach of fiduciary duty; negligence; fraud; and wantonness are dismissed with prejudice. "Claimant's claim for breach of contract is denied. The Panel makes an express finding that Respondent Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in Claimant's account. However, Claimant's claims are all barred by the applicable statutes of limitations. ".... "Any and all claims for relief not specifically addressed herein, including Claimant's requests for punitive damages and attorneys' fees, are denied." As the circuit court later noted, the arbitration award itself, therefore, has been of record since February 14, 2008. 60 1130590; 1130655 On February 27, 2008, the circuit court responded to the parties' post-arbitration filings with the following order: "The parties having orally announced to the Court their inability to be prepared to argue the Motion to Vacate Arbitration Award previously filed herein and set for hearing before the undersigned ... due to the difficulty in securing a written transcript of the proceedings before the Arbitrator, the Order entered by this Court setting the hearing ... is hereby withdrawn and held for naught and the said hearing is hereby cancelled. The Plaintiff and Defendants are hereby ORDERED and DIRECTED to file with the Court a written request for status conference within ten (10) days upon receipt of the transcribed transcription of the proceedings before the Arbitrator." (Capitalization in original.) On October 17, 2008, Honea filed a "Submission in Support of Vacatur of Arbitration Award." In the submission, Honea argued that she was "entitled to a de novo review of the arbitration award made between the parties hereto before this Court" based on the contractual provision quoted above. Honea attached a copy of the arbitration award as an exhibit to her submission. On October 31, 2008, RJFS filed a response to Honea's submission. In addition to restating the arguments from its response to Honea's motion to vacate, RJFS argued that, 61 1130590; 1130655 despite the provisions in the parties' arbitration agreement providing for de novo review, Honea was not entitled to such a review in light of the United States Supreme Court's decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008). Honea filed a reply to RJFS's response, arguing that, in light of the de novo-judicial-review provision agreed to by Honea and Raymond James as part of their arbitration agreement, RJFS had forgone the right to rely on the exclusivity provisions of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), as discussed in Hall Street. Honea contended that Hall Street did not preclude such a waiver, nor did it preclude such review of an arbitration award as may be available under state law. Honea further contended that, if the judicial-review provision of the parties' arbitration agreement was void, the entire arbitration agreement must fail because such review was an "important consideration" for the agreement. See Ex parte Warren, 718 So. 2d 45, 48 (Ala. 1998)("[W]here it is clear that a specific failed term of an arbitration agreement is not 62 1130590; 1130655 an ancillary logistical concern but, rather, is as important a consideration as the arbitration agreement itself, a court will not sever the failed term from the rest of the agreement and the entire arbitration provision will fail."). On July 20, 2009, the circuit court entered an order citing the parties' arbitration agreement and concluding that Honea was entitled to de novo review by the court as provided in that agreement. The circuit court explained in its order: "[T]he Supreme Court made it clear that its opinion in Hall Street 'addressed ... only ... the scope of the expeditious judicial review under §§ 9, 10 and 11 of the FAA, deciding nothing about other possible avenues for judicial enforcement of arbitration awards.' Hall Street, supra. 128 S. Ct., at 1407. "The Supreme Court went on to note the exceptions of state statutory and common law that may permit review. Id. Thus, the FAA does not preempt state law regarding proceedings to enforce or vacate arbitration awards. It applies only to proceedings under §§ 9, 10 and 11 of the FAA. "Here, because neither party has sought expeditious judicial enforcement under §§ 9, 10 and 11 of the FAA, the issue addressed in Hall Street, the Court must consider Alabama law. The Alabama Arbitration Act provides for the review of arbitration awards essentially on the same grounds as the FAA. Thus, neither the FAA nor the Alabama Act would permit judicial review of an arbitration award. The Alabama arbitration statute does not preempt Alabama common law. In fact, the statute 63 1130590; 1130655 expressly reserves arbitration at common law. (See Ala. Code [1975,] § 6-6-16). As noted, the Supreme Court in Hall Street also stated that state common law may allow for review." The circuit court thus concluded that the provision for de novo review by the circuit court, as agreed to by RJFS and Honea in the same agreement that provided for any arbitration at all, was enforceable under the common law according to its terms. Further, the circuit court concluded that, "[e]ven if the FAA did provide the exclusive grounds for the enforcement of arbitration awards, defendants have waived their right, and are estopped, to rely on the FAA's review provision. ... By providing for appeal rights in the Agreement that are not included in FAA, defendants expressed their intention not to rely on the review rights provided by the FAA, and thus have waived their right to rely on the FAA." The circuit court also stated: "[T]he very provision that provided for arbitration of this dispute in the first place also provided for de novo review in this Court in the event of certain possible outcomes of the arbitration, one of which occurred here. Defendants moved to compel arbitration based on such arbitration provision, attaching the entire arbitration provision to its motion to compel arbitration. Defendants then obtained an order compelling arbitration based on such provision, but now ask this Court not to enforce all the rights thereunder. Estoppel operates to prevent such results." 64 1130590; 1130655 (Emphasis added.) And, the circuit court further concluded, "the arbitration provision ... formed one integrated provision of the Agreement. Because it is only one integrated provision, if any part thereof is to be severed, the entire arbitration provision is to be severed. ... To strike the review provision but to keep the other parts of the arbitration provision would thwart the object of the agreement to arbitrate." Finally, the circuit court stated that the arbitration award was due to be vacated because the arbitration was not conducted pursuant to the applicable arbitration rules of the National Association of Securities Dealers. The circuit court's order concludes: "Accordingly, it is hereby ORDERED and ADJUDGED as follows: "1. That the arbitration award made between the parties hereto is hereby vacated; and "2. A Status Conference is hereby set before the undersigned on AUGUST 28, 2009, at 10:00 a.m., to establish a schedule of deadlines for the entry of a Scheduling Order and Trial Setting, consistent with this Order." (Capitalization in original.) 2. Raymond James I RJFS appealed to this Court to challenge the circuit court's setting of the dispute for a trial. Significantly, 65 1130590; 1130655 RJFS argued that the parties' contract for de novo circuit court review of the arbitration award in certain categories of cases could not be enforced because it was preempted by the FAA, 55 So. 3d at 1164-68, and, if not that, then by § 6-6-14, Ala. Code 1975, 55 So. 3d at 1168. Both the FAA and § 6-6-14 provide for relief from an arbitration award only on very limited and narrow grounds. In the case of § 6-6-14, our legislature provided for review only on grounds of "fraud, partiality, or corruption" and, in a companion statute, § 6-6-15, Ala. Code 1975, provided a mechanism for seeking relief from an appellate court on those grounds.15 This Court rejected both of RJFS's arguments in Raymond James I. We specifically held that the arbitration provision 15Section 6-6-15 begins by stating that "[e]ither party may appeal from an award under this division" and then explains that a "[n]otice of appeal to the appropriate appellate court shall be filed" in the applicable circuit court. Upon such a filing, the arbitration award was to be "enter[ed] ... as the judgment of the court" and thereafter could be reviewed on appeal in the appellate court, "unless within 10 days the court shall set aside the award for one or more of the causes specified in Section 6-6-14." Section 6-6- 15 was superseded effective February 1, 2009, by Rule 71B, Ala. R. Civ. P. See Committee Comments to Rule 71B. 66 1130590; 1130655 agreed to by the parties, including specifically the provision for de novo review by the circuit court under certain defined circumstances, was enforceable in accordance with its terms under Alabama law. Raymond James I, 55 So. 3d at 1169. We reversed the judgment of the circuit court, however, because it scheduled a trial instead of simply conducting "a de novo review of the transcript and exhibits of the arbitration hearing and ... enter[ing] a judgment based on that review" as required by the parties' agreement. 55 So. 3d at 1170. The holding of this Court in Raymond James I remains germane to the proper disposition of this dispute at the present time. It is worthy of repeating here, not only because of its explanation of Honea's entitlement to a de novo review by the circuit court, but because it reveals the absence of any challenge by RJFS to the manner or timing of Honea's post-arbitration filing in the circuit court. As Justice Stuart wrote for the Court at that time: "The gravamen of RJFS's argument on appeal is that an Alabama court can vacate an arbitration award deciding a dispute involving interstate commerce and subject to the FAA only if one of the following grounds for vacatur enumerated in § 10(a) of the FAA is clearly established: 67 1130590; 1130655 "'(1) where the award was procured by corruption, fraud, or undue means; "'(2) where there was evident partiality or corruption in the arbitrators, or either of them; "'(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or "'(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.' "In support of this argument, RJFS cites Hall Street [Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008)], in which the Supreme Court of the United States considered the issue whether parties could, consistent with the FAA, expand by contract the grounds for judicial review of an arbitration award beyond those enumerated in § 10 of the FAA and answered that question in the negative. Honea, however, argues that the holding of Hall Street does not apply to this case. ".... "It is accordingly clear that, post-Hall Street, the specific grounds enumerated in § 10 of the FAA are the only grounds upon which an arbitration award may be vacated under the FAA. However, Honea argues that an arbitration award may nevertheless be vacated upon grounds outside those enumerated in § 68 1130590; 1130655 10 of the FAA if those other grounds are authorized by state statute or by common law. The Supreme Court of the United States expressly recognized this possibility in Hall Street ... "'....' "... Honea accordingly argues that even though agreements providing for the expanded judicial review of arbitration awards may not be enforceable under the FAA, they are nevertheless enforceable under Alabama common law because Alabama courts have consistently held that general contract law requires that arbitration agreements be enforced as written. This principle was explained by this Court in Bowater Inc. v. Zager, 901 So. 2d 658, 667–68 (Ala. 2004): "'Section 3 of the FAA provides that, when a party to pending litigation successfully moves to compel arbitration, the trial court shall stay the proceeding "until such arbitration has been had in accordance with the terms of the agreement." Section 4 of the FAA likewise provides, in a situation where there is no pending litigation and a party desiring to compel arbitration petitions a court "for an order directing that such arbitration proceed in the manner provided for in [the] agreement," that "the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." Section 5 provides that "[i]f in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed...." 69 1130590; 1130655 "'"Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, see Mitsubishi [Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614], at 628 [(1985)], so too may they specify by contract the rules under which that arbitration will be conducted.... By permitting the courts to 'rigorously enforce' such agreements according to their terms, see [Dean Witter Reynolds Inc. v.] Byrd, [470 U.S. 213], at 221 [(1985)], we give effect to the contractual rights and expectations of the parties, without doing violence to the policies behind ... the FAA." "'Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989). "'"...." "'....' "RJFS refutes Honea's argument on this point by arguing, first, that the FAA -- not Alabama common law -- governs the review of this arbitration award .... ".... 70 1130590; 1130655 "Moreover, RJFS argues that, even if this Court does accept Honea's argument and apply the common law, the end result would be the same. Section 6–6–14, Ala. Code 1975, provides that an arbitration award in Alabama is final unless there is evidence of 'fraud, partiality, or corruption in making it,' and this Court has declared that this statute 'is but declaratory of the common-law rule on the subject.' Fuerst v. Eichberqer, 224 Ala. 31, 33, 138 So. 409, 410 (1931). Thus, RJFS argues, courts reviewing arbitration awards under Alabama common law or statute are limited to the three grounds enumerated in § 6–6–14, which grounds it argues are even more narrow than those in § 10 of the FAA, and, it further argues, courts may not therefore engage in de novo review even if the parties have contractually agreed to such review. It is therefore ultimately immaterial, RJFS argues, whether the arbitration award in this case is reviewed pursuant to the FAA, the [Alabama Arbitration Act], or the common law. For the reasons that follow, we disagree. "In [Birmingham News Co. v.] Horn, [901 So. 2d 27 (Ala. 2004)], we made clear that Alabama courts should apply § 10 of the FAA when moved to vacate or to confirm arbitration awards, even though § 10 was facially applicable only to federal district courts. 901 So. 2d at 46. However, we refrained from holding that § 10 constituted substantive law that we were required by the FAA to apply in state court proceedings, stating that it was unnecessary to 'stumble over the distinction between substantive law and procedural law' because we had already adopted § 10 'as applicable to an appeal of an arbitration award in this state, and we see no need to retreat from that position.' 901 So. 2d at 46–47. However, in Hall Street, the Supreme Court of the United States acknowledged that state statutory or common law might permit arbitration 71 1130590; 1130655 awards to be reviewed under standards different from those enumerated in § 10, thus effectively stating that § 10 represents procedural as opposed to substantive law. We are accordingly at liberty to decide whether to apply § 10 in state court proceedings on motions to vacate or to confirm an arbitration award. We have heretofore done so; however, this case presents us with the situation we implicitly recognized in Horn in which there are good and sufficient reasons 'to retreat from that position.' 901 So. 2d at 46–47. Under the Alabama common law, courts must rigorously enforce contracts, including arbitration agreements, according to their terms in order to give effect to the contractual rights and expectations of the parties. See, e.g., Bowater, supra. Applying that principle in this case requires us to give effect to the provision in the arbitration agreement authorizing a court having jurisdiction to conduct a de novo review of the award entered as a result of arbitration proceedings conducted pursuant to that same agreement." 55 So. 3d at 1164-1169 (some emphasis original; some emphasis added; footnotes omitted). Thus, in Raymond James I, we concluded that "the provision [of the parties' arbitration agreement] providing for de novo review of the arbitration award by the trial court is enforceable under state law." 55 So. 3d at 1170. We then explained that, "because the trial court vacated the arbitration award before conducting the de novo review required by the arbitration provision and contemplated by the 72 1130590; 1130655 parties, its judgment [had to be] reversed and the cause ... remanded for the trial court to conduct a de novo review of the transcript and exhibits of the arbitration hearing and to enter a judgment based on that review." 55 So. 3d at 1179. 3. In the Circuit Court on Remand from Raymond James I On remand, the circuit court complied with this Court's mandate in Raymond James I. The circuit court conducted the de novo review called for by the parties' arbitration agreement and required by this Court's decision in Raymond James I. On November 3, 2011, the circuit court entered a thorough 27-page "Order and Final Judgment" that included detailed findings of fact (with references to the testimony and exhibits presented during the proceeding before the arbitrators), discussed pertinent law, and explained the basis for its independent, judicial adjudication in favor of Honea and against RJFS as to Honea's claims. Specifically, the circuit court's November 2011 order vacated the arbitration award and entered a judgment in favor of Honea and against RJFS in the amount of $1,169,113.35 as compensatory damages for "breach of contract, breach of 73 1130590; 1130655 fiduciary duty, breach of the Alabama Securities Act, fraud, negligence, and wantonness." The order denied Honea's request for punitive damages and attorney fees, and taxed costs against RJFS. In part, the circuit court's November 2011, judgment reads as follows: "As shown above, this Court is in full accord with the [Arbitration] Panel's finding that RJFS breached its duties to HONEA and that such breach proximately caused HONEA's damages. The Panel erred, however, in finding that HONEA's claims are barred by the statutes of limitations. This action was filed on March 30, 2006. The trust relationship between RJFS and HONEA tolled the running of the limitation periods until HONEA's accounts were closed in 2006. ... Thus, all claims are timely. ... [T]he contract claim is governed by a six-year limitations period meaning, of course, that all claims arising after March 30, 2000 were timely." (Capitalization in original.) RJFS filed a notice of appeal, giving rise to Raymond James II. 4. Raymond James II In Raymond James II, this Court never reached the arguments made by the parties regarding the merits of the independent adjudication that had been made on remand by the circuit court pursuant to our mandate in Raymond James I. Instead, following RJFS's filing of its notice of appeal in 74 1130590; 1130655 Raymond James II, the clerk of this Court issued an order for the parties to show cause as to why that appeal should not be dismissed for lack of jurisdiction in light of the Court's pre-Raymond James I decisions in Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008)(clarifying the process of appealing an arbitration award), and Championcomm.net of Tuscaloosa. Inc. v. Morton, 12 So. 3d 1197, 1200 (Ala. 2009)(explaining Horton Homes), among other cases. The parties filed responses to the show-cause order. RJFS argued that this Court should vacate the circuit court's judgment vacating the arbitration award and that RJFS's appeal should be dismissed for lack of jurisdiction "because of the circuit clerk's apparent failure to enter the arbitration award as the judgment of the circuit court, as required by both Ala. R. Civ. P. 71B and its predecessor, Ala. Code [1975,] § 6-6-15." (Emphasis added.)16 As noted above (see note 15, supra, and accompanying text), § 6-6-15 provided a process by which an arbitration award could be subjected to appellate review on the grounds 16As noted above, § 6-6-15 was supplanted effective February 1, 2009, by Rule 71B, Ala. R. Civ. P. See Committee Comments to Rule 71B. See note 15, supra. 75 1130590; 1130655 prescribed in § 6-6-14. This process included the entry of the arbitration award as the judgment of the circuit court in order to put that award in a form amenable to such review. In response to this Court's show-cause order, RJFS contended for the first time that the circuit court lacked subject-matter jurisdiction to consider the post-arbitration "return" made by Honea to the circuit court in 2008. This, despite the fact that that 2008 filing was made by Honea in an action (a) Honea had duly commenced in that court some two years earlier and (b) from which the order for arbitration, including a requirement that the parties file a "return" to the circuit court following the completion of arbitration, had emanated. Ignoring those aspects, RJFS, following the lead provided by the order of this Court's clerk, posited, for the first time, that Honea's filing in the circuit court after the entry of the arbitration award did not qualify as a timely or proper filing under § 6-6-15. RJFS made this argument notwithstanding the lack of any expression of concern in this regard by it in Raymond James I and, to the contrary, its express representation to the circuit court that "'[w]e don't 76 1130590; 1130655 believe that a conditional judgment is required here or the entry of a conditional judgment is required here.'" Order of Trial Court, February 25, 2014, following Raymond James II (emphasis added). More particularly, RJFS made this argument in the face of the fact that the post-arbitration filing Honea made in the circuit court was not one by which Honea sought appellate court review of the arbitration award on the limited statutory grounds provided by § 6-6-14, nor one by which Honea sought to invoke § 6-6-14's tandem procedural statute, § 6-6- 15, in an effort to initiate such an appeal. Instead, it was a "return" to the circuit court that Honea made (a) in an effort to comply with directive for such a return included in that court's order sending the case to arbitration in the first place and (b) in order to obtain a new and independent judicial adjudication based on the specially contracted-for de novo review by the circuit court under the parties' arbitration agreement. See Raymond James I, supra. In response to RJFS's new position, Honea offered three alternative grounds for not dismissing the appeal: "This appeal should not be dismissed because (i) § 6-6-15 does not apply to this 'common law' 77 1130590; 1130655 arbitration proceeding, (ii) the case can be remanded to the circuit court for entry of judgment on the arbitration award without dismissing the appeal under the teachings of Foster v. Greer & Sons, 446 So. 2d 605 (Ala. 1984), and/or (iii) the failure to enter the arbitration award as the judgment of the court is a 'clerical error' which can be corrected pursuant to Rule 60(a), Ala. R. Civ. P., during the pendency of this appeal." And, Honea added: "Alternatively, in the event of dismissal of this appeal, precedent of this Court and fundamental principles of due process and equal protection require that Honea be given the right to invoke the arbitration award appeal process anew. (Ex post facto application of [such] a judicial decision [would] implicate[] the due process clause. Hunt v. Tucker, 875 F. Supp. 1487 (N.D. Ala. 1995), aff'd 93 F.3d 73[5 (11th Cir. 1996)]). This is so because of the confusing and unsettled nature of arbitration award appeal process at the time Honea filed her motion to vacate in the circuit court, i.e., January 14, 2008. Such condition of the law led (i) this Court to revamp the appeal process, and (ii) to the eventual amendment of Rule 71, Ala. R. Civ. P., effective February 1, 2009. The standard procedure for this Court in like cases has been to allow the appeal process to begin anew. See, e.g. Horton Homes, Inc. v. William Shaner H & S Homes, L.L.C., 999 So. 2d 462 (Ala. 2008), and Jenks v. Harris, 990 So. 2d 878 (Ala. 2008)."17 17In addition, responding to references by RJFS to Rule 71B along with § 6-6-15, Honea noted, "Rule 71B ... became effective in February 2009, more than a year after Honea initiated her appeal in the circuit court. Thus, it does not apply here and was not made an issue in the Show Cause Order." 78 1130590; 1130655 After receiving the parties' respective responses to our show-cause order, this Court dismissed RJFS's appeal. Specifically, the opinion in Raymond James II accepted the position urged by RJFS that this Court lacked jurisdiction over the appeal because "the arbitration award to RJFS was not entered as a judgment of the trial court as required by § 6-6- 15, Ala. Code 1975." Raymond James II, 141 So. 3d at 1015. According to the opinion, "the trial court lacked subject- matter jurisdiction" to review the award; therefore, the judgment it had entered in favor of Honea on remand from Raymond James I would not sustain an appeal. Id. 5. In the Circuit Court Following Dismissal of the Appeal in Raymond James II In an effort to proceed in a manner consistent with this Court's stated rationale in Raymond James II, Honea filed in the circuit court a "Motion for Clerk to Enter Judgment on Arbitration Award."18 The motion requested that the Jefferson 18Although this Court's opinion in Raymond James II invoked § 6-6-15, which was the statutory scheme for appealing an arbitration award in effect in 2008 when the arbitration award was entered, in 2013, when this Court remanded the case in Raymond James II, § 6-6-15 had been supplanted by Rule 71B, Ala. R. Civ. P., which became effective on February 1, 2009. Honea referenced Rule 71B in her post-Raymond James II filings 79 1130590; 1130655 Circuit Court clerk enter judgment on the January 2008 arbitration award, which she attached as an exhibit to the motion. Contemporaneously with the filing of her motion, and likewise in an apparent effort to proceed consistently with our decision in Raymond James II, Honea filed a "notice of appeal." She attached as exhibits to this notice a copy of the arbitration award and "a disk containing the record from the arbitration proceedings." On October 16, 2013, the Jefferson Circuit Court clerk entered a "Judgment," stating: "Pursuant to Ala. Code, 1975, Sections 6-6-12 and/or 6-6-15; and Rules 71B and/or 71C of the Alabama Rules of Civil Procedure, the Arbitrator's Award of January 3, 2008 (attached hereto), is hereby entered as a judgment of the Court. Court costs are taxed to the Defendant pursuant to Administrative Order 08-0011, dated March 24, 2008." On October 22, 2013, Honea filed a "Motion for De Novo Review of, and to Vacate, Arbitration Award." She cited Raymond James I for the proposition that she was entitled to a de novo review of the arbitration award pursuant to the common law and, specifically, the agreement setting the terms in the circuit court. 80 1130590; 1130655 pursuant to which the parties had agreed to arbitrate their dispute in the first place. Honea's motion continued: "This Court has previously (i) conducted the de novo review, (ii) vacated the arbitration award, and (iii) entered judgment for Honea, on the precise issues now before the Court, but such judgment has now been vacated by the Supreme Court of Alabama on the basis that the clerk had not first entered judgment on the arbitration award. Such error has now been cured. Accordingly, this matter is now ripe for adjudication." (References to exhibits omitted.) On October 24, 2013, RJFS filed a motion in the circuit court asking that court to dismiss Honea's post-Raymond James II filing. RJFS argued that Rule 71B now imposes a 30- day time limit (from receipt of notice of the arbitration award) for filing a "notice of appeal" and that, therefore, Honea's filing was untimely. As a result of this untimeliness, RJFS argued, Honea had waived her right to review of the arbitration award by the circuit court. Beyond any alleged waiver, however, RJFS went further to argue that the alleged untimeliness of Honea's filing meant that the circuit court actually lacked subject-matter jurisdiction over Honea's action. 81 1130590; 1130655 Honea responded to RJFS's motion. Deferring to the ruling of this Court in Raymond James II that § 6-6-15 was applicable, Honea argued that her motion was timely and that "principles of equity, due process, and equal protection prohibit the retroactive application of either (i) Rule 71B which was enacted after Honea began the appeal process, or (ii) court decisions rendered after Honea moved to vacate the arbitration award." Honea also noted that, "[i]n Jenks v. Harris, 990 So. 2d 878 (Ala. 2008), the Alabama Supreme Court, quoting from an earlier order entered in the case, stated 'the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15, Ala. Code (1975)[,] is far from clear,' 990 So. 2d, at 882. Thus, even though it dismissed the earlier appeal for lack of jurisdiction, the Court ordered that the appeal process start anew in the circuit court. (Id.) In Horton Homes v. Shaner, 999 So. 2d 462 (Ala. 2008), the Alabama Supreme Court again noted that the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15 is far from clear. 999 So. 2d at 464. Once again, the Court in Horton Homes permitted the appeal process to begin anew in the Circuit Court. "Both Jenks and Horton Homes were decided after Honea filed her motion to vacate in the Circuit Court. In a like circumstance, the Alabama Court of Civil Appeals, instead of finding waiver, permitted the appeal process to begin anew in the circuit court because the procedure for appealing arbitration awards was unclear at the time of the tenants' initial appeal, and the law was 82 1130590; 1130655 subsequently changed following that appeal. Hurst v. Eagles Landing IV, Ltd., 20 So. 3d 143 (Ala. Civ. App. 2009). In accord is Tuscaloosa Chevrolet, Inc. v. Guyton, 41 So. 3d 95 (Ala. Civ. App. 2009). "Accordingly, well-established, controlling precedent requires this Court to permit Honea to begin anew the appeal process." Honea later filed a supplement to her response, adding that "Honea had, in fact, complied with requirements of Ala. Code [1975,] § 6-6-15, at the time that she filed her motion to vacate on January 14, 2008. In that regard, § 6-6-15 requires that either party may appeal from an arbitration award when an action is pending, by filing with the circuit clerk a notice of appeal in the appropriate appellate court within 10 days after receipt of notice of the award. The notice of appeal, together with a copy of the award, shall then be delivered with the file and the clerk shall enter the award as judgment of the clerk. Honea complied with such statute by filing her motion to vacate in the circuit court within 10 days of her receipt of the award and attaching thereto the arbitration award. "The fact that Honea's motion to vacate can also serve as the notice of appeal is clear. A notice of appeal is reviewed for substance, not form. Ex parte P&H Const[r]. Co., Inc., 723 So. 2d 45 (Ala. 1998)."19 Honea further noted that "neither § 6-6-15 nor Rule 71B provides for any default or waiver of appeal rights for the 19Honea notes that "the award was received on January 3, 2008, and the motion to vacate was filed on January 14, 2008, a Monday." 83 1130590; 1130655 failure of the circuit clerk to enter judgment on the award in a timely fashion." On February 21, 2014, Honea filed a motion for relief from judgment, invoking Rule 60(b), Ala. R. Civ. P. Although the circuit court never ruled on Honea's October 2013 "Motion for De Novo Review of, and to Vacate, Arbitration Award," Honea noted that "[i]f the 90 day limitation set forth in Rule 59.1[, Ala. R. Civ. P.,] applies to these proceedings or was not otherwise tolled, Honea's Motion to Vacate was denied by operation of law on January 20, 2014." On February 25, 2014, the circuit court entered an order concluding that Honea had timely filed her January 2008 motion to vacate and denying RJFS's motion to dismiss. In its order, the circuit court stated: "On January 14, 2008, Honea filed a Motion to Vacate Arbitration Award ('Motion to Vacate') in the circuit court. The Motion to Vacate contained various statements positively identifying the judgment, i.e., the award, appealed from, properly named the 'appellees,' and was filed in the appropriate court. The motion to vacate also contained various quotes from the Award and referenced the Award as Exhibit A thereto. The clerk's record, however, does not contain the exhibits referenced in the motion to vacate, including the Award. 84 1130590; 1130655 "On February 14, 2008, Raymond James filed its Opposition to the Motion to Vacate and attached a copy of the Award thereto. Thus, the arbitration award itself has been of record since February 14, 2008. Thereafter, Honea's Motion to Vacate was further briefed and then heard by this Court. During a hearing on Honea's right to de novo review, this Court inquired of the parties as to whether the clerk should enter judgment on the award. Raymond James' position [in 2008] was, 'We don't believe that a conditional judgment is required here or the entry of a conditional judgment is required here.' Transcript, pp. 68, November 7, 2008. Thereafter, by Order dated July 20, 2009, this Court granted Honea's Motion to Vacate and scheduled the de novo review as provided in the ... Agreement." (Emphasis added.)20 20The order also states: "During the pendency of this case, the Alabama Supreme Court decided Horton Homes, Inc. v. Shaner, 999 So. 2d 462 (Ala. 2008), and Jenks v. Harris, 990 So. 2d 878 (2008), wherein the Alabama Supreme Court recognized that the procedure for obtaining jurisdiction to review an arbitration award under § 6-6-15, Ala. Code (1975), was far from clear. Jenks, supra, 990 So. 2d, at 882. In response, Rule 71B of the Alabama Rules of Civil Procedure was adopted, effective February 1, 2009, to establish the method for filing appeals from an arbitration award. "As stated, Honea had, on January 14, 2008, moved to vacate the award. In addition, on October 15, 2013, in response to the dismissal of Raymond James' appeal to the Supreme Court [in Raymond James II], Honea filed a notice of appeal of the award and 85 1130590; 1130655 Based on "the briefs of the parties, arguments of counsel, and the review of the record," the circuit court concluded in its February 2014 order that Honea had complied with the requirements of § 6-6-15 in her January 2008 filing in that court. In addition to the foregoing explanation of its ruling, the circuit court added that, under § 6-6-15, "only the notice of appeal[, not the arbitration award itself,] is required to be filed within 10 days. Such omission was, at most, a defect in the notice of appeal which results in dismissal only if prejudice can be shown. Raymond James, however, cannot show, nor has even argued, any prejudice resulting therefrom. Thus, Honea complied with such statute by filing her Motion to Vacate with the a motion for the clerk to enter judgment on the award. On October 16, 2013, the clerk entered judgment on the award. On October 22, 2013, Honea moved to vacate the award. On October 24, 2013, Raymond James moved to dismiss the appeal. The hearing on Raymond James' motion to dismiss Honea's appeal was set for November 8, 2013. Thereafter, Raymond James moved to continue the hearing, and Honea consented thereto. Thereafter, the hearing was reset for, and held on, January 17, 2013. At the conclusion of the hearing, the parties requested until January 24, 2014, to file supplemental briefs and until February 7, 2014 to submit proposed orders. Due [to] weather conditions and other factors, the parties agreed to extend the time for filing briefs until February 7, 2014, and to submit proposed orders to February 19, 2014." (Emphasis added.) 86 1130590; 1130655 clerk within 10 days of the service of the award. As to the timeliness of seeking to have judgment entered on the award, there is no timetable for the clerk to enter judgment on the award. Even Rule 71B enacted after Honea had filed her appeal, provides no timetable for entry of the award. It does recite that judgment should be entered 'promptly', but neither § 6-6-15 nor Rule 71B provides for any default or waiver of appeal rights for the failure of the circuit clerk to enter judgment on the award in a timely fashion. "Moreover, the arbitration award appeal process of Rule 71B cannot be applied to this case. Retrospective legislation is not favored by the courts and a statute will not be construed as retrospective unless language used in enactment is so clear that there can be no other possible construction." (Emphasis added.) The circuit court also stated that "appellate court precedent and fundamental principles of due process, equal protection, and equity require that Honea be given the right to continue the arbitration award appeal process." (Emphasis added.) On March 19, 2014, the circuit court entered an order purporting to schedule a hearing on Honea's October 2013 "Motion for De Novo Review of, and to Vacate, Arbitration Award." On April 10, 2014, this Court ordered the circuit court to stay the proceedings until the appeals were resolved. 87 1130590; 1130655 Honea appeals from the October 2013 order of the circuit court adopting the 2008 arbitration award as its own judgment in an effort to respond to this Court's decision in Raymond James II. RJFS cross-appeals the circuit court's order denying its motion to dismiss and files a separate motion in this Court under Rule 27, Ala. R. App. P., to dismiss Honea's appeal. B. Discussion RJFS's cross-appeal and its motion to dismiss Honea's appeal raise issues of subject-matter jurisdiction based on the decision in Raymond James II and require this Court to review and to reexamine the holding in that case regarding subject-matter jurisdiction. RJFS asserts that, following our dismissal of the appeal in Raymond James II, the circuit court erred in finding that Honea had filed an adequate and timely notice of appeal under § 6-6-15, Ala. Code 1975, and that the circuit clerk had timely entered the arbitration award as the judgment of the court.21 Thus, according to RJFS, Honea made 21Although RJFS seeks to ground both of these particular assertions in the decision of this Court in Raymond James II, the decision to dismiss the appeal in that case provides no basis for either assertion. The opinion in Raymond James II 88 1130590; 1130655 "incurably defective efforts ... to appeal th[e] award, [and therefore] the circuit court never had subject matter jurisdiction." In support of its argument, RJFS relies upon this Court's decision in Raymond James II and, consistent with that decision, asserts that Honea's "appeal" to the circuit court was not "perfected pursuant to the time and manner prescribed in the controlling statute" and thus must be dismissed. LeFlore v. State ex rel. Moore, 288 Ala. 310, 313, 260 So. 2d 581, 583 (1972). The fundamental problem with RJFS's argument -- and for that matter with the overall posture of this case at the present time -- is twofold. The first problem is the notion that any alleged errors by Honea as to the filing she made in the circuit court after the completion of arbitration implicated the subject-matter jurisdiction of the circuit did not address the timeliness of Honea's filing in the circuit court. The sole basis for that decision was the fact that the circuit court had not entered an order incorporating the arbitration award as its own judgment. See 141 So. 3d at 1014-15. And as to this latter issue, the decision was based solely on the absence of such a judgment; this Court did not have before it, and it did not address, any issue as to time limits that might or might not be applicable to the entry by the circuit court of such a judgment. See id. 89 1130590; 1130655 court. The second problem with RJFS's position is the notion that Honea's attempt to exercise her right to "'de novo' review" under the arbitration agreement was the same as an "appeal" under Alabama's arbitration statutes, § 6-6-1 et seq., Ala. Code 1975. As to the first issue, this Court has described subject- matter jurisdiction as follows: "Subject-matter jurisdiction concerns a court's power to decide certain types of cases. Woolf v. McGaugh, 175 Ala. 299, 303, 57 So. 754, 755 (1911) ('"By jurisdiction over the subject-matter is meant the nature of the cause of action and of the relief sought."' (quoting Cooper v. Reynolds, 77 U.S. (10 Wall.) 308, 316, 19 L.Ed. 931 (1870))). That power is derived from the Alabama Constitution and the Alabama Code. See United States v. Cotton, 535 U.S. 625, 630-31, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002) (subject-matter jurisdiction refers to a court's 'statutory or constitutional power' to adjudicate a case)." Ex parte Seymour, 946 So. 2d 536, 538 (Ala. 2006). Upon careful reflection, it appears that this Court mistakenly perceived a jurisdictional defect and raised that issue ex mero motu in Raymond James II. The circuit court acquired subject-matter jurisdiction over Honea's action when she filed her complaint and initiated this action on March 30, 90 1130590; 1130655 2006. And the circuit court's jurisdiction over Honea's action continues until finally terminated by an order from that court or the equivalent of such an order by operation of law, e.g., Rule 59.1, Ala. R. Civ. P. The fact that the circuit court ordered the parties to arbitrate their dispute pursuant to their arbitration agreement did not divest the circuit court of subject-matter jurisdiction over Honea's action. That order merely stayed the circuit court's immediate exercise of its jurisdiction over Honea's action pending the decision of the arbitrators. And, in fact, that order specifically instructed the parties to make a return to circuit court by "fil[ing] an Arbitration Report herein at the completion of said Arbitration detailing all findings and awards of the Arbitrator so this cause may be disposed of at said time." (Emphasis added.) Moreover, the decision in Raymond James II failed to take account of the fact that, from the beginning, Honea never attempted to file an appeal of the arbitration award under the standards and procedures provided in §§ 6-6-14 and -15. What Honea did following arbitration was to make a return to the 91 1130590; 1130655 circuit court as had been ordered by that court and then ask that court to enter a new, independent adjudication based on a de novo review by it of the evidence pursuant to the express terms of the parties' arbitration agreement and pursuant to the terms of the circuit court's order that sent that case to arbitration and that contemplated its return to that court based on that agreement. It is true that, in the wake of our decision in Raymond James II, both Honea and the circuit court sought, and Honea continues to seek, to fit the parties' January and February 2008 filings into the "holes" prescribed by § 6-6-15. But, all of Honea's attempts to persuade the circuit court, and now this Court, that her filings in early 2008 satisfied the post- arbitration filing requirements described in § 6-6-15 (and all of the circuit court's findings as to whether Honea's filings would satisfy the filing requirements described in § 6-6-15) were forced by the erroneous holding in Raymond James II that such statutory prerequisites were applicable in this case. But that holding failed to take proper account of the fact that, from the outset, Honea did not seek to appeal the 92 1130590; 1130655 arbitrators' award pursuant to Alabama's limited statutory standards and procedures. Instead, from the outset, Honea sought to have the circuit court conduct its own de novo review and, based on that review, to make its own, independent adjudication of the parties dispute and enter an entirely new "award," or "judgment," reflecting that adjudication.22 In other words, from the beginning Honea sought simply to pursue the special avenue de novo review by the circuit court of certain categories of disputes between her and RJFS as expressly agreed to by those parties in their arbitration agreement. It is well settled, as we held in Raymond James I, that courts "'enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms,' and 'parties are generally free to structure their arbitration agreements as they see fit.' Volt Information Sciences, Inc. [v. Board of Trustees of Leland Stanford Junior Univ.], 489 U.S. [468,] 478–79, 109 S. Ct. 1248 [(1989)]." 22This new judgment by the court, not being an arbitration award, would in turn be subject to the normal rules of procedure, including the provisions for postjudgment motions and the normal mechanisms for subsequent appellate review. 93 1130590; 1130655 Homes of Legend, Inc. v. McCollough, 776 So. 2d 741, 746 (Ala. 2000). And, this Court will "presume that the parties intended what they stated and will enforce the contract as written." Id. In the present case, it is undisputed that the award at issue was made by arbitrators in a case that fell within one of the categories of circumstances that prevented that award from being binding and that triggered a right to a de novo adjudication of the parties' dispute by the circuit court (albeit by taking advantage of the evidentiary record developed in the course of the arbitration process). And we have been directed to no state law that precludes parties from agreeing to such a review, i.e., one that is different from that provided by the arbitration provisions of § 6-6-1 et seq., Ala. Code 1975, as to some or all the disputes that might arise between them. To the contrary, Ala. Code 1975, § 6-6-16, provides that "[n]othing contained in this division shall prevent any person or persons from settling any matters of controversy by a reference to arbitration at common law."23 23The fact that, absent an agreement otherwise, a party who prevails in an arbitration proceeding pursuant to § 6-6-1 94 1130590; 1130655 In short, the parties' arbitration agreement itself gave either party the right to obtain, in substitution for the arbitration award, an independent judgment of the circuit court based upon "a 'de novo' review" by the circuit court of the testimony and exhibits produced at the arbitration hearing. Honea timely invoked that right, and no law deprives the parties of the ability to contract for such a right. The circuit court never lacked subject-matter jurisdiction to conduct a review of the evidence and to enter an independent judicial judgment as agreed to by the parties, particularly in a case that was originally filed in that court, that was merely stayed by that court while the dispute was considered by the arbitrators, and that was sent to those arbitrators by that same court based solely upon an arbitration agreement that by its terms limited the types of disputes and outcomes as to which any resulting arbitration award would be binding. Honea sought merely to make a return of the case to the et seq. may file an arbitration award in a pending action such that the award "has the force and effect of a judgment, upon which execution may issue as in other cases," Ala. Code 1975, § 6-6-12, is not relevant under the circumstances before us. The parties did enter into such an agreement here. 95 1130590; 1130655 circuit court pursuant to the terms of the circuit court's own order (a) providing for such return in accordance with the parties' agreement and (b) contemplating the eventual disposition of the parties' dispute by the circuit court in accordance with the terms of that agreement.24 Section 12-2-13, Ala. Code 1975, expressly provides that "[t]he Supreme Court, in deciding each case when there is a conflict between its existing opinion and any former ruling in the case, must be governed by what, in its opinion, at that time is law, without any regard to such former ruling on the law by it." It is now well established that "[s]ection 12-2-13 abrogates the common law rule that principles decided 24Put differently, the purpose of the parties' arbitration agreement was to enable either party, if dissatisfied with certain arbitration awards, to intercept such an award and to seek instead a different, independent "award" from the circuit court. Nothing in the parties' agreement required, and it would make little sense to require (and it would elevate form over substance to deprive Honea of relief based on a failure of), the circuit court to enter as its "own judgment" an award that the parties have agreed will not stand because one of the parties has invoked its right to obtain from that same court a different -- de novo -- judgment. And it would put the circuit court in the position of "jumping" through the procedural "hoop" of entering a certain judgment as its own and then conducting a de novo review of the same matter. 96 1130590; 1130655 and rulings made on appeal, however erroneous, are the 'law of the case'•and govern the appellate court on a subsequent appeal in the same case." Papastefan v. B & L Constr. Co. of Mobile, 385 So. 2d 966, 967 (Ala. 1980). This Court "is not barred from re-examination of a previous ruling upon a subsequent appeal of the same case" where justice requires that it correct a previous mistake. Id. See also, e.g., Ex parte Vest, 181 So. 3d 1049 (Ala. 2015)(correcting this Court's mistake as to the denial of an earlier petition for a writ of certiorari). This principle has been applied by this Court in the context of disputes over arbitration and in particular where, like here, a previous decision of this Court failed to give proper effect to the terms of the parties' arbitration agreement. In Ex parte Discount Foods, Inc., 789 So. 2d 842 (Ala. 2001) ("Discount Foods II"), this Court determined that the Court's own opinion in Ex parte Discount Foods, Inc., 711 So. 2d 992 (Ala. 1998)("Discount Foods I"), had been in error. As we explained in Discount Foods II: "This Court is not required under the doctrine of 'law of the case' to adhere to the decision in 97 1130590; 1130655 Discount Foods I. Generally, the law-of-the-case doctrine provides that when a court decides upon a rule of law, that rule should continue to govern the same issues in subsequent stages in the same case. The purpose of the doctrine is to bring an end to litigation by foreclosing the possibility of repeatedly litigating an issue already decided. See Murphy v. FDIC, 208 F.3d 959 (11th Cir. 2000); see, also, Blumberg v. Touche Ross & Co., 514 So. 2d 922 (Ala. 1987). However, the law-of-the case doctrine does not in all circumstances require rigid adherence to rulings made at an earlier stage of a case. The doctrine directs a court's discretion; it does not limit a court's power. The law-of-the-case doctrine is one of practice or court policy, not of inflexible law, and it will be disregarded when compelling circumstances call for the redetermination of a point of law on a prior appeal; and this is particularly true when the court is convinced that its prior decision is clearly erroneous or where an intervening or contemporaneous change in the law has occurred by an overruling of former decisions or when such a change has occurred by new precedent established by controlling authority. See State v. Whirley, 530 So. 2d 861 (Ala. Crim. App. 1987), rev'd on other grounds, 530 So. 2d 865 (Ala. 1988); Callahan v. State, 767 So. 2d 380 (Ala. Crim. App. 1999); Murphy v. FDIC, supra; United States v. Escobar–Urrego, 110 F.3d 1556 (11th Cir. 1997); Heathcoat v. Potts, 905 F.2d 367 (11th Cir. 1990). The decision in Discount Foods I failed to give effect to the parties' contractual intent, as evidenced by the plain language of the arbitration provision; it, therefore, was clearly erroneous." 789 So. 2d at 846 n. 4 (emphasis added). 98 1130590; 1130655 Based on the foregoing, this Court should overrule Raymond James II and vacate the October 2013 judgment entered by the circuit court as a consequence of that decision. The circuit court has twice attempted to vacate the arbitrators' award and to enter a judgment on the merits in favor of Honea and against RJFS. The latter attempt was made after the circuit court had conducted the de novo review prescribed by the parties' agreement –- and approved in Raymond James I. That attempt was thwarted by the decision in Raymond James II. I respectfully submit that we should recognize that decision as erroneous, overrule it, and reinstate the circuit court's de novo judgment entered on remand from Raymond James I. 25 The main opinion, however, chooses the different tack of (1) leaving in place the decision in Raymond James II and its results –- namely the voiding of the November 2011 judgment that clearly reflected the circuit court's independent, judicial adjudication as to Honea's claims based on that court's de novo review of the record –- (2) upholding the 25Alternatively, we could remand this case to the circuit court to allow it the opportunity to reinstate its judgment entered in response to Raymond James I. 99 1130590; 1130655 October 2013 judgment (a) that, unlike a typical trial court judgment, became the judgment of the circuit court only due to the sui generis dictates of § 6-6-15 and the holding in Raymond James II that those dictates were applicable and (b) that is directly contrary to the November 2011 judgment, and yet (3) concluding that Honea still has received the benefit of a de novo review. I submit that Raymond James II complicated and made uncertain a case that was, at least by comparison, uncomplicated at the time of our decision in Raymond James I. And today's decision, in my view, takes us yet another step away from the clarity of Raymond James I. I believe we should reverse field and return to our decision in Raymond James I. It certainly appears that the denial by operation of law under Rule 59.1, Ala. R. Civ. P., of Honea's motion to vacate the October 2013 judgment was due to an oversight by the circuit court. See Part I.A.5., supra. In any event, because the issue put to the circuit court in Honea's postjudgment motion was her entitlement to a de novo decision by the circuit court, and because I believe the denial of that motion 100 1130590; 1130655 by operation of law erroneously denied Honea the de novo review to which she was entitled, I would vacate the judgment of the circuit court on that ground and reinstate the de novo judgment entered by the circuit court on remand from Raymond James I.26 Because this approach does not reflect the view of a majority of the Court, however, and because the main opinion 26Alternatively, as noted, this Court could remand the case to the circuit court to allow it the opportunity to reinstate the judgment it entered on remand from Raymond James I. In either event, this Court should (1) examine this issue with the aid of the briefs filed by the parties in Raymond James II (of which this Court may take judicial notice), which briefs more fully address the merits of the statute-of- limitations issue itself than do the briefs in the current appeal (which focus primarily on the error of the circuit court in allowing Honea's postjudgment motion to be denied by operation of law) and/or (2) allow the parties to file supplemental briefs more fully addressing the merits of the circuit court's de novo judgment (including particularly the statute-of-limitations issue). I note that almost the entirety of the argument presented by RJFS in its brief as the appellant in Raymond James II was devoted to the merits-based issue of the statute of limitations. The merits of this issue similarly was the focus of Honea's brief as the appellee in Raymond James II, engendering over 20 pages of argument. In contrast, the briefs filed by the parties in this current appeal do not contain a similar full-throated discussion of the merits of this issue, but instead address it only briefly in relation to whether the circuit court's failure to conduct a hearing on Honea's postjudgment motion was harmless error under the probability-of-merit standard. 101 1130590; 1130655 proceeds to address those merits, specifically the statute-of- limitations issue, I will do so as well. II. Statute of Limitations I agree with the majority's conclusions that the fiduciary relationship between RJFS and Honea was not that of a trustee and beneficiary of an express trust and that the special rule applicable to the tolling of the statute of limitations that was in place before 2006 as to such a beneficiary's claims is inapplicable to Honea's claims.27 Accordingly, the two-year statute of limitations applicable to Honea's breach-of-fiduciary-duty claims bars those claims. As to Honea's breach-of-contract claim, Honea is correct that AC, Inc. v. Baker, 622 So. 2d 331, 334 (Ala. 1993), clearly supports her argument that claims alleging breaches of 27Before the enactment of § 19-3B-1005, Ala. Code 1975 (Act No. 2006-216), the two-year statute of limitations for claims alleging breach of fiduciary duty as to a trustee began "'to run once the fiduciary relationship [wa]s terminated and possession of trust property by the trustee becomes adverse.'" Tonsmeire v. AmSouth Bank, 659 So. 2d 601, 604 (Ala. 1995)(quoting and adopting the trial court's order). Under § 19-3B-1005(a), "[a] beneficiary may not commence a proceeding against a trustee for breach of trust more than two years after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust." 102 1130590; 1130655 contract that occurred after March 30, 2000, were not barred by the six-year statute of limitations applicable to contract actions. See Ala. Code 1975, § 6-2-34(9). The plaintiffs in Baker filed their action on September 4, 1991, against Leon C. Baker, a tax attorney; S. David Johnston, a certified public accountant; and Johnston, Joyce & Wiginton ("JJW"), the accounting firm in which Johnston was a partner. The cause of action as to Johnston and JJW arose out of errors they allegedly made in preparing tax returns for the plaintiffs from 1981 through 1985. This Court noted that "[e]ach plaintiff contends that it purchased [equipment from a business owned by Coleman Leasing Corporation, a business owned by Baker,] solely in reliance on promises made by Johnston, JJW, and Baker that ownership of the equipment would provide legitimate tax deductions, through depreciation and interest expenses, to reduce each plaintiff's tax liability for the years 1981 through 1985." 622 So. 2d at 332. "In 1986, the Internal Revenue Service ('IRS') and the Alabama Department of Revenue audited the plaintiffs' tax returns and disallowed the income tax deductions related to the computer equipment for all of the years 1981 through 1985." Id. This Court specifically noted that, unlike the 103 1130590; 1130655 tax returns for the years 1981 through 1984, the 1985 tax return was filed on April 15, 1986, within six years from the date the plaintiffs filed their complaint. Id. at n.2. On appeal from a summary judgment entered in favor of Johnston and JJW, this Court considered "the propriety of the trial court's holding that the six-year statute of limitations barred the plaintiffs' breach of contract claims, except those claims based on the 1985 tax returns." Id. at 334 (emphasis added). In particular, the Court was concerned "with an issue of first impression in this State: whether the nature of the plaintiffs' agreements, as either entire contracts or separate contracts, impacts on the running of the statute of limitations." Id. In discussing the import of the distinction between how the statute of limitations would apply in the context of "separate contracts," a position urged by Johnston and JJW, this Court stated: "If the agreements in this case constituted several, separate annual agreements under which Johnston and JJW prepared and reviewed the plaintiffs' tax returns from 1981 to 1985, then a breach of contract action accrued on each contract, individually, for purposes of the six-year limitations period, when performance under each contract was complete. Under this interpretation of 104 1130590; 1130655 the parties' contractual relationships, the trial court's judgment would be affirmed, because the statute of limitations would bar all of the plaintiffs' breach of contract claims except the claims based on the 1985 tax returns." 622 So. 2d at 334 (citations omitted). In contrast to the position taken by Johnston and JJW, this Court noted that "each plaintiff contends that the accounting services performed by Johnston and JJW from 1981 to 1986 and related to deductions taken on computer equipment should be treated as services rendered under an entire contract, spanning continuously from 1981 to 1986. Further, we infer from each plaintiff's argument that each is contending that if its relationship with Johnston and JJW constituted an entire contract, then the six-year limitations periods for its breach of contract action would not begin to run until April 15, 1986, when the last returns claiming deductions were filed." Id. (emphasis added). The Baker Court continued: "Although this Court has never addressed a continuing contract argument such as the one the plaintiffs in this case touch upon, several courts have recognized a 'continuing contract' doctrine for determining when a breach of contract action on an entire contract accrues for limitations purposes. This doctrine has been applied most often to cases concerning payment for performance of services, to determine when the plaintiff's right to sue for payment occurred. "However, this is not an action seeking compensation for services rendered; rather, [the plaintiffs] seek recovery for harm incurred from allegedly erroneous tax advice. An application of 105 1130590; 1130655 the 'continuing contract' doctrine to this case would toll the running of the limitations period until the last time the plaintiffs acted upon the defendants' advice. Further, although this Court has never applied a 'continuing contract'•doctrine, it has recognized, in certain situations, a 'continuing tort'• doctrine that operates to toll the running of the limitations period in tort cases until the date that the last injury occurred. However, this Court has expressly limited 'recovery for a continuous tort ... to those damages that occurred within the period of limitations.'• [Continental Cas. Ins. Co. v.] McDonald, 567 So. 2d [1208,] 1216 [(Ala. 1990)](citing Garrett [v. Raytheon Co.], 368 So. 2d [516,] 521 [(Ala. 1979)]; see American Mutual Liability Ins. Co. v. Agricola Furnace Co., 236 Ala. 535, 183 So. 677 (1938); Howell v. City of Dothan, 234 Ala. 158, 174 So. 624 (1937). Too, despite the possibilities presented by the plaintiffs' continuing contract argument, this case presents no compelling reason that would dissuade us from placing a similar limitation upon a 'continuing contract'•action, limiting it to those breaches that occurred during the six years before the action was filed. We, therefore, decline to apply a 'continuing contract'•doctrine at this time." 622 So. 2d at 334-35 (emphasis added; footnotes omitted). In other words, the Baker Court declined to definitively decide whether it should recognize a "continuing-contract" theory because, even under such a theory, the Court would have "limit[ed] it to those breaches that occurred during the six years before the action was filed." Id. Baker in no way 106 1130590; 1130655 supports the conclusion that application of a continuing- contract theory bars recovery for breaches that occur less than six years before the action was filed so long as similar breaches occurred more than six years before the action was filed.28 28The position discussed in Baker is consistent with the general rule applicable to actions based on a defendant's breach of a contract under which that defendant has a continuing duty of performance. As explained in 54 C.J.S. Limitations of Actions § 199 (2010): "The right of action for breach of a continuing covenant accrues from day to day as long as the breach continues, and where a contract provides for continuing performance over a period of time, each breach may begin the running of the statute anew such that accrual occurs continuously. Consequently, the fact that a portion of the claim is barred by the statute of limitations will not prevent a recovery for the part which has not become barred at the time suit is filed. On the other hand, the continuing claims doctrine does not apply to a claim based on a single distinct event which has ill effects that continue to accumulate over time." (Footnotes omitted; emphasis added.) The plaintiffs in Baker were attempting to argue that Johnston and JJW's preparation of their yearly tax returns reflected not just a contract under which Johnston and JJW had a continuing duty, but an indivisible contract for services such that the limitations period would not begin to run until all services under the contract had been provided or the contract otherwise terminated. The rule in such a case is 107 1130590; 1130655 Also, in addressing the Baker plaintiffs' alternative argument, the Baker Court stated: "[T]he plaintiffs argue that the limitations period applicable to their breach of contract claims did not commence running until the IRS in 1986 disallowed their deductions related to the computer equipment. Admittedly, the plaintiffs did not incur any actual damage until the IRS disallowed their deductions; however, the incurring of actual damages marks the commencement point for the running of the two-year limitations period applicable to professional malpractice actions. See Leighton Ave. Office Plaza, Ltd. v. Campbell, 584 So. 2d 1340 (Ala. 1991); Stephens[ v. Creel], 429 So. 2d [278,] 281 [(Ala. 1983)]. The statute of limitations on a contract action runs from the time a breach occurs rather than from the time actual damage is sustained. Stephens, 429 So. 2d at 280. "Accordingly, although the plaintiffs have made well reasoned and able presentations of authority supporting their claimed right to pursue a remedy for all of the contracts allegedly breached by Johnston and JJW, we conclude that the trial court properly held that the only claims not barred by the statute of limitations were the plaintiffs' breach that "the limitations period usually does not commence until the contract is fully performed unless one party refuses to fulfill the contract or prevents the other party from performing." 54 C.J.S. Limitations of Actions § 199 (2010)(footnote omitted). The Baker Court correctly rejected the plaintiffs' attempt to characterize their agreement with Johnston and JJW as being indivisible, because even were it to address the agreement as a "continuing contract," the statute of limitations would bar plaintiffs' recovery as to the only claims at issue -- those based on breaches that occurred more than six years before the filing of their actions. 108 1130590; 1130655 of contract claims based on their 1985 tax returns. Therefore, we affirm the summary judgment for Johnston and JJW as to the plaintiffs' breach of contract claims against them." Baker, 622 So. 2d at 335 (emphasis added; footnote omitted). In other words, the Baker Court did not conclude that because the same type of breach (taking an improper deduction for the purchased computer equipment) had occurred in tax returns filed before the 1985 return, the Baker plaintiffs' cause of action must fail in its entirety. The Baker Court merely concluded that the statute of limitations applicable to each breach began when that breach occurred, rather than when actual damages from that breach were incurred. In the present case, Honea cites us to pertinent portions of the record that reflect that RJFS was actively and aggressively executing trades in her account after March 30, 2000, and that those trades were in breach of RJFS's duties to her. The present case is not one in which the purchases in Honea's account and in violation of RJFS's duties to her were all made before March 30, 2000, and the losses as to those purchases merely did not occur until after March 30, 2000. 109 1130590; 1130655 Also, as RJFS noted at the outset of the arbitration proceeding: "The account suffered a monthly loss in November 2000 of $404,949 and an additional loss of $352,626 in February 2001. At the end of February 2001 the cumulative loss in the account stood at $676,199. It is undeniable that [Honea] was on inquiry notice no later than March 2001 of her claims against RJFS (upon receipt of her February 2001 statement) given that her account had lost over 90% of its value in a four month period. Notwithstanding this fact, [Honea] waited over five years to bring the present claim." (Emphasis omitted; emphasis added.) RJFS further noted that, "[a]t the end of October 2000, the account had a positive gain of $74,521. Thus, the account lost approximately $750,000 in value in the span of four months." Although it is true that Honea's account suffered considerable losses (and some gains) before March 30, 2000, as to purchases and sales of securities in violation of RJFS's duties to Honea that also occurred before March 30, 2000, the record fully supports the conclusion that some of the losses that occurred in Honea's account after March 30, 2000, were the result of breaches of duty that also occurred after March 30, 2000. The fact that earlier breaches of RJFS's duties 110 1130590; 1130655 might have given rise to earlier causes of action did not preclude the subsequent breaches from also giving rise to distinct causes of action, namely yet another purchase of an unsuitable investment, yet another excessive trade, yet another improper use of margin, etc.29 This Court rightly refuses to reject Honea's claims as to damages she incurred from those "breaches that occurred during 29For example, based on an account summary for the account in which Honea suffered most of her losses, in April 2000 Honea deposited $300,000 into the account. Honea had previously deposited $850,000 into the account between May 1997 and August 1999. As of March 31, 2000, the investments in the account were valued at $1,293,234. After Honea made the April 2000 deposit, funds from the account were used over the next several months to purchase numerous technology stocks, on margin, for an account that was already significantly overweighted in technology stocks. According to Honea's expert witness, both the weighting of the account and the use of margin during the period in question were in breach of RJFS's duties to Honea. The account thereafter lost 90% of its value, by RJFS's own admission. Even without considering continuing sale and reinvestment decisions made after March 30, 2000, as to funds deposited before March 30, 2000, how was it possible for RJFS to breach its duties as to the investment of the aforementioned $300,000 in deposited funds before they were actually deposited? Viewed from another angle, the value of Honea's account on March 31, 2000, the first day of the six-year statute-of- limitations window applicable to the March 30, 2006, commencement of her lawsuit, was $1,293,234, while less than a year later, on February 28, 2001, the value of the account had diminished to $78,257. 111 1130590; 1130655 the six years before the action was filed" merely because other breaches occurred more than six years before the action was filed. Wise, J., concurs. 112

June 30, 2017

0804700d-09cb-4b82-a94a-d889505c94c4

Family Security Credit Union v. Kendrick M. Nettles

N/A

1151001

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

18525299-5d30-443d-80b4-22b86ac43e47

Family Security Credit Union v. Wanda J. Pezent

N/A

1151002

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

06be1c89-f6fa-4a1e-84ac-00b0365f06d8

Daphne Automotive, LLC v. Eastern Shore Neurology Clinic, Inc.

N/A

1151296

Alabama

Alabama Supreme Court

REL: 08/11/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1151296 ____________________ Daphne Automotive, LLC, and Robin Sanders v. Eastern Shore Neurology Clinic, Inc., and Rassan Tarabein Appeal from Baldwin Circuit Court (CV-16-900535) SELLERS, Justice.1 Daphne Automotive, LLC, and its employee, Robin Sanders (hereinafter sometimes collectively referred to as "the 1This case was originally assigned to another Justice on this Court. It was reassigned to Justice Sellers on May 31, 2017. 1151296 dealership"), appeal from an order of the Baldwin Circuit Court denying their motion to compel arbitration of the claims filed against them by Eastern Shore Neurology Clinic, Inc. ("Eastern Shore"), and Rassan Tarabein. We affirm. Facts and Procedural History Rassan Tarabein is the owner of Eastern Shore. Tarabein also owns another company–-Infotec, Inc. Tarabein hired his nephew, Mohamad Tarbin, as an employee of Infotec. As part of the nephew's compensation, Tarabein agreed to provide him with the use of a vehicle for as long as he was employed with Infotec. Accordingly, Tarabein purchased, through Eastern Shore, a 2014 Toyota RAV4 sport-utility vehicle ("the vehicle") from Daphne Automotive; the total purchase price was $25,000. Tarabein, the nephew, and the dealership agreed that the dealership would arrange for the vehicle to be titled in the nephew's name, but that Eastern Shore would be listed on the title as lienholder. In conjunction with the sale, the nephew signed a document entitled "Terms and Conditions," i.e., the sales contract, which contained the following arbitration provision: "Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or 2 1151296 nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing ..., the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration in accordance with the procedure set forth on separate Arbitration Agreement form." (Emphasis added.) The stand-alone arbitration agreement referenced in the sales contract was signed by the nephew and the dealership and similarly provides: "Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing agreement, arrangements for financing, purchase of insurance, purchase of extended warranties, or service contracts, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration conducted pursuant to the provisions of (9 U.S.C. Section 1 et seq.). And according to the Commercial Rules of the Better Business Bureau of South Alabama, Inc. Without limiting the generality of the foregoing, it is the intention of the buyer/lessee and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease or financing and its condition including disputes concerning the terms and conditions of the sale, lease or financing, the condition of the vehicle, any damage to the vehicle, the terms and meanings of any of the documents 3 1151296 signed or given in connection with the sale, lease or financing[,] any representations, promises or omissions made in connection with the negotiations for the sale, lease or financing of the vehicle, or any terms, conditions, or representations made in connection with the financing, credit life insurance, disability insurance, and vehicle extended warranty of service contract purchased or obtained in connection with the vehicle. ".... "Neither of us [is] committed by the terms of this agreement to arbitrate unless you sign below, in which event we will both be committed." (Emphasis added.) The nephew also signed an Alabama Department of Revenue power-of-attorney form authorizing the dealership to apply for a certificate of title for the vehicle. Tarabein, on the other hand, executed only the documents to establish Eastern Shore as lienholder on the title for the vehicle.2 The dealership thereafter submitted the application for the certificate of title, neglecting, however, to list Eastern Shore as the lienholder. In January 2014, the Department of Revenue issued to the nephew an original certificate of title for the vehicle that listed no lienholders. In April 2014, Tarabein terminated the 2The documents establishing Eastern Shore as lienholder are not included in the record on appeal; we assume such documents contain no provision regarding arbitration. 4 1151296 nephew's employment with Infotec. Tarabein made repeated requests for the nephew to return possession of the vehicle to Eastern Shore, but the nephew refused. In June 2014, Tarabein, believing Eastern Shore was listed as lienholder on the title for the vehicle, inquired of the dealership why he had not received the title to the vehicle. According to Tarabein, the dealership informed him that when it applied for the certificate of title it listed Eastern Shore as a lienholder. After investigating the matter further, the dealership informed Tarabein that the certificate of title for the vehicle had been mailed to the nephew's address. The dealership contacted the nephew, who denied that he had received the certificate of title for the vehicle. According to Tarabein, the dealership never informed him that it had failed to list Eastern Shore as a lienholder on the application for the certificate of title. Rather, he argues, after it became aware of its error, the dealership engaged in a fraudulent scheme of forging the nephew's name on the Department of Revenue power-of-attorney form in order to replace the original certificate of title with a certificate of title listing Eastern Shore as the lienholder. As a 5 1151296 result, the nephew held an original certificate of title free and clear of any lienholder, and Eastern Shore held a reissued certificate of title for the same vehicle listing it as the lienholder. After Eastern Shore received its certificate of title, it engaged a towing company to repossess the vehicle. After the vehicle was repossessed and delivered to Eastern Shore, an officer from the Baldwin County Sheriff's Office appeared at Eastern Shore to arrest Tarabein. Tarabein was able to avoid arrest by producing the certificate of title listing Eastern Shore as the lienholder. According to Tarabein, the incident concerning the arrest was the first time he became aware of the possible existence of another certificate of title for the vehicle. Tarabein and Eastern Shore (hereinafter collectively referred to as "the plaintiffs") sued the dealership, asserting against Daphne Automotive claims of breach of contract, negligent and wanton supervision, and misrepresentation; against Sanders a claim of negligence; and against both claims of suppression, fraudulent inducement, and civil conspiracy, and seeking damages for mental anguish. The dealership moved to compel arbitration and to stay the 6 1151296 litigation based upon the arbitration provision in the sales contract and the stand-alone arbitration agreement (hereinafter referred to collectively as "the arbitration agreements"), both of which the nephew had signed in conjunction with the sale of the vehicle. On September 12, 2016, the trial court entered an order denying the dealership's motion to compel arbitration. The dealership appeals pursuant to Rule 4(d), Ala. R. App. P.3 Standard of Review "This Court's standard of review on an appeal from a trial court's order granting or denying a motion to compel arbitration is well settled. Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1141 (Ala. 2003). A direct appeal is the proper procedure by which to seek review of such an order, Rule 4(d), Ala. R. App. P., and this Court will review de novo the trial court's grant or denial of a motion to compel arbitration. Bowen, 879 So. 2d at 1141. The party seeking to compel arbitration has the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction involving interstate commerce. Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So. 2d 1129, 1132 (Ala. 2003). The party seeking to compel arbitration must present some evidence tending to establish its claim. Wolff Motor Co. v. White, 869 So. 2d 1129, 1131 (Ala. 2003). Once the moving party meets that initial burden, the party opposing arbitration has the 3On October 13, 2016, this Court entered an order granting the dealership's motion to stay the proceedings below in their entirety pending the outcome of this appeal. 7 1151296 burden of presenting evidence tending to show that the arbitration agreement is invalid or that it does not apply to the dispute in question. Bowen, 879 So. 2d at 1141. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1052–53 (Ala. 2007)." Alabama Title Loans, Inc. v. White, 80 So. 3d 887, 891-92 (Ala. 2011). Discussion At the outset, we note that the parties do not dispute that the underlying transaction involves interstate commerce. They do, however, dispute the existence of a contract calling for arbitration of the plaintiffs' claims against the dealership insofar as the plaintiffs did not sign the arbitration agreements. It is well established that "'"'[a]rbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'"'" Custom Performance, Inc. v. Dawson, 57 So. 3d 90, 97 (Ala. 2010) (quoting Central Reserve Life Ins. Co. v. Fox, 869 So. 2d 1124, 1127 (Ala. 2003), quoting in turn AT & T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 648 (1986), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). "A party typically manifests its 8 1151296 assent to arbitrate a dispute by signing the contract containing the arbitration provision." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). There are, however, exceptions to the general rule that nonsignatories to an arbitration provision cannot be compelled to arbitrate their claims. In this case, the dealership relies on the third-party-beneficiary and equitable-estoppel exceptions. "[T]he third-party-beneficiary exception ... provides that '[a] nonsignatory can be bound to an arbitration agreement if "the contracting parties intended, upon execution of the contract, to bestow a direct, as opposed to incidental[,] benefit upon the third party."' Custom Performance, [Inc. v. Dawson,] 57 So. 3d [90] at 97 [(Ala. 2010)](quoting Dunning v. New England Life Ins. Co., 890 So. 2d 92, 97 (Ala. 2003)). [Another] exception is closely related and provides that a nonsignatory to a contract having an arbitration agreement will be treated as a third-party beneficiary of the contract regardless of whether the nonsignatory meets the legal definition of a third-party beneficiary 'when he or she asserts legal claims to enforce rights or obtain benefits that depend on the existence of the contract that contains the arbitration agreement.' Custom Performance, 57 So. 3d at 98 (emphasis omitted). This exception is referred to as the equitable-estoppel exception because of the inequity that would result if a party were allowed to simultaneously claim the benefits of a contract while repudiating its burdens and conditions." 9 1151296 MTA, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 114 So. 3d 27, 31 (Ala. 2012). The dealership argues that the plaintiffs are third-party beneficiaries of the sales contract between it and the nephew because, its says, the plaintiffs purchased the vehicle to compensate the nephew for his employment with Infotec. The dealership further argues that, even if the plaintiffs are not in fact third-party beneficiaries of the sales contract, they are estopped from denying arbitration because, it says, their claims are dependent on the sales contract, which contains and references the arbitration agreements. The plaintiffs, on the other hand, assert that the dealership has failed to meet its burden of demonstrating that, at the time the nephew and the dealership executed the sales contract, they intended to bestow a direct, as opposed to an incidental, benefit upon the plaintiffs. Specifically, the plaintiffs state that, although they financed the purchase of the vehicle and Eastern Shore was ultimately listed as lienholder on the certificate of title, the person directly benefiting from the sale of the vehicle was the nephew--he was the only intended user of the vehicle, the vehicle was titled in his name, the vehicle was 10 1151296 part of his compensation as an employee of Infotec, and it was agreed that he would enjoy the use of the vehicle for as long as he was an employee of the company. In response to the dealership's equitable-estoppel argument, the plaintiffs assert that their claims against the dealership are not dependent on the sales contract. Rather, they say their claims are based on a separate and distinct agreement between them, the nephew, and the dealership in which it was agreed that the vehicle would be titled in the nephew's name, but that Eastern Shore would be listed as a lienholder on the certificate of title. According to the plaintiffs, it is this agreement the dealership breached when it failed to list Eastern Shore as lienholder on the certificate of title for the vehicle. Finally, the plaintiffs assert that their claims against the dealership do not fall within the scope of the arbitration agreements. Although we find the plaintiffs' arguments persuasive, it is ultimately unnecessary for this Court to conduct any inquiry as to whether the plaintiffs are third-party beneficiaries under the sales contract or whether the doctrine of equitable estoppel is applicable because we agree with the 11 1151296 plaintiffs that the dealership is seeking to enforce the arbitration agreements beyond the scope of those agreements. Specifically, the arbitration agreements, as quoted above, are broad insofar as they apply to "all claims, demands, disputes or controversies of every kind or nature." However, the agreements are limited to disputes that arise "between them," i.e, the "buyer/lessor" (nephew) and the "dealer[ship]." Stated differently, the language employed in the arbitration agreements is not broad enough to encompass the plaintiffs, who are nonsignatories to those agreements. See MTA, 114 So. 3d at 32-33 ("[R]egardless of whether the third-party- beneficiary or equitable-estoppel exception might otherwise apply, the narrow scope of the arbitration provisions ... precludes this Court from requiring MTA to arbitrate its third-party claims against Merrill Lynch."). In MTA, an employer entered into a deferred-compensation agreement with its employee pursuant to which the employer agreed to pay $750,000 to the employee's two children in the event the employee died before a certain age; the employee did in fact die before the specified age. A trust was established for the children's benefit; however, the employer paid less than 12 1151296 $750,000 into the trust. The trustee of the trust had entered into three agreements with a brokerage firm to open an account to house and manage the assets of the trust; each agreement contained an arbitration provision. The children sued the employer, alleging breach of contract and unjust enrichment arising out of the employer's alleged failure to pay the full agreed-upon amount into the trust. The employer in turn filed a third-party complaint against the trustee and the brokerage firm. The brokerage firm moved the trial court to compel arbitration of the employer's third-party claims against it pursuant to the agreements between the trustee and the brokerage firm, which the employer had not signed. The brokerage firm argued to the trial court and on appeal that the employer was required to arbitrate its third-party claims against it based on the equitable-estoppel exception. This Court concluded: "In the instant case, the arbitration provisions in the identified contracts are broad in the sense that they apply to 'any controversies' and 'all controversies,' but narrow in the sense that they apply only to controversies between 'the parties,' 'the customer' and [the brokerage firm], or 'the client' and [the brokerage firm]. The contracts containing the arbitration provisions do not define the terms 'the customer' or 'the client' in such a way that would encompass [the employer], and 13 1151296 although [the brokerage firm] argues that [the employer] is effectively a party to the contracts containing the arbitration provisions because it was a party to the [agreement between the employer and the employee] and the grantor of the trust, we disagree. Regardless of [the employer's] involvement in establishing or funding the trust, it is neither the trust nor the trustee and is accordingly a nonsignatory to the contracts and can be held subject to the arbitration provisions only as set forth supra. See also Porter Capital Corp. [v. Thomas,] 101 So. 3d [1209] at 1209 [(Ala. Civ. App. 2012)](arbitration agreement entered into by borrower did not apply to borrower's shareholder or borrower's guarantor). Thus, regardless of whether the third-party-beneficiary or equitable-estoppel exception might otherwise apply, the narrow scope of the arbitration provisions in the [agreements between the trustee and the brokerage firm] precludes this Court from requiring [the employer] to arbitrate its third-party claims against [the brokerage firm]." 114 So. 3d at 32-33. Likewise, in this case, regardless of whether the third- party-beneficiary exception or the equitable-estoppel exception might otherwise apply, the narrow scope of the arbitration agreements precludes the plaintiffs from being required to arbitrate their claims against the dealership because those agreements are limited by their terms to disputes between the signatories. See Jack Ingram Motors, Inc. v. Ward, 768 So. 2d 362 (Ala. 1999)(holding that an arbitration provision that limited its scope to the 14 1151296 buyer/lessor and dealer was not broad enough to cover a nonsignatory); see also Cook's Pest Control, Inc. v. Boykin, 807 So. 2d 524, 527 (Ala. 2001), explaining: "The narrow scope of the arbitration agreement serves as an independent basis for affirming the trial court's order denying Cook's motion to compel arbitration of Allen's claims against Cook's. The text of the arbitration clause limits its application to disputes arising between Cook's and the 'customer' (Knollwood). ... This Court has held that a nonsignatory cannot require arbitration of a claim by the signatory against the nonsignatory when the scope of the arbitration agreement is limited to the signatories themselves. See Southern Energy Homes, Inc. v. Gary, 774 So. 2d 521 (Ala. 2000). ... We have recognized that the rule requiring that a contract be construed most strongly against the party who drafted it applies to an agreement to arbitrate. See Homes of Legend, Inc. v. McCollough, 776 So. 2d 741 (Ala. 2000). We conclude that Cook's is attempting to enforce the clause beyond its scope, and the motion to compel arbitration fails for this reason." Conclusion Based on the foregoing, we conclude that the dealership has failed to meet its burden of proving the existence of a contract calling for arbitration. The sales contract containing the arbitration provision and the stand-alone arbitration agreement are both limited in their scope to disputes arising between the parties to the contract and the agreements--the nephew and the dealership. Accordingly, the 15 1151296 trial court did not err in denying the dealership's motion to compel arbitration of the plaintiffs' claims against the dealership. AFFIRMED. Stuart, C.J., and Parker and Wise, JJ., concur. Shaw, J., concurs in the result. 16

August 11, 2017

7c199903-eefd-430e-a44d-c4f3885f8eed

CraneWorks, Inc., et al. v. RPM Cranes, LLC, and Muhammad Wasim Ali

N/A

1150018

Alabama

Alabama Supreme Court

Rel: 06/16/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150018 ____________________ CraneWorks, Inc., et al. v. RPM Cranes, LLC, and Muhammad Wasim Ali ____________________ 1150028 ____________________ Russell Brooks et al. v. RPM Cranes, LLC, and Muhammad Wasim Ali Appeals from Jefferson Circuit Court (CV-15-902765) PER CURIAM. CraneWorks, Inc. ("CraneWorks"), and its owners, David Upton ("David") and Steve Upton ("Steve"), and Russell Brooks, Rick Yates, and Casey Markos (all hereinafter collectively referred to as "the defendants") filed two appeals challenging the entry by the Jefferson Circuit Court ("the trial court") of a permanent injunction against them and in favor of RPM Cranes, LLC ("RPM"), and Muhammad Wasim Ali, the owner of RPM. We reverse the trial court's judgment and remand the case. Facts and Procedural History The basic facts underlying these appeals are well summarized in the "Findings of Fact" in the trial court's final order of August 25, 2015.1 "Based on the information presented by the parties via affidavit and live testimony, the court makes the following findings of fact: "A. The Creation of RPM "The Plaintiff, Muhammad Wasim Ali ('Dr. Ali')[2], is the sole owner of RPM Cranes, LLC ('RPM'). Defendants Russell (Rusty) Brooks ('Brooks') and Rick Yates ('Yates'), along with RPM's current General Manager Patrick Watson 1We note that the defendants in their appellate briefs to this Court do not take issue with the trial court's summary of the facts and, in fact, quote extensively from it. RPM and Ali have not filed appellee's briefs in these appeals. 2Ali is a medical doctor. 2 1150018, 1150028 ('Watson'), all of whom testified at the hearing, started RPM in 2008 with financial backing from Dr. Ali (who was not present at the hearing). Neither Dr. Ali nor Watson had any prior experience in or knowledge of the crane industry. By contrast, Brooks and Yates had many years of experience in the crane industry, having previously worked for both Birmingham Steel and CraneWorks. Brooks and Yates had many contacts in the crane industry and brought those contacts with them to RPM. Brooks served as RPM's Operations Manager and Yates was its Sales Manager. "B. Brooks'[s] and Yates'[s] Employment Agreements "When the company began, Brooks and Yates understood they would become equity owners of the company within five (5) years. Prior to the expiration of that five (5) year period, however, Dr. Ali demanded they either buy in to the company at a cost of one million dollars ($1,000,000.00) each or remain employees of the company. Without the resources to make such an investment, Brooks and Yates agreed to remain with RPM as employees. At that time, RPM presented them with employment agreements that contained restrictive covenants pertaining to competition. "[RPM and Ali] attached copies of Brooks'[s] and Yates'[s] employment agreements to their Complaint as Exhibits B and C. The employment agreements i n c l u d e d , i n t e r a l i a , a n o n - competition/non-solicitation provision limiting Brooks and Yates from working for a competing business for a period of two years and prohibiting Brooks and Yates from soliciting RPM's customers served within twenty-four (24) months prior to the date their employment with RPM ended. "The employment agreements also included RPM's commitment to provide employee benefits to Brooks 3 1150018, 1150028 and Yates in the same manner provided to all other employees. Watson testified that most RPM employees are union members and that RPM is obligated to make contributions to the union, on behalf of the union employees, for the employees’ health and pension benefits. During his employment with RPM, Brooks was a union member and relied on RPM to make contributions to his health and pension plans via the union. At the request of RPM, Yates withdrew from the union in 2011. With his union withdrawal came RPM's responsibility (admitted by Watson on cross-examination) to pay for Yates'[s] health and pension benefits, in the same way RPM paid for Watson's health and pension benefits. RPM did not pay for Yates'[s] pension benefits for a period of nineteen (19) months -- from August 29, 2011 through April 9, 2013 -- resulting in zero contributions to Yates'[s] pension for that entire period. "C. Markos'[s] Employment With RPM "Defendant, Casey Markos ('Markos'), was hired at RPM in 2008 as an oiler, later became a crane operator, and became a salesperson in 2013. Per Markos, Watson asked him to sign a non-compete agreement when Markos became a salesperson in 2013, and Markos declined. Watson testified that he witnessed Markos sign the agreement, but admits that neither he nor RPM have the original agreement bearing Markos'[s] signature. Instead, [RPM and Ali] have presented as Exhibit D to the Complaint a copy of an agreement that appears (even to Markos) to bear Markos'[s] signature. Markos testified that he does not know how his signature was affixed to the non-compete [agreement] and is emphatic that he did not sign the document. "Watson admits that nothing was offered to Markos in exchange for signing the non-compete [agreement], and the purported agreement does not state that any consideration was provided. The agreement that Markos allegedly signed contains a 4 1150018, 1150028 different restriction than the one in Brooks'[s] and Yates'[s] employment agreements, and prohibits 'Employee' from working for any company 'engaged in the business of rental.' Exhibit D to the Complaint does not specify that Markos was restricted from working in the crane rental business. Like Brooks, Markos was a union member during his employment with RPM, relying on RPM to make contributions to the union for his health and pension benefits. "D. Events Leading to the Resignation of Brooks, Markos, and Yates "In 2015, a number of incidents occurred that led Brooks, Markos, and Yates to believe that RPM was in financial and reputational disarray and to fear that the company would soon close its doors. The men testified (via live testimony and affidavit) that company credit cards were declined on a number of occasions, including credit cards needed to provide fuel for cranes that were located at existing job sites. Salespeople and operators used their personal credit cards to either fuel machinery or pay for overnight hotel stays while on out-of-town jobs. Salespeople were instructed not to spend money on company marketing (including lunches, a primary way salespeople maintain contact with their customers and learn of future crane opportunities). "In March 2015, Dr. Ali was arrested on federal drug charges, and he was indicted the following month. As part of the indictment, some RPM assets and bank accounts were seized and/or frozen. On June 1, 2015, RPM filed for Chapter 11 bankruptcy protection, where [RPM] remains today.[3] Dr. Ali's 3We note that the automatic-stay provision in the Bankruptcy Code, 11 U.S.C. § 362, applies only to "the commencement or continuation ... of a judicial ... action or proceeding against the debtor." (Emphasis added.) The action underlying these appeals was filed by RPM. 5 1150018, 1150028 arrest and indictment, as well as RPM's bankruptcy, received media attention, and Brooks, Markos, and Yates received questions from concerned customers about these incidents. "In mid-June 2015, Brooks, Markos, and Yates learned RPM had not made payments to the union for the health and pension benefits of any of RPM’s union employees, including but not limited to Brooks and Markos, since at least February 2015. RPM admits that it did not make these payments despite its obligation to do so. Approximately six crane operators then resigned their employment with RPM. Brooks, Markos, and Yates knew that a lack of crane operators would result in an inability to service client crane needs. That fact, compounded with the financial problems RPM was experiencing (Yates'[s] last four paychecks were drawn from four different banks), as well as the reputational issues associated with Dr. Ali's arrest and indictment, and the company's bankruptcy petition, led Brooks, Markos, and Yates to feel they had no choice but to leave RPM. RPM had not made required payments to Yates'[s] pension plan, nor had it made required contributions to the union for Brooks'[s] and Markos'[s] health and pension benefits. Brooks, Markos, and Yates feared that the company's financial condition would cause it to close its doors at any moment, leaving them without a job and unable to pay their bills and support their families. These employees further believed their personal reputations in the crane industry had been and would continue to be damaged by their affiliation with RPM, and they needed to ensure that the customers with whom they had developed relationships over many years in the industry received proper service. Accordingly, Brooks and Yates submitted their resignations on June 16, 2015 and Markos submitted his resignation the following day. All three men were hired by CraneWorks, where Brooks and Yates had worked prior to starting RPM." 6 1150018, 1150028 On July 15, 2015, RPM and Ali sued the defendants, alleging that Brooks, Yates, and Markos had violated their employment agreements by going to work for CraneWorks and that CraneWorks' hiring of Brooks, Yates, and Markos likewise violated those employment agreements. David and Steve were named as defendants by virtue of their ownership of CraneWorks. RPM and Ali sought monetary damages and injunctive relief. Along with their complaint, RPM and Ali filed a motion for a temporary restraining order ("TRO") and a request for a preliminary injunction. Following an ex parte hearing on the motion, the trial court granted the request for a TRO on July 16, 2015. The order stated, in pertinent part, that "[t]he [d]efendants are hereby temporarily restrained and enjoined from contacting, in any manner whatsoever, any of the former or current clients of RPM." CraneWorks filed a motion to dissolve the TRO in which it observed, among other things, that counsel for RPM and Ali had informed counsel for CraneWorks that RPM and Ali did not intend to obtain a TRO against CraneWorks. RPM and Ali did not dispute that assertion. 7 1150018, 1150028 On July 23, 2015, the trial court entered an order modifying the TRO to clarify that it did not apply to CraneWorks, David, or Steve but that it remained in place as to Brooks, Yates, and Markos. The trial court also set a date for a hearing on RPM and Ali's request for a preliminary injunction. On August 19, 2015, the trial court held a hearing on the motion for a preliminary injunction in which it accepted evidentiary submissions and heard testimony from Patrick Watson, RPM's general manager, and from Brooks, Yates, and Markos. During the hearing, when counsel for CraneWorks indicated that he wanted to cross-examine Watson, counsel for RPM and Ali objected: "[Counsel for RPM and Ali]: Your Honor, if I may, counsel represents CraneWorks. "THE COURT: Is CraneWorks a party? "[Counsel for RPM and Ali]: CraneWorks on this is no longer involved, because we did away with their TRO on them. "THE COURT: So CraneWorks isn't being -- is CraneWorks a party to the complaint? "[Counsel for RPM and Ali]: To the complaint, yes, sir. "THE COURT: All right. Well, they -- 8 1150018, 1150028 "[Counsel for RPM and Ali]: As far as that involves this at the last meeting we had, the order did away with them being involved with any of the TRO or the restraining order at all. "THE COURT: Yeah. Response? "[Counsel for CraneWorks]: Your Honor, if he wants to dismiss all claims against CraneWorks and the owners, the Uptons; then I don't need to be at this hearing. But right now we're being sued by this company. Our employees are currently being restrained from doing work for us. "THE COURT: All right. Have you got questions concerning the TRO or preliminary injunction? "[Counsel for CraneWorks]: I have a few follow-[up] questions for Mr. Watson. "THE COURT: Go right ahead." On August 25, 2015, the trial court entered the order from which we have already quoted the findings of fact. In the "Legal Analysis" portion of that order, the trial court reviewed each of the elements of a preliminary injunction under separate headings. The first heading states: "Plaintiffs Did Not Prove Irreparable Injury." In this section, the trial court observed: "With respect to the enforcement of noncompetition agreements against a former salesperson, the Alabama Supreme Court has adopted a rebuttable presumption of irreparable injury where the employer can establish three prima facie elements: (1) the 9 1150018, 1150028 existence of a valid noncompetition agreement, (2) a protectable interest of the employer, (3) and a violation of the former employee salesperson's noncompetition agreement by 'actively competing with his or her former employer in the same geographic area.' Ormco [Corp. v. Johns], 869 So. 2d [1109,] 1118-19 [(Ala. 2003)]. Plaintiffs have not met this burden." The trial court then examined each of the three prima facie elements of irreparable injury presumed to stem from a noncompetition agreement. The trial court concluded that RPM and Ali "have not demonstrated the existence of valid noncompetition agreements." With respect to Yates and Brooks, the trial court reasoned: "By failing to pay for Yates'[s] pension benefits and failing to make contributions to Brooks'[s] health and pension plans via the union, RPM breached the employment agreements with Brooks and Yates and did not provide the consideration necessary to support the agreement." As for the agreement with Markos, the trial court stated: "Markos expressly denies signing the document attached as Exhibit D to the Complaint, and [RPM and Ali] have been unable to produce the original document. "Even if Markos signed the document attached as Exhibit D to [RPM and Ali's] Complaint, it fails for lack of consideration. Not only does the agreement itself fail to list any consideration provided by 10 1150018, 1150028 RPM to Markos in exchange for the non-competition agreement, but both Markos and Watson confirmed that nothing was offered to Markos as an inducement to sign the agreement." The trial court further concluded that the noncompetition agreement between Markos and RPM "violates Ala. Code [1975,] § 8-1-1, as a restraint on trade" because it was not limited to a geographic area and it prohibited Markos from working for any company "engaged in the business of rental," rather than restricting him from working for other "crane rental" businesses, which was the only type of rental services RPM offered. As to the second element necessary for irreparable injury to be presumed based on a noncompetition agreement, the trial court concluded that RPM and Ali "presented no evidence of any protectable interest. Indeed, [RPM and Ali] offered no testimony or other evidence that any of the customers served by the company were developed during [Brooks's, Yates's, and Markos's] employment with RPM, using RPM resources. The only testimony on this topic was from Yates, who, without cross-examination by [RPM and Ali], testified that he had preexisting contacts and customers that he brought with him to RPM, and that Yates and Brooks taught Dr. Ali and Watson about the crane business not vice versa. ... Here, [RPM and Ali] have not established that they have a protectable interest in customers served by Brooks, Markos, and/or Yates, nor that they have a unique or substantial right that warrants protection." 11 1150018, 1150028 The trial court further noted that, "[e]ven if [RPM and Ali] had established irreparable injury, Brooks, Markos and Yates rebutted that assertion via evidence showing alternate reasons for such injury," namely "Ali's indictment, RPM's bankruptcy, or because the company no longer had sufficient crane operators to provide necessary services." The trial court also observed that "the undisputed affidavits submitted in this case demonstrate that customers in need of crane rental services often select their rental company based on the availability of a specific piece of needed equipment, not solely on a relationship with a particular company or salesperson." Despite all the evidence against finding any protectable interest on the part of RPM and Ali, at the end of the trial court's discussion of irreparable injury, the trial court stated: "[I]t does stand to reason that since [Brooks, Markos, and Yates] helped to create RPM ..., then some of the clients were developed as a result of [Brooks's, Markos's, and Yates's] relationship with RPM .... Therefore, RPM ... does show a minuscule protectable interest." 12 1150018, 1150028 Continuing with the next element required for establishing the need for a preliminary injunction, the trial court's heading states: "[RPM and Ali] Have an Adequate Remedy at Law." In this section, the trial court observed: "The only testimony presented as to [RPM and Ali's] alleged damage was Watson's testimony that RPM allegedly lost 'millions' of dollars since the departures of Brooks, Markos, and Yates. [RPM and Ali] offered no proof of such loss, nor have they established that said loss was solely, or even in part, attributable to Brooks, Markos, and Yates'[s] departure. More importantly, if, as [RPM and Ali] claim, their only damage is monetary, then they have an adequate remedy at law and an injunction is not appropriate. ... To the extent [RPM and Ali] have been damaged in any other way, they have not offered evidence to so demonstrate, and have therefore failed to meet their burden of establishing an inadequate remedy at law." The next heading in the trial court's order states: "[RPM and Ali] Do Not Have a Reasonable Chance of Success on the Merits." In this section of the order, the trial court reasoned that because of "the invalidity of Markos'[s] alleged non-competition agreement and RPM's breach of its own obligations under the other two employment agreements, [RPM and Ali] cannot demonstrate a reasonable chance of success on the merits." 13 1150018, 1150028 The final heading of the trial court's order states: "The Hardship Imposed on Brooks, Markos, and Yates Would Unreasonably Outweigh the Benefit Accruing to [RPM and Ali]." In this section, the trial court noted: "Brooks, Markos, and Yates testified that the crane industry is what they know and what they have spent their careers learning. Prohibiting them from working in the crane industry would, effectively, prohibit them from working, resulting in financial burdens on these men and their families. ... Defendants Brooks, Markos, and Yates live paycheck to paycheck. Their trade is a single industry. To prohibit them from working (particularly when there are alternative methods of redress for any potential violation of any valid agreement) would impose an undue burden that cannot be surpassed by [RPM and Ali's] articulation of any alleged monetary damage." In spite of all the foregoing analysis, at the conclusion of its order the trial court entered a permanent injunction in favor of RPM and Ali and against the defendants. In pertinent part, the injunction provided: "For the foregoing reasons, [RPM and Ali's] motion for preliminary injunction is hereby GRANTED, but only as follows: "1. The Defendants are hereby permanently restrained and enjoined from contacting, in any way whatsoever, any of those clients which are now clients of RPM Cranes. "2. This permanent injunction does not extend to enjoining or restraining the aforementioned clients from becoming clients of Crane[W]orks of their own 14 1150018, 1150028 volition; but, rather extends only to enjoin and restrain Crane[W]orks or its employees and assigns, from contacting in any way whatsoever, the aforementioned clients. "3. The limitations this court previously imposed on Defendants Brooks, Markos, and Yates via the entry of a Temporary Restraining Order (and its amendment) are now expired and expressly lifted, except as delineated in Paragraph 2 above. ".... "5. This case is hereby DISMISSED with prejudice. Costs taxed as paid." (Capitalization in original.) CraneWorks, David, and Steve, on the one hand, and Brooks, Markos, and Yates, on the other, filed separate timely appeals from the trial court's August 25, 2015, order. This Court consolidated those appeals for the purpose of writing one opinion. Standard of Review "'The applicable standard of review [of an order granting injunctive relief] depends on whether the trial court entered a preliminary injunction or a permanent injunction. A preliminary injunction is reviewed under an abuse-of-discretion standard, whereas a permanent injunction is reviewed de novo.' TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1241–42 (Ala. 1999); see also Smith v. Madison County Comm'n, 658 So. 2d 422, 423 n. 1 (Ala. 1995)." 15 1150018, 1150028 Weeks v. Wolf Creek Indus., Inc., 941 So. 2d 263, 271 (Ala. 2006). Although the trial court analyzed RPM and Ali's motion for an injunction as seeking a preliminary injunction, the restrictions placed upon the defendants constitute a permanent injunction. Therefore, our standard of review is de novo. Discussion The defendants' arguments are straightforward and compelling. The defendants observe that, in its order, the trial court concluded that none of the elements required for a preliminary injunction favored RPM and Ali. The trial court's order explained in detail that RPM and Ali failed to demonstrate 1) that they had sustained an irreparable injury; 2) that they had an adequate remedy at law; 3) that they had a likelihood of success on the merits; and 4) and that the hardships imposed by an injunction upon Brooks, Yates, and Markos "unreasonably outweigh[ed]" the benefits that would accrue to RPM and Ali. Every aspect of the trial court's order favored the defendants, yet the trial court granted RPM and Ali's request for an injunction. The trial court's order provides no basis for imposing any injunction -- preliminary or permanent -- against the defendants. See TFT, Inc. v. 16 1150018, 1150028 Warning Sys., Inc., 751 So. 2d 1238, 1242 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173, 1176 (Ala. 2008)("The elements required for a preliminary injunction and the elements required for a permanent injunction are substantially similar, except that the movant must prevail on the merits in order to obtain a permanent injunction, while the movant need only show a likelihood of success on the merits in order to obtain a preliminary injunction. Pryor v. Reno, 998 F. Supp. 1317 (M.D. Ala. 1998)."). Moreover, concerning CraneWorks and David and Steve specifically, the actions of the trial court with respect to the TRO as well as the above-quoted statements by RPM and Ali's counsel during the course of the hearing on the motion for a preliminary injunction indicated that RPM and Ali did not intend to seek an injunction against CraneWorks, David, or Steve. Because no contractual obligation existed between RPM and CraneWorks, David, or Steve, there also was no legal basis for imposing an injunction against CraneWorks, David, or Steve. 17 1150018, 1150028 Beyond all of this, the defendants observe that the injunction order itself fails to comply with Rule 65(d)(2), Ala. R. Civ. P., which provides: "(2) Every order granting an injunction shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise." Specifically, the defendants note that the order does not provide any reasons why an injunction should be imposed upon them; instead, it does the opposite by stating an extensive number of reasons why RPM and Ali's request for an injunction should fail. They also observe that the injunction is not specific in its scope. The order states that the defendants are "permanently restrained and enjoined from contacting, in any way, whatsoever, any of those clients which are now clients of RPM Cranes." The order fails, however, to specify which clients are included in the injunction. Trey Fulton, chief financial officer of CraneWorks, testified by affidavit that CraneWorks did not know who RPM's clients were or which 18 1150018, 1150028 of its clients were not also clients of CraneWorks. RPM and Ali introduced no evidence as to who RPM's clients were or whether it had developed any clients of its own that Yates and Brooks did not bring onboard as a result of their previous jobs with other entities. In other words, the injunction is broad and vague rather than "specific in [its] terms." Conclusion Based on the foregoing, we reverse the trial court's order and remand the matter for further proceedings consistent with this opinion. 1150018 -- REVERSED AND REMANDED. 1150028 -- REVERSED AND REMANDED. Stuart, C.J., and Parker, Shaw, Wise, and Sellers, JJ., concur. 19

June 16, 2017

7342c533-c6cd-4844-835d-dfd4db585eb8

Newman v. Howard

N/A

1160226

Alabama

Alabama Supreme Court

Rel: 06/16/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160226 ____________________ Lynda Newman, individually and as personal representative of the Estate of Oscar Newman, deceased v. Michael D. Howard and Rhonda B. Howard Appeal from Calhoun Circuit Court (CV-15-900256) PARKER, Justice. Lynda Newman, individually and as personal representative of the estate of Oscar Newman, deceased, appeals the summary 1160226 judgment entered by the Calhoun Circuit Court in favor of Michael D. Howard and Rhonda B. Howard. Facts and Procedural History This action concerns a piece of real property located in Calhoun County. The Howards owned the property in 2003 and in April 2003 mortgaged the property to secure a note. The mortgage was recorded with the Calhoun Probate Court on April 24, 2003. On May 16, 2007, the Howards conveyed the property by general warranty deed to Lynda Newman and Oscar Newman, Lynda's husband who subsequently died. It is undisputed that, unbeknownst to the Newmans, the 2003 mortgage was not satisfied by the Howards before the conveyance and remains an encumbrance on the property. Thereafter, the Newmans and the Howards were involved in litigation concerning numerous claims against one another, as well as others, involving deeds, financing agreements, mortgages, and contracts between the various parties concerning several pieces of real property, including the property at issue in this case. Before a final judgment was reached in that litigation, in December 2014 the parties 2 1160226 dismissed the lawsuit and entered into a "settlement agreement and mutual release agreement" ("the agreement"). The agreement states, in pertinent part: "8. In consideration of the dismissal of the lawsuit ... and other good and valuable consideration, receipt of which from [the Howards] is hereby acknowledged, [the Newmans], for themselves, their heirs, their legal representatives, successors, assigns, corporations, partnerships, joint ventures, related businesses, alter egos, employees, agents and attorneys, release and forever discharge [the Howards], their heirs, their legal representatives, successors, assigns, companies, corporations, partnerships, joint ventures, related businesses, alter egos, employees, agents, attorney and subsidiaries, from all claims, demands and causes of action that [the Newmans] may now have or that might subsequently accrue to [the Newmans] arising out of or connected with, directly or indirectly, the causes of action set forth or that could have been set forth in that certain lawsuit ... having case number CV-2011-900016. 9. Further [the Newmans], for themselves, their legal representatives, successors, assigns, corporation[s], partnerships, joint ventures, related businesses, alter egos, employees, agents and attorneys ... forever discharge[] [the Howards], their heirs, legal representatives, successors, assigns, companies, corporations, partnerships, joint ventures, related businesses, alter egos, employees, agents, attorneys and subsidiaries from all claims, demands, actions, and causes of action of any kind or nature at law or in equity which [the Newmans] may have against all or any of them from 3 1160226 the beginning of time to the date of this agreement."1 Also in December 2014, shortly after Lynda signed the agreement, she attempted to sell the property at issue here. During the process of closing on the sale of the property, Lynda's attorney conducted a title search of the property and discovered that the property was encumbered by the 2003 mortgage. Lynda requested that the Howards satisfy the mortgage pursuant to the terms of the May 16, 2007, warranty deed. The Howards refused. On May 8, 2015, Lynda sued the Howards, alleging breach of warranty of title. On June 10, 2015, Michael filed an answer; Michael did not raise any affirmative defenses. Rhonda never filed an answer. On October 19, 2015, the Howards filed a motion for a summary judgment. The sole argument raised by the Howards was that Lynda had waived any claims she may have had against the Howards regarding the property by signing the agreement. On March 3, 2016, Lynda filed a response to the Howards' summary- 1Oscar died during the course of the previous litigation. Accordingly, Lynda signed the agreement in her individual capacity and in her capacity as personal representative of Oscar's estate. 4 1160226 judgment motion. Lynda argued, among other things, that "[r]elease is an affirmative defense ... that ... cannot be raised for the first time in a motion for [a] summary judgment." Following a hearing, on November 28, 2016, the circuit court granted the Howards' summary-judgment motion on the sole basis that Lynda had released any claims she may have had against the Howards. Lynda appealed. Standard of Review Our standard of review of a summary judgment is well settled: "'The standard of review applicable to a summary judgment is the same as the standard for granting the motion....' McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992). "'A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law. In determining whether the movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving 5 1160226 party must present "substantial evidence" creating a genuine issue of material fact -- "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala. Code 1975, § 12–21–12; West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).' "Capital Alliance Ins. Co. v. Thorough–Clean, Inc., 639 So. 2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So. 2d 337, 342 (Ala. 2004)." Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935 (Ala. 2006). Discussion Lynda argues that the circuit court erred in entering a summary judgment for the Howards based on the defense of release when the Howards did not raise that defense until they filed their summary-judgment motion. The Howards offer no argument in rebuttal. The Howards' argument that Lynda is barred from enforcing the May 16, 2007, warranty deed based on Lynda's signing of the agreement is an affirmative defense. See Rule 8(c), Ala. R. Civ. P. The record indicates that Lynda timely objected to the Howards' raising this affirmative defense for the first time in their summary-judgment motion and that the Howards never filed an amended answer to include 6 1160226 the affirmative defense before the circuit court entered the summary judgment in their favor. We addressed a nearly identical factual scenario in Bechtel v. Crown Central Petroleum Corp., 451 So. 2d 793 (Ala. 1984), a case Lynda cites in support of her argument before this Court. In Bechtel, we stated: "[The defendant] correctly points out that it is within the court's discretion to allow the defendant to raise an affirmative defense after the initial answer to the complaint. In support of this proposition it quotes from Freeman v. Blue Mountain Industries, 395 So. 2d 1049 (Ala. Civ. App. 1981): "'Rule 15(a), [Ala. R. Civ. P.], expressly provides that amendments should be freely allowed when justice so requires. Stead v. Blue Cross-Blue Shield, 294 Ala. 3, 310 So. 2d 469 (1975). The party opposing the amendment must show that the amendment would cause actual prejudice or undue delay in order to bar the amendment. Bracy v. Sippial Electric Co., Inc., Ala. 379 So. 2d 582 (1980).' "395 So. 2d at 1050. "The weakness in [the defendant's] argument is that both Freeman and Rule 15(a) pertain to the amendment of pleadings. If [the defendant] had attempted to amend its answer to raise the defense, the discretion of the trial court would have been invoked, and the burden would have been upon [the plaintiff] to show that such amendment would cause actual prejudice or undue delay. This court has recently allowed a defendant to amend his answer in order to raise an affirmative defense after the 7 1160226 defendant had filed a motion for summary judgment based on the defense. Piersol v. ITT [Phillips] Drill Division, Inc., 445 So. 2d 559 (Ala. 1984). However, Rule 8(c)[, Ala. R. Civ. P.,] requires that in pleading, a party 'shall set forth affirmatively' any matter constituting an affirmative defense. In Piersol, the defendant, after answering the complaint, filed a motion for summary judgment, alleging that he was entitled to such a judgment based on the applicable statute of limitations. Some four months later, but before the court had ruled on the motion, the defendant filed an amended answer in order to raise the defense of the statute of limitations. "In the case before us, five weeks lapsed between the filing of the motion for summary judgment and the court's hearing on the motion. There is no indication that [the defendant] attempted to amend its answer during that time, or thereafter, although [the plaintiff] had filed a 'Motion to Strike Affirmative Defense' within one week after the summary judgment motion was filed. "The language of Rule 8(c) is mandatory. This court has held: "'[An affirmative defense] is required to be specially pleaded under Rule 8(c). See Nash v. Vann, 390 So. 2d 301, 303 (Ala. Civ. App. 1980). Under the Federal Rules of Civil Procedure, after which our rules are modeled, the consequences of a party's failure to plead an affirmative defense have been explained as follows: "'"If an affirmative defense is not pleaded it is waived to the extent that the party who should have pleaded the affirmative defense may not introduce evidence in support 8 1160226 thereof, unless the adverse party makes no objection in which case the issues are enlarged, or unless an amendment to set forth the affirmative defense is properly made." "'2A J. Moore, Federal Practice § 8.27[3] at 8-251 (2d Ed. 1948). See Funding Systems Leasing Corporation v. Pugh, 530 F.2d 91 (5th Cir. 1976).' "Smith v. Combustion Resources Engineering, 431 So. 2d 1249 (Ala. 1983). See, also, Columbia Engineering International, Ltd. v. Espey, 429 So. 2d 955 (Ala. 1983). "It is clear that [the plaintiff] made timely objection to the reliance on the affirmative defense in the motion for summary judgment, and equally clear that an amendment to the pleading to set forth the defense was not made. For this reason, the court erred in granting the summary judgment based on the defense. "... [W]e do not intend by our decision to intimate an opinion as to whether the trial judge should, in the exercise of his discretion, allow the defendant's pleading to be amended following remand." 451 So. 2d at 795-96. Based on the nearly identical facts in Bechtel, we come to the same result as did the Court in Bechtel. It is clear that Lynda timely objected to the Howards' reliance on the affirmative defense of settlement and release in their summary-judgment motion and equally clear that an amendment to 9 1160226 specially plead that affirmative defense was not made by the Howards. The circuit court erred in granting the Howards' summary-judgment motion based on the unpleaded affirmative defense of release. Conclusion We reverse the summary judgment for the Howards and remand this cause. As in Bechtel, 451 So. 2d at 796, we do not express an opinion as to whether the circuit court, in exercising its discretion, should allow the Howards to file an amended answer on remand. REVERSED AND REMANDED. Stuart, C.J., and Shaw, Wise, and Sellers, JJ., concur. 10

June 16, 2017

a7c9bef9-a640-4786-a205-d9b0f894832e

Ex parte GEICO Indemnity Company.

N/A

1151266, 1150511, 1150269

Alabama

Alabama Supreme Court

REL:05/05/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1150269 _________________________ Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Elizabeth Rebecca Zajic v. Kimberly D. Payne and Allstate Property and Casualty Insurance Company) (Madison Circuit Court, CV-12-901575) ________________________ 1150511 Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Danielle Carter v. Alvin Lee Walker and Allstate Property and Casualty Insurance Company) (Macon Circuit Court, CV-13-900170) 1151266 Ex parte GEICO Indemnity Company PETITION FOR WRIT OF MANDAMUS (In re: Rasheena Harris-Williams v. Frederick Chamberlin IV and GEICO Indemnity Company) (Jefferson Circuit Court, CV-15-900013) SHAW, Justice. In these three matters, Allstate Property and Casualty Insurance Company ("Allstate") and GEICO Indemnity Company ("GEICO") separately petition this Court for a writ of mandamus. The petitions seek writs directing the Madison, Macon, and Jefferson Circuit Courts to vacate their respective orders purporting to allow separate parties who have 2 1150269, 1150511, 1151266 underinsured-motorist ("UIM") insurance with Allstate or GEICO to enter into, without the applicable insurer's consent, settlement agreements with an alleged underinsured tortfeasor. In case no. 1150269, we dismiss the petition as untimely filed. In case no. 1150511 and case no. 1151266, we grant the petitions and issue the writs. Facts and Procedural History Each of these matters resulted from separate automobile accidents between either an Allstate or a GEICO insured with UIM coverage and allegedly underinsured tortfeasors. In each case, it appears undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. Case No. 1150269 On November 1, 2012, Elizabeth Rebecca Zajic filed in the Madison Circuit Court a complaint against Kimberly D. Payne, alleging that the two had been involved in an automobile accident on November 1, 2010, in which Payne had acted 3 1150269, 1150511, 1151266 negligently and wantonly. Zajic also included a claim against her insurer, Allstate, seeking to recover UIM benefits. Thereafter, Payne's liability insurer offered to tender the entire $50,000 available under Payne's policy limits in exchange for a full release of Payne's liability. Pursuant to the procedure outlined by this Court in Lambert v. State Farm Mutual Automobile Insurance Co., 576 So. 2d 160, 167 (Ala. 1991), Zajic notified Allstate of the settlement offer and sought its consent to settle. Allstate, however, declined to consent; instead, as also permitted by Lambert, Allstate opted to advance the $50,000 to Zajic. Allstate then opted out of participation in further proceedings determining Payne's liability and Zajic's damages. Approximately 10 months after Allstate opted out, Payne filed a "Motion to Enforce Settlement and for Pro Tanto Dismissal of Defendant, Kimberly D. Payne." In her motion, Payne, citing Lambert, among other authorities, argued that "the only permissible reason for a UIM carrier to advance or front the tortfeasor's liability limits is to preserve subrogation." Payne, citing Pennsylvania National Mutual Casualty Insurance Co. v. Bradford, 164 So. 3d 537 (Ala. 4 1150269, 1150511, 1151266 2014), and Hardin v. Metlife Auto & Home Insurance Co., 982 So. 2d 522 (Ala. Civ. App. 2007), further argued that Allstate had, after advancing the money in Zajic's case, failed to file either a subrogation cross-claim or a separate action against Payne, and that the applicable statute of limitations had, by that time, expired on any such action. Thus, Payne contended: "As [Zajic] originally reached a settlement agreement with ... Payne, to accept her policy limits of $50,000.00 and to release and dismiss ... Payne from [the] case, and because the only delay was an alleged subrogation claim by ... [Allstate] which no longer exists as a matter of law, the original settlement agreement ... should not be prevented from proceeding forward." In response, Allstate argued, among other things, that, despite the expiration of the statute of limitations on direct actions it might have against Payne, under Bradford and pursuant to the terms of the policy, it retained certain reimbursement rights to any funds Zajic might obtain from Payne in excess of the liability policy. After a hearing and over Allstate's objection, the trial court, on October 20, 2015, granted Payne's motion. More specifically, the trial court directed that the parties "effectuate the settlement" and submit appropriate pleadings seeking to dismiss the claims against Payne. In response, 5 1150269, 1150511, 1151266 Allstate filed, on November 4, 2015, a motion requesting that the trial court "alter, amend, or vacate" its order. The trial court denied that motion by order entered the following day. Following the denial of its motion seeking relief from that order, Allstate filed the instant petition for a writ of mandamus on December 16, 2015. Case No. 1150511 As the result of an automobile accident that occurred in Tuskegee on August 5, 2013, Danielle Carter sued, in the Macon Circuit Court, the alleged tortfeasor, Alvin Lee Walker. Carter's complaint also included a count against Allstate, her UIM insurer, pursuant to which Carter, who alleged that Walker was underinsured, sought to recover UIM benefits under her own policy. Walker's liability insurer subsequently made a $25,000 policy-limits offer to settle Carter's claims against Walker. Carter notified Allstate of the settlement offer; Allstate refused to consent to the settlement and, pursuant to the Lambert guidelines, instead elected to advance Carter $25,000. In addition, on May 12, 2014, Allstate obtained leave from the trial court to opt out of further participation in the litigation. 6 1150269, 1150511, 1151266 Over one year later, in September 2015, Walker filed a motion seeking "enforcement" of the original settlement offer and his dismissal from the action. In his motion, Walker noted that, despite the fact that "the only permissible reason for a UIM carrier to 'front' liability limits is to preserve subrogation," Allstate had not filed either a cross-claim or a separate subrogation action against him; thus, according to Walker, because the statute of limitations applicable to any such claim against him had expired with no action by Allstate, the settlement offer was due to be "enforced." Citing Bradford, Allstate responded that, although the statute of limitations might foreclose the right of a UIM insurer to maintain a direct action against the tortfeasor for recovery of amounts paid to its insured, the insurer had other means to seek reimbursement if the UIM insured obtained amounts from the tortfeasor in excess of the liability policy. On January 7, 2016, the trial court ordered the parties to effectuate settlement of Carter's claims against Walker and dismissed Walker with prejudice. The trial court further noted: "The case will remain pending only against the underinsured motorist carrier, Allstate ...." Allstate 7 1150269, 1150511, 1151266 responded with the instant petition for a writ of mandamus, which was filed on February 17, 2016. Case No. 1151266 On October 22, 2013, Rasheena Harris-Williams was, while driving a vehicle insured under a policy issued by GEICO, injured as the result of an automobile accident in Birmingham. Harris-Williams filed, in the Jefferson Circuit Court, a complaint against the alleged tortfeasor, Frederick Chamberlin IV. The complaint did not name GEICO as a party. Thereafter, Harris-Williams placed GEICO on notice, in light of the amount of Chamberlin's policy limits, of her intent to also seek UIM benefits under the GEICO policy. Harris-Williams also notified GEICO that Chamberlin's insurer had extended a $25,000 policy-limits offer to settle her claims against Chamberlin in exchange for Chamberlin's dismissal and that bills related to her medical treatment already exceeded $20,000. Harris-Williams requested that GEICO consent to the settlement or advance funds in the amount of the settlement offer. GEICO declined to consent and, instead, remitted the requested amount, stating that it reserved its right of 8 1150269, 1150511, 1151266 subrogation and to pursue reimbursement of the advanced settlement. In May 2016, Harris-Williams amended her complaint to add GEICO as a named defendant and to formally assert a claim for UIM benefits. In June 2016, Chamberlin filed a motion seeking "enforcement" of the settlement offer to Harris-Williams and the dismissal of all claims against him. More specifically, Chamberlin argued, as in the above cases, that preservation of its subrogation rights was the only "permissible" reason for GEICO's decision and that, pursuant to Bradford and Hardin, supra, the two-year statute of limitations applicable to any subrogation claim against him had expired without action by GEICO. Thus, according to Chamberlin, "[t]he settlement agreement is due to be enforced in its entirety and upon payment of $25,000.00 by [his insurer], [he was] due to be released and dismissed from this case, with prejudice." The trial court, over GEICO's claim that Bradford and Hardin concerned only the filing of "new actions" and were, thus, inapposite, granted, on August 2, 2016, Chamberlin's motion in all respects and dismissed Chamberlin as a defendant. Following the denial of its motion requesting that the trial 9 1150269, 1150511, 1151266 court "reconsider" that decision, GEICO filed the instant petition for a writ of mandamus on September 13, 2016. This Court subsequently ordered answers and briefs in all three cases and, considering that the issues presented are identical, has consolidated them for the purpose of writing a single opinion. Standard of Review As discussed in more detail below, in Lowe v. Nationwide Insurance Co., 521 So. 2d 1309, 1310 (Ala. 1988), this Court "set out the rights of a UIM carrier when its insured is involved in litigation" as including the right to "'elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court).'" Ex parte Geico Cas. Co., 58 So. 3d 741, 743 (Ala. 2010) (quoting Lowe, 521 So. 2d at 1310). In the instant cases, by attempting to enforce settlement agreements between the insureds and the alleged underinsured tortfeasors and dismissing the tortfeasors from these actions, the trial courts have left the UIM carriers as the sole defendants, regardless of their desire to opt out of participation at 10 1150269, 1150511, 1151266 trial. It is well settled that "[a] petition for a writ of mandamus is the appropriate means for challenging a trial court's refusal to grant a UIM carrier the right to opt out of litigation pursuant to Lowe." 58 So. 3d at 743. See also Ex parte Aetna Cas. & Sur. Co., 708 So. 2d 156 (Ala. 1998) (issuing a writ of mandamus directing the trial court to set aside an order compelling a UIM insurer to participate at trial). The standard for the issuance of the requested writs is also well settled: "'"Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995). The question of subject-matter jurisdiction is reviewable by a petition for a writ of mandamus. Ex parte Flint Constr. Co., 775 So. 2d 805 (Ala. 2000).' "Ex parte Liberty Nat'l Life Ins. Co., 888 So. 2d 478, 480 (Ala. 2003)." Ex parte Progressive Specialty Ins. Co., 31 So. 3d 661, 663 (Ala. 2009). 11 1150269, 1150511, 1151266 Discussion I. Timeliness Although not raised by any of the parties to these proceedings, this Court must first consider whether these petitions were timely filed. The Court of Civil Appeals in Ex parte Hoyt, 984 So. 2d 424, 425-26 (Ala. Civ. App. 2007), explained: "'The presumptively reasonable time within which to file a petition for a writ of mandamus is the time in which an appeal may be taken.'• Norman v. Norman, 984 So. 2d 427, 429 (Ala. Civ. App. 2007). In the present case, the petition was filed 68 days after the trial court had entered its order [challenged by the mandamus petition]. Accordingly, the petition was filed outside of the presumptively reasonable 42-day period. '[A] motion to [alter, amend, or vacate] [does] not work to extend that presumptively reasonable time within which the [petitioner] could have filed a petition for a writ of mandamus.' Norman, 984 So. 2d at 429; see also Ex parte Onyx Waste Servs., 979 So. 2d [833,] 834 [(Ala. Civ. App. 2007)]. '"[U]nlike a postjudgment motion following a final judgment, a motion to reconsider an interlocutory order does not toll the presumptively reasonable time period that a party has to petition an appellate court for a writ of mandamus."'• Norman, 984 So. 2d at 429 (quoting Ex parte Onyx Waste Servs., 979 So. 2d at 834). "'When a petition for a writ of mandamus has not been filed within a presumptively reasonable time, the petition "shall include a statement of circumstances constituting good cause for the appellate court to consider the petition, 12 1150269, 1150511, 1151266 notwithstanding that it was filed beyond the presumptively reasonable time." Rule 21(a)(3), Ala. R. App. P. "The filing of such a statement in support of an untimely petition for a writ of mandamus is mandatory." Ex parte Fiber Transp., L.L.C., 902 So. 2d 98, 100 (Ala. Civ. App. 2004) (citing Ex parte Pelham Tank Lines, Inc., 898 So. 2d 733, 736 (Ala. 2004), and Ex parte Troutman Sanders[, LLP], 866 So. 2d [547,] at 550 [(Ala. 2003)]).' "Ex parte Onyx Waste Servs., 979 So. 2d at 835. "The petitioner in this case did not include a 'statement of circumstances constituting good cause for the appellate court to consider the petition, notwithstanding that it was filed beyond the presumptively reasonable time.'• Rule 21(a)(3), Ala. R. App. P. 'Therefore, because the petition was not filed within a presumptively reasonable time and no statement constituting good cause for this court to consider the petition was filed, we must dismiss the petition.'• Ex parte Onyx Waste Servs., 979 So. 2d at 835." 984 So. 2d 424-25. See Ex parte Troutman Sanders, LLP, 866 So. 2d 547, 549-50 (Ala. 2003) (noting that the effect of a Rule 59(e), Ala. R. Civ. P., motion in tolling the time to file an appeal is applicable to final judgments and holding that a motion to reconsider a nonfinal, interlocutory order does not toll the time for filing a petition for a writ of mandamus seeking review of such order). 13 1150269, 1150511, 1151266 In case no. 1150269, as in Hoyt, Allstate filed its petition more than 42 days after the trial court had entered the order purporting to grant Payne's motion seeking to "enforce" the settlement agreement. In fact, Allstate's petition was filed on the 57th day following entry of that order. As was true in Hoyt, Allstate's motion to alter, amend, or vacate that interlocutory order did not toll the time for filing a petition for writ of mandamus in this Court. In addition, the petition does not include, as contemplated by Rule 21(a)(3), Ala. R. App. P., a statement explaining Allstate's failure to file the petition within the 42-day period contemplated by that rule. In consideration of those circumstances, the petition was not filed within the presumptively reasonable time; therefore, it is due to be dismissed. See Hoyt, supra; Troutman Sanders, 866 So. 2d at 549. In case no. 1150511 and case no. 1151266, both petitions were timely filed within 42 days of the trial court's orders 14 1150269, 1150511, 1151266 purporting to enforce the settlement agreements.1 Those matters are, thus, properly before this Court. II. Case No. 1150511 and Case No. 1151266 In Lowe, the Court considered the following question of first impression: "Whether an insured may file a claim for underinsured motorist coverage against his or her own insurer in the same lawsuit with the insured's claim against the alleged underinsured motorist ...." 521 So. 2d at 1309. We noted: "Three separate, underlying considerations are essential to our disposition of this first-impression case: 1) that of protecting the right of the insurer to know of, and participate in, the suit; 2) that of protecting the right of the insured to litigate all aspects of his claim in a single suit ...; and 3) that of protecting the liability phase of the trial from the introduction of extraneous and corrupting influences, namely, evidence of insurance ...." Id. This Court ultimately held that all the foregoing concerns were accommodated by the following procedure: "A plaintiff is allowed either to join as a party defendant his own liability insurer in a suit against the underinsured motorist or merely to give it notice of the filing of the action against the 1As noted above, GEICO filed a motion to reconsider, but nevertheless filed its petition within 42 days of the trial court's order purporting to grant the motion to enforce the settlement. 15 1150269, 1150511, 1151266 motorist and of the possibility of a claim under the underinsured motorist coverage at the conclusion of the trial. If the insurer is named as a party, it would have the right, within a reasonable time after service of process, to elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court). Under either election, the insurer would be bound by the factfinder's decisions on the issues of liability and damages. If the insurer is not joined but merely is given notice of the filing of the action, it can decide either to intervene or to stay out of the case." 521 So. 2d at 1310. Subsequently, in Lambert, the Court considered "the right of an insured to settle with a tort-feasor, and to give the tort-feasor a complete release without getting the consent of the insured's carrier of underinsured motorist coverage to the settlement." 576 So. 2d at 161. Noting "the 'twilight zone' that [an insured] is placed in when the underinsured motorist insurance carrier does not want to give its consent to settle, or wants to protect its subrogation rights," Lambert "attempt[ed] to provide a road map for everyone concerned to follow." 576 So. 2d at 165. That "road map" included the following "general rules": 16 1150269, 1150511, 1151266 "(1) The insured, or the insured's counsel, should give notice to the underinsured motorist insurance carrier of the claim under the policy for underinsurance benefits as soon as it appears that the insured's damages may exceed the tortfeasor's limits of liability coverage. "(2) If the tort-feasor's liability insurance carrier and the insured enter into negotiations that ultimately lead to a proposed compromise or settlement of the insured's claim against the tort-feasor, and if the settlement would release the tort-feasor from all liability, then the insured, before agreeing to the settlement, should immediately notify the underinsured motorist insurance carrier of the proposed settlement and the terms of any proposed release. "(3) At the time the insured informs the underinsured motorist insurance carrier of the tort-feasor's intent to settle, the insured should also inform the carrier as to whether the insured will seek underinsured motorist benefits in addition to the benefits payable under the settlement proposal, so that the carrier can determine whether it will refuse to consent to the settlement, will waive its right of subrogation against the tort-feasor, or will deny any obligation to pay underinsured motorist benefits. If the insured gives the underinsured motorist insurance carrier notice of the claim for underinsured motorist benefits, as may be provided for in the policy, the carrier should immediately begin investigating the claim, should conclude such investigation within a reasonable time, and should notify its insured of the action it proposes with regard to the claim for underinsured motorist benefits. "(4) The insured should not settle with the tort-feasor without first allowing the underinsured motorist insurance carrier a reasonable time within 17 1150269, 1150511, 1151266 which to investigate the insured's claim and to notify its insured of its proposed action. "(5) If the uninsured motorist insurance carrier refuses to consent to a settlement by its insured with the tort-feasor, or if the carrier denies the claim of its insured without a good faith investigation into its merits, or if the carrier does not conduct its investigation in a reasonable time, the carrier would, by any of those actions, waive any right to subrogation against the tort-feasor or the tort-feasor's insurer. "(6) If the underinsured motorist insurance carrier wants to protect its subrogation rights, it must, within a reasonable time, and, in any event before the tort-feasor is released by the carrier's insured, advance to its insured an amount equal to the tort-feasor's settlement offer." 576 So. 2d at 167. Finally, Lambert explained that the foregoing "guidelines should be applied with the understanding that the purpose of consent-to-settle clauses in the uninsured/underinsured motorist insurance context is to protect the underinsured motorist insurance carrier's subrogation rights against the tort-feasor, as well as to protect the carrier against the possibility of collusion between its insured and the tortfeasor's liability insurer at the carrier's expense." Id. In these two remaining petitions, Allstate and GEICO (hereinafter collectively referred to as "the insurers") contend that they are entitled to mandamus relief on the 18 1150269, 1150511, 1151266 ground that they, in all respects, complied with the procedural requirements established by this Court in Lowe and in Lambert, supra, and that they, therefore, possessed a clear legal right to have their liability to pay UIM benefits, if any, determined by a jury whose verdict would not be influenced by evidence of insurance coverage. According to the insurers, the trial courts' actions in ordering the subject settlements to be enforced over their objections, and the tortfeasors to be dismissed, thus leaving the insurers as the only remaining defendants, deprived them of that right. The respondents counter that, contrary to the insurers' claims, the trial courts' actions did not deprive the insurers of any legal right because, at the time the settlements were enforced, the insurers' subrogation claims against the tortfeasors had been extinguished by the expiration of the applicable limitations period –- a claim that, at least according to Walker, is "the practical and logical result of this Court's decision in Bradford." (Case no. 1150511, Walker's answer, at p. 8.) We disagree. It is undisputed that, at all times pertinent hereto, the insurers complied, to the very "letter of the law," with the 19 1150269, 1150511, 1151266 Court's dictates in Lowe and Lambert, as set out above. Specifically, Allstate and GEICO, after receiving notice of a settlement offer but declining to consent, which right was secured by the respective contracts between the insurers and their insureds, properly advanced an amount equal to the tortfeasor's respective settlement offer. Further, Allstate ultimately exercised the available option of opting out of further participation in the litigation2 in order to prevent mention of "its potential involvement." Despite that compliance, the actions of the trial courts in attempting to order that the settlements be effected and the tortfeasors dismissed have essentially nullified the insurers' legal right both to withhold consent to settlement and to opt out of further proceedings. In essence, despite the insurers' payment of the funds necessary to enjoin the insureds' consummation of the tortfeasors' offered settlements, the insurers were, nonetheless, ultimately forced to accept the exact settlement to which they had previously declined to consent. Further, as a result of the trial courts' attempted 2There appears to be no suggestion that, in any of the three cases, the consent of the respective insurer was unreasonably withheld or that Allstate did not "opt out" within a reasonable time. 20 1150269, 1150511, 1151266 dismissal of the tortfeasors, the insurers –- each of which would be the sole remaining defendant in each case –- are being denied the right to opt out of further proceedings and to avoid mention of their involvement in the case. 3 The respondents argue that this circumstance resulted from the insurers' own inaction, namely, the failure of the insurers to timely file either cross-claims or separate subrogation actions against the tortfeasors. More specifically, citing Bradford and Hardin, it is contended that once the statute of limitations on a direct subrogation action by the insurers against the tortfeasors has expired, "[t]here would be no viable legal means by which the [insurers] could collect against the [tortfeasors]." (Case no. 1151266, 3GEICO was added as a defendant in May 2016, and Chamberlin's motion seeking "enforcement" of the settlement offer was made the next month. Thus, it does not appear that GEICO had yet had the opportunity to "opt out" of the proceedings within a reasonable time. See Ex parte Electric Ins. Co., 164 So. 3d 529, 531 (Ala. 2014) (holding that an insurer's decision to opt out, which was nearly two years after the complaint was filed and after participation in discovery, was made within a reasonable time), and Ex parte Edgar, 543 So. 2d 682, 685 (Ala. 1989) ("Logically, the insurer would not want to withdraw from the case too early, before it could determine, through the discovery process, whether it would be in its best interest to do so."). The trial court's order essentially denies GEICO the ability to do so, despite the fact that GEICO has complied with the procedures in Lowe and Lambert. 21 1150269, 1150511, 1151266 Chamberlin's answer, at p. 10.) As this Court recently explained in Bradford, however, "insurers need not file a direct action against the tortfeasor to protect their rights of reimbursement ... [but] may obtain reimbursement from the insured's recovery against the tortfeasor." 164 So. 3d at 540.4 Indeed, as Justice Murdock noted in his special concurrence in Bradford, having advanced the tortfeasor's policy limits to its insured, "[the insurer] is now the beneficial owner of 'the case' against [the tortfeasor]," and, as such, "has the right to control the prosecution of that case." 164 So. 3d at 541 (Murdock, J., concurring specially). Thus, it is of no consequence that the timing for filing a direct action by the insurers against the tortfeasors has expired. The respondents correctly point to Bradford, 164 So. 3d at 539, Hardin, 982 So. 2d at 526, and related authorities as establishing that the statute of limitations begins to run against a subrogated insurer at the same time it begins to run 4GEICO was not made a party in the action until after the applicable limitations period had expired. Additionally, in case no. 1150269, which we are dismissing as untimely filed, Zajic's complaint against Payne and Allstate was filed the day the statute of limitations expired, making it virtually impossible for Allstate to file a timely direct subrogation action against Payne. 22 1150269, 1150511, 1151266 against the insured. See also Home Ins. Co. v. Stuart-McCorkle, Inc., 291 Ala. 601, 607-08, 285 So. 2d 468, 472-73 (1973). However, that well settled principle is clearly applicable only insofar as it prevents an insurer from "fil[ing] some new claim in its own name against [the tortfeasor] after the statute of limitations has expired." Bradford, 164 So. 3d at 541 (Murdock, J., concurring specially) (emphasis added).5 As noted in Lambert: "This Court has held that the insurer's duty to defend is more extensive than its duty to pay. See Universal Underwriters Ins. Co. v. Youngblood, 549 So. 2d 76 (Ala. 1989); United States Fidelity & Guar. Co. v. Armstrong, 479 So. 2d 1164 (Ala. 1985); and Samply v. Integrity Ins. Co., 476 So. 2d 79 (Ala. 1985). Therefore, the liability insurer's duty to defend the tort-feasor could extend beyond that moment when the underinsured motorist insurance carrier elected to pay to its insured the amount offered by the tort-feasor's liability insurer." 576 So. 2d at 167-68. 5We are likewise unpersuaded by Chamberlin's claim that mere "'fronting' of the settlement money did not create a vehicle for actual subrogation recovery" but, instead, that "the additional step of a timely Crossclaim or a timely separate lawsuit is necessary." (Case no. 1151266, Chamberlin's answer, at p. 9.) Notably, Chamberlin includes no citation to authority in support of that contention, which appears to be directly contradicted by Bradford and the authority cited therein. 23 1150269, 1150511, 1151266 Because the insurers, in following the express directives of this Court, have been deprived of their contractual rights as well as the benefit of the procedures set forth in Lowe and Lambert, we conclude that they have demonstrated a clear legal right to the requested relief. We, therefore, in case no. 1150511 and case no. 1151266, direct the applicable circuit court to vacate its respective order purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. 1150269 -- PETITION DISMISSED. Stuart, C.J., and Bolin, Parker, Main, Wise, and Bryan, JJ., concur. Murdock, J., dissents. 1150511 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 1151266 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 24

May 5, 2017

b17e76e8-5fd8-4f60-9068-d35b7d2090db

Ex parte Zachary Blake Walden.

N/A

1160233

Alabama

Alabama Supreme Court

Rel: 06/30/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160233 ____________________ Ex parte Zachary Blake Walden PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Zachary Blake Walden v. State of Alabama) (Covington Circuit Court, CC-13-372; Court of Criminal Appeals, CR-15-0577) PER CURIAM. WRIT QUASHED. NO OPINION. 1160233 Stuart, C.J., and Bolin, Parker, Main, Wise, and Sellers, JJ., concur. Murdock, Shaw, and Bryan, JJ., dissent. 2 1160233 MURDOCK, Justice (dissenting). I respectfully dissent, and I join Justice Bryan's dissent. To be admissible under Rule 404(b), Ala. R. Evid., evidence of a prior bad act must go to one of the issues prescribed in the second sentence of that rule, i.e., "motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." But that alone is not enough. The prescribed Rule 404(b) issue to which the prior- acts evidence is relevant must actually be "at issue" in the present case. As Justice Bryan notes in his dissent, the fact of the prior bad act must be "probative ... to some issue in the present case." ___ So. 3d at ___. As to the so-called knowledge exception, one well known treatise puts it this way: "There is ... a danger that the supposed inferences to knowledge will be obscured by the forbidden inference to propensity, particularly in cases in which the theory of knowledge is the probability that the defendant would have obtained knowledge in the course of repetitive involvement in criminal conduct. For this reason, it is important that there be a genuine issue of knowledge where introduction of other crimes evidence is sought on this theory." 22B Charles Alan Wright & Kenneth W. Graham, Jr., Federal Practice & Procedure, Evidence § 5245 (2014) (emphasis added). 3 1160233 Compare United States v. Garcia-Rosa, 876 F.2d 209, 221 (1st Cir. 1989) ("The defendant never put his knowledge of drugs at issue; admission of this evidence cannot be justified to rebut an issue that the defendant did not raise."),1 with United States v. Ramirez, 894 F.2d 565, 568-69 (2d Cir. 1990) ("When the defendant disavows awareness that a crime was being perpetrated, and the government bears the burden of proving the defendant's knowing possession as an element of the crime, knowledge is properly put in issue. On notice of the government's intention to offer the similar act evidence, Ramirez during direct examination denied any knowledge about the contraband concealed within the package. Ramirez's disclaimer, counterposed against the government's burden, put knowledge in issue; consequently, the district court allowed the evidence of his involvement in an attempted cocaine transaction for a proper purpose." (citations omitted)), and United States v. Rubio-Estrada, 857 F.2d 845, 847 (1st Cir. 1988) (admitting evidence of prior conviction because, "[d]uring, and just after, the government's presentation of 1The judgment in Garcia-Rosa was vacated, on other grounds, sub nom. Rivera-Feliciano v. United States, 498 U.S. 954 (1990). 4 1160233 its case, defendant's counsel, through cross-examination and comment, made clear that a major part of the defense would consist of a claim that the defendant lacked knowledge of the presence of cocaine or intent to commit the crime (which makes it unlawful to 'possess [cocaine] with intent to distribute ...' 21 U.S.C. § 841(a)(2) (1982))"). See also, e.g., United States v. Near, 733 F. 2d 210, 217 (2d Cir. 1984) (noting that knowledge exception will not justify admission of prior-acts evidence where the matter at issue is one "of common knowledge"). Here, as Justice Bryan points out, no evidence was introduced that the prior conviction involved marijuana. But even if it had, the only plausible reason for the introduction of evidence of Zachary Blake Walden's previous conviction would be to show that he knew what marijuana smelled like (because the police officer said that the smell of marijuana was emanating from the cooler that had been inside the car). But there is no issue in this case as to whether the defendant knew how marijuana smelled; the prior conviction had no probative value as to any actual issue in this case. 5 1160233 This case is indistinguishable, in my view, from Turner v. State, 929 So. 2d 1041 (Ala. Crim. App. 2005). 6 1160233 BRYAN, Justice (dissenting) I respectfully dissent. This case arises from Zachary Blake Walden's convictions for unlawful possession of marijuana in the first degree and unlawful possession of drug paraphernalia. The facts were summarized in the Court of Criminal Appeals' opinion: "On March 8, 2011, Elba Police Officer Alva Carlson received a complaint about a 'reckless driver coming down [Highway] 29 from Andalusia towards Gantt; the report indicated that the driver was a black male and that he was driving a blue vehicle with a 'helping schools' tag. Officer Carlson drove in that direction and saw a vehicle matching the description parked at a house on Deer Run Road. Officer Carlson pulled up behind the vehicle and noticed Walden sitting in the front passenger seat. Walden exited the vehicle and asked Officer Carlson if there was a problem. Walden then closed the passenger door, despite Officer Carlson's demands to leave it open. After Walden closed the door, the driver of the vehicle began to drive away without Walden. Officer Carlson ordered Walden to sit down and wait while he followed and stopped the vehicle. "Officer Carlson yelled at the driver to stop several times and followed the vehicle onto a dirt road. As Officer Carlson followed the vehicle, he saw the driver throw a red cooler out the passenger side window. Officer Carlson turned on his lights and siren and noted that the 'driver mashed the gas and refused to stop.' After a brief pursuit, the driver stopped the vehicle and fled the area on foot; he was subsequently apprehended with the assistance of another officer. 7 1160233 "After arresting the driver, officers retrieved the red cooler and discovered a large bag of what was later determined to be marijuana inside. Officer Greg Jackson with the 22nd Judicial Circuit Drug Task Force testified that he was able to smell marijuana coming from the cooler before opening it.[2] The names 'Walden' and 'Jimmy Kirkland' were written on the outside of the cooler along with some other numbers. Officers later searched the vehicle and discovered a coffee can containing several bags of marijuana on the passenger-side floorboard. "Officer Carlson transported the driver to the Covington County jail and then returned to the house on Deer Run Road. When Officer Carlson asked to speak to Walden, a woman who identified herself as Walden's mother informed him that Walden was not there anymore. Walden was later arrested. "Before the State rested, it informed the circuit court that it intended to introduce evidence of two convictions –- a 2009 conviction for first- degree possession of marijuana in Dale County and a 2009 conviction for the unlawful distribution of a controlled substance (marijuana) in Covington County -- under Rule 404(b), Ala. R. Evid., in order to show that Walden had the intent to possess the marijuana seized in this case. Defense counsel objected to the introduction of the convictions. After a discussion with the attorneys and over Walden's objection, the circuit court ruled that the State could introduce evidence of Walden's conviction for the unlawful distribution of a controlled substance for the purpose of showing 'intent and knowledge as part of that constructive possession charge.' The circuit court sustained Walden's objection to the introduction of his 2Officer Carlson retrieved the discarded cooler, which he later gave to Officer Jackson. Officer Jackson testified that, as soon as Officer Carlson handed him the cooler, he could smell the marijuana in the cooler before opening it. 8 1160233 conviction for possession of marijuana in the first degree. The State then offered a certified copy of Walden's 2009 conviction for the unlawful distribution of a controlled substance and the warrant affidavit regarding that conviction.[3] "Later, the circuit court charged the jury and stated: 'I charge you, ladies and gentlemen of the jury, that evidence of other crimes, wrongs, or acts is admissible to prove the defendant's intent and knowledge at the time of the alleged offense.' "After both sides rested and the circuit court instructed the jury on the applicable principles of law, the jury found Walden guilty of unlawful possession of marijuana in the first degree and unlawful possession of drug paraphernalia." Walden v. State, [Ms. CR-15-0577, Oct. 21, 2016] ___ So. 3d ___, ___ (Ala. Crim. App. 2016) (record citations omitted). Walden appealed to the Court of Criminal Appeals, arguing that the circuit court erred by admitting evidence of his prior conviction for unlawful distribution of a controlled substance. A majority of the Court of Criminal Appeals 3The case-action summary admitted into evidence indicated that Walden previously had been convicted of unlawful distribution of a controlled substance, but it did not identify that controlled substance. The State also attempted to have admitted a warrant affidavit that specified that Walden had been convicted of distributing marijuana. The circuit court did not allow that warrant affidavit to go to the jury, but the circuit court stated that the warrant affidavit would become part of the record for the limited purpose of providing documentation for the arguments made regarding the admissibility of the prior-conviction evidence. 9 1160233 disagreed and affirmed the circuit court's judgment. Judge Welch dissented, concluding that evidence of Walden's prior conviction should have been excluded and that the case presented "a textbook example" of why Rule 404(b), Ala. R. Evid., exists. ___ So. 3d at ___ (Welch, J., dissenting). Walden then petitioned this Court for a writ of certiorari, and we granted that petition. The issue in this case is whether, under Rule 404(b), the circuit court properly admitted evidence of Walden's prior conviction for unlawful distribution of a controlled substance. More specifically, the issue is whether, under Rule 404(b), that evidence was properly admitted to show that Walden knew that there was marijuana in the vehicle and that he intended to possess the marijuana. Whether Walden had knowledge of the marijuana and whether he intended to possess it were central to the State's theory that Walden constructively possessed the marijuana. In reviewing a circuit court's decision on the admissibility of evidence, this Court will reverse a judgment only upon a clear showing that the circuit court exceeded its discretion. Ex parte Loggins, 771 So. 2d 1093, 1103 (Ala. 2000). 10 1160233 Rule 404(b) prevents the State from relying on a defendant's past acts to prove the defendant's present guilt. Rule 404(b) provides, in pertinent part: "Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident ...." Evidence of a prior conviction, therefore, is admissible only to show something besides the character of the defendant in order to show action in conformity therewith -- such as knowledge or intent. But for evidence of a prior conviction to be admissible to show knowledge or intent, that conviction must have a probative factual connection to the present case. Ex parte Casey, 889 So. 2d 615 (Ala. 2004), is illustrative. The Court first discussed the rationale for the exclusionary rule found in Rule 404(b): "Long before the adoption and effective date of Rule 404(b) on January 1, 1996, the exclusionary rule was explained and followed in our caselaw. The adoption of Rule 404(b) did not abrogate our prior caselaw on the exclusionary rule. Hunter v. State, 802 So. 2d 265 (Ala. Crim. App. 2000). Our caselaw explains the purpose of the exclusionary rule: 11 1160233 "'The general rule is that in criminal prosecutions, evidence of prior criminal acts is not admissible since the only facts to be laid before the jury should consist exclusively of the transaction which forms the subject of the indictment, and which alone the defendant is called on to answer. "'This rule, however, is subject to some well recognized exceptions. Evidence of other distinct criminal acts is admissible when relevant to the crime charged, as bearing on scienter, intent, motive, res gestae, or to establish the identity of the accused.... The authorities also recognize such an exception to show system or plan usually to identify the accused or to show intent. But even under the exceptions noted they or one of them is admissible only when the evidence is relevant to the crime charged.'" 889 So. 2d at 617-18 (quoting Garner v. State, 269 Ala. 531, 533, 114 So. 2d 385, 386 (1959)(emphasis added in Ex parte Casey)). In Ex parte Casey, this Court held that the defendant's prior convictions for theft of property and unauthorized use of a credit card were inadmissible to prove either that he had knowledge of the presence of stolen items found in his girlfriend's apartment and car or that he intended to exercise control over those items. The Court stated: 12 1160233 "The record, which contains none of the factual specifics of the defendant's prior convictions, discloses no logical connection between his prior theft or his prior unauthorized use of a credit card and his knowledge of the presence, ownership, or stolen character of any of the items he was being tried for receiving in the case now before us. That is, the defendant's mere knowledge that the property he previously had been convicted of stealing or the credit card he had previously been convicted of using without authority belonged to some other persons would not, in the absence of some evidence of connecting facts, supply the defendant with knowledge of the presence, ownership, or stolen character of items found five years later in his girlfriend's apartment and car and would not enable him to differentiate between items there which were stolen and items there which were not stolen. In other words, the record reveals no identity or connection between what the defendant knew or learned in his prior crimes and what he knew or learned about the items in his girlfriend's apartment or car." 889 So. 2d at 621. Notably, the Court in Ex parte Casey distinguished the facts in that case from those in Karr v. State, 491 So. 2d 1073 (Ala. Crim. App. 1986), in which a defendant's prior receiving-stolen-property conviction was held to be admissible to prove scienter in a subsequent receiving-stolen-property case involving the same parties. Further, the Court distinguished Karr from Stephens v. State, 300 So. 2d 414 (Ala. Crim. App. 1974), in which a defendant's prior receiving-stolen-property conviction was inadmissible to 13 1160233 show scienter because the then present charge against him involved different parties. Turner v. State, 929 So. 2d 1041 (Ala. Crim. App. 2005), is also illustrative. In that case, the defendant was on trial for possession of cocaine. As in the present case, the State argued that the defendant had constructively possessed the drug. There was evidence indicating that the defendant had driven a passenger to retrieve a bag of cocaine the passenger had earlier discarded while the two were fleeing from police. The trial court admitted evidence of the defendant's prior conviction for possession of cocaine. In the prior case, the defendant swallowed $200 worth of cocaine because he was afraid of being caught by the police with cocaine. The Court of Criminal Appeals concluded that the trial court erred in admitting the evidence of the prior conviction: "The record discloses no logical connection between Turner's prior conviction and the present charge. That is, the defendant's prior conviction for possession of cocaine would not, in the absence of some connecting facts, supply the defendant with the knowledge of the presence of cocaine in his vehicle, the subject of the instant offense. Except for the tendency, condemned by Rule 404(b), 'to show action in conformity therewith,' the record before us discloses no logical connection between the 14 1160233 defendant's obvious knowledge of cocaine generally, as evidenced by his prior conviction, and his knowledge of the presence of cocaine in his vehicle, or his intent to possess that cocaine, which were the primary issues in the present case." Turner, 929 So. 2d at 1045. Thus, for evidence of a prior conviction to be admissible under Rule 404(b), the conviction must have a probative factual connection to some issue in the present case. Such a connection was not established here. The State contends that the circuit court properly admitted evidence of Walden's prior conviction to show knowledge of the presence of marijuana in the vehicle and the intent to possess it. Regarding knowledge, the Court of Criminal Appeals concluded that the prior conviction "showed that Walden was familiar with the smell of marijuana and that he had knowledge that there was marijuana inside of the cooler and coffee can when he sat in the passenger seat of the vehicle." ___ So. 3d at ___. That determination seems to be based on an implicit conclusion based, in turn, on Officer Jackson's testimony. Officer Jackson testified that, when Officer Carlson handed him the cooler, which had been in some unspecified place in the vehicle before the driver threw it 15 1160233 from the vehicle while fleeing, he could smell the packaged marijuana in the cooler before opening it. The implicit conclusion is that, based on Officer Jackson's testimony, there was evidence indicating that the smell of marijuana was present in the vehicle when Walden had been sitting in the parked vehicle. Thus, the reasoning goes, Walden's prior conviction is relevant to show that he recognized the smell of marijuana in the vehicle and, therefore, that he knew that it was there. In my opinion, the admissibility of the prior-conviction evidence comes down to this key point: The only evidence of Walden's prior conviction actually submitted to the jury was the case-action summary stating that Walden had been convicted of unlawful possession of a controlled substance, but that case-action summary did not specify the identity of the controlled substance. The simple fact that Walden was convicted of possessing an unspecified controlled substance does not establish any factual connection relevant to whether he knew there was marijuana in containers in the vehicle. I reach the same conclusion regarding whether evidence of the prior conviction established the necessary factual connection 16 1160233 relevant to Walden's intent to possess the marijuana. The Court of Criminal Appeals did not specifically discuss the intent exception in its analysis, as it did the knowledge exception. The mere fact of Walden's prior conviction is not relevant to whether he knew about the presence of the marijuana in the vehicle or whether he intended to possess it. The evidence before the jury contained no connecting facts making Walden's prior conviction relevant to the issues of Walden's knowledge and intent. Therefore, the circuit court erred by admitting the evidence of Walden's prior conviction.4 Further, the admission of the evidence was prejudicial. The jury heard evidence that could only be used to draw the improper inference that, because Walden had previously committed a crime, he committed the crime charged in the present case. This is precisely the type of evidence Rule 404(b) is intended to keep out. Moreover, the limiting 4I note that, even if evidence of a prior conviction falls within one of the exceptions found in Rule 404(b), the evidence still may be inadmissible. To be admissible, the probative value of the evidence must outweigh its potential prejudicial effect by being reasonably necessary to the State's case and by being plain, clear, and conclusive. Ex parte Jackson, 33 So. 3d 1279, 1285 (Ala. 2009). However, it is unnecessary to discuss this additional hurdle in light of the analysis above. 17 1160233 instruction given by the circuit court to the jury did not eliminate the prejudicial effect of the admission, as Judge Welch observed in his dissent below: "The majority states that the prejudice alleged by Walden 'was alleviated by the circuit court's instruction to the jury.' ___ So. 3d at ___. The circuit court instructed the jury 'that evidence of other crimes, wrongs, or acts is admissible to prove the defendant's intent and knowledge at the time of the alleged offense.' The instruction eliminated none of the prejudice. In Ex parte Casey, 889 So. 2d 615 (Ala. 2004), the Alabama Supreme Court held that evidence of Casey's prior convictions for theft and the unauthorized use of a credit card should not have been admitted during his trial on a charge of receiving stolen property because the evidence should have been excluded under Rule 404(b). The Court further held that the evidence served only to suggest that, because Casey 'had harbored the dishonest intent that constituted essential elements of his prior crimes, he must have harbored the dishonest intent that constituted essential elements of the crimes' for which he was then on trial. Id. at 621. The Alabama Supreme Court held that the error was not harmless because, the Court said, the evidence tended only to show that he probably committed the crime for which he was being tried because he had committed a similar crime previously. 'The erroneous admission of the defendant's prior convictions into evidence substantially increased the likelihood that he would be convicted on at least some of the numerous counts then being tried, as he was.' Id. at 622. The Alabama Supreme Court then discussed the jury charge on the prior bad act: "'The "limiting" instruction given by the trial court to the jury did not ameliorate the prejudicial effect of the erroneous admission of the defendant's 18 1160233 prior convictions. Indeed, the instruction contradicted itself and exacerbated the prejudice. While the trial judge told the jurors they could not consider the prior convictions "as evidence that [the defendant] committed the now-charged crimes," the trial judge, in the same breath, told the jurors they could consider the prior convictions "as evidence of the elements of knowledge and intent" (emphasis added) of the now-charged crimes, and, thus, in legal and practical effect, that they could consider the prior convictions "as evidence that [the defendant] committed the now-charged crimes." In other words, considering the prior convictions as evidence of the elements of "the now-charged crimes" is the same as considering the prior convictions as evidence of the commission of "the now-charged crimes."' "Id. "The trial court's charge in this case also allowed the jurors to consider Walden's prior conviction as evidence of the elements of knowledge and intent, both of which were necessary to prove the charges for which he was on trial. As in Ex parte Casey, the erroneous admission of Walden's prior conviction cannot be considered harmless error ...." Walden, ___ So. 3d at ___ (Welch, J., dissenting) (record citations omitted). Thus, the circuit court should not have admitted evidence of Walden's prior conviction, and the admission of that 19 1160233 evidence prejudiced Walden. Therefore, I respectfully dissent. Murdock and Shaw, JJ., concur. 20

June 30, 2017

d1574c24-c2ba-48b2-9bdf-a8c0371a32db

Rochester-Mobile, LLC v. C&S Wholesale Grocers, Inc.

N/A

1160185

Alabama

Alabama Supreme Court

Rel: 06/16/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160185 ____________________ Rochester-Mobile, LLC, and Salzman-Mobile, LLC v. C&S Wholesale Grocers, Inc., and Southern Family Markets of Mobile South University BLVD, LLC Appeal from Mobile Circuit Court (CV-15-902061) MAIN, Justice. Rochester-Mobile, LLC, and Salzman-Mobile, LLC (hereinafter referred to as "Rochester-Salzman"), appeal from a judgment entered against them in a declaratory-judgment 1160185 action relating to the validity of a 25-year sublease between Rochester-Salzman and Southern Family Markets of Mobile South University BLVD, LLC ("SFM"), and C&S Wholesale Grocers, Inc. ("C&S"). The trial court concluded that because the sublease was not recorded pursuant to § 35-4-6, Ala. Code 1975, the sublease was void for the remainder of the term extending beyond 20 years. We reverse and remand. I. Facts and Procedural History In July 1974, Multiple Properties, Ltd., entered into a ground lease with Casto Developers, a general partnership, related to a parcel of property located in Mobile County. The lease was for an initial term of 31 years with 5 successive 10-year renewal options. The lease agreement was duly recorded in the Probate Office for Mobile County on August 21, 1974. The land was developed as a shopping center, and Bruno's, Inc. ("Bruno's"), then obtained Casto Developers' leasehold interest. On June 27, 1997, Bruno's entered into a sale-leaseback financing arrangement with Rochester-Salzman. In exchange for $7,000,000, Bruno's assigned its interest under the ground lease to Rochester-Salzman. On that same day, Rochester- 2 1160185 Salzman, now the lessee by virtue of the assignment, subleased the premises back to Bruno's in a document titled "Lease and Agreement" ("the sublease"). The sublease was for a term of 25 years with 5 additional, successive 5-year renewal options. Bruno's agreed to make monthly basic rent payments of $55,500. The sublease was not recorded in the office of the judge of probate. In 2009, Bruno's filed for bankruptcy. As a part of the bankruptcy proceedings, SFM was assigned the rights and assumed the obligations of Bruno's under the sublease. C&S guaranteed SFM's obligations under the sublease. In 2015, Multiple Properties, LLC, the successor to Multiple Properties, Ltd., initiated this lawsuit, seeking a declaration as to whether Rochester-Salzman or Rochester- Salzman's mortgagees had timely exercised the option to renew the ground lease. C&S was added as a defendant at some time following the original complaint. Rochester-Salzman then filed a cross-claim against C&S and a third-party claim against SFM alleging violations of the sublease. In response, C&S and SFM filed a cross-claim and counterclaim, respectively, against Rochester-Salzman. Their claims sought 3 1160185 a judgment declaring that, because the sublease was not recorded, it was due to terminate on the expiration of 20 years pursuant to § 35-4-6. Rochester-Salzman answered the cross-claim/counterclaim, admitting that the sublease had not been recorded within one year of its execution but denying that any such recordation was necessary under § 35-4-6. It further alleged that the sublease contained separate and independent agreements, promises, and covenants that continued in force notwithstanding the termination of the sublease. Rochester-Salzman then filed an additional counterclaim, requesting a judgment declaring that C&S and SFM continued to be obligated to Rochester-Salzman for the full 25-year term of the sublease. C&S and SFM moved for judgment on the pleadings on the cross-claim/counterclaim, contending that the pleadings established that the sublease was not recorded within 1 year of its execution and that, therefore, the sublease was due to terminate on June 25, 2017, 20 years after it was executed, pursuant to § 35-4-6. Rochester-Salzman opposed the motion and moved for a summary judgment on its declaratory-judgment counterclaim. Rochester-Salzman argued that the recording of 4 1160185 the ground lease satisfied the recording requirement of § 35- 4-6. Rochester-Salzman also contended that the payment obligations contained in the sublease were part of a financing transaction and that those obligations were independent and enforceable regardless of the termination of the sublease agreement. On October 3, 2016, the trial court entered an order granting C&S and SFM's motion for a judgment on the pleadings and denying Rochester-Salzman's motion for a summary judgment. The trial court held as follows: "(1) The Lease and Agreement among [Rochester- Salzman] as Landlord and [Bruno's] as Tenant [d]ated June 27, 1997 ('the Lease') which is the subject of the parties' respective motions is a lease covered by Alabama Code [1975,] § 35-4-6. "(2) It is undisputed that the Lease was not recorded within one year of its execution. "(3) The Lease is unambiguous. "(4) Although the Lease provides for a principal term greater than twenty years, the Lease's term is twenty years pursuant to Alabama Code [1975,] § 35- 4-6[,] because it was not recorded within one year of execution. The Lease expires on June 26, 2017. "(5) To the extent the Lease by its terms extends beyond June 26, 2017, the Lease is void and unenforceable pursuant to Alabama Code [1975,] § 35- 4-6. As a result, any rights or obligations (monetary or non-monetary) of C&S, SFM Mobile, or 5 1160185 Rochester-Salzman which would otherwise accrue under the Lease or the Guaranty of Lease after June 26, 2017, including without limitation any obligation of C&S or SFM Mobile to pay Rent or Additional Rent (as defined in the Lease), are likewise void and unenforceable pursuant to Alabama Code [1975,] § 35- 4-6." On January 24, 2017, the trial court certified its October 3, 2016, order as final pursuant to Rule 54(b), Ala. R. Civ. P. Rochester-Salzman appealed. II. Standard of Review Our review of a judgment on the pleadings is de novo: "When a motion for a judgment on the pleadings is made by a party, 'the trial court reviews the pleadings filed in the case and, if the pleadings show that no genuine issue of material fact is presented, the trial court will enter a judgment for the party entitled to a judgment according to the law.' B.K.W. Enters., Inc. v. Tractor & Equip. Co., 603 So. 2d 989, 991 (Ala. 1992). See also Deaton, Inc. v. Monroe, 762 So. 2d 840 (Ala. 2000). A judgment on the pleadings is subject to a de novo review. Harden v. Ritter, 710 So. 2d 1254, 1255 (Ala. Civ. App. 1997). ... [I]n deciding a motion for a judgment on the pleadings, the trial court is bound by the pleadings. See Stockman v. Echlin, Inc., 604 So. 2d 393, 394 (Ala. 1992)." Universal Underwriters Ins. Co. v. Thompson, 776 So. 2d 81, 82-83 (Ala. 2000). III. Analysis 6 1160185 The key inquiry in this case is whether § 35-4-6 applies to a sublease. Section 35-4-6 provides: "No leasehold estate can be created for a longer term than 99 years. Leases for more than 20 years shall be void for the excess over said period unless the lease or a memorandum thereof is acknowledged or approved as required by law in conveyances of real estate and recorded within one year after execution in the office of the judge of probate in the county in which the property leased is situated." Rochester-Salzman argues that § 35-4-6 should not be read to include a sublease. First, it notes that the statute, which imposes restrictions on the freedom to contract in the conveyance of property interests, is in derogation of the common law and, therefore, must be strictly construed. See Foster v. Martin, 286 Ala. 709, 712, 246 So. 2d 435, 438 (1971) (noting that a statute in derogation of the common law must be strictly construed and that such a statute "will not be extended further than is required by the letter of the statute"). Next, Rochester-Salzman contends that the terms "lease" and "sublease" are not synonymous: "A lease and a sublease involve different parties and different relationships of the parties to the real property involved. In a lease, an owner of land conveys a possessory interest in that land to a lessee for some period of time. A sublease involves not the landowner, but the lessee and a 7 1160185 third party to whom the lessee conveys some portion of its leasehold interest." (Rochester-Salzman's brief, at 30-31.) Rochester-Salzman further notes that the legislature knows how to include subleases in the express language of statutes, and it cites a multitude of examples from the Alabama Code in which the terms "lease" and "sublease," or derivatives of those terms, are used in the same section. Finally, it contends that the legislative purpose of § 35-4-6 –- preventing landowners from tying up property by lease for long terms -- is not served by requiring recording of a sublease, which, by definition, cannot add to the term of a master lease. For these reasons, Rochester-Salzman argues, § 35-4-6 does not apply to subleases. SFM and C&S, on the other hand, contend simply that a sublease is, in fact, a lease. They argue that the language of § 35-4-6 unambiguously applies to all leases, including subleases. In interpreting a statutory provision, "a court is required to ascertain the intent of the legislature as expressed and to effectuate that intent." Tuscaloosa Cty. 8 1160185 Comm'n v. Deputy Sheriffs' Ass'n of Tuscaloosa Cty., 589 So. 2d 687, 689 (Ala. 1991). "Words used in the statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says. If the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect." IMED Corp. v. Systems Eng'g Assocs. Corp., 602 So. 2d 344, 346 (Ala. 1992)). "'In the absence of a manifested legislative intent to the contrary, or other overriding evidence of a different meaning, legal terms in a statute are presumed to have been used in their legal sense.'" Crowley v. Bass, 445 So. 2d 902, 904 (Ala. 1984) (quoting 2A D. Sands, Sutherland Statutory Construction § 47.30 (4th ed. 1973)). "Our review of an issue concerning the intent of the legislature is confined to the terms of the legislative act itself, unaided by the views of observers of or participants in the legislative process. City of Daphne v. City of Spanish Fort, 853 So. 2d 922, 945 (Ala. 2003). We can look to '"the history of the times, the existing order of things, the state of the law when the instrument was adopted, and the conditions necessitating such adoption."' City of Birmingham v. Hendrix, 257 Ala. 300, 307, 58 So. 2d 626, 633 (1952) (quoting In re Upshaw, 247 Ala. 221, 223, 23 So. 2d 861, 863 (1945)). We can also look to an act's '"relation to other statutory and constitutional provisions, view its history and the purposes sought to be 9 1160185 accomplished and look to the previous state of law and to the defects intended to be remedied."' Hendrix, 257 Ala. at 307, 58 So. 2d at 633 (quoting Birmingham Paper Co. v. Curry, 238 Ala. 138, 140, 190 So. 86, 88 (1939))." King v. Campbell, 988 So. 2d 969, 984 (Ala. 2007). After careful consideration of the parties' arguments, and in light of the applicable canons of statutory interpretation, we conclude that the term "lease" as used in § 35-4-6 does not include a sublease. First, the terms "lease" and "sublease" are not altogether synonymous. A lease is a contract by which the "possessor of real property conveys the right to use and occupy the property in exchange for consideration." Black's Law Dictionary 1024 (10th ed. 2014). Although a sublease is a species of lease, it has a distinct, refined legal meaning. A "sublease" is defined as "[a] lease by a lessee to a third party, conveying some or all of the leased property for a term shorter than that of the lessee, who retains a right of reversion." Black's, supra, at 1652. Indeed, a body of case- law exists regarding the determination of whether an instrument is a sublease or an assignment and the resulting ramifications. See, e.g., Pantry, Inc. v. Mosley, 126 So. 3d 10 1160185 152, 159 n.2 (Ala. 2013); Johnson v. Moxley, 216 Ala. 466, 468, 113 So. 656, 657 (1927); and Johnson v. Thompson, 185 Ala. 666, 668-89, 64 So. 554, 555 (1914). That the drafters of § 35-4-6 did not intend the term "lease" to include a sublease finds ample support among the other provisions of the Alabama Code in which the legislature has used both "lease" and "sublease," or derivatives of those terms, in the same provision.1 "'"There is a presumption that 1See § 8-15-31(5), Ala. Code 1975 (defining "owner" of self-service storage facility as "owner, operator, lessor or sublessor of a self-service storage facility"); § 11-47- 14.1(b), Ala. Code 1975 (providing that municipalities "may authorize the lessees in ... leases and their subleasees to construct or maintain buildings and other improvements upon the properties so leased and collect wharfage dues thereon and to sublet all or any part of said wharfs, buildings and other improvements"); § 11-88-7.1(f), Ala. Code 1975 (providing that county may "acquire by lease or sublease" property comprising a water system, sewer system, or fire-protection facility); § 11-89A-2(18), Ala. Code 1975 (defining "revenues" as all income or other charges received from, among other sources, a "lease [or] sublease"); § 11-97-2(21), Ala. Code 1975 (defining "revenues" as all rentals or other income received by utility-services facility from sale, "lease, [or] sublease"); § 24-8-3(10), Ala. Code 1975 (defining for purpose of Alabama Fair Housing law, "to rent" as "to lease, to sublease"); § 26-1A-204(2), Ala. Code 1975 (providing that power of attorney granting general authority with respect to real property authorizes agent to both "lease" and "sublease" property); § 26-1A-205(2), Ala. Code 1975 (providing that power of attorney granting general authority with respect to tangible personal property authorizes agent to "lease" and "sublease" personal property); § 33-10-19, Ala. Code 1975 (providing that commission created in that chapter "may lease 11 1160185 every word, sentence, or provision [of a statute] was intended for some useful purpose, has some force and effect, and that some effect is to be given to each, and also that no superfluous words or provisions were used."'" Richardson v. Stanford Props., LLC, 897 So. 2d 1052, 1058 (Ala. 2004)(quoting Sheffield v. State, 708 So. 2d 899, 909 (Ala. Crim. App. 1997), quoting in turn 82 C.J.S. Statutes § 316, at 551-52 (1953)). Thus, to hold that the term "lease" includes a sublease would render the term "sublease" superfluous in those numerous other statutes in which both terms, or derivatives of those terms, were used. Moreover, when the legislature has intended that the term "lease" include a "sublease," it has demonstrated the ability to expressly or sublease lands leased from the State of Alabama"); § 35-8- 4, Ala. Code 1975 (deeming each condominium unit real property, the ownership of which may be by "lease or sublease"); § 35-8A-412(a), Ala. Code 1975 (requiring declarant of condominium containing conversion buildings to give notice of conversion to "each of the residential tenants, and any residential subtenant in possession"); § 35-9-60, Ala. Code 1975 (providing that landlord of any storehouse or other building shall have a lien on the goods, furniture, and effects "belonging to the tenant, and subtenant, for rent"); § 35-9A-141(7), Ala. Code 1975 (defining, for purpose of Residential Landlord and Tenant Act, "landlord" to mean "the owner, lessor or sublessor of the dwelling unit"); and § 41-9- 44(a)(6), Ala. Code 1975 (providing that Council on the Arts is authorized to "lease or sublease" real property). 12 1160185 indicate its intent. See § 7-2A-103(1)(j), Ala. Code 1975 (defining "lease" and providing that, "[u]nless the context clearly indicates otherwise, the term [lease] includes a sublease"). Furthermore, the history and legislative purpose of § 35- 4-6 support the proposition that § 35-4-6 was not intended to apply to subleases. The initial version of § 35-4-6, adopted in 1852, prohibited the creation of a leasehold estate for a longer term than 20 years.2 The policy underlying the statute was to prevent landowners from tying up property by leasing for long terms.3 Harco Drug, Inc. v. Notsla, Inc., 382 So. 2d 1, 3 (Ala. 1980) ("The policy expressed by the statute is that a person should not be permitted to tie up his property by a lease for a period greater than twenty years."); Tennessee Coal, Iron & R.R. Co. v. Pratt Consol. Coal Co., 156 Ala. 446, 2"No leasehold estate can be created for a longer term than twenty years." 3An early version of a statute or constitutional provision prohibiting long-term leases appeared in New York's constitution of 1846 and prohibited leases of agricultural land for terms longer than 12 years. The framers of that particular provision deemed long-term leases undesirable because, it was believed, tenants were unwilling to make improvements to land as to which they had no independent ownership. Stephens v. Reynolds, 6 N.Y. (2 Seld.) 454, 457 (1852). 13 1160185 448, 47 So. 337, 337 (1908) ("The policy of the law is clearly expressed in the statute that a person shall not be allowed to tie his property up by lease for a longer period than 20 years ...."). Necessarily, the original version of the statute would have had no application to a sublease because, given that the original lessee could never have possessed a leasehold interest for a term greater than 20 years, the lessee could not have transferred a leasehold interest for a greater term. Thus, the original version of the statute placed no restrictions on a lessee's right to sublet a leasehold estate. The statute was amended in 1911 to create what is, essentially, the current § 35-4-6.4 The 1911 amendment increased the maximum term of a lease to 99 years, but retained a vestige of the prior 20-year limit, providing that the term of any lease that extended beyond 20 years was void unless it had been recorded within 1 year of the execution of the lease. We have stated that the "plain purpose" of the recording requirement of § 35-4-6 "is to provide notice to innocent purchasers of property who otherwise might purchase 4The statute was amended in 1989 to permit recording a memorandum in lieu of the actual lease. 14 1160185 property and then discover an unrecorded lease on the property that deprives them of the benefits of ownership for up to 99 years." Eastwood Mall Assocs., Ltd. v. All American Bowling Corp., 518 So. 2d 44, 46 (Ala. 1987). The recognized legislative purpose of § 35-4-6 is not furthered by applying the recording requirement to subleases. First, a sublease by its nature cannot extend the lease term and thus cannot tie up property for any term longer than that held by the lessee under the master lease. Likewise, the recording of the master lease gives notice of the maximum length for which the property at issue is encumbered by lease. Thus, the legislative purpose of the statute is satisfied upon the recording of the master lease. Moreover, once a leasehold estate of longer than 20 years -- fully valid under § 35-4-6 –- is established, there is no readily apparent basis for further restricting the alienability of that leasehold interest. In support of this point, we recognize that § 35-4-6 does not, by its terms, apply to assignments.5 Thus, a lessee who holds a leasehold 5We have explained the differences between an assignment and a sublease as follows: "'In general terms, the difference between an 15 1160185 for a term of more than 20 years can freely assign the entirety of his leasehold estate without the necessity of recording the assignment under § 35-4-6. Applying the statute to subleases, however, restricts a lessee's ability to transfer the estate for a lesser term. It seems to us that, if a leasehold estate is valid in its sum, it must also be valid –- and alienable -- in its parts. Finally, in addition to the above-referenced canons of statutory construction, Alabama law has long provided that "[s]tatutes in derogation or modification of the common law are strictly construed." Arnold v. State, 353 So. 2d 524, 526 (Ala. 1977). Statutes are presumed to not alter the common law in any way not expressly declared. Arnold, supra. Likewise, "[s]tatutes or ordinances which impose restrictions on the use of private property are strictly construed and assignment and a sublease is that an assignment transfers the lessee's entire interest in the property, whereas a sublease transfers only a portion of that interest, with the original lessee retaining a right of reentry at some point during the unexpired term of the lease.'" Pantry, Inc. v. Mosley, 126 So. 3d at 159 n.2 (quoting 69 Am. Jur. Proof of Fact 3d 191, Circumstances Establishing Landlord's Unreasonable Withholding of Consent to Assignment or Sublease § 4 (2002) (footnotes omitted)). 16 1160185 their scope cannot be extended to include limitations not therein included or prescribed." Smith v. City of Mobile, 374 So. 2d 305, 307 (Ala. 1979). We agree that § 35-4-6, which restrains the ability to transfer a leasehold interest, is in derogation of the common law, mandating the narrowest reasonable construction. For the above-stated reasons, therefore, we hold that the sublease in this case is not void under the provisions of § 35-4-6. Accordingly, the trial court erred in entering a judgment on the pleadings in favor of SFM and C&S and against Rochester-Salzman. Given our holding, we pretermit discussion of the issue whether the sublease contained separate agreements that are independently enforceable, regardless of the validity of the sublease. IV. Conclusion The judgment of the trial court is reversed and the case remanded for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, J., concur. Murdock and Bryan, JJ., concur in the result. 17

June 16, 2017

c3c28abb-2ee9-48b4-a8c6-7cb4a804b87f

Ex parte Alfa Mutual Insurance Company.

N/A

1141343

Alabama

Alabama Supreme Court

REL: 04/28/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1141343 ____________________ Ex parte Alfa Mutual Insurance Company PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: Alfa Mutual Insurance Company v. University of South Alabama d/b/a University of South Alabama Medical Center Hospital) (Mobile Circuit Court, CV-14-901532; Court of Civil Appeals, 2140366) MURDOCK, Justice. 1141343 Alfa Mutual Insurance Company ("Alfa") appealed to the Alabama Court of Civil Appeals from a summary judgment in favor of University of South Alabama d/b/a/ University of South Alabama Medical Center Hospital ("USA"). The Court of Civil Appeals affirmed in part, reversed in part, and remanded with instructions. Alfa Mut. Ins. Co. v. University of S. Alabama, [Ms. 2140366, July 17, 2015] ___ So. 3d ___ (Ala. Civ. App. 2015) ("Alfa"). We granted Alfa's petition for a writ of certiorari with respect to the issue whether USA's hospital lien was impaired and the amount of damages recoverable by USA from Alfa for that impairment. For the reasons set forth below, we reverse the judgment of the Court of Civil Appeals insofar as it affirmed the circuit court's ruling that the amount of damages recoverable from Alfa was an amount equal to the entirety of USA's reasonable charges, irrespective of the amount that was otherwise owed by Alfa under the terms of its policy, and we remand the case for further proceedings. I. Facts and Procedural History USA filed a complaint against Alfa alleging impairment of its hospital lien imposed pursuant to Ala. Code 1975, 2 1141343 §§ 35-11-370 through -372, with respect to expenses incurred by USA in its treatment of Abaney T. Wright, who was injured in an automobile accident less than one week before her admission to USA's hospital and later died as a result of her injuries. USA alleged that Alfa impaired its lien by making a $2,000 payment to Wright's parents for funeral expenses under a medical-payment-benefit provision in the parents' automobile-insurance policy.1 Approximately one month later, Alfa issued a draft to USA's counsel in the amount of $2,000; USA did not negotiate the draft. The case was tried on stipulated facts, briefs, and arguments of counsel. The circuit court entered a summary judgment in favor of USA in the amount of its amended lien, $36,438.50, plus attorney fees in the amount of $5,166.69. That is, the circuit court awarded damages based on the entirety of the hospital's charges, without respect to the amount otherwise owed by Alfa under its policy. Alfa appealed to the Court of Civil Appeals. 1The insurance policy provided for a medical-payment benefit of $2,000 for necessary medical and/or funeral expenses because of bodily injury to a covered person caused by an automobile accident. 3 1141343 On appeal, Alfa argued (1) that the hospital lien attached only to tort claims and not to the contract claim at issue here,2 (2) that USA's lien was not impaired because there had been no release, satisfaction, or settlement of any covered claim, and (3) that the damages awarded against Alfa are not owed by it under a proper reading of the lien- impairment statute. Alfa did not challenge the perfection of the lien, the reasonableness of USA's charges, or the amount of the attorney-fee award (assuming that attorney fees were payable at all). The Court of Civil Appeals issued an opinion affirming the judgment in part, specifically concluding that, under the rationale of University of South Alabama v. Progressive Insurance Co., 904 So. 2d 1242 (Ala. 2004), the circuit court correctly ruled that the amount of damages awarded against Alfa should be based on the entirety of USA's reasonable charges secured by its perfected lien.3 Presiding Judge 2We did not grant certiorari review as to this first issue. See Progressive Specialty Ins. Co. v. University of Alabama Hosp., 953 So. 2d 413 (Ala. Civ. App. 2006). 3The Court of Civil Appeals reversed the judgment insofar as it increased those damages to include additional amounts charged by USA in a subsequent lien perfected before the alleged impairment. The Court of Civil Appeals held that USA 4 1141343 Thompson concurred specially, noting that the result was inequitable and not intended by the legislature when it enacted §§ 35-11-370 through -372 but concluding that he was "compelled" by caselaw to agree with the disposition of the case. Alfa, ___ So. 3d at ___ (Thompson, P.J., concurring specially). Alfa petitioned this Court for a writ of certiorari. We granted the petition for a writ of certiorari with respect to the issue whether USA's lien was impaired and the proper measure of damages. II. Standard of Review Our standard of review on an appeal of a summary judgment is well settled. "'"We review a summary judgment de novo. We apply the same standard of review as the trial court in determining whether the evidence presented to the trial court demonstrated the existence of a genuine issue of material fact. A summary judgment is proper where 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the was entitled to recover only the amount of its original lien ($30,900.50), which was the only lien perfected at the time Alfa made the payment to Wright's parents. USA did not seek certiorari review as to the amount of the lien; the difference between the two lien amounts is not material to the analysis in this opinion. 5 1141343 moving party is entitled to a judgment as a matter of law.'"'" Tanner v. State Farm Fire & Cas. Co., 874 So. 2d 1058, 1063 (Ala. 2003) (quoting Slay v. Keller Indus., Inc., 823 So. 2d 623, 624–25 (Ala. 2001) (citations omitted), quoting in turn Northwest Florida Truss, Inc. v. Baldwin Cty. Comm'n, 782 So. 2d 274, 276 (Ala. 2000)). III. Analysis The pertinent statutes are Ala. Code 1975, §§ 35-11-370 through -372. Section 35-11-370 governs the creation of a hospital lien and provides: "Any person, firm, hospital authority, or corporation operating a hospital in this state shall have a lien for all reasonable charges for hospital care, treatment, and maintenance of an injured person who entered such hospital within one week after receiving such injuries, upon any and all actions, claims, counterclaims, and demands accruing to the person to whom such care, treatment, or maintenance was furnished, or accruing to the legal representatives of such person, and upon all judgments, settlements, and settlement agreements entered into by virtue thereof on account of injuries giving rise to such actions, claims, counterclaims, demands, judgments, settlements, or settlement agreements and which necessitated such hospital care, subject, however, to any attorney's lien." (Emphasis added.) 6 1141343 Section 35-11-372 addresses the impairment of a hospital lien and provides: "During the period of time allowed by Section 35-11-371 for perfecting the lien provided for by this division and also after the lien provided for by this division has been perfected, as provided in this division, by any lienholder entitled thereto, no release or satisfaction of any action, claim, counterclaim, demand, judgment, settlement, or settlement agreement, or of any of them, shall be valid or effectual as against such lien unless such lienholder shall join therein or execute a release of such lien. "Any acceptance of a release or satisfaction of any such action, claim, counterclaim, demand or judgment and any settlement of any of the foregoing in the absence of a release or satisfaction of the lien referred to in this division shall prima facie constitute an impairment of such lien, and the lienholder shall be entitled to a civil action for damages on account of such impairment, and in such action may recover from the one accepting such release or satisfaction or making such settlement the reasonable cost of such hospital care, treatment and maintenance. Satisfaction of any judgment rendered in favor of the lienholder in any such action shall operate as a satisfaction of the lien. Any action by the lienholder shall be brought in any court having jurisdiction thereof and may be brought and maintained in the county wherein the lienholder has his, its, or their residence or place of business. If the lienholder shall prevail in such action, the lienholder shall be entitled to recover from the defendant, costs and reasonable attorney's fees. Such action shall be commenced against the person liable for such damages within one year after the date such liability shall be finally determined by a settlement release covenant not to sue or by the judgment of a court of competent jurisdiction." 7 1141343 (Emphasis added.) Section 35-11-370 grants hospitals a lien on certain actions, claims, counterclaims, demands, judgments, and settlements for the reasonable expenses of treating certain patients injured in accidents. Section 35-11-372 entitles a hospital lienholder "to a civil action for damages on account of" an impairment of a lien. Like the circuit court, the Court of Civil Appeals considered itself bound by Progressive, and it held that USA was entitled to damages in the amount of its lien, plus attorney fees. We take this opportunity to revisit the holding of Progressive. In Progressive, a hospital claimed that its lien was impaired by a settlement between the patient and a tortfeasor, in which the patient was paid $6,000 in exchange for a full release of the claims against the tortfeasor. After concluding that the tortfeasor's liability insurer did not adequately present its argument that the hospital lien had not been impaired, this Court rejected the argument that the amount of damages for impairment of a hospital lien is limited 8 1141343 to the payment made by the insurer to obtain the release of the tortfeasor. This Court stated: "To answer this question [as to the amount of damages], we need look no farther than the plain language of § 35–11–372. There, the Legislature plainly and unambiguously stated that a lienholder, such as [the hospital], in a case such as this, 'may recover from the one accepting [the] release [i.e., the insurer] ... the reasonable cost of [the] hospital care, treatment and maintenance [of the injured person].' The statute clearly does not limit the damages to the amount of the consideration paid for the release. Indeed, such a limitation would be contrary to the purpose of the hospital-lien statute, that is, 'to give hospitals ... an automatic lien for the reasonable value of their services.' Ex parte Infinity Southern Ins. Co., 737 So. 2d 463, 464 (Ala. 1999). Thus, we agree with [the hospital] that the trial court erred in interpreting the hospital-lien statute as limiting [its] damages to the amount of the settlement between Progressive and [the patient]. Having determined that Progressive had impaired [the hospital's] lien, the trial court was required to enter a judgment for [the hospital] against Progressive 'for all reasonable charges,' which, in this case, the trial court found totaled $57,097. "Although § 35–11–372 deals specifically with the damages recoverable in an action for the impairment of a hospital lien, Progressive argues that '[t]he plain language of § 35–11–370, [which gives the hospital the lien,] dictates that ... Progressive is only liable to [the hospital] for the amount of its settlement agreement.' Progressive's brief, at 17. However, § 35–11–370 contains no such 'plain language.' Instead, it gives the hospital an automatic lien 'for all reasonable charges for hospital care, treatment and maintenance of an injured person,' which, in this case, totaled 9 1141343 $57,097. By its plain language, which this Court cannot ignore, § 35–11–372 provides that a party, such as Progressive, that is found to have impaired a lien, is responsible for those reasonable charges, not for some lesser amount. Any other interpretation would be contrary to 'this Court's recognition that the statute is to be construed broadly to accomplish its purpose.' Ex parte University of South Alabama, 761 So. 2d [240] at 245 [(Ala. 1999)] (emphasis added)." 904 So. 2d at 1248-49. Chief Justice Nabers dissented as to the amount of damages, concluding that the hospital was entitled to be made whole and to seek the fair value of the claim against the wrongly released tortfeasor, but was not automatically entitled to the full amount of its lien. Chief Justice Nabers stated: "I dissent ... from the main opinion's conclusion that [the hospital] is entitled to recover from Progressive the reasonable value of all services rendered by the hospital to Clarence Bell as a result of the May 14, 2002, accident -- $57,097 -- without any regard to the amount of Progressive's obligation to indemnify its insured. "Section 35–11–372, Ala. Code 1975, provides that, in a case such as this, a hospital 'may recover from the one accepting such [a] release ... the reasonable cost of [the] hospital care, treatment and maintenance the hospital provided the injured party. (Emphasis added.) Importantly, the Legislature did not state that a hospital 'shall be entitled to recover' such damages. The Legislature did say, however, in that same statute, that '[i]f 10 1141343 the lienholder shall prevail in [a civil] action [for damages], the lienholder shall be entitled to recover from the defendant, costs and reasonable attorney's fees.' (Emphasis added.) I think it only reasonable to conclude that the Legislature intended a difference when it used 'may recover' with respect to the recovery by the lienholder-hospital of costs for services and 'shall be entitled to recover' with respect to litigation costs and attorney fees. The majority opinion, in effect, concludes that the Legislature intended no such difference. "However, while I think this difference is clear, I acknowledge that the Legislature did not clarify under what circumstances a hospital 'may recover' all reasonable costs. When interpreting a statute that is ambiguous on its face, this Court seeks a result that is 'workable and fair' and one that considers 'the intent of the legislature,' 'the results that flow from assigning one meaning over another,' and 'related statutory provisions.' John Deere Co. v. Gamble, 523 So. 2d 95, 100 (Ala. 1988). My consideration of all of these factors leads me to conclude that a hospital 'may recover' the reasonable cost of all services only if the lien that was impaired had a value equal to or greater than such reasonable cost." Progressive, 904 So. 2d at 1249-50 (Nabers, C.J., concurring in part and dissenting in part). We agree with Chief Justice Nabers that a hospital is not entitled to recover automatically the full amount of its lien whenever there has been an impairment of any magnitude. As Chief Justice Nabers noted in Progressive: "[I]t is appropriate that [the hospital] be restored to the position it 11 1141343 would have been in had its lien not been impaired." 904 So. 2d at 1250. That conclusion is consistent with § 35-11- 372, which provides for "a civil action for damages on account of such impairment." Damages on account of an impairment means damages caused by or resulting from the impairment. See Shands Teaching Hosp. & Clinics, Inc. v. Mercury Ins. Co. of Florida, 97 So. 3d 204, 213 (Fla. 2012) (noting that "damages on account of such impairment" means damages "by reason of" or "because of" an impairment). That is to say that damages on account of an impairment are measured by the difference between the amount the hospital actually recovered and the amount it could have recovered absent the impairment. That result is equitable and comports with the purpose of the lien statute. Awarding a hospital a windfall for a minor impairment is not equitable and does not comport with the purpose of the statute. In the present case, the value of the claim to which the lien attached was the policy limit of the medical-payment benefit at issue, or $2,000. Logically, in a case such as this, the value of the lien could not be more than the value of the claim to which it attaches. In contrast, Progressive 12 1141343 involved a release of a tortfeasor, which, unlike an insurer whose potential liability is limited pursuant to a pre-injury contract, could potentially be liable for an amount that equals or exceeds the full amount of the hospital's lien (assuming that liability for at least that amount can be shown). Compare Shands Teaching Hosp. & Clinics, Inc., 97 So. 3d at 213 (holding that hospital's damages for impairment of its lien were limited to the policy limits of the applicable liability insurance). See also 41 C.J.S. Hospitals § 25 (2015) (damages for impairment of hospital lien are limited to the policy limits of liability-insurance coverage). Accordingly, we conclude that the amount of damages recoverable in this case (assuming there was an impairment), is the amount of the claim against Alfa -- $2,000. The purpose of the lien statute is to induce hospitals to "receive a patient injured in an accident, without first considering whether the patient will be able to pay the medical bills incurred." Ex parte University of South Alabama, 761 So. 2d 240, 244 (Ala. 1999). The purpose of the statute is not to precipitate additional litigation, provide a windfall for hospitals, or saddle insurers with 13 1141343 uncontracted-for liability in the event they pay a policy benefit that happens to be subject to a hospital lien. IV. Conclusion Based on the foregoing, we reverse the judgment of the Court of Civil Appeals insofar as it affirmed an award of damages against Alfa based on the full amount of USA's lien. We remand the case for further proceedings consistent with this opinion. In light of our holding that the measure of impairment of a hospital's lien under circumstances such as those presented here does not exceed the amount that would be recoverable against an insurer under the terms of its policy, we pretermit discussion of the issue whether Alfa's actions (including its making a payment to Wright's parents of its policy limits and its subsequent tender of the same amount to USA) amounted to an impairment of USA's lien within the meaning of the statute (an issue that was not considered by the circuit court, given its understanding of the measure of damages for which Alfa was responsible). 14 1141343 REVERSED AND REMANDED. Parker, Main, and Wise, JJ., concur. Bolin and Shaw, JJ., concur in the result. Stuart, C.J., recuses herself. 15

April 28, 2017

9c7a6617-cc5d-4948-b0c3-8cd739c11406

Gerstenecker v. Gerstenecker

N/A

1160144

Alabama

Alabama Supreme Court

05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160144 ____________________ Julie Gerstenecker v. Janice Gerstenecker Appeal from Jefferson Circuit Court (CV-15-904654) PARKER, Justice. Julie Gerstenecker appeals a judgment entered by the Jefferson Circuit Court ("the trial court") in favor of Janice Gerstenecker. Facts and Procedural History 1160144 As of September 2014, Julie, who at that time was married to Adam Gerstenecker, Janice's son, owed approximately $78,000 on two student loans she had borrowed to fund her education. Janice testified that Julie "was upset about" "the amount of interest that she owed on her student loans" and that Janice "decided that [she] would offer [Julie] an interest-free loan to pay off those student loans." Janice testified that she had a discussion with Julie and Adam about the possibility of lending Julie the money to repay her student loans. According to Janice, Janice agreed to repay Julie's student loans and Julie agreed to repay Janice by "pay[ing] [Janice] $700 a month until [Julie and Adam's child] turned one. And then the payments would rise to $1,000." Janice testified that the terms of the agreement between her and Julie were not reduced to writing. Adam also testified at trial; his testimony supports the events as testified to by Janice. Julie testified that she had never borrowed money from Janice and that she does not recall Janice telling her that Janice would lend her money to repay her student loans. On September 15, 2014, Julie sent Janice an e-mail informing Janice of Julie's student-loan lenders and the 2 1160144 amount of indebtedness she owed each of them. Julie's e-mail indicated that Julie owed Department of Education FedLoan Servicing ("FedLoan Servicing") $72,124.04 and that she owed Sallie Mae $6,319.98. On September 16, 2014, Janice mailed checks in the amount of Julie's indebtedness to FedLoan Servicing and Sallie Mae. Janice testified that, after she repaid Julie's student loans, she received four payments from Julie on the interest- free loan Janice alleges she made to Julie. Janice testified that, on October 6, 2014, Adam gave her a check in the amount of $700 "for loan repayment." Janice testified that, on October 31, 2014, Julie gave her a check in the amount of $530. Janice explained that the amount of the October 31, 2014, check was $530, instead of $700, because Julie and Adam had bought Janice and her husband a sound bar for their television. The cost of the sound bar was deducted from the $700, leaving $530. Julie testified that she had no recollection or explanation as to why she wrote the October 31, 2014, check to Janice. Janice testified that, on November 22, 2014, she received a check in the amount of $700 "for Julie's repayment of the loan." Janice testified that Julie 3 1160144 gave her a check on December 29, 2014, in the amount of $227. Janice explained that the amount of the December 29, 2014, check was $227, instead of $700, because Janice reimbursed Julie for items Julie had purchased on Janice's behalf in the amount of $473. Julie testified that she had no recollection or explanation as to why she wrote the December 29, 2014, check to Janice. Adam testified that each of the checks were given to Janice for repayment of the loan Janice made to Julie. Janice testified that, since receiving the December 29, 2014, check, she has not received any further payments on the loan from Julie. On January 7, 2015, Julie sent Adam an e-mail discussing the terms of their pending divorce. In their e-mail exchange, Adam indicated that the monthly repayment amount under the agreement between Janice and Julie would be decreased from $700 to $500. On December 3, 2015, Janice sued Julie alleging that Julie had breached their agreement and requesting $78,444 in damages, an amount that Janice alleged was equal to the amount of the outstanding debt Julie allegedly owed Janice.1 On 1Janice also asserted various equitable claims, including unjust enrichment, fraudulent inducement, moneys had and 4 1160144 December 17, 2015, Julie filed an answer; Julie did not assert any affirmative defenses. On September 5, 2016, at 11:27 p.m., Julie filed an amended answer asserting the Statute of Frauds as an affirmative defense. On the next day, September 6, 2016, the trial court conducted a bench trial. On September 13, 2016, the trial court entered an order in favor of Janice. The trial court essentially held that Julie had waived the Statute of Frauds affirmative defense by failing to plead it in her initial response. The trial court also held that, even if Julie had not waived the Statute of Frauds affirmative defense, the Statute of Frauds was not applicable "because the evidence submitted at trial showed that, without dispute, the contract made the subject of this lawsuit was no longer executory because [Janice] had fully performed her part of the bargain." The trial court further held that Janice had "proven her case," and it entered a judgment against Julie "in the amount of $75,644.00 (the outstanding balance testified to without dispute)." Standard of Review "Because the trial court heard ore tenus evidence during the bench trial, the ore tenus received, and breach of an implied-in-law contract. 5 1160144 standard of review applies. Our ore tenus standard of review is well settled. '"When a judge in a nonjury case hears oral testimony, a judgment based on findings of fact based on that testimony will be presumed correct and will not be disturbed on appeal except for a plain and palpable error."' Smith v. Muchia, 854 So. 2d 85, 92 (Ala. 2003) (quoting Allstate Ins. Co. v. Skelton, 675 So. 2d 377, 379 (Ala. 1996)). "'"The ore tenus rule is grounded upon the principle that when the trial court hears oral testimony it has an opportunity to evaluate the demeanor and credibility of witnesses." Hall v. Mazzone, 486 So. 2d 408, 410 (Ala. 1986). The rule applies to "disputed issues of fact," whether the dispute is based entirely upon oral testimony or upon a combination of oral testimony and documentary evidence. Born v. Clark, 662 So. 2d 669, 672 (Ala. 1995). The ore tenus standard of review, succinctly stated, is as follows: "'"[W]here the evidence has been [presented] ore tenus, a presumption of correctness attends the trial court's conclusion on issues of fact, and this Court will not disturb the trial court's conclusion unless it is clearly erroneous and against the great weight of the evidence, but will affirm the judgment if, under any reasonable aspect, it is supported by credible evidence."' "Reed v. Board of Trs. for Alabama State Univ., 778 So. 2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane, 342 So. 2d 358, 360 (Ala. 1977)). However, 'that presumption [of correctness] has no application when 6 1160144 the trial court is shown to have improperly applied the law to the facts.' Ex parte Board of Zoning Adjustment of Mobile, 636 So. 2d 415, 417 (Ala. 1994)." Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67–68 (Ala. 2010). Discussion First, Julie argues that the trial court exceeded its discretion in holding that she waived the affirmative defense of the Statute of Frauds. Julie does not dispute that she failed to raise the Statute of Frauds as an affirmative defense until the eve of trial, literally at the 11th hour. Julie argues, however, that the issue of the Statute of Frauds was tried by the implied consent of the parties and that her answer was, thus, effectively amended under Rule 15(b), Ala. R. Civ. P., to assert that affirmative defense. In Adams v. Tractor & Equipment Co., 180 So. 3d 860, 867 (Ala. 2015), this Court set forth the following concerning the waiver of the affirmative defense of the Statute of Frauds: "The Statute of Frauds is included in the list of affirmative defenses in Rule 8(c), Ala. R. Civ. P., and that rule requires that such a defense be specially pleaded. See Wallace v. Alabama Ass'n of Classified Sch. Emps., 463 So. 2d 135, 136 (Ala. 1984). However, although it is generally true that a party's failure to assert an affirmative defense in its answer works as a waiver of that defense, that rule is subject to certain exceptions." 7 1160144 In Tounzen v. Southern United Fire Insurance Co., 701 So. 2d 1148, 1150 (Ala. Civ. App. 1997), the Court of Civil Appeals stated that "Rule 15(b)[, Ala. R. Civ. P.,] is an exception to the rule that an affirmative defense is waived if it is not specifically pleaded. Mid–South Credit Collection v. McCleskey, 587 So. 2d 1212 (Ala. Civ. App. 1991)." Rule 15(b) provides, in pertinent part: "When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues." This Court set forth the following concerning a trial court's discretion in determining whether a party's pleadings have been amended pursuant to Rule 15(b): "'We also note that a determination "as to whether [an] issue has been tried by express or implied consent under Rule 15(b) is a matter for the trial court's sound discretion, which will not be altered on appeal absent an abuse [of that discretion]."' International Rehab. Assocs., Inc. v. Adams, 613 So. 2d 1207, 1214 (Ala. 1992) (quoting McCollum v. Reeves, 521 So. 2d 13, 16 (Ala. 1987)). '"[W]hether pleadings are deemed to be amended in order to conform to the evidence presented is also a matter within the discretion of the trial court," and a decision in that regard will not be disturbed 8 1160144 on appeal absent an abuse of discretion.' Adams, 613 So. 2d at 1214 (quoting McCollum, 521 So. 2d at 16–17)." Ammons v. Tesker Mfg. Corp., 853 So. 2d 210, 216-17 (Ala. 2002). Julie argues that the following evidence presented by Janice demonstrate that the issue of the Statute of Frauds was tried by implied consent: "[Janice] presented evidence at the trial of this matter to the effect that there was an oral agreement for [Janice] to pay off Julie's student loan debt of some $80,000.00 and for Julie to pay her back at the rate of $700.00 per month for a year, then to raise the payments to $1,000.00 per month until paid in full. Clearly the contract could not be performed within a year. [Janice] further acknowledged there was no writing supporting the agreement other than Julie's email to her, Julie's email to Adam, and the 4 checks. Thus, facts invoking the Statute of Frauds were admitted, not only without objection, but in fact, by [Janice] in her case in chief." Julie's brief, at p. 19. However, Julie has not cited any authority indicating what facts are significant to the affirmative defense of the Statute of Frauds. Neither has Julie provided any analysis explaining why the above- summarized facts presented by Janice pertain solely to the issue of Julie's affirmative defense of the Statute of Frauds. Accordingly, we need not consider this argument. 9 1160144 "Rule 28(a)(10)[, Ala. R. App. P.,] requires that arguments in briefs contain discussions of facts and relevant legal authorities that support the party's position. If they do not, the arguments are waived. Moore v. Prudential Residential Servs. Ltd. P'ship, 849 So. 2d 914, 923 (Ala. 2002); Arrington v. Mathis, 929 So. 2d 468, 470 n. 2 (Ala. Civ. App. 2005); Hamm v. State, 913 So. 2d 460, 486 (Ala. Crim. App. 2002). 'This is so, because "'it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument.'"' Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9 (Ala. 2007) (quoting Butler v. Town of Argo, 871 So. 2d 1, 20 (Ala. 2003), quoting in turn Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994))...." White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). Moreover, even if we were to consider Julie's argument that her answer was amended pursuant to Rule 15(b), Julie has not demonstrated that the trial court exceeded its discretion in determining that Julie's answer was not so amended. Janice argues that the facts relied upon by Julie in arguing that the issue of the Statute of Frauds was tried by the implied consent of the parties were actually presented by Janice to prove the elements of her breach-of-contract claim. See Capmark Bank v. RGR, LLC, 81 So. 3d 1258, 1267 (Ala. 2011)("In order to recover on a breach-of-contract claim, a party must 10 1160144 establish: (1) the existence of a valid contract binding the parties; (2) the plaintiff's performance under the contract; (3) the defendant's nonperformance; and (4) damages."). "When a party contends that an issue was tried by express or implied consent and the evidence on that issue is also relevant to the issue expressly litigated, there is nothing to indicate that a new issue was raised at trial, and the pleadings are not deemed amended under Rule 15(b)." McCollum v. Reeves, 521 So. 2d 13, 17 (Ala. 1987) (citing Wright & Miller, Federal Practice and Procedure, Civil, § 1493 (1971)). We agree with Janice; Julie has not demonstrated that the trial court exceeded its discretion in concluding that Julie's answer was not amended by implied consent pursuant to Rule 15(b). Julie also argues that the trial court erred in concluding that the affirmative defense of the Statute of Frauds was not applicable. However, our conclusion that the trial court did not exceed its discretion in concluding that Julie waived the affirmative defense of the Statute of Frauds pretermits consideration of that argument. Next, Julie argues that the trial court "committed legal error in concluding there was a contract between the parties for [Julie] to repay [Janice] for paying off her student 11 1160144 loans." Julie's brief, at p. 21. Julie argues that Janice failed to present evidence sufficient to prove mutual assent between the parties and, thus, failed to prove the existence of a contract between her and Janice. Specifically, Julie argues that "[t]here is no tangible evidence supporting the assertion that Julie intended to agree to pay [Janice] back." Id., at p. 22. The only authority relied upon by Julie is a plurality decision by the Court of Civil Appeals, Mobile Attic, Inc. v. Kiddin' Around of Alabama, Inc., 72 So. 3d 37 (Ala. Civ. App. 2011). Although this plurality decision has little, if any, persuasive value, the Court of Civil Appeals did summarize this Court's well established precedent indicating that acceptance of an offer may be demonstrated by a means other than signing a written contract: "[I]n Denson [v. Kirkpatrick Drilling Co., 255 Ala. 473, 144 So. 86 (1932),] ... our supreme court began by explaining the general rule that, unless a contract is required by law to be in writing and signed by the parties, an offeree need not sign the contract to evince his or her mutual assent to it. Denson, 225 Ala. at 479, 144 So. at 91. The court then cautioned that '"such an acceptance, however, to become effective as a binding contract must be positive and unambiguous."' Id. (quoting Stephenson Brick Co. v. Bessemer Eng'g & Constr. Co., 218 Ala. 325, 326, 118 So. 570, 571 (1928), and citing 1 12 1160144 Williston on Contracts, pp. 127, 168, §§ 72, 90). In the context of that discussion, the court noted that '[t]his statement of the general rule precludes acceptance by mere silence and inaction, as "generally speaking an offeree has a right to make no reply to offers, and his silence and inaction cannot be construed as an assent to the offer."' Id. (quoting 1 Williston on Contracts, p. 168, § 91). "However, even if 'mere silence' cannot be considered an assent to an offer, this case does not involve 'mere silence.' '"It is well settled that whether parties have entered a contract is determined by reference to the reasonable meaning of the parties' external and objective actions."' Cook's Pest Control, Inc. v. Rebar, 852 So. 2d 730, 738 (Ala. 2002) (quoting SGB Constr. Servs., Inc. v. Ray Sumlin Constr. Co., 644 So. 2d 892, 895 (Ala. 1994)). Neither the uncommunicated beliefs of a party nor any misunderstandings regarding the import of particular terms prevent an objective manifestation of intent from being effective. Lilley [v. Gonzales], 417 So. 2d [161,] 163 [(Ala. 1982)]; Mayo v. Andress, 373 So. 2d 620, 624 (Ala. 1979); and Johnson v. Boggan, 325 So. 2d 178, 182, 56 Ala. App. 668, 672 (Ala. Civ. App. 1975)." 72 So. 3d at 44-45. Julie argues that Janice has not presented evidence indicating that Julie positively and unambiguously accepted Janice's offer. Julie acknowledges the evidence demonstrating that she e-mailed Janice the information necessary to repay Julie's student loans and the evidence of the two checks Julie personally signed and presented to Janice. However, without citing any supporting authority, Julie simply states that 13 1160144 "this evidence is not positive and unambiguous." Julie's brief, at p. 24. Janice argues that she did present evidence sufficient to prove that an agreement existed between her and Julie. Janice presented evidence indicating that she and Julie met and discussed Janice's offer to loan Julie money to repay Julie's student loans. Janice also testified that she agreed to repay Julie's student loans and that Julie agreed to "pay [Janice] $700 a month until [Julie and Adam's child] turned one. And then the payments would rise to $1,000." Adam testified to the same facts. Janice presented the e-mail Julie had sent her in which Julie references a meeting she had had with Janice and, in accordance with the terms of the agreement Janice testified to, includes the details of Julie's student loans Janice had agreed to repay. Julie also included in her e-mail to Janice specific instructions on how to repay those loans. Further, Janice presented evidence indicating that Julie and Adam made four payments in accordance with the terms of the agreement. Janice has presented evidence indicating that an agreement existed between her and Julie and evidence detailing 14 1160144 the specific terms of the agreement. Julie provided Janice with the information necessary for Janice to perform her obligation under the agreement. After Janice satisfied her obligation under the agreement by repaying Julie's student loans, Julie then began performance of her obligation under the agreement to repay Janice. In Deeco, Inc. v. 3-M Co., 435 So. 2d 1260, 1262 (Ala. 1983), this Court stated: "Conduct of one party from which the other may reasonably draw the inference of assent to an agreement is effective as acceptance. Mayo v. Andress, 373 So. 2d 620, 624 (Ala. 1979)." Julie has not directed this Court's attention to any authority indicating that the trial court's conclusion that Julie's conduct indicated a positive and unambiguous acceptance of the agreement is plainly and palpably wrong. Next, Julie argues that, even if an agreement does exist between Janice and Julie, the trial court "committed legal error in entering a judgment in the full amount provided by [Janice] where there was no testimony of an acceleration clause being part of the alleged agreement." Julie's brief, at p. 26. Julie argues that Janice presented no evidence indicating that the oral agreement between the parties 15 1160144 included an acceleration clause and, thus, that the trial court erred in awarding Janice the entire amount of the outstanding loan, rather than only the payments Julie had missed at the time the judgment was entered against her. In making her argument, Julie relies on Rosenfeld v. City Paper Co., 527 So. 2d 704 (Ala. 1988), and Meigs v. Estate of Mobley, 134 So. 3d 878 (Ala. Civ. App. 2013). In Meigs, it was undisputed that an oral contract existed between a lender and a borrower in which the lender agreed to loan the borrower $50,000 and the borrower agreed to make monthly payments in a specified amount until the principal amount, plus interest, was paid in full. 134 So. 3d at 879-80. There was no evidence offered indicating that the oral contract contained an acceleration clause. The borrower made payments pursuant to the terms of the oral contract for some time, but eventually stopped making payments, thereby breaching the oral contract. The lender sued, asserting breach of contract and requesting damages. It was undisputed that, at the time the lender sued the borrower, the past-due amount was less than the total amount of the outstanding debt. The trial court, however, awarded the lender the entire amount of the 16 1160144 outstanding debt, rather than only the past-due amount. 134 So. 3d at 885. On appeal, the borrower argued, among other things, "that the oral contract did not contain an acceleration clause and that, in the absence of an acceleration clause, the trial court should have limited the judgment to the monthly payments that had accrued at the time the judgment was entered." 134 So. 3d at 888. In so arguing, the borrower relied on Rosenfeld. The Court of Civil Appeals summarized the applicable portion of Rosenfeld: "In Rosenfeld [v. City Paper Co., 527 So. 2d 704 (Ala. 1988)], the parties entered into a written agreement for the payment of money that did not contain an acceleration clause. In Rosenfeld, the pertinent language of the promissory note at issue read: "'"In the event that the relationship between [Rosenfeld/payor] and [City Paper Company/payee] terminates, regardless of the reason for such termination, the outstanding balance then due on the obligation expressed herein shall be due and payable, without interest, in five (5) equal annual installments, beginning one year from the date of the termination of the relationship of the parties."' "527 So. 2d at 704–05. "Apparently, Rosenfeld breached the agreement. Among other issues, the trial court entered a 17 1160144 summary judgment in favor [of] City Paper Company based on the full amount of the note, even though only two of the five installments had become due at the time of the entry of the judgment. Our supreme court reversed the judgment as to this issue and remanded the case with instructions to the trial court to enter the judgment based on the sum of two accrued annual installments. 527 So. 2d at 704. In so doing, our supreme court rejected the application of 'anticipatory breach' to unilateral contracts for the payment of money only. Id. at 705. "In analyzing the issue, our supreme court reasoned, in part: "'City Paper Company agrees that the note contains no acceleration clause, and that the case law, generally speaking, supports Rosenfeld's contention that "acceleration of the maturity of unaccrued payments" is not to be read into payment contracts by implication. For a collection of the cases so holding, see 10 C.J.S., Bills & Notes § 529 at 1160 (1938).... "'.... "'... "Anticipatory breach" has a field of operation where the nondefaulting parties remain liable for certain obligations under a bilateral contract. To require the nondefaulting party to continue the discharge of his contractual duties, in face of a clear, unequivocal repudiation of the contract by the defaulting party, is a senseless requirement that unduly penalizes the nondefaulting party. "'The majority of jurisdictions faced with this issue have drawn the distinction and have not allowed the "anticipatory breach" doctrine to apply to unilateral 18 1160144 contracts, particularly for the payment of money only. The "settled" rule was succinctly expressed by Justice Cardozo in Smyth v. United States, 302 U.S. 329 at 356, 58 S. Ct. 248 at 253 (1937): "'"[T]he doctrine of anticipatory breach has in general no application to unilateral contracts, and particularly to such contracts for the payment of money only." "'Some of the cases cited above reference Professor Williston's treatise for the rationale that rejects the application of the "anticipatory breach" doctrine to installment contracts that contain no acceleration clause: "[A]llowing the promissee immediate recovery is nothing but a direct bonus to the promissee beyond what he was promised and a direct penalty to the promissor." See, for example, Mabery v. Western Casualty & Surety Co., 173 Kan. 586, 250 P.2d 824, 828–29 (1952), citing 5 Williston on Contracts § 1328 (rev. ed. 1937). "'Indeed, the use of the "acceleration of maturity of payment" clause is in recognition of the nonapplicability of the anticipatory breach doctrine in installment payment contracts. Once the promissee has done all there is for him to do under the contract and the promissor's obligation is confined to payment by installments as specified by the contract, the doctrine of anticipatory breach has no field of operation and will not intercede to rescue the promissee from the consequences of the absence of an acceleration clause. 19 1160144 "'While City Paper Company's "judicial economy" argument has its appeal, the right of the parties to the protection of the rule of law cannot be sacrificed on the altar of judicial efficiency.' "Rosenfeld, 527 So. 2d at 705–06 (footnote omitted)." Meigs, 134 So. 3d at 888-89. The Court of Civil Appeals then applied the principles from Rosenfeld to the facts before it in Meigs: "We recognize that Rosenfeld involved a written unilateral agreement for the payment of money, and the case before us involves an oral unilateral agreement for the payment of money. However, we have found no Alabama cases involving the issue whether acceleration of payments can be read into an oral unilateral agreement for the payment of money. Logically, and in fairness, the requirement that a borrower must specifically agree to the acceleration of payments in such a written agreement should apply to a borrower under an oral agreement. Therefore, we hold that the trial court erred in reading the acceleration of payments into the oral agreement before us. Accordingly, we reverse the judgment as to this issue. On remand, the trial court should determine the amount owed based on the accrued payments as of the date of the judgment and not the full amount of the outstanding loan balance." 134 So. 3d at 889. Julie's argument based on Rosenfeld and Meigs is convincing. In the present case, as in Meigs, there is no evidence indicating that the oral unilateral agreement for the 20 1160144 payment of money between Janice and Julie contained an acceleration clause. Therefore, the trial court erred in reading the acceleration of payments into the oral agreement between Janice and Julie. Janice argues that the trial court properly awarded her the entirety of the outstanding debt based on principles of equity. Janice argues that "the trial court was forced to determine whether a contract existed, and this task, being declaratory in nature, invoked the court's equity jurisdiction." Janice's brief, at p. 26. However, Janice has not demonstrated that the trial court invoked the principles of equity in determining that an oral agreement existed between her and Julie. Instead, based on the evidence presented by Janice, the trial court determined that Janice proved that a contract existed and that Julie breached that contract. Determining the amount of damages under the contract requires no resort to equitable principles, but to the terms of the agreement. This is a purely legal action. See Simler v. Conner, 372 U.S. 221, 223 (1963)(noting that a breach-of-contract claim in which the amount of damages is based on the terms of the contract is "a traditionally 'legal' 21 1160144 action. ... The fact that the action is in form a declaratory judgment case should not obscure the essentially legal nature of the action. The questions involved are traditional common-law issues.").2 2We note that Janice, as an alternative to her breach-of- contract claim, asserted in her complaint that there was an implied contract between her and Julie, which Julie allegedly breached. This Court has stated the following concerning implied contracts: "[A] contract implied by law or quasi contract is not a contract at all. 'A quasi contractual obligation is one that is created by the law for reasons of justice, without any expression of assent and sometimes even against a clear expression of dissent. ...' 1 A. Corbin, Corbin on Contracts, § 19, at 46 (1963). The purpose of imposing these contractual obligations is to bring about justice. 1 S. Williston, A Treatise on the Law of Contracts, § 3A (3d ed. 1957). Moreover, these obligations are usually based on unjust enrichment or benefit; the defendant may be required to surrender the benefit he has received or even restore the plaintiff to a former status. Williston, supra, at 15. '... As the law may impose any obligations that justice requires, the only limit in the last analysis to the category of quasi contracts is that the obligation in question more closely resemble those created by contract than those created by tort. ...' Williston, supra, at 13." Berry v. Druid City Hosp. Bd., 333 So. 2d 796, 798-99 (Ala. 1976). Janice presented evidence and argued that an actual contract existed between her and Julie. As stated above, we are convinced by Janice's argument that an actual contract exists between her and Julie. The trial court had no need to apply principles of equity to determine the existence of a contract between Janice and Julie. 22 1160144 Conclusion Based on the foregoing, we affirm the trial court's judgment insofar as it assessed liability against Julie for breaching the agreement she had with Janice. However, because the trial court erred in reading an acceleration-of-payments clause into the agreement between Janice and Julie, we reverse the trial court's damages award and remand this case for the trial court to determine the amount owed based on the accrued payments as of the date of the judgment and not the full amount of the outstanding loan balance. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. Stuart, C.J., and Wise and Bryan, JJ., concur. Shaw, J., concurs in the result. 23

May 19, 2017

69d9bcac-67fa-4b2e-a3da-aa9009787180

Locklear Automotive Group, Inc. v. Carol Fuller

N/A

1160337

Alabama

Alabama Supreme Court

REL: 09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160335 ____________________ Locklear Automotive Group, Inc. v. Brad Hubbard Appeal from Tuscaloosa Circuit Court (CV-16-900716) ____________________ 1160336 ____________________ Locklear Automotive Group, Inc. v. Jeremy Averette Appeal from Tuscaloosa Circuit Court (CV-16-900683) ____________________ 1160337 ____________________ Locklear Automotive Group, Inc. v. Carol Fuller Appeal from Tuscaloosa Circuit Court (CV-16-901091) ____________________ 1160375 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Appeal from Bibb Circuit Court (CV-16-900098) ____________________ 1160435 ____________________ Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Appeal from Bibb Circuit Court (CV-16-900081) ____________________ 1160436 ____________________ Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Appeal from Bibb Circuit Court (CV-16-900074) ____________________ 1160437 ____________________ Locklear Automotive Group, Inc. v. Dorothea Williams Appeal from Bibb Circuit Court (CV-16-900073) MURDOCK, Justice. Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. 3 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes. I. Facts All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an 4 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC." The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters 5 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. 6 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about 7 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: _______________" (Capitalization in original; emphasis omitted; and emphasis added.) In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle- identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by 8 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case. A. Case no. 1160435: Jeffery Lollar and Betsy Lollar Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD. Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided 9 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information. The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.1 They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated 1The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 10 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017. On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 11 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Dodge Ram 3500 truck2 from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft. On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.3 He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; 2There is an immaterial discrepancy between Hood's complaint and the arbitration agreement on the year of the purchased vehicle, i.e., whether it was a 2015 or 2016 model. 3The other defendants were Verizon Communications, Inc., CellCo Partnership d/b/a Verizon Wireless, Verizon Credit, Inc., Wireless Advantage Communications, Inc., and fictitiously named defendants A through H. 12 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references. Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER," a signature of a dealer representative on a line designated "DEALER," and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC." 13 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC," and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified: "3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay. "4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document. "5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion." The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that 14 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER," the signature of a representative of the "DEALER," the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC." On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows: 15 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for -- because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate." Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration. C. Case no. 1160335: Brad Hubbard On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal 16 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 information. In early 2016, Hubbard discovered that he was the victim of identity theft. On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion. On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) 17 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated: "This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See 18 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So. 3d 27 (Ala. 2012). "Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED." (Capitalization in original.) Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.4 D. Case no. 1160336: Jeremy Averette On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft. On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On 4On February 8, 2017, this Court by order consolidated this appeal with case no. 1160336 and case no. 1160337 for purposes of filing the record and briefing. 19 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration. On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to 20 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD. On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration. E. Case no. 1160337: Carol Fuller On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft. 21 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD. On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying 22 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. F. Case no. 1160436: Elizabeth Booth On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft. On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity 23 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the order entered in Fuller's case, but it was issued by a different circuit judge. 24 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. G. Case no. 1160437: Dorothea Williams On January 13, 2016, Dorothea Williams purchased a 2016 Chrysler 200 automobile from Locklear CJD. In the course of doing so, she signed the arbitration agreement. At that time, Williams also completed a credit application and provided Locklear CJD with personal information. In February 2016, Williams was notified by the Northport Police Department that she had been the victim of identity theft. On October 6, 2016, Williams filed her complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training. Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 25 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 2016, Williams filed a response in opposition to the motion to compel. On January 23, 2017, Williams filed a supplemental response to the motion. In her response, Williams -- as did Hubbard, Averette, Fuller, and Booth -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Williams. Williams did not oppose arbitration of her claims against Locklear CJD. On January 31, 2017, the trial court held a hearing on the motion. On February 1, 2017, the trial court granted the motion to compel as to Locklear CJD but denied it as to Locklear Group. Except for the name of the plaintiff, the order was substantively the same as the orders entered in the Fuller and Booth cases. It was issued by the same circuit judge who decided Booth's case. Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it. II. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: 26 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). 27 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 III. Analysis A. Case no. 1160335: Brad Hubbard; case no. 1160336: Jeremy Averette; case no. 1160337: Carol Fuller; case no. 1160436: Elizabeth Booth; and case no. 1160437: Dorothea Williams The arguments by the parties in the Hubbard, Averette, Fuller, Booth, and Williams cases are identical,5 and so we will address them together. As we observed in the rendition of the facts, the trial courts in those cases determined that the arbitration agreement "is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.'" It was on this premise that the trial courts concluded that the plaintiffs' claims against Locklear CJD must be arbitrated but that their claims against Locklear Group were not subject to arbitration because Locklear Group was not a signatory to the arbitration agreement. None of the plaintiffs in this group of appeals objected to arbitration of their claims against Locklear CJD. 5Hubbard, Averette, Fuller, Booth, and Williams are all represented by the same attorneys, and the argument sections of their appellee briefs are substantively very similar. 28 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1. Who Decides the Arbitrability of the Claims Against Locklear Group? We have stated that "[t]he question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme Court's terminology, simply 'arbitrability')." Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094, 1101 (Ala. 2014). "A court decides issues of substantive arbitrability '[u]nless the parties clearly and unmistakably provide otherwise.'" Id. (quoting AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986)). On appeal, Locklear Group contends that clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability exists in the arbitration agreement. Specifically, it cites the following language in the arbitration agreement: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: ... the terms of this agreement and all clauses herein contained, their breadth and scope, ... shall be submitted to BINDING ARBITRATION ...." 29 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 (Capitalization in original; emphasis added.) In support of this contention, Locklear Group observes that in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), this Court evaluated an arbitration agreement that contained identical language as to arbitrability. Specifically, "[t]he single-page arbitration agreement provide[d] that the arbitrator decides 'the terms of this agreement and all clauses herein contained, their breadth and scope.'" 826 So. 2d at 132. The McGrue Court concluded that "[t]he language of the arbitration agreement is clear and unmistakable evidence indicating that McGrue and Jim Burke intended to arbitrate the question of arbitrability." Id. Likewise, in Ex parte Waites, 736 So. 2d 550 (Ala. 1999), the Court examined an arbitration agreement that contained the same language on arbitrability: "The arbitration provision included in the contract entered into by the parties states that the parties agree to arbitrate any disputes 'resulting from or arising out of the sale transaction entered into (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope ....'" 736 So. 2d at 552. The Waites Court concluded that "[t]his language expresses a clear intent to submit to arbitration the 30 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 issue of arbitrability." Id. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1054–55 (Ala. 2007) (concluding that an arbitration agreement that provided that the parties agreed to arbitrate "'all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, [and] the validity and scope of this Arbitration Provision'" "demonstrates that the parties intended to arbitrate whether the agreement applies to 'any disputes that arose from their relationship'"). For their part, the plaintiffs in these five appeals do not directly challenge the Locklear Group's position that language in the arbitration agreement sufficiently expresses an intention to arbitrate issues of arbitrability. Instead, they argue that Locklear Group did not sufficiently assert this position in the trial courts and that, therefore, it cannot serve as a basis for reversing the trial courts' orders. The plaintiffs observe that all of Locklear Group's motions to compel arbitration (which are substantially identical in all the cases before us) 31 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "consisted of six pages and fourteen numbered paragraphs. The motions contained only one sentence on the topic of who should decide disputes concerning the scope of the arbitration agreements. Specifically, the last sentence of paragraph 10 of the motions states[:] 'Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator.' This sentence was not followed by a citation to any legal authority." The plaintiffs in these five appeals note that "[t]his Court has long held that it 'will not hold a trial court to be in error unless that court has been apprised of its alleged error and has been given the opportunity to act thereon.'" Moultrie v. Wall, 172 So. 3d 828, 840 (Ala. 2015) (quoting Sea Calm Shipping Co. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990)). They argue that the solitary sentence in the motions to compel was not sufficient to apprise the trial courts that arbitrability issues -- including Locklear Group's ability, as a nonsignatory, to enforce the arbitration agreement -- had to be decided by the arbitrator. The plaintiffs contend that the sentence is a quintessential example of an "undelineated general proposition[] not supported by sufficient authority or argument." White Sands Grp., LLC v. PRS II, LLC, 998 So. 2d 1042, 1058 (Ala. 2008). The plaintiffs cite multiple cases in 32 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 which this Court concluded that a solitary reference to an argument in a motion before the trial court was not sufficient to raise the issue sought to be raised on appeal. See, e.g., Knight v. Alabama Power Co., 580 So. 2d 576, 578 (Ala. 1991) (noting that "except for the one sentence requesting the trial court to adopt the doctrine of comparative negligence, Knight presented nothing in the way of argument on that issue. ... This issue was not sufficiently argued to the trial court ...."); TFT, Inc. v. Warning Sys., Inc., 751 So. 2d 1238, 1243 (Ala. 1999), overruled on other grounds by Holiday Isle, LLC v. Adkins, 12 So. 3d 1173 (Ala. 2008) (holding that an unsuccessful bidder for a public contract could not argue on appeal that the invitation to bid was ambiguous because it "did not raise this argument in the trial court" where "[t]he only mention of ambiguity TFT made at trial came in one sentence of TFT's trial brief"); and Birmingham Hockey Club, Inc. v. National Council on Compensation Ins., Inc., 827 So. 2d 73, 81 (Ala. 2002) (observing that the plaintiff's only argument regarding the applicability of a six-year statute of limitations was one sentence in a three-page motion and concluding that "[i]t can hardly be said that [the plaintiff] 33 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 has presented this argument to the trial court and opposing parties so as to give them an opportunity to address this issue"). In the Booth and Williams appeals, Locklear Group responds that, in addition to the sentence in its motion to compel arbitration, it also raised the issue of arbitrability in the hearings on those motions.6 Booth and Williams have filed motions to strike Locklear Group's references and arguments to statements it might have made in the hearings in the Booth and Williams cases, observing that no transcript of those hearings was made and so there is no evidence in the record concerning what was argued in those hearings. Booth and Williams further observe that Locklear Group could have submitted a statement under Rule 10(d), Ala. R. App. P., recounting its recollection of what was argued in the hearings if it had wanted those statements to be included as evidence before this Court, but it failed to do so.7 Finally, Booth 6Locklear Group does not argue that it presented the arbitrability argument in the hearings in the Hubbard, Averette, and Fuller cases. 7Rule 10(d), Ala. R. App. P., states, in part: "If no report of the evidence or proceedings at a hearing or trial was made, or if a transcript is unavailable, the appellant may 34 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Williams cite multiple cases in which this Court has refused to allow a party unilaterally to alter or supplement the record through statements in an appellate brief. See, e.g., Jim Parker Bldg. Co. v. G & S Glass & Supply Co., 69 So. 3d 124, 134 (Ala. 2011) (noting that "because the hearing in this case was not transcribed, nothing presented at that hearing may form the basis for reversing the trial court's denial of Parker's motion to compel arbitration"); Bechtel v. Crown Cent. Petroleum Corp., 451 So. 2d 793, 795 (Ala. 1984) (observing that the appellant "states that estoppel was raised in oral argument at the hearing on the motion for summary judgment. However, no transcription of that hearing is included in the record. This court is limited to a review of the record alone and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel."). In its responses to the motions to strike, Locklear Group admits that "there is no record of the oral argument," that "no steps were taken to create a statement of what occurred at the hearing[s]," and that Booth and Williams "correctly prepare a statement of the evidence or proceedings from the best available means, including the appellant's recollection." 35 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 present[] the case law on this issue." Accordingly, we grant the motions to strike Locklear Group's references to arguments it allegedly made in the hearings on its motions to compel arbitration in the Booth case and the Williams case. Thus, as in the Hubbard, Averette, and Fuller cases, the only reference to arbitrability in the trial courts in the Booth and Williams cases was the single statement in Locklear Group's motion to compel arbitration. We agree with the plaintiffs that Locklear Group's solitary statement in its motion to compel arbitration that the arbitrator should decide the arbitrability of the claims against it was not sufficient to apprise the trial court that Locklear Group was relying on that argument. The first three numbered paragraphs in the motion set out facts relevant to the issue of arbitration, including quotations of substantial portions of the arbitration agreement. The next three paragraphs argued that the transaction at issue affected interstate commerce. The following four paragraphs -- including paragraph 10, which contains the one sentence referencing arbitrability of the arbitration issue -- argued that the language of the arbitration agreement was broad 36 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 enough to include the subject matter of the underlying claims asserted by the plaintiffs. Paragraph 10 stated: "Arbitration contracts cannot be singled out and be subjected to any different or more stringent rules of construction than other contracts. Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996). As plainly demonstrated by its language, the arbitration agreement in this case is sufficiently broad in scope to require arbitration of all disputes relating to: "'the resolution of any dispute arising out of, relating to, resulting from or concerning any contracts or agreements ... entered into by the parties, all alleged representation, promises and covenants, issues concerning compliance with any state or federal law or regulation ...[,] any matters taking place either before or after the parties entered into this agreement ...[,] the terms of this agreement and all clauses herein contained, their breadth and scope ...' "(Exhibit A). The present case clearly arises out of and relates to the Plaintiff's purchase of the [vehicle] at issue, events taking place before and after the parties entered into the agreement, the dealership's compliance with state and/or federal law or regulations and alleged misrepresentations and/or omissions of Locklear in connection therewith. Additionally, the scope and breadth of this arbitration agreement is, by its terms, to be determined by the arbitrator." The next paragraph argued that courts have a duty under the Federal Arbitration Act to "rigorously enforce agreements to 37 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrate." The final few paragraphs stated the relief Locklear Group requested (i.e., that the trial court "should compel the Plaintiff to submit his dispute to binding arbitration, ... and all Court actions, including discovery, should be stayed pending arbitration") without any reference to having the arbitrator decide the issue of arbitrability. When the motion to compel arbitration is read as a whole, it is clear that Locklear Group did not articulate why the question of the arbitrability of the claims against it should be submitted to the arbitrator. Its overriding argument was devoted to the merits of the issue whether the arbitration agreement is broad enough to encompass the plaintiffs' underlying claims against Locklear Group even though Locklear Group was not a signatory to the arbitration agreement, not to the proposition that the arbitrator, and not the court, should decide this issue. Except for the brief reference in paragraph 10, Locklear Group never mentioned arbitration of the arbitrability issue anywhere in its motion, including in its paragraphs specifying the relief it was requesting from the trial courts. Locklear Group's single, unsupported, and unexplained sentence in this regard contrasts sharply with its 38 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 relatively fulsome discussion in its motion as to the breadth of the language of the arbitration agreement and how this language was sufficient to entitle Locklear Group to arbitrate the plaintiffs' underlying claims (not to mention the contrast with the Locklear Group's thoroughly explained position on the subject of arbitrability in its brief on appeal to this Court). Indeed, by focusing essentially all of its attention on whether the language of the arbitration agreement was broad enough to cover the plaintiffs' claims against it, Locklear Group suggested that that was the dispositive issue and that it was for trial court to decide it.8 Locklear Group contends that the fact that it argued to the trial courts that the scope of the arbitration agreement was broad enough to cover claims asserted by the plaintiffs and that it also mentioned the arbitrability of that issue constituted the presentation of two arguments in the 8A fair question exists, albeit one we need not address further, as to whether the trial courts' error could be said to have been invited under the circumstances. A party "'"may not predicate an argument for reversal on 'invited error,' that is, 'error into which he has led or lulled the trial court.'"'" White Sands Grp., L.L.C. v. PRS II, LLC, 998 So. 2d at 1057 (quoting Mobile Infirmary Med. Ctr. v. Hodgen, 884 So. 2d 801, 808 (Ala. 2003), quoting other cases). 39 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 alternative. The plaintiffs note, however, that the arguments "were not framed as alternative arguments." Instead, the arbitrability statement is tacked as an afterthought to Locklear Group's central claim that emphasized the broad scope of the arbitration agreement. Based on the foregoing, we conclude that, in the Hubbard, Averette, Fuller, Booth, and Williams cases, Locklear Group waived the issue whether the arbitration agreement by its terms assigns the issue of the arbitrability of the plaintiffs' claims against Locklear Group to the arbitrator for decision. 2. The Arbitrability of the Plaintiffs' Claims Against Locklear Group Having concluded that it was for the courts to decide the arbitrability of the underlying claims made by Hubbard, Averette, Fuller, Booth, and Williams against Locklear Group, we now consider whether the trial courts correctly decided that issue. Whether they did so turns on the proper application of the so-called "equitable-estoppel exception" to the general rule that an arbitration agreement binds only the signatories to that agreement. 40 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 a. The Exception to Equitable Estoppel for "Party Specific" Language Locklear Group argues that, despite the fact that it is not a signatory to the arbitration agreement, the plaintiffs "are equitably estopped from arguing that their claims against Locklear Group are not subject to arbitration." "A party typically manifests its assent to arbitrate a dispute by signing the contract containing the arbitration provision. Ex parte Stamey, 776 So. 2d 85, 88–89 (Ala. 2000). One of the key exceptions to this rule is the theory of equitable estoppel, under which a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are '"'intimately founded in and intertwined with'"' the underlying contract obligations. Stamey, 776 So. 2d at 89 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), quoting in turn McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir. 1984))." Smith v. Mark Dodge, Inc., 934 So. 2d 375, 380 (Ala. 2006). This Court has, however, crafted an exception to this equitable-estoppel exception: "Where 'the language of the arbitration provisions limited arbitration to the signing parties,' this Court has not allowed the claims against the nonsignatories to be arbitrated." Id. at 380-81 (quoting Stamey, 776 So. 2d at 89). In other words, 41 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "[i]f an arbitration agreement is written in broad language so that it applies to '[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract,' Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998) (emphasis added), or even in slightly narrower language so that it applies to 'ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS CONTRACT OR THE PARTIES THERETO,' Stamey, 776 So. 2d at 91 (capitalization in original; emphasis added), this Court will proceed to determine whether arbitration may be compelled under the doctrine of equitable estoppel. "Conversely, if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, this Court's inquiry is at an end, and we will not permit arbitration of claims against the nonsignatory. See Jim Burke Auto., Inc. v. McGrue, 826 So. 2d 122, 131 (Ala. 2002) (affirming the trial court's order denying a nonsignatory's motion to compel arbitration where the arbitration agreement was between 'you [a signatory plaintiff] and us [a signatory defendant] or our employees, agents, successors or assigns') (bracketed language added); Ex parte Lovejoy, 790 So. 2d 933, 938 (Ala. 2000) (issuing a writ of mandamus directing a trial court to enter an order denying a nonsignatory's motion to compel arbitration where the arbitration provision was limited to 'all disputes or controversies between you [Lovejoy] and us [Allen Motor Company and its assignees]') (bracketed language and emphasis in original); First Family Fin. Servs. v. Rogers, 736 So. 2d 553, 560 (Ala. 1999) (reversing a trial court's order granting a nonsignatory's motion to compel arbitration where 'you [the plaintiffs] and we [First Family]' agreed to arbitrate and the arbitration provision elsewhere stated that it applied to 'all claims and disputes between you [the plaintiffs] and us [First Family],' 42 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and furthermore stated that it applied to 'any claim or dispute ... between you [the plaintiff] and any of our [First Family's] employees or agents, any of our affiliate corporations, and any of their employees or agents') (bracketed language and emphasis in original); and Med Center Cars[, Inc. v. Smith], 727 So. 2d [9] at 19 [(Ala. 1998)] (affirming a trial court's order denying nonsignatories' motions to compel arbitration where the arbitration provisions were limited to disputes and controversies 'BETWEEN BUYER AND SELLER') (capitalization in original)." 934 So. 2d at 381. The plaintiffs in this group of appeals contend that the arbitration agreement was limited to controversies between the signatories -- Locklear CJD and each plaintiff -- and thus that Locklear Group, as a nonsignatory, cannot enforce the arbitration agreement against the signatory plaintiffs. The plaintiffs highlight references in the arbitration agreement to "any party" or "the undersigned" or "the dealer." The trial courts' orders did the same. In this regard, the trial courts' orders set out the following passage, which they attribute to the arbitration agreement: "'In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the 43 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties .... shall be submitted to BINDING ARBITRATION.'" (Capitalization in original; ellipses supplied by the trial courts.) The plaintiffs argue that "[c]ontract language cannot get much more 'party specific' than [that found in the arbitration agreements]. There is no hint that the agreements are intended to cover claims against nonsignatories." The plaintiffs in particular emphasize a passage of the arbitration agreement that states that "the undersigned customer[s] and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." About this passage, the plaintiffs state: "Even aside from all the other party-specific language in the agreements, this language makes it clear that the agreements were intended to control disputes between and among the signatories, with no indication whatsoever that the agreements control any other dispute." 44 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 As Locklear Group observes, however, neither the plaintiffs nor the trial courts fully and accurately quote the operative language of the arbitration agreement. First, as to the sentence of the arbitration agreement emphasized by the plaintiffs, that sentence actually states in full as follows: "In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them." Obviously, the purpose of this statement is simply to address which of two arbitration agreements would control disputes between the parties if the parties have entered into more than one such agreement related to the subject transactions. As to the above-quoted passage from the trial courts' orders, that passage conflates two separate sentences from the arbitration agreement. The first sentence, which in the arbitration agreement ends within the portion of the passage for which the trial courts substituted an ellipses, actually reads in its entirety as follows: 45 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." This sentence merely states that "the undersigned and the dealer ... stipulate and agree" that the transactions and agreements "are regulated by the laws of the United States of America" and that "agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq." In short, this sentence does nothing more than express the agreement of the 46 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 parties that federal arbitration law is applicable to the arbitration agreement. The second sentence, part of which the trial courts added to the above-quoted passage following the ellipses, is in fact the operative part of the agreement for present purposes. But that sentence actually begins as follows: "The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) 47 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Contrary to the suggestion by the trial courts, this sentence in the arbitration agreement clearly is not "party specific" in the sense described in Mark Dodge, but, as emphasized, actually professes to be applicable to "all disputes" arising from the transaction and related matters. There is no language in this passage that restricts the disputes covered by the arbitration agreement to claims between the parties.9 The operative arbitration language in the arbitration agreement is similar to the language in the arbitration agreement in Ex parte Napier, 723 So. 2d 49, 51 (Ala. 1998), which provided that "'[a]ll disputes, claims or controversies arising from or relating to this Contract or the relationships which result from this Contract ... shall be resolved by 9We note that Hubbard, Averette, Fuller, Booth, and Williams -- unlike the Lollars and Hood -- do not contend that the substantive nature of their identity-theft claims, rather than the nature of the parties against whom those claims are made, is such that the language of the arbitration agreement is not broad enough to encompass those claims. Such a contention would be difficult for Hubbard, Averette, Fuller, Booth, and Williams to maintain, given that they did not oppose Locklear CJD's motion for arbitration of the plaintiffs' similar identity-theft claims against it, which motion was based on the same substantive arbitration-agreement language. 48 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 binding arbitration.'" The Napier Court concluded that this language was "broad enough to encompass Napier and Godfrey's claims against [nonsignatories] Foremost and Manning." Id. at 53. The operative arbitration language in the arbitration agreement in these cases is also nearly identical to the language in the arbitration agreement at issue in Volkswagen Group of America, Inc. v. Williams, 64 So. 3d 1062, 1064 (Ala. Civ. App. 2010), which provided: "'The undersigned agree that all disputes ... resulting from or arising out of or relating to or concerning the transaction entered into ... shall be submitted to BINDING ARBITRATION ....'" In Williams, the Court of Civil Appeals disagreed with the plaintiff's contention that "the arbitration clause at issue is 'party specific.' The clause, rather, speaks to 'all disputes ... resulting from or arising out of or relating to or concerning the transaction,' a formulation that closely parallels the broad language recognized by the Alabama Supreme Court in Smith v. Mark Dodge, Inc., 934 So. 2d 375 (Ala. 2006), as authorizing a nonsignatory to assert a right to compel arbitration through application of equitable estoppel ...." Id. at 1065. 49 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 To reiterate, when "references [in arbitration provisions] to the parties specifically limited the claims that would be arbitrable under those provisions," the Court has concluded that the arbitration provisions "'are not broad enough to encompass claims against the nonsignatories.'" Ex parte Stamey, 776 So. 2d 85, 90 (Ala. 2000) (quoting Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9, 19 (Ala. 1998)). On the other hand, this Court also has held that, when an arbitration provision "contained no references to the parties that would impose a limitation on what claims would be arbitrated," the arbitration provision was broad enough to include claims that were related to the contract because the language was sufficient to indicate that "the party resisting arbitration ha[d] assented to the submission of claims against nonparties -- claims that otherwise would fall within the scope of the arbitration provision -- to arbitration." Stamey, 776 So. 2d at 89. Like the arbitration provisions in Napier and Williams, the operative arbitration language in the arbitration agreement is not limited to claims between the parties. Accordingly, Locklear Group has cleared this hurdle to the invocation of the doctrine of equitable estoppel 50 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 against Hubbard, Averette, Fuller, Booth, and Williams. We turn then to the central issue -- whether the plaintiffs' claims against Locklear Group, a nonsignatory, are sufficiently intertwined with their claims against Locklear CJD, a signatory. b. Sufficient Intertwining to Invoke Estoppel As noted, a nonsignatory can enforce an arbitration provision when the claims against the nonsignatory are "intimately founded in and intertwined with" the underlying contract obligations. Stamey, 776 So. 2d at 89. Smith v. Mark Dodge, Inc., 934 So. 2d at 380. In Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534 (Ala. 2008), this Court summarized the intertwining analysis provided in Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003): "In Service Corp. International v. Fulmer, 883 So. 2d 621 (Ala. 2003), Blair Fulmer entered into a contract with SCI Alabama Funeral Services, Inc. ('SCI-Alabama'), for the provision of funeral and cremation services for his deceased mother. The contract included an arbitration provision. After Fulmer was given a vase that was supposed to have contained his mother's remains but allegedly did not, Fulmer sued SCI-Alabama and Service Corporation International ('SCI'), SCI-Alabama's parent corporation. The defendants filed a motion to compel arbitration, which the trial court denied. The defendants appealed. 51 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 "SCI argued that, even though it was not a signatory to the contract containing the arbitration agreement, 'Fulmer's claims against the signatory defendant, SCI-Alabama, are so "intertwined" with his claims against SCI that arbitration of all of Fulmer's claims, including those against SCI, is appropriate.' 883 So. 2d at 634. After noting Stamey's two-part test, this Court addressed the first part, which relates to whether the claims against the nonsignatory defendant are intertwined with the claims against the signatory defendant. Finding that prong satisfied, this Court wrote: "'Here, Fulmer's claims against SCI are clearly "intimately founded in and intertwined with" his claims against SCI-Alabama.... All of Fulmer's claims arise from the same set of facts. Virtually none of Fulmer's claims makes a distinction between the alleged bad acts of SCI (the parent corporation) and those of SCI-Alabama (its subsidiary); rather, the claims are asserted as if SCI and SCI-Alabama acted in concert.' "883 So. 2d at 634." 988 So. 2d at 543. Just as in Fulmer, all of the plaintiffs' claims against Locklear Group in these cases are "intimately founded in" the same facts as are their claims against Locklear CJD. The plaintiffs' complaints make virtually no distinction between the bad acts of Locklear Group and those of Locklear CJD. Indeed, when the plaintiffs' complaints described purchasing 52 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 their vehicles, they stated that they "dealt with Locklear [CJD] and/or Defendant Locklear [Group] employee[s]" and "[t]he Defendant Locklear [CJD] and/or Defendant Locklear [Group] ran a credit check on" each plaintiff. Every claim the plaintiffs asserted against Locklear CJD they also asserted against Locklear Group, and those claims were asserted as if Locklear CJD and Locklear Group had acted in concert, as if the latter was responsible for the acts of the former, and/or as if those persons who acted for one also acted for the other. Therefore, we conclude that the plaintiffs' claims against Locklear Group as a nonsignatory to the arbitration agreement are "intimately founded in and intertwined with" the underlying contract obligations and with the plaintiffs' contract-related claims against the signatory to the arbitration agreement, Locklear CJD, so that the doctrine of equitable estoppel is applicable. Based on the foregoing, Locklear Group can enforce the arbitration agreement against Hubbard, Averette, Fuller, Booth, and Williams; the trial courts in this group of cases erred in denying Locklear Group's motions to compel arbitration. 53 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 B. Case no. 1160435: Jeffery Lollar and Betsy Lollar As to the Lollars, Locklear CJD and Locklear Group argue that they met their prima facie burden so as to enforce the arbitration agreement, having filed a joint motion in support of which they submitted a contract calling for arbitration and uncontradicted evidence that the transaction affected interstate commerce. They also note that it is undisputed that the Lollars filed no response to their joint motion and supporting evidence. Accordingly, they contend that the trial court had no alternative but to grant their motion to compel arbitration and that it erred in not doing so. In support of their position, Locklear CJD and Locklear Group cite a passage from this Court's opinion Ex parte Greenstreet, Inc., 806 So. 2d 1203 (Ala. 2001): "We hold that once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce, the burden of persuasion shifts to the party opposing arbitration. If that party presents no evidence in opposition to a properly supported motion to compel arbitration, then the trial court should grant the motion to compel arbitration." 806 So. 2d at 1209 (emphasis added). 54 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The Lollars acknowledge that they failed to file a response to the motion to compel arbitration. They assert that failing to do so was an oversight that occurred because their counsel was expecting the trial court to set the motion to compel for a hearing just as it had done in two similar cases (one of which is before us in these appeals, case no. 1160375 -- Hood). Instead, in this case the trial court did not set a hearing; it simply entered an order denying arbitration before the Lollars filed a response. In an apparent attempt to rectify this oversight, the Lollars attach to their brief on appeal their own affidavits and a copy of what they contend was the actual arbitration agreement they signed. Locklear CJD and Locklear Group have rejoined with a motion to strike the attachments to the Lollars' brief as well as all references in their brief to those documents. As they note, this Court cannot consider evidence that is not part of the record on appeal. "'"[A]ttachments to briefs are not considered part of the record and therefore cannot be considered on appeal."' Morrow v. State, 928 So. 2d 315, 320 n. 5 (Ala. Crim. App. 2004) (quoting Huff v. State, 596 So. 2d 16, 19 (Ala. Crim. App. 1991)). Further, we 55 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 cannot consider evidence that is not contained in the record on appeal because this Court's appellate review '"is restricted to the evidence and arguments considered by the trial court."' Ex parte Old Republic Sur. Co., 733 So. 2d 881, 883 n.1 (Ala. 1999) (quoting Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) ...)." Roberts v. NASCO Equip. Co., 986 So. 2d 379, 385 (Ala. 2007). Locklear CJD and Locklear Group are correct. We do not consider the evidence submitted by the Lollars on appeal or their arguments based on that evidence because that evidence and those arguments were not presented to the trial court; accordingly, we grant the motion to strike that evidence. Contrary to Locklear CJD and Locklear Group's argument, however, the Lollars' lack of response does not end our inquiry. It is true that, "once a moving party has satisfied its burden of production by making a prima facie showing that an agreement to arbitrate exists in a contract relating to a transaction substantially affecting interstate commerce," the burden shifts to the nonmoving party to show otherwise. Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). It is likewise true that this Court has said that, "[i]f th[e nonmoving] party presents no evidence in opposition to a properly supported motion to compel arbitration, then the 56 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 trial court should grant the motion to compel arbitration." Ex parte Greenstreet, Inc., 806 So. 2d at 1209 (emphasis added). Implicit in this standard is that we must evaluate whether the motion to compel arbitration does make a "prima facie showing" that the parties entered into an agreement to arbitrate the dispute in question and that this showing was "properly supported" by evidence of such an agreement. As we have otherwise recently expressed in another case in which the party opposing arbitration failed to present evidence in the trial court: "[U]nless on its face the arbitration provision is not valid or does not apply to the dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous." Family Sec. Credit Union v. Etheredge, [Ms. 1151000, May 19, 2017] ___ So. 3d ___ , ___ (Ala. 2017) (emphasis added). The arbitration agreement states: "The undersigned agree that all disputes ... resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into ... shall be submitted to BINDING ARBITRATION ...." (Emphasis added.) There is no question that the arbitration agreement is broadly worded (a fact we have relied 57 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 upon in the appeals in the Booth, Williams, Hubbard, Averette, and Fuller cases in concluding that the nonsignatory, Locklear Group, could enforce the agreement against those plaintiffs). And "'where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract,'" as does this one, "'that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 505 (Ala. 1999) (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). But as stated, this broader application still is one that is tied to "the contract" to which reference is made, i.e., claims "'"arising out of or relating to" the contract,'" per the language at issue in Green Tree, for example. Or, in the case of the language at issue here, disputes "resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into." See also State v. Lorillad Tobacco, 1 So. 3d 1, 9 (Ala. 2008) (quoting Kenworth of Dothan, Inc. v. Bruner–Wells Trucking, Inc., 745 So. 2d 271, 275 (Ala. 1999)) (noting that, "[f]or a dispute to relate to the subject matter 58 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 of the arbitration provision, 'there must be some legal and logical nexus' between the dispute and the [subject matter of the] arbitration provision"). In this particular case, the parties agreed to arbitrate matters "relating to ... the transaction entered into," which was the Lollars' purchase of a 2009 Dodge Ram truck on May 28, 2013. According to the uncontradicted allegations of the complaint, the personal information of the Lollars' that was wrongly disseminated in connection with their identity-theft claims was provided to Locklear CJD in December 2015 during a visit to the dealership that was not related to the purchase of the 2009 Dodge Ram truck. On the face of the arbitration agreement, its terms do not apply to the interaction of the Lollars and the defendants that occurred in 2015. The 2013 vehicle purchase to which the 2013 arbitration agreement refers and relates is one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) is, quite simply, an unrelated matter. 59 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 The situation is similar to one presented in Capitol Chevrolet & Imports, Inc. v. Payne, 876 So. 2d 1106 (Ala. 2003). In that case, Jean Payne purchased a used 1997 Cadillac Catera automobile from Capitol Chevrolet & Imports, Inc. ("Capitol"), on September 6, 2001. The arbitration agreement Payne signed in connection with the purchase had language similar to the arbitration agreement in this case: "'Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration ....'" 876 So. 2d at 1107. The Court described the facts involved in Payne's claims against Capitol as follows: "In September 2002, Payne sued Capitol and a Capitol salesperson, Jason Golden, alleging fraud and conversion. According to Payne's complaint, 60 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 approximately one month after she purchased the Catera, she returned the Catera to Capitol in reliance on Golden's representation that Capitol had a willing buyer for the vehicle. Payne relinquished possession of the Catera to Capitol and stopped making payments on the car. Payne alleged that Golden, while acting in the line and scope of his employment with Capitol, misrepresented to her that Capitol had a buyer for the Catera, and that, when Payne relinquished the Catera to Capitol in reliance on that misrepresentation, Golden converted the Catera for his personal use. Payne's complaint alleged that, as a result of the misrepresentation, she lost the use of her vehicle, suffered severe mental anguish, and suffered an adverse credit rating once she stopped making payments on the Catera." 876 So. 2d at 1107–08. The Court concluded that Payne's claims were not related to her purchase of the Catera and therefore were not subject to the arbitration agreement. "We do not believe that the plain language of the arbitration agreement would lead one to assume or understand that the agreement covered the claims alleged in Payne's complaint -- a later fraudulent misrepresentation, unrelated to the original sale of the vehicle, resulting in the conversion of the vehicle. The present dispute involves alleged subsequent tortious conduct on the part of Capitol and its agent that is not close enough in relation to the initial sale of the Catera to be covered by the language of the arbitration agreement." 876 So. 2d at 1110 (emphasis added). 61 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 In this case, as in Payne, the plain language of the arbitration agreement, which relates to the 2013 transaction, does not lead one to understand that the 2015 identity-theft claims would be covered under the agreement. We noted in Kenworth of Dothan that, "[i]n order for a dispute to be characterized as arising out of or relating to the subject matter of the [transaction], and therefore subject to arbitration, the language of the arbitration provision must reasonably apply to the dispute." 745 So. 2d at 275. In response to the clear disconnect between the transaction to which the arbitration agreement relates and the separate matters at issue in this action, Locklear CJD and Locklear Group do not really explain how the arbitration agreement is broad enough to encompass the Lollars' identity- theft claims. Instead, they attempt to rely upon the arbitrability clause in the arbitration agreement (i.e., the clause providing that the arbitrator is to decide disputes over the arbitrability of the parties' underlying substantive dispute) in an effort to avoid this issue. But the difficulty with this is the same one that existed in the Booth, Williams, Hubbard, Averette, and Fuller cases. That is, this issue was 62 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 not presented to the trial court in such a manner as to preserve it for later appellate review. For the reasons already stated in our discussion of those other cases, we cannot reverse the trial court's order on that basis. Because the arbitration agreement on its face does not apply to the Lollars' claims, we conclude that the trial court did not err in denying the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. C. Case no. 1160375: Anthony Hood The final appeal before us involves the joint motion to compel arbitration filed by Locklear CJD and Locklear Group in response to the complaint filed by Anthony Hood. Locklear CJD and Locklear Group contend that they presented a prima facie case in support of their motion to compel arbitration, i.e., that they introduced a contract calling for arbitration and produced evidence showing that the transaction affected interstate commerce. They argue that the trial court erred in determining the scope of the arbitration agreement because the arbitration agreement contained an arbitrability clause reflecting an agreement to allow the arbitrator to decide any arbitrability issues. 63 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's first response to these arguments is that the version of the arbitration agreement Locklear CJD and Locklear Group submitted to the trial court "is invalid and unenforceable because the agreement is fabricated and was not signed by [Hood] and the issue is for the Court to decide, not the arbitrator." "'[A] party who contests the existence of a contract containing an arbitration provision cannot be compelled to arbitrate that threshold issue because an arbitrator derives his authority solely from the parties' agreement. Only a court can resolve the question whether a contract exists.'" Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1053-54 (Ala. 2007) (quoting Edward D. Jones & Co. v. Ventura, 907 So. 2d 1035, 1040 (Ala. 2005)). Hood's position is meritless. As detailed in the rendition of the facts, Hood alleged in his complaint and reiterated in his response to the joint motion to compel arbitration that he purchased a 2016 Dodge Ram 3500 truck from Locklear CJD in December 2015. He also admitted in his response that he signed a "Pre-Dispute Arbitration Agreement" with Locklear CJD. Hood alleged in his response and in his supporting affidavit that the only difference between the 64 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 version of the arbitration agreement he signed and the one Locklear CJD and Locklear Group submitted with their joint motion to compel arbitration was that in the latter version "[t]he words 'Locklear Chrysler Jeep Dodge, LLC'" had been added near the bottom of the agreement in a different typeset than that of the rest of the agreement. Indeed, the version of the arbitration agreement Hood attached to his brief contains all the elements contained in the version attached to the defendants' joint motion to compel arbitration except the printed words "Locklear Chrysler Jeep Dodge, LLC" typed or printed above the "DEALER" signature line. Thus, Hood admits that he signed the arbitration agreement that contains the substantive language quoted in this opinion; he admits the agreement was signed by someone on behalf of the "DEALER," which he admits to be Locklear CJD; and he admits that the agreement contained an exact description of the vehicle he purchased. Even if the allegation that Locklear CJD and/or Locklear Group added the words "Locklear Chrysler Jeep Dodge, LLC" to the arbitration agreement after Hood signed the agreement is accepted as true, we are given no basis on which to conclude 65 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 that this is a material alteration to the agreement for purposes of Hood's underlying claims. This Court has stated that in order to determine whether an alteration is material we should inquire: "Did the interposed matter make the 'instrument speak a language different in legal effect from that which it originally spoke, which carries with it some change in the rights, interests, or obligations of the parties?'" Benton v. Clemmons, 157 Ala. 658, 660, 47 So. 582, 583 (1908). See also 3B C.J.S. Alteration of Instruments § 4 (2017) ("In general, for the alteration of an instrument to be 'material,' the alteration must be such as to change the legal effect of the instrument."). In this instance, the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC" changed none of the obligations of the parties to the arbitration agreement. Hood knew and admitted that he was signing an arbitration agreement with Locklear CJD in connection with his purchase of a vehicle. A representative of the dealership signed the agreement. The terms of that agreement were not changed in any degree by the alleged addition of the words "Locklear Chrysler Jeep Dodge, LLC." Accordingly, the arbitration agreement was not "fabricated," 66 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 and Hood's argument does not defeat the arbitration of Hood's underlying claims.10 Like the Lollars, Hood also contends that his identity- theft allegations are not within the scope of the arbitration agreement because they do not "result[] from, aris[e] out of, relat[e] to or concern[] the transaction entered into," i.e., the purchase of a vehicle from Locklear CJD, which is the object of the arbitration agreement. In response, as in the Lollars' case (and the Hubbard, Averette, Fuller, Booth, and Williams cases), Locklear CJD and Locklear Group counter that there is a clause in the arbitration agreement that provides for the arbitrator to determine the scope of the arbitration agreement. Unlike all the other appeals before us, however, in this case not only was there a hearing on the motion to compel arbitration, but also that hearing was transcribed and the transcript submitted as part of the record on appeal. 10In an effort to provide an alternative ground for affirmance of the trial court's order as to Locklear Group, Hood also makes a "nonsignatory" argument similar to that made by first group of plaintiffs discussed above. This argument by Hood fails for the same reasons as did the similar argument by those other plaintiffs. See discussion, supra. 67 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 According to that transcript, Hood's counsel argued as follows to the trial court: "[O]ur argument is that somebody at the dealership was being allowed to [take customers' personal information] and then sell [their] identities out on the black market[, which] doesn't have anything to do with buying a car." In response, counsel for Locklear CJD and Locklear Group stated: "And our response to that specific argument is, first, we believe that the arbitration agreement is broad enough in scope to cover these. But, more importantly, we don't even get to that issue here before you, your Honor. The arbitration agreement clearly provides that the issue of scope and breadth arbitrability is for the arbitrator to decide, not this trial court. So whether or not the claims being asserted fall within the scope of the arbitration agreement is for the arbitrator to decide based on the plain and unambiguous language in the arbitration agreement. Plus, it applies for AAA rules, and there [are] Alabama Supreme Court cases that clearly state that, that in and of itself also shows an intent based on those rules to allow the arbitrator to decide the issue of scope and breadth. So that is something that the arbitrator is to determine and not this court." Thus, in Hood's case, Locklear CJD and Locklear Group clearly and explicitly argued to the trial court that there was an arbitrability clause in the arbitration agreement and that the import of the clause was that the issue whether 68 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Hood's identity-theft claims were covered by the arbitration agreement was for the arbitrator to decide, not the trial court. Therefore, the effect of the arbitrability clause is properly before us in this appeal. Hood's first response to Locklear CJD and Locklear Group's invocation of the arbitrability clause is to contend that "clear and unmistakable evidence that [Hood] and [the] Locklear Defendants agreed to arbitrate the issue of arbitrability does not exist because a valid arbitration agreement does not exist." This argument relies upon Hood's assertion, which we just rejected, that the arbitration agreement was fabricated. Because we have concluded that a valid arbitration agreement was submitted by Locklear CJD and Locklear Group, the arbitrability clause cannot be ignored on that basis. Hood next contends that the "Locklear Defendants arguably waived a 'First Options clause' argument because this argument was not presented in their initial Motion to Compel Arbitration with the trial court or in oral argument on the 69 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 same."11 As we have already recounted, however, Locklear CJD and Locklear Group clearly and explicitly presented its arbitrability-clause argument to the trial court in the hearing on their joint motion to compel arbitration. Hood also argues that the arbitrability clause in the arbitration agreement is "wholly diverse from the "'First Options clause' in [Smith v.] Mark Dodge[, Inc., 934 So. 2d 375 (Ala. 2006)]." Hood notes that the arbitrability clause in Smith stated: "'[Smith] and [Mark Dodge] further agree that any question regarding whether a particular controversy is subject to arbitration shall be decided by the Arbitrator.'" 934 So. 2d at 378. Hood argues that "[t]he explicit language in Mark Dodge stating 'whether a particular controversy is subject to arbitration shall be decided by the Arbitrator' is clearly missing from [the] Locklear Defendants' fabricated arbitration agreement." In their principal brief, Locklear CJD and Locklear Group do not contend that the arbitrability clause in the arbitration agreement is similar in wording to the 11Hood's reference to a "First Options clause" is a reference to the discussion of arbitrability clauses in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). 70 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrability clause in Smith. Instead, they argue correctly that the arbitrability-clause language in the arbitration agreement is identical to language in arbitration agreements analyzed by this Court in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999).12 As Locklear CJD and Locklear Group observe, this Court in McGrue and Waites held that the arbitrability clauses in those arbitration agreements constituted clear and unmistakable evidence that the parties intended to arbitrate issues of arbitrability. In his brief to this Court, Hood addresses McGrue and Waites, but only by contending that they are distinguishable from the present case on the ground that "neither [McGrue nor Waites] disputed the validity of the underlying arbitration agreements." As we already have concluded, however, Hood's contention that the arbitration agreement was "fabricated" must be rejected. The fact remains, then, that in McGrue and Waites this Court concluded that language identical to that contained in the arbitration agreement was sufficient to warrant submission of issues of arbitrability to the 12See discussion, supra. 71 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 arbitrator. Hood offers no other reason why McGrue and Waites would not be dispositive of the present case. IV. Conclusion Based on the foregoing analysis, we affirm the order of the trial court in the Lollars' appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group. We reverse the trial courts' orders in Hubbard's, Averette's, Fuller's, Booth's, and Williams's appeals, which denied the motions to compel arbitration as to Locklear Group, and in Hood's appeal, which denied the joint motion to compel arbitration filed by Locklear CJD and Locklear Group; those causes are remanded for the trial courts to enter orders granting those motions. 72 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 1160335 -- REVERSED AND REMANDED. 1160336 -- REVERSED AND REMANDED. 1160337 -- REVERSED AND REMANDED. 1160435 -- MOTION TO STRIKE GRANTED; AFFIRMED. 1160436 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. 1160437 -- MOTION TO STRIKE GRANTED; REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 1160375 -- REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. Murdock, J., concurs specially. 73 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 MURDOCK, Justice (concurring specially in case no. 1160375). As the main opinion explains, Anthony Hood responds to the invocation by Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc., of this Court's decisions in Jim Burke Automotive, Inc. v. McGrue, 826 So. 2d 122 (Ala. 2002), and Ex parte Waites, 736 So. 2d 550 (Ala. 1999), but he does so by arguing only that those cases involved no issue as to the validity of the underlying arbitration agreements, whereas, according to Hood, the underlying arbitration agreement in this case is invalid (the rejection of the latter proposition by the main opinion being a position with which I agree). Hood does not, for example, attempt to argue that the language of the arbitrability provision at issue here is materially different from that held to be sufficient in McGrue and Waites. Neither does Hood argue that we should overrule McGrue and Waites. And, although I confess concerns as to the sufficiency of the language here to meet the "clear and unmistakable" test articulated in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), other than pointing out that the language used here is "diverse" from the more explicit language employed in First Options, Hood does not 74 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 offer a sufficient explication of the asserted insufficiency so as to compel a reexamination of McGrue and Waites. And because the question at hand does not concern the subject- matter jurisdiction of the trial court or this Court, I cannot conclude that this Court should sua sponte explore the matter. In addition, neither party has even mentioned this Court's 2012 decision in Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc., 99 So. 3d 1193 (Ala. 2012). In particular, Hood does not argue that, even if the arbitrability language at issue satisfies the "clear and unmistakable" standard articulated in First Options, the particular underlying substantive claims in this case should not be sent to the arbitrator for consideration of their arbitrability because they do not even "arguably" fall within the ambit of the arbitration agreement. See Blackmon, 99 So. 3d at 1198. That is, no issue is raised as to whether Hood's identity-theft claims fall within the universe of disputes to which the so-called arbitrability clause is to apply. I feel no compunction therefore to cast a vote in this case reflective of the position I took in my dissent in 75 1160335, 1160336, 1160337, 1160375, 1160435, 1160436, and 1160437 Blackmon, a position to which I continue to adhere. See Blackmon, 99 So. 3d at 1199 (Murdock, J., dissenting). 76

September 29, 2017

35353951-5767-459b-973e-efe8cabcb5d7

Complete Cash Holdings, LLC v. Powell

N/A

1150536

Alabama

Alabama Supreme Court

Rel: 04/21/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150536 ____________________ Complete Cash Holdings, LLC v. Lola Mae Powell Appeal from Barbour Circuit Court (CV-14-900025) PARKER, Justice. Complete Cash Holdings, LLC ("Complete Cash"), appeals a judgment entered by the Barbour Circuit Court on a jury verdict in favor of Lola Mae Powell. Facts and Procedural History 1150536 This case arises out of Complete Cash's repossession of Powell's 2002 Chevrolet Avalanche truck based on a forged title-pawn agreement. Complete Cash lends money to consumers by the use of deferred-presentment agreements and vehicle title pawns. Complete Cash is also a pawnbroker, as that term is defined in Ala. Code 1975, § 5-19A-2(4), which states, in pertinent part: "Any person engaged in the business of lending money on the security of pledged goods left in pawn, or in the business of purchasing tangible personal property to be left in pawn on the condition that it may be redeemed or repurchased by the seller for a fixed price within a fixed period of time." On October 1, 2011, Vakeela Brown, Powell's granddaughter, went to a Complete Cash storefront in Eufaula. Brown, without Powell's knowledge or permission, forged Powell's signature on two deferred-presentment agreements to borrow a total of $300 ($150 under each of the deferred- presentment agreements). Renata Green, an employee of Complete Cash and the manager of the Complete Cash store in Eufaula, signed the deferred-presentment agreements on behalf of Complete Cash. Under the terms of each of the deferred- presentment agreements, Complete Cash agreed to lend "Powell" $150 ($300 total) on October 1, 2011, and, in exchange, 2 1150536 "Powell" agreed to present to Complete Cash two personal checks, each in the amount of $176.25 ($352.50 total), which Complete Cash would hold until the presentment date of October 31, 2011.1 On the presentment date, Complete Cash would cash Powell's personal checks, which would satisfy "Powell's" obligation to Complete Cash. In order to satisfy this condition of the deferred-presentment agreements, Brown stole two personal checks from Powell and forged Powell's signature on those checks. Of course, Powell was not obligated to make repayment under the deferred-presentment agreements because it is undisputed that Brown forged Powell's signature on the deferred-presentment agreements and on the personal checks given to Complete Cash. In addition to being the manager of the Complete Cash store, Green was also a friend of Brown's and knew Powell personally. Green knew that Brown had forged Powell's signature on the deferred-presentment agreements and on Powell's personal checks. Brown testified that, at some time thereafter, she and Green decided to pawn the title to 1The $176.25 payment represented $150 in principal and $26.25 in interest. The annual percentage rate on the loans under the deferred-presentment agreements was 212.92%. 3 1150536 Powell's truck and to split the money procured from pawning the title. As a result, Brown testified that she and Green stole the title to Powell's truck to pawn it. On October 27, 2011, Brown went to the Complete Cash store and forged Powell's signature on an agreement with Complete Cash entitled "Alabama Pawn Ticket" ("the title-pawn agreement"). Green signed the title-pawn agreement on behalf of Complete Cash. Under the terms of the title-pawn agreement, Complete Cash agreed to lend "Powell" $2,352.50, and "Powell" agreed to give Complete Cash a security interest in the title to the truck as collateral securing the amount borrowed. Powell also agreed to repay the amount borrowed plus a "finance charge" of $294.06, for a total repayment of $2,646.56, on November 26, 2011.2 The title-pawn agreement also permitted the repayment period to be extended for 30-day periods. The title-pawn agreement stated that the truck would become the property of Complete Cash if "Powell" failed to 2The annual percentage rate on the loan under the title- pawn agreement was 150%. 4 1150536 repay the amount owed under the terms of the title-pawn agreement.3 Brown testified that Green satisfied the deferred- presentment agreements using some of the money Brown and Green had procured under the title-pawn agreement. After the title-pawn agreement was executed, from October 27, 2011, until August 24, 2013, 19 payments were made on the title-pawn agreement totaling $2,133.75; the amount of the payments varied from $5 to $450. Ashley Newman, an employee of Complete Cash and Green's supervisor, testified that such a repayment history was not unusual for accounts held by Complete Cash. Brown testified that she "may have come in [to the Complete Cash store] and did [sic] one or two [of the payments], but the other[ payments] were made by [Green]." However, Green's employment with Complete Cash was terminated in August 2013 based on Green's failure to "collect a certain percentage a month." Newman testified that Green's employment was terminated because Green was "not doing her job." Newman further testified that the termination of Green's employment 3Brown also forged Powell's signature on all the necessary paperwork for Complete Cash to legally obtain and record its security interest in Powell's truck. 5 1150536 was not related to her fraudulent activity in regard to Powell; in fact, Newman testified that Complete Cash had no knowledge that Green had been engaged in any fraudulent activity at the time her employment was terminated. After Green's employment with Complete Cash was terminated, Green quit making payments on the title-pawn agreement; no payments were made on the title-pawn agreement after August 24, 2013. On September 23, 2013, based on the fact that Powell had defaulted on the title-pawn agreement, Complete Cash sent its repossession agent, D&T Custom Automotive, LLC ("D&T"), a "repossession packet" requesting that D&T repossess Powell's truck. On January 27, 2014, D&T repossessed Powell's truck. The same day, Jerome Anthony Rogers, Powell’s nephew, drove Powell to the Complete Cash store to understand why Complete Cash had repossessed Powell's truck. Upon arriving at the Complete Cash store, Powell and Rogers spoke with April Scott, an employee of Complete Cash and the manager of the Complete Cash store who had been hired to replace Green. Scott agreed to speak with her supervisor about the matter. 6 1150536 Newman was Scott's supervisor. Newman testified that Scott spoke with her about Powell's account. Newman testified that, upon learning that Powell alleged that the title-pawn agreement had been created fraudulently, she thoroughly reviewed Powell's account. Newman testified that she found no signs of fraud with the title-pawn agreement. Specifically, Newman testified that the fact that Complete Cash actually had the title to Powell's truck naming Complete Cash as a lienholder and the payment history on the account indicated to her that the title-pawn agreement was not the result of fraudulent activity. On February 18, 2014, Powell's counsel sent Complete Cash a letter demanding that Powell's truck be returned to Powell. In the demand letter, Powell's trial counsel informed Complete Cash that Powell's signature had been forged by Brown on the title-pawn agreement. Powell's trial counsel also requested that someone from Complete Cash contact him to discuss the matter further. A few days after Powell's counsel sent the demand letter, Brandi Jackson, the manager of Complete Cash's legal department, telephoned Powell's counsel. Jackson testified 7 1150536 that she informed Powell's counsel that Complete Cash had investigated Powell's account and determined that there was no fraudulent activity concerning the title-pawn agreement. On February 27, 2014, Powell sued Complete Cash asserting claims of replevin, detinue, trespass to chattels, conversion, negligence, and wantonness.4 On June 4, 2014, Powell filed an amended complaint, adding D&T and Green as defendants and asserting numerous claims against Complete Cash, D&T, and Green. In addition to the claims Powell asserted against Complete Cash in her original complaint, Powell asserted that Complete Cash had violated the Alabama Pawnshop Act, § 5-19A-1 et seq., Ala. Code 1975, that Complete Cash had violated the Deceptive Trade Practices Act, § 8-19-1 et seq., Ala. Code 1975 ("the DTPA"), that Complete Cash had violated 15 U.S.C. § 1692f(6) of the Fair Debt Collection Practices Act, 15 4Powell also filed, contemporaneously with her complaint, an "ex parte motion for emergency preliminary relief or temporary restraining order" in which Powell requested immediate possession of her truck during the pendency of the lawsuit. On March 3, 2014, the trial court granted Powell's request for immediate possession of the truck. The trial court later converted its order to a preliminary injunction. Pursuant to the trial court's order, Complete Cash returned the truck to Powell on March 14, 2014. On June 19, 2014, Powell "received the vehicle title [to her truck] from Complete Cash." 8 1150536 U.S.C. § 1692 et seq. ("the FDCPA"), and asserted claims of fraudulent suppression and civil conspiracy. Powell asserted against D&T and Green claims of conversion, negligence, wantonness, fraudulent suppression, and civil conspiracy. On June 18, 2014, Complete Cash filed an answer to Powell's first amended complaint, cross-claims against Green, and a third-party complaint against Brown. On October 16, 2014, Complete Cash filed motions for default judgments against Brown and Green based on their failure to respond to the claims asserted against them by Complete Cash. On October 20, 2014, the trial court granted Complete Cash's motions for default judgments against Brown and Green but did not assess damages. On July 17, 2015, Powell filed a motion for a summary judgment. On the same day, Complete Cash also filed a motion for a summary judgment or, in the alternative, for a partial summary judgment. On August 5, 2015, Complete Cash filed an amended motion for a summary judgment. On August 17, 2015, just before the trial began, the trial court heard oral argument on the parties' summary- judgment motions. The trial court entered a summary judgment 9 1150536 for Complete Cash on Powell's fraudulent-suppression and civil-conspiracy claims. The trial then commenced on the remaining claims against Complete Cash.5 At the close of Powell's case-in-chief, Complete Cash filed a motion for a judgment as a matter of law ("JML") as to Powell's remaining claims, challenging each claim with specificity. Concerning Powell's claim that Complete Cash had violated § 1692f(6), Complete Cash argued that the FDCPA did not apply because, it argued, Complete Cash was not a "debt collector" as that term is defined in the FDCPA. The trial court entered a JML for Complete Cash on Powell's claims of detinue, trespass, violation of the Alabama Pawnshop Act, and Powell's claim that Complete Cash had violated the DTPA; the trial court denied Complete Cash's motion as to all other claims, including the claim asserting a violation of the FDCPA. The case was then submitted to the jury. The jury returned a verdict in favor of Powell. On September 15, 2015, the trial court entered the following judgment on the jury's verdict: 5On August 15, 2015, Powell and D&T filed a joint stipulation dismissing D&T as a party, which the trial court granted. 10 1150536 "Issue having been joined, this matter came on for trial commencing on August 17, 2015 at the Barbour County Courthouse in Eufaula, Alabama. Thereupon came a jury of good and lawful citizens, to wit: Scotty Smith and eleven others, who being duly impaneled, sworn, and charged by the court according to law, before whom the trial of this cause was entered upon and continued from day to day and from time to time, and upon the 18th day of August, 2015, said jurors upon their oath did say: "'We, the Jury, find in favor of the Plaintiff, Lola Mae Powell, and against the Defendants, Complete Cash, LLC, et al[.], and assess damages as follows: Compensatory damages: Fifty Thousand Dollars ($50,000.00) Punitive damages: One Hundred Fifty Thousand Dollars ($150,000.00).' "SPECIAL INTERROGATORY "'1. Is the jury reasonably satisfied from the evidence in this case that the Defendant, Complete Cash, is a debt collector as defined by the Fair Debt Collection Practices Act and took non-judicial action to effect dispossession or disablement of property when there was no present right to possession of the property? "'Check One _____ Yes _____ No (The 'Yes' boxed was checked on the verdict form by the jury foreman.)' "Therefore, judgment is entered in favor of the Plaintiff, Lola Mae Powell." On September 17, 2015, Complete Cash filed a renewed motion for a JML or, in the alternative, for a new trial. 11 1150536 Complete Cash adopted the arguments it had asserted in its original motion for a JML as to those claims submitted to the jury. Complete Cash did provide additional analysis of its argument that the FDCPA did not apply because, it argued, Complete Cash was not a "debt collector" as that term is defined in the FDCPA. Complete Cash further argued that, if the trial court found convincing Complete Cash's argument that the FDCPA did not apply, the judgment entered on the jury's general verdict had to be reversed because a "bad count" had been submitted to the jury. On January 13, 2016, the trial court entered an order denying Complete Cash's renewed motion for a JML or for a new trial and assessing damages against Brown and Green. The trial court's order stated that Brown and Green "are hereby jointly and severely [sic] liable for the damages assessed [against Complete Cash] by the jury." On February 3, 2016, Powell filed an "application for assessment of fees and costs" requesting attorney fees in the amount of $114,480 and costs in the amount of $3,114.56, which 12 1150536 the trial court granted. On February 19, 2016, Complete Cash filed its notice of appeal.6 Standard of Review "We review as follows a trial court's ruling on a motion for a JML made after a verdict has been returned: "'The standard of review applicable to a ruling on a [renewed] motion for [a JML] is identical to the standard used by the trial court in granting or denying a motion for [a JML]. Thus, in reviewing the trial court's ruling on the motion, we review the 6We note that the issue of costs and attorney fees remained pending when Complete Cash filed its notice of appeal. In Wolfe v. JPMorgan Chase Bank, N.A., 142 So. 3d 697, 698-99 (Ala. Civ. App. 2013), the Court of Civil Appeals stated: "'[A] decision on the merits' of the claims asserted by the parties is a '"final decision"' even when 'there remains for adjudication a request for attorney's fees attributable to the case.' Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202–03, 108 S. Ct. 1717, 100 L. Ed. 2d 178 (1988); see also In re Porto, 645 F.3d 1294, 1299 (11th Cir. 2011) ('[T]he Supreme Court has established a bright line rule that the issue of attorney's fees is always collateral to the merits, and a decision on the merits, even if the attorney's fees issue remains unresolved, is immediately appealable....'); and State Bd. of Educ. v. Waldrop, 840 So. 2d 893, 899 (Ala. 2002) ('[A] decision on the merits disposing of all claims is a final decision from which an appeal must be timely taken, whether a request for attorney fees remains for adjudication.')." (Footnote omitted.) 13 1150536 evidence in the light most favorable to the nonmovant, and we determine whether the party with the burden of proof has produced sufficient evidence to require a jury determination. "'.... "'... In ruling on a [renewed] motion for a [JML], the trial court is called upon to determine whether the evidence was sufficient to submit a question of fact to the jury; for the court to determine that it was, there must have been "substantial evidence" before the jury to create a question of fact. "[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved."' "American Nat'l Fire Ins. Co. v. Hughes, 624 So. 2d 1362, 1366–67 (Ala. 1993) (citations omitted)." Lee v. Houser, 148 So. 3d 406, 414 (Ala. 2013). Discussion Complete Cash argues that the trial court erred in denying its renewed motion for a JML as to Powell's claim that Complete Cash violated § 1692f(6) of the FDCPA. Complete Cash argues that the FDCPA does not apply because, it argues, Complete Cash is not a "debt collector" as that term is defined under the FDCPA. The United States Court of Appeals for the Eleventh Circuit stated the following concerning the 14 1150536 definition of "debt collector" under the FDCPA for purposes of a claim brought under § 1692f(6): "The FDCPA imposes liability on 'debt collectors' who fail to comply with its provisions when collecting a 'debt.' 15 U.S.C. § 1692k. The FDCPA's restrictions apply only to 'debt collectors.' ... A 'debt collector' is defined, for the purposes of § 1692f(6), as 'any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts [or the enforcement of security interests], or who regularly collects or attempts to collect ... debts [owed or due or asserted to be owed or] due another....' Id. § 1692a(6); see Harris v. Liberty Cmty. Mgmt., Inc., 702 F.3d 1298, 1302 (11th Cir. 2012)." Lodge v. Kondaur Capital Corp., 750 F.3d 1263, 1273 (11th Cir. 2014)(first bracketed language in original). See also Davidson v. Capital One Bank (USA), N.A., 797 F.3d 1309, 1313 (11th Cir. 2015) (noting that the definitions of "debt collector" set forth in 15 U.S.C. § 1692a(6) are alternative). Complete Cash argues that it does not satisfy either definition of "debt collector" in 15 U.S.C. § 1692a(6) because, it says, its principal purpose of business is not the collection of debts or the enforcement of security interests and because Complete Cash does not collect debts owed to third 15 1150536 party or enforce security interests held by a third party.7 7Powell argues that Complete Cash has waived any argument pertaining to her claim asserted under the FDCPA because Complete Cash did not object to the trial court's jury instruction on Powell's FDCPA claim or to the inclusion of the special interrogatory on the jury's verdict form. Powell relies only upon Cochran v. Ward, 935 So. 2d 1169 (Ala. 2006), in making this argument. The portion of Cochran relied upon by Powell concerns the preservation for appellate review of an alleged error in a verdict form submitted to the jury in that case. This Court held that, under Rule 51, Ala. R. Civ. P., a party must state the matter objected to and the grounds of the objection in order to preserve any alleged errors for appellate review. However, in the present case, Complete Cash has not alleged that there was error in the trial court's jury instructions or verdict form. Instead, Complete Cash argues that it was entitled to a JML under Rule 50, Ala. R. Civ. P. "To preserve its argument, [Complete Cash] was required to follow the mandates of Rule 50, Ala. R. Civ. P., which governs a JML. Contrary to [Powell's] contention, preservation of [Complete Cash's] argument does not require following the mandates of Rule 51, Ala. R. Civ. P., which governs objections to jury instructions." Cook's Pest Control, Inc. v. Rebar, 28 So. 3d 716, 722 (Ala. 2009). This Court specifically stated in Cook's that it is not necessary for purposes of preservation for a party seeking to appeal a trial court's denial of that party's motion for a JML "to object to the trial court's jury instructions on the same grounds as set forth in its motions for a JML." 28 So. 3d at 723. Complete Cash did not waive any argument concerning Powell's FDCPA claim. As Complete Cash explains in its reply brief, Complete Cash filed a motion for a JML concerning Powell's FDCPA claim, but the trial court denied Complete Cash's motion. Complete Cash states that it did, indeed, agree to the special interrogatory because "it was important for Complete Cash to understand how significant that claim was, and whether the jury's general verdict was due to a finding that Complete Cash is a debt collector as defined by the FDCPA." Complete Cash's reply brief, at p. 7. Throughout the course of these proceedings, Complete Cash has maintained the consistent position that it is entitled to a JML as to Powell's claim 16 1150536 Instead, Complete Cash argues that the parties stipulated to the fact that "Complete Cash is in the business of lending money to consumers by way of deferred presentment agreements and title pawns." Complete Cash's brief, at pp. 27-28. Essentially, Complete Cash is arguing that it is a "creditor" under the FDCPA, not a debt collector.8 Complete Cash is correct. In Davidson, the Eleventh Circuit stated that, "[u]nlike debt collectors, creditors typically are not subject to the FDCPA. See, e.g., Pollice v. Nat'l Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000). A 'creditor' is 'any person who offers or extends credit creating a debt or to whom a debt is owed.' [15 U.S.C.] § 1692a(4)." 797 F.3d at 1313. In Pollice v. National Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000), that Complete Cash violated § 1692f(6). Based on the above- quoted portions of Cook's, we conclude that Complete Cash did not waive any argument concerning this issue by not objecting to the trial court's jury instruction on the FDCPA or by agreeing to have the special interrogatory included on the jury's verdict form. 8As set forth above, the term "debt collector" is a statutorily defined term. Section 1692a(6) includes within the definition of "debt collector" one whose primary business is the collection of debts and/or the enforcement of security interests. Any reference throughout this opinion to the term "debt collector" contemplates one who enforces security interests. 17 1150536 the case relied upon by the Eleventh Circuit in Davidson, the United States Court of Appeals for the Third Circuit stated: "The FDCPA's provisions generally apply only to 'debt collectors.' Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1059 (7th Cir. 2000). Creditors -- as opposed to 'debt collectors' -- generally are not subject to the FDCPA. See Aubert v. American Gen. Fin., Inc., 137 F.3d 976, 978 (7th Cir. 1998) ('Creditors who collect in their own name and whose principal business is not debt collection ... are not subject to the [FDCPA].... Because creditors are generally presumed to restrain their abusive collection practices out of a desire to protect their corporate goodwill, their debt collection activities are not subject to the [FDCPA] unless they collect under a name other than their own.'); Staub[ v. Harris], 626 F.2d [275,] 277 [(3d Cir. 1980)] ('The [FDCPA] does not apply to persons or businesses collecting debts on their own behalf.'); Hon. D. Duff McKee, Liability of Debt Collector to Debtor under the Federal Fair Debt Collection Practices Act, 41 Am. Jur. Proof of Facts 3d 159, at § 3 (1997) ... ('[I]nterestingly, the term "debt collector" does not include the creditor collecting its own debt.')." 225 F.3d at 403. In Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985), the United States Court of Appeals for the Fifth Circuit stated the above proposition even more definitively: "The legislative history of section 1692a(6) indicates conclusively that a debt collector does not include the consumer's creditors.... See S. Rep. No. 95–382, 95th Cong., 1st Sess. 3, reprinted in 1977 U.S. Code Cong. & Ad. 18 1150536 News 1695, 1698." See also Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir. 2003)(quoting Perry with approval for the same proposition); Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106 (6th Cir. 1996)(same); and McCrimmon v. Mariner Fin. North Carolina, Inc., 154 F. Supp. 3d 256, 258 (M.D. N.C. 2016)("'[C]rediting institutions, such as banks, are not debt collectors under section 1692a(6)(A) because they collect their own debts and are in the business of lending money to consumers.' Davis v. Dillard Nat'l Bank, No. 1:02–cv–546 (M.D. N.C. June 4, 2003) (unpublished)." (citing Thomasson v. Bank One, Louisiana, N.A., 137 F. Supp. 2d 721, 724 (E.D. La. 2001), and Meads v. Citicorp Credit Servs., Inc., 686 F. Supp. 330, 333 (S.D. Ga. 1988))). Complete Cash is a "creditor" under the FDCPA because it "offers or extends credit creating a debt." 15 U.S.C. § 1692a(4). Complete Cash's business is to extend credit to borrowers, which places those borrowers in debt. Complete Cash is Powell's creditor.9 Powell put on extensive evidence 9Of course, we recognize that the contract establishing the relationship between Powell and Complete Cash was fraudulently created; Complete Cash makes no assertion that Powell is liable under the title-pawn agreement. We state that Complete Cash is Powell's creditor solely for purposes of analyzing Powell's FDCPA claim, which requires us to look to 19 1150536 proving this fact. Further, Complete Cash collects its own debts and enforces its own security interests; Powell has not presented any evidence indicating that Complete Cash collects debt owed to others, enforces security interests held by others, or collects its own debt in a name other than its own. Powell has offered no argument opposing Complete Cash's position that it is a creditor under § 1692a(4) of the FDCPA. Instead, Powell argues that, "[w]hile an original creditor is generally not considered a debt collector per the FDCPA, there are instances in which an original creditor may still be liable as a debt collector under the FDCPA, if the creditor is shown to be in violation of the FDCPA, 15 U.S.C. § 1692f(6) as to enforcement of security interests." Powell's brief, at p. 25. However, Powell has not cited any authority in support of her argument that a creditor may nevertheless be liable as a debt collector under the FDCPA "as to the enforcement of security interests." In order for a party to be liable under the FDCPA it must be demonstrated that the party is a debt collector under § 1692a(6). Powell has failed to demonstrate that Complete Cash is a debt collector. Further, after extensive research, we have not the nature of Complete Cash's business and the relationship between Powell and Complete Cash. 20 1150536 found any authority with similar facts explaining an instance where a creditor, like Complete Cash, has been held liable as a debt collector. Viewing the facts in a light most favorable to Powell, as we must, we conclude that there is no evidence, let alone substantial evidence, indicating that Complete Cash is a debt collector under the FDCPA. Instead, the evidence establishes that Complete Cash is a creditor. Thus, as Powell's creditor, Complete Cash is not included within the definition of "debt collector" in the FDCPA. In Birster v. American Home Mortgage Servicing, Inc., 481 F. App'x 579, 582 (11th Cir. 2012)(not selected for publication in the Federal Reporter), a case relied upon by Powell, a panel of the Eleventh Circuit stated: "[W]hether an individual or entity is a 'debt collector' is determinative of liability under the FDCPA." The evidence is conclusive that Complete Cash is Powell's creditor, not a debt collector, which determines the issue of liability. Based on the foregoing, we conclude that the trial court erred in denying Complete Cash's renewed motion for a JML as to Powell's claim that Complete Cash violated 15 U.S.C. § 1692f(6). 21 1150536 Next, Complete Cash argues that "[t]he entire jury verdict is improper since the 'bad' count regarding the FDCPA went to the jury, and the jury found in favor of Powell by a general verdict." Complete Cash's brief, at p. 32. Complete Cash notes that, in answering the special interrogatory on the jury's verdict form in the affirmative, the jury expressly concluded that Complete Cash is a debt collector under the FDCPA. This demonstrates, Complete Cash argues, that the jury's verdict was based, at least in part, on Powell's claim that Complete Cash violated § 1692f(6), which, Complete Cash argues, is a "bad count" in that it is not supported by substantial evidence. Complete Cash is correct. In Larrimore v. Dubose, 827 So. 2d 60, 62-63 (Ala. 2001), this Court set forth the following applicable law concerning a "good count/bad count" situation, like that presented in this case: "In Aspinwall v. Gowens, 405 So. 2d 134, 138 (Ala. 1981)(opinion on rehearing), this Court stated: "'On reconsideration, we believe the better view to be that if a complaint has more than one count and the defendant believes that the evidence is not sufficient to support one or more of these counts, he must challenge this by motion for [JML], specifying the count which is not supported 22 1150536 by evidence and detailing with specificity the grounds upon which the particular count is not supported by the evidence. If this is not done and all counts go to the jury and a general verdict is returned, the court will presume that the verdict was returned on a valid count.' "Furthermore, in Alfa Mutual Insurance Co. v. Roush, 723 So. 2d 1250, 1257 (Ala. 1998), this Court stated what occurs when a properly presented motion for a JML preserves a challenge to a 'bad count': "'When a jury returns a general verdict upon two or more claims, as it did here, it is not possible for this Court to determine which of the claims the jury found to be meritorious. Therefore, when the trial court submits to the jury a "good count" -- one that is supported by the evidence -- and a "bad count" -- one that is not supported by the evidence -- and the jury returns a general verdict, this Court cannot presume that the verdict was returned on the good count. In such a case, a judgment entered upon the verdict must be reversed.' "See also Ex parte Grand Manor, Inc., 778 So. 2d 173 (Ala. 2000); St. Clair Fed. Sav. Bank v. Rozelle, 653 So. 2d 986 (Ala. 1995); and South Cent. Bell Tel. Co. v. Branum, 568 So. 2d 795 (Ala. 1990)." Powell argues that Complete Cash failed to adequately challenge in its motions for a JML, as required by Aspinwall v. Gowens, 405 So. 2d 134 (Ala. 1981), Powell's claim that Complete Cash violated § 1692f(6). Powell's argument is not persuasive. Complete Cash moved for a JML at the close of 23 1150536 Powell's case, which coincided with the close of all the evidence. Complete Cash argued that it was entitled to a JML on all of Powell's claims. With regard to Powell's claim that Complete Cash violated § 1692f(6), Complete Cash specifically argued that the FDCPA did not apply because Complete Cash was not a debt collector. Although the trial court granted Complete Cash's motions for a JML as to some of Powell's claims against Complete Cash, the trial court allowed the remainder of the claims, including Powell's claim under the FDCPA, to be submitted to the jury. The jury then returned a general verdict for Powell, awarding her compensatory damages and punitive damages. The jury's verdict was general, but it also included a special interrogatory indicating that the jury specifically found that Complete Cash was a debt collector under the FDCPA. After the trial court entered a judgment on the jury's verdict, Complete Cash, in a renewed motion for a JML, renewed its arguments that there was insufficient evidence from which to conclude that Complete Cash was a debt collector under the FDCPA. Based on these facts, we conclude that Complete Cash adequately challenged Powell's FDCPA claim under Aspinwall. 24 1150536 We also conclude, based on the jury's express finding that Complete Cash was a debt collector under the FDCPA, that the jury's award of compensatory damages was based, at least in part, on Powell's claim that Complete Cash had violated § 1692f(6). Accordingly, there is no question that the jury's verdict was based on a "bad count." Of course, because the FDCPA does not provide for the award of punitive damages, we can also safely assume that the jury's verdict was based in part on Powell's claims of conversion or wantonness.10 This, however, does not save the jury's verdict because we know, based on the special interrogatory, that the jury based its general verdict in part on a bad count. For this reason, we must reverse the entirety of the compensatory-damages award. Further, our reversal of the jury's compensatory-damages award mandates that we also reverse the jury's punitive- damages award. This Court stated in Ex parte Third Generation, Inc., 855 So. 2d 489, 491 (Ala. 2003), "that in order to be consistent with due process, 'a jury's verdict 10We note that Complete Cash argues on appeal that the trial court erred in denying its renewed motion for a JML as to Powell's wantonness claim; however, as further explained below, we need not address this argument because we have already determined that the jury's general verdict was based on a bad count. 25 1150536 [must] specifically award either compensatory damages or nominal damages in order for an award of punitive damages to be upheld.' [Life Ins. Co. of Georgia v. Smith,] 719 So. 2d [797,] 806 [(Ala. 1998)] (citing BMW of North America v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996))." See also Jenelle Mims Marsh, Alabama Law of Damages § 4:1 (6th ed. 2012)("There also must be a finding by the jury of either compensatory or nominal damages before an award of punitive damages will be upheld."). The jury's compensatory-damages award having been reversed, there is no basis upon which the jury's punitive-damages award may be upheld. Therefore, the trial court's judgment must be reversed in its entirety and the cause remanded for a new trial. Because we are reversing on this issue, we pretermit consideration of all other issues raised on appeal. REVERSED AND REMANDED. Stuart, Shaw, Main, and Wise, JJ., concur. 26

April 21, 2017

e2213024-83b7-4e34-99f6-69dd6d8dc1d7

SSC Selma Operating Company, LLC v. Fikes

N/A

1160080

Alabama

Alabama Supreme Court

Rel:05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160080 ____________________ SSC Selma Operating Company, LLC, d/b/a Warren Manor Health and Rehabilitation Center, and SavaSeniorCare Administrative Services, LLC v. Jackie Fikes Appeal from Dallas Circuit Court (CV-16-900053) BOLIN, Justice. SSC Selma Operating Company, LLC, doing business as Warren Manor Health and Rehabilitation Center, and SavaSeniorCare Administrative Services, LLC (hereinafter 1160080 collectively referred to as "the companies"), appeal from an order of the Dallas Circuit Court denying their motion to compel arbitration of a retaliatory-discharge claim filed against them by Jackie Fikes. We reverse and remand. Facts On March 4, 2016, Fikes sued the companies, seeking to recover worker's compensation benefits pursuant to the Alabama Workers' Compensation Act, § 25–5–1 et seq., Ala. Code 1975 ("the worker's compensation claim"), and alleging that the companies had discharged her from her employment in violation of Ala. Code 1975, § 25–5–11.1, solely because she had filed a claim for worker's compensation benefits ("the retaliatory-discharge claim"). Fikes specifically alleged that on February 19, 2013, she suffered a work-related injury when she attempted to lift a patient while working for the companies as a certified nurse assistant; that she underwent medical treatment for her work-related injury; and that she returned to work under light-duty restrictions until March 4, 2014, at which time, she says, the companies wrongfully terminated her employment. Fikes requested in the complaint that the worker's compensation claim and the retaliatory- 2 1160080 discharge claim be severed in order for the retaliatory- discharge claim to be tried by a jury. It does not appear from the record that the trial court severed the claims.1 The companies moved to compel arbitration of the retaliatory- discharge claim pursuant to their employment-dispute- resolution program (hereinafter "the EDR program") under which Fikes had agreed to be bound. Fikes responded, arguing that the retaliatory-discharge claim was not covered by the EDR program. On October 12, 2016, the trial court entered an order denying the companies' motion to compel arbitration; the companies appeal pursuant to Rule 4(d), Ala. R. App. P. Standard of Review "This Court's standard of review on an appeal from a trial court's order granting or denying a motion to compel arbitration is well settled. Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1141 (Ala. 2003). A direct appeal is the proper procedure by which to seek review of such an order, Rule 4(d), Ala. R. App. P., and this Court will review de novo the trial court's grant or denial of a motion to compel arbitration. Bowen, 879 So. 2d at 1141. The party seeking to compel arbitration has the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction involving interstate commerce. Polaris Sales, Inc. v. Heritage 1On January 27, 2017, this Court entered an order denying the companies' motion to stay the proceedings below in their entirety pending this appeal. 3 1160080 Imports, Inc., 879 So. 2d 1129, 1132 (Ala. 2003). The party seeking to compel arbitration must present some evidence tending to establish its claim. Wolff Motor Co. v. White, 869 So. 2d 1129, 1131 (Ala. 2003). Once the moving party meets that initial burden, the party opposing arbitration has the burden of presenting evidence tending to show that the arbitration agreement is invalid or that it does not apply to the dispute in question. Bowen, 879 So. 2d at 1141. See also Title Max of Birmingham, Inc. v. Edwards, 973 So. 2d 1050, 1052–53 (Ala. 2007)." Alabama Title Loans, Inc. v. White, 80 So. 3d 887, 891–92 (Ala. 2011). Discussion At the outset, it is noted that neither the companies nor Fikes disputes that the EDR program governs the arbitration of employment disputes between the companies and its employees or that the transaction--Fikes's employment by a company operating in 19 states--involves interstate commerce. The only issue before this Court is whether Fikes met her burden of demonstrating that her retaliatory-discharge claim was not covered under the EDR program. The relevant portions of the document establishing the EDR program state: "Your decision to accept employment or to continue employment with the [companies] constitutes your agreement to be bound by the EDR Program. Likewise, the [companies] agree[] to be bound by the EDR Program. This mutual agreement to arbitrate claims means that both you and the [companies] are bound to 4 1160080 use the EDR Program as the only means of resolving employment related disputes and to forego [sic] any right either may have to a jury trial on issues covered by the EDR Program. ".... "The EDR Program is the process for resolving most workplace disputes between you and the [companies], including but not limited to, disputes concerning legally protected rights such as freedom from discrimination, retaliation or harassment. ".... "Disputes covered under the EDR Program pertain to claims such as discipline, discrimination, fair treatment, harassment, termination and other legally protected rights [i.e., 'such as freedom from discrimination, retaliation or harassment'--as stated in the prior paragraph]. "Disputes not covered under the EDR Program relate to worker's compensation, unemployment benefits, health, welfare and retirement benefits, and claims by the [companies] for injunctive relief to protect trade secrets and confidential information." (Emphasis added.) Fikes, relying solely on the provision concerning disputes "not covered" under the EDR program, argues that the plain language of the provision is unambiguous and expressly provides that an employment dispute that "relate[s] to worker's compensation" is not covered under the EDR program. Specifically, she argues that the retaliatory-discharge claim 5 1160080 is related to the worker's compensation claim because she has to demonstrate that the companies terminated her employment because she filed a claim for worker's compensation benefits. The companies, on the other hand, argue (1) that the EDR program specifically covers employment-related disputes concerning termination and legally protected rights such as freedom from retaliation; (2) that a retaliatory-discharge claim is not in the nature of a worker's compensation claim; and (3) that the obvious and clear intention of the EDR program is to exclude as arbitrable claims by the companies for injunctive relief to protect trade secrets and confidential information, as well as claims that are governed by special statutes–-claims typically handled administratively and limited in their potential recoveries, i.e., specifically, worker's compensation benefits are governed by the Alabama Workers' Compensation Act, and claims seeking such benefits are typically tried before a circuit court judge without a jury, § 25–5–81, Ala. Code 1975; unemployment-compensation benefits are governed by the Alabama Unemployment Compensation Act, Ala. Code 1975, § 25–4–1 et seq.; and an employee- welfare-benefit plan, pension plan, or retirement plan is 6 1160080 governed by the Employee Retirement Income Security Act of 1974. The companies further argue that, even if the scope of the arbitration agreement that is part of the EDR program is not clear, any ambiguities therein as to its scope must be resolved in favor of arbitration. We agree. In Koullas v. Ramsey, 683 So. 2d 415, 416-17 (Ala. 1996), this Court stated: "The strong federal policy favoring the enforceability of arbitration contracts is designed to place arbitration agreements on the same footing as any other contract. Allied–Bruce Terminix Companies v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed.2d 753 (1995). Like any other contract, an arbitration agreement must be enforced in accordance with its terms; both federal and state courts have consistently recognized that the duty to arbitrate is a contractual obligation and that a party cannot be required to arbitrate any dispute that he or she has not agreed to arbitrate. AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S. Ct. 1415, 89 L. Ed.2d 648 (1986); A.G. Edwards & Sons v. Clark, 558 So. 2d 358 (Ala. 1990). Whether an arbitration agreement applies to a dispute between the parties is to be determined by the language of the contract entered into by the parties. Blount Int'l, Ltd. v. James River–Pennington, Inc., 618 So. 2d 1344 (Ala. 1993). "In the event of an ambiguity or uncertainty over the applicability of an arbitration clause, federal policy dictates that it be resolved in favor of arbitration. Allied–Bruce. However, this Court will not stretch the language of a contract to apply to matters that were not contemplated by the parties when they entered the contract. Seaboard Coast Line 7 1160080 R.R. v. Trailer Train Co., 690 F. 2d 1343 (11th Cir. 1982). To determine whether the arbitration clause applies to this dispute, we must consider the intent of the parties, as it is expressed in the language of the ... contract." It is apparent from the language of the document establishing the EDR program that the intent of the program is to submit to arbitration those employment-related disputes the plaintiff would ordinarily be entitled to have resolved by a jury trial, i.e., disputes sounding in tort, as opposed to those disputes that are governed by specific statutes and are typically limited in their recovery. In the case at hand, it is well settled that although a retaliatory-discharge claim brought pursuant to § 25-5-11.1 arises out of a worker's compensation factual setting, the claim is nevertheless a tort action and is governed by the general rules of tort law. Jackson Cty. Hosp. v. Alabama Hosp. Ass'n Trust, 619 So. 2d 1369 (Ala. 1993). In Jackson County Hospital, this Court explained the relationship between a retaliatory-discharge claim and a worker's compensation claim: "[T]he [Alabama's Workers' Compensation] statute has no special provisions tying the [retaliatory- discharge] claim to damages relating to workers' compensation benefits; on the contrary, a plaintiff who brings a claim under § 25-5-11.1 can be awarded damages under the general law of torts. Caraway v. 8 1160080 Franklin Ferguson Mfg. Co., 507 So. 2d 925 (Ala. 1987). See, also, Continental Eagle Corp. v. Mokzrycki, 611 So. 2d 313 (Ala. 1992)(mental anguish and loss of wages compensable 'under the general law of torts and, thus, under Ala. Code 1975, § 25-5- 11.1.' 611 So. 2d at 315). The award of such damages could entail proof of damage or harm and could entail jury trials, which are nonexistent in traditional workers' compensation actions.... "We note that claims that do 'arise under' workers' compensation laws are generally for occupational diseases and accidental injuries resulting from one's employment. The § 25-5-11.1 action for retaliatory discharge operates to protect an employee who files a traditional worker's compensation claim but, in so doing, does not itself become a 'worker's compensation' action. We therefore hold that the retaliatory discharge claim is in the nature of a traditional tort, albeit one that is applied in the specialized circumstances of a worker's compensation claim, and thus does not arise 'under' our workers' compensation law for purposes of the general liability insurance provision in this case." 619 So. 2d at 1371. Likewise here, claims that "relate to" worker's compensation laws "are generally for occupational diseases and accidental injuries resulting from one's employment," as opposed to claims alleging retaliatory discharge. The two claims–-a workers' compensation claim and a tort claim--are mutually exclusive, in part, by virtue of their limited recoveries. See, e.g., Robert W. Lee & Steven W. Ford, Alabama 9 1160080 Workers' Compensation Law and Handbook § 1.04 (2d ed. 2004)(internal citations omitted)("In a tort claim, all damages that can be proven can be awarded (i.e., pain and suffering, actual lost wages, lost earning capacity, punitive damages, loss of consortium, disfigurement, loss of enjoyment of life, medical bills, etc.). In a workers' compensation claim in Alabama, however, three benefits are available: (1) lifetime medical coverage for all reasonable and necessary medical expenses that are related to the on-the-job injury and provided by the authorized doctor; (2) compensation based upon injuries to scheduled members of the body, or upon loss of earning capacity; and (3) payment of vocational rehabilitation expenses, if appropriate."). In Dillard's, Inc. v. Gallups, 58 So. 3d 196, 199 (Ala. Civ. App. 2010), the Court of Civil Appeals addressed a similar argument by an employee regarding whether a retaliatory-discharge claim was arbitrable by virtue of the following description in the parties' agreement of the types of claims required to be arbitrated: "'Personal injuries except those covered by workers' compensation or those covered by an employee welfare benefit plan, pension plan or retirement plan which are subject to the Employee Retirement Income 10 1160080 Security Act of 1974 (ERISA) other than claims for breach of fiduciary duty (which shall be arbitrable). "'Retaliation for filing a protected claim for benefits (such as workers' compensation) or exercising your protected rights under any statute.'" The employee argued that the two provisions created an ambiguity because his retaliatory-discharge claim was arbitrable under the second provision, yet excluded under the first provision. The employee specifically argued that the retaliatory-discharge claim was excluded under the first provision because, according to him, the claim arose under the Alabama Workers' Compensation Act. Relying, in part, on this Court's decision in Jackson County Hospital, the Court of Civil Appeals rejected the employee's argument: "Our supreme court has determined that, although a retaliatory-discharge action 'operates to protect an employee who files a traditional workers' compensation claim ..., [it] does not itself become a "workers' compensation" action.' Jackson County Hosp., 619 So. 2d at 1371. The issue in Jackson County Hospital was whether the Alabama Hospital Association Trust ('the Trust') was required to defend Jackson County Hospital ('the Hospital') against a retaliatory-discharge claim brought against the Hospital. Id. at 1370. Although the opinion does not make it clear, the agreement between the Trust and the Hospital must have excluded workers' compensation claims from those 11 1160080 claims the Trust was required to defend. Id. at 1370-71. ... ".... "... Based on ... Jackson County Hospital, therefore, we hold that the trial court erred in c o n c l u d i n g t h a t [ t h e e m p l o y e e ' s ] retaliatory-discharge claim could not be arbitrated because it fell under the first of the two relevant above-quoted provisions in the [agreement]. A retaliatory-discharge claim does not arise under the Workers' Compensation Act such that it falls within the exclusion stated in the [agreement] for '[p]ersonal injuries ... covered by workers' compensation.'" 58 So. 3d at 201-04. See also Gibson v. Staffco, L.L.C., 63 So. 3d 1272, 1274 (Ala. Civ. App. 2010)("Recently, this court [in Dillard's, Inc. v. Gallups] held that, in the context of the arbitrability of claims, a claim of retaliatory discharge does not fit within a contractual exclusion from arbitration for workers' compensation claims."). Based on the foregoing analysis, we conclude that the trial court erred in denying the companies' motion to compel arbitration of Fikes's retaliatory-discharge claim. When the language of the document establishing the EDR program is viewed as a whole, it is apparent that the intent of the program is to include as arbitrable those employment-related disputes the employee would be entitled to have resolved by a 12 1160080 jury trial, as opposed to those disputes that are governed by special statutes and limited in their potential recovery--such as claims arising under a workers' compensation act. Stated differently, when viewed in its proper context, a retaliatory- discharge claim asserted by an employee participating in the EDR program is not "related to" disputes concerning workers' compensation laws, which are governed solely by the workers' compensation act, and, thus, is governed by the general rules of tort law. Even assuming, arguendo, that an uncertainty or a latent ambiguity exists in the language of the document establishing the EDR program concerning covered and noncovered disputes, it is well settled that federal policy "dictates that [any uncertainty or ambiguity] be resolved in favor of arbitration." Koullas, 683 So. 2d at 417. "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983). 13 1160080 Conclusion Fikes has failed to demonstrate that her retaliatory- discharge claim is not covered by the EDR program. Accordingly, we reverse the trial court's order denying the companies' motion to compel arbitration of that claim and remand this case to the trial court for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Parker, Main, Wise, and Bryan, JJ., concur. Murdock and Shaw, JJ., concur in the result. 14

May 19, 2017

4df72273-a56a-4891-9588-de92dac99859

Ex parte Jewels by Park Lane, Inc.

N/A

1160333

Alabama

Alabama Supreme Court

Rel:06/23/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160333 ____________________ Ex parte Jewels by Park Lane, Inc., et al. PETITION FOR WRIT OF MANDAMUS (In re: Jennifer Miller v. Kathy Cassidy, individually, and d/b/a Park Lane Jewelry, and Jewels by Park Lane, Inc.) (Tallapoosa Circuit Court, CV-16-900069) BOLIN, Justice. Jewels by Park Lane, Inc. (hereinafter referred to as "JBPL"), and Kathy Cassidy, the national director for JBPL, 1160333 seek a writ of mandamus compelling the Tallapoosa Circuit Court to vacate its order denying their motion to dismiss an action against them on the ground of improper venue arising out of a forum-selection clause and to enter an order dismissing the case. We grant the petition and issue the writ. Facts and Procedural History JBPL is a multilevel marketing company that sells jewelry through independent contractors who host parties offering JBPL's jewelry line for sale. Jennifer Miller lives and works in Alabama. In July 2015, Miller attended an annual convention hosted by JBPL in Rosemont, Illinois. At that time, Miller worked for a competitor of JBPL. On August 4, 2015, Miller and JBPL entered into a "director agreement." The front of the agreement set out Miller's personal information along with the name of the JBPL person who "sponsored" her and the name of the JBPL manager to whom Miller would answer. The director agreement further provided, in pertinent part: "I hereby apply to become an Independent Contractor of [JBPL]. As an Independent Contractor of JBPL, I understand and agree to the following terms: 2 1160333 ".... "16. The director agrees that this Agreement has been drafted in accordance with the laws of the state of Illinois, and that the company is a [sic] Illinois corporation. The director agrees that the company may use equitable remedies (including specific performance and injunctive relief) in addition to any other remedies available, for any actions of the director which may be deemed to be in violation of this Agreement or in violation of any of the company's programs. Any disputes arising hereunder shall be solely governed by and interpreted in accordance with the laws of the state of Illinois and personal and subject matter jurisdiction is solely vested in the courts of the state of Illinois." The reverse side of the agreement contains a space for the name and address of the executive training manager to whom Miller's jewelry kit is to be sent. That space has one word filled in; it appears to read "Sent." The reverse side of the director agreement also provides spaces for the director, i.e., Miller, to set out the upcoming home parties at which JBPL's jewelry line will be displayed to potential customers. This part of Miller's director agreement is blank. Another part of the director agreement provides, in pertinent part, as follows: "Leader Direct Appointment Approval Authorization "(Complete the following when Applicable.) 3 1160333 "1. Experienced candidate to be appointed to the management level of: " . "2. Explain the candidate's party plan/direct sales management experience. List companies he/she has represented and position/titles previously achieved. " . "3. Have you discussed this appointment with your Sr. Division and/or Vice-President? " . "Their name:___________ "4. Verbal approval from a Home Office executive must be obtained prior to extending an offer of direct appointment to a management level. A manager agreement submitted without prior Home Office authorization cannot be processed. "I verbally secured Home Office approval from: " . "Sponsor's Signature: " . "I acknowledge that the information regarding my experience is accurate and true. "Leader candidate's signature: " "Date: " 4 1160333 This part of Miller's director agreement has been completed with the relevant information. On June 7, 2016, Miller sued JBPL and Cassidy. Miller alleged that JBPL promised to employ her for a 12-month period and to pay her $4,000 a month for that period. Miller set out claims alleging account stated, open account, breach of contract, and fraud. Miller sought compensatory damages, punitive damages, and attorney fees. Miller attached a letter to her complaint. The letter, dated "August 2015," provides: "Dear Jennifer, "Congratulations on your appointment to the Executive Position of Sales Vice President. As was shared with you confidentially in our meeting, in addition to our very generous compensation plan for the position of Sales Vice President, you will receive the following: "For a period of 1 year: (review at end) "$4,000 per month with an expectation to build to 10 new personal/group recruits who begin on a Wednesday payroll date in the same calendar month with a minimum of $500 net (commissionable) sales. "In addition: "$1,000 for every additional 10 new personal/group recruits, over and above the initial 10 and meeting the same sales and start date requirements, to a maximum of $8,000/month. "This bonus will be paid on the first payroll of the following month and be attached to your paycheck 5 1160333 earned through personal commission and/or group sales overrides. "You May also choose 7 sets from our new catalog (pgs 1-87) to add to your kit. "Welcome to the Park Lane Family, Jennifer. We look forward to working together for many years to come! "/s/ Kathy Cassidy" On August 12, 2016, JBPL and Cassidy filed a joint Rule 12(b)(3), Ala. R. Civ. P., motion to dismiss Miller's action based on improper venue. They argued that the outbound forum- selection clause in the director agreement required Miller to bring her action in Illinois. Subsequently, Miller amended her complaint to include a fraud-in-the-inducement claim. Miller admitted that the director agreement contained a forum- selection clause but argued that she would not have entered into the agreement but for the fraud perpetuated by JBPL and Cassidy. The defendants responded, arguing that, in order to void the forum-selection clause, the fraud must be directed to that particular clause and not to the contract as a whole. Following a hearing at which the parties discussed only the arguments related to the defendants' Rule 12(b)(3) motion, the 6 1160333 trial court denied the defendants' motion to dismiss.1 JBPL and Cassidy timely filed a petition for a writ of mandamus. Standard of Review "'Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.' Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995)." Ex parte CTB, Inc., 782 So. 2d 188, 190 (Ala. 2000). "[A]n attempt to seek enforcement of the outbound forum-selection clause is properly presented in a motion to dismiss without prejudice, pursuant to Rule 12(b)(3), Ala. R. Civ. P., for contractually improper venue. Additionally, we note that a party may submit evidentiary matters to support a motion to dismiss that attacks venue. Williams v. Skysite Communications Corp., 781 So. 2d 241 (Ala. Civ. App. 2000), quoting Crowe v. City of Athens, 733 So. 2d 447, 449 (Ala. Civ. App. 1999)." Ex parte D.M. White Constr. Co., 806 So. 2d 370, 372 (Ala. 2001). Discussion 1The defendants also moved to dismiss Miller's complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P. At the hearing on their motion to dismiss, the parties discussed only the forum- selection clause. In their mandamus petition, the defendants state that the petition is based solely on Rule 12(b)(3). 7 1160333 At the outset, we note that "[a]n outbound forum- selection clause -- a clause by which parties specifically agree to trial outside the State of Alabama in the event of a dispute -- implicates the venue of a court rather than its jurisdiction. See Ex parte CTB, Inc., 782 So. 2d 188 (Ala. 2000); and O'Brien Eng'g Co. v. Continental Machs., Inc., 738 So. 2d 844, 845 n. 1 (Ala. 1999)." Ex parte Leasecomm Corp., 879 So. 2d 1156, 1158 (Ala. 2003). In F.L. Crane & Sons, Inc. v. Malouf Construction Corp., 953 So. 2d 366 (Ala. 2006), this Court held that an outbound forum-selection clause raises procedural issues and is governed by the law of the forum jurisdiction addressing the issue, which, in that case, was this Court. The Crane Court relied on Ex parte Procom Services, Inc., 884 So. 2d 827 (Ala. 2003), in which this Court decided the validity of an outbound forum-selection clause under Alabama law despite a choice-of-law clause in the contract stating that Texas law governed disputes between the parties. In Professional Insurance Corp. v. Sutherland, 700 So. 2d 347 (Ala. 1997), this Court adopted the majority rule that an outbound forum-selection clause should be enforced so long as 8 1160333 its enforcement is neither unfair nor unreasonable under the circumstances. An outbound forum-selection clause is enforceable unless the party challenging the clause can clearly establish that enforcement of the clause would be unfair on the basis that the contract was affected by fraud, undue influence, or overweening bargaining power or that enforcement would be unreasonable on the basis that the chosen forum would be seriously inconvenient for the trial of the action. Ex parte Leasecomm, 879 So. 2d at 1159. With regard to the inconvenience of the selected forum, this Court has stated: "'"When an agreement includes a clearly stated forum-selection clause, a party claiming that clause is unreasonable and therefore invalid will be required to make a clear showing of unreasonableness. In determining whether such a clause is unreasonable, a court should consider these five factors: (1) Are the parties business entities or businesspersons? (2) What is the subject matter of the contract? (3) Does the chosen forum have any inherent advantages? (4) Should the parties have been able to understand the agreement as it was written? (5) Have extraordinary facts arisen since the agreement was entered that would make the chosen forum seriously inconvenient? We state these items not as requirements, but merely as factors that, considered together, should in a particular case give a clear indication whether the chosen forum is reasonable."'" 9 1160333 Ex parte Nawas Int'l Travel Serv., Inc., 68 So. 3d 823, 827 (Ala. 2011) (quoting Ex parte Rymer, 860 So. 2d 339, 342–43 (Ala. 2003), quoting in turn Ex parte Northern Capital Res. Corp., 751 So. 2d 12, 15 (Ala. l999)). Here, Miller, the party challenging the forum-selection clause, has not shown that the chosen forum is a seriously inconvenient venue for the trial of this case. Miller contends that she was a "director" in name only and was not to operate as an independent contractor but, instead, was hired as a sales vice president for JBPL. However, Miller acknowledges that she signed the director agreement that contains the forum-selection clause. Miller does not argue that the forum-selection clause is ambiguous. The chosen forum is the location of JBPL's headquarters, and JBPL's sole office is in Illinois as well. Cassidy travels to JBPL's headquarters to conduct business on regular basis. Miller traveled to Illinois to attend the JBPL convention. Miller does not argue that any extraordinary circumstances have arisen since the director agreement was entered into that would make Illinois a seriously inconvenient forum. 10 1160333 We now turn to whether enforcement of the forum-selection clause would be unfair on the basis that the director agreement was affected by fraud, undue influence, or overweening bargaining power. Miller does not argue that she was subject to undue influence in the negotiation or execution of the director agreement or that JBPL or Cassidy had overweening bargaining power over her. Instead, Miller asserts that the defendants fraudulently induced her to sign the director agreement. This Court has explained: "[T]he proper inquiry is whether the forum-selection clause is the result of fraud in the inducement in the negotiation or inclusion in the agreement of the forum-selection clause itself. If the forum- selection clause is the result of fraud in the inducement, then the fraud exception to the enforceability of the clause applies. However, if the claim of fraud in the inducement is directed toward the entire contract, the fraud exception to enforcement of the forum-selection clause does not apply." Ex parte Leasecomm, 879 So. 2d at 1159 (emphasis added); see also Ex parte PT Solutions Holdings, LLC, [Ms. 1150687, November 23, 2016] So. 3d , (Ala. 2016)(explaining that the logic behind considering the validity of the forum- selection clause before analyzing the validity of the contract 11 1160333 as a whole is to ensure that the more general claims of contractual fraud will be litigated in accordance with the contractual expectations of the parties in selecting a forum). In the present case, Miller argues that she was fraudulently induced to sign the director agreement as a whole. The fraud alleged was not specific to the forum- selection clause itself. See Ex parte Soprema, Inc., 949 So. 2d 907 (Ala. 2006)(holding that the plaintiff did not meet the exception to the enforcement of the forum-selection clause where the plaintiff's allegations of fraud related to the agreement generally and were not directed to the forum- selection clause); Ex parte Procom Servs., Inc., 884 So. 2d 827 (Ala. 2003)(holding that because the plaintiff alleged only that he had relied upon fraudulent statements pertaining to his salary when he entered into his employment contract, he failed to clearly establish that enforcement of the forum- selection clause was unfair as he failed to allege that the forum-selection clause was affected by fraud). Therefore, Miller failed to clearly establish that the enforcement of the forum-selection would be unreasonable or unfair. Conclusion 12 1160333 Accordingly, we conclude that JBPL and Cassidy have shown a clear legal right to have the action against them dismissed on the basis that venue in the Tallapoosa Circuit Court is, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying their motion to dismiss Miller's action. We direct the court to dismiss the cause, without prejudice, pursuant to Rule 12(b)(3), Ala. R. Civ. P. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Parker, Murdock, Shaw, Main, Wise, and Bryan, JJ., concur. Sellers, J., recuses himself. 13

June 23, 2017

6c3d2897-9a7a-4299-b055-0f28d7ff6a94

Taylor v. Paradise Missionary Baptist Church

N/A

1160034

Alabama

Alabama Supreme Court

REL:07/28/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160034 ____________________ Charles Brookins Taylor et al. v. Paradise Missionary Baptist Church et al. Appeal from Choctaw Circuit Court (CV-14-900007) BOLIN, Justice. Charles Brookins Taylor and others identified later in this opinion appeal from an order of the Choctaw Circuit Court holding that Taylor was rightfully removed as the pastor of the Paradise Missionary Baptist Church ("PMBC"). 1160034 Facts and Procedural History PMBC was organized in 1993 by Lenora Ray, her late husband Harding Ray, and Thelma Taylor. The members of PMBC initially held church services in Lenora's home until the church acquired property at 1106 East Pushmataha Street in Butler. A $20,000 gift to PMBC by Lenora and her late husband made it possible for the church to acquire the property. PMBC has, since its inception, been affiliated with the Gilfield District Missionary Baptist Association, the Alabama State Missionary Baptist Convention, and the National Baptist Convention. Although PMBC is affiliated with those entities, they do not control PMBC; it remains, as described in the church's bylaws, a "self-determining-autonomous body under the Lordship of Jesus Christ." Charles Brookins Taylor, Thelma's brother, became the pastor at PMBC in 2007. On August 18, 2010, the members of the congregation of PMBC decided to organize PMBC as a domestic nonprofit corporation pursuant to § 501(c)(3) of the Internal Revenue Code. Also on August 18, 2010, the members of PMBC voted to adopt bylaws. Article 3 of the bylaws sets forth PMBC's purpose as being "to advance the Kingdom of Jesus Christ." 2 1160034 Article 4 of the bylaws sets forth PMBC's mission statement: "The mission of PMBC is (1) to be a purpose driven church, 'a church that acts on faith' -- Heb. 11:1-6; (2) to practice the Great Commission -- St. Matthew 28:19-20, and the Great Commandment -- St. Matthew 22:34-40; and (3) to glorify God by ministering to the spiritual and Human needs in the name of Christ." Article 6 provides that PMBC is a "self-determining- autonomous body under the Lordship of Jesus Christ," the government of which "is vested in the body of the believers who compose it," and that it is "subject to the control of no other ecclesiastical body." Article 7 of the bylaws states that "PMBC receives the Scriptures as its authority in matters of church and practice." Matters of church discipline are found in Article 9. Article 9.02 provides: "TERMINATION OF MEMBERSHIP: Any person may be terminated from membership by any of the following methods: "A. By Letter. Any member in full and regular standing who desires a letter of recommendation to a designated church of like faith and order, is entitled to receive it upon his/her request, and such a letter shall be granted by PMBC. "B. Uniting with another church. If a member of PMBC unites with another church 3 1160034 his or her membership in PMBC is terminated automatically. "C. By exclusion. A member is dismissed after recommendation by the pastor and deacons, and by a vote of the church due reasons and circumstances provided in ARTICLE 9, section 4 -- Church Discipline. The pastor and deacons will do all they can to counsel the member for restoration prior to action of dismissal or a request of the member to be dismissed from church membership. "D. INACTIVE MEMBERS. When a person has manifested a lack of interest in the support and life of PMBC for a year by failure to attend services, to communicate with PMBC, or to contribute to it through tithing and general offering, his/her name may be placed on the Inactive List upon recommendation of the pastor and deacons, and confirmed by PMBC. "1. Persons whose names are on the inactive membership list shall not be counted or reported as members and shall not take part in church business meetings or be eligible to vote or to hold office. "2. Any person whose name is on the inactive membership list may be reinstated to active membership by recommendation of the Pastor and Deacons, and majority vote of the church. "E. PROLONGED INACTIVE MEMBER. The church may, after faithful efforts to make such action unnecessary, ... terminate the 4 1160034 membership of persons ... whose names appear on the inactive membership rolls for at least (3) consecutive years. The church shall keep a permanent list of such persons." Article 9.04 provides: "A. Should any unhappy difference arise among members, the aggrieved member shall follow a tender spirit, the rules given by our Lord in St. Matthew 18:15-17. If the issue is not resolved, the aggrieved member then takes the issue before the Deacons. "B. Should any case of gross breach of covenant and doctrine, or of public scandal, occur, the Deacons in counsel with the pastor shall endeavor to resolve the conflict, and if this effort fails, shall report the case to the church. The offender, at this stage of resolution, shall not hold a leadership role in the church, pending further action taken by the church. "C. All such proceedings shall be pervaded by a spirit of Christian kindness and Forbearance, but should and adverse decision be reached, PMBC may proceed to Admonish or declare the offender to be no longer in the membership of PMBC." Article 11 of the bylaws addresses PMBC's leadership and states that "[t]he leadership of the church shall consist of the Pastor, Deacons Ministry, Trustee Ministry, Women Missionary Ministry's President, Financial Secretary, Treasurer, Sunday School Superintendent, Church Clerk, Director of Christian Education, and Presidents of all other 5 1160034 designated Adult Ministries. The leaders shall form the Joint Committee of PMBC." Article 12 provides that the pastor of PMBC is an ecclesiastical officer of the church. Finally, Article 14 of the bylaws addresses the dismissal of the pastor: "The Pastor shall be considered for dismissal from PMBC only after the alleged charges(s) has been fully investigated and which must include the following steps: (1) The Deacons Ministry and the Joint Board must meet with the Pastor; (2) if PMBC Deacons and Joint Board find the alleged charges to be non-meritorious, no further action is taken; (3) if the Deacons Ministry and PMBC's Joint Board decide[] the alleged charges to be meritorious, a written notice containing the specifications of the charge(s) as alleged shall be given by certified mail, return receipt requested[,] to the Pastor at least 14 days prior to a special meeting to be held for this purpose and the pastor shall be accorded an opportunity to defend himself against such charges including the right of counsel. In the event such charges are not sustained, the pastor shall resume the duties of the pastor and the church shall be responsible for the payment of reasonable counsel fees incurred by the pastor in defending himself against such allegations." By 2012, PMBC's membership of 16 persons had fractured into 2 groups. It is alleged that the congregation had become dissatisfied with Taylor's service as pastor at PMBC and that Taylor and his close relatives had "started taking over the church" and were behaving in such a way as to have "forced 6 1160034 other members from attending church." Taylor headed one group of eight church members, and Lenora, a church trustee, headed the other group of eight church members. On July 20, 2012, Lenora sent Taylor a letter by certified mail informing him of a specially called meeting to be held at PMBC on August 28, 2012. The letter requested Taylor’s attendance at the meeting and indicated that the purpose of the meeting was to decide the issue of Taylor’s continued service as pastor at PMBC. The letter gave no "specifications of the charge(s) alleged" against Taylor. It appears from the record that Taylor refused service of this certified letter on three occasions. In the meantime, a special meeting of PMBC was convened on August 5, 2012, by Taylor's eight-member group. Taylor presided over this meeting and stated that Lenora had not attended any church services since July 8, 2012, and had performed acts that prevented other members and friends from conducting religious services at PMBC. Carolyn G. Taylor, the chairman of the PMBC Board of Trustees ("the Board") and Taylor's wife, moved to seek a restraining order against Lenora to prevent her from attempting to keep Taylor and the 7 1160034 members from entering the PMBC or engaging in any other action designed to prevent Taylor and the members present at the meeting from exercising their right to worship at PMBC. Also at this special meeting, Thelma, a founder and former trustee of PMBC, moved to have Lenora removed as a trustee of PMBC and to nominate Rose E. Taylor -- a sister of Taylor's and the clerk of PMBC -- as a trustee to the Board. Finally, Thelma moved those members present to approve by a vote of affirmation Taylor's continued service as the pastor of PMBC. Each of these actions was approved by a unanimous vote of those present. On August 28, 2012, a "mutual" council met with PMBC. The council's purpose was to serve as an advisory body for PMBC and consisted of the following representatives: Reverend Pettus L. Lockett of the Kinterbish District Baptist Association ("the Kinterbish association"); Reverend Theodis McSwain of the Gilfield District Missionary Baptist Association ("the Gilfield association"); and Reverend Jasper Irby of the Gilfield association. Taylor did not attend this meeting. Reverend Lockett expressed his "sadness" that Taylor was absent, having been afforded the opportunity to "vindicate 8 1160034 himself of the charges forwarded by the church." The council advised PMBC to "strive to restore harmony" and suggested a seven-day restoration period. Although the council had advised PMBC to "strive to restore harmony" and suggested a restoration period, it appears from the church minutes1 that five members of PMBC present at this meeting voted to dismiss Taylor. Taylor was informed of the action taken at the meeting and responded by telling Lenora that she had no authority to call the meeting. On September 12, 2012, a special meeting was held at PMBC that appears to have been attended by eight church members. The purpose of the meeting was to verify the expiration of the seven-day restoration period given Taylor at the August 28, 2012, meeting. Reverend Irby stated at this meeting that "nothing could be done to over-rule any decision made by the church" in the previous meeting held on August 28, 2012. Reverend O.L. Sealey, a representative of the Gilfield association, moved at this meeting that the decision made at the meeting on August 28, 2012, to remove Taylor as the pastor 1Those minutes were not generated from the actual August 28, 2012, meeting, but are minutes generated from a subsequent special meeting held on September 12, 2012, describing the official action taken at the August 28, 2012, meeting. 9 1160034 of PMBC be upheld. Lenora seconded this motion. Taylor was provided notice that his services as pastor were terminated effective September 17, 2012. On October 4, 2012, Taylor informed Lenora by letter that the meetings held on August 28, 2012, and September 12, 2012, were unauthorized and that they were held without following PMBC's bylaws; that the Gilfield association had no authority over PMBC and was not authorized to call a "mutual" council; that she had been removed as a trustee of PMBC on August 5, 2012; and that he did not accept the results of the unauthorized meetings of August 28, 2012, and September 12, 2012. Taylor requested that Lenora "cease and desist from acting outside the jurisdiction and the membership body of [PMBC]." On January 10, 2014, PMBC, Lenora, Rosie Drummond, Vernon L. Harbin, and Billy Ray (hereinafter collectively referred to as "the Ray plaintiffs") sued Taylor, Carolyn, Rose, and Thelma (hereinafter collectively referred to as "the Taylor defendants") seeking injunctive relief. The Ray plaintiffs alleged, among other things, that Taylor had behaved in such a bullish and domineering manner as the pastor of PMBC that 10 1160034 the only regular attendees of PMBC are his close relatives; that Taylor insisted on controlling everything in the church and had created an atmosphere where others feel unwelcome; that during a church meeting Taylor was verbally abusive to Ray; that Taylor has conducted specially called meetings in violation of PMBC's bylaws; and that Taylor and the other defendants have appropriated church assets for their own use and control. The Ray plaintiffs sought an order from the trial court finding that Taylor's termination as the pastor of PMBC was valid and requiring the Taylor defendants to return all church documents, records, and bank accounts in their possession. The Ray plaintiffs also sought to enjoin Taylor from claiming to be the pastor at PMBC and to enjoin the Taylor defendants from "conspiring and claiming that they are the Church and controlling all aspects of the Church"; from holding themselves out as having sole and exclusive authority to act on behalf of PMBC; and from disrupting church activities and harassing church members.2 2In contrast to the minutes contained in the record and discussed above in note 1, supra, the Ray plaintiffs alleged in their complaint that eight members of PMBC voted to remove Taylor as pastor at the August 28, 2012, and that the 11 1160034 On February 17, 2014, the Taylor defendants moved the trial court to dismiss the Ray plaintiffs' complaint, arguing, among other things, that the complaint failed to state a claim upon which relief could be granted; that the trial court lacked the jurisdiction to remove a church pastor and "to interfere with the 'spiritual' or 'ecclesiastical' affairs of any Church"; that the removal of a pastor is an ecclesiastical matter rather than a civil matter; and that the alleged removal of Taylor as the pastor of PMBC was invalid because PMBC's bylaws were not followed in removing him. The Taylor defendants supported their motion to dismiss with exhibits. On March 6, 2014, the Ray plaintiffs filed a response in opposition to the motion to dismiss in which they contended that they were not asking the trial court to interfere with the "spiritual" or "ecclesiastical" affairs of the church by removing Taylor as pastor of PMBC because they contended that Taylor had already been removed as the pastor of PMBC by a majority vote of the congregation. The Ray plaintiffs stated that they were requesting an order upholding Taylor's removal as the pastor of PMBC. The Ray plaintiffs alleged that "a membership status of one of those eight members was questioned. 12 1160034 majority of the members of [PMBC] held a valid meeting, a meeting in which [Taylor was] given proper notice to attend, and by a majority vote, voted to remove [Taylor] as pastor." Relying upon In re Galilee Baptist Church, 279 Ala. 393, 186 So. 2d 102 (1966), the Ray plaintiffs argued that the trial court had jurisdiction of this matter because they were seeking an order determining that Taylor's removal as the pastor of PMBC was valid and had been accomplished in accordance with the bylaws of PMBC. On April 30, 2015, the Taylor defendants filed their brief in support of their motion to dismiss, to which they attached a number of exhibits. On June 8, 2015, the Ray plaintiffs filed their brief in response, supported with a number of exhibits. On December 16, 2015, the trial court heard the parties' oral arguments in support of their briefs.3 On May 20, 2016, the trial court entered the following order, which reads, in part: "The Court has reviewed the legal briefs submitted by the parties and has heard oral arguments from counsel. "This Court is extremely disappointed and saddened that a matter such as this has made its way 3The record does not contain a transcript of this hearing. 13 1160034 into the judicial process. Spiritual matters are best left to each particular church and its congregation to resolve. However, given the present posture of this situation, this Court is forced, however reluctantly, to make a determination of certain issues involving [PMBC]. "In arriving at a decision, the Court is relying heavily on the Alabama Supreme Court's recent opinion in Ex parte Tatum, 185 So. 3d 434 [(Ala. 2015)]. It is this Court's opinion that Ex parte Tatum is a road map for circuit courts in Alabama when determining church disputes. "A circuit court lacks subject matter jurisdiction to apply judicial notions of due process to church proceedings when the highest adjudicatory body of a church decides a purely ecclesiastical matter. However, the mere fact that the subject matter of a church dispute concerns an ecclesiastical or spiritual issue does not preclude a circuit court from recognizing a decision rendered by the highest adjudicatory body of a church and, based on that decision, enjoining persons from taking unauthorized actions on behalf of the church. "In the present case, the Court concurs with the opinion in Ex parte Tatum that it lacks subject- matter jurisdiction to apply notions of due process to a church proceeding to remove the pastor of that church, but the Court does have the ability to recognize that a decision made by the majority of the members of [PMBC] to remove Defendant, Charles Brookins Taylor, as the pastor was a valid decision. In affirming such action of the church, the Court can also enjoin the Defendant, Charles Brookins Taylor, from taking unauthorized actions on behalf of the church. "In a Baptist church, the majority of the congregation is the highest adjudicatory body, unless the church bylaws provide otherwise. In a 14 1160034 Baptist church, the majority of the members of the church control the business of the church. Each Baptist church is within itself a pure democracy; it is the right of the majority to rule; the will of the majority having been expressed; it becomes the minority to submit; church action is final. The church may remove the pastor at any appropriate time it deems necessary. Thus in the church, the highest adjudicatory body of the church with respect to removing a pastor is a majority of its members. "It is apparent from the legal briefs and oral arguments of counsel that, even though the bylaws of [PMBC] did provide for boards to be established and persons to be appointed to those positions to make decisions for the church, no such boards existed at the time of the August 28, 2012, meeting and the bylaws did not specifically state that the majority of the congregation would not be considered the highest adjudicatory body of the church. While after July 2013, the Court recognizes that a question arose as to the active membership of [PMBC], it is apparent from the legal briefs and oral arguments of counsel that the [Ray plaintiffs] and the other members who voted to remove the Defendant, [Taylor,] as the pastor of [PMBC] on August 28, 2012, did constitute a majority of the membership of [PMBC] and therefore their decision to remove the pastor shall be affirmed. ".... "The Court finds that the August 28, 2012, meeting held by the [Ray] Plaintiffs and other members of [PMBC] to remove the Defendant, [Taylor], as pastor of [PMBC] and approved on September 12, 2012, was a valid meeting held by the majority of the membership of said church and that their decision to remove the Defendant, [Taylor], as pastor is hereby affirmed; 15 1160034 "That the Defendant, [Taylor], is hereby removed as pastor of [PMBC] by a majority vote of the membership effective immediately and said leadership and/or control of the church shall be vested with the [Ray] Plaintiffs and other members of [PMBC]." On June 1, 2016, the Taylor defendants moved the trial court to alter, amend, or vacate its judgment, which motion was denied by operation of law. The Taylor defendants have filed this timely appeal. Standard of Review The Taylor defendants asserted in their motion to dismiss both that the complaint failed to state a claim upon which relief could be granted and that the trial court lacked the jurisdiction to remove a church pastor and "to interfere with the 'spiritual' or 'ecclesiastical' affairs of any Church." Although the Taylor defendants had based their motion to dismiss in part on a failure to state a claim upon which relief could be granted, pursuant to Rule 12(b)(6), Ala. R. Civ. P., the substance of the motion is one arguing lack of subject-matter jurisdiction under Rule 12(b)(1), Ala. R. Civ. P. Although the Taylor defendants give a passing reference to the failure of the Ray plaintiffs' complaint to state a claim upon which relief could be granted, the Taylor defendants 16 1160034 argued in their motion to dismiss, and in their supporting brief, that the trial court lacked subject-matter jurisdiction to remove a pastor because the removal of a pastor from the pulpit is a purely ecclesiastical matter with which a temporal court has no jurisdiction to interfere. It is the substance of the motion that determines what kind of motion it is. Evans v. Waddell, 689 So. 2d 23 (Ala. 1997). Accordingly, we will treat this motion as one to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1), Ala. R. Civ. P. 4 "We review de novo whether the trial court had subject-matter jurisdiction." Solomon v. Liberty Nat'l Life Ins. Co., 953 So. 2d 1211, 1218 (Ala. 2006). See also McClendon v. Pugh, 49 So. 3d 1238, 1240 (Ala. Civ. App. 2010)(rejecting an assertion that the dispute was ecclesiastical in nature, holding that the trial court had subject-matter jurisdiction, and citing this Court's decision in Ex parte Terry, 957 So. 2d 455, 457 (Ala. 2006), for the proposition that the decision as to subject-matter 4Because we treat this motion as one for dismissal pursuant to Rule 12(b)(1), Ala. R. Civ. P., we pretermit any discussion as to whether the motion in this case was converted to one for a summary judgment. See Ex parte Price, [Ms. 1151041, April 14, 2017] __ So. 3d __, __ (Ala. 2017). 17 1160034 jurisdiction in such a case is a question of law, which an appellate court reviews de novo).5 Discussion The Taylor defendants initially argue that Taylor's alleged termination as pastor of PMBC involves a purely ecclesiastical matter and that, therefore, the trial court lacked the jurisdiction to consider the allegations contained in the Ray plaintiffs' complaint. This Court has stated: "It is firmly established that courts decline to assume any jurisdiction as regards the purely ecclesiastical or spiritual feature of the church. "On the other hand, in many cases we have recognized the right and duty of civil courts to exercise jurisdiction to protect the temporalities of the church, such as where civil rights or rights of property are involved." Williams v. Jones, 258 Ala. 59, 61, 61 So. 2d 101, 102 (1952)(citations omitted). Further, "[a]s is the case with 5In an appropriate case, a trial court may properly consider matters outside the pleadings in deciding a challenge to subject-matter jurisdiction. See generally Ex parte Safeway Ins. Co. of Alabama, Inc., 990 So. 2d 344, 349-50 (Ala. 2008). In the unusual case in which it becomes necessary for the trial court to receive evidence of such matters through ore tenus testimony, the de novo standard of appellate review presumably would, to that extent, yield to the ore tenus standard. No such case is presented here. 18 1160034 all churches, the courts will not assume jurisdiction, in fact [have] none, to resolve disputes regarding their spiritual or ecclesiastical affairs. However, there is jurisdiction to resolve questions of civil or property rights." Abyssinia Missionary Baptist Church v. Nixon, 340 So. 2d 746, 748 (Ala. 1976) (citing Williams, supra). As it pertains to the removal of a minister from the church's pulpit, this Court has stated: "The civil courts will not take jurisdiction of a controversy arising out of the removal of a minister if the right to the position is merely spiritual or ecclesiastical. But if he has a civil or property right in his position, the civil courts will protect that right. But if there is such right in the minister, which will give the courts jurisdiction, it is well settled that his removal by the appropriate church tribunal is conclusive upon the courts, if there is no violation of contractual right." Odoms v. Woodall, 246 Ala. 427, 429, 20 So. 2d 849, 851 (1945). See also Putman v. Vath, 340 So. 2d 26 (Ala. 1976). The trial court was correct in its initial determination here that it lacked subject-matter jurisdiction to adjudicate the matter of Taylor's removal as the pastor at PMBC. Article 12 of PMBC's bylaws provides that the pastor of PMBC is an ecclesiastical officer of the church. Neither the Taylor defendants nor the Ray plaintiffs have asserted that Taylor 19 1160034 possesses a property right in his position as the pastor of PMBC. The Taylor defendants have argued that the matter presented here is purely ecclesiastical in nature and that the trial court lacks jurisdiction. The Ray plaintiffs have argued that the trial court has subject-matter jurisdiction over this matter but that that jurisdiction is not based on a property right held by Taylor; rather, they contend, the trial court has jurisdiction over the matter to determine whether Taylor's removal as the pastor of PMBC was valid and accomplished in accordance with the church's bylaws.6 Simply 6As set forth above, the Ray plaintiffs asserted that the Taylor defendants had appropriated church property and sought its return through injunctive relief. In Yates v. El Bethel Primitive Baptist Church, 847 So. 2d 331 (Ala. 2002), this Court stated: "'[T]he civil courts of this state have taken jurisdiction of disputes between factions of Baptist churches or of churches similarly governed on the ground that property or civil rights were involved.' This case began as one involving the finances, financial assets, and business of the Church, not any of its purely ecclesiastical or spiritual features, and those financial and business aspects of the Church have remained center stage throughout." 847 So. 2d at 336 (quoting Williams, 258 Ala. at 62, 61 So. 2d at 104). The trial court did not address the claim for injunctive relief in its order because that claim related to an alleged misappropriation of church property. The Ray plaintiffs have not raised the claim in a postjudgment motion, 20 1160034 put, the matter of Taylor's removal as the pastor of PMBC based on his alleged bad behavior at its core is purely an ecclesiastical matter as to which the trial court lacked subject-matter jurisdiction to adjudicate. This conclusion, however, does not end our inquiry. As noted above, "it is well settled that [a pastor's] removal by the appropriate church tribunal is conclusive upon the courts, if there is no violation of contractual right." Odoms, 246 Ala. at 429, 20 So. 2d at 851. "The question then arises as to the jurisdiction of the court to go behind the decision of that tribunal to inquire into its jurisdiction and regularity of its proceedings ...." Id. Although the trial court concluded in its order that it lacked subject-matter jurisdiction to remove Taylor as the pastor of PMBC, it went on to conclude that it had subject-matter jurisdiction to determine whether the removal of Taylor was valid under church law. nor have they presented argument in support of the claim on appeal. Claims not argued on appeal are considered abandoned. Messer v. Turner, 932 So. 2d 104 (Ala. Civ. App. 2005). Accordingly, we will not consider the Ray plaintiffs' claim seeking injunctive relief for an alleged misappropriation of church funds as a "property-rights" basis for the trial court's jurisdiction in this case. 21 1160034 In Barton v. Fitzpatrick, 187 Ala. 273, 65 So. 390 (1914), a dispute over whether to remove W.F. Fitzpatrick from the pulpit divided the congregation of the Peace Baptist Church. A majority of the board of deacons backed Pastor Fitzpatrick and prohibited the matter of his removal from being presented to the full congregation. Eventually, a deacon opposed to Pastor Fitzpatrick rose during a worship service and gave notice of a meeting to be held for the purposes of declaring the pastorate vacant and electing a new pastor. The call for the meeting was not approved by Pastor Fitzpatrick or a majority of the board of deacons. The meeting nonetheless took place, and the congregation voted to remove Pastor Fitzpatrick from the pulpit and to replace him with J.P. Barton. The newly appointed Pastor Barton and his followers took possession of the church property. Fitzpatrick and certain deacons brought an action seeking a determination as to the right to the possession and control of the church property and an order restoring him to the pastorate of the church. Fitzpatrick contended that the meeting in which he was removed from the pulpit was held in contravention of established church law. The trial court agreed and entered a 22 1160034 judgment in his favor. In undertaking to decide the issues presented, this Court stated: "The pastor of a church in his pastoral office performs a spiritual function. Spiritualities are beyond the reach of the temporal courts. It follows that a church which has employed a pastor, though the employment be for a fixed term and at a fixed salary, may at any time, so far as the civil courts are concerned, depose him from his spiritual office, subject only to inquiry by the courts as to whether the church, or its appointed tribunal, has proceeded according to the law of the church." 187 Ala. at 280, 65 So. at 392-93. This Court held that the actions taken to remove Pastor Fitzpatrick from the pulpit were "irregular, and without authority of the church law." Id. In In re Galilee Baptist Church, 279 Ala. 393, 186 So. 2d 102 (1966), Thomas Thornes was serving as pastor of the Galilee Baptist Church when the congregation split into two factions over whether Pastor Thornes should continue to serve in that capacity. A congregational meeting was eventually called, at which time Pastor Thornes was removed as pastor. Following petitions being filed by both pro-pastor and anti- pastor factions, the trial court entered an order finding, among other things, that, although the congregational meeting at which Thornes was removed as pastor was "'regularly petitioned,'" the meeting was not conducted in "'such a manner 23 1160034 that the business of the congregation of the complainant was adequately or lucidly transacted, and any purported results of that meeting [were] null and void.'" 279 Ala. at 396, 186 So. 2d at 105. The trial court further determined that Pastor Thornes was legally entitled to serve as pastor of the church and to occupy the pulpit upon the condition that Pastor Thornes call a subsequent congregational meeting for the purpose of allowing the congregation to vote on his retention or dismissal. Relying upon the decision in Barton, supra, this Court found no error on the part of the trial court in inquiring into whether proper notice of the congregational meeting, at which Pastor Thornes was removed from the pulpit, was given in accordance with church procedure and whether, once called, the meeting was properly conducted and the removal of Pastor Thornes was accomplished in accordance with church procedure. Although this Court determined that the trial court had the authority to inquire into whether proper church procedure was followed in removing Pastor Thornes, it also determined that the court was without the authority to grant to Pastor Thornes the right to occupy the church's pastorate upon the condition 24 1160034 that he call a subsequent congregational meeting for the purpose of allowing the congregation to decide by a vote whether to retain him. This Court determined that the trial court lacked the jurisdiction to do that because it amounted to the court's taking over and running the affairs of the church. Galilee Baptist Church, supra. In Abyssinia Missionary Baptist Church v. Nixon, 340 So. 2d 746 (Ala. 1976), several individuals claimed to have been wrongfully expelled from membership in their church and claimed that church moneys had been misappropriated by the church's pastor. The trial court dismissed the complaint on the grounds that the plaintiffs lacked standing and that it lacked the jurisdiction to consider the matter. In reversing the trial court's judgment, this Court stated: "As is the case with all churches, the courts will not assume jurisdiction, in fact [have] none, to resolve disputes regarding their spiritual or ecclesiastical affairs. However, there is jurisdiction to resolve questions of civil or property rights. Williams v. Jones, 258 Ala. 59, 61 So. 2d 101 (1952). "This court takes cognizance of the well established case law of this State pertaining to the Baptist Church and the limited nature of this State's courts' jurisdiction over the business transacted within the Baptist Church. 25 1160034 ".... "[An] accurate reflection of present Alabama law on this subject is found in In re Galilee Baptist Church, 279 Ala. 393, 186 So. 2d 102 (1966); also involving a dispute between two opposing factions, and the alleged expulsion of the pastor at a congregational meeting. This court demonstrated it is proper for the courts to inquire whether a congregational meeting, at which church business is to be transacted, was preceded by adequate notice to the full membership, and whether, once called, the meeting was conducted in an orderly manner and the expulsion was the act of the authority within the church having the power to order it. "Once the court is presented with sufficient evidence regarding the regularity of the meeting, it will then generally refuse to inquire further as to the fruits of the meeting. As was stated in Galilee: "'Spiritualities are beyond the reach of temporal courts, and a pastor may be deposed by a majority of the members at a congregational meeting at any time, so far as the civil courts are concerned, subject only to inquiry by the courts as to whether the church, or its appointed tribunal has proceeded according to the law of church.' "We recognize here there are civil, as opposed to ecclesiastical, rights which have cognizance in the courts. A determination of whether the fundamentals of due process have been observed can be made in the judicial arena." Nixon, 340 So. 2d at 748. In Foster v. St. John's Baptist Church, Inc., 406 So. 2d 389 (Ala. 1981), the church, through its board of deacons, 26 1160034 filed a petition seeking a temporary restraining order and an injunction, alleging that, at the annual meeting of the church held pursuant to the duly adopted bylaws, its pastor, Reverend Foster, was removed as pastor by the affirmative vote of the majority of the members present. The church plaintiffs further alleged that Reverend Foster had refused to relinquish the pastorate, that he was promoting disturbances in the church, and that he had threatened to occupy the pulpit after his removal. Reverend Foster had a contract with the church that required him to render full-time services to the church and to receive 90 days' notice of dismissal. Following a hearing, the trial court found that Foster had been removed from the pastorate in accordance with church rules, enjoined him from attempting to occupy the pulpit, and ordered him to vacate the church office and parsonage within four weeks. Reverend Foster argued on appeal that the contract that existed between him and the church required 90 days' notice of dismissal. However, this Court expressly pretermitted deciding any matters pertaining to an alleged civil or property right possessed by Reverend Foster, stating that the sole question before the Court "pertain[ed] to the church's ecclesiastical 27 1160034 right to remove the pastor." Foster, 406 So. 2d at 392. This Court stated: "We pretermit discussion of [the contract] aspect of the case because the narrow issue before us is whether or not the defendant was removed as pastor according to the law of the church. As was stated in Barton v. Fitzpatrick, 187 Ala. 273, 65 So. 390 at 392-3 (1914): "'The pastor of a church in his pastoral office performs a spiritual function. Spiritualities are beyond the reach of the temporal courts. It follows that a church which has employed a pastor, though the employment be for a fixed term and at a fixed salary, may at any time, so far as the civil courts are concerned, depose him from his spiritual office, subject only to inquiry by the courts as to whether the church, or its appointed tribunal, has proceeded according to the law of the church; nor can the payment of his salary, though in arrear, be made a condition precedent to his deposition. And in the case of a church organized on the congregational plan the inquiry is limited to the determination whether in fact the church has acted as a congregation....'" 406 So. 2d at 391. This Court determined that Reverend Foster was removed as the pastor of the church in accordance with the law of the church, and it affirmed the judgment of the trial court. Foster, supra. The foregoing authorities demonstrate this Court's willingness to recognize subject-matter jurisdiction in a 28 1160034 trial court to determine whether church procedure or law has been followed when a church decides an ecclesiastical matter such as the removal of a pastor from the pulpit or the expulsion of members from the congregation. However, authorities to the contrary also exist. In Hundley v. Collins, 131 Ala. 234, 32 So. 575 (1902), the petitioner, following a meeting of the congregation, was removed as a member and deacon of the Christian Church of Huntsville based on a disorderly conduct charge. The petitioner petitioned the trial court for a writ of mandamus, alleging that the church had improperly removed him as a member and deacon because he was not given notice of the meeting and the congregation had not actually voted on the charge of which he was accused. The trial court denied the petition; the petitioner appealed to this Court. This Court affirmed the judgment denying the petition, stating: "There were no property interests involved, nothing touching what are termed the temporalities of the church, as contradistinguished from its spiritualities. The petitioner had no pecuniary interests, in any direction, involved in the proceeding, and it did not touch any of his civil rights at any point. It may be, the church proceeded irregularly according to common usage in such cases; but it is averred, that this church 'is of the denomination known as "Disciples of Christ," of 29 1160034 which Alexander Campbell was the original preacher, if not the founder,' and that 'each church is of itself independent, not subject to the control of any higher or other ecclesiastical judicature.' As an ecclesiastical body, therefore, it was a law unto itself, self-governing and amenable to no court, ecclesiastical or civil, in the discharge of its religious functions. It could make and unmake its rules and regulations for the reception and exclusion of members, and in reference to other matters; and what other body religious or civil could question its right to do so? Certainly, if it violated no civil law, the arm of civil authority was short to reach it. Admitting, therefore, as we must on demurrer, that petitioner had no notice of this proceeding, and that it was irregular according to common usage, the church being independent, and not subject to higher powers, and being a law unto itself for its own procedure in religious matters, what it did towards the expulsion of petitioner was not unlawful, even if it was not politic and wise. If the civil courts may in this instance interfere to question the exclusion of petitioner, they may do so, in any instance where a member of that or any other church is removed, on the allegations of irregular and unfair proceedings for the purpose. This would open a door to untold evils in the administration of church affairs, not consistent with the principles of religious freedom as recognized in this country, where there is no established church or religion, where every man is entitled to hold and express with freedom his own religious views and convictions, and where the separation of state and church is so deeply intrenched in our constitutions and laws. "These views are in accord with the decisions of other States and of the Supreme Court of the United States." 30 1160034 Hundley, 131 Ala. at 242-43, 32 So. at 578. Accordingly, this Court held that the trial court had no jurisdiction of the matter, even where it was alleged that the petitioner's removal from the church was not in accordance with the church procedure. In Putman v. Vath, 340 So. 2d 26 (Ala. 1976), a priest refused to accept a reassignment ordered by the bishop at whose direction the priest was serving. The bishop then suspended the priest from the ministry and ordered him to vacate the rectory where he had been living. When the priest refused, the priest and the bishop reached an agreement whereby the priest would vacate the rectory immediately and the bishop would arrange for the proper canonical tribunal to hear the priest's grievances relative to his reassignment. When the bishop sought to convene the canonical tribunal he was informed by the Vatican that the matter of the reassignment was administrative and not judicial and that, therefore, under the canonical law of the Roman Catholic Church no tribunal could be established. The priest appealed this determination according to canonical law of the church, and the determination was upheld on appeal. The priest then 31 1160034 sued the bishop seeking monetary damages and asking for a judgment declaring that the bishop could not deprive him of a benefice, office, or salary, and could not suspend him from the ministry. The bishop challenged the trial court's jurisdiction to entertain the matter, arguing that the matter was one controlled by church law and not by the civil courts. The priest responded by arguing that the bishop's actions failed to satisfy the basic elements of due process because the priest had no opportunity to appear before a Vatican official with counsel, had no opportunity to present evidence, and had no opportunity to confront or cross-examine adverse witnesses. The trial court entered a summary judgment in favor of the bishop. Relying in part upon Hundley, supra, this Court affirmed the summary judgment on appeal, stating, in part: "The facts in this matter leave no question in our minds that the dispute between [the priest and the bishop] is an ecclesiastical one. Such disputes cannot be resolved in the courts of this state. Harris v. Cosby, 173 Ala. 81, 55 So. 231 (1911); Mt. Olive Primitive Baptist Church v. Patrick, 252 Ala. 672, 42 So. 2d 617 (1949). "The latter case involved a factional dispute within the church which resulted in two members being ousted from membership without notice. One of them was deposed from any official connection in the 32 1160034 church and filed suit seeking reinstatement to the church office he had held. This court held that the civil courts would not intervene in the dispute, noting: "'We think the court would be treading on most dangerous ground and invading a sanctuary not set apart for its jurisdiction if it should permit dissident minorities, believing themselves to have been improperly excluded because of the procedure by which they were exscinded, to invoke its power to determine such a factional dispute. ...' 252 Ala. at 674, 42 So. 2d at 619. "Likewise, in Hundley v. Collins, 131 Ala. 234, 32 So. 575 (1901), this court affirmed the trial court in its refusal to entertain a suit whereby the plaintiff sought reinstatement to the Christian Church of Huntsville, from which the General Assembly of the church had suspended him without notice and a hearing. There, the court said: "'... Admitting ... that petitioner had no notice of this proceeding, and that it was irregular according to common usage, the church being independent, and not subject to higher powers, and being a law unto itself for its own procedure in religious matters, what it did towards the expulsion of petitioner was not unlawful, even if it was not politic and wise. If the civil courts may in this instance interfere to question the exclusion of petitioner, they may do so, in any instance where a member of that or any other church is removed, on the allegation of irregular and unfair proceedings for the purpose. This would open a door to untold evils in the administration of church affairs, not consistent with the principles of religious 33 1160034 freedom as recognized in this country, where there is no established church or religion, where every man is entitled to hold and express with freedom his own religious views and convictions, and where the separation of State and Church is so deeply entrenched in our constitutions and laws.' 131 Ala. at 243, 32 So. at 578." Putnam, 340 So. 2d at 27-28. In Lott v. Eastern Shore Christian Center, 908 So. 2d 922 (Ala. 2005), a church member petitioned the trial court seeking an order requiring the church to make available its financial records for copying and inspection by the member. The member also sought a temporary restraining order ("TRO") prohibiting the church from taking disciplinary action against him, including expulsion from church membership, based on his request to inspect and copy church records. Following a hearing, the trial court entered an order permitting the member to copy and inspect the church records. However, the trial court denied the TRO stating that "this judge isn't going to get involved in the government of a church, because I don't think I have any jurisdiction over who is a member, or not a member, or what is contained in the constitution or the bylaws or anything of that nature." Lott, 908 So. 2d at 925 (emphasis omitted). Meanwhile, on the same day the trial 34 1160034 court denied the TRO, the church unanimously voted to rescind the member's and his wife's membership in the church. The church then refused to allow the member to inspect and copy the church documents on the basis that he was no longer a member of the church. Thereafter, the member filed two rule nisi motions in the the trial court seeking an order requiring the church to show cause as to why it should not be held in contempt. The member argued that he had been refused access to the church records; that his membership in the church had been terminated in contravention of church bylaws; and that the trial court had jurisdiction over the matter to set aside the church's membership action based on a violation of his property interests and due-process rights. The trial court denied the motions for rule nisi. On appeal, this Court noted that the trial court concluded that it had "'no jurisdiction over the internal workings of a church group,'" 908 So. 2d at 928, and stated that the issue was whether the trial court had exceeded its discretion in refusing to enjoin the church from expelling the church member after he had invoked his rights of inspection 35 1160034 under § 10–3A–43, Ala. Code 1975. In affirming the trial court's refusal to enjoin the church based on its lack of subject-matter jurisdiction, this Court stated: "Courts are constrained by the First Amendment of the United States Constitution from 'intrud[ing] into a religious organization's determination of ... ecclesiastical matters such as theological doctrine, church discipline, or the conformity of members to standards of faith and morality.' Singh v. Singh, 114 Cal. App. 4th 1264, 1275, 9 Cal. Rptr. 3d 4, 12 (2004) (emphasis added). 'Of course, [Alabama] courts concerned with restraints under the First Amendment applicable to the states through the Fourteenth [Amendment] are bound by the authoritative interpretations of the First Amendment enunciated by the United States Supreme Court.' 114 Cal. App. 4th at 1280, 9 Cal. Rptr. 3d at 16. "To be sure, this Court has reviewed the actions of churches in expelling members or electing officers. See, e.g., Yates v. El Bethel Primitive Baptist Church, 847 So. 2d 331 (Ala. 2002); Abyssinia Missionary Baptist Church v. Nixon, 340 So. 2d 746 (Ala. 1976); In re Galilee Baptist Church, 279 Ala. 393, 186 So. 2d 102 (1966). Jurisdiction was exercised in such cases, however, only insofar as 'to determine whether an election meeting of a church, or a similar meeting, was conducted so improperly as to render its results void.' Yates, 847 So. 2d at 335–36 (the trial court properly invalidated an election of deacons, where the election meeting (1) was irregular in 'several material respects'; (2) was conducted to circumvent a prior, unappealed injunction; and (3) involved no 'issues of differences in religious faith,' 'creed,' or 'ecclesiastical doctrine'). See Nixon, supra (in an appeal from the grant of the pastor's motion to dismiss filed pursuant to Ala. R. Civ. P. 12(b), former church members, alleging that they had been 36 1160034 improperly expelled, were entitled to 'present evidence' of invalidity or '[ir]regularity of the meeting' in which they were expelled); In re Galilee, supra (court's inquiry was limited to whether the meeting convened for the pastor's removal was so irregular as to void the results). ".... "The mere threat of expulsion, which is all the TRO motion in this case involved, obviously did not involve an issue regarding a secular, or neutral, procedural defect. A challenge such as this one essentially alleges violation of a substantive right, such as a right to be free from the arbitrary action of an ecclesiastical body. However, the United States Supreme Court has clearly stated that no such right exists. Serbian Eastern Orthodox Diocese for the United States of America & Canada v. Milivojevich, 426 U.S. 696, 96 S. Ct. 2372, 49 L. Ed. 2d 151 (1976). "In Milivojevich, the Court considered whether the Illinois Supreme Court had properly invalidated the decision of the Holy Assembly of Bishops and the Holy Synod of the Serbian Orthodox Church ('the Mother Church') to 'defrock' Bishop Dionisije Milivojevich 'on the ground that [the decision] was "arbitrary" because a "detailed review of the evidence disclose[d] that the proceedings resulting in Bishop Dionisije's removal and defrockment were not in accordance with the prescribed procedure of the constitution and the penal code of the Serbian Orthodox Church."' 426 U.S. at 718, 96 S. Ct. 2372. The Court held 'that the inquiries made by the Illinois Supreme Court into matters of ecclesiastical cognizance and polity and the court's action pursuant thereto contravened the First and Fourteenth Amendments.' 426 U.S. at 698, 96 S. Ct. 2372. In doing so, it explained: 37 1160034 "'The conclusion of the Illinois Supreme Court that the decisions of the Mother Church were "arbitrary" was grounded upon an inquiry that persuaded the Illinois Supreme Court that the Mother Church had not followed its own laws and procedures in arriving at those decisions. We have concluded that whether or not there is room for "marginal civil court review" under the narrow rubrics of "fraud" or "collusion" when church tribunals act in bad faith for secular purposes, no "arbitrariness" exception in the sense of an inquiry whether the decisions of the highest ecclesiastical tribunal of a hierarchical church complied with church laws and regulations is consistent with the constitutional mandate that civil courts are bound to accept the decisions of the highest judicatories of a religious organization of hierarchical polity on matters of discipline, faith, internal organization, or ecclesiastical rule, custom, or law. For civil courts to analyze whether the ecclesiastical actions of a church judicatory are in that sense "arbitrary" must inherently entail inquiry into the procedures that canon or ecclesiastical law supposedly requires the church judicatory to follow, or else into the substantive criteria by which they are supposedly to decide the ecclesiastical question. But this is exactly the inquiry that the First Amendment prohibits; recognition of such an exception would undermine the general rule that religious controversies are not the proper subject of civil court inquiry, and that a civil court must accept the ecclesiastical decisions of church tribunals as it finds them.... "'"...." 38 1160034 "'Indeed, it is the essence of religious faith that ecclesiastical decisions are reached and are to be accepted as matters of faith whether or not rational or measurable by objective criteria. Constitutional concepts of due process, involving secular notions of "fundamental fairness" or impermissible objectives, are therefore hardly relevant to such matters of ecclesiastical cognizance.' "426 U.S. at 712–16, 96 S. Ct. 2372 (emphasis added; footnotes omitted). See also Kaufmann v. Sheehan, 707 F.2d 355 (8th Cir. 1983); Green v. United Pentecostal Church Int'l, 899 S.W.2d 28 (Tex. Ct. App. 1995). "Milivojevich involved the discipline of a bishop, rather than a church member such as Lott. Nevertheless, '[f]or essentially the same reasons that courts have refused to interfere with the basic ecclesiastical decision of choosing the minister ..., this Court must not interfere with the fundamental ecclesiastical concern of determining who is and who is not [a Church] member.' Burgess v. Rock Creek Baptist Church, 734 F. Supp. 30, 33 (D.D.C. 1990). See also Kral v. Sisters of the Third Order Regular of St. Francis, 746 F.2d 450 (8th Cir. 1984); Nunn v. Black, 506 F. Supp. 444, 448 (W.D. Va.) ('the fact that the local church may have departed arbitrarily from its established expulsion procedures in removing the plaintiffs is of no constitutional consequence, whether one appeals the First, Fifth, or Fourteenth Amendments'), aff'd, 661 F.2d 925 (4th Cir. 1981); Caples v. Nazareth Church of Hopewell Ass'n, 245 Ala. 656, 660, 18 So. 2d 383, 386 (1944) ('"we have no power to revise or question ordinary acts of church membership, or of excision from membership"'). "Lott's motion stated no grounds for a TRO, other than an allegedly intractable disagreement 39 1160034 over 'rights of access [to] and copying [of] Church records.' In seeking to preempt church discipline on these grounds, the motion for a TRO essentially invited the court to become embroiled in the merits of a 'fundamental ecclesiastical concern' with which the courts must have nothing to do, namely, 'determining who is and who is not [a Church] member.' Burgess, 734 F. Supp. at 33. Lott has cited no case preempting ecclesiastical discipline as he urged the trial court to do, and we have found none. Because Lott failed to show a 'reasonable chance of success on the merits,' the trial court did not err in denying his motion for a TRO." Lott, 908 So. 2d at 928-31 (footnotes omitted). See also Ex parte Board of Trs./Dirs. &/or Deacons of Old Elam Baptist Church, 983 So. 2d 1079, 1093 (Ala. 2007) (quoting heavily from Lott, supra, and holding that the trial court cannot inquire into or assess the substantive criteria upon which terminations of church memberships are based). Justice Parker noted in his special concurrence in Ex parte Tatum, 185 So. 3d 434 (Ala. 2015), that this Court's recognition of Serbian Eastern Orthodox Diocese for the United States of America & Canada v. Milivojevich, 426 U.S. 696 (1976), in Lott signaled a modification in those authorities recognizing the subject-matter jurisdiction of the trial court to determine whether church procedure or law had been followed in church proceedings in which a church decides an 40 1160034 ecclesiastical matter. The holdings in Hundley, supra, Putman, supra, Milivojevich, supra, and Lott, supra, indicate that a trial court lacks subject-matter jurisdiction to determine whether church procedure or law had been followed in a church proceeding in which the church decided an ecclesiastical matter. Perhaps Justice Murdock stated the rule best, while a member of the Court of Civil Appeals, in his special concurrence in McGlathery v. Richardson, 944 So. 2d 968, 975 (Ala. Civ. App. 2006)(Murdock, J., concurring specially): "[I]t is the nature of the underlying dispute that determines whether a court has jurisdiction to consider matters of church procedure. As Hundley [v. Collins, 131 Ala. 234, 32 So. 575 (1902),] clearly articulates, if the substantive dispute is spiritual or ecclesiastical in nature, it is irrelevant to the civil court whether the church followed its own procedures, per se; the civil court has no jurisdiction to consider the matter. See also, e.g., Caples v. Nazareth Church of Hopewell Ass'n, 245 Ala. 656, 18 So. 2d 383 (1944). Accord Sale v. First Regular Baptist Church, 62 Iowa 26, 17 N.W. 143 (1883); and Evans v. Shiloh Baptist Church, 196 Md. 543, 77 A.2d 160 (1950)." Here, the Ray plaintiffs sought a determination from the trial court that Taylor's removal as pastor of PMBC was valid and in accordance with the PMBC bylaws. The trial court concluded in its order that it had subject-matter jurisdiction 41 1160034 to "recognize that a decision made by the majority of the members of [PMBC] to remove [Taylor] as the pastor was a valid decision." The trial court then proceeded to note that, although the PMBC bylaws "did provide for boards to be established and persons to be appointed to those positions to make decisions" regarding the merit of any charges levied against a pastor upon which dismissal is based, no such boards existed at the time of the August 28, 2012, meeting in which a purported majority of PMBC's members voted to dismiss Taylor. The trial court -- recognizing that, "[i]n a Baptist church, the majority of the congregation is the highest adjudicatory body, unless the church bylaws provide otherwise" and that the "PMBC bylaws did not specifically state that the majority of the congregation would not be considered the highest adjudicatory body of the church" –- determined the members who voted to remove Taylor as the pastor of PMBC on August 28, 2012, constituted a majority of the membership of PMBC. Thus, the trial court held that the meeting conducted on August 28, 2012, in which Taylor was removed as the pastor of PMBC was a valid meeting. The trial court then ordered that Taylor be removed as pastor of PMBC immediately and that 42 1160034 leadership and/or control of the church be vested with the Ray plaintiffs. As discussed above, the removal of Taylor as the pastor of PMBC was purely an ecclesiastical matter not involving a property right and the trial court lacked the jurisdiction to consider it. The determination of whether his removal was valid and in accordance with PMBC's bylaws necessarily required the trial court to delve into matters relating to PMBC's internal organization and its ecclesiastical or spiritual rule, custom, or law. Based on the decisions in Hundley, supra, Putman, supra, Milivojevich, supra, and Lott, supra, the trial court lacked the jurisdiction to make that inquiry. Accordingly, to the extent that the trial court determined that the removal of Taylor as the pastor of PMBC was valid and, to that end, ordered that his removal be effective immediately, the trial court lacked the subject- matter jurisdiction to make such a determination because the matter was purely ecclesiastical in nature. Conclusion Because we conclude that the trial court lacked the subject-matter jurisdiction to make a determination as to 43 1160034 whether Taylor's dismissal as the pastor of PMBC was valid, we reverse the judgment entered in favor of the Ray plaintiffs upholding his dismissal and remand the cause to the trial court to enter an order dismissing the Ray plaintiffs' complaint.7 REVERSED AND REMANDED WITH DIRECTIONS. Stuart, C.J., and Parker, Main, Wise, and Sellers, JJ., concur. Murdock, J., concurs specially. Shaw and Bryan, JJ., concur in the result. 7Because we conclude that the trial court lacked the subject-matter jurisdiction to make a determination as to whether Taylor's dismissal as the pastor of PMBC was valid, we pretermit discussion of the issue raised by the Taylor defendants as to whether the five members who voted in favor of Taylor's dismissal actually constituted a majority of the congregation of PMBC. 44 1160034 MURDOCK, Justice (concurring specially). I concur in all aspects of the main opinion. I write separately to comment briefly on the issue of the trial court's authority to decide whether it had jurisdiction over the dispute before it. Alabama law provides that "[a] court has jurisdiction to determine its own jurisdiction." Jefferson Cty. Comm'n v. Edwards, 32 So. 3d 572, 583 (Ala. 2009). We do not say that a trial court has jurisdiction to decide its own jurisdiction only when it does have jurisdiction. Nor do we say that a trial court has jurisdiction only to make correct decisions regarding its own jurisdiction. A trial court either has the jurisdiction to decide or it does not. Our jurisprudence holds that it does. Here, the trial court decided the issue of its own jurisdiction. It is true that it then turned to the substantive merits of the case before it, but, before doing so, it expressly took up and decided the issue whether it had jurisdiction over those merits. As it happens, the trial court erred in its decision as to its own jurisdiction. It is that error and only that error 45 1160034 -- as to an issue over which the trial court had jurisdiction -- that this Court addresses in its opinion today. Because the trial court had jurisdiction over that issue, its decision addressing that issue is not void for lack of jurisdiction. Likewise, because the trial court had jurisdiction over that issue, this Court has jurisdiction over the appeal of its judgment as to that issue and, accordingly, this Court's "reversal" of the trial court's judgment is appropriate. The alternative -- "dismissing" this appeal -- would imply that the only portion of the trial court's judgment that we address -- its decision that it had jurisdiction -- was void. I see no basis for such a conclusion. The trial court's decision as to its own jurisdiction was one made in error, not one beyond its jurisdiction to make. 46 1160034 SHAW, Justice (concurring in the result). I concur in the result. I write specially to note the following. I. The appellate courts of this State have in recent years strived to explain the difference between a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss for failure to state a claim and a Rule 12(b)(1), Ala. R. Civ. P., motion to dismiss for lack of subject-matter jurisdiction: "There is a significant difference between proposing that a trial court must summarily adjudicate a case in favor of a defendant because a plaintiff is not entitled to prevail on certain claims as a matter of law (see Rule 12(b)(6), Ala. R. Civ. P.) and proposing that a trial court cannot adjudicate a case because it lacks jurisdiction over the subject matter (see Rule 12(b)(1), Ala. R. Civ. P.)." Hill v. Hill, 89 So. 3d 116, 120 (Ala. Civ. App. 2010). Unlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion is not converted to a motion for a summary judgment by the attachment of materials outside the pleadings: "Affidavits, depositions, answers to interrogatories and similar evidentiary matter may be presented on a motion under Rule 12. Such matter is freely considered on a motion attacking jurisdiction." Committee Comments on the 1973 Adoption of 47 1160034 Rule 12. The attachment of matters outside the pleadings, if not excluded, converts only motions under Rule 12(b)(6) and Rule 12(c), Ala. R. Civ. P., into motions for a summary judgment. Committee Comments on the 1973 Adoption of Rule 12 ("On a motion ... pursuant to Rule 12(b)(6), or a motion ... pursuant to Rule 12(c), if matter outside the pleadings is presented to and not excluded by the court, the motion is to be treated as one for summary judgment pursuant to Rule 56."). However, "[u]nlike a motion pursuant to subsection (6) of Rule 12(b), a motion under subsection (1) of that rule is a 'speaking' motion that may be supported or opposed by materials outside the complaint, i.e., '[e]videntiary matters may be freely submitted on a motion to dismiss that attacks jurisdiction.'" Hutchinson v. Miller, 962 So. 2d 884, 886 n.2 (Ala. Civ. App. 2007) (quoting Williams v. Skysite Commc'ns Corp., 781 So. 2d 241, 245 (Ala. Civ. App. 2000)). In reviewing a motion to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction, this Court has noted the existence of two distinct standards, depending on the nature of the motion: "'A court ruling on a Rule 12(b)(1) motion to dismiss "may consider documents 48 1160034 outside the pleadings to assure itself that it has jurisdiction." Al–Owhali [v. Ashcroft], 279 F. Supp. 2d [13,] 21 [(D.D.C. 2003)]; see also Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987) ("In 12(b)(1) proceedings, it has been long accepted that the judiciary may make appropriate inquiry beyond the pleadings to satisfy itself on [its] authority to entertain the case." (internal citations and quotation marks omitted)). The level of scrutiny with which the Court examines the allegations in the complaint that support a finding of jurisdiction, however, depends upon whether the motion to dismiss asserts a facial or factual challenge to the court's jurisdiction. See I.T. Consultants v. Pakistan, 351 F.3d 1184, 1188 (D.C. Cir. 2003). "'Facial challenges, such as motions to dismiss for lack of standing at the pleading stage, "attack[] the factual allegations of the complaint that are contained on the face of the complaint." Al–Owhali, 279 F. Supp. 2d at 20 (internal quotation marks and citation omitted). "If a defendant mounts a 'facial' challenge to the legal sufficiency of the plaintiff's jurisdictional allegations, the court must accept as true the allegations in the complaint and consider the factual allegations of the complaint in the light most favorable to the non-moving party." Erby [v. United States,] 424 F. Supp. 2d [180, 181 (D.D.C. 2006)]; see also I.T. Consultants, 351 F.3d at 1188. The court may look beyond the allegations contained in the complaint to decide a facial challenge, "as long as it still accepts the factual allegations in the complaint as true." Abu Ali [v. Gonzales,] 387 F. Supp. 49 1160034 2d [16,] 18 (D.D.C. 2005)]; see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253–54 (D.C. Cir. 2005) ("At the pleading stage .... [w]hile the district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction, the court must still accept all of the factual allegations in the complaint as true." (internal citations and quotation marks omitted)). "'Factual challenges, by contrast, are "addressed to the underlying facts contained in the complaint." Al–Owhali, 279 F. Supp. 2d at 20. Where a defendant disputes the factual allegations in the complaint that form the basis for a court's subject matter jurisdiction, "the court may not deny the motion to dismiss merely by assuming the truth of the facts alleged by the plaintiff and disputed by the defendant." Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000). Instead, a court deciding a Rule 12(b)(1) motion asserting a factual challenge "must go beyond the pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss." Id. In such situations, "the plaintiff's jurisdictional averments are entitled to no presumptive weight; the court must address the merits of the jurisdictional claim by resolving the factual disputes between the parties." Erby, 424 F. Supp. 2d at 181 (internal quotations omitted); see also Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. [1977]) (holding that a court ruling on a factual challenge to its jurisdiction is not required to accept the plaintiff's factual allegations 50 1160034 as true, but rather "is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case ... and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims").' "Lindsey v. United States, 448 F. Supp. 2d 37, 42–43 (D.D.C. 2006). Thus, a Rule 12(b)(1) motion can allege either a facial challenge, in which the court accepts as true the allegations on the face of the complaint, or a factual challenge, which requires consideration of evidence beyond the face of the complaint." Ex parte Safeway Ins. Co. of Alabama, 990 So. 2d 344, 349-50 (Ala. 2008). An appellate court reviews the trial court's application of these standards and resulting judgment "de novo," that is to say, with no presumption of correctness. See Hill, 89 So. 3d at 117–18. II. Although I agree with the substantive analysis in the main opinion concluding that the trial court lacked subject- matter jurisdiction, I have concerns regarding whether the ultimate disposition of this appeal should be a dismissal instead of a reversal. Generally, when a trial court lacks subject-matter jurisdiction, then all orders and judgments, except for a 51 1160034 dismissal for lack of jurisdiction, are void "ab initio." Attenta, Inc. v. Calhoun, 97 So. 3d 140, 146 (Ala. 2012) ("It is well settled that if the trial court lacks subject-matter jurisdiction over an action, then all orders and judgments in that action--except an order dismissing the case--are void ab initio."), Bernals, Inc. v. Kessler-Greystone, LLC, 70 So. 3d 315, 319 (Ala. 2011) ("When a circuit court lacks subject-matter jurisdiction, all orders and judgments entered in the case, except an order of dismissal, are void ab initio."). "Ab initio" means "[f]rom the beginning; from the first act; from the inception." Black's Law Dictionary 6 (6th ed. 1990). Because the trial court in the instant case lacked jurisdiction over the subject matter, its decision was void from the beginning. A void judgment cannot support an appeal: "'A judgment entered by a court lacking subject-matter jurisdiction is absolutely void and will not support an appeal ....'" MPQ, Inc. v. Birmingham Realty Co., 78 So. 3d 391, 394 (Ala. 2011) (quoting Vann v. Cook, 989 So. 2d 556, 559 (Ala. Civ. App. 2008)). In such cases, "'an appellate court must dismiss an attempted appeal from such a void judgment.'" Id. 52 1160034 It would thus appear to me that the main opinion, by holding (correctly, in my mind) that the trial court lacked subject- matter jurisdiction, recognizes that the trial court's decision was void ab initio. In such a case, the trial court's decision would not support an appeal, and a dismissal is required. On the other hand, a court has jurisdiction to determine whether it has jurisdiction. Jefferson Cty. Comm'n v. Edwards, 32 So. 3d 572, 583 (Ala. 2009) ("A court has jurisdiction to determine its own jurisdiction."). When a court determines that it does not have jurisdiction, it has the power to order the case dismissed. Attenta and Bernals, supra. If a court erroneously rules that it does have jurisdiction, as in this case, the question arises whether it had jurisdiction to do so if this Court later holds that it had no jurisdiction in the first place. However, it is not necessary for me to resolve this issue: The result of the main opinion is that the trial court must dismiss the complaint. I concur in that result. 53

July 28, 2017

346670ba-bc90-41de-a7d1-8230886558a6

Family Security Credit Union v. Gene McClure

N/A

1151005

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

1ed5bb42-0e0c-4b63-8435-42cc4c26a5e2

Ex parte City of Guntersville.

N/A

1151214

Alabama

Alabama Supreme Court

05/26/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151214 ____________________ Ex parte City of Guntersville PETITION FOR WRIT OF MANDAMUS (In re: Margaret Hulgan v. City of Guntersville) (Marshall Circuit Court, CV-14-900328) PARKER, Justice. The City of Guntersville ("the City") petitions this Court for a writ of mandamus ordering the Marshall Circuit 1151214 Court ("the circuit court") to vacate its order denying the City's motion for a summary judgment and to enter a summary judgment in favor of the City in an action filed by Margaret Hulgan against the City. Facts and Procedural History The City owns and operates a municipal park, known as Civitan Park. The deed conveying the property on which the park is located to the City specified that the property being conveyed was "for public recreation for the benefit of all members of the general public without distinction or discrimination and in accordance with generally recognized standards of development and operation of such lands for public parks or for areas providing public access to the waters of public lakes." The affidavit testimony of Cecil Conerly III, the director of the department of parks and recreation for the City, states that the City "does not charge any fee or other expense to the general public for the use of ... Civitan Park." Conerly's affidavit further states that Civitan Park "is open for use by members of the general public without cost" and that the City "neither obtains nor derives 2 1151214 any financial benefit, directly or indirectly, from the use of ... Civitan Park." On July 4, 2012, the City hosted its annual fireworks show at Civitan Park, which Hulgan attended. Hulgan's deposition testimony indicates that, on July 4, 2012, Leroy Windsor drove Hulgan to Civitan Park and that the two of them arrived at Civitan Park at 10:00 a.m. Windsor parked his vehicle in a parking lot in Civitan Park. Conerly's affidavit includes the following description of the parking lot in which Windsor parked his vehicle: "There are a series of vertical poles located at the edge of the parking lot to Civitan Park and the grassy area of the Park. The poles have holes in the top which allow for steel cabling to be run horizontally through the poles to prevent vehicles from entering the grassy area of the Park. Several of the poles are supported by a diagonal crossbar." It is undisputed that, on July 4, 2012, there was no steel cabling running horizontally between the poles. After parking his vehicle, Windsor and Hulgan exited the parking lot and went to a pavilion in Civitan Park. Hulgan's deposition testimony indicates that, in walking to the pavilion, she walked directly past the pole and diagonal crossbar she would, later that evening, trip over, resulting in her fall. 3 1151214 Hulgan's deposition testimony indicates that she did not pay any attention to the pole and diagonal crossbar as she walked past them going to the pavilion. Hulgan also stated in her deposition testimony that "[i]f [she] looked over at [the pole and diagonal crossbar she] probably would've seen [them]." Hulgan and Windsor remained near the pavilion until the fireworks show concluded at approximately 9:30 p.m. After the fireworks show, Hulgan and Windsor, along with friends and members of Hulgan's family, walked back to the parking lot where Windsor had parked his vehicle. Hulgan's deposition testimony indicates that, although there were security lights illuminating the parking lot, the lighting "was very poor." Hulgan's deposition testimony also indicates that there was enough light to see that she was walking toward Windsor's truck. The parties also presented competing expert affidavit testimony concerning the visibility of the diagonal crossbar and the danger presented by it. Hulgan's deposition testimony indicates that, as she was walking, she tripped over a diagonal crossbar supporting one of the poles at the edge of the parking lot and fell to the ground. Hulgan's deposition testimony states that she landed on her "right shoulder area." 4 1151214 Hulgan incurred various injuries to the area of her right shoulder as a result of the fall. Hulgan's deposition testimony indicates that she had attended each of the City's annual fireworks shows at Civitan Park "[e]ver since [the City] started shooting fireworks" and that she had watched the fireworks shows from Civitan Park "for several years"; she could not recall an exact number of years. Hulgan's deposition testimony also states that she had watched the annual fireworks show from the pavilion every year, if the pavilion was unoccupied when she arrived at Civitan Park. Hulgan presented the affidavit testimony of Thomas E. Cooper, a professional engineer. Cooper's affidavit testimony indicates that he inspected the diagonal crossbar over which Hulgan allegedly tripped and the area surrounding the crossbar "at [or] about the time Ms. Hulgan fell." Cooper's affidavit testimony further states that, in his opinion, "the light in question and route of ingress/egress (including the pole and [diagonal crossbar]) were unreasonably dangerous at the time of Ms. Hulgan's fall." 5 1151214 David Wood, the supervisor of maintenance for the City's department of parks and recreation, provided affidavit testimony indicating that the diagonal crossbar over which Hulgan allegedly tripped had been installed at Civitan Park more than 19 years before Hulgan's fall. Wood's affidavit testimony also indicates that, before Hulgan's incident, the City "had no knowledge that there was any potential of a nighttime trip hazard presented by the crossbar upon which [Hulgan] contends she tripped and fell in this case." Wood's affidavit testimony indicates that, "[d]uring the entire time of [Wood's] employment as [s]upervisor for [m]aintenance," the City had not received a complaint that the diagonal crossbar over which Hulgan alleges she tripped presented a dangerous condition. On June 30, 2014, Hulgan sued the City, alleging negligence. Hulgan specifically alleged that the City "owed a duty to ... Hulgan not to create, cause, and/or allow unreasonably dangerous conditions to exist at or on [the] City['s] ... property." Hulgan also alleged that the City "recklessly and with knowledge of the potential consequences of its actions, breached its duty to ... Hulgan ...." Hulgan 6 1151214 also alleged that the diagonal crossbar over which she says she tripped was a hidden danger; thus, Hulgan alleged that the City is not entitled to immunity under §§ 35-15-1 et seq. and 35-15-20 et seq., Ala. Code 1975 (hereinafter referred to collectively as "the recreational-use statutes"). On July 16, 2014, the City filed an answer to Hulgan's complaint alleging, among other things, that it was entitled to immunity under the recreational-use statutes and under § 11-47-190, Ala. Code 1975. On June 14, 2016, the City filed a motion for a summary judgment. The City argued that it was entitled to immunity from Hulgan's action under the recreational-use statutes and under § 11-47-190. On August 22, 2016, Hulgan filed a response to the City's summary-judgment motion. On August 24, 2016, the circuit court entered an order denying the City's summary-judgment motion. The City then filed in this Court a petition for a writ of mandamus ordering the circuit court to vacate its order denying the City's summary-judgment motion and to enter a summary judgment in its favor. Standard of Review 7 1151214 We apply the following standard of review to a mandamus proceeding challenging the denial of a motion for a summary judgment based on a claim of immunity: "'While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion for summary judgment grounded on a claim of immunity is reviewable by petition for writ of mandamus.' Ex parte Rizk, 791 So. 2d 911, 912 (Ala. 2000). A writ of mandamus is an extraordinary remedy available only when there is: '(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.' Ex parte BOC Group, Inc., 823 So. 2d 1270, 1272 (Ala. 2001)." Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003). This Court has stated that the recreational-use statutes provide immunity to qualifying landowners. See Tuders v. Kell, 739 So. 2d 1069, 1072 (Ala. 1999), and Owens v. Grant, 569 So. 2d 707, 710-12 (Ala. 1990). Discussion The City first argues that it has a clear legal right to immunity from Hulgan's claims against it under the recreational-use statutes. In Ex parte City of Geneva, 707 So. 2d 626 (Ala. 1997), this Court set forth the following applicable law concerning the recreational-use statutes: 8 1151214 "Sections 35–15–1 through –5[, Ala. Code 1975,] of the recreational use statutes, appearing in Article 1 of Chapter 15, define and limit the duties of an owner of recreational land in relation to a person using the land for recreational purposes. Under these sections, '[a]n owner, whether public or private, owes no duty to users of the premises except for injury caused by a willful or malicious failure to guard or warn against a dangerous condition, use, structure, or activity.' Poole v. City of Gadsden, 541 So. 2d 510 (Ala. 1989); § 35–15–3, Ala. Code 1975. "Unlike Article 1, Article 2, consisting of §§ 35–15–20 through –28, [Ala. Code 1975,] applies specifically to owners of noncommercial public recreational land, such as the City here. These sections 'provide such landowners with even greater protections than §§ 35–15–1 through –5.' Poole, at 513. See also Grice v. City of Dothan, 670 F. Supp. 318, 321 (M.D. Ala. 1987) ('[Article 2] further limits the liability of owners of land'); Clark v. Tennessee Valley Authority, 606 F. Supp. 130 (N.D. Ala. 1985) ('[Article 2] provides [landowners] even tighter limitations than [Article 1]'). The recreational use statutes appearing in Article 2 provide the following limitations on landowner duty and liability: "'§ 35–15–22[, Ala. Code 1975]. "'Except as specifically recognized by or provided in this article, an owner of outdoor recreational land who permits non-commercial public recreational use of such land owes no duty of care to inspect or keep such land safe for entry or use by any person for any recreational purpose, or to give warning of a dangerous condition, use, structure, or activity on such land to persons entering for such purposes.' 9 1151214 "'§ 35–15–23[, Ala. Code 1975]. "'Except as expressly provided in this article, an owner of outdoor recreational land who either invites or permits non-commercial public recreational use of such land does not by invitation or permission thereby: "'(1) Extend any assurance that the outdoor recreational land is safe for any purpose; "'(2) Assume responsibility for or incur legal liability for any injury to the person or property owned or controlled by a person as a result of the entry on or use of such land by such person for any recreational purpose; or "'(3) Confer upon such person the legal status of an invitee or licensee to whom a duty of care is owed.'" 707 So. 2d at 628-29. Hulgan did not argue below and does not argue in her response before this Court that the recreational-use statutes do not apply in this case. Instead, Hulgan argued below and argues before this Court that she presented substantial evidence indicating that the conditions of § 35-15-24, Ala. Code 1975, which "carves out an exception to the liability limitations provided in §§ 35–15–22 and –23," Ex parte City of 10 1151214 Geneva, 707 So. 2d at 629, were satisfied, allowing her to maintain her action against the City. Section 35-15-24 states, in pertinent part: "(a) Nothing in this article limits in any way legal liability which otherwise might exist when such owner has actual knowledge: "(1) That the outdoor recreational land is being used for non-commercial recreational purposes; "(2) That a condition, use, structure, or activity exists which involves an unreasonable risk of death or serious bodily harm; "(3) That the condition, use, structure, or activity is not apparent to the person or persons using the outdoor recreational land; and "(4) That having this knowledge, the owner chooses not to guard or warn, in disregard of the possible consequences. "(b) The test set forth in subsection (a) of this section shall exclude constructive knowledge by the owner as a basis of liability and does not create a duty to inspect the outdoor recreational land." Initially, we note that Hulgan has the burden of proving by substantial evidence that the exception of § 35-15-24 applies. See Ex parte City of Geneva, 707 So. 2d at 629 (agreeing with the noncommercial landowner's argument that the 11 1151214 plaintiff "failed to meet her burden of proving [by substantial evidence] that the exception of § 35–15–24 applies"). Given the use of the conjunctive conjunction "and" in the list in § 35-15-24(a)(1)-(4), Ala. Code 1975, Hulgan must present substantial evidence of each element to prove that the exception of § 35-15-24 applies. See, e.g., Payne v. State, 791 So. 2d 383, 398 (Ala. Crim. App. 1999)(stating that use "of the conjunctive 'and' between" subparts of a rule required the satisfaction of all the subparts of the rule); see also Michael L. Roberts, Alabama Tort Law § 8.07 (6th ed. 2015)("[P]laintiff must show that the [landowner], with actual knowledge of each of the elements [set forth in § 35-15- 24(a)(1)-(3)], chose not to guard or warn against the danger." (emphasis added)). The City argues in its petition before this Court, as it did below, that Hulgan failed to meet her burden in proving that the exception of § 35-15-24 applies. Essentially, the City argues that Hulgan failed to present substantial evidence indicating that the City had the actual knowledge contemplated in § 35-15-24(a)(2). The City argues that it "had no actual notice as required by Ala. Code [1975,] § 35-15-24(b) that the 12 1151214 alleged defect giving rise to [Hulgan's] injuries in this case constituted an unreasonable risk of death or serious bodily harm." The City does not deny that it had actual knowledge of the existence of the diagonal crossbar over which Hulgan allegedly tripped. Instead, the City argues that Hulgan failed to present substantial evidence that the City had actual knowledge that the diagonal crossbar presented a "condition, use, structure, or activity ... which involves an unreasonable risk of death or serious bodily harm." In support of its argument, the City relies on Wood's affidavit testimony. As summarized above, Wood's affidavit testimony indicates that, despite the diagonal crossbar having been in place for nearly 20 years before Hulgan allegedly tripped on it, the City had not received a complaint indicating that the crossbar presented a dangerous condition. Further, Wood's affidavit testimony states that the City "had no knowledge that there was any potential of a nighttime trip hazard presented by the crossbar upon which [Hulgan] contends she tripped and fell in this case." In response, Hulgan argues that the City did have actual knowledge that the diagonal crossbar over which Hulgan 13 1151214 allegedly tripped presented a "condition, use, structure, or activity ... which involves an unreasonable risk of death or serious bodily harm." In support of her argument, Hulgan relies on Cooper's affidavit testimony. As summarized above, Cooper concluded "that the light in question and route of ingress/egress (including the pole and [diagonal crossbar]) were unreasonably dangerous." However, Cooper's affidavit is merely an opinion on the danger allegedly presented by the diagonal crossbar. Although such evidence may be relevant to a showing that the City had constructive knowledge1 of "a condition, use, structure, or activity ... which involves an unreasonable risk of death or serious bodily harm," § 35-15- 24(b) specifically states that "[t]he test set forth in subsection (a) of this section shall exclude constructive knowledge by the owner as a basis of liability ...." (Emphasis added.) Nothing in Cooper's affidavit testimony 1In Hale v. Kroger Ltd. Partnership I, 28 So. 3d 772, 779 (Ala. Civ. App. 2009), the Court of Civil Appeals, citing S.H. Kress & Co. v. Thompson, 267 Ala. 566, 569, 103 So. 2d 171, 174 (1957), provided the following explanation of constructive knowledge: "A [premises owner] is charged with knowledge of a hazard if the evidence shows that the hazard has existed on the premises for such a length of time that a reasonably prudent [premises owner] would have discovered and removed it." 14 1151214 rebuts Wood's affidavit testimony indicating that the City did not have actual knowledge that the diagonal crossbar presented "a condition, use, structure, or activity ... which involves an unreasonable risk of death or serious bodily harm." Accordingly, we must conclude that Hulgan has failed to present substantial evidence in support of § 35-15-24(a)(2) and, thus, has not demonstrated that she is entitled to maintain her action against the City. We note that Hulgan also appears to argue that she presented substantial evidence in support of § 35-15-24(a)(4), Ala. Code 1975, which requires her to present substantial evidence that the City chose "not to guard or warn, in disregard of the possible consequences," against the "unreasonable risk of death or serious bodily harm" allegedly presented by the diagonal crossbar over which Hulgan says she tripped. Hulgan argues in her response that she presented substantial evidence that the City "made a conscious cho[ic]e to remove the [steel] cable which prevented individuals from walking between the [poles] of the fence as [Hulgan] did." Hulgan further argues that the City had actual knowledge "of 15 1151214 the fact the [steel] cable was gone and there were no warnings regarding the [crossbar] upon which [Hulgan] fell." Assuming for the sake of argument that Hulgan is correct in her assertion that she presented evidence sufficient to satisfy the requirement in § 35-15-24(a)(4),2 Hulgan has not explained how this relates to her evidentiary burden of proving that the City had the actual knowledge contemplated in § 35-15-24(a)(2). As discussed above, Hulgan has not directed this Court's attention to any evidence indicating that the City had actual knowledge that the diagonal crossbar over which Hulgan allegedly tripped presented "a condition, use, structure, or activity ... which involve[d] an unreasonable risk of death or serious bodily harm." Based on the foregoing, we conclude that the City has demonstrated that it has a clear legal right to immunity under the recreational-use statutes from Hulgan's claim against it. 2The City disputes whether Hulgan presented evidence sufficient to demonstrate that the City chose "not to guard [against] or warn [of], in disregard of the possible consequences," the danger allegedly presented by the pole and diagonal crossbar over which Hulgan allegedly tripped. Specifically, the City notes that there is "no evidence whatsoever ... either (1) that any cable was ever installed at any time prior to plaintiff's fall, or that if it was, (2) it was the City that removed the cable." The City's reply brief, at p. 2 n. 1. 16 1151214 The City has demonstrated that Hulgan failed to present substantial evidence in support of each of the elements set forth in § 35-15-24. Our conclusion pretermits discussion of the City's other arguments. Conclusion We grant the City's petition and direct the circuit court to vacate its order denying the City's summary-judgment motion and to enter a summary judgment for the City. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Main, and Bryan, JJ., concur. 17

May 26, 2017

a9f4ec8c-4fbc-431a-9bed-d8a96ec687c5

Rainbow Cinemas, LLC v. Consolidated Construction Company of Alabama

N/A

1160070

Alabama

Alabama Supreme Court

Rel: 06/16/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160070 ____________________ Rainbow Cinemas, LLC, et al. v. Consolidated Construction Company of Alabama Appeal from Madison Circuit Court (CV-16-901237) PER CURIAM. Rainbow Cinemas, LLC ("Rainbow"), Ambarish Keshani, and Harshit D. Thakker (hereinafter collectively referred to as "the defendants") appeal the Madison Circuit Court's order denying their motion to compel arbitration of a contract 1160070 dispute with Consolidated Construction Company of Alabama ("CCC"). Facts and Procedural History On April 14, 2015, Rainbow and CCC entered into a contract ("the contract"). In the contract, CCC agreed to provide specified services in constructing a movie theater for Rainbow.1 The contract consists of two documents. First, the parties signed the American Institute of Architects "Document A101-2007 -- Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum" ("the agreement"). The agreement incorporates by reference American Institute of Architects "Document A201-2007 -- General Conditions of the Contract for Construction" ("the general conditions"). The agreement contains an article entitled "Dispute Resolution." Section 6.1 in this article, entitled "Initial Decision Maker," states: "The Architect will serve as Initial Decision Maker pursuant to Section 15.2 of [the general conditions], unless the parties appoint ... another 1This is the second contract between the parties. In the first contract, executed on August 19, 2014, CCC was to provide specified construction services to prepare a site location for the construction of the movie theater. 2 1160070 individual, not a party to this Agreement, to serve as Initial Decision Maker." The agreement identifies "Hay Buchanan Architects, P.C." as the architect. Section 15.2 of the general conditions, entitled "Initial Decision," sets forth the extensive process by which the parties are to obtain an initial decision on a claim. Section 15.2.1 of the general conditions requires that any claim arising from the contract "be referred to the Initial Decision Maker for initial decision." Section 15.2.1 further states that "an initial decision shall be required as a condition precedent to mediation of any Claim arising prior to the date final payment is due, unless 30 days have passed after the Claim has been referred to the Initial Decision Maker with no decision having been rendered." Section 6.2 of the agreement, entitled "Binding Dispute Resolution," states: "For any Claim subject to, but not resolved by, mediation pursuant to Section 15.3 of [the general conditions], the method of binding dispute resolution shall be ... Arbitration pursuant to Section 15.4 of [the general conditions]." Section 15.3.1 of the general conditions states that "Claims disputes, or other matters in 3 1160070 controversy arising out of or related to the Contract ... shall be subject to mediation as a condition precedent to binding dispute resolution." Section 15.3.2 sets forth the mediation process. Section 15.4 of the general conditions, entitled "Arbitration," states: "§ 15.4.1 If the parties have selected arbitration as the method for binding dispute resolution in the [a]greement, any Claim subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association in accordance with its Construction Industry Arbitration Rules in effect on the date of the [a]greement. A demand for arbitration shall be made in writing, delivered to the other party to the Contract, and filed with the person or entity administering the arbitration. The party filing a notice of demand for arbitration must assert in the demand all Claims then known to that party on which arbitration is permitted to be demanded. ".... "§ 15.4.2 The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. "§ 15.4.3 The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to the [a]greement shall be specifically enforceable under applicable law in any court having jurisdiction thereof." 4 1160070 The Construction Industry Arbitration Rules of the American Arbitration Association ("the AAA") in effect on the date of the agreement, which are referenced in § 15.4.1 of the general conditions, state, in pertinent part: "R-9 Jurisdiction "(a) The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement. "(b) The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part." During the course of CCC's performance under the contract, a dispute arose between Rainbow and CCC. On August 24, 2015, in accordance with the contract, CCC referred its claim to the initial decision maker, which was the architect, Hay Buchanan. In a letter dated October 30, 2015, counsel for CCC informed counsel for Rainbow that "[t]he Initial Decision Maker was unable to issue any decision on the Claim within the required time period, partially or entirely as a result of interference by [Rainbow]. Notwithstanding that interference and lack of decision, and in an effort to continue to comply with the [c]ontract ..., CCC demands that [Rainbow] file for mediation ...." On November 25, 2015, CCC made a request for mediation to be administered by the AAA. It appears that CCC's claim was 5 1160070 not resolved by mediation. On July 6, 2016, CCC filed a demand for arbitration of its claim. On July 28, 2016, after having already initiated the arbitration process, CCC sued the defendants. Among other things, CCC alleged that the defendants had fraudulently induced it into entering into the contract. Specifically, CCC alleged that the defendants knew that the contract required an initial decision maker and that the defendants also "knew they had not contracted for [initial-decision-maker] services from the [initial decision maker]." CCC alleges that the defendants "failed to inform CCC ... that Rainbow had not contracted with Buchanan to act as [the initial decision maker]." On August 8, 2016, CCC filed a motion with the AAA requesting that the arbitration proceedings CCC had initiated be stayed. On August 29, 2016, the defendants filed in the circuit court a motion to compel arbitration. The defendants argued that the validity of the arbitration clause in the contract "is something that must be decided by the arbitrator." On the same day, the defendants also filed a motion to dismiss CCC's 6 1160070 complaint against Keshani and Thakker, arguing that CCC failed to state a claim upon which relief could be granted, Rule 12(b)(6), Ala. R. Civ. P., and that CCC failed to plead its fraud claim with particularity, Rule 9(b), Ala. R. Civ. P. On October 17, 2016, the circuit court entered an order denying both the defendants' motion to compel arbitration and Keshani's and Thakker's motion to dismiss. The defendants appealed from the denial of their motion to compel arbitration. On November 8, 2016, the AAA denied CCC's motion to stay the arbitration proceedings. Standard of Review "Our standard of review of a ruling denying a motion to compel arbitration is well settled: "'"This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. '[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in 7 1160070 question.' Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala. 1995) (opinion on application for rehearing)."' "Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000))." SSC Montgomery Cedar Crest Operating Co. v. Bolding, 130 So. 3d 1194, 1196 (Ala. 2013). Discussion It is undisputed that the defendants met their initial burden "of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce." SSC Montgomery Cedar Crest, supra. Thus, the burden then shifted to CCC to present evidence indicating that the arbitration clause was "not valid or does not apply to the dispute in question." SSC Montgomery Cedar Crest, supra. CCC argued in the circuit court that the contract is not enforceable because, it says, the contract was induced by fraud. CCC argued that it was induced to enter into the contract, in part, based on the inclusion of the initial- decision process. The contract appointed Buchanan as the initial decision maker. However, CCC argued that it was the 8 1160070 defendants' role to contract with Buchanan to act as the initial decision maker under the contract and that the defendants knowingly failed to do so. CCC further argued in the circuit court that the defendants suppressed this information and "knowingly and intentionally misrepresented the fact that Rainbow had contracted with Buchanan to act as [the initial decision maker]." The defendants argue on appeal that "CCC failed to present substantial evidence of its fraud claim." Defendants' brief, at p. 20. As the defendants note, this Court has stated that, "[t]o avoid arbitration, '[a] party must provide substantial evidence of fraud in the inducement, particularly related to the arbitration clause.'" Massey Auto., Inc. v. Norris, 895 So. 2d 215, 218 (Ala. 2004)(quoting Ex parte Perry, 744 So. 2d 859, 863 (Ala. 1999)(plurality decision)); see also Harold Allen's Mobile Home Factory Outlet, Inc. v. Early, 776 So. 2d 777, 784 (Ala. 2000)(noting that a party arguing that it was fraudulently induced into signing an arbitration agreement must prove the alleged fraudulent inducement by substantial evidence). Of course, if a party must prove the alleged fraudulent inducement by substantial 9 1160070 evidence, it follows that "[m]erely alleging fraudulent inducement as to the arbitration clause in an agreement" does not allow a party to avoid the arbitration agreement. Ex parte Perry, 744 So. 2d at 863. The defendants argue that "CCC has not presented any evidence -- let alone substantial evidence -- of fraudulent inducement by the [defendants] related to the arbitration clause." Defendants' brief, at p. 21. CCC presents no argument to rebut this particular argument of the defendants. The defendants are correct. The allegations in CCC's complaint are based on its assertion that the defendants failed to retain Buchanan as the initial decision maker under the contract, that the defendants misrepresented that fact to or suppressed that fact from CCC, and that CCC relied on this fact to its detriment. The defendants specifically denied CCC's allegations in their answer. CCC has not presented any evidence to support the allegations in its complaint. The only evidence submitted by the parties is the contract and the October 30, 2015, letter from CCC's counsel to Rainbow's counsel. This evidence does not indicate that the defendants failed to retain Buchanan as the initial decision maker or 10 1160070 that Buchanan refused to make an initial decision on CCC's claim because he had not been retained by the defendants as the initial decision maker. We conclude that CCC has failed to provide substantial evidence in support of its fraud claim and, thus, has failed to demonstrate that the contract is not enforceable. The defendants proved the existence of the contract, which contains the arbitration provision, and it is undisputed that the contract affects interstate commerce. The burden then shifted to CCC. CCC has failed to present any evidence, let alone substantial evidence, indicating that the contract is unenforceable. Accordingly, the circuit court erred in denying the defendants' motion to compel arbitration. Although CCC did not raise any argument to rebut the defendants' argument discussed above, CCC does argue, for the first time on appeal, that the circuit court's denial of the defendants' motion to compel arbitration "is due to be affirmed because [the defendants] have failed to satisfy, and cannot now satisfy, conditions precedent necessary for requiring [CCC] to arbitrate its claims." CCC's brief, at p. 18. CCC notes that the contract requires that two conditions 11 1160070 be satisfied before arbitration can be initiated. First, a party desiring to initiate arbitration proceedings must submit his claim to the initial-decision process. Second, assuming a controversy still exists after the initial-decision process, a party desiring to initiate arbitration must then submit his claim to mediation. Only after both the initial-decision process and mediation have failed may a party initiate arbitration proceedings under the contract. CCC argues that it is impossible for the defendants to satisfy those conditions precedent because the defendants did not retain Buchanan as the initial decision maker, thus foreclosing the initial-decision process. Accordingly, CCC argues, the circuit court properly denied the defendants' motion to compel arbitration. The defendants argue that whether conditions precedent to arbitration have been satisfied is an issue to be decided by the arbitrator, not the courts. In so arguing, the defendants rely upon Brasfield & Gorrie, L.L.C. v. Soho Partners, L.L.C., 35 So. 3d 601 (Ala. 2009), in which this Court considered the same issue. In Brasfield, an owner contracted with a contractor to construct two structures. The contract between 12 1160070 the owner and the contractor contained a dispute-resolution process nearly identical to the dispute-resolution process set forth in the contract. The contract in Brasfield required that, before a party could initiate arbitration, the party had to submit its claim to the architect for an initial decision. After exhausting the initial-decision process, the party then had to submit its claim to mediation. After exhausting mediation, the party could then initiate arbitration proceedings. A dispute arose between the owner and the contractor. Instead of first seeking an initial decision or mediation, the contractor submitted its claim directly to the AAA for arbitration. The owner filed a lawsuit seeking to stay the arbitration proceedings, alleging that the contractor had failed to satisfy the conditions precedent to arbitration. The contractor filed a motion to compel arbitration, which the trial court denied. The contractor appealed. On appeal, the contractor argued "that it is for the arbitrator, and not the court, to decide whether conditions precedent to arbitration in a contract have been met." Brasfield, 35 So. 3d at 605. Relying on Howsam v. Dean Witter 13 1160070 Reynolds, Inc., 537 U.S. 79 (2002), this Court agreed: "[O]ur review of Howsam convinces us that [the owner's] and [the contractor's] contractual obligation to submit claims first to the architect for decision and then to mediate before invoking arbitration is the same kind of 'condition precedent to an obligation to arbitrate' that Howsam presumed would be decided by the arbitrator." Brasfield, 35 So. 3d at 606. This Court concluded that "this case presents a question of procedural arbitrability[2] that should be decided by the arbitrator." Id. at 608. 2This Court defined "procedural arbitrability" in Brasfield as follows: "'[P]rocedural arbitrability' ... involves questions that grow out of the dispute and bear on its final disposition, e.g., defenses such as notice, laches, estoppel, and other similar compliance defenses; such questions are for an arbitrator to decide. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002) ('"'procedural' questions which grow out of the dispute and bear on its final disposition are presumptively not for the judge, but for an arbitrator, to decide"'); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S. Ct. 909, 11 L. Ed. 2d 898 (1964) (holding that an arbitrator should decide whether the steps of a grievance procedure were completed, where those steps were prerequisites to arbitration)." 35 So. 3d at 604-05. 14 1160070 This case, like Brasfield, presents a question of procedural arbitrability that should be decided by the arbitrator. CCC's argument does not demonstrate that the circuit court properly denied the defendants' motion to compel arbitration. CCC also argues on appeal, as it did before the circuit court, that, even if it is compelled to arbitrate its claims against Rainbow, CCC cannot be compelled to arbitrate its claims against Keshani and Thakker, who did not sign the contract in their individual capacities. CCC argued below that it has no contractual agreement with Keshani and Thakker and, thus, that it cannot be compelled to arbitrate its claims against them. The defendants argue that whether CCC must arbitrate its claims against Keshani and Thakker is an issue to be decided by the arbitrator, not the circuit court. In so arguing, the defendants rely on this Court's decision in Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094 (Ala. 2014). "In Anderton, ... we recognized the general rules that apply in arbitration cases providing that ... nonsignatory issues of the type raised by [CCC] should be resolved by the trial court before the underlying dispute is sent to arbitration if, in fact, arbitration is ultimately determined to be the 15 1160070 proper forum for the dispute. However, we also recognized that these general rules have their exceptions. ... "'....' "... The Anderton Court ... addressed the nonsignatory issue ..., stating: "'The question whether an arbitration provision may be used to compel arbitration of a dispute between a nonsignatory and a signatory is a question of substantive arbitrability (or, under the Supreme C o u r t ' s t e r m i n o l o g y , s i m p l y "arbitrability"). In First Options [of Chicago, Inc. v. Kaplan], 514 U.S. [938,] 943–46 [(1995)], the Supreme Court analyzed the question whether an arbitration agreement binds a nonsignatory as a question of arbitrability. See also Howsam [v. Dean Witter Reynolds], 537 U.S. [79,] 84 [(2002)] (noting that in First Options the Supreme Court held that the question "whether the arbitration contract bound parties who did not sign the agreement" is a question of arbitrability for a court to decide). More recently, the United States Court of Appeals for the Eighth Circuit succinctly addressed the threshold issue before us. In Eckert/Wordell Architects, Inc. v. FJM Properties of Willmar, LLC, 756 F.3d 1098 (8th Cir. 2014), a nonsignatory sought to compel arbitration of a dispute with a signatory, as in this case. The court stated: "'"Whether a particular arbitration provision may be used to compel arbitration between a signatory and a nonsignatory is a t h r e s h o l d q u e s t i o n o f 16 1160070 arbitrability. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84–85, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002) (delineating potentially dispositive threshold issues between 'questions of arbitrability' and 'procedural questions'). We presume threshold questions of arbitrability are for a court to decide, unless there is clear and unmistakable evidence the parties intended to commit questions of arbitrability to an arbitrator. Id. at 83, 123 S. Ct. 588; Express Scripts, Inc. v. Aegon Direct Mktg. Servs., Inc., 516 F.3d 695, 701 (8th Cir. 2008). We have previously held the incorporation of the AAA [ A m e r i c a n A r b i t r a t i o n Association] Rules into a contract requiring arbitration to be a clear and unmistakable indication the parties intended for the arbitrator to decide threshold questions of arbitrability.... Eckert Wordell's drafting of the architectural services contract here to incorporate the AAA Rules requires the same result." "'756 F.3d at 1100. See also Knowles v. Community Loans of America, Inc. (No. 12–0464–WS–B, Nov. 20, 2012) (S.D. Ala. 2012) (not reported in F. Supp. 2d) ("A question as to 'whether the arbitration contract bound parties who did not sign the agreement' is one that 'raises a "question of arbitrability" for a court to decide.'" (quoting Howsam, 537 U.S. at 84)). 17 1160070 "'Like the Eighth Circuit, we have held "that an arbitration provision that incorporates rules that provide for the arbitrator to decide issues of arbitrability clearly and unmistakably evidences the parties' intent to arbitrate the scope of the arbitration provision." CitiFinancial Corp. v. Peoples, 973 So. 2d 332, 340 (Ala. 2007). See also Joe Hudson Collision Ctr. v. Dymond, 40 So. 3d 704, 710 (Ala. 2009) (concluding that an arbitrator decides issues of substantive arbitrability when the arbitration provision incorporated the same AAA rule as in the present case); and Wells Fargo Bank, N.A. v. Chapman, 90 So. 3d 774, 783 (Ala. Civ. App. 2012) (same). The relevant AAA rule incorporated by the arbitration provision provides: "The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement." Thus, although the question whether an arbitration provision may be used to compel arbitration between a signatory and a nonsignatory is a threshold question of arbitrability usually decided by the court, here that question has been delegated to the arbitrator. The arbitrator, not the court, must decide that threshold issue.' "164 So. 3d at 1101–02. Thus, the law in Alabama is such that a trial court considering a motion to compel arbitration should resolve ... nonsignatory issues unless the subject arbitration provision clearly and unmistakably indicates that those arguments should instead be submitted to the arbitrator." 18 1160070 Federal Ins. Co. v. Reedstrom, 197 So. 3d 971, 974-76 (Ala. 2015). The contract incorporates the AAA's Construction Industry Arbitration Rules, which state that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement." This is the same rule that was incorporated into the contract at issue in Anderton. Accordingly, we conclude, as we did in Anderton, that, "although the question whether an arbitration provision may be used to compel arbitration between a signatory and a nonsignatory is a threshold question of arbitrability usually decided by the court, here that question has been delegated to the arbitrator. The arbitrator, not the court, must decide that threshold issue." 164 So. 3d at 1102. Conclusion The circuit court's order is reversed insofar as it denied the defendants' motion to compel arbitration and the 19 1160070 cause remanded for the circuit court to enter an order granting the motion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Main, Wise, Bryan, and Sellers, JJ., concur. Shaw, J., concurs in the result. Parker and Murdock, JJ., concur in part and dissent in part. 20 1160070 PARKER, Justice (concurring in part and dissenting in part). I concur with the main opinion insofar as it reverses the circuit court's order denying the motion to compel arbitration filed by Rainbow Cinemas, LLC, Ambarish Keshani, and Harshit D. Thakker, and insofar as it determines "that whether conditions precedent to arbitration have been satisfied is an issue to be decided by the arbitrator, not the courts." ___ So. 3d at ___. However, for the reasons set forth in Justice Murdock's dissent in Federal Insurance Co. v. Reedstrom, 197 So. 3d 971, 979-81 (Ala. 2015)(Murdock, J., dissenting), which I joined, I dissent from that portion of the main opinion holding that whether the individual defendants, nonsignatories to the contract, are subject to the arbitration provision in the contract is a decision for the arbitrator, not the courts. Murdock, J., concurs. 21 1160070 MURDOCK, Justice (concurring in part and dissenting in part). I concur in the portion of the main opinion holding that it is for the arbitrator rather than the court to decide the "procedural arbitrability" of the claims by Consolidated Construction Company of Alabama ("CCC") against Rainbow Cinemas, LLC. I dissent as to the portion of the main opinion holding that it also is for the arbitrator to decide the "substantive arbitrability" of the claims by CCC against the individual defendants. The latter issue arises in the context of nonsignatories -- the individual defendants –- seeking to require a signatory -- CCC -- to submit its claims against them to arbitration. As a general rule, one who is not a signatory to an arbitration agreement cannot enforce that agreement. An exception to this rule exists in cases where the signatory is estopped from asserting that an arbitration agreement cannot be enforced by a nonsignatory. This Court has stated that, "[i]n order for a party to be equitably estopped from asserting that an arbitration agreement cannot be enforced by a nonparty [to an arbitration agreement], the arbitration provision itself must indicate that the party resisting arbitration has assented to the submission of claims against nonparties ... to arbitration. See Ex parte Napier, 723 So. 2d [49] at 53 [(Ala. 1998)]. [What] is 22 1160070 required is (1) that the scope of the arbitration agreement signed by the party resisting arbitration be broad enough to encompass those claims made by that party against nonsignatories, or that those claims be 'intimately founded in and intertwined with' the claims made by the party resisting arbitration against an entity that is a party to the contract, and (2) that the description of the parties subject to the arbitration agreement not be so restrictive as to preclude arbitration by the party seeking it." Ex parte Stamey, 776 So. 2d 85, 89 (Ala. 2000). For the reasons explained by Justice Parker in his special writing, I agree that the decision as to the "substantive arbitrability" of the dispute between CCC and the individual defendants, under the above-stated standard, should be made by the court. 23

June 16, 2017

28edd667-9428-45f9-9451-845489431a81

Family Security Credit Union v. Dana Dunn and Timothy Dunn

N/A

1151007

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

344c0f06-a06f-4c07-83ac-2c3d5d6ab89a

Ex parte Locklear Chrysler Jeep Dodge, LLC

N/A

1160372, 1160373, 1160374

Alabama

Alabama Supreme Court

Rel:09/29/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160372 ____________________ Ex parte Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. PETITION FOR WRIT OF MANDAMUS (In re: Rhonda Cook v. Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive, Inc.) (Bibb Circuit Court, CV-16-900049) ____________________ 1160373 ____________________ Ex parte Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. PETITION FOR WRIT OF MANDAMUS (In re: James McKinney v. Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.) (Bibb Circuit Court, CV-16-900053) ____________________ 1160374 ____________________ Ex parte Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. PETITION FOR WRIT OF MANDAMUS (In re: James Daniel Parker v. Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.) (Bibb Circuit Court, CV-16-900054) BOLIN, Justice. Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. (hereinafter referred to collectively as "Locklear"), seek a writ of mandamus ordering the Bibb 2 1160372, 1160373, 1160374 Circuit Court to vacate certain discovery orders in actions filed against Locklear by Rhonda Cook, James McKinney, and James Daniel Parker (hereinafter referred to collectively as "the purchasers"), who allege that they were victims of identity theft by a Locklear employee. Facts and Procedural History In order to explore the possibility of financing the purchase of an automobile from Locklear, the purchasers each completed a credit application. The credit applications contained personal information, including Social Security numbers, birth dates, mother's maiden names, income, etc. In connection with the purchase, each purchaser signed an arbitration agreement titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"); its operative language is as follows: "In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting 3 1160372, 1160373, 1160374 therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service to be purchased or purchased herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or Consumer Protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as 4 1160372, 1160373, 1160374 follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason 5 1160372, 1160373, 1160374 the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, or non-fulfillment of any other contract, covenant or agreement related to the products acquired or sought to be acquired from the Dealer, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREINABOVE. "DESCRIPTION OF PRODUCTS/SERVICES: ________________" (Capitalization and emphasis in original.) 6 1160372, 1160373, 1160374 In the blank line following the words "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased as well as the vehicle- identification number of that vehicle. Below that were lines for the date to be filled in and lines for signatures of the customer and a dealer representative. Each of the purchasers signed the arbitration agreement in December 2015. In July and August 2016, each of the purchasers sued Locklear, as well as other defendants. Each purchaser alleged that he or she was the victim of identity theft by an employee of Locklear's who used the personal information from the purchaser's credit application to purchase thousands of dollars in cellular-telephone services. They asserted claims of negligence, wantonness, invasion of privacy, conversion, fraud, tort of outrage, civil conspiracy, violations of Alabama's Consumer Identity Protection Act, and breach of fiduciary duty. Shortly after filing their lawsuits, the purchasers sought general discovery, including interrogatories, requests for production of documents, requests for admissions, and notices of deposition. The 7 1160372, 1160373, 1160374 general discovery requests regarded matters related to the purchasers' substantive claims. In response to the three actions, Locklear filed a motion in each action seeking an order compelling arbitration staying the action. The trial court held a hearing on the motions, but did not rule on them. Subsequently, each of the purchasers filed a motion to compel Locklear's responses to their discovery requests and to deem admitted their requests for admissions. The trial court granted the purchasers' motions. Locklear then filed three petitions for mandamus review, which this Court consolidated for the purpose of writing one opinion. While the mandamus petitions were pending, the trial court granted Locklear's motions to stay discovery. Standard of Review "Mandamus is an extraordinary remedy and will be granted only where there is '(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.' Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala. 1991). This Court will not issue the writ of mandamus where the petitioner has '"full and adequate relief"' by appeal. State v. Cobb, 288 Ala. 675, 678, 264 So. 2d 523, 526 (1972) 8 1160372, 1160373, 1160374 (quoting State v. Williams, 69 Ala. 311, 316 (1881)). "Discovery matters are within the trial court's sound discretion, and this Court will not reverse a trial court's ruling on a discovery issue unless the trial court has clearly exceeded its discretion. Home Ins. Co. v. Rice, 585 So. 2d 859, 862 (Ala. 1991). Accordingly, mandamus will issue to reverse a trial court's ruling on a discovery issue only (1) where there is a showing that the trial court clearly exceeded its discretion, and (2) where the aggrieved party does not have an adequate remedy by ordinary appeal. The petitioner has an affirmative burden to prove the existence of each of these conditions." Ex parte Ocwen Fed. Bank, FSB, 872 So. 2d 810, 813 (Ala. 2003). Discussion Locklear argues that, although discovery may be allowed while a motion to compel arbitration is pending, that discovery is limited to whether the parties to the arbitration agreement must arbitrate their claims. Locklear argues that the trial court exceeded its discretion in allowing general discovery regarding the merits of the purchasers' claims. Locklear argues that permitting general discovery to proceed in a case that may be subject to arbitration could frustrate one of the purposes underlying arbitration, namely, the inexpensive and expedient resolution of disputes. 9 1160372, 1160373, 1160374 Locklear cites Ex parte Kenworth of Birmingham, Inc., 789 So. 2d 227 (Ala. 2000), in support of its position. In Kenworth, the plaintiffs sued Kenworth and its salesman, asserting claims arising out of the purchase of a truck. They alleged that the salesman had represented that the truck was new, when, in fact, the truck had been used and damaged, had been repaired, had had parts replaced, and had been repainted to appear new. Kenworth and the salesman answered the complaint, raising several affirmative defenses and asserting that the plaintiffs' claims were subject to arbitration. They moved to stay the proceedings and to compel arbitration, attaching a copy of a "Buyer's Order" that contained an arbitration provision. In response to the motion to compel, the plaintiffs asserted that they did not recall an arbitration provision in the paperwork underlying the sale of the truck and that the signature on the paperwork was not theirs. On the day of the hearing on the motion to stay and to compel arbitration, Kenworth and the salesman moved in open court to continue the hearing and requested leave to conduct discovery. The trial court rescheduled the hearing on the 10 1160372, 1160373, 1160374 motion to compel arbitration and ordered that discovery would not be stayed pending the hearing, nor would discovery be limited to the issue of the genuineness of the signature on the buyer's order containing the arbitration provision. Both sides in Kenworth filed notices of depositions. A week before the scheduled depositions, Kenworth and the salesman moved for what they called a "reconsideration" and to stay discovery, arguing that they had made a prima facie showing that the arbitration provision was enforceable. The trial court denied that motion and further stated that "'there is no "prima facie showing that the arbitration agreement is enforceable."'" 789 So. 2d at 229. The court then reset the hearing on the motion to compel arbitration. Kenworth and the salesman petitioned this Court for the writ of mandamus before the hearing could be held. They argued that the trial court exceeded its discretion by allowing unrestricted discovery before a resolution of the question whether the plaintiffs must arbitrate their claims. This Court agreed, holding that, although the trial court did not err in allowing the parties to conduct discovery, it did err in failing to restrict that 11 1160372, 1160373, 1160374 discovery to the question whether the plaintiffs had agreed to arbitrate their dispute with Kenworth and the salesman. We note that, in the instant case, this Court is not reviewing a trial court's order denying a motion to compel arbitration; the trial court has not yet ruled on Locklear's motion to compel. It is the trial court's general discovery orders that are being challenged. Here, as in Kenworth, the trial court exceeded its discretion by allowing general discovery before the resolution of the issue whether the purchasers must arbitrate their claims. In Ex parte Jim Burke Automotive, Inc., 776 So. 2d 118 (Ala. 2000), this Court explained that, although it was not error for the trial court to allow the parties to conduct discovery prior to arbitration, it was error not to limit the discovery to the question whether the plaintiff agreed to arbitrate his claims and that such limited discovery did not constitute a waiver of the right to arbitrate. Here, the purchasers have not requested discovery on an issue related to the arbitration agreement; instead, they sought general discovery regarding the merits of their claims. In granting the purchasers' requests for general discovery before the resolution of 12 1160372, 1160373, 1160374 Locklear's arbitration motions, the trial court exceeded its discretion. Furthermore, because it would be unfair to require Locklear conduct merit-based discovery prior to deciding the arbitration issue, and because Locklear could not be afforded the relief it seeks after that discovery has been conducted, Locklear does not have an adequate remedy by ordinary appeal. Accordingly, we grant the petitions and issue the writs, directing the trial court to vacate its orders requiring Locklear to respond to the purchasers' discovery requests, including the requests for admissions and to sit for depositions. 1160372 -- PETITION GRANTED; WRIT ISSUED. 1160373 -- PETITION GRANTED; WRIT ISSUED. 1160374 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Parker, Murdock, Shaw, Main, Wise, Bryan, and Sellers, JJ., concur. 13

September 29, 2017

3c87b536-14e2-43ec-ae87-ea0adc5d7be9

Ex parte Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine.

N/A

1160326

Alabama

Alabama Supreme Court

Rel: December 1, 2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2017-2018 _________________________ 1160326 _________________________ Ex parte Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine PETITION FOR WRIT OF MANDAMUS (In re: Mike Zak d/b/a Hometown Magazine v. City of Arab et al.) (Marshall Circuit Court, CV-15-000002) SHAW, Justice. Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine ("HVCM"),1 one of the defendants below, 1Although this petition was filed on behalf of "Hometown Values Coupon Magazine," its proper name is "Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine." 1160326 petitions this Court for a writ of mandamus directing the Marshall Circuit Court to vacate its order denying HVCM's motion to dismiss the claims filed against it by Mike Zak d/b/a Hometown Magazine ("Zak") and to direct that court to enter an order dismissing Zak's claims against it. We grant the petition and issue the writ. Facts and Procedural History HVCM is a State of Washington based "print broker ... for direct mail advertising." Richard Hagedorn, doing business as HTV Etowah, LLC, apparently purchased, before the initiation of the underlying litigation, a license from HVCM to use its trademark for publication of a coupon magazine. Hometown Magazine is a coupon distributor; Mike Zak is its sole proprietor. Following an initial inquiry initiated by Zak in August 2013, Zak and HVCM entered into a "Print Brokerage Agreement" and related "Licensing Agreement" whereby Zak was to become an exclusive "Area Publisher" of HVCM's coupon magazine in three specified zones within Alabama, namely Madison, Huntsville, and Arab/Guntersville. E-mail communications in the materials before us suggest that Hagedorn was aware of that agreement and that HVCM encouraged 2 1160326 coordination and cooperation between Zak and Hagedorn with regard to their "neighboring" markets. On October 11, 2013, Zak obtained from the City of Arab ("the City") a business license to engage in "publishing industries." Zak ultimately published a single issue of a publication entitled Hometown Magazine. Thus, according to HVCM, "[i]nstead of publishing as [HVCM], Zak formed Hometown Magazine and used the [HVCM] trademark when he sold advertising to local business," i.e., allegedly, "Zak solicited ... Hagedorn's clients as [HVCM], sold them advertising using the [HVCM] trademark ..., and never published a magazine as [HVCM]." This action resulted in a dispute between Zak and Hagedorn. On November 12, 2013, Hagedorn sent the Arab Chamber of Commerce ("the Chamber") the following e-mail communication regarding Zak and Hometown Magazine: "There are 2 men going around Arab purporting to represent [HVCM]. Their names are Dion Hahn and Mike Zak; they are leaving behind this magazine telling merchants this is what they are getting. In fact they are not in anyway affiliated with [HVCM]. They have been delivered cease and desist orders due to copyright and trademark infringements. They are also telling people the method of distribution is direct mail when in fact it was distributed via The Arab Tribune. These people do not hold business licenses and should be reported to the appropriate 3 1160326 authorities. I have attached a copy of my magazine. Please forward to all Chamber members." The following day, the City posted on Facebook, a social- media Web site, an essentially verbatim copy of Hagedorn's e- mail regarding Mike Zak and Hometown Magazine. In response, Dion Hahn, purportedly an employee of Hometown Magazine, commented on the post, allegedly notifying the City that the information in its post was incorrect and should be promptly removed. The City, however, allegedly declined to remove it; instead, it posted a response indicating that it had "'received [the] information through a mass email sent from the ... Chamber..., which has always been very reliable," and directed further inquiries to the Chamber. On November 19, 2013, counsel purporting to represent both "HTV Etowah, LLC[, Hagedorn's business,] and [HVCM]" sent written communication addressed to Hahn and Zak alleging that, "[r]ather than contract[ing] to become a distributor of [HVCM's] magazine, [Zak] apparently and allegedly appropriated the name, likeness and attributes of [HVCM], marketed it as [his] own product and sold advertising to customers while representing to them [Zak was HVCM]." The letter further demanded that Zak "immediately cease and desist from any 4 1160326 actions which violate [Hagedorn and HVCM's] proprietary ownership rights in [HVCM]" or warned that "appropriate legal action" would follow.2 As a result of the above-described Facebook post, which Zak maintains "was entirely fallacious and possessed absolutely no truth," Zak allegedly began to receive queries from customers regarding the legality of his activities. Ultimately, according to Zak, his reputation was allegedly so "irreparably tarnished and damaged" that Zak was forced to close his business. On August 22, 2014, Zak sued, in the Cullman Circuit Court, the City, the Chamber, and various fictitiously named defendants.3 Specifically, Zak sought to 2Nothing suggests that HVCM knew anything about this letter, which was presumably sent at Hagedorn's request. 3The fictitiously named defendants included: "Fictitious parties A, B, and C whether singular or plural, the person, firm, corporation, partnership or entities who or which caused or contributed to cause the damages complained of herein. "... Fictitious Parties D, E, and F whether singular or plural, firms or corporations, partnership or other entities who or which were or may have been responsible for the actions, conduct or were the principal or agent of any of the named Defendants who Defamed [Zak]. "... Fictitious Parties G, H and I, those 5 1160326 recover both compensatory and punitive damages on various theories, including defamation, negligence, and "wantonness/gross negligence." On December 3, 2014, Zak issued several sets of discovery requests to the defendants, including interrogatories directed to the Chamber that sought information about any "communications with [HVCM] or ... Hagedorn." On January 12, 2015, Zak amended his complaint to add two additional counts against the City pursuant to 42 U.S.C. § 1983, asserting "civil rights depravation and violation" and also "inadequate training and supervision [and] failure to train." In its October 29, 2015, responses to Zak's discovery requests, as described above, the Chamber produced the November 12, 2013, e-mail from Hagedorn on which the offending post was based and identified Hagedorn as a party having information regarding the underlying events. As best we are able to discern based on the limited materials before us, it appears that, following Zak's first persons, firms or corporations who recklessly disseminated false or otherwise inaccurate information concerning [Zak], whose identity is not presently known but who will be substituted by amendment when ascertained." 6 1160326 amendment to his complaint adding federal claims, the matter was, at the request of the City, first transferred, in January 2015, from the Cullman Circuit Court to the Marshall Circuit Court on the ground that venue in the Cullman Circuit Court was improper and, in February 2015, removed to the United States District Court for the Northern District of Alabama. However, the two federal § 1983 claims were later dismissed by the federal court, and, on July 24, 2015, the matter was remanded to the Marshall Circuit Court. On March 1, 2016 -- after the expiration of the two-year limitations period applicable to Zak's claims -- Zak filed a "Second Amended Complaint" that, among other changes, specifically named HVCM and Hagedorn as defendants. Neither HVCM nor Hagedorn was substituted in place of any of the fictitiously named defendants in Zak's original complaint. Zak's second amended complaint asserted against HVCM and Hagedorn his previous tort-based claims for relief and further added counts alleging "tortious interference with business" and civil conspiracy. In response, HVCM filed, pursuant to various provisions of Rule 12, Ala. R. Civ. P., a "Motion to Dismiss" all claims 7 1160326 against it. Specifically, in its motion and accompanying brief, HVCM disputed the sufficiency of service, challenged the trial court's exercise of personal jurisdiction over it, and maintained that Zak's claims were time-barred. HVCM's motion was supported by, among other exhibits, evidence indicating that Zak was allegedly aware of HVCM's identity at the time he filed his original complaint and certainly before the statute of limitations expired. HVCM further noted that it was added as a new defendant rather than substituted for a previously identified but fictitiously named defendant. HVCM further denied sufficient contacts with Alabama to support personal jurisdiction under Alabama's long-arm rule and included affidavit testimony from HVCM's president aimed at establishing its alleged lack of contacts with Alabama. In opposition to HVCM's dismissal request, Zak asserted that HVCM was properly served or that he should be allowed to correct service, that HVCM conducted "substantial business" within Alabama, and that his claims against HVCM were timely either as the result of tolling pursuant to removal of the matter to federal court or because his second amended 8 1160326 complaint "relate[d] back" to the filing of his original complaint pursuant to Rules 9(h) and 15(c), Ala. R. Civ. P. Thereafter, on September 8, 2016, the trial court denied a motion by HVCM to quash Zak's allegedly ineffective service of process and granted Zak leave to perfect service. On that same date, it denied HVCM's motion to dismiss. HVCM later promptly filed, subsequent to Zak's perfection of proper service on HVCM, a motion again seeking dismissal on the grounds that the trial court lacked personal jurisdiction and that Zak's claims were untimely. The trial court denied the motion, and HVCM then filed the instant petition seeking mandamus relief; we subsequently ordered answers and briefs. Standard of Review "'"A writ of mandamus is an extraordinary remedy, and it 'will be issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court.'"' Ex parte Monsanto Co., 862 So. 2d 595, 604 (Ala. 2003) (quoting Ex parte Butts, 775 So. 2d 173, 176 (Ala. 2000), quoting in turn Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala. 1993)). ... A petition for a writ of mandamus ... is the proper means to seek review of an order denying a motion to dismiss or for a summary judgment filed by a defendant added after the statute of limitations has run, under Rule 15(c)(3), Ala. R. Civ. P., which 9 1160326 governs the relation back of amended complaints when the defendant has received notice of the action so that the defendant will not be prejudiced in maintaining a defense on the merits and the defendant knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the defendant. See, e.g., Ex parte Empire Gas Corp., 559 So. 2d 1072 (Ala. 1990) (denying petition for writ of mandamus where parent corporation filed a motion to dismiss judgment creditors' amended complaint in which the judgment creditors sought to add parent corporation as a party under Rule 15(c), Ala. R. Civ. P., and to hold the parent corporation liable for the debts of its subsidiary). See also Ex parte Jackson, 780 So. 2d 681 (Ala. 2000), Ex parte Snow, 764 So.2d 531 (Ala. 1999), and Ex parte Stover, 663 So. 2d 948 (Ala. 1995)." Ex parte Novus Utils., Inc., 85 So. 3d 988, 995–96 (Ala. 2011). Discussion I. Before reaching the claims in HVCM's petition, we first consider Zak's contention that the petition is untimely. According to Zak, HVCM filed its petition more than 42 days -- and, in fact, more than 4 months -- after the trial court's September 8, 2016, order denying HVCM's original motion to dismiss. See Ex parte Franks, 7 So. 3d 391, 393 (Ala. Civ. App. 2008) ("The presumptively reasonable time within which to file a petition for a writ of mandamus is the same time 10 1160326 allowed for taking an appeal, i.e., 42 days from the date of entry of the judgment or order being challenged." (citing Rule 21(a)(3), Ala. R. App. P.; Rule 4(a)(1), Ala. R. App. P.; and Ex parte Fiber Transp., L.L.C., 902 So. 2d 98, 99–100 (Ala. Civ. App. 2004))). This petition was filed after HVCM's second motion to dismiss was denied. Zak cites Ex parte Jones, 147 So. 3d 415 (Ala. 2013), for the proposition that a party's renewed filing raising essentially the same arguments as a previously disposed motion will not toll the presumptively reasonable time for petitioning for mandamus relief. In Jones, we held: "To allow [a defendant] to ... petition this Court for a writ of mandamus following the denial of the 'renewed' motion for a summary judgment, after this Court had determined that his previously filed mandamus petition challenging the denial of his first summary-judgment motion based on the same arguments and grounds as the 'renewed' motion for a summary judgment [was untimely], would undermine the spirit and purpose of Rule 21(a)(3)[, Ala. R. App. P.,] and render that rule meaningless." 147 So. 3d at 420. Zak further relies on authority establishing that "[t]he filing of [a] motion to reconsider [does] not toll the 42–day period for filing a petition for a writ of mandamus." Meadwestvaco Corp. v. Mitchell, 195 So. 3d 290, 294–95 (Ala. Civ. App. 2015). 11 1160326 HVCM, however, maintains that the trial court's September 8 order was void as to HVCM as the result of ineffective service. See Bank of America Corp. v. Edwards, 881 So. 2d 403, 405 (Ala. 2003) ("'A judgment rendered against a defendant in the absence of personal jurisdiction over that defendant is void.'" (quoting Horizons 2000, Inc. v. Smith, 620 So. 2d 606, 607 (Ala. 1993))). Alternatively, HVCM argues that it filed the instant petition within a reasonable time -- and certainly within 42 days of the trial court's January 3, 2017, order denying HVCM's renewed motion following Zak's perfection of service. Under the present circumstances, we agree. A notable factor distinguishing this case from Mitchell, supra, where the pleadings omitted the "statement of circumstances constituting good cause for the appellate court to consider the petition, notwithstanding that it was filed beyond the presumptively reasonable time," Rule 21(a)(3), Ala. R. App. P., is the following explanation for HVCM's delay: "Because service is a threshold jurisdictional issue, the [September 8, 2016,] order denying the remainder of [HVCM's] motion to dismiss was void, and an appeal was not necessary. Med-Call, Inc. [v. Livingston], 64 So. 3d [1051] at 1053 [(Ala. Civ. App. 2010)]. To preserve for appeal the personal 12 1160326 jurisdiction and statute of limitations issues, [HVCM] filed a new motion to dismiss once it was served. ... If this Court believes that [HVCM] should have appealed the September 8, 2016, order ..., then pursuant to Ala. R. App. P. 21(a)(3), [HVCM] states that this petition is filed within a reasonable time because it was reasonable to require [Zak] to perfect service upon [HVCM] before it appealed lack of personal jurisdiction." (Zak's petition, at p. 4 n.5.) In comparable circumstances in Ex parte Franks, supra, the Court of Civil Appeals permitted an apparently untimely petition where the petitioner included a statement explaining that he had not been served with the underlying complaint until more than 43 days from the entry date of the order his petition challenged. Holding that the petitioner's explanation constituted good cause because "the [petitioner] was not a party to the action until after the expiration of the presumptively reasonable time for challenging the May 13, 2008, order," the court considered the petition. 7 So. 3d at 393–94. Although, unlike the petitioner in Ex parte Franks, HVCM did apparently receive notice of and an opportunity to be heard at the hearing preceding the entry of the trial court's September 8 order, HVCM's concerns regarding the validity of that order before proper service and the potential impact of 13 1160326 a void order on a subsequent appeal were valid. See Ex parte Washington, 176 So. 3d 852, 854 (Ala. Civ. App. 2015) ("This court cannot conduct a review of void orders; therefore, the ... petition is due to be dismissed."). Moreover, HVCM's second motion represented an apparent attempt to obtain a valid order denying HVCM's claims that would support a mandamus petition. It was, therefore, neither a mere request for reconsideration of the trial court's original denial nor an improper attempt to attain a "'second bite' at appellate review"; HVCM's second motion also did not serve to eviscerate Rule 21(a)(3), which concerned the Court in Jones. 147 So. 3d at 420. Therefore, HVCM's petition establishes that HVCM was not dilatory and that the instant petition should not be deemed untimely. II. In its petition, HVCM maintains that it lacks sufficient contacts with Alabama to support personal jurisdiction and that the trial court thus erred in denying its motion to dismiss. Alternatively, HVCM contends that mandamus should issue to direct dismissal of Zak's claims because those claims were filed after the statute of limitations expired and do not 14 1160326 relate back to the filing of Zak's original complaint. Without commenting on the merits of HVCM's personal- jurisdiction challenge, because of our disposition of HVCM's challenge based on the statute of limitations and the doctrine of relation back, we pretermit discussion of the personal- jurisdiction issue. See Favorite Mkt. Store v. Waldrop, 924 So. 2d 719, 723 (Ala. Civ. App. 2005) (stating that this Court would pretermit discussion of further issues in light of the dispositive nature of another issue). See also Ex parte Lost River Oilfield Servs., LLC, 167 So. 3d 371, 375 (Ala. Civ. App. 2014) (pretermitting discussion of trial court's alleged lacked of personal jurisdiction over petitioner based on the holding that the trial court lacked subject-matter jurisdiction to hear the respondent's workers' compensation claim). In his filings below, Zak conceded both that a two-year statute of limitations applied to all claims pending against HVCM and that his claims accrued in November 2013. It further appears undisputed that Zak did not include HVCM as a named defendant in his original complaint, but added it as a defendant for the first time in his second amended complaint 15 1160326 filed on March 1, 2016, after the two-year limitations period had expired in November 2015. Finally, Zak candidly acknowledged that his second amended complaint did not substitute HVCM for one of the fictitiously named defendants included in the original complaint. Based on those facts, HVCM argues, none of the provisions in Rule 15, Ala. R. Civ. P., support its untimely addition as a party under relation- back principles. Specifically, HVCM contends that, contrary to Zak's contention in the trial court, the claims asserted against HVCM do not relate back to the filing of the original complaint as permitted by Rules 9(h) and 15(c)(4), Ala. R. Civ. P. Instead, HVCM says, it was added as a new defendant rather than substituted for a fictitious one, despite the fact that Zak's 2014 discovery requests clearly indicated that he was aware of HVCM's identity well before the statute of limitations expired. Also according to HVCM, it would be substantially prejudiced if added, pursuant to Rule 15(c)(3), 16 1160326 as a defendant at this late stage4 -- an error that it contends a postjudgment appeal would not correct. The petition points this Court to the well established principles cited in Ex parte Novus Utilities, supra, in which we explained: "Rule 15(c) provides, in pertinent part: "'(c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when "'.... "'(3) the amendment, other than one naming a party under the party's true name after having been initially sued under a fictitious name, changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the applicable period of limitations or one hundred twenty (120) days 4See Prior v. Cancer Surgery of Mobile, P.C., 959 So. 2d 1092, 1095 (Ala. 2006) ("Even if otherwise barred by the applicable statute of limitations, an amendment to a complaint may be allowed if it 'arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading....' Rule 15(c)(2), Ala. R. Civ. P. However, if allowing the plaintiff to amend his or her complaint would prejudice the opposing party, the amendment should be denied. Ex parte Johnston-Tombigbee Furniture Mfg. Co., 937 So. 2d 1035 (Ala. 2005)." (footnote omitted)). 17 1160326 of the commencement of the action, whichever comes later, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party....' "The Court of Civil Appeals has correctly stated: "'Our Supreme Court has held that the granting of amendments to pleadings other than those of right under Rule 15(a), Ala. R. Civ. P.[,] are within the discretion of the [trial] court. However, if the statute of limitations has run, the amendment may relate back only if the requirements of Rule 15(c), [Ala.] R. Civ. P.[,] are met. Ex parte Tidmore, 418 So. 2d 866 (Ala. 1982).' "Weaver v. Redwing Carriers, Inc., 475 So. 2d 869, 871 (Ala. Civ. App. 1985). "We note that federal decisions construing the Federal Rules of Civil Procedure are persuasive authority in construing the Alabama Rules of Civil Procedure because the Alabama Rules were patterned after the Federal Rules. Borders v. City of Huntsville, 875 So. 2d 1168 (Ala. 2003). "'The purpose of the relation back concept is to permit a claim to be tried on its merits rather than being dismissed based on a technicality so long as the purpose 18 1160326 underlying the statute of limitations has been satisfied. James Wm. Moore, Moore's Federal Practice § 15.19(3)(a)(3d ed. 2005). The primary purpose of statutes of limitation is to ensure that defendants have notice of an action against them before evidence has been lost or becomes unavailable and with enough time to prepare an adequate defense. [Rebecca S.] Engrav, [Relation Back of Amendments Naming Previously Unnamed Defendants Under Federal Rule of Civil Procedure 15(c), 89 Cal. L. Rev. 1549] at 1573 [(2001)]. Thus, if a party has been notified of litigation involving a specific factual occurrence, it has received the protection that the statute of limitations requires. See, e.g., Williams v. U.S. Postal Serv., 873 F.2d 1069, 1073 (7th Cir.1989). Under such circumstances, courts should freely grant leave to amend. Woods v. Ind. Univ.–Purdue Univ. at Indianapolis, 996 F.2d 880, 883 (7th Cir. 1993) (stating that courts should attempt to avoid permitting defendants to rely on technical defects to avoid litigation).' "Mitchell v. CFC Fin., LLC, 230 F.R.D. 548, 549–50 (E.D. Wis. 2005)." 85 So. 3d at 996–97. As set out above, Rule 15(c)(3) excludes fictitious-party pleading and instead applies to a plaintiff's attempt to amend in order to correctly identify a defendant included in or contemplated by the plaintiffs' original complaint. That is not what occurred in the present case. Instead, Zak's second 19 1160326 amended complaint specifically acknowledged that it "add[ed] additional Defendants," including HVCM, as well as "additional claims relating to the new Defendants," and Zak acknowledges that no substitution occurred. Even assuming that the provisions of Rule 15(c)(3) apply to the present circumstances, we further note that the rule limits application of the relation-back principles to situations where the party added by the amendment received notice of the commencement of the action either before the expiration of the applicable limitations period or within 120 days of the filing of the complaint initiating the action. Finally, the rule requires that the added party both would not be prejudiced by having to maintain a defense and understood that, in the absence of a mistake regarding its identity, it would have been included in the original complaint: "[I]n order for the [plaintiffs] to obtain the benefits of the relation-back doctrine when they attempted to add ... a new party, the amended pleading adding [that party] must satisfy the requirements of Rule 15(c)(3), Ala. R. Civ. P. The party added must have received notice of the institution of the action within the applicable limitations period or within 120 days of the filing of the original complaint (whichever comes later) so that it is not prejudiced in maintaining a defense on the merits. Rule 15(c)(3). A court may impute notice of the institution of an action against the 20 1160326 original defendant to a subsequently named defendant if there is an 'identity of interests.'" Ex parte Novus Utils., 85 So. 3d at 1001. Here, HVCM denies receiving notice of Zak's action within the specified time frame. It is undisputed that the City and the Chamber were the only defendants actually named in either Zak's original or his first amended complaint. There is nothing suggesting identity of interests -- or even a tenuous connection -- between either of those municipal entities and HVCM. Moreover, the e-mail message that ultimately led to the initiation of the action appears to have originated solely from Hagedorn, not from HVCM. Nothing suggests that HVCM was even aware that the message had been sent or of Hagedorn's apparent dispute with Zak regarding local rights to distribute HVCM's products. Similarly, the November 2013 cease-and- desist letter also does not appear to have been sent to HVCM. In any event, even Hagedorn, the only party with whom HVCM had an arguable connection and from whom HVCM might have learned of the action, was not a party at any time within the parameters specified in Rule 15(c)(3). In sum, nothing in the materials before us indicates that HVCM either had notice of 21 1160326 the institution of the action or should have understood that HVCM was, in the absence of mistake, an intended defendant. In light of the foregoing, HVCM has demonstrated that it was added as a defendant -- not substituted for a fictitiously named defendant -- after the expiration of the applicable limitations period and that relation-back principles do not apply. We therefore conclude that HVCM established a clear legal right to the relief sought. See Ex parte Novus Utils., 85 So. 3d at 995–96. See also, generally, Ex parte Hodge, 153 So. 3d 734, 738 (Ala. 2014). "Because we hold that the second amended complaint does not relate back, we need not inquire whether [HVCM] would be prejudiced by allowing the amendment." Prior v. Cancer Surgery of Mobile, P.C., 959 So. 2d 1092, 1097–98 (Ala. 2006) (footnote omitted). In opposition to that showing, Zak -- and, more particularly, his second amended complaint -- fail to allege facts countering HVCM's claims. Instead, he raises two counterarguments: (1) that the claims against HVCM were timely added pursuant to the practice contemplated by Rules 9(h) and 15(c) and (2) that, as a result of removal to federal court, 22 1160326 the statute of limitations was tolled pursuant to 28 U.S.C. § 1367(d), thus rendering his claims timely. Despite Zak's present reliance on the rules of fictitious-party practice governed by Rules 9(h) and 15(c), we note that, as discussed above, in his response in opposition to HVCM's initial motion below, Zak conceded that "technically, the Second Amended Complaint does not substitute HVCM for the fictitious party as would be proper." Zak nevertheless seeks to have applied the analysis governing relation back in the fictitious-party setting. Zak's filings in this Court characterize his acknowledged failure to substitute as a "technicality" that, he maintains, he should have been granted leave to correct. There is, however, nothing in the materials before us demonstrating that Zak ever sought the trial court's permission to correct the alleged technical mistake or that he attempted, at any time, to file a "corrected" second amended complaint seeking to properly substitute HVCM for a defendant that had been previously named fictitiously. We can reach no other conclusion but that Zak's reliance on principles of fictitious-party practice avail him nothing under the present facts. That is especially true, 23 1160326 here, where all evidence suggests -- alleged outstanding discovery aside -- that there is no conceivable way Zak could demonstrate that he was ignorant of the identity of HVCM -- with whom Zak had directly negotiated and communicated -- either at the time the original complaint was filed, at the time Zak's initial discovery requests clearly demonstrating his knowledge of HVCM were filed, or when Zak received the Chamber's discovery responses before the statute of limitations had expired. See Ex parte Nicholson Mfg. Ltd., 182 So. 3d 510, 513 (Ala. 2015) (explaining, with regard to fictitious-party practice, that "'the relation back principle applies only when the plaintiff "is ignorant of the name of an opposing party"'" (quoting Ex parte General Motors of Canada, Ltd., 144 So. 3d 236, 239 (Ala. 2013))). We are similarly unpersuaded by Zak's claims that the statutory tolling provision of 28 U.S.C. § 1367(d) undermines the merit of HVCM's petition. As Zak correctly notes, "[t]he statute of limitations for [a] plaintiff's state law claims are tolled during the pendency of the [federal] action pursuant to 28 U.S.C. § 1367(d) and continue to be tolled for an additional 30 days after dismissal." (Zak's brief, at pp. 24 1160326 17-18.) Nonetheless, this proposition is inapplicable in the present action. "Section 1367(d), 28 U.S.C., specifically states: "'The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.'" Weinrib v. Duncan, 962 So. 2d 167, 169 (Ala. 2007) (original emphasis omitted; emphasis added). As discussed in detail above, however, Zak's claims against HVCM had not been asserted at the time the case was removed to federal court; therefore, those claims were not pending "in the same action that [was] voluntarily dismissed at the same time" as the other pending federal and state-law claims that were dismissed by the federal district court's July 24, 2015, opinion. See Rester v. McWane, Inc., 962 So. 2d 183, 186 (Ala. 2007) ("Section 1367(d) ... tolls state-law claims when those same claims are pending in federal court."). Moreover, as also discussed above, we have already concluded that the claims against HVCM do not relate back to the original complaint. 25 1160326 Based on the foregoing, we hold that the trial court erred in denying HVCM's motion requesting dismissal of Zak's claims on statute-of-limitations grounds. We therefore grant HVCM's petition and issue a writ of mandamus directing the Marshall Circuit Court to vacate its January 3, 2017, order denying HVCM's motion and to enter an order dismissing HVCM as a defendant in the underlying action. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Main, Wise, Bryan, and Sellers, JJ., concur. 26

December 1, 2017

6b2f7d9d-562d-469e-95c8-bc6d7b796756

Family Security Credit Union v. Martha H. Dunagan

N/A

1151004

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

87a5b20f-e263-4e92-8abf-1f1378e90d6e

Ex parte Andrew Hugine, Jr., et al.

N/A

1130428

Alabama

Alabama Supreme Court

REL: 03/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1130428 ____________________ Ex parte Andrew Hugine, Jr., et al. PETITION FOR WRIT OF MANDAMUS (In re: Regina Colston v. Alabama Agricultural and Mechanical University et al.) (Madison Circuit Court, CV-11-901604) MURDOCK, Justice. Andrew Hugine, Jr., Ph.D., Daniel Wims, Ph.D., and Mattie Thomas, Ph.D., petition this Court for a writ of mandamus 1130428 directing the Madison Circuit Court to vacate its December 11, 2013, order that denied their requests for qualified immunity and State-agent immunity from all claims filed against them in their individual capacities by Regina Colston in an action stemming from the termination of Colston's employment at Alabama Agricultural and Mechanical University ("the University") and to enter a summary judgment in their favor. We grant the petition and issue the writ. I. Facts and Procedural History In 1979, Colston was hired as an instructor at the University to teach telecommunications for the School of Arts and Sciences in the Department of English, Foreign Languages, and Telecommunications. She taught broadcast journalism and other similar classes at the University continuously for the next 32 years. Colston holds a bachelor of arts degree in journalism and a master of arts degree in broadcast, film, and communication, both of which she earned from the University of Alabama. Colston has served multiple terms as an officer, and two terms as president, of the University's chapter of the Alabama Education Association ("the AEA"). L. Shefton Riggins, Ph.D., who served two terms on the University's Board 2 1130428 of Trustees ("the Board"), stated in an affidavit that, in her representative capacity with the AEA, "Ms. Colston was well- known among the Board members as a strong advocate for the faculty and staff." The University first hired Thomas as an English instructor in 1964. She was promoted to full professor in 1984. From 1978 until her retirement in July 2010, Thomas served as the chairperson of the University's Department of English, Foreign Languages, and Telecommunications. As the chairperson of the department, Thomas was responsible for planning and directing the work of her department, which included evaluating faculty within the department. Thomas was Colston's immediate supervisor during Colston's entire career at the University, with the exception of Colston's last year of employment with the University. Hugine began his term as president of the University in July 2009. It is undisputed that, at the time Colston's employment was terminated, the president had the authority to make personnel decisions concerning University employees. Wims was hired as provost and vice president for academic affairs of the University in April 2010. In that position, 3 1130428 Wims has responsibility for administrative oversight of the divisions of Academic Affairs and Research at the University. Such oversight includes participation in decisions related to hiring, tenure, and termination of employment of University faculty. In December 1991, Colston submitted to Thomas an application for promotion to associate professor. In a December 3, 1991, letter signed by Bessie Jones, Ph.D., the then interim vice president for academic affairs, the University's Office of Academic Affairs confirmed receiving Colston's application for promotion. On May 12, 1992, the Promotion and Tenure Committee recommended Colston for promotion to associate professor. A June 15, 1992, letter from Jones to Colston stated that Colston's "application for promotion to the rank of assistant professor has been approved."1 Colston alleges that in the fall of 1992 she submitted a similar application seeking tenure. Colston testified that in 1993 Jones told Colston that she "was receiving tenure in 1The terms "associate professor" and "assistant professor" appear to be used interchangeably in the record. 4 1130428 conjunction with her promotion."2 Riggins testified that he recalled "learning when I first joined the Board [in 1994] that Ms. Regina Colston's tenure had been approved by the Board on the recommendation of Dr. Bessie Jones. I recall this, in part, because I was surprised that someone with only a Masters Degree would be approved for tenure."3 Colston notes that an "Office of Academic Affairs Faculty-Unit Rank Report" dated January 7, 1994, from Virginia Caples, then 2Jones died before the underlying action was filed. 3In his affidavit, Riggins testified: "5. In the year 2009, Dr. Hugine and I had a specific discussion about Ms. Colston shortly after he was hired. I told him that Ms. Colston was the President of the University chapter of the AEA and a vocal advocate for the faculty and the staff at the University. I told him that Ms. Colston was tenured, and if he wanted to terminate her he would have to build a strong case in the files around her job performance. "6. I did not instruct Dr. Hugine to terminate Ms. Colston. I told him that if he wanted to fire her, he would have to do so based on well-documented performance problems because she was tenured and because she was President of the University chapter of the AEA. "7. Dr. Hugine and I specifically discussed the presence of the AEA chapter at the University and the nuisance that the AEA would likely be to him. We also discussed Ms. Colston's active leadership role in the AEA." 5 1130428 vice president for academic affairs, indicated that Colston was tenured. A faculty-evaluation form dated May 15, 2002, signed by Thomas as Colston's supervisor, marked Colston as tenured. Colston submitted 10 years of faculty-evaluation forms that she contends indicate that she was tenured. Thomas's assistant, Loretta Townsend, testified by affidavit, however, that the markings on those faculty-evaluation forms actually meant to convey that Colston held a "tenure-track" position, not that she was, in fact, tenured. Thomas testified in her deposition that she did not notice that the forms showed Colston as being tenured. An October 25, 2006, letter from Beverly Edmond, Ph.D., the then provost and vice president for academic affairs, to Colston stated that Colston was "a tenured member of the faculty." In her deposition, Thomas admitted that she had received a copy of that letter. Attached to that letter was a 2006 employment contract for Colston indicating that she was tenured. Colston submitted as evidence a copy of that contract signed by Colston, Edmond, and then president of the University Robert Jennings, Ph.D. A January 18, 2008, self- 6 1130428 study report of Colston's department stated that Colston was a tenured assistant professor at the University. Similarly, an "Academic Program Review Self Study Report" on the department dated February 21, 2011, listed Colston as a tenured professor. Conversely, the petitioners note that the 1988 Faculty Handbook spelled out procedures for obtaining tenure that required review and approval of the Promotion and Tenure Committee's recommendations for tenure by the vice president for academic affairs and the president of the University. Those recommendations were then to be submitted to the Board for review and final approval of tenure.4 The petitioners assert that the University has no record of Colston's filing an application for tenure, no record of the Promotion and Tenure Committee recommending Colston for tenure, no record of the vice president for academic affairs or the president approving a recommendation for Colston's tenure, and, notwithstanding Riggins's testimony, no record of the Board voting to grant Colston tenure. Colston produced no 4An update of the faculty handbook in 1993 modified the procedure to provide that the "final decision" on promotions and tenure was made by the president of the University. 7 1130428 University records to the contrary. A note dated May 11, 2010, Thomas placed in Colston's employment file stated that "Colston is non-tenured." In the 2007-2008 academic year, Thomas started rating Colston poorly in her faculty-evaluation forms. (Previous to that year, Thomas had written positive evaluations of Colston's performance each year she had been chair of the department.) Faculty-evaluation forms pertaining to Colston and signed by Thomas for the 2007-2008 academic year and subsequent years stated that Colston was non-tenured. Also, Colston refused to sign her faculty-evaluation forms from 2007 through 2010 on the basis that, she said, they incorrectly stated that she was not tenured. In the fall of 2009, undertaking to act in her capacity as president of the University's chapter of the AEA, Colston organized and invited all faculty, staff, and administration to attend a presentation to be held on October 20, 2009, titled "Cut Waste, Redundancy -- Not Jobs, Not Pay" ("the presentation"). Colston sent the invitation through the University's e-mail system. Kenneth Hairston of the University's office of general counsel sent Colston a letter 8 1130428 on October 15, 2009, regarding "the email you sent through campus email notifying the university family of an all-campus meeting." Hairston stated that, "[a]lthough [the University] AEA may call meetings on campus, only the president has the authority to call an 'all-campus' meeting. An 'all-campus' meeting implies that employees are authorized to take time away from their positions to attend the meeting. In this case, that is not true since the president did not call the 'all-campus' meeting." The letter was copied to Hugine. In her deposition testimony, Colston asserted that she had called such meetings in the past and had not received any complaints from the administration for those invitations. The presentation was given by University Professor Haresha Khanna. Colston helped prepare the slides for the presentation. The presentation complained that, despite increased revenues, the University had cut the budget for instruction; it had required faculty members to increase their teaching loads; and it was "contemplating outsourcing custodial and ground services functions of the University." The presentation also complained that the University was "continuing to spend more on administration and non-value adding activities." It expressed displeasure with the 9 1130428 University's administration for implementing furlough programs that resulted in cutting salaries of faculty and staff. In this regard, the presentation charged that "[t]he furlough program implemented by the administration is grossly unfair, inequitable and down right regressive. It is, clearly a pay cut for the faculty." The presentation summarized the grievances as follows: "Something is seriously wrong here; what have we done to be punished? Faculty and staff should not have to sacrifice for gross negligence and sheer incompetence of the management." The presentation called for solutions such as: "Cut waste and redundancy, improve operational efficiency, by better management and accountability"; "Divest from non-value added activities"; and "build reserves." The presentation asserted that the University's "organization structure was built to deal with different challenges from a different era. Too often, the result is wasteful spending, bloated bureaucracy and programs producing less than the desirable results." The presentation claimed to offer proposals "to reduce/manage costs and grow revenues which are concrete and quantifiable," which included "proposing ways that [the 10 1130428 University] should be organized to operate efficiently by cutting waste and redundancy" and to build reserves. Among other things, the presentation called for the University to "[r]estructure, realign and consolidate functions of the top administration." Undertaking to act in her capacity as president of the University's chapter of the AEA, Colston submitted a request to make the presentation before the Board. When the Board declined to hear the presentation, Colston sent copies of the presentation to the editorial board of The Huntsville Times and other media outlets in communications in which she identified herself as president of the University's chapter of the AEA. On October 20, 2009, a Huntsville television station ran a news story about the presentation in which Colston was identified as the president of the University's chapter of the AEA. On December 1, 2009, again undertaking to act in her capacity as president of the University's chapter of the AEA, Colston sent a copy of the presentation and a letter to then Governor Bob Riley. The letter provided: "We respectfully request your immediate intervention on behalf of the citizens of this great 11 1130428 state and employees of Alabama A&M University [AAMU] to rescind the recent employment-related decisions made by the administration of Dr. Andrew Hugine, Jr., the president of the university. "We request that AAMU, a state instrumentality, observe and follow the rule of law, longstanding practices and traditions, the constitutionally guaranteed rights and privileges of fellow citizens, and above all respect the dignity of all who are affected by the decisions made. "The recent decisions made by Dr. Hugine directly affect our livelihood, the academic integrity of the institution and have enormous impact on the local and regional economies of north Alabama. Financial and economic stress we are all experiencing was not precipitated by the common faculty or staff members of the university. Declining state support is not unique to AAMU. It is clear, however, AAMU administration was ill- prepared in dealing with the situation and opted for furloughs and pay reduction, and cutting jobs, while other public universities implemented alternative methods of dealing with the situation. "We appreciate and applaud your executive orders and subsequent actions promoting the openness, honesty, and accountability in state government. We respectfully ask that you instruct Dr. Hugine to open the financial records of the university for the last five years and moving forward so that we the taxpayers can analyze and assess the situation. "We look forward to your immediate response and intervention on our behalf. Time is of the essence." The Governor responded to Colston's letter in a letter dated December 11, 2009, in which he thanked Colston for 12 1130428 "taking the time to contact my office regarding your concerns with recent decisions made by the administration of Alabama A&M University." The letter informed Colston that the Governor had forwarded her submission to President Hugine for his "review and consideration." The Governor also "encourage[d]" Colston "to follow up with Dr. Hugine and his administration to discuss your concerns." On December 9, 2009, Colston issued a press release referencing the fact that the University recently had regained accreditation from the Southern Association of Colleges and Schools ("SACS") after SACS had placed the University on probation for 12 months. The press release stated, in pertinent part: "The AAMU-AEA Chapter cautions the AAMU Board of Trustees to be more responsible in protecting the hard work, scholarship, research, teaching and extension done by the faculty and staff and which is accredited under the Southern Association of Schools and Colleges. "The behavior of the BOT has been embarrassing and seriously damaged the good work of the people who really matter: students, faculty, and staff. "We also caution the administration under the leadership of Dr. Andrew Hugine, Jr., to not punish the people who have built this great University. Recent communications give cause for concern that it is his intention to collapse and dismantle important 13 1130428 programs that will ultimately jeopardize our University status and may land us on probation again but for different reasons. This action is a veiled attempt to remove faculty and staff to save money. "We urge Dr. Hugine to rethink the use of the stimulus money to save faculty and staff positions which affect programs rather than using the money for dorms. The stimulus money was to be used to save jobs and reduce the impact of student tuition increases. Restoring academic buildings and not dorms are lower on the hierarchy. The use of the stimulus money for buildings is punitive to the faculty and staff and reflects a laziness and lack of vision on the part of the Administration to raise badly needed funds for deferred maintenance. We urge the President to begin work fundraising to address the dorm issues and where appropriate seek redress through the State of Alabama. "We also urge the President to begin meeting with the faculty and staff in the various schools to shore up morale and seek input directly from these constituencies in a spirit of unity." The following day, December 10, 2009, The Huntsville Times reported that Colston, "A&M's AEA Chapter President ... handed out a Press Release ... urging the Administration to not punish people who have built this great University." Martha Sherrod, a member of the Board, subsequently sent an e-mail to the other members of the Board, which was copied to Hugine, with the subject heading "Release from Regina Colston." In the e-mail, Sherrod stated: "Ms. Colston's release is replete with misinformation. I resent her 14 1130428 statement that 'The behavior of the BOT has been embarrassing and seriously damages the good work of the people who really matter,' and recognize that her behavior has been allowed to go unchecked for a number of years." On March 10, 2010, Professor Khanna was terminated from his position, which he had held for more than 30 years. On May 27, 2010, Colston, again undertaking to act as president of the University's chapter of the AEA, sent Wims an e-mail in which she "respectfully request[ed] that you please insure proper procedure is followed by Dr. Barbara Cady and the Faculty Senate regarding the grievance hearings and the forwarding of the rulings" for faculty members who had been terminated, including Professor Khanna. The e-mail stated that the AEA was particularly concerned that a ruling on Professor Khanna's grievance might be delayed given the "particular interest" that "[t]he University administration has taken ... in Dr. Khanna's hearing." Colston testified at Professor Khanna's grievance hearing. In her testimony, she accused Hugine and others in the University's administration of conspiring to deny Professor Khanna due process, and she asserted that he was 15 1130428 unfairly fired. Colston also testified that the administration systematically was not applying the grievance procedures fairly and in accordance with its own policies and procedures as demonstrated by the way Professor Khanna's hearing was conducted. This testimony was recorded and reported to the Board in October 2010. Colston alleges that sometime during the 2009-2010 school year, the dean of the School of Arts and Sciences, Matthew Edwards ("Dean Edwards"), and the chair of the Department of English, Foreign Languages, and Telecommunications, Thomas, tried to get Colston to change the grades of students who, according to Colston, had not earned the grades Thomas and Dean Edwards were suggesting. Colston represented to some of her colleagues and to some members of the administration that the request for grade changes was unethical behavior. On September 15, 2010, several exchanges occurred between Dean Edwards, the new chair of Colston's department, Gatisinzi Basaninyenzi, Ph.D., and Colston in which Colston noted what she termed "unethical" behavior of the administration. The behavior referenced by Colston concerned an Internet television project she had personally developed that had been 16 1130428 taken over by Dean Edwards and the coordinator of the department without providing Colston with academic credit for the project. Thomas retired from her position on July 1, 2010. On August 12, 2010, Thomas wrote a letter addressed to Wims that was placed in Colston's file. Basaninyenzi, as the new chair of the department, also received a copy of the letter. In the letter, Thomas stated that the chairperson prepares the faculty evaluations and that Colston had failed to sign or return her evaluation forms for the past three years. Thomas stated that "[t]he major point of contention on the [2007–2008] evaluation was [Colston's] tenure status." The letter noted that Colston had refused to sign recent evaluations because they indicated that she was not tenured. Thomas concluded the letter with the assertion that Colston's "failure to respond adequately to the evaluation process during the past three years reveals the evasive, defiant and dishonest patterns of her behavior and her refusal to follow required procedures. She has circumvented all of my efforts to discuss her performance while the quality of her work continues to decline. Her 2009-2010 evaluation clearly reveals her unsatisfactory performance. It is obvious that she has no intentions of improving. I recommended her dismissal." 17 1130428 In his deposition, Wims admitted that he received Thomas's letter, but he stated that it did not constitute a basis for his recommendation that Colston's employment be terminated. Likewise, Basaninyenzi testified that he did not act on Thomas's recommendation because he "had not supervised [Colston]" at that point in time. It is undisputed that the University was facing budget problems when Hugine was hired as president in 2009. As part of its 2009-2010 budget, the University raised tuition and fees, reduced personnel, implemented faculty furloughs, and outsourced facilities management. The presentation organized and disseminated by Colston criticized those measures. The University's budget shortfalls continued through the 2010-2011 fiscal year and the 2011-2012 fiscal year. According to Hugine's testimony, in order to address the problem, he tasked the vice presidents of the University, including Wims, with "the responsibility of compiling recommendations to address these issues." Wims recommended the dismissal of a large number of University employees. Accordingly, he met with the Dean's Council of the University concerning this recommendation. 18 1130428 Pursuant to Wims's instructions, Dean Edwards began reviewing the files of faculty members for the purpose of evaluating faculty for dismissal. In the course of developing a list of potential dismissals, Dean Edwards reviewed the tenure status of each candidate for dismissal. In the case of Colston, Dean Edwards stated that he took into account the May 11, 2010, note from Thomas stating that Colston was not tenured and the fact that he did not see anything in Colston's personnel filed indicating that she was tenured. Dean Edwards testified that he placed Colston on his list of recommendations for dismissal because he "wanted the strongest faculty I can, most capable faculty for both teaching and scholarly productivity," which meant keeping those "who are publishing, who are about their profession, and who are engaged in academic process for it." In total, Dean Edwards recommended seven faculty members in the School of Arts and Sciences for dismissal. Dean Edwards submitted his recommendations to Wims. Wims then investigated Colston's tenure status before making his recommendation for dismissal. The investigation included a review of Colston's personnel file, as well as directives to 19 1130428 Dean Edwards and Basaninyenzi to search for any helpful documents. Wims admitted that in the course of his investigation he saw in Colston's file the October 25, 2006, letter from Edmond to Colston that stated that Colston was tenured, but he stated that he concluded that Edmond must have been mistaken based on the lack of evidence that Colston had obtained tenure through the normal procedures. According to Wims, following his investigation he concluded that there was no evidence indicating that Colston had ever been awarded tenure through the ordinary approval process. Thereafter, Wims, Dean Edwards, and Basaninyenzi met to discuss the dismissal of employees within the Department of English, Foreign Languages, and Telecommunications. Basaninyenzi testified that Colston was not specifically discussed during the meeting. Basaninyenzi stated, however, that he was aware that Colston was one of the highest paid non-tenured faculty in his department. At the conclusion of the meeting, Wims, Dean Edwards, and Basaninyenzi executed memoranda dated June 22, 2011, recommending Colston and six other faculty members within the School of Arts and Sciences for dismissal. 20 1130428 After receiving the memorandum recommending Colston's dismissal, Hugine approved her dismissal. Hugine testified that the recommendation from Basaninyenzi, Dean Edwards, and Wims constituted all that he considered in approving Colston's dismissal. In correspondence dated June 24, 2011, Hugine informed Colston that "based on the recommendation of your Chair, [Basaninyenzi] and approval by Dean [Edwards] and [Wims,] Provost and Vice President of Academic Affairs, ... your employment ... will end effective July 31, 2011." The correspondence did not list a reason for the termination. Its subject heading read: "No Cause Termination of Your Employment at Alabama A&M University."5 James D. Montgomery, Sr., a member of the Board of Trustees at the time Colston filed the present action, testified in his deposition as to the reason he believed Colston's employment was terminated: "I believed then, as I do now, that she was terminated because of her outspokenness, because she was challenging. And, in my opinion, the 5In 2011, the Alabama Legislature amended § 16-49-23, Ala. Code 1975, placing in the office of the president of the University certain powers previously held by the Board. Of particular note is the fact that the amended statute empowered the president, rather than the board of trustees, to terminate the employment of University faculty. 21 1130428 University, or President Hugine and his administrative staff ... seem to have it in for you if you cross them in any way. "And I say that because that's not based on hearsay or based -- it's based on my own personal experience with them. So, I believe that she was terminated and fired from her job because she spoke up, where she testified at [Professor] Khanna's hearing, if that would have been considered going against the administration. And I believe that's why they fired her. I don't think it was because she wasn't tenured. I don't think it was because she wasn't doing a good job. It was because she was stirring up trouble." Montgomery also testified that he thought "there was animus toward [Colston] from [Wims] and Dr. Hugine." Colston filed a grievance upon being fired. The Grievance Committee held a hearing concerning Colston's dismissal on September 8, 2011. In the hearing, the University reiterated that Colston's was a so-called "no-cause" termination. After the hearing, on September 26, 2011, the chair of the Grievance Committee, Patricia Young, sent Colston a letter stating that a majority of the committee members found that certain exhibits submitted by Colston "suggest that you are Tenured." The Grievance Committee sent the administration a letter recommending that it consider some of the evidence indicating that Colston was tenured before 22 1130428 finalizing the termination of her employment. The administration had the vice president for academic affairs consider the matter, and he notified Colston that her dismissal was final. Colston filed this action on November 30, 2011, in the Madison Circuit Court against the University; the Board; the members of the Board and Hugine in their official capacities; and Hugine in his individual capacity. The University filed a motion to dismiss the complaint, and, in response, Colston filed her first amended complaint on February 22, 2012. The University renewed its motion to dismiss in a filing submitted March 7, 2012. On May 1, 2012, the trial court entered an order on the pending motions to dismiss in which it, in pertinent part, dismissed all state-law claims that sought recovery of monetary damages against the University. On November 2, 2012, Colston filed a second amended complaint that contained 11 counts and that added as defendants Wims in both his official capacity and his individual capacity and Thomas in her individual capacity. Relevant to the present petition are six counts of the second 23 1130428 amended complaint: counts 2 and 4, which alleged violations of Colston's First Amendment rights, and counts 7 through 10, which alleged violations of state law. Count 2 asserted that Colston "engaged in speech by opposing and criticizing the financial practices, the handling of administrative appointments, the unethical changing of grades and usurpation of academic pursuits, the business practices, and other important matters of public concern relating to [the University]." It alleged that Hugine and Wims improperly terminated Colston's employment because she exercised her First Amendment right to free speech by discussing the above-listed matters. Colston requested damages against Hugine and Wims in their individual capacities for violating Colston's constitutional right to free speech by terminating her employment. Count 4 alleged that Hugine and Wims terminated Colston's employment because of her association with the AEA, an association protected by the First Amendment. Colston requested damages against Hugine and Wims in their individual capacities for violating Colston's constitutional right to free association by terminating her employment. 24 1130428 Count 7 alleged that Hugine and Wims wrongfully terminated Colston's employment because they dismissed her without providing her a pretermination hearing.6 Colston alleged that she was entitled to a pretermination hearing because, she says, she was a tenured employee. The complaint stated that "Dr. Hugine (in his individual capacity) and Dr. Wims (in his individual capacity) acted wilfully, maliciously, fraudulently, in bad faith, beyond their authority or under a mistaken interpretation of law in terminating Regina Colston's employment without a pre- termination hearing." Count 8 alleged that Hugine and Wims committed fraud or misrepresentation by allowing Colston to believe that she was tenured and "[w]ithout disclosing to her their belief that she was obligated to take further actions under the policies" in order to obtain tenure. Colston alleged that she "reasonably relied on these material omissions and/or misrepresentations regarding her tenured status and ... reasonably expected continued employment as a tenured assistant professor." 6Colston also asserted this claim against the members of the Board in their official capacities, but that aspect of count 7 is not before us in the present mandamus petition. 25 1130428 Colston further alleged that "[t]hese misrepresentations and/or omissions" were to her detriment when she was dismissed without a pretermination hearing. Colston asserted that Hugine and Wims should be held individually responsible for "terminating Regina Colston's employment without cause and without a pre-termination hearing on the basis that she was not tenured." In counts 9 and 10, Colston alleged that Thomas and Wims tortiously interfered with Colston's contractual relationship with the University. With regard to Thomas, Colston alleged that she committed a series of acts intended to undermine Colston's tenured status. With regard to Wims, Colston alleged that he was aware that Colston had tenure but that he "conspired with Thomas and instructed her to place a memorandum in the file [stating] that Regina Colston was not tenured in order to terminate her not for cause and avoid her being available for an interview by SACS, for which he was responsible." On November 16, 2012, the University filed a "Motion to Dismiss or, in the Alternative, Motion for Summary Judgment" concerning the second amended complaint. The parties engaged 26 1130428 in extensive discovery that included deposing 19 witnesses and producing nearly 23,000 pages of documentation. On July 26, 2013, all the defendants filed a "Supplemental Motion for Summary Judgment." In that motion and the memorandum of law that accompanied it, the defendants argued that Hugine and Wims were entitled to qualified immunity in their individual capacities for Colston's First Amendment retaliation claims (counts 2 and 4) and that Hugine, Wims, and Thomas were entitled to State-agent immunity in their individual capacities as to Colston's state-law claims (counts 7 through 10). On December 11, 2013, the trial court entered an order addressing various motions for a summary judgment. Specifically, the trial court entered a summary judgment in favor of the defendant as to all claims by Colston seeking compensatory and/or punitive damages against any defendant in the defendant's official capacity. The trial court denied summary judgment as to all other claims asserted by Colston. Subsequently, Hugine, Wims, and Thomas filed the present petition for a writ of mandamus with this Court in which they asked this Court to vacate the trial court's December 11, 27 1130428 2013, order to the extent that it denied Hugine and Wims qualified immunity from Colston's First Amendment retaliation claims against them in their individual capacities and to the extent that it denied Hugine, Wims, and Thomas State-agent immunity from Colston's state-law claims against them in their individual capacities and to enter a summary judgment in their favor as to Colston's claims against them. II. Standard of Review "This Court has stated: "'"While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion grounded on a claim of immunity is reviewable by petition for writ of mandamus. Ex parte Purvis, 689 So. 2d 794 (Ala. 1996) .... "'"Summary judgment is appropriate only when 'there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.' Rule 56(c)(3), Ala. R. Civ. P., Young v. La Quinta Inns, Inc., 682 So. 2d 402 (Ala. 1996). A court considering a motion for summary judgment will view the record in the light most favorable to the nonmoving party, Hurst v. Alabama Power Co., 675 So. 2d 397 (Ala. 28 1130428 1996), Fuqua v. Ingersoll-Rand Co., 591 So. 2d 486 (Ala. 1991); will accord the nonmoving party all reasonable favorable inferences from the evidence, Fuqua, supra, Aldridge v. Valley Steel Constr., Inc., 603 So. 2d 981 (Ala. 1992); and will resolve all reasonable doubts against the moving party, Hurst, supra, Ex parte Brislin, 719 So. 2d 185 (Ala. 1998). "'"An appellate court reviewing a ruling on a motion for summary judgment will, de novo, apply these same standards applicable in the trial court. Fuqua, supra, Brislin, supra. Likewise, the appellate court will consider only that factual material available of record to the trial court for its consideration in deciding the motion. Dynasty Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala. 1991), Boland v. Fort Rucker Nat'l Bank, 599 So. 2d 595 (Ala. 1992), Rowe v. Isbell, 599 So. 2d 35 (Ala. 1992)."' "Ex parte Turner, 840 So. 2d 132, 135 (Ala. 2002) (quoting Ex parte Rizk, 791 So. 2d 911, 912-13 (Ala. 2000)). A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: '"(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court."' Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003) 29 1130428 (quoting Ex parte BOC Group, Inc., 823 So. 2d 1270, 1272 (Ala. 2001))." Ex parte City of Montgomery, 99 So. 3d 282, 291-92 (Ala. 2012). "We review the validity of a qualified immunity defense de novo. Elder v. Holloway, 510 U.S. 510, 516, 114 S.Ct. 1019, 127 L.Ed.2d 344 (1994)." Volkman v. Ryker, 736 F.3d 1084, 1089 (7th Cir. 2013). We are also mindful of the fact that, "[a]s a general rule, 'summary judgment is particularly inappropriate in first amendment cases.'" Hatcher v. Board of Pub. Educ. & Orphanage for Bibb Cty., 809 F.2d 1546, 1558 (11th Cir. 1987) (quoting Ferrara v. Mills, 781 F.2d 1508, 1515 (11th Cir. 1986)). III. Analysis A. Colston's First Amendment Claims and Qualified Immunity As we noted in Part I of this opinion, Colston asserts claims under 42 U.S.C. § 1983 alleging that Hugine and Wims violated her First Amendment rights to free speech and free association when they terminated her employment with the University. Hugine and Wims assert that they are protected from Colston's claims by qualified immunity because, they say, they were acting within their discretionary authority when 30 1130428 they terminated Colston's employment and they did so for budgetary reasons, not because of Colston's First Amendment activities. "Qualified immunity offers complete protection for individual public officials performing discretionary functions 'insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.'" Sherrod v. Johnson, 667 F.3d 1359, 1363 (11th Cir. 2012) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)). "In Saucier [v. Katz,] 533 U.S. 194, 121 S.Ct. 2151 [(2001)], this Court mandated a two-step sequence for resolving government officials' qualified immunity claims. First, a court must decide whether the facts that a plaintiff has alleged (see Fed. Rules Civ. Proc. 12(b)(6), ©)) or shown (see Rules 50, 56) make out a violation of a constitutional right. 533 U.S., at 201, 121 S.Ct. 2151. Second, if the plaintiff has satisfied this first step, the court must decide whether the right at issue was 'clearly established' at the time of defendant's alleged misconduct. Ibid. Qualified immunity is applicable unless the official's conduct violated a clearly established constitutional right. Anderson [v. Creighton, 483 U.S. 635,] 640, 107 S.Ct. 3034 [(1987)]." Pearson v. Callahan, 555 U.S. 223, 232 (2009). Before we evaluate the two prongs of the test for qualified immunity, however, we must examine the threshold 31 1130428 issue of discretionary function. "To even be potentially eligible for summary judgment due to qualified immunity, the official must have been engaged in a 'discretionary function' when he performed the acts of which the plaintiff complains." Holloman v. Harland, 370 F.3d 1252, 1263-64 (11th Cir. 2004). In this regard, "[o]ur inquiry is two-fold. We ask whether the government employee was (a) performing a legitimate job-related function (that is, pursuing a job-related goal), (b) through means that were within his power to utilize." Id. at 1265.7 7 "In many areas other than qualified immunity, a 'discretionary function' is defined as an activity requiring the exercise of independent judgment, and is the opposite of a 'ministerial task.' See, e.g., Williams v. Wood, 612 F.2d 982, 985 (5th Cir. 1980). In the qualified immunity context, however, we appear to have abandoned this 'discretionary function/ministerial task' dichotomy. In McCoy v. Webster, 47 F.3d 404, 407 (11th Cir. 1995), we interpreted 'the term "discretionary authority" to include actions that do not necessarily involve an element of choice,' and emphasized that, for purposes of qualified immunity, a governmental actor engaged in purely ministerial activities can nevertheless be performing a discretionary function." Holloman, 370 F.3d at 1265. 32 1130428 Colston contends that Hugine and Wims were not engaged in a discretionary function because they allegedly violated requirements of the University handbook in terminating Colston's employment. In making this argument, however, Colston misunderstands the nature of the initial inquiry concerning the applicability of qualified immunity. 8 "Instead of focusing on whether the acts in question involved the exercise of actual discretion, we assess whether they are of a type that fell within the employee's job responsibilities. ... ".... "Consider the first prong of the test -- whether the official is engaged in a legitimate job-related function. In Sims v. Metropolitan Dade County, 972 F.2d 1230 (11th Cir. 1992), 'we did not ask whether it was within the defendant's authority to suspend an employee for an improper reason; instead, we asked whether [the defendant's] discretionary duties included the administration of discipline.' Harbert [Int'l., Inc. v. James], 157 F.3d [1271] at 1282 [(11th Cir. 1998)]. ... Put another way, to pass the first step of the discretionary function test for qualified immunity, the defendant must have been performing a function that, but for the alleged constitutional infirmity, would have fallen with his legitimate job description. 8In misunderstanding a portion of the qualified-immunity analysis, Colston is far from alone. See, e.g., Ex parte Madison Cty. Bd. of Educ., 1 So. 3d 980, 994 (Ala. 2008) (Murdock, J., concurring in the result) (suggesting that there may be "'no area of the law which is more confusing than qualified immunity ....'" (quoting Flowers v. Bennett, 123 F. Supp. 2d 595, 601 (N.D. Ala. 2000))). 33 1130428 ".... "After determining that an official is engaged in a legitimate job-related function, it is then necessary to turn to the second prong of the test and determine whether he is executing that job-related function -- that is, pursuing his job-related goals -- in an authorized manner. ... Each government employee is given only a certain 'arsenal' of powers with which to accomplish her goals. For example, it is not within a teacher's official powers to sign her students up for the Army to promote patriotism or civic virtue, or to compel them to bring their property to school to redistribute their wealth to the poor so that they can have firsthand experience with altruism." 370 F.3d at 1265, 1266-67 (some emphasis added). Employment decisions are clearly within the job description of the president of the University, and the provost is specifically designated to help the president in making such decisions. See § 16-49-23, Ala. Code 1975. Likewise, dismissal is among the tools available to the president in making employment decisions. See id. Therefore, when they terminated Colston's employment, Hugine and Wims were engaged in a "discretionary function" as that concept is understood for purposes of the doctrine of qualified immunity. "[O]nce a defendant establishes that he was engaged in a discretionary function at the time of the acts in question, the burden shifts to the plaintiff to show that the defendant is not entitled to summary judgment on qualified immunity grounds. To do so, 34 1130428 the plaintiff must demonstrate that a reasonable jury could interpret the evidence in the record as showing that the defendant violated a constitutional right that was clearly established at the time of the acts in question." Holloman, 370 F.3d at 1267. Colston has alleged that Hugine and Wims should be personally liable for money damages because, she contends, they violated her First Amendment rights to free speech and free association. Evaluating whether a government official violated the free-speech rights of a government employee -- Colston was employed by a state-sponsored university -- involves its own special test grounded in the decision of the United States Supreme Court in Pickering v. Board of Education of Township High School District 205, 391 U.S. 563 (1968). In Boyce v. Andrew, 510 F.3d 1333, 1342 n.12 (11th Cir. 2007), the United States Court of Appeals for the Eleventh Circuit explained: "Following Pickering, our analysis of retaliation against an employee by a government employer for alleged constitutionally protected speech has been comprised of four parts: "'To prevail under this analysis, an employee must show that: (1) the speech involved a matter of public concern; (2) the employee's free speech interests outweighed the employer's interest in 35 1130428 effective and efficient fulfillment of its responsibilities; and (3) the speech played a substantial part in the adverse employment action. If an employee satisfies her burden on the first three steps, [(4)] the burden then shifts to the employer to show by a preponderance of the evidence that it would have made the same decision even in the absence of the protected speech.'" (Quoting Cook v. Gwinnett Cty. Sch. Dist., 414 F.3d 1313, 1318 (11th Cir. 2005).) "Whether an employee's speech addresses a matter of public concern must be determined by the content, form, and context of a given statement, as revealed by the whole record." Connick v. Myers, 461 U.S. 138, 147-48 (1983). "[T]he Connick test requires us to look at the point of the speech in question: Was it the employee's point to bring wrongdoing to light? Or to raise issues of public concern? Or was the point to further some purely private interest?" Hesse v. Board of Educ. of Twp. High Sch. Dist. No. 211, Cook Cty., Ill., 848 F.2d 748, 752 (7th Cir. 1988). "[P]ublic concern is something that is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public at the time of publication." City of San Diego, Cal. v. Roe, 543 U.S. 77, 83-84 (2004). "[Because] '[a]n 36 1130428 employee's speech will rarely be entirely private or entirely public,' the 'main thrust' of the employee's speech must be determined." Maggio v. Sipple, 211 F.3d 1346, 1352 (11th Cir. 2000) (quoting Morgan v. Ford, 6 F.3d 750, 755 (11th Cir. 1993)). The petitioners contend that "the 'main thrust' of [Colston's] 'speech' concerned quintessential internal college affairs and items of personal, rather than public, concern." (Quoting Mayles v. Richmond Cty. Bd. of Educ., 267 F. App'x 898, 900 (11th Cir. 2008) (not selected for publication in the Federal Reporter).) Colston disagrees. Indeed, the parties disagree as to the application of each of the Pickering factors. Courts use the same general test for evaluating whether defendants in their individual capacities are entitled to qualified immunity from free-association claims as they do for free-speech claims, i.e., whether the defendants' conduct violated a constitutional right and whether that right was "clearly established" at the time of the defendants' action. One difference between a free-speech analysis and a free- association analysis is that, "unlike speech or petitions by 37 1130428 public employees, associational activity by public employees need not be on matters of public concern to be protected under the First Amendment." D'Angelo v. School Bd. of Polk Cty., Fla., 497 F.3d 1203, 1212 (11th Cir. 2007). Courts do apply the remainder of the Pickering test, however, in evaluating whether a defendant violated a public-employee plaintiff's right to free association. See, e.g., Ross v. Clayton Cty., Ga., 173 F.3d 1305, 1310 (11th Cir. 1999) (stating that "Pickering requires the district court to balance the interest of the public employee in exercising his right of free speech or association against the 'interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.'" (quoting Pickering, 391 U.S. at 568)). Again, the parties disagree as to the proper application of essentially all the elements of the law applicable to Colston's associational claims. In this case we need not determine whether Colston's speech addressed matters of public concern, how to balance Colston's free-speech interests against the public employer's interest in effective and efficient fulfillment of its responsibilities, whether Colston's speech played a 38 1130428 substantial motivating factor in her dismissal, or whether other aspects of the Pickering test are met as to Colston's free-speech claims. Nor must we resolve similar disputes over application of the Pickering test to Colston's associational claims. Those issues may be pretermitted because, even if Colston presented substantial evidence in her favor on all of these matters, the record reflects a separate, objectively lawful basis for terminating Colston's employment. In Foy v. Holston, 94 F.3d 1528 (11th Cir. 1996), the United States Court of Appeals for the Eleventh Circuit explained the applicable law in so-called "mixed-motive cases": "That state officials can act lawfully even when motivated by a dislike or hostility to certain protected behavior by a citizen is well established. See Mt. Healthy v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1979). ... For example, state officials act lawfully despite having discriminatory intent, where the record shows they would have acted as they, in fact, did act even if they had lacked discriminatory intent. Mt. Healthy, 429 U.S. at 286–87, 97 S.Ct. at 576. ".... "One trigger to the doctrine's application depends upon whether the record establishes that the defendant, in fact, did possess a substantial lawful motive for acting as he did act. At least when an adequate lawful motive is present, that [an 39 1130428 unlawful] motive might also exist does not sweep qualified immunity from the field even at the summary judgment stage. Unless it, as a legal matter, is plain under the specific facts and circumstances of the case that the defendant's conduct -- despite his having adequate lawful reasons to support the act -- was the result of his unlawful motive, the defendant is entitled to immunity. Where the facts assumed for summary judgment purposes in a case involving qualified immunity show mixed motives (lawful and unlawful motivations) and pre-existing law does not dictate that the merits of the case must be decided in plaintiff's favor, the defendant is entitled to immunity." 94 F.3d at 1534-35 (some emphasis added). It is not plain as a legal matter, under the specific facts and circumstances of this case, that the defendants' conduct -- despite adequate lawful reasons therefor -- was the result of their unlawful motive. It is undisputed that there were budgetary constraints in existence at the University at the time of Colston's dismissal. In June 2011, the University administration reported to the Board of Trustees that the University would experience a $10.6 million reduction in state funding for the 2011-2012 fiscal year. The administration simultaneously announced that a significant number of University personnel would be dismissed in an effort to address the funding shortfall. The petitioners note that even 40 1130428 Professor Khanna in his presentation conceded that the University was overstaffed and that this overstaffing included faculty. Perhaps most significantly, it is undisputed that, as a result of the budget shortfall, the University subsequently dismissed 33 employees, including 7 faculty members in the School of Arts and Sciences, and that Colston was among those let go. Consequently, there was an adequate lawful basis for terminating Colston's employment. 9 It also is undisputed that Dean Edwards initially compiled the list of seven faculty members from the School of Arts and Sciences who would be recommended for dismissal, and Colston was on the list. Dean Edwards testified without contradiction that he did not consult with anyone else in developing the criteria for placement of a faculty member on the list or in producing his initial list. He stated that he formulated the list as he did because he "wanted the strongest faculty ..., most capable faculty for both teaching and scholarly productivity," which meant keeping those "who are 9Any claim that termination of Colston's employment was improper because she was tenured is not part of Colston's First Amendment claims. Notwithstanding Colston's focus on the "facts" regarding the issue of her tenure, this particular case concerns Colston's First Amendment rights, not her rights as an allegedly tenured faculty member. 41 1130428 publishing, who are about their profession, and who are engaged in academic process for it."10 Dean Edwards testified that he was unaware of Colston's position with the AEA or with her speaking activities performed in that role. Of particular note, it is undisputed that neither Hugine nor Wims suggested to Dean Edwards that he should put Colston on his list. After he compiled his list, Dean Edwards met with Wims and Basaninyenzi. According to Dean Edwards, Basaninyenzi requested that one faculty member on the list (not Colston) be substituted for another, but the three men did not discuss Colston. Basaninyenzi also confirmed that they did not discuss Colston. At the conclusion of the meeting, Wims, Dean Edwards, and Basaninyenzi executed memoranda recommending the termination of the employment of Colston and six other faculty members within the School of Arts and Sciences. Hugine testified that he approved the dismissals based solely on the recommendations from those officials. Both Hugine and Wims testified that budget shortfalls were the driving force behind all the dismissals. 10Dean Edwards also stated that Colston was the highest paid non-tenured professor in the School of Arts and Sciences. 42 1130428 Colston argues that the budgetary shortfall was a pretext for firing her for impermissible reasons. She points to evidence indicating that the petitioners did not raise the budget concerns as a defense until 14 months into the action and the fact that the University sought a replacement to teach Colston's courses. This, however, does not constitute substantial evidence that, but for the allegedly protected speech and associations, Hugine and Wims would have ignored the recommendations on the list, a list that was not influenced in any way by suggestions from Hugine or Wims. In addition, there is evidence indicating that the budget concerns were not raised earlier in the action because the relevant persons involved in the decision-making process were not deposed by Colston until that time. Although it is true that the University advertised for another communications faculty position, this simply represented the University's effort to find professors to teach some of the courses Colston taught; the University did not fill Colston's full-time position.11 11Colston also cites James Montgomery's testimony as to his belief that Colston was fired for "stirring up trouble." Yet, Montgomery did not talk to Hugine or Wims about Colston's dismissal. His statements merely reflected his opinion as to 43 1130428 As was the case in Foy, "the record makes it clear that the Defendants' acts" -- which in this case followed approximately a year and a half after the activity at issue -- "were actually motivated by lawful considerations without which they would not have acted." Foy, 94 F.3d at 1535. In discussing its own facts as well as those in Foy, Johnson v. City of Fort Lauderdale, Fla., 126 F.3d 1372 (11th Cir. 1997), and Stanley v. City of Dalton, Ga., 219 F.3d 1280, 1294 (11th Cir. 2000), the court in Rioux v. City of Atlanta, 520 F.3d 1269 (11th Cir. 2008), provides a helpful discussion: "We now turn to Appellees' defense of qualified immunity, interposed in the individual capacity claims for money damages. '[Q]ualified immunity protects government officials performing discretionary functions from the burdens of civil trials and from liability,' McMillian v. Johnson, 88 F.3d 1554, 1562 (11th Cir. 1996) (citing Lassiter v. Alabama A&M Univ., 28 F.3d 1146, 1149 (11th Cir. 1994) (en banc)), '[i]n all but exceptional cases.' Id. It is only 'when an official's conduct violates "clearly established statutory or constitutional rights of which a reasonable person would have known"' that 'the official is not protected by the reason for the termination of Colston's employment. Importantly, Montgomery's testimony does not dispute that there was a cost-cutting effort at the University, nor does it cast any doubt on the legitimacy of the creation of the list used to achieve the necessary cost-cutting. Montgomery's conclusory testimony did not meet the particulars of the objectively lawful motive otherwise shown for the termination of Colston's employment. 44 1130428 qualified immunity.' Id. (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)). ".... "Rioux's claims, if believed, would establish a violation of the Equal Protection Clause, which ensures the right to be free from intentional discrimination based on race. Williams v. Consol. City of Jacksonville, 341 F.3d 1261, 1268 (11th Cir. 2003); see also Yeldell v. Cooper Green Hosp., Inc., 956 F.2d 1056, 1064 (11th Cir. 1992) (holding that intentional discrimination in hiring and firing practices violated Equal Protection Clause). If the trier of fact believed Rioux's showing of pretext, and disbelieved Appellees' proffered legitimate reason, then a violation of the Equal Protection Clause would be shown. The 'other' evidence from which a jury might infer discriminatory animus on the part of Rubin and COO Young, which we have summarized above, constitutes that showing by Rioux, at the summary judgment stage, of the violation of a constitutional right. ".... "We therefore turn to an examination of 'whether the defendant's conduct was nonetheless "objectively reasonable" in light of that [Equal Protection] right.' Johnson [v. City of Fort Lauderdale, Fla.], 126 F.3d [1372] at 1378 [(11th Cir. 1997)] (citing Anderson [v. Creighton], 483 U.S. [635] at 638, 107 S.Ct. 3034 [(1987)]). Rioux must demonstrate at this step in the qualified immunity analysis that a reasonable fire chief and a reasonable chief operating officer of a city would know that demoting a high-ranking, subordinate, discretionary officer in the factual circumstances presented here violated clearly established law. See Stanley v. City of Dalton, Ga., 219 F.3d 1280, 1294 (11th Cir. 2000) 45 1130428 (citing Harlow, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396). And it is this that he cannot show. "Clearly established law provides that state officials 'can be motivated, in part, by a dislike or hostility toward a certain protected class to which a citizen belongs and still act lawfully ....' Foy, 94 F.3d at 1534 (citing Vil. of Arlington Hts. v. Metro. Housing Dev., 429 U.S. 252, 269-71 n. 21, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977)); see also Mt. Healthy v. Doyle, 429 U.S. 274, 286-87, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). Thus, 'state officials act lawfully despite having discriminatory intent, where the record shows they would have acted as they, in fact, did act even if they had lacked discriminatory intent.' Id. (citing Mt. Healthy, 429 U.S. at 286-87, 97 S.Ct. 568). ... "Foy explained: "'At least when an adequate lawful motive is present, that a discriminatory motive might also exist does not sweep qualified immunity from the field even at the summary judgment stage. Unless it, as a legal matter, is plain under the specific facts and circumstances of the case that the defendant's conduct--despite his having adequate lawful reasons to support the act--was the result of his unlawful motive, the defendant is entitled to immunity. Where the facts assumed for summary judgment purposes in a case involving qualified immunity show mixed motives (lawful and unlawful motivations) and pre-existing law does not dictate that the merits of the case must be decided in plaintiff's favor, the defendant is entitled to immunity.' "94 F.3d at 1534-35. 46 1130428 "Tracking the reasoning used in Foy to reverse the denial of summary judgment where qualified immunity was interposed as a defense, here no jury could find that it would have been unlawful for a fire chief and the city's chief operating officer to do as Appellees did if they had lacked discriminatory intent. Id. at 1535. No jury could find that a reasonable fire chief and chief operating officer would never have demoted Rioux but for a discriminatory intent. Id. The record here, as in Foy, undisputably establishes that Appellees were motivated at least in part by lawful justifications, supported by the independent investigations conducted by OPS [Office of Professional Standards] and the Law Department, investigations which these two decisionmakers were not a part of and which there is no evidence they manipulated. Id. at 1535 n.9. Cf. McMillian, 88 F.3d 1554 (affirming trial court denial of summary judgment where genuine issues of fact existed as to reasons officials placed plaintiff on death row, in part, due to issue of whether officers lied concerning their reasons). ".... "The objective reasonableness inquiry in Stanley proceeded in the following manner. Chadwick, the chief of police, had cause to resent Stanley, a police officer who had years before named Chadwick as a suspect in an investigation. Years after Stanley's remarks, and following several disciplinary incidents, Chadwick terminated Stanley, and Stanley brought a section 1983 action for violation of his first amendment rights. The reversal of the denial of a motion for summary judgment on qualified immunity rested on two undisputed facts. First, the record undisputably established that objectively valid reasons existed for the step Chadwick took, because the incidents underlying the discipline that led to the termination did in fact take place. Thus, 'no jury 47 1130428 could find that it would have been unlawful to terminate Stanley as Chadwick did absent retaliatory motive.' Id. at 1296. "Second, summary judgment was appropriate because the record undisputably established that Chadwick was motivated, at least in part, by the lawful considerations of the disciplinary incidents. A four-year time gap existed between Stanley's initial protected speech naming Chadwick as a suspect, and in those four years, Stanley had engaged in actions that resulted in discipline. 'Even if a reasonable police chief acted with retaliatory motive, the law in 1997 did not clearly establish that a reasonable police chief--faced with the same undisputed evidence of Stanley's misconduct and undisputably acting at least in part because of Stanley's misconduct--should not have terminated Stanley in the same manner.' Id. at 1297 (citing Johnson, 126 F.3d at 1379). "Similarly, Johnson reversed the denial of a summary judgment motion raising qualified immunity on the ground that the demotion and discharge of the plaintiff-firefighter was based on indisputable and adequate lawful motives, specifically, the firefighter's failure to obey a direct order and repeated lies at his disciplinary hearing. 126 F.3d at 1379. In Johnson, '[e]ven assuming that the defendants acted with some discriminatory or retaliatory motives in demoting and discharging Johnson, the law did not clearly establish that a reasonable official faced with the same evidence of disobedience and deception should not have disciplined Johnson in the same manner.' Id. at 1379. Cf. Bogle [v. McClure], 332 F.3d [1347] at 1356 [(11th Cir. 2003)] (affirming denial of renewed motion for judgment as a matter of law following jury verdict where evidence suggested defendants' evidence of reorganization plan was a sham designed to cover-up race-based transfers and jury squarely found appellants intentionally discriminated on 48 1130428 account of race, rejecting proffered nondiscriminatory reasons). "Here, the record shows Appellees were in fact motivated, at least in part, by objectively valid reasons in demoting Rioux. Notwithstanding the evidence of pretext, which is sufficient to sustain Rioux's burden of showing that his demotion was the result of discrimination, there is no evidence that Rubin or COO Young influenced two independent investigations concerning the May 2, 2004 incident. There is no evidence that the May 2, 2004 incident did not in fact take place, or that the incident did not involve some violation of one or more work rules by the second-highest ranking member of the AFD. No evidence was presented that Appellees' decisions to demote Rioux were not motivated, at least in part, by the lawful consideration of the OPS and Law Department's concluded investigations and findings. We cannot say that, even assuming Appellees were acting with improper race-based animus or a desire to address race-balancing in the workplace, reasonable officials faced with the same evidence of Rioux's violations of work rules would have known that demoting Rioux violated clearly established federal law. "Because pre-existing law did not provide fair warning to Appellees that demoting Rioux under these circumstances would violate clearly established federal law, Appellees are entitled to qualified immunity." Rioux, 520 F.3d at 1282–85 (some emphasis added). As was the case in Foy, Rouix, Stanley, and Johnson, there is no genuine issue as to whether the defendants in the present case "were motivated at least in part by lawful justifications, supported by independent [recommendations] ... which these ... 49 1130428 decisionmakers were not a part of and which there is no evidence they manipulated." Rioux, 520 F. 3d at 1284. "When public officials do their jobs, it is a good thing. Qualified immunity is a real-world doctrine designed to allow local officials to act (without always erring on the side of caution) when action is required to discharge the duties of public office. See Davis v. Scherer, 468 U.S. 183, 196, 104 S.Ct. 3012, 3020, 82 L.Ed.2d 139 (1984) ('[O]fficials should not always err on the side of caution.'). For many public servants, a failure to act can have severe consequences for the citizenry. ... "As we decide this case, we cannot forget the purpose of qualified immunity. The qualified immunity defense functions to prevent public officials from being intimidated -- by the threat of lawsuits which jeopardize the official and his family's welfare personally -- from doing their jobs. Qualified immunity can be a muscular doctrine that impacts on the reality of the workaday world as long as judges remember that the central idea is this pragmatic one: officials can act without fear of harassing litigation only when they can reasonably anticipate -- before they act or do not act -- if their conduct will give rise to damage liability for them." Foy, 94 F.3d at 1534. Ultimately, Foy instructs that "whenever a public officer is sued for money damages in his individual capacity for violating federal law, the basic qualified immunity question looms unchanged: Could a reasonable officer have believed that what the defendant did might be lawful in the 50 1130428 circumstances and in the light of the clearly established law?" Id. The clear answer to that question in this case is yes. Budgetary constraints are a common and entirely legal reason for dismissing employees. The evidence indicates that Hugine and Wims were motivated, at least in part, by the University's financial situation in deciding to terminate Colston's employment. There is also no evidence indicating that the unconstitutional motive advanced by Colston for her dismissal was a factor in her name being placed on the original list of faculty members Dean Edwards offered as candidates for dismissals. In short, under the test enunciated in Foy, Hugine and Wims established as a matter of law that they would have made the same decision concerning Colston's employment with the University even in the absence of her speech and associational activities. Therefore, Hugine and Wims are entitled to qualified immunity from Colston's federal constitutional claims, and the trial court erred in concluding otherwise. B. Colston's State-law Claims and State-agent Immunity Colston also asserts claims against Hugine, Wims, and Thomas under state law related to the termination of her 51 1130428 employment. Specifically, Colston alleged claims of wrongful termination and fraud against Wims and Hugine; she alleged claims of tortious interference with a contractual relationship against Wims and Thomas. The petitioners contend that they are entitled to State-agent immunity from those claims and that the trial court exceeded its discretion in failing to dismiss those claims on that basis. "This Court, in [Ex parte] Cranman[, 792 So. 2d 392 (Ala. 2000)], stated the test for State-agent immunity as follows: "'A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'(1) formulating plans, policies, or designs; or "'(2) exercising his or her judgment in the administration of a department or agency of government, including, but not limited to, examples such as: "'(a) making administrative adjudications; "'(b) allocating resources; "'©) negotiating contracts; "'(d) hiring, firing, transferring, assigning, or supervising personnel; or 52 1130428 "'(3) discharging duties imposed on a department or agency by statute, rule, or regulation, insofar as the statute, rule, or regulation prescribes the manner for performing the duties and the State agent performs the duties in that manner; or "'(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, law-enforcement officers' arresting or attempting to arrest persons; or "'(5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students. "'Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity "'(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or "'(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law.' "Cranman, 792 So. 2d at 405." 53 1130428 Ex parte City of Montgomery, 99 So. 3d 282, 292-93 (Ala. 2012). "'This Court has established a "burden-shifting" process when a party raises the defense of State-agent immunity.' Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006). A State agent asserting State-agent immunity 'bears the burden of demonstrating that the plaintiff's claims arise from a function that would entitle the State agent to immunity.' 946 So. 2d at 452. Should the State agent make such a showing, the burden then shifts to the plaintiff to show that one of the two categories of exceptions to State-agent immunity recognized in Cranman is applicable." Ex parte Kennedy, 992 So. 2d 1276, 1282 (Ala. 2008). Before we analyze the elements of State-agent immunity for each of Colston's claims, we note at the outset that Colston has argued that the University is not an instrumentality of the State and, therefore, that its officials are not eligible for State-agent immunity. Colston reaches this conclusion first by observing that one of the factors this Court has articulated for determining whether an entity is an instrumentality of the State is the "'degree of control the State maintains over the entity.'" Ex parte Madison Cty. Bd. of Educ., 1 So. 3d 980, 987 (Ala. 2008) (quoting Manders v. Lee, 338 F.3d 1304, 1309 (11th Cir. 2003)). Colston then contends that after the enactment of the 54 1130428 amended version of § 16-49-23, Ala. Code 1975, the University "has insulated itself from State control and the State has virtually zero degree of control over [the University]." We note with some curiosity that Colston essentially argues that the means by which the University allegedly gained autonomy from State control came about through an enactment of the legislature. The inherent contradictions of the argument aside, we wholly reject it. This Court has repeatedly stated that "'Alabama A & M University is an instrumentality of the State of Alabama and, thus, is absolutely immune from suit under § 14.'" Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867, 873 (Ala. 2004) (quoting Matthews v. Alabama Agric. & Mech. Univ., 787 So. 2d 691, 696 (Ala. 2000)). Section 16-49-23 merely shifted to the University's president some powers previously assigned to its Board of Trustees. It does not purport to state or imply that the University itself is no longer under the State's control. The University is an instrumentality of the State, and, therefore, the petitioners are eligible for State-agent immunity. There is no dispute that the claims Colston asserts against the petitioners arise from functions that would 55 1130428 entitle them to State-agent immunity. Wims and Hugine exercised their judgment in the administration of the University on an issue of firing personnel, and Thomas exercised her judgment in supervising Colston. Colston contends, however, that the exception for actions that are willful, malicious, fraudulent, in bad faith, beyond authority, or taken under a mistaken interpretation of the law applies to her state-law claims. It is Colston's burden to present substantial evidence demonstrating that this exception applies to her claims. First, Colston asserted in her second amended complaint a claim alleging wrongful termination against Wims and Hugine. Colston noted that our courts have stated that "'[t]he dismissal of a public employee who is entitled to a pretermination hearing, without such a hearing, is a wrongful act constituting a tort under Alabama law.'" Hardric v. City of Stevenson, 843 So. 2d 206, 210 (Ala. Civ. App. 2002) (quoting City of Gadsden v. Harbin, 398 So. 2d 707, 708 (Ala. Civ. App. 1981)). Colston alleged that she was tenured but that Wims recommended that Colston's employment be terminated and Hugine terminated her employment without providing Colston 56 1130428 with a pretermination hearing, a procedure to which she says she was entitled based on her tenured status. Specifically, the complaint stated: "Dr. Hugine (in his individual capacity) and Dr. Wims (in his individual capacity) acted willfully, maliciously, fraudulently, in bad faith, beyond their authority or under a mistaken interpretation of law in terminating Regina Colston's employment without a pre-termination hearing." The submissions before us do not contain evidence indicating that Wims and Hugine acted in bad faith or beyond their authority by terminating Colston's employment without a pretermination hearing. Although Colston presented evidence indicating that Hugine was told shortly after he was hired that Colston was tenured, it is undisputed that Wims later undertook an investigation to determine Colston's tenure status. Wims admitted that in the course of that investigation he encountered the October 25, 2006, letter from Beverly Edmond, Ph.D, the then provost and vice president for academic affairs, to Colston that stated that Colston was "a tenured member of the faculty." He concluded, however, based on the totality of the evidence in Colston's file, that she 57 1130428 was not tenured, and he recommended to Hugine, after reaching that conclusion, that Colston's employment be terminated. The parties agree, because of the conflict in the evidence on the question, that Colston's tenure status is a jury question. And Colston cites no evidence indicating that either Wims or Hugine knew or believed that Colston was tenured at the time they made the decision to terminate her employment. Indeed, in her fraud allegations against Wims and Hugine, Colston asserted: "Dr. Hugine ..., Dr. Wims ... and the Trustees ... were aware or should have been aware of Regina Colston's understanding and belief that she was tenured. Without disclosing to her their belief that she was obligated to take further actions under the policies [to become tenured], defendants continued to utilize the services of Regina Colston." (Emphasis added.) Without evidence indicating that Wims or Hugine knew or believed that Colston was tenured at the time they terminated her employment without a pretermination hearing, it cannot be said that they acted willfully or in bad faith by doing so. Colston argues that, "[a]t a minimum, th[e] evidence shows Hugine and Wims acted beyond their authority" when they terminated Colston's employment without complying with policy- 58 1130428 manual procedures applicable to tenured employees. It is true that our cases hold that an employee may be deemed to act "beyond authority and therefore not be immune when he or she 'fail[s] to discharge duties pursuant to detailed rules or regulations, such as those stated on a checklist.'" Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003) (quoting Ex parte Butts, 775 So. 2d 173, 178 (Ala. 2000)). See also, e.g., Ex parte Watson, 37 So. 3d 752 (Ala. 2009). But the question that must be asked in this case is whether it fell to Hugine and Wims in the first place -- i.e, was it part of their job -- to make a judgment call as to whether Colston was tenured so as to trigger Colston's entitlement to the "guidelines" or "checklist" of procedures to which she claims to have been entitled. The complaint alleges that Colston was a tenured employee and therefore that Hugine and Wims acted beyond their authority by, for example, terminating Colston's employment without a pretermination hearing. Colston might well be correct if this was a typical tenure case in which the plaintiff's tenured status was a given and the only issue to be resolved was whether proper termination procedures had been 59 1130428 employed. If that were the circumstance here, then it might well be concluded that, because the individual defendants proceeded without granting Colston a pretermination hearing, they violated the "guidelines" or "checklist" applicable to the termination of a tenured employee.12 But that is the unique thing about this case. We cannot and do not start with the premise, as do most tenure cases, that the plaintiff was in fact tenured. Instead, it is the administrative decision as to that issue that is the true point of contention in this case. That is, before the defendants were required to provide Colston with the very hearing to which she says the University's "guidelines" and "checklist" entitled her, they first had to make the administrative decision whether she was in fact tenured. If she was not, then she was not entitled to such a hearing; the claimed "guidelines" or "checklist" would not be applicable. Hugine and Wims fulfilled their responsibility to make the administrative decision whether Colston was or was not tenured; they concluded that she was not. Colston does not 12We do not mean to imply that, in such a circumstance, the plaintiff necessarily would be entitled to an award of monetary damages against the individual defendants personally. 60 1130428 allege that in reaching that judgment, Hugine and Wims failed to follow some "checklist" of procedures applicable to that decision. They therefore cannot be deemed to have acted beyond their authority on the ground that they failed to follow a set of detailed guidelines or a detailed checklist. Of course, once Hugine and Wims decided that Colston was not tenured, that decision dictated a different procedural path for subsequent personnel decisions regarding Colston. If they made a good-faith decision as to this historical fact, but just happened to get it wrong based on their review of conflicting records in the plaintiff's file, then the plaintiff could not sue them personally. The plaintiff may well be entitled to seek relief from them in their official capacities in that circumstance (and thereby get reinstated and/or obtain the benefit of a required hearing or other procedures applicable to tenured employees), but if all these individuals did was fulfill their administrative responsibility to make a judgment call as to whether the plaintiff was tenured and they made a mistake in that judgment call, then the plaintiff is not entitled to pursue those individual defendants' personal bank accounts under the 61 1130428 "beyond-authority" exception to State-agent immunity. They were doing their jobs as state-school officials, and it is the protection of officials engaged in such discretionary activities that is the purpose of State-agent immunity. Compare Ex parte Ingram, [Ms. 1131228, Feb. 24, 2017] ___ So. 3d ___, ___ (Ala. 2017); see generally Ex parte Cranman, 792 So. 2d 392 (Ala. 2000). Colston also asserted fraud claims against Wims and Hugine in their individual capacities. The gist of those claims is that Wims and Hugine knew that Colston believed she was tenured, and they allowed her to work for the University under that assumption without informing her that they did not believe that she was tenured. Colston asserted that Wims knew Colston believed she was tenured because Thomas had written Wims a letter in which she had stated that "[t]he major point of contention on [Colston's 2007–2008 faculty] evaluation was [Colston's] tenure status." The letter also had noted that Colston had refused to sign recent evaluations because they indicated that she was not tenured. Colston alleged that Hugine knew that Colston believed she was tenured because Riggins had told Hugine that Colston was tenured shortly after 62 1130428 Hugine was hired as president of the University in 2009. Colston alleged that "[t]hese misrepresentations and/or omissions" were to her detriment when her employment was terminated without a pretermination hearing. Colston's complaint in essence alleges fraudulent suppression against Wims and Hugine. "In order to establish a prima facie claim of fraudulent suppression, a plaintiff must produce substantial evidence establishing the following elements: "'"(1) that the defendant had a duty to disclose an existing material fact; (2) that the defendant suppressed that existing material fact; (3) that the defendant had actual knowledge of the fact; (4) that the defendant's suppression of the fact induced the plaintiff to act or to refrain from acting; and (5) that the plaintiff suffered actual damage as a proximate result."'" Johnson v. Sorensen, 914 So. 2d 830, 837 (Ala. 2005) (quoting Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143, 1161 (Ala. 2003), quoting in turn State Farm Fire & Cas. Co. v. Slade, 747 So. 2d 293, 323-24 (Ala. 1999)). The first problem with Colston's fraud claim is that Colston simply assumes that Wims and Hugine had a duty to 63 1130428 disclose their belief that she was not tenured. "A duty to communicate can arise from a confidential relationship between the plaintiff and the defendant, from the particular circumstances of the case, or from a request for information, but mere silence in the absence of a duty to disclose is not fraudulent." Mason v. Chrysler Corp., 653 So. 2d 951, 954 (Ala. 1995). Colston cites no authority to establish the existence of a duty on the part of Wims and Hugine to disclose,13 nor does she explain why Wims or Hugine would have a duty to disclose their beliefs about Colston's tenure status to Colston other than stating that they were both given information at one time or another that indicated that Colston 13Colston cites two cases in a footnote in her brief that address the duty issue, Rigby v. Auburn University, 448 So. 2d 345 (Ala. 1984), and Johnson v. Waters, 970 F. Supp. 991 (M.D. Ala. 1997), but neither is on point. The portion of Rigby Colston cites simply notes that a university employee could bring a fraud claim against a supervisor for allegedly altering the terms of a plaintiff's employment. See Rigby, 448 So. 2d at 347. That is not the nature of Colston's fraud claim against Wims and Hugine. The portion of Johnson Colston cites discusses the fact that a county commission's refusal to intervene when the plaintiff's supervisor discharged the plaintiff in violation of her constitutional rights constituted a claim against the county commission. Again, the situation described in Johnson is not what Colston alleges occurred in her case. Neither case addresses a duty to disclose a material fact. 64 1130428 was tenured. As we already have noted, however, Wims and Hugine did not conclude that Colston was not tenured until after Wims investigated the issue during the process of deciding whether to terminate her employment. Before that point, neither Wims nor Hugine had any reason to disclose anything to Colston about her tenure status because, according to Colston's facts, the information they had been given indicated that she was tenured. Moreover, Wims and Hugine were not directly supervising Colston, so they did not have a relationship to her that would require communication on such a subject. In short, Colston does not establish that Wims or Hugine had a duty to disclose the fact that they believed she was not tenured. The second problem with Colston's fraud claim is that she did not establish that she acted or refrained from acting in some way based on the alleged suppression of the fact that she was not tenured. Starting in 2007, Colston was in fact told by Thomas several times that she was not tenured. Despite receiving this communication, Colston did nothing to assert her position, other than refusing to sign faculty-evaluation forms that indicated that she was not tenured. There is no 65 1130428 evidence indicating that, at any time before her employment was terminated, Colston asked the dean of the School of Arts and Sciences or Wims or Hugine to confirm her tenured status. Likewise, Colston does not state, and there is no evidence to suggest, that, before her employment was terminated, Colston would have submitted herself to the regular procedure for obtaining tenure rather than simply continuing to insist, as she did, that she was tenured. Finally, even if Colston relied on the previous representations of other University administration officials that she was tenured such that she did not attempt to do anything to gain tenured status, the alleged omissions by Wims and Hugine were not the proximate cause of the harm Colston claims. Under her fraud claim in her complaint, Colston stated: "Dr. Hugine (in his individual capacity) and Dr. Wims (in his individual capacity) acted willfully, fraudulently, in bad faith, beyond their authority or under a mistaken interpretation fo law in terminating Regina Colston's employment without cause and without a pre-termination hearing on the basis that she was not tenured." Colston was fired without a pretermination hearing because Wims and Hugine 66 1130428 believed Colston was not tenured, not because they suppressed that belief. There is no evidence to suggest that Colston's employment would not have been terminated had she been told that she was not tenured. In reality, Colston's claim of injury under her fraud claim mirrors her claim of injury for her wrongful-termination claim. In other words, she states as a fraud claim what is, in fact, a breach-of-contract claim. A breach of contract, alone, does not constitute fraud. See Heisz v. Galt Indus., Inc., 93 So. 3d 918, 925 (Ala. 2012) (noting that a "'failure to perform alone is not sufficient evidence to show a present intent not to perform. If it were, then every breach of contract would be "tantamount to fraud."'" (quoting Gadsden Paper & Supply Co. v. Washburn, 554 So. 2d 983, 987 (Ala. 1989), quoting in turn Purcell Co. v. Spriggs Enters., Inc., 431 So. 2d 515, 519 (Ala. 1983))). For all of these reasons, we conclude that Colston failed to present substantial evidence that Wims or Hugine acted fraudulently; therefore, Wims and Hugine are entitled to State-agent immunity as to Colston's fraud claims against them. 67 1130428 The last state-law claims contained in Colston's second amended complaint that are before us in this mandamus petition are claims alleging tortious interference with a contractual relationship against Wims and Thomas. With regard to Thomas, Colston alleged that Thomas knew that Colston was tenured and that, in fact, she told Colston for 10 years that she was tenured. Colston asserted that after she accused Thomas of unethical behavior related to changing the grade of one of Colston's students, Thomas started noting on Colston's faculty-evaluation forms that she was not tenured, "with the intent of ensuring [Colston] would lose her job." Colston alleged that after Colston recommended to Dean Edwards that Thomas should be replaced as chair of Department of English, Foreign Languages, and Telecommunications, Thomas's "malice against Regina Colston grew and she further attempted to create an opportunity to deprive Regina Colston of her property right of tenure." Those further actions included writing the memorandum of May 11, 2010, which went in Colston's personnel file and which stated that "Colston is non-tenured," and writing the August 12, 2010, letter a month after she retired that was placed in Colston's personnel file 68 1130428 in which Thomas recommended that Colston's employment be terminated because of "the evasive, defiant and dishonest patterns of her behavior and her refusal to follow required procedures." With regard to Wims, Colston alleged that Wims knew that Colston was tenured but that he "maliciously conspired with Thomas and instructed her to place a memorandum in [Colston's personnel] file that Regina Colston was not tenured in order to terminate her not for cause." The essential elements of the tort of intentional interference with contractual or business relations are: "(1) the existence of a protectible business relationship; (2) of which the defendant knew; (3) to which the defendant was a stranger; (4) with which the defendant intentionally interfered; and (5) damage." White Sands Grp., L.L.C. v. PRS II, LLC, 32 So. 3d 5, 14 (Ala. 2009). Our courts also have stated: "An employee who desires to maintain a suit against a coworker for intentional interference with the employee's employment contract must also '"show that the [coworker] acted outside [his or her] scope of employment and did so maliciously."' Hanson v. New Technology, Inc., 594 So. 2d 96, 103 (Ala. 1992) (quoting Hickman v. Winston County Hosp. Bd., 508 So. 2d 237, 241 (Ala. 1987) (Adams, J., concurring specially)). Further, in order to show malice the plaintiff must '"make a strong showing of a pattern 69 1130428 of interference."' Perlman v. Shurett, 567 So. 2d 1296, 1299 (Ala. 1990) (quoting Hickman, 508 So.2d at 241 (Adams, J., concurring specially))." Michelin Tire Corp. v. Goff, 864 So. 2d 1068, 1077 (Ala. Civ. App. 2002). Colston's tortious-interference claim against Wims is problematic for at least three reasons. First, Colston failed to present any evidence supporting her accusation that Wims told Thomas to write the May 11, 2010, memorandum that stated that Colston was non-tenured. Thomas testified that Dean Edwards instructed her to write the memorandum. Wims stated that he had never seen the memorandum before the initiation of Colston's lawsuit. The memorandum itself was addressed to "Dr. Matthew Edwards, Dean School of Arts and Sciences." In fact, Thomas testified that she never talked to Wims about Colston, and Wims testified that he never consulted Thomas about Colston. In short, there is simply no evidence of a conspiracy between Wims and Thomas. The second problem with Colston's claim against Wims is that, aside from her allegation of a conspiracy with Thomas, Colston made no showing of a pattern of interference by Wims. Finally, even if Wims had told Thomas to write the May 11, 70 1130428 2010, memorandum, it was within the line and scope of his position to do so as Thomas's superior and as the vice president for academic affairs at the University. In sum, Colston failed to produce evidence indicating that Wims interfered with Colston's contractual relationship with the University and failed to demonstrate that Wims acted willfully, maliciously, in bad faith, or beyond his authority in this regard. Therefore, Wims is entitled to State-agent immunity as to Colston's claim of tortious interference against him in his individual capacity. Colston's tortious-interference claim against Thomas in her individual capacity fares no better than Colston's similar claim against Wims. Colston presented evidence indicating that Thomas knew Colston was tenured and told her as much over a long period, but that, in the 2007-2008 school year, Thomas began noting otherwise on Colston's faculty-evaluation forms without providing any explanation for the change. Around the same time, Thomas started to give Colston poor marks on her faculty evaluations, which followed several years of more favorable evaluations. Thomas wrote the May 11, 2010, memorandum, which stated that Colston was non-tenured and 71 1130428 which Dean Edwards testified he took into account when he evaluated Colston's tenure status in the course of considering which faculty members to place on a list for employment termination. Thomas also wrote the August 12, 2010, letter recommending that Colston's employment be terminated based on insubordination and poor performance, which was addressed to Wims and which was copied to Basaninyenzi. We see here no substantial evidence of bad faith or malice on Thomas's part. Colston makes much of the conflict between herself and Thomas that occurred in the 2009-2010 school year when, according to Colston, Colston refused to alter certain students' grades at Thomas's urging. In an evaluation of Colston, Thomas stated that the grade-change situation was one that required the involvement of herself, the dean of the School of Arts and Sciences, the associate provost, the provost, and an ad hoc committee, when it should have been handled by Colston if she had maintained proper records. Regardless of this conflict of evidence, it was well before this, namely in the 2007-2008 academic year, that Thomas started rating Colston poorly in her faculty-evaluation 72 1130428 forms. That was also the same year Colston's faculty- evaluation forms started being marked as "Non-Tenured." (In response, Colston refused to sign her faculty-evaluation forms from 2007 through 2010 on the ground that they incorrectly stated that she was not tenured.) In an evaluation of Colston, Thomas stated that during the 2009-2010 academic year Colston set up office hours in the School of Business library, away from the rest of the professors in her department, which caused logistical problems for faculty and for students seeking Colston's help. Thomas also stated that in the spring semester of the same year students complained that Colston often did not show up for her "Discussion for TV" class. Thomas also stated that several of Colston's courses were not being conducted in accordance with the syllabuses she had submitted to Thomas at the beginning of the academic year. Thomas further stated that for three years Colston was asked by colleagues to provide data from her Writing Broadcasting class but that she failed to present anything. 73 1130428 In short, several legitimate reasons existed for Thomas's negative evaluations of Colston and her recommendation that Colston's employment should be terminated. IV. Conclusion We grant the petition for a writ of mandamus. We conclude that the trial court erred in not holding that Wims and Hugine were entitled to qualified immunity from Colston's retaliation claims based on alleged violations of her free- speech and free-association rights. We likewise conclude that Hugine, Wims, and Thomas were entitled to State-agent immunity with respect to Colston's state-law claims against them individually alleging wrongful termination, fraud, and tortious interference with a contractual relationship. PETITION GRANTED; WRIT ISSUED. Stuart, Bolin, Main, Wise, and Bryan, JJ., concur. Parker, J., concurs in part and concurs in the result. Shaw, J., concurs in the result. 74 1130428 PARKER, Justice (concurring in part and concurring in the result). I concur in the result as to Part III.B. of the opinion; I concur in the remaining aspects of the opinion. 75

March 17, 2017

51307fbf-dafc-43e4-aec4-9da985aa7443

Hall v. Environmental Litigation Group, P.C.

N/A

1151077

Alabama

Alabama Supreme Court

REL:09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 _________________________ 1151077 _________________________ Mary Hall, as personal representative of the Estate of Adolphus Hall, Sr., deceased, and Anaya McKinnon, as personal representative of the Estate of Wanzy Lee Bowman, deceased v. Environmental Litigation Group, P.C. (Jefferson Circuit Court, CV-13-901014) SHAW, Justice. Mary Hall, as personal representative of the estate of Adolphus Hall, Sr.,1 and Anaya McKinnon, as personal 1The record reflects that, during the pendency of these proceedings, Mary Hall died and was succeeded as executor of the estate of Adolphus Hall, Sr., by Joyce Hall, the daughter of Adolphus. Subsequent to her appointment as successor 1151077 representative of the estate of Wanzy Lee Bowman (hereinafter collectively referred to as "the plaintiffs"), appeal from the Jefferson Circuit Court's dismissal of their class-action claims against Environmental Litigation Group, P.C. ("ELG"). We reverse and remand. Facts and Procedural History This is the second time this matter has come before the Court. Our previous decision, Hall v. Environmental Litigation Group, P.C., 157 So. 3d 876, 878 (Ala. 2014) ("Hall I"), discusses the pertinent factual and procedural history: "On March 19, 2013, the plaintiffs filed a complaint in the Jefferson Circuit Court against ELG, requesting a declaratory judgment and alleging one count of unjust enrichment and one count of breach of contract. The plaintiffs asserted those claims on behalf of the estates they represented and on behalf of 'others similarly situated as a class action pursuant to Rule 23,'•Ala. R. Civ. P. The plaintiffs' complaint included the following factual allegations: in the 1990s, ELG agreed to represent hundreds of clients who had been exposed to asbestos, including Adolphus Hall and Bowman; ELG entered into an attorney-employment agreement with each client; pursuant to that agreement, ELG agreed to 'take all legal steps necessary to enforce the said tort claim,'•and in return ELG would receive executor, the plaintiffs moved the trial court to substitute Joyce for Mary as a named plaintiff. Nothing in the record suggests that the trial court ruled on that motion before the appeal. Therefore, we retain the style of the case as it appeared in the trial court. 2 1151077 40% of amounts collected from any settlement or judgment as its fee; the agreement also permitted ELG to reimburse itself for reasonable expenses related to the clients' claims; on February 23, 2012, ELG sent a memorandum to all of its 'asbestos clients'•stating that, as a result of additional work required to obtain the proceeds of a settlement that ELG had negotiated, ELG would begin charging an 'administrative-service-expense charge'•in the amount of $250 for living clients and $600 for clients who were deceased, which could be deducted from settlement proceeds due to be passed on to the client; between April 2011 and July 2012, the estate of Adolphus Hall received settlement proceeds from three asbestos defendants and, from those proceeds, ELG deducted $192.01 in expenses and a $600 administrative-service-expense charge, in addition to deducting 40% of the settlement proceeds as an attorney fee; and, in December 2012, the estate of Wanzy Lee Bowman received settlement proceeds from one asbestos defendant and ELG deducted $68.64 as an 'administrative credit'•in addition to deducting 40% of the proceeds as an attorney fee. The plaintiffs alleged that the administrative-service-expense charge 'is nothing more than an extra attorney fee collected by ELG in addition to the 40% contingent fee'•provided as the attorney fee in the attorney-employment agreement. "The plaintiffs asked the circuit court to enter an order declaring that ELG had breached the attorney-employment agreement 'by charging, without legal authority, more than 40% for attorney staff services'; that ELG had been unjustly enriched by its wrongful activities; that the plaintiffs were due monetary relief; and that the plaintiffs were entitled to recover an attorney fee and reasonable expenses related to the prosecution of this action. In addition, the plaintiffs alleged separate counts of unjust enrichment and breach of contract, which were based on ELG's alleged breach of the attorney-employment agreement. 3 1151077 "In response to the plaintiffs' complaint, ELG moved the circuit court to dismiss the complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P., for failure to state a claim upon which relief could be granted. ELG attached several documents to its motion to dismiss, including the attorney-employment agreement signed by Adolphus Hall and Mary Hall, the attorney-employment agreement signed by Bowman, and an 'adoption and ratification'• of Bowman's attorney-employment agreement signed by McKinnon. ELG also attached the memorandum dated February 23, 2012, from ELG to its asbestos clients informing them of the implementation of the administrative-service-expense charge. "ELG subsequently filed a supplement to its motion to dismiss, arguing that the plaintiffs had, 'in essence, ... asserted that ELG has charged its clients an excessive fee and [they] ask this court to enter a declaratory judgment to that effect.' ELG further argued, among other things, that Rule 1.5, Ala. R. Prof. Cond., directly addresses the issue of excessive attorney fees; that the Alabama State Bar was not a party to the action; and that a declaratory judgment in the present case would constitute only an advisory opinion by the circuit court because, it argued, the Alabama State Bar has sole authority to enforce the Alabama Rules of Professional Conduct and to determine whether an attorney fee is excessive under Rule 1.5. Thus, ELG argued, the circuit court was required to dismiss the plaintiffs' complaint for lack of subject-matter jurisdiction. See Rule 12(b)(1), Ala. R. Civ. P. (providing that 'lack of jurisdiction over the subject matter'•is a defense that may be made by motion). ELG cited B.W.T. v. Haynes & Haynes, P.C., 20 So. 3d 815, 822 (Ala. Civ. App. 2009), to support its position. The plaintiffs filed a response to ELG's motion to dismiss, arguing, among other things, that their complaint was not 'based merely on an ethics charge of "excessive fees"'•but was based on an allegation that 'ELG ha[d] breached the 4 1151077 terms of the [attorney-employment agreement,] which ELG drafted and entered into with each client.'• ".... "On November 20, 2013, the circuit [court] entered an order ... dismissing the case with prejudice. The plaintiffs timely filed a notice of appeal. On appeal, the plaintiffs argue[d] that the circuit court erred in dismissing their complaint because, they [said], the allegations in their complaint articulated a breach-of-contract claim against ELG and because their complaint was not an ethics complaint against ELG, which, they contend, would have been subject to the exclusive jurisdiction of the Alabama State Bar. In response, ELG assert[ed] that the circuit court properly dismissed the plaintiffs' complaint because, ELG says, the circuit court did not have subject-matter jurisdiction over the plaintiffs' complaint." 157 So. 3d at 877-79 (footnotes omitted). On appeal, this Court disagreed with the circuit court's holding. We held that "[t]he 'crux'•of the plaintiffs' claims [was] that ELG breached the attorney-employment agreement by allegedly taking as an attorney fee more than 40% of the settlement proceeds" and, thus, the plaintiffs' claims "[fell] within the subject-matter jurisdiction of the circuit court." 157 So. 3d at 881. Unlike B.W.T. v. Haynes & Haynes, P.C., 20 So. 3d 815, 822 (Ala. Civ. App. 2009), which ELG cited, "the 'crux' of the plaintiffs' case [was] not whether ELG's fee arrangement with the plaintiffs violated Rule 1.5, Ala. R. 5 1151077 Prof. Cond." 157 So. 3d at 881. We therefore reversed the circuit court's order of dismissal and remanded the matter for further proceedings.2 Following remand, ELG moved for a status conference to establish a discovery schedule and to consider class certification.3 Shortly thereafter, the plaintiffs filed a "First Amended Class Action Complaint" that added to the previously pending individual and class-based claims a count against ELG pursuant to the Alabama Legal Services Liability Act, § 6–5–570 et seq., Ala. Code 1975. Additionally, the plaintiffs filed a motion seeking, after discovery, class certification pursuant to Rules 23(b)(2) and 23(b)(3), Ala. R. 2The record suggests that, during the pendency of this matter and approximately four days after this Court's decision in Hall I, ELG initiated separate litigation in the Jefferson Circuit Court (case no. CV-2014-902655) against the plaintiffs' counsel alleging "intentional interference with business or contractual relations and abuse of process." The two matters were, on motion of the plaintiffs and with the consent of ELG, consolidated for purposes of discovery. The record further suggests that all proceedings in case no. CV- 2014-902655 have been stayed and the matter placed on the court's administrative docket pending resolution of this appeal. 3According to ELG's motion, it also contemporaneously filed both an answer and a counterclaim alleging breach of contract. Neither of those pleadings, however, appears to have been included in the record on appeal. 6 1151077 Civ. P.4 After numerous additional filings by the parties and the trial court's appointment of a special master, who recommended the denial of ELG's renewed dismissal request, on February 23, 2016, ELG filed a "Motion to Dismiss Class Claims or, Alternatively, for Partial Judgment on the Pleadings." In that motion, ELG sought the dismissal of only the plaintiffs' class-based claims on the ground that the claims "require individualized inquiries" that would destroy the "commonality" required for class-based relief because, according to ELG, the contract at issue was ambiguous. Specifically, the parties disagree on whether the "Administrative Service Expense 4In response, ELG again moved, pursuant to Rule 12, Ala. R. Civ. P., to dismiss the plaintiffs' amended complaint on numerous grounds and for sanctions pursuant to Rule 11, Ala. R. Civ. P. In support of those requests, ELG explained the imposition of the challenged expenses and reiterated its belief that recoupment of those expenses was contemplated by the attorney-employment agreement and allegedly informally preapproved by the Alabama State Bar. ELG further argued that the plaintiffs' complaints were not only baseless but also alleged only around $900 in actual damages, and, according to ELG, the plaintiffs' lawyers were attempting to "turn [the action] into to a money-making machine for the Plaintiffs' lawyers." Finally, it argued that the legal-malpractice count, which it says was filed more than two years after the occurrence or omission on which it was based, did not relate back to the original complaint and was, therefore, untimely. See § 6-5-574, Ala. Code 1975; Rule 15(c)(2), Ala. R. Civ. P. No ruling on this motion is before us in this appeal. 7 1151077 Charge" (hereinafter "the new charge") assessed to the plaintiffs was permitted under the terms of the attorney- employment contract, which allowed recoupment of ELG's "expenses," or whether the new charge was an additional "fee." ELG further maintained that the plaintiffs' proposed definition of a class, which included all past and present ELG asbestos clients who executed a contingency-fee contract, was both "overly broad" and "inconsistent with and contradicted by the allegations in the Complaint." On April 11, 2016, ELG filed, as a "supplement" to its motion to dismiss, an "alternate" motion to strike the plaintiffs' class claims and allegations pursuant to Rules 12(f), 23(c)(1), and 23(d)(4), Ala. R. Civ. P., which, according to ELG, "provide a clear path for the Court to evaluate class claims at an early stage under the burden of proof and standard of review of Alabama Rule 23" and, where appropriate, to strike class allegations before the class- certification process. Following a hearing--but without permitting the plaintiffs' requested discovery on the class-certification issue--the trial court granted ELG's motion to dismiss. The 8 1151077 trial court agreed with ELG that the "[p]laintiffs' contracts with ELG are ambiguous regarding whether the 'Administrative Service Expense Charge' was an expense or should have been included in the 40% contingency fee." The trial court held: "Specifically, the contract is ambiguous in at least three ways. First, the definition of expense is open-ended and ambiguous. Second, the client contracts are silent and ambiguous regarding how work related to probate, bankruptcy, and Medicare should be charged to the client. Third, the client contracts are ambiguous regarding whether post- settlement work done to make sure that claims that have already been recovered are paid out to the proper party is an expense or part of the contingency fee for prosecution and 'enforce[ment of] the said tort claim,' or outside the scope of the contract." As a result of that ambiguity and of the particular nature of the asbestos claims themselves, including "the fact that the current plaintiffs are not even victims of asbestos injuries but instead are actually second or third generation descendants of the original clients who signed the fee agreements in 1992 and 1994" and that ELG's long-term representation could have given rise to "situation[s] ... not anticipated and addressed by the parties on the face of the contract," the trial court concluded that "individualized inquiry is required to resolve the ambiguity and delve into 9 1151077 the state of mind of each party and determine what each party intended at the time of contracting" and that, therefore, such inquiry "destroys predominance and commonality and bars class ... breach-of-contract-based claims in this case." In sum, opining that no amount of discovery would alleviate the above- identified issues with the plaintiffs' class-based claims, the trial court granted ELG's motion to dismiss, "struck" the plaintiffs' claims for class-based relief, and held that the class-based claims were "denied."5 The plaintiffs appeal.6 Standard of Review ELG contends that the trial court was authorized to 5The trial court also concluded that, under Alabama law, "unjust enrichment claims depend on the particular facts and circumstances of each class member's case and are unsuitable for class treatment." On appeal, the plaintiffs do not challenge the trial court's holding as to the unjust- enrichment claim. 6See Mann v. GTE Mobilnet of Birmingham Inc., 730 So. 2d 150, 154 (Ala. 1999) ("Although an order denying class certification is an interlocutory order, it is nevertheless an appealable 'final'•order because it 'finally determines a claim of right separate from and collateral to the rights asserted in the cause of action'•and makes further judicial proceedings in the action ineffective.") (quoting Butler v. Audio/Video Affiliates, Inc., 611 So. 2d 330, 331 (Ala. 1992) (emphasis omitted)). In this case, the trial court's order dismissing the class allegations is the functional equivalent of denying class certification. 10 1151077 "strike" the class allegations in the complaint under the authority of a combination of three rules: Rule 12(f),7 Rule 23(c)(1),8 and Rule 23(d)(4).9 In support of this argument, ELG cites numerous federal court decisions explaining that Rule 12(f), Fed. R. Civ. P.; Rule 23(c)(1)(A), Fed. R. Civ. P.; and Rule 23(d)(1)(D), Fed. R. Civ. P., together can form the basis for striking class allegations in the pleading stage 7Rule 12(f) provides: "Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within thirty (30) days after the service of the pleading upon the party or upon the court's own initiative at any time, the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." 8Rule 23(c)(1) provides: "As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits." 9Rule 23(d)(4) provides: "In the conduct of actions to which this rule applies, the court may make appropriate orders ... requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly ...." 11 1151077 and before the class-certification process begins: "As an initial matter, the authority to strike class allegations stems from Federal Rules of Civil Procedure 12(f), 23(c)(1)(A), and 23(d)(1)(D) .... See Gray v. BMW of North America, LLC, 22 F. Supp. 3d 373 (D.N.J. 2014) (citing Fed. R. Civ. P. 12(f) as authority for the District Court to strike class allegations); In re Paulsboro Derailment Cases, [Civ. No. 13-784, April 8, 2014] (D.N.J. 2014) ('A motion to strike class allegations implicates Federal Rules of Civil Procedure 12(f) and 23(c)(1)([A]).... A further procedural vehicle is provided by Federal Rule of Civil Procedure Rule 23(d)(1)(D), which provides that a "court may issue orders that ... require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly."'); see also 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 3:4 (11th ed. 2014) (Noting that Federal Rule of Civil Procedure 23(d)(1)(D) 'expressly authorizes a motion to strike class action allegations by authorizing the court to issue an order "requiring that the pleadings be amended to eliminate allegations about representation of absent persons...."'[).] Rule 12(f) permits a district court to 'strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter,' and Rule 23(c)(1)(A) directs the court to make the class certification determination '[a]t an early practicable time.' Fed. R. Civ. P. 12(f), 23(c)(1)(A). "These Rules, together, provide authority for the Court to strike the class allegations from Plaintiffs' Complaint, if appropriate, even before Plaintiffs move for class certification. The Court of Appeals for the Third Circuit has acknowledged that there are a 'rare few [cases] where the complaint itself demonstrates that the requirements 12 1151077 for maintaining a class action cannot be met,' although, '[i]n most cases, some level of discovery is essential.' Landman & Funk PC v. Skinder–Strauss Assoc., 640 F.3d 72, 93, 93 at n. 30 (3d Cir. 2011). Class allegations may be stricken only when no amount of discovery will demonstrate that the class can be maintained. Goode v. LexisNexis Risk & Info. Analytics Group, Inc., 284 F.R.D. 238, 244 (E.D. Pa. 2012) (citing Thompson v. Merck & Co., Inc., [No. C.A. 01-1004, January 6, 2004] (E.D. Pa. 2004)); see also Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178, 182 (M.D. Pa. 2008) (noting that a 'district court will strike class allegations without permitting discovery or waiting for a certification motion where the complaint and any affidavits clearly demonstrate that the plaintiff cannot meet the requirements for a class action')." Bell v. Cheswick Generating Station, Genon Power Midwest, L.P., No. 12–929, Jan. 28, 2015 (W.D. Pa. 2015) (not selected for publication in F. Supp. 3d). No Alabama decisions are cited that have addressed the propriety of a motion to strike class allegations before class-certification discovery or the class-certification process. However, in the instant case, we are not required to determine such issue, because it does not appear that the trial court simply struck the plaintiffs' class allegations. Specifically, ELG's motion to dismiss requested that the trial court dismiss the plaintiffs' class claims "with prejudice." The trial court's order stated: "[ELG's motion to dismiss] is 13 1151077 hereby granted. Plaintiffs' class allegations are hereby stricken and the claims denied." (Emphasis added.) It appears that, by stating that the class claims were "denied," the trial court was dismissing them with prejudice. Specifically, stating that the claims were "denied" is inconsistent with merely striking the claims or "requiring that the pleadings be amended" under Rule 23(d)(4). Further, we see no basis in this case for striking the class claims for containing "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Rule 12(f). Therefore, we treat the trial court's dismissal as pursuant to the initial ground specified in ELG's motion to dismiss: failure to state a claim under Rule 12(b)(6). Generally, a Rule 12(b)(6) motion "'should not be used to test the sufficiency of a complaint after a responsive pleading has been filed.'" Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557, 562 (Ala. 2005) (quoting Sims v. Lewis, 374 So. 2d 298, 301 (Ala. 1979)). However, "a defense of failure to state a claim upon which relief can be granted, although typically raised pursuant to Rule 12(b)(6), can be raised after an answer has been filed by moving for a judgment 14 1151077 on the pleadings" under Rule 12(c), Ala. R. Civ. P. Pontius, 915 So. 2d at 562. This Court has discussed the distinction between the standard of review for a ruling based on Rule 12(c) and one based on Rule 12(b)(6) as follows: "In Reed Elsevier, Inc. v. TheLaw.net Corp., 269 F. Supp. 2d 942, 947 (S.D. Ohio 2003), the federal district court stated with regard to Rule 12(b)(6) and Rule 12(c), Fed. R. Civ. P.: "'.... "'The difference between the two types of motions stems from when in the course of proceedings they can be raised. Motions brought under Rule 12(b)(6), indeed, under 12(b) generally, must be brought by a defendant "before pleading" (i.e., before filing its answer to the complaint). Motions brought under Rule 12(c) cannot be filed until "[a]fter the pleadings are closed" (i.e., after filing its answer). Still and all, the standard for reviewing Rule 12(c) motions is often identical to that used for reviewing Rule 12(b)(6) motions, given that Rule 12(c) can be invoked in a number of situations where a Rule 12(b) motion could have been, but was not, filed by the defendant. See Rule 12(h)(2) & (3); 5A Wright & Miller § 1368, at 514-17. Thus, often times, after a responsive pleading has been filed, a defendant will move to dismiss for failure to state a claim under Rule 12(c), even though there may be no need to refer to the responsive pleading, such that it would 15 1151077 have been proper to move for dismissal under Rule 12(b)(6). In such an instance, it is proper to treat the motion in the manner as one brought pursuant to Rule 12(b)(6). See id., at 515. ...'" Pontius, 915 So. 2d at 561–62 (footnotes omitted). ELG explicitly argued in the trial court that the class allegations failed to state a claim because, it said, the plaintiffs could not meet the requirements of Rule 23. Therefore, we will treat the motion as a Rule 12(b)(6) motion. "'On appeal, a dismissal is not entitled to a presumption of correctness. The appropriate standard of review under Rule 12(b)(6) is whether, when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle her to relief. In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether she may possibly prevail. We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.'" Lloyd Noland Found., Inc. v. HealthSouth Corp., 979 So. 2d 784, 791 (Ala. 2007) (quoting Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993) (citations omitted in Lloyd Noland)). 10 10Although the parties' various filings below included exhibits, which do not appear to have been specifically excluded by the trial court, the dismissal motion on which the 16 1151077 Discussion I. As noted above, the trial court held that the attorney- employment agreement was ambiguous and that this ambiguity was fatal to the plaintiffs' class-allegation claims. Thus, the trial court dismissed the class claims before the class- certification process began. To maintain a class action, the trial court must find that questions of law or fact common to the plaintiff class members predominate over questions impacting individual members. Rule 23(a)(2) and (b)(3), Ala. R. Civ. P. This is difficult to show in the context of an action alleging breach of contract when the contract at issue is deemed ambiguous; in present appeal is based appears, as the trial court noted, to rely solely on documents referenced in and/or relied upon by the plaintiffs' complaint, namely the attorney-employment contracts executed by the decedents of the named plaintiffs and the February 23, 2012, memorandum imposing the new charge. See, e.g., Donoghue v. American Nat'l Ins. Co., 838 So. 2d 1032, 1035 (Ala. 2002) ("'"[I]f a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiffs claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss."'") (quoting Wilson v. First Union Nat'l Bank of Georgia, 716 So. 2d 722, 726 (Ala. Civ. App. 1998), quoting other cases). 17 1151077 such a case, each individual class member may have differing interpretations of the ambiguous contract language and, thus, the finder of fact will have to determine how each individual plaintiff interpreted the language, resulting in determinations of individual issues predominating over the common issues. In University Federal Credit Union v. Grayson, 878 So. 2d 280, 293 (Ala. 2003), this Court explained: "'Under some circumstances, this Court has held that the conclusion that a contract was ambiguous was fatal to a claim for class certification. Mann v. GTE Mobilnet of Birmingham, Inc., 730 So. 2d 150, 155 (Ala. 1999) (failure to "satisfy the commonality requirement of Rule 23(a)(2) as to questions of fact, because the evidence necessary to resolve those questions of fact will vary from case to case"). See also Lackey v. Central Bank of the South, 710 So. 2d 419 (Ala. 1998) (trial court did not abuse its discretion in decertifying a class, when it determined that the evidence of an ambiguity rendered class certification improper on a breach-of-contract claim) (plurality opinion).' "Alfa Life Ins. Corp. v. Johnson, 822 So. 2d 400, 404-05 (Ala. 2001).... Additionally, because resolving an ambiguity forces the finder of fact to determine how each individual class member interpreted the ambiguous language, an ambiguity may foreclose the conclusion that common issues predominate over individual issues. General Motors Acceptance Corp. v. Dubose, 834 So. 2d 67, 72–73 18 1151077 (Ala. 2002)." See also General Motors Acceptance Corp. v. Dubose, 834 So. 2d 67, 72 (Ala. 2002) (noting that an "ambiguity prevents [the class representatives] from satisfying the 'commonality' requirement of Rule 23(a)(2), Ala. R. Civ. P., and forecloses the conclusion that 'common issues predominate'"). "A contractual provision is ambiguous if it is reasonably susceptible of more than one meaning." FabArc Steel Supply, Inc. v. Composite Constr. Sys., Inc., 914 So. 2d 344, 357 (Ala. 2005). "[T]he question is not whether the parties have differing interpretations of allegedly ambiguous language; whether there is an ambiguity is for the trial court to determine. In Winkleblack v. Murphy, 811 So. 2d 521, 525 (Ala. 2001), this Court stated: "'The question whether a contract is ambiguous is for a court to decide. State Farm Fire & Cas. Co. v. Slade, 747 So. 2d 293 (Ala. 1999). As long as the contractual terms are clear and unambiguous, questions of their legal effect are questions of law. Commercial Credit Corp. v. Leggett, 744 So. 2d 890 (Ala. 1999). Thus, we apply a de novo review to a trial court's determination of the legal effect of an unambiguous contract term.'• "See also Woodall v. Alfa Mut. Ins. Co., 658 So. 2d 369 (Ala. 1995). 19 1151077 "In Mann [v. GTE Mobilnet of Birmingham, Inc., 730 So. 2d 150 (Ala. 1999)], this Court determined that the language in GTE's contract that provided that customers would be billed 'per minute'•was ambiguous, because the language was 'susceptible to more than one reasonable interpretation by the various members of the proposed class.'• 730 So. 2d at 155. We held that Mann had not satisfied the commonality requirement because the evidence necessary to resolve questions of fact would vary from case to case. Id. "'An "instrument is unambiguous if only one reasonable meaning clearly emerges."'• Sealing Equip. Prods. Co. v. Velarde, 644 So. 2d 904, 908 (Ala. 1994), quoting Reeves Cedarhurst Dev. Corp. v. First Amfed Corp., 607 So. 2d 184, 186 (Ala. 1992)." General Motors Acceptance, 834 So. 2d at 72 (emphasis added). In construing contractual language, this Court has observed that "'the mere fact that a word or a phrase ... is not defined in [a document] does not mean that the word or phrase is inherently ambiguous.'" Lambert v. Coregis Ins. Co., 950 So. 2d 1156, 1161 (Ala. 2006) (quoting Safeway Ins. Co. of Alabama v. Herrera, 912 So. 2d 1140, 1143 (Ala. 2005)). Cf. Grove Hill Homeowners' Ass'n, Inc. v. Rice, 43 So. 3d 609, 614 (Ala. Civ. App. 2010) (noting that "'an undefined word or phrase [does not] create an inherent ambiguity'") (quoting Hipsh v. Graham Creek Estates Owners Ass'n, 927 So. 2d 846, 849 (Ala. Civ. App. 2005)). In the absence of a 20 1151077 definition, "the court should construe the word or phrase according to the meaning a person of ordinary intelligence would reasonably give it." Safeway Ins., 912 So. 2d at 1143. The pertinent portion of the attorney-employment agreement states: "This attorney employment agreement expresses the intent of the undersigned to employ Environmental Litigation Group, P.C., attorneys at law, Birmingham, Alabama, to represent the undersigned in the prosecution of a tort claim and cause of action for injuries suffered by the undersigned (or the undersigned's decedent) as a result of exposure to asbestos products. The undersigned hereby give to the said attorneys the exclusive right to take all legal steps necessary to enforce the said tort claim. ... "In consideration of the services rendered by the said attorneys, the undersigned hereby assign and convey unto the said attorneys as their compensation the following present and undivided interest in the said claim or claims: 40% of collection from settlement or trial. No fee for services will be charged unless some amount is recovered." The attorney-employment agreement, the plaintiffs argue, provides that the work performed by ELG is to be compensated through the 40% contingency fee. The agreement states that, in exchange for representing the client "in the prosecution of a tort claim ... for injuries suffered by the [client] (or the 21 1151077 [client's] decedent)" and "the exclusive right to take all legal steps necessary to enforce the said tort claim," ELG was entitled to receive, "as [its] compensation," 40% of "collection from settlement or trial," and "no fee" would be charged "unless some amount is recovered." This part of the agreement specifies the work that ELG would perform--all legal steps necessary for the prosecution and enforcement of the claim--and that the client is charged nothing for this work until a recovery is had for the client. The plaintiffs alleged in their complaint and on appeal that the new charge described in the February 23, 2012, memorandum ("the memorandum") is for "additional work" that should be part of the 40% contingency fee and that the new charge is thus an "extra attorney fee." The memorandum describes the nature of the new charge: "Environmental Litigation Group ('ELG') is devoted to achieving the best possible recovery in your case. There are certain unavoidable legal requirements that we have had to meet over the past seven years, and we must continue to do so, as the legal landscape has changed. In order to comply with these requirements most efficiently, there are certain services that our attorneys and staff provide that are in addition to the work performed under the terms of the attorney client contract. The contingency fee agreement provides that this 22 1151077 additional fee will be deducted from your settlement(s). ELG is required to correspond with Medicaid and Medicare under the terms of the Secondary Payer in relation to potential subrogation (whether or not you have ever been covered by Medicaid or Medicare), administrate certain probate- related activities on behalf of deceased clients, and perform extensive work and research in determining if clients have filed for bankruptcy protection (whether or not you have ever filed for bankruptcy protection). The work required to fully comply with legal requirements relating to these three areas of service [is] very significant. "Therefore, ELG has instituted an 'Administrative Service Expense Charge' of $250.00 for living clients and $600.00 for deceased clients, which have been applied to your account. Living clients who have been charged $250.00 and subsequently pass away will incur an additional offset cost of $350.00. Law firms which specialize in dealing with subrogation and bankruptcy matters typically charge hourly rates exceeding our charge for an attorney's time, which quickly trickles down to be additionally handled by another law firm's personnel at high hourly rates. A detailed study of the significant amount of time spent by ELG attorneys and staff working on these matters has proven that ELG's cost of this service to clients can easily exceed the Administrative Service Expense Charge. Finally, to have these matters handled by a firm other than ELG would quickly exceed our onetime charge, as these matters typically take several hours to deal with, and often must be revisited over what we believe will be the four year lifespan of the remainder [of] your case." (Emphasis added.) The memorandum describes "certain services that [ELG's] 23 1151077 attorneys and staff provide" that are related to corresponding with Medicaid and Medicare, probate-related activities, and determining if clients have filed for bankruptcy protection. These services are described as "in addition" to the work performed under the attorney-employment agreement and are described as "extensive work" "required to fully comply with legal requirements relating to these three areas of service." It then describes three new, flat charges that are applicable to all clients. The charges for the services are described as an "additional fee." The memorandum further states that the cost of its attorneys and staff working on the issues described in the first paragraph might exceed the actual amount of the flat charge. The plaintiffs, in their complaint, describe the new charge as a "flat fee" for "legal services necessary to enforce" the clients' claims. When these allegations are viewed in the light most favorable to the plaintiffs, and given the existence of the memorandum, the plaintiffs can prove a set of circumstances demonstrating that the services for which the new charge is assessed are work performed "in the prosecution of a tort claim," and part of the "legal steps 24 1151077 necessary to enforce the said tort claim" and delivery of the "amount [that] is recovered" for the client. This, under the attorney-employment agreement, is "compensat[ed]" by the 40% of "the collection" from settlement or trial. ELG argues, as it did below, that the new charge is an "expense" the attorney-employment agreement specifically contemplated in a provision describing expenses. This "expense provision" states: "The said attorneys are authorized to pay all expenses in this case, including but not limited to medical expenses, court costs, deposition expenses, long distance calls, investigation expenses, copy expenses, and the said attorneys are further authorized to deduct and withhold from any amount collected or recovered with respect to any such claim or claims the full amount of such expenses as reimbursement thereof (including estimated fixed amounts for such expenses as copy expense, long distance telephone calls and investigation costs). Such expense reimbursements are in addition to the legal fees payable to the said attorneys." (Emphasis added.) Viewing the allegations in the light most favorable to the plaintiffs, we conclude that the new charge does not meet what is described in the expense provision, even if such provision is ambiguous. An expense under this provision is only something for which ELG would receive a full 25 1151077 "reimbursement"--an amount expended that is paid back from the award collected for the client. The memorandum, as the complaint alleges, shows that the new charge is not a reimbursement of amounts that were expended, but a flat charge for work and services unrelated to specific amounts that were expended and subject to full reimbursement. The memorandum describes the new charge, not as repayment for out-of-pocket expenses, but as a charge for work and services performed. Simply put, the new charge is not an "expense" as described by this portion of the attorney-employment agreement. 11 ELG contends that the new charge is a "fixed amount" that fits within the following portion of the expense provision: "estimated fixed amounts for such expenses as copy expense, long distance telephone calls and investigation costs." This portion, however, simply explains that ELG may deduct or withhold an estimated fixed amount for certain things already 11ELG might ultimately produce evidence that shows, despite the characterization of the new charge by the complaint and the memorandum, that it actually constituted an expense as described in the attorney-employment agreement. At this point in the proceedings, however, the allegations in the complaint, which are confirmed by the memorandum, show that the plaintiffs might possibly prevail on their allegations. 26 1151077 described as expenses. It does not state that all fixed charges constitute expenses. Further, construing the allegations in the plaintiffs' favor, nothing before us suggests the work and services encompassed in the new charge are susceptible to a fixed estimated amount. In fact, the memorandum even describes the work or services performed as varying and notes that the costs of such work or services "can" exceed the amount of the new charge. The trial court held that the attorney-employment agreements were "silent and ambiguous regarding how work related to probate, bankruptcy, and Medicare should be charged to the client." We disagree. The agreements provide that ELG would be compensated for the work and services performed by the 40% contingency fee. This general description would necessarily include all such narrowly defined work identified by the trial court; the failure of the agreement to address any specific type of work does not make it ambiguous. See In re Laughlin, 265 F.2d 377, 378 (D.C. Cir. 1959) (denying attorneys additional compensation for defending a negligence judgment on appeal based on the conclusion that "in the absence of a specific provision in the contract for additional 27 1151077 fees the contract must be construed to include the services rendered on appeal"). Again, work in prosecuting the clients' claims and taking the legal steps necessary to enforce the claims is compensated for by the contingency fee. Finally, the trial court held that the attorney- employment agreements in general were ambiguous regarding whether post-settlement work done to ensure payment to the client is an expense, part of the contingency fee, or outside the scope of the contract. However, the agreement is to represent the client in the prosecution of the tort claim, ELG is assigned the right to "take all legal steps necessary to enforce" the claims, and no fees for services are charged unless the client recovers. Under the standard of review, nothing in the agreement suggests that ELG's obligation to enforce the clients' claims ends before recovery is had by its clients. The relevant inquiry is whether, based on the nature of the work involved, the collection of the new charge was, under the plain language of the employment agreement, permitted by ELG as recoupment of its expenses under the contract terms or whether it was an improper attempt by ELG to recover an 28 1151077 additional fee exceeding the 40% provided for in the parties' original agreement. At this point in the proceedings and under the standard of review, we see no ambiguity in the attorney-employment agreements on these issues. This holding negates the trial court's contrary conclusion as to the individualized inquiry necessary with regard to the plaintiffs' contract claims. We therefore reverse the trial court's order dismissing the plaintiffs' claims for class- based relief and remand the matter for further proceedings. II. The plaintiffs further challenge the trial court's alternative conclusion that the class definition included in the plaintiffs' amended complaint was "fatally defective." Specifically, the trial court's holding in this regard, which appeared in a footnote to the dismissal order, provided, in full: "In addition, Plaintiffs’ class definition is fatally defective. A 'proposed class definition must specify a particular group harmed during a particular time period via a particular manner.' Fisher v. Ciba Specialty Chemicals Corp., 238 F.R.D. 273, 301 (S.D. Ala. 2006). See also CVS Caremark Corp. v. Lauriello, 175 So. 3d 596, 613 (Ala. 2014) (finding that the class, as defined, was 'overly broad'). The proposed class in this case includes 29 1151077 all past and present ELG asbestos clients who signed contingent fee contracts, which is everyone: 'All clients with asbestos claims who were and are represented by ELG as attorneys under a contingent fee contract.' (Complaint at ¶ 5.) This class definition includes ELG clients who were never charged the Administrative Service Expense Charge, and thus, is overly broad." The plaintiffs assert that such a finding was premature at the present state of the litigation. They include in their brief authority suggesting that "[r]eviewing the complaint alone is not normally a suitable method for determining whether a class eventually can be certified" and that "a sufficiently defined class is appropriately addressed after some development of the facts and under Rule 23's established protocol for weighing the propriety of class certification." College of Dental Surgeons of Puerto Rico v. Connecticut Gen. Life Ins. Co., 585 F.3d 33, 41-42 (1st Cir. 2009). ELG counters that "a class definition, at a minimum, must limit the class to the group who suffered the alleged harm" and cites authority purporting to deny class certification on the ground that the class is "overly broad." (ELG's brief at p. 7) (citing Fisher v. Ciba Specialty Chems. Corp., 238 F.R.D. 273, 301 (S.D. Ala. 2006), and CVS Caremark Corp. v. 30 1151077 Lauriello, 175 So. 3d 596, 613 (Ala. 2014)).12 ELG further contends that because the plaintiffs allegedly failed, in the trial court, to oppose its motion on this ground, the plaintiffs have waived any such challenge -- and more specifically a challenge on the ground that such a determination was premature -- for purposes of appeal. Initially, we note that we are unable to determine from the face of the dismissal order the extent to which the trial court relied on this apparent aside as alternate support for its decision to dismiss the plaintiffs' class-based claims. We are, however, unpersuaded by ELG's assertion that the plaintiffs waived, for purposes of appeal, their prematurity challenge. To the contrary, the transcript of the dismissal hearing makes clear that, during that proceeding, the parties 12ELG's reliance on Lauriello appears misplaced. Specifically, although we, in Lauriello, agreed that the proposed class definition was "impermissibly broad" to the extent that it included potential class plaintiffs who were allegedly not damaged by the defendants' purported tortious conduct, we specifically noted that the trial court's certification order had appropriately limited certification solely to those damaged by the challenged conduct. 175 So. 3d at 613. We see nothing that would prevent, if necessary, a similar adjustment by the trial court in the present case when the matter proceeds to class certification. 31 1151077 repeatedly agreed that the "one issue for the [trial] Court to decide" was whether "[the] contract [was] ambiguous." More specifically, according to ELG, "the only thing [it was] asking the [trial] Court to look at" was "the threshold issue on the class-certification issue, [namely] whether the contract is ambiguous." Counsel for the plaintiffs subsequently agreed that "[a]mbiguity ... [was] the heart of the issue." Therefore, the plaintiffs presumably did not oppose the overbreadth argument as premature because it was apparent that the only issue for consideration was the alleged ambiguity in the attorney-employment agreement. As a result, we are unable to agree that the plaintiffs waived a challenge to the dismissal of their class-based claims on an alternate ground. Further, we agree that any challenge regarding the sufficiency of the plaintiffs' class definition appears premature. Moore v. Walter Coke, Inc., 294 F.R.D. 620, 627 (N.D. Ala. 2013) ("[S]triking a class claim before a motion for certification (and before the benefit of pre-certification discovery) is rare."). To avoid pre-certification dismissal, Rule 23 requires only that class representatives propose a 32 1151077 class definition that is objectively ascertainable, i.e., "to determine who will be bound by rulings once the class is certified," and that only "[w]here a proposed class definition ... is so amorphous that it is not ascertainable" is dismissal appropriate on a motion by the defendant. See id. at 627, 624-25. See also id. at 626 ("When other courts have dismissed a plaintiff's complaint on the pleadings (i.e., before a motion for certification has been filed or any preliminary discovery taken place) based on ascertainability, the class definitions have been intrinsically indefinite."). "The Eleventh Circuit has said that, '[i]n a class action, it is sufficient that a complaint generally give the defendant notice of the nature and scope of the plaintiffs' claims; it is not necessary that the class representatives plead evidence or otherwise meet any burden beyond the minimal Rule 8 standard.'" Id. at 631 (quoting United States v. Baxter Int'l, Inc., 345 F.3d 866, 882 (11th Cir. 2003)). Further, as the plaintiffs note, in Connecticut General, supra, the United States Court of Appeals for the First Circuit concluded that where the plaintiffs' complaint "plausibly allege[d] claims for class-wide relief," that 33 1151077 pleading was sufficient even in the "absence of any sufficient class definition." 585 F.3d at 40. Whether the class is appropriately defined is addressed in the later class- certification process. In sum, we are unable to agree that the initial class definition proposed by the plaintiffs, even if in need of subsequent clarification during discovery and before class certification, is, at this posture, so facially indeterminate to support dismissal.13 See Gray v. BMW of N. America, LLC, 22 F. Supp. 3d 373, 386 (D.N.J. 2014) ("Motions to strike class allegations from a pleading are disfavored because a motion for class certification is a more appropriate vehicle for arguments about class propriety."). Conclusion In consideration of the foregoing, the trial court's judgment is reversed and the case is remanded for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, C.J., and Bolin, Parker, Main, Wise, Bryan, and Sellers, JJ., concur. 13Our decision is not intended as a commentary upon the trial court's eventual consideration of the class- certification issue. 34

September 1, 2017

f636a914-6339-4bc1-a078-0e6e5d699ae6

Firestone v. Weaver

N/A

1151211

Alabama

Alabama Supreme Court

Rel: 08/11/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1151211 ____________________ Roger D. Firestone v. Carl Weaver Appeal from Coosa Circuit Court (CV-10-900025) On Application for Rehearing PARKER, Justice. This Court's opinion of May 12, 2017, is withdrawn, and the following is substituted therefor. Roger D. Firestone sued Carl Weaver, Charles Tooley ("Tooley"), L.C. Collins, Jr. ("L.C."), and Mickie Wayne 1151211 Collins ("Mickie") (hereinafter collectively referred to as "the defendants"), alleging that the defendants conspired to and did brutally assault and batter and attempt to murder Firestone and seeking damages. Firestone appeals from a summary judgment entered by the Coosa Circuit Court in favor of Weaver dismissing Firestone's claims against Weaver as barred by the applicable statutes of limitations.1 Facts and Procedural History Firestone's deposition testimony indicates that Firestone, Chuck Amberson, and Daryl Coleman frequented a hunting cabin they had built in Coosa County ("the hunting cabin"). According to Firestone's deposition testimony, Amberson and Coleman regularly smoked crystal methamphetamine at the hunting cabin, a supply of which they kept in "a hiding place somewhere" at the hunting cabin. In a statement Tooley gave the Coosa County Sheriff's Department after he was apprehended for the offense and after waiving his rights under Miranda v. Arizona, 384 U.S. 436 (1966), Tooley indicated that Weaver knew that there was "a 1As explained in greater detail below, this is not the first time these parties have appeared before this Court. See Weaver v. Firestone, 155 So. 3d 952 (Ala. 2013), and Ex parte Weaver (No. 1140946, July 13, 2015). 2 1151211 bunch of crystal meth" at the hunting cabin. Tooley said in his statement that Weaver took Tooley to the area where the hunting cabin was located to show him where the cabin was and urged Tooley to return to the cabin to steal the crystal methamphetamine. According to Tooley's statement, Weaver gave Tooley $600 "for expenses" and Tooley recruited L.C. and Mickie to help him steal the crystal methamphetamine. Firestone's deposition testimony indicates that, on May 16, 1995, Firestone, Amberson, and Coleman were at the hunting cabin when Tooley, L.C., and Mickie arrived. L.C. and Mickie restrained Firestone, Amberson, and Coleman and questioned them about the location of the crystal methamphetamine and any cash they may have had. Coleman gave L.C. and Mickie the crystal methamphetamine, and Firestone, Amberson, and Coleman gave L.C. and Mickie all the cash they had. According to Firestone's deposition testimony, L.C. and Mickie did not believe that Firestone, Amberson, and Coleman had given them all the crystal methamphetamine and cash in their possession. L.C. and Mickie then doused the hunting cabin and Firestone, Amberson, and Coleman with kerosene and set the hunting cabin, with Firestone, Amberson, and Coleman restrained inside, on 3 1151211 fire. Firestone, Amberson, and Coleman suffered substantial injuries as a result of being burned in the fire; Amberson and Coleman eventually died from their injuries. Tooley, L.C., and Mickie were eventually charged with various crimes arising out of the events described in Firestone's deposition testimony; all three men ultimately pleaded guilty to the charges in 2010. On February 23, 2000, D.B. Matson, a deputy state fire marshal employed by the Alabama Department of Insurance, created a report concerning the incident. Matson's report states that, on June 10, 1996, Christi Coleman Hicks, who was married to Coleman at the time of the incident, informed an Alabama Bureau of Investigation ("ABI") agent investigating the case that "she heard that L.C. ..., Stanley Tooley, and ... Tooley did the burning in Coosa County." Matson's report further indicates that Tooley told another individual "that he and his brother [Stanley] did the crime." Matson's report states that "Tooley was picked up by an undercover police officer ... and questioned about this incident." Firestone's deposition testimony indicates that, in 2007, Firestone's son told Firestone that he had heard rumors that 4 1151211 in 1995 Tooley had stolen the same amount of crystal methamphetamine that had been stolen from the hunting cabin on May 16, 1995. Firestone informed the ABI officers investigating the case what Firestone's son had told him concerning Tooley. Firestone's deposition testimony indicates that the ABI officers told him that they were going to investigate the information Firestone's son had heard concerning Tooley. Affidavit testimony of Eddie Whorton, Betty Cheney, Brian Farley, and Christi Coleman Hicks was presented by Weaver. Whorton's affidavit testimony states that he "was an acquaintance of ... Amberson and ... Firestone" and that, "in 1995, approximately five months after the incident [at the hunting cabin] which resulted in the deaths of ... Amberson and ... Coleman and injury to ... Firestone, I obtained information from a female friend that ... Tooley was one of the individuals that perpet[r]ated the deaths and injuries. I obtained pictures of ... Tooley taken at a wedding from this friend and took them to ... Firestone. I showed the pictures of ... Tooley to [Firestone] and he identified him as one of the assailants. I then contacted Roy Harbin, who was a local law enforcement officer and provided him with the information. I have knowledge that Roy Harbin talked to [Firestone] after this and even put ... Tooley in a line-up for ... Firestone." 5 1151211 In his deposition testimony, Firestone confirmed that in 1995 Whorton had shown him a picture of Tooley and that Whorton told Firestone that Tooley "knew something about" the incident. Firestone also confirmed in his deposition testimony that he had met with Roy Harbin and that Harbin had Firestone look at Tooley in a room to determine if Tooley was one of Firestone's assailants. Cheney's affidavit states that she was married to Firestone at the time of the incident but that they divorced in 1998. Cheney's affidavit further states: "3. Sometime between 1995 to 1996, ... Firestone was called in for a meeting with Roy Harbin for the purpose of attempting to identify ... Tooley from a lineup. Roy Harbin specifically questioned ... Firestone about ... Tooley's involvement. After the meeting, ... Firestone explained that he was not able to identify [Tooley]. In response, [Firestone] explained to me that Roy Harbin responded that ... Tooley was the guy who did it and he just let him go. "4. In late 1997 to spring 1998, I received a telephone call from a Kristy Hollingsworth. During this call, Ms. Holling[s]worth informed me that she knew what happened to [Firestone] in Coosa County. She gave me specific names of people that she claimed to be involved, including ... Tooley ..., L.C. ..., [and] Mickie .... The caller told me that it was ... Tooley who did it. ... She also said that ... Weaver was involved. ... I made contemporaneous hand-written notes of this phone conversation. 6 1151211 "5. At a later date, I passed along my notes to ... Firestone in anticipation of one of his meetings with the ABI investigators." Farley's affidavit states that he "was a close friend" of Coleman's and that he knew Firestone. Farley's affidavit states that he "had heard information that the perpetrators of this incident were Mickie ..., ... Tooley and L.C." Farley's affidavit further states that in 1995 he informed an ABI investigator of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. According to his affidavit testimony, Farley also informed Firestone while Firestone was in the hospital recovering from the injuries he suffered in the fire of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. Hicks's affidavit indicates that Farley also told her of the information he had received concerning Tooley's, L.C.'s, and Mickie's involvement in the incident. Hicks's affidavit does not indicate that she passed this information along to Firestone. In August 2010, Tooley, L.C., and Mickie pleaded guilty to the attempted murder of Firestone. On August 20, 2010, 7 1151211 Firestone filed a complaint against the defendants and several fictitiously named parties, seeking damages on claims of conspiracy, the tort of outrage, assault and battery, and attempted murder. Although Weaver was not present at the hunting cabin, Firestone alleged that he organized and funded the incident. Recognizing that a question might exist as to whether his action was barred by the applicable statutes of limitations, Firestone averred in his complaint: "On August 9, 2010, Tooley, [Mickie], and [L.C.] pleaded guilty to attempted murder of [Firestone]. It was not until this date that [Firestone] discovered the identity of the [individuals] who had attacked him because of the fraudulent concealment of the conspiracy and the identity of the conspirators. [Firestone] avers that despite diligent efforts, he could not discover the identity of his attackers before August 9, 2010. [Firestone] has since August 9, 2010, further discovered the identity of Defendant [Carl] Weaver and his role in this matter. [Firestone] avers that none of the acts of [the defendants] are barred by the statute of limitations. [Firestone] avers that this action is brought against [these individuals] within the time allowed by Alabama law for bringing an action following discovery of facts which have been fraudulently concealed by defendants. [Firestone] further avers that any otherwise applicable statute of limitations has been equitably tolled until the reasonable efforts of [Firestone] to discover the identity of [these individuals] and that [Firestone] has brought this action in the time allowed by law following such discovery. [Firestone] further avers that no statute of limitations is applicable to this case under Alabama law because it is an action for 8 1151211 damages for maiming and attempted murder with the relevant facts of the identity of [the defendants] deliberately concealed as a part of a conspiracy by [the defendants] to maim and murder [Firestone] and others." On September 24, 2010, Weaver filed a motion to dismiss Firestone's complaint. On July 21, 2011, the circuit court denied Weaver's motion to dismiss. On the same day, the circuit court entered an order concerning Tooley and L.C., which stated: "[H]aving been served with process in this action, and the time for answering having passed, this action will be dismissed as to [Tooley and L.C.] unless [Firestone] shall, within 21 days, initiate default." The circuit court also entered a separate order noting that Mickie had died and dismissing him from the lawsuit; no motion requesting that a representative of Mickie's estate be substituted as a party had been filed at that time. On August 4, 2011, Firestone filed applications for default judgments against Tooley and L.C. On August 10, 2011, the circuit court entered an "order entering default," which states: "Default is hereby entered against defendants L.C. ... and ... Tooley. [Firestone] may submit a proposed order for consideration." The circuit court's August 10, 2011, order 9 1151211 did not assess damages against Tooley or L.C. and specifically requested that Firestone submit a proposed order doing so. After the circuit court denied Weaver's motion to dismiss, Weaver filed a motion for a permissive appeal pursuant to Rule 5, Ala. R. App. P. This Court granted Weaver permission to appeal the circuit court's denial of his motion to dismiss. Weaver v. Firestone, 155 So. 3d 952, 954 (Ala. 2013)("Weaver I"). In Weaver I, we stated the following concerning Weaver's motion to dismiss: "Weaver filed a motion to dismiss Firestone's complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P., and §§ 6–2–34 and 6–2–38, Ala. Code 1975.[2] In his motion, Weaver argued that Firestone's claims were barred by the applicable statutes of limitations and that no tolling provision precluded the application of the time-bars. Specifically, Weaver argued that neither the discovery rule of § 6–2–3, Ala. Code 1975, nor the doctrine of equitable tolling was applicable to Firestone's claims. "After conducting a hearing on Weaver's motion to dismiss, the trial court denied the motion. The trial court specifically noted that Firestone 'alleges in the complaint that he made diligent efforts to discover the identity of his assailants, 2Section 6-2-34, Ala. Code 1975, requires that an action "for any trespass to person or liberty, such as ... assault and battery," be commenced within six years. Section 6-2- 38(l), Ala. Code 1975, requires that "[a]ll actions for any injury to the person or rights of another not arising from contract and not specifically enumerated in this section must be brought within two years." 10 1151211 but could not do so until they pleaded guilty and implicated Weaver.'" 155 So. 3d at 956. On appeal, this Court determined that Firestone had "alleged facts that would support the conclusion that equitable tolling is applicable in the present case." 155 So. 3d at 968. Accordingly, this Court affirmed the circuit court's denial of Weaver's motion to dismiss, and the case proceeded in the circuit court. On February 5, 2015, Weaver filed a motion for a summary judgment. Weaver argued, as he did in his motion to dismiss, that Firestone's claims against him were barred by §§ 6–2–34 and 6–2–38(l), Ala. Code 1975. Weaver also argued in his summary-judgment motion that neither the discovery rule of § 6–2–3, Ala. Code 1975, nor the doctrine of equitable tolling applied to save Firestone's claims from the bar of the applicable statutes of limitations. Weaver argued that, even if the doctrine of equitable tolling applied, the statutes of limitations should have begun running when Firestone met with Harbin for the purpose of identifying Tooley as one of Firestone's assailants, i.e., in 1995 or 1996, or at the latest in 2007 -- when Firestone received information from his 11 1151211 son indicating that Tooley had been involved in the theft of the crystal methamphetamine from the hunting cabin and possibly in the assault and battery of Firestone. On May 19, 2015, the circuit court denied Weaver's summary-judgment motion. The circuit court determined that Firestone "was presented with evidence as would place a reasonable person on notice that Tooley was one of those who committed the assault on Firestone." Specifically, the circuit court determined that the information Firestone received from his son concerning Tooley's involvement "would place a reasonable person on notice as of 2007 (the year in which Firestone’s son presented him with the ... information regarding Tooley)." The circuit court further stated: "[T]his court determines that a reasonable person in the exercise of due diligence would have followed up on Firestone's son's 2007 information in an effort to confirm its accuracy. There is no indication that Firestone took any ... action other than to report this information to the Alabama Bureau of Investigation." Accordingly, the circuit court held that the six-year statute of limitations set forth in § 6-2-34, which the circuit court determined applied to all of Firestone's claims against Weaver, began to run on an unspecified day in 2007. The 12 1151211 circuit court concluded that Firestone's claims against Weaver were thus not barred by the applicable statute of limitations because Firestone filed his action against Weaver within six years of 2007. On June 5, 2015, Weaver filed a petition for a writ of mandamus with this Court challenging the denial of his summary-judgment motion. We denied Weaver's petition by order of the Court, without ordering answers and briefs. Ex parte Weaver (No. 1140946, July 13, 2015). On April 5, 2016, after conducting further discovery, Weaver filed a second motion for a summary judgment. In support of his second summary-judgment motion, Weaver submitted, among other things, the affidavits of Whorton, Cheney, Farley, and Hicks summarized earlier in this opinion. Weaver argued that the facts set forth in his evidentiary submissions were substantial evidence that Firestone had information in 1995 or 1996 that Tooley was involved in the incident at the hunting cabin. On May 16, 2016, Firestone filed a response to Weaver's summary-judgment motion. 13 1151211 On July 14, 2016, the circuit court granted Weaver's second summary-judgment motion. After summarizing the relevant evidence before it, the circuit court stated: "This Court finds that the foregoing facts 1) would place a reasonable person on notice that at least one of the named Defendants in this action was one of those persons who had committed the assault which is the basis of this action, 2) were presented to [Firestone] no later than 1996, and 3) are uncontroverted. "The previously tolled statute of limitations as to [Firestone's] claims against Defendants and fictitious parties, began to run no later than the end of 1996, expired no later than December 31, 2006, and [Firestone] did not file suit against any defendant until August 20, 2010. "It is therefore considered and ordered as follows: "1. [Weaver's] motion for summary judgment is granted and [Firestone's] claims against Defendant Carl Weaver [are] hereby dismissed with prejudice. "2. This order granting summary judgment in favor of Defendant Weaver and against [Firestone] renders all other pending motions moot, and all previous orders setting motion hearings are hereby withdrawn. "3. Defendant Weaver being the only represented Defendant in this action and the only Defendant to have filed any pleadings in this action, therefore, pursuant to authority of Rule 54(b)[, Ala. R. Civ. P.], there being no just reason for delay, the Court directs the entry of the foregoing as a final judgment." 14 1151211 Firestone appealed. Discussion Although neither party has raised the issue of the appropriateness of the circuit court's Rule 54(b), Ala. R. Civ. P., certification of its July 14, 2016, summary-judgment order, this Court may consider that issue ex mero motu because the issue whether a judgment or order is sufficiently final to support an appeal is a jurisdictional one. See, e.g., Robinson v. Computer Servicenters, Inc., 360 So. 2d 299, 302 (Ala. 1978) (noting that "the trial court cannot confer appellate jurisdiction upon this court through directing entry of judgment under Rule 54(b) if the judgment is not otherwise 'final'"). Rule 54(b) states, in pertinent part: "When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." This Court has recently explained the standard for reviewing Rule 54(b) certifications: 15 1151211 "'"If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment." Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007). "'Although the order made the basis of the Rule 54(b) certification disposes of the entire claim against [the defendant in this case], thus satisfying the requirements of Rule 54(b) dealing with eligibility for consideration as a final judgment, there remains the additional requirement that there be no just reason for delay. A trial court's conclusion to that effect is subject to review by this Court to determine whether the trial court exceeded its discretion in so concluding.' "Centennial Assocs. v. Guthrie, 20 So. 3d 1277, 1279 (Ala. 2009). Reviewing the trial court's finding in Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006), that there was no just reason for delay, this Court explained that certifications under Rule 54(b) are disfavored: "'This Court looks with some disfavor upon certifications under Rule 54(b). "'"It bears repeating, here, that '"[c]ertifications under Rule 54(b) should be entered only in exceptional cases and should not be entered routinely."' State v. Lawhorn, 830 So. 2d 720, 725 (Ala. 2002) (quoting Baker v. Bennett, 644 So. 2d 901, 903 (Ala. 1994), citing in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373 (Ala. 1987)). '"'Appellate review in a piecemeal fashion is not 16 1151211 favored.'"' Goldome Credit Corp. [v. Player, 869 So. 2d 1146, 1148 (Ala. Civ. App. 2003)] (quoting Harper Sales Co. v. Brown, Stagner, Richardson, Inc., 742 So. 2d 190, 192 (Ala. Civ. App. 1999), quoting in turn Brown v. Whitaker Contracting Corp., 681 So. 2d 226, 229 (Ala. Civ. App. 1996)) (emphasis [omitted])." "'Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004).' "In considering whether a trial court has exceeded its discretion in determining that there is no just reason for delay in entering a judgment, this Court has considered whether 'the issues in the claim being certified and a claim that will remain pending in the trial court "'are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results.'"' Schlarb, 955 So. 2d at 419–20 (quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987), and concluding that conversion and fraud claims were too intertwined with a pending breach-of-contract claim for Rule 54(b) certification when the propositions on which the appellant relied to support the claims were identical). See also Centennial Assocs., 20 So. 3d at 1281 (concluding that claims against an attorney certified as final under Rule 54(b) were too closely intertwined with pending claims against other defendants when the pending claims required 'resolution of the same issue' as issue pending on appeal); and Howard v. Allstate Ins. Co., 9 So. 3d 1213, 1215 (Ala. 2008) (concluding that the judgments on the claims against certain of the defendants had been improperly certified as final under Rule 54(b) because the pending claims against 17 1151211 the remaining defendants depended upon the resolution of common issues)." Lighting Fair, Inc. v. Rosenberg, 63 So. 3d 1256, 1263–64 (Ala. 2010). Firestone asserted his four claims (conspiracy, tort of outrage, assault and battery, and attempted murder) against each of the defendants and claimed that the defendants were "separately and severally" liable for the entirety of his damages. Firestone's claims against all the defendants arise out of the same set of facts. Although Tooley and L.C. have not filed a pleading in response to Firestone's complaint, any appeal they may file in the future from a judgment against them in this case would concern the same facts that are the basis of Firestone's claims against Weaver. This Court stated in Smith v. Slack Alost Development Services of Alabama, LLC, 32 So. 3d 556, 562-63 (Ala. 2009): "In Centennial Associates, Ltd.[ v. Guthrie, 20 So. 3d 1277 (Ala. 2009)], we stated that '"[i]t is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties."' 20 So. 3d at 1281 (quoting 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998)). Repeated appellate review of the same underlying facts would 18 1151211 be a probability in this case, and, in light of this Court's stated policy disfavoring appellate review in a piecemeal fashion, see Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004), we accordingly hold that the trial court exceeded its discretion in certifying the judgment entered against [one of the defendants] as final pursuant to Rule 54(b)." In the present case, there is a probability of "[r]epeated appellate review of the same underlying facts." Smith, 32 So. 3d at 562. It appears that the circuit court may yet enter a final default judgment against Tooley and L.C.3 Tooley and L.C. will then have an opportunity to 3The circuit court's August 10, 2011, order finding Tooley and L.C. in default for failing to file a responsive pleading is not a final judgment, but an "'interlocutory default judgment.'" Ex parte Family Dollar Stores of Alabama, Inc., 906 So. 2d 892, 896 (Ala. 2005)(quoting Ex parte Keith, 771 So. 2d 1018, 1019 (Ala. 1998)). In Ex parte Family Dollar, this Court provided the following explanation of the application of Rule 55, Ala. R. Civ. P., in such situations: "Rule 55, Ala. R. Civ. P., 'Default,' provides, in pertinent part, as follows: "'(a) Entry. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default. "'(b) Judgment. Judgment by default may be entered as follows: "'(1) By the Clerk. When the 19 1151211 plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the clerk upon request of the plaintiff and upon affidavit of the amount due shall enter judgment for that amount and costs against the defendant, if the defendant has been defaulted for failure to appear and if the defendant is not a minor or incompetent person. "'(2) By the Court. In all other cases the party entitled to a judgment by default shall apply to the court therefor.... If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury pursuant to the provisions of Rule 38. "'(c) Setting Aside Default. In its discretion, the court may set aside an entry of default at any time before judgment. The court may on its own motion set aside a judgment by default within thirty (30) days after the entry of the judgment. The court may also set aside a judgment by default on the motion of a 20 1151211 party filed not later than thirty (30) days after the entry of the judgment.' "Thus, Rule 55 envisions a two-step process pursuant to which the clerk of the court first enters the party's default and a 'judgment by default' is then entered, either by the clerk or the court, depending upon the nature of the claim. Pursuant to subsection (c), the court may set aside 'an entry of default' at any time, in its discretion, before a judgment by default is entered and may also set aside, under the time limitations specified in that subsection, the 'judgment by default.' Accordingly, it is probably helpful to talk in terms of an entry of 'default' and an entry of a 'judgment by default,' respectively, to differentiate between the two events. Rule 55(b)(2) provides that where a default has been entered, but 'in order to enable the court to enter judgment ..., it is necessary to ... determine the amount of damages ... the court may conduct such hearings ... as it deems necessary and proper....' This Court has referred to the interim 'judgment' entered in such a situation as 'an interlocutory default judgment.' Ex parte Keith, 771 So. 2d 1018, 1019 (Ala. 1998). 'A judgment by default with leave to prove damages is interlocutory and can be set aside at any time until entry of judgment on assessment of damages. It then becomes a final judgment.' Maddox v. Hunt, 281 Ala. 335, 339, 202 So. 2d 543, 545 (1967). 'A default judgment that reserves the assessment of damages is interlocutory and may be set aside at any time; once the trial court assesses damages on the default judgment, the judgment becomes final. Rule 55(c), Ala. R. Civ. P.; Maddox v. Hunt, 281 Ala. 335, 202 So. 2d 543 (1967).' Keith v. Moone, 771 So. 2d 1014, 1017 (Ala. Civ. App. 1997), rev'd on other grounds, Ex parte Keith, [771 So. 2d 1018 (Ala. 1998)]." 906 So. 2d at 896 (emphasis added). 21 1151211 appeal. Firestone's claims against them "are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results." Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987). We conclude that the piecemeal adjudication of the claims against the defendants poses an unreasonable risk of inconsistent results. Further, we are not ignorant of the fact that, until the claims against Tooley and L.C. are finally adjudicated, there remains the possibility that they may file a responsive pleading raising the affirmative defense of the statute of limitations.4 Assuming they do so, the facts regarding when Firestone's claims against Weaver accrued, when the applicable statute of limitations pertaining to Firestone's claims against Weaver began to run, and if the applicable statute of limitations pertaining to Firestone's claims against Weaver Until the circuit court enters a judgment assessing damages against Tooley and L.C., the circuit court may set aside its "interlocutory default judgment" at any time and allow Tooley and L.C. to litigate the claims against them. 4As noted in footnote 3, it is within the circuit court's discretion to set aside its "interlocutory default judgment" any time before it enters a final judgment of default. 22 1151211 were tolled would also be relevant to any statute-of- limitations defense asserted by Tooley and/or L.C. The issue whether Firestone's claims against Weaver are barred by the applicable statutes of limitations -- which is the issue raised in this Court -- is the same issue that could be raised in the circuit court by Tooley and/or L.C., if the circuit court were to set aside its entry of default and they were to file a responsive pleading asserting the affirmative defense of the statute of limitations. In such an event, "the issues in the claim being certified and a claim that will remain pending in the trial court '"are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results."'" Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006)(quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch, 514 So. 2d at 1374). Conclusion Based on the foregoing, we conclude that the circuit court exceeded is discretion in certifying the summary judgment in favor of Weaver as final. Because "[a] nonfinal judgment will not support an appeal," Dzwonkowski v. Sonitrol 23 1151211 of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004), Firestone's appeal must be dismissed. APPLICATION OVERRULED; OPINION OF MAY 12, 2017, WITHDRAWN; OPINION SUBSTITUTED; APPEAL DISMISSED. Stuart, C.J., and Bolin, Shaw, Wise, and Sellers, JJ., concur. 24

May 12, 2017

a69294cc-3da2-4986-a51e-a91ed3fea14a

Newell v. SCI Alabama Funeral Services, LLC

N/A

1151078

Alabama

Alabama Supreme Court

Rel:03/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151078 ____________________ Robert O. Newell v. SCI Alabama Funeral Services, LLC, and Richard T. Johnson III Appeal from Mobile Circuit Court (CV-15-902787) BOLIN, Justice. Robert O. Newell appeals from an order of the Mobile Circuit Court granting a motion to compel arbitration filed by 1151078 SCI Alabama Funeral Services, LLC, and Richard T. Johnson III (hereinafter collectively referred to as "SCI"). Facts and Procedural History Newell's wife Lisa passed away at their home on November 17, 2013. Newell telephoned E-911, and an ambulance and the sheriff's department soon arrived. According to Newell, he requested that Lisa's body be transported to Mobile Memorial Gardens Funeral Home. However, unbeknownst to Newell, Lisa's body was transported to Radney Funeral Home.1 The following day Newell, accompanied by his sister, two daughters, and a son-in-law, went to Mobile Memorial Gardens Funeral Home to make the final arrangements for Lisa. Newell testified that he asked his family to accompany him because he was distraught over Lisa's death. When Newell and the others arrived at Mobile Memorial Gardens Funeral Home they met with Richard T. Johnson III, an employee of Mobile Memorial Gardens. Johnson informed Newell at that time that Lisa's body had been transported to Radney Funeral Home instead of 1It appears that SCI Alabama Funeral Services, LLC, is an Alabama corporation that owns or is otherwise affiliated with the Dignity Memorial network of funeral homes, of which Mobile Memorial Gardens Funeral Home and Radney Funeral Home are a part. 2 1151078 Mobile Memorial Gardens Funeral Home. According to Newell, Johnson informed him that Lisa's body had been transported to Radney instead of Mobile Memorial Gardens because Radney was now a part of the Dignity Memorial Company and because Mobile Memorial Gardens did not have a crematory service. Newell stated that he was upset when he learned that Lisa's body had been transported to Radney Funeral Home instead of Mobile Memorial Gardens Funeral Home. Newell informed Johnson during the meeting that he wanted Lisa's remains cremated and that he wanted to conclude the process as soon as possible. Johnson responded that they could return Lisa's ashes to Newell within 5 to 10 days. According to Newell, Johnson then began asking him a series of questions from a "checklist" that Newell said he found "very insensitive," including whether he wanted to pay to have Lisa's eyes and mouth sewn shut during the cremation process. Newell elected not to have Lisa's body embalmed because Johnson had represented that Lisa's ashes would be returned to him in 5 to 10 days. After Newell answered the questions, he executed a contract providing for the disposition of Lisa's remains by cremation. 3 1151078 The contract contained immediately above the signature lines a section entitled "NOTICES TO PURCHASER/CO-PURCHASER." Within that section appeared the following: "SEE PART THREE FOR TERMS AND CONDITIONS THAT ARE PART OF THIS AGREEMENT. DO NOT SIGN THIS AGREEMENT BEFORE YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS AGREEMENT. "BY SIGNING THIS AGREEMENT, YOU ARE AGREEING THAT ANY CLAIM YOU MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A COURT OR JURY TRIAL AS WELL AS YOUR RIGHT OF APPEAL." (Capitalization in original.) The contract contains in part three a section entitled "TERMS AND CONDITIONS." This section contains the arbitration provision, which provides: "ARBITRATION: YOU AGREE THAT ANY CLAIM YOU MAY HAVE RELATING TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY CLAIM OR CONTROVERSY REGARDING THE INTERPRETATION OF THIS ARBITRATION CLAUSE) SHALL BE SUBMITTED TO AND FINALLY RESOLVED BY MANDATORY AND BINDING ARBITRATION IN ACCORDANCE WITH THE APPLICABLE RULES OF THE AMERICAN ARBITRATION ASSOCIATION ('AAA'); PROVIDED, HOWEVER, THAT THE FOREGOING REFERENCE TO THE AAA RULES SHALL NOT BE DEEMED TO REQUIRE ANY FILING WITH THAT ORGANIZATION, NOR ANY DIRECT INVOLVEMENT OF THAT ORGANIZATION. THE ARBITRATOR SHALL BE SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. IF THE PARTIES FAIL TO OR ARE UNABLE TO AGREE ON THE SELECTION OF AN APPROPRIATE ARBITRATOR, THE AAA SHALL SELECT THE ARBITRATOR PURSUANT TO ITS RULES AND PROCEDURES UPON THE APPLICATION OF ONE OR BOTH PARTIES. THIS AGREEMENT TO ARBITRATE ALSO APPLIES TO ANY CLAIM OR 4 1151078 DISPUTE BETWEEN OR AMONG THE SELLER, YOU AS THE PURCHASER, ANY PERSON WHO CLAIMS TO BE A THIRD PARTY BENEFICIARY OF THIS AGREEMENT, ANY OF THE SELLER'S EMPLOYEES OR AGENTS, ANY OF THE SELLER'S PARENT, SUBSIDIARY, OR AFFILIATE CORPORATIONS, EXCEPT AS MAY BE REQUIRED BY LAW, NEITHER PARTY NOR AN ARBITRATOR MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES." (Capitalization in original.) The contract also requested that Newell provide his Social Security number directly below the signature line; however, Newell wrote "refused" on the line provided for the Social Security number. Newell states that after Lisa's memorial service on November 21, 2013, SCI did not return any of his telephone calls or e-mails inquiring as to the status of Lisa's remains. Newell eventually went to Radney Funeral Home on December 4, 2013, to obtain an answer regarding the status of Lisa's remains. Newell learned at that time that Lisa had not yet been cremated because the funeral home had not yet received the death certificate from a physician. Newell stated that at that time he was so upset over the lack of communication and the knowledge of the status of Lisa's remains that he requested that his sister re-identify Lisa's remains. Newell alleged that he was emotionally distraught over the potential 5 1151078 state of Lisa's remains because, based on Johnson's representation that she would be cremated within 5 to 10 days, he had elected not to embalm her. Lisa's ashes were ultimately returned to Newell on December 6, 2013. On November 17, 2015, Newell sued SCI alleging negligence, wantonness, the tort of outrage, and fraud. On March 8, 2016, SCI moved the trial court to compel arbitration. On May 12, 2016, Newell filed a response in opposition to the motion to compel arbitration or, in the alternative, seeking discovery relating to arbitration, arguing that the arbitration provision was unconscionable. Specifically, Newell argued that the terms of the arbitration provision were grossly favorable to SCI, that SCI had overwhelming bargaining power over a grieving husband, and that the arbitration provision violated public policy. On May 31, 2016, the trial court entered an order granting SCI's motion to compel arbitration. Newell appeals. Standard of Review This Court's standard of review of a ruling on a motion to compel arbitration is well settled: "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. 6 1151078 Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). Discussion Newell argues that the arbitration provision in part three of the contract is unconscionable, and therefore void, because, he says, the terms of the provision are grossly favorable to SCI. "Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998)." Fleetwood Enters., 784 So. 2d at 281. In order to meet that burden, the party seeking to invalidate an arbitration 7 1151078 provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "Substantive unconscionability "'"relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction."' "Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n. 4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "Procedural unconscionability, on the other hand, 'deals with "procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction."' Thicklin, 824 So. 2d at 731 8 1151078 (quoting Foster, 758 So. 2d at 520 n. 4, quoting in turn 8 Williston on Contracts § 18:10)." 923 So. 2d at 1086–87. Relying upon Anderson v. Ashby, 873 So. 2d 168 (Ala. 2003), Newell initially argues that the arbitration provision was substantively unconscionable. I. Newell first contends that the breadth of the arbitration provision meets the standard for substantive unconscionability, because, he says, it reaches every possible action the party opposing arbitration may have against the party seeking to compel arbitration and protects every individual against whom a claim could be brought. The arbitration provision in Anderson provided: "'Borrower(s) and Lender agree that, except as otherwise set forth in this provision, all claims, disputes, or controversies of every kind and nature between Borrower(s) and Lender shall be resolved by arbitration including (i) those based on contract, tort or statute, (ii) those arising out of or relating to the transaction(s) evidenced by this agreement, the disclosures relating to this agreement, the Federal Disclosure Statement, any insurance certificates or policies, any documents executed at or about the same time this agreement was executed or (iii) those arising out of, [or] relating to any other prior, proposed 9 1151078 or actual loan or extension of credit (and the relationships which result from these transactions or any other previous transactions between Borrower(s) and Lender). Borrower(s) and Lender further agree that all issues and disputes as to the arbitrability of claims must also be resolved by the arbitrator. "'BORROWER(S) AND LENDER UNDERSTAND THAT EACH HAS THE RIGHT TO LITIGATE SUCH DISPUTES THROUGH A COURT, AND BORROWER(S) AND LENDER VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT THEY HAVE TO A JURY TRIAL OR JUDGE TRIAL OF SUCH DISPUTES. "'.... "'BORROWER(S) AND LENDER AGREE THAT THE ARBITRATOR MAY AWARD PUNITIVE DAMAGES ONLY UNDER CIRCUMSTANCES WHERE A COURT OF COMPETENT JURISDICTION COULD AWARD SUCH DAMAGES. HOWEVER, IN NO EVENT SHALL AN AWARD OF DAMAGES EXCEED FIVE (5) TIMES THE ECONOMIC LOSS SUFFERED BY THE PARTY. BORROWER(S) AND LENDER FURTHER AGREE THAT THE ARBITRATOR SHALL NOT CONDUCT ANY CLASS-WIDE PROCEEDINGS AND WILL BE RESTRICTED TO RESOLVING THE INDIVIDUAL DISPUTES BETWEEN THE PARTIES. "'Borrower(s) and Lender agree that, notwithstanding the foregoing, Lender retains the right to use judicial or self-help remedies (i) to repossess or foreclose on collateral or to enforce the security interests relating to this transaction, and (ii) to pursue collection actions against the Borrower(s) where the amount of the debt is $10,000 or less. The exercise of this right by Lender to pursue judicial or self-help remedies shall not 10 1151078 constitute a waiver of Lender's right to compel the arbitration of any claim or dispute subject to this arbitration clause--including the filing of a counterclaim by Borrower(s) in a lawsuit filed by Lender.'" 873 So. 2d at 170. This Court found the arbitration provision in Anderson unconscionable, on the basis that it contained a number of terms grossly favorable to the defendant and indicative of unconscionability, including: "1) the breadth of the arbitration agreement, which extends to every cause of action that might conceivably arise in favor of the Ashbys and that applies to every individual or entity against whom the Ashbys might bring a claim; (2) the provision purporting to invest the arbitrator with the threshold issue of arbitrability; (3) the provision reserving to American General Finance the right to a trial by jury while mandating that the Ashbys arbitrate any and every claim that might arise; and (4) the provision limiting the Ashbys' right of recovery for all species of damages to no more than five times the economic loss while preserving American General Finance's right to seek full redress for its claims." Anderson, 873 So. 2d 176-77. Focusing on the provision in "Notices to Purchaser/Co- Purchaser" that states "BY SIGNING THIS AGREEMENT, YOU ARE AGREEING THAT ANY CLAIM YOU MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION," Newell argues that, like the arbitration provision in Anderson, this provision is overly 11 1151078 broad because it contemplates that every conceivable claim he might possibly have against SCI must be submitted to arbitration. This argument is not well taken. The provision relied upon by Newell to form the basis of his argument is not the actual arbitration provision. Rather, the provision is contained in the "Notices to Purchaser/Co- Purchaser" section and informs the signatory that the contract contains an arbitration provision. Further, the "Notices to Purchaser/Co-Purchaser" section expressly informs the signatory that the terms and conditions of the contract are found in part three of the contract. Part three of the contract contains the arbitration provision, which expressly limits it scope to "any claim ... relating to the transaction contemplated by this agreement." Because the arbitration provision in this case expressly limited its scope to claims relating only to transactions contemplated by the contract of which it was a part and did not extend to every conceivable claim that may have arisen in favor of Newell against SCI, it is distinguishable from the arbitration provision in Anderson. Accordingly, because the scope of the arbitration provision is expressly limited to only those claims "relating to the 12 1151078 transaction contemplated by this agreement," we cannot say that it is so overly broad so as to be unconscionable. II. Newell, again relying upon Anderson, next argues that the arbitration provision, which vests the arbitrator with the jurisdiction to determine questions of arbitrability, is grossly favorable to SCI and therefore unconscionable. The arbitration provision in Anderson provided that "all issues and disputes as to the arbitrability of claims must also be resolved by the arbitrator." 873 So. 2d at 170. The arbitration provision presently before this Court provides that "any claim or controversy regarding the interpretation of this arbitration clause ... shall be submitted to and finally resolved by mandatory and binding arbitration." This Court has upheld arbitration provisions that give the arbitrator the authority to determine arbitrability: "When deciding the threshold issue whether the court or the arbitrator decides a challenge to the enforcement of an arbitration clause entered into by the parties, the court first must satisfy itself that the terms of the arbitration clause are broad enough to permit the arbitrator to decide issues of arbitrability. However, a determination that, by the terms of the arbitration clause, the arbitrator is to decide issues of arbitrability does not end the inquiry. Where the attack is addressed to the 13 1151078 arbitration clause itself, as opposed to the contract as a whole, the court, and not the arbitrator, resolves the issue. But, when the challenge goes to the whole contract, a contract that happens to contain an arbitration clause, the issue of enforceability of the contract, including the arbitration clause, is for the arbitrator to decide." Green Tree Fin. Corp. of Alabama v. Wampler, 749 So. 2d 409, 413 (Ala. 1999). See also Regions Bank v. Neighbors, 168 So. 3d 1 (Ala. 2014); Anderton v. Practice-Monroeville, P.C., 164 So. 3d 1094 (Ala. 2014); and CitiFinancial Corp. v. Peoples, 973 So. 2d 332, 340 (Ala. 2007). As discussed above, this Court found unconscionable in Anderson a provision reserving to the arbitrator the authority to determine the threshold issue of arbitrability when considered in conjunction with several other terms in the contract that were grossly favorable to the defendant. Those other grossly favorable terms are not present in this case. Initially, we determined above that the arbitration provision was not overly broad so as to include every conceivable claim that could arise between Newell and SCI because the arbitration provision in part three is expressly limited to the transaction contemplated by the contract. Second, the arbitration provision in this case contains no terms limiting 14 1151078 Newell's right to the recovery of damages. Accordingly, the terms found in the arbitration provision in this case, in addition to that reserving to the arbitrator the authority to determine any issues of arbitrability, are not so grossly favorable to SCI as to render the arbitration provision unconscionable. III. Continuing to rely upon Anderson, Newell next argues that a defendant's specific reservation of the right to avail itself of the courts while forcing a plaintiff to arbitrate every conceivable claim is grossly favorable to the defendant and therefore unconscionable. We find Anderson to be easily distinguishable from the present case. In Anderson, the defendant expressly reserved in the arbitration provision the "right to use judicial or self-help remedies (i) to repossess or foreclose on collateral or to enforce the security interests relating to this transaction, and (ii) to pursue collection actions against the Borrower(s) where the amount of the debt is $10,000 or less," 873 So. 2d at 170, while requiring the plaintiffs to arbitrate any and every claim that might arise between the parties. 15 1151078 We initially note that there is no express reservation by SCI in the arbitration provision here of the right to avail itself of the courts, while relegating Newell to arbitration. Although the contract does allow SCI to refer the agreement to an attorney for collections, there is no express reservation of that right in the arbitration provision. In addition to expressly reserving the right to pursue collections, the arbitration provision in Anderson expressly reserved to the defendant the right to avail itself of the courts in order to pursue foreclosure or repossession of collateral. That factor is not present in this case. Also, as discussed above, the arbitration provision here requires Newell to arbitrate only the claims relating to the transaction contemplated by the agreement between the parties, whereas the arbitration provision in Anderson expressly reserved for the defendant the right to avail itself of the courts in order to pursue the collateral and to allow for collections, while requiring the plaintiff to arbitrate any and every conceivable claim between the parties. Finally, the limitation of the plaintiff’s right of recovery contained in the arbitration provision in Anderson is not present in this case. Accordingly, the contract term 16 1151078 allowing SCI to refer the agreement to an attorney for collections is not so grossly favorable to SCI as to render the arbitration provision unconscionable. Based on the foregoing, we conclude that Newell has failed to establish that the arbitration provision in this case was substantively unconscionable. Rigas, supra. IV. Newell next argues that the arbitration provision was also "procedurally" unconscionable because, he says, SCI had overwhelming bargaining power over him in that he was distraught and grieving when he executed the contract containing the arbitration provision. As set out earlier in the quotation from Rigas, procedural unconscionability deals with the procedural deficiencies in the contract-formation process, "'"such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had a meaningful choice about whether and how to enter into the transaction."'" Leeman v. Cook’s Pest Control, Inc., 902 So. 2d 641, 645 (Ala. 2004)(quoting Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002), quoting in turn Ex parte Foster, 785 So. 2d 516, 520 n.4 (Ala. 1999)). 17 1151078 Newell does not claim that SCI deceived him or coerced him into entering into the contract containing the arbitration provision. Rather, Newell claims that, when a contract involves funeral matters, time is of the essence with respect to making final arrangements and it is not practical to require a grieving family member to "shop around" for a funeral home that does not require the execution of an arbitration agreement. Newell states that he had originally selected Mobile Memorial Gardens Funeral Home as the funeral home he wanted to use and that when he arrived there to make the final arrangements he was notified that Lisa’s remains had been taken to Radney Funeral Home without his knowledge. He claims that to require him at that point in time to make an additional choice regarding funeral homes in the state of mind he was in would have required him to expend considerable effort and resources. Newell contends that those considerable efforts and resources should be viewed in the context of a family making final arrangements for a loved one and that, when viewed in that light, SCI held overwhelming bargaining power over him. 18 1151078 "'Although a party would not have to spend a considerable amount of time and effort to find alternatives, Alabama Courts, nevertheless, do require that a party "shop around" in order to show that there was no meaningful alternative.'" Leeman, 902 So. 2d at 647 (quoting Pitchford v. AmSouth Bank, 285 F. Supp. 2d 1286, 1295 (M.D. Ala. 2003)). Although the sensitive nature of the circumstances in this case are not lost upon this Court, we cannot say that those circumstances would have required Newell to expend considerable effort and resources in seeking an alternate funeral home as he claims. Nothing in the record indicates that either Newell or one of the other family members accompanying him to make the final arrangements was unable to at least make a telephone call to one of the number of funeral homes in the Mobile area to inquire about funeral services. Newell’s assertions that he did not consider alternatives and that he was in no position to negotiate because of his emotional state must be viewed in light of his express refusal to provide his Social Security number and his negotiation of the services he desired for his wife, including the choice of cremation and the insistence that the cremation process be concluded as soon as possible. 19 1151078 Based on the foregoing, we conclude that Newell has failed to establish that the circumstances under which he entered into the contract containing the arbitration provision were procedurally unconscionable. Rigas, supra. V. Newell last argues that the arbitration provision in part three of the contract violates public policy. "'The [Federal Arbitration Act] preempts contrary state law (specifically, contrary law based on Ala. Code 1975, § 8–1–41(3), and public policy) and renders enforceable a written predispute arbitration agreement but only if that agreement appears in a contract evidencing a transaction that "involves" interstate commerce.'" Tefco Fin. Co. v. Green, 793 So. 2d 755, 758 (Ala. 2001) (quoting Southern United Fire Ins. Co. v. Knight, 736 So. 2d 582, 585–86 (Ala. 1999)). This Court has consistently enforced arbitration agreements where the following elements are established: (1) "'the existence of a contract calling for arbitration'" and (2) "'that contract evidences a transaction affecting interstate commerce.'" Kenworth of Mobile, Inc. v Dolphin Line, Inc., 988 So. 2d 534, 20 1151078 539-39 (Ala. 2008)(quoting Fleetwood Enters., 784 So. 2d at 280). In this case, we have before us a contract that includes an arbitration provision that we have upheld as being valid in the face of challenges based on unconscionability. Newell has made no argument that the contract is not one evidencing a transaction involving interstate commerce. Again, although we realize the sensitive nature of the circumstances surrounding the underlying transaction in this case, we cannot say that the arbitration provision in this case violates public policy. Conclusion Based on the forgoing, we conclude that Newell has failed to establish that the arbitration provision contained in the contract he executed with SCI for funeral services was unconscionable or that it violated public policy. Accordingly, we affirm the trial court's order compelling arbitration of the dispute. AFFIRMED. Murdock, Main, Wise, and Bryan, JJ., concur. 21

March 17, 2017

d37b6392-ed5d-4749-a2cf-373fabeb55fd

Family Security Credit Union v. Kayla N. Williams

N/A

1151006

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

53a093bf-5d6b-4990-9247-bac1a272275f

Ex parte Terry

N/A

1160087

Alabama

Alabama Supreme Court

REL:05/05/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160087 ____________________ Ex parte Yolanda Terry PETITION FOR WRIT OF MANDAMUS (In re: Homer Lee Washington, as personal representative of the Estate of Mildred P. Collins v. Cherri Forrester et al.) (Macon Circuit Court, CV-12-900074) BOLIN, Justice. Yolanda Terry, a social worker employed by the Macon County Department of Human Resources ("DHR"), petitions this 1160087 Court for a writ of mandamus directing the Macon Circuit Court to vacate its order denying her motion for a summary judgment based on State-agent immunity and to enter a summary judgment in her favor based on that defense. We grant the petition. Facts Mildred P. Collins, who was 85 years old at the time of her death on October 9, 2011, lived with her daughter Cherri Forrester, who was her legal guardian; Collins had suffered from Alzheimer's disease since approximately 2005.1 On September 30, 2011, Ronald Person, Collins's grandson, contacted DHR and reported that Forrester had been physically abusing Collins. On Thursday, October 6, 2011, DHR assigned the case to Terry. At approximately 10:00 a.m. on that same day, Terry attempted to make an unannounced investigative visit to Forrester's home. According to Terry's case-file memo, Forrester came to the door in her pajamas; she seemed agitated by Terry's visit; and she requested that Terry return the following day, explaining that neither she nor Collins was dressed and that they had not eaten breakfast. The case-file 1A copy of the Lee County Probate Court order, adjudicating Collins incapacitated and granting letters of guardianship to Forrester, is included in the materials before us. 2 1160087 memo further indicates that Terry "did not feel threatened or influenced by Ms. Forrester's demeanor to come back the next day." Following the attempted unannounced visit, Terry returned to her office, at which time she contacted Person concerning the allegations of abuse. Terry indicated in her case-file memo the following concerning her conversation with Person: "On 10/06/2011, [Terry] returned to the office and made a phone call to Mr. Person being that he was the reporter. Mr. Person began explaining the history behind the allegations in his report to the agency. Mr. Person revealed to [Terry] that he had some pictures of his grandmother with bruises to her face. When asked, Mr. Person could not recall the specific time and day that the pictures were taken. Based on the conversation, it seemed that the pictures had been taken 2 weeks prior, as Mr. Person referenced the time frame when he, his daughter, and mother had just moved out of the home with Ms. Forrester and his grandmother in Montgomery at the request of Ms. Forrester. Mr. Person agreed to e- mail some pictures to [Terry]. After several attempts, Mr. Person was not successful in his attempt to send the pictures of his grandmother with bruises to her face due [to] the formatting in his cell phone. Mr. Person stated that he was driving and that the pictures were in his cell phone. He stated that he would send them that night when he was able to send them from a computer instead of his cell phone. [Terry] was unable to view the pictures on 10/06/2011 as [Terry] had left for day. During the conversation, [Terry] also received information regarding [Collins] being tied with pantyhose and threatened with a gun. Mr. Person also reported that he hid a tape recorder at the home one night. Mr. Person stated that the next day when he 3 1160087 retrieved the tape recorder and played it back he could hear the sounds of someone being hit. [Terry] did not hear the tape recording." Person testified in his deposition that he also had informed Terry that Forrester had mental-health issues and suggested that she take law enforcement with her on her next visit to Forrester's home. On Friday, October 7, 2011, Terry returned to Forrester's home for an investigative visit, which, according to Terry, lasted approximately one hour; Terry was accompanied by Catherine Stakely, a DHR social worker. The materials before us indicate the following concerning the October 7, 2011, visit: When Terry and Stakely arrived at Forrester's home, Collins was neatly dressed and well groomed; Collins appeared to show no signs of physical abuse but had a mark on her forearm that appeared to be a birthmark or some type of "skin- on-skin" contact mark; Terry did not interview Collins alone because Collins was not oriented to person, place, or time; Stakely discussed with Forrester receiving home-health services for Collins to provide Forrester some relief as a caregiver; Forrester denied the allegations of abuse; Forrester expressed her frustration with family members because they were always telephoning DHR; Terry observed no 4 1160087 aggression on Forrester's part toward Collins during the visit; Forrester indicated that she had been in the military and that she was receiving services through the Department of Veterans Affairs; and Forrester signed a "Department of Human Resources HIPPA Privacy Authorization" permitting DHR to contact the Department of Veterans Affairs. Following the October 7, 2011, investigative visit, Terry met with her supervisor, TaRhonda Wiggins, to discuss the visit. As a result of her meeting with Wiggins, Terry agreed that, when she returned to work the following week, she would continue her investigation by conducting a follow-up visit with Forrester and Collins, conducting additional interviews with collaterals who reportedly had witnessed Forrester's maltreatment of Collins, and contacting the Department of Veterans Affairs concerning Forrester. Terry testified in her deposition that, based on her observations of both Forrester and Collins on October 7, 2011, she determined that Collins was not in imminent danger, and there was no indication that legal intervention was needed at that time to have Collins immediately removed from Forrester's home. Collins died two days later on Sunday, October 9, 2011. The evidence before us is conflicting concerning the cause of Collins's death; 5 1160087 however, the death certificate indicates "blunt force abdominal injuries with hematoma." On June 22, 2012, Homer Lee Washington, the personal representative of Collins's estate, sued Terry, in her individual capacity, among others, seeking monetary damages. The gist of Washington's complaint is that Terry violated DHR policy and procedures by failing to properly investigate the report of the alleged abuse of Collins by Forrester and, more specifically, by allowing Collins to remain in Forrester's custody. On June 24, 2016, following extensive discovery, Terry moved for a summary judgment, asserting State-agent immunity as a defense. Washington filed an opposition to the summary- judgment motion on July 8, 2016. Following a hearing, the circuit court, on September 29, 2016, entered an order denying Terry's summary-judgment motion. This petition followed. Standard of Review A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: "'(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly 6 1160087 invoked jurisdiction of the court.'" Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003) (quoting Ex parte BOC Grp., Inc., 823 So. 2d 1270, 1272 (Ala. 2001)). "'While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion grounded on a claim of immunity is reviewable by petition for writ of mandamus. Ex parte Purvis, 689 So. 2d 794 (Ala. 1996).... "'Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Rule 56(c)(3), Ala. R. Civ. P., Young v. La Quinta Inns, Inc., 682 So. 2d 402 (Ala. 1996). A court considering a motion for summary judgment will view the record in the light most favorable to the nonmoving party, Hurst v. Alabama Power Co., 675 So. 2d 397 (Ala. 1996), Fuqua v. Ingersoll–Rand Co., 591 So. 2d 486 (Ala. 1991); will accord the nonmoving party all reasonable favorable inferences from the evidence, Fuqua, supra, Aldridge v. Valley Steel Constr., Inc., 603 So. 2d 981 (Ala. 1992); and will resolve all reasonable doubts against the moving party, Hurst, supra, Ex parte Brislin, 719 So. 2d 185 (Ala. 1998). "'An appellate court reviewing a ruling on a motion for summary judgment will, de novo, apply these same standards applicable in the trial court. Fuqua, supra, Brislin, supra. Likewise, the appellate court will consider only that factual material available of record to the trial court for its consideration in deciding the motion. Dynasty Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala. 1991), Boland v. Fort Rucker Nat'l Bank, 599 So. 2d 595 (Ala. 1992), Rowe v. Isbell, 599 So. 2d 35 (Ala. 1992).'" 7 1160087 Ex parte Turner, 840 So. 2d 132, 135 (Ala. 2002) (quoting Ex parte Rizk, 791 So. 2d 911, 912–13 (Ala. 2000)). Discussion Although of relatively recent origin as precedent, this Court has had occasion in numerous matters to apply the test restated in Ex parte Cranman, 792 So. 2d 392 (Ala. 2000), for determining when a State agent sued in his or her individual capacity is entitled to State-agent immunity: "A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "(1) formulating plans, policies, or designs; or "(2) exercising his or her judgment in the administration of a department or agency of government, including, but not limited to, examples such as: "(a) making administrative adjudications; "(b) allocating resources; "(c) negotiating contracts; "(d) hiring, firing, transferring, assigning, or supervising personnel; or "(3) discharging duties imposed on a department or agency by statute, rule, or regulation, insofar as the statute, rule, or regulation prescribes the manner for performing the duties and the State agent performs the duties in that manner; or 8 1160087 "(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, law-enforcement officers' arresting or attempting to arrest persons; or "(5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students. "Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity "(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or "(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law." 792 So. 2d at 405 (some emphasis added). Although Cranman was a plurality decision, the restatement of law as it pertains to State-agent immunity set forth in Cranman was subsequently adopted by this Court in Ex parte Butts, 775 So. 2d 173 (Ala. 2000). Additionally, "[t]his Court has established a 'burden-shifting' process when a party raises the defense of State-agent immunity. Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003). In order 9 1160087 to claim State-agent immunity, a State agent bears the burden of demonstrating that the plaintiff's claims arise from a function that would entitle the State agent to immunity. Giambrone, 874 So. 2d at 1052; Ex parte Wood, 852 So. 2d 705, 709 (Ala. 2002). If the State agent makes such a showing, the burden then shifts to the plaintiff to show that the State agent acted willfully, maliciously, fraudulently, in bad faith, or beyond his or her authority. Giambrone, 874 So. 2d at 1052; Wood, 852 So. 2d at 709; Ex parte Davis, 721 So. 2d 685, 689 (Ala. 1998). 'A State agent acts beyond authority and is therefore not immune when he or she "fail[s] to discharge duties pursuant to detailed rules or regulations, such as those stated on a checklist."' Giambrone, 874 So. 2d at 1052 (quoting Ex parte Butts, 775 So. 2d 173, 178 (Ala. 2000))." Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006). Terry asserts in her petition, and we agree, that, as a social worker with DHR, she is entitled to State-agent immunity under category (3) of the Cranman restatement because, she says, the actions for which she is being sued involve her discharging duties pursuant to DHR policy and procedures. Accordingly, Terry asserts, the burden shifted to Washington to show that, in investigating the reported allegations of abuse against Collins, Terry acted "willfully, maliciously, fraudulently, in bad faith, or beyond ... her authority." Ex parte Estate of Reynolds, supra. Washington asserts that Terry is not entitled to State-agent immunity because, he says, Terry acted beyond her authority by failing 10 1160087 to comply with specific DHR policy and procedures concerning investigations of adults in need of protection. Specifically, Washington states that he offered substantial evidence to that effect through his expert, Alicia VanBuskirk, an Oklahoma registered nurse, who opined that Terry violated DHR policy and procedures by failing to complete an unannounced investigative visit to Forrester's home; by failing to notify law enforcement after being denied access to Forrester's home on October 6, 2011; by failing to interview Collins outside the presence of Forrester; and by failing to inspect all affected areas of Collins's body. Accordingly, the only issue for this Court's review is whether Washington presented substantial evidence, through his expert, establishing that Terry acted beyond her authority by allegedly failing to investigate the reported allegations of abuse against Collins pursuant to DHR policy and procedures so as to preclude Terry from being entitled to State-agent immunity. DHR's "procedures of investigations and dispositions" state that the purpose of an investigation to determine whether an adult is in need of protection is "to establish facts that will be useful in determining whether the reported victim has been abused, neglected, or exploited" and "to 11 1160087 secure sufficient information to determine what, if any, interventions are required by [DHR], whether to seek court action, and, to reach a disposition for each allegation and each person allegedly responsible." DHR policy and procedures concerning investigations of adults in need of protection state, in relevant part: "All adults in need of protection who are the subject of abuse/neglect/exploitation reports must be seen and interviewed within seven calendar days of receipt of the report. Document any unusual circumstances that prevent seeing the person allegedly abused, neglected, or exploited. Unannounced investigative visits must be made to get the full picture of the home and the situation of the victim. There will be very limited circumstances when the worker's supervisor directs the worker to make an appointment. In most cases, a private interview is essential. The worker must discuss with the client each allegation that is part of the protective service report. ... Whenever possible, when the person allegedly responsible is a member of the household, the worker should arrange to observe the interaction between the client and that person after the individual interview. "Where allegations of physical abuse are made, the worker will need to personally observe the affected areas (i.e. if allegation states bedsores on back, worker should observe this area). This must be done with the client's permission and preferably in the presence of another person. ... "If there are allegations of neglect and/or self- neglect reported, the worker will need to observe for signs of deprivation of food, clothing, medications, or medical care. Supplies of food and medications should be checked as well as the 12 1160087 condition of the victim's home including the kitchen, bathroom, and client's bedroom. Hazardous and unsanitary housing conditions, and improper or lack of supervision are also signs of neglect. ... ".... "If the alleged victim refuses to talk to the worker or to allow access to the home, a systematic method should be used to gain acceptance. It is important to continue to seek entry by showing compassion and understanding to the client or caregiver who may feel threatened by 'someone from the State.' ... The worker must not force his/her way into a home and place his/her safety in jeopardy. Difficulties encountered in gaining access to the client and all efforts made to interview the client and observe his/her condition/situation must be carefully documented and fully detailed in the narrative. "In some instances, the alleged victim may refuse to discuss the allegations with the worker. The client may be unable to communicate or may make a conscious decision not to do so because of fear, shame, or a sense of failure and uncertainty. The worker should continue with the investigation unless it appears that immediate court action for treatment, evaluation, or placement should be taken. ".... "If a worker is denied access to the client because a caregiver or other person refuses to permit contact by the worker or because of locked doors, assistance should be requested from law enforcement officials. According to Code of Alabama 1975, Section 13A-10-2, obstructing government operations by means of intimidation, physical force, or interference where a person intentionally prevents a public servant from performing a government function is a Class A criminal misdemeanor. A petition must be filed in circuit court to gain 13 1160087 access to the client to complete the investigation if all other strategies fail." (DHR000184-000187.) (Some emphasis added.) DHR policy and procedures also state: "It is likely that the worker may still need to do further work to complete the investigation, such as interview a collateral witness, obtain medical or psychological evaluation, secure bank records, etc., after the seven day period. However, all investigations should be completed, recorded and approved by a supervisor within 60 calendar days of the date the report is received by [DHR]. ..." (DHR000203.) 1. Terry's compliance with DHR policy and procedures concerning unannounced investigative visits Washington's expert, VanBuskirk, opined that Terry violated DHR policy and procedures by failing to make an unannounced investigative visit to Forrester's home because, according to VanBuskirk, the first step to any investigation involves an unannounced visit. VanBuskirk's opinion, however, is contrary to the plain language of DHR policy and procedures concerning unannounced investigative visits. DHR policy and procedures specifically state that "[u]nannounced investigative visits must be made to get the full picture of the home and the situation of the victim." (Emphasis added.) Pursuant to DHR policy and procedures, Terry had 7 days from 14 1160087 the date DHR received the report of allegations of abuse to see and to interview Collins, and she had 60 days from the date DHR received the report of allegations of abuse to complete her investigation. DHR policy and procedures do not state at what point during this 60-day investigative period any unannounced visits have to be made, nor do they state that the initial investigative visit must be unannounced. Terry's supervisor, TaRhonda Wiggins, testified in her deposition that an unannounced visit has to be completed at some point within the 60-day investigative period. Here, the case was assigned to Terry on Thursday, October 6, 2011, and on that same day Terry attempted an unannounced visit--but was requested by Forrester to return the following day. On October 7, 2011, Terry returned to Forrester's home to see and to interview Collins, as well as Forrester. Thereafter, Wiggins advised Terry to follow up with neighbors and collateral contacts and to make an unannounced visit the following week. However, Terry was unable to conduct an unannounced visit the following week because Collins died on Sunday, October 9, 2011. Because DHR policy and procedures did not require Terry's initial investigative visit to be unannounced, Washington has failed 15 1160087 to establish, through his expert, that Terry is not entitled to State-agent immunity. 2. Terry's compliance with DHR policy and procedures concerning the assistance of law enforcement VanBuskirk opined that Terry violated DHR policy and procedures by failing to contact law enforcement after she was refused entry into Forrester's home on October 6, 2011-- the date Terry attempted an unannounced visit. VanBuskirk stated in her deposition that, when Forrester refused to let Terry into her home at the time of the unannounced visit, Terry "definitely" should have notified law enforcement. DHR policy and procedures concerning access to a home state that, if a client, or in this case, the caregiver, "refuses to talk to the worker or to allow access to the home, a systematic method should be used to gain acceptance"; that "[i]t is important to continue to seek entry by showing compassion and understanding to the client or caregiver who may feel threatened by 'someone from the State'"; and that "[t]he worker must not force his/her way into a home and place his/her safety in jeopardy." In this case, Terry reported in her case-file memo that, when she arrived unannounced at Forrester's home on October 6, 2011, she agreed, at Forrester's request, to return the 16 1160087 following day based on the fact that Forrester had come to the door in her pajamas and indicated that neither she nor Collins were dressed and that they had not eaten breakfast. Terry further reported in her case-file memo that "she did not feel threatened or influenced by Ms. Forrester's demeanor to come back the next day." This evidence demonstrates that Terry complied with DHR policy and procedures by showing Forrester, the caregiver, compassion and understanding by agreeing to return the following day and by not forcing herself into Forrester's home. Finally, the relative portion of DHR policy and procedures concerning assistance from law enforcement states that "[i]f a worker is denied access to the client because a caregiver ... refuses to permit contact by the worker or because of locked doors, assistance should be requested from law enforcement officials." (Emphasis added.) When questioned by Williams's counsel, Stakely, Terry's co- worker, testified at length concerning DHR policy and procedures on this subject: "Q. And what would prompt you to call law enforcement? "A. If the worker is in danger–-is at risk of being in danger or the individual that we are going to see. 17 1160087 "Q. Okay. What about if a worker has been denied access to an adult in need of services, is that a reason to call law enforcement? "A. It would depend on the situation, because you may go back another day and not receive the same response from family members. "Q. Okay. "A. Because sometimes law enforcement will escalate a situation. ".... "Q. And I just want to ask you, before we get into the policy, what would you consider access being denied? "A. I would think that if I went to a home and I was informed that I was not going to be able to come into to the home and no matter who I brought, be it law enforcement or whomever, that would be denial of access to the home. "Q. Does it have to be you are not coming in my home ever or you are not coming into my home today, or does it have to be a time limit on that denial to count as a denial of access? "A. If the person informed me that I was not going to be able to enter the home and they were not going to allow me to come into the home, I would think of that as denial." In this case, Forrester never denied Terry access to Collins; rather, Forrester requested that Terry return the following day, October 7, 2011, and Terry agreed. Stakely testified that if presented with these same circumstances she, 18 1160087 too, would not have contacted law enforcement. Based on the foregoing, we conclude that DHR policy and procedures did not require Terry, under the facts indicated, to contact law enforcement. Accordingly, Washington failed to establish, through his expert, that Terry is not entitled to State-agent immunity. 3. Terry's compliance with DHR policy and procedures concerning private interviews VanBuskirk opined that Terry violated DHR policy and procedures by failing to provide Collins an opportunity to be interviewed privately during which time Terry could have assessed Collins's mental condition. When questioned by Terry's counsel, VanBuskirk testified: "Q. Did you read ... where Ms. Terry was interviewing [Collins] and ... her narrative indicates that [Collins] was not–-she could not communicate. ".... "A. [Terry] never interviewed [Collins] or was able to get into the home on the unannounced visit that was required, but on the announced visit she went in, and immediately ... started interviewing with [Collins] in the presence of the alleged perpetrator [Forrester]. Now, per policy [Terry] is supposed to give a private interview [during which time Terry] must discuss with [Collins] each allegation. Now, [Terry] may have at that time when she went in to do that private interview, decided that [Collins] was disoriented, but [Terry] never gave [Collins] an 19 1160087 opportunity for that private interview. [Terry] immediately went in and did the interview with [Collins and Forrester] together. ".... "Q. ... [W]hat aspect of your education and training qualifies you to make that particular opinion? "A. Because in my forensic nursing if there has been a report of any type of violence or abuse to a victim by an alleged perpetrator, and that perpetrator is in the home, it is very important that you interview that client separately to get their opinion on it before that perpetrator can coerce them, do any type of undue influence to them, any type of threats. So when you have the report that came in like we did on Ms. Collins, to keep them from being at risk of further threat or injury, it's important to speak with them so that you get their side of the story first." (Emphasis added.) In other words, VanBuskirk opined that, regardless of Terry's personal observation that Collins was not oriented to person, place, or time, and despite Collins's documented Alzheimer's disease, DHR policy and procedures required Terry to provide Collins an opportunity to be interviewed privately. Accordingly to VanBuskirk, Collins still had some ability to communicate and had some orientation as to person because she recognized Stakely.2 DHR policy and procedures, however, 2Terry indicated in one of her assessment narratives that, during her October 7, 2011, investigative visit, Collins was 20 1160087 specifically state that a private interview is essential "in most cases"; it does not state such an interview is essential in all cases. (Emphasis added.) The materials before us indicate that, during the investigative visit, Forrester presented Terry with paperwork showing that she was Collins's legal guardian because Collins had been adjudicated incapacitated as a result of Alzheimer's dementia. Terry's case-file memo states the following concerning her observations of Collins: "On 10/07/2011, after observing the verbal responses of Ms. Collins, it was clear that Ms. Collins was not person, place, or time oriented. During the interview with Ms. Forrester, Ms. Collins continuously asked Ms. Forrester about different family members that she had indicated had passed away. Worker did not feel that an interview with Ms. Collins would be capable of giving accurate information; therefore, [Terry] did not ask to interview Ms. Collins alone." Wiggins, Terry's supervisor, testified in her deposition that a private interview would not be necessary where the social worker personally observes the client and determines moving back and forth in a rocking motion, that Collins repeatedly made small outbursts during her conversation with Forrester, and that Collins stated to Stakely that she knew her--to which Stakely replied "yes, you do." Stakely explained to Forrester that she had been involved with Collins years earlier because Collins "had been driving erratically in town and on the outskirts." 21 1160087 that the client is incoherent. Stakely, Terry's coworker, testified in her deposition that social workers have "leeway" concerning private interviews. Stakely specifically stated that a social worker is not required to interview a client privately when the client "has disorientation to the point that [he or she is] not able to communicate with [the social worker]." Although DHR policy and procedures required Terry to "see and interview" Collins, the policy and procedures nonetheless afforded Terry the discretion to use her judgment in determining whether to interview Collins privately, especially where, as here, Terry personally observed Collins and determined that she would be incapable of giving accurate information because she was not oriented to person, place, or time. See, e.g., Ex parte Estate of Reynolds, 946 So. 2d at 457 ("[A]lthough the manuals required ALDOT workers to make frequent inspections of the roads to discover defects, the workers nonetheless were required to make judgments in performing this duty."). Accordingly, Washington has failed to establish, through his expert, that Terry is not entitled to State-agent immunity. 4. Terry's compliance with DHR policy and procedures concerning her personal observations of the affected areas of Collins's body 22 1160087 VanBuskirk opined that Terry violated DHR policy and procedures by failing to look at the inside of Collins's lip, by failing to address an area on Collins's forearm that Terry perceived to be a birthmark or some type of skin-to-skin contact, and by failing to inspect Forrester's entire home in order to get a full picture of the home. Where allegations of physical abuse are made, DHR policy and procedures require that the social worker "personally observe the affected areas" of the client's body. VanBuskirk conceded that the affected areas in this case were Collins's two black eyes, a swollen eye, and a busted lip, as indicated in the following DHR intake report: "On 9/30/2011 at 4:15 p.m., Mr. Ronald Person called in regards to his grandmother Mildred Collins. Mr. Person stated that his aunt, Cherri Forrester, is caring for her. Mr. Person stated that his grandmother has two black eyes. Mr. Person stated that his grandmother has Alzheimer's and she does not remember the abuse. ... According to Mr. Person, Ms. Forrester has threatened to kill Ms. Collins. Mr. Person stated that he reported the information to Ms. Collins's son, and he was supposed to call but he didn't. Mr. Person stated this has been an ongoing situation and it needed to be investigated. Mr. Person stated that Ms. Forrester makes Ms. Collins stand in the middle of the living room naked. Mr. Person stated that he has pictures of when Ms. Collins's lip was busted and eye was swollen." (Emphasis added.) 23 1160087 Terry's case-file memo indicates the following concerning her observations of Collins: "On 10/07/11, [Terry] returned to the family's residence along with co-worker, Ms. Stakely. Ms. Forrester appeared to be cordial on this day. Once inside the home, [Terry] observed Ms. Collins sitting on the sofa dressed in a short-sleeved Capri outfit, which allowed visibility of her arms from the elbow to her hands. Ms. Collins' pants revealed visibility of her legs from the calf area to her feet. Ms. Collins' clothes were observed to be clean. [Terry] noticed an area on Ms. Collins's forearm that appeared as it might have been a birthmark or some type of skin-to-skin contact mark. [Terry] did not observe any other marks or bruises on Ms. Collins during the visit. [Terry] did not ask Ms. Forrester about the pictures mentioned by [Person] for risk that it would reveal the identity of the reporter." (Emphasis added.) In other words, Terry did not observe any marks or bruises on Collins's body other than a mark of undetermined origin on her forearm, which Terry perceived to be a "birthmark or some type of skin-on-skin contact mark." Terry testified in her deposition that Collins's face was "clean, clear of bruises" and that there was "just no sign of—- indication of any kind of abuse." Stakely testified in her deposition as well that she did not observe any marks on Collins's body indicative of injury or that she felt necessitated a physical exam. According to VanBuskirk, 24 1160087 however, when Terry saw the mark on Collins's forearm, she should have delved deeper. However, Terry's testimony is clear that she did not perceive the mark on Collins's forearm to be indicative of any kind of physical abuse. DHR policy and procedures required Terry only to "personally observe the affected areas," i.e., Collins's eyes and lips. Terry further testified that she did not look inside Collins's lip to see if it was busted because her lip was not swollen. In fact, Terry indicated in her case-file memo that Person's pictures denoting the black eyes, swollen eye, and busted lip were taken at least two weeks earlier when he contacted DHR about the alleged abuse. Person himself testified in his deposition that the pictures he took of Collins's black eyes, swollen eye, and busted lip were actually taken two months before he contacted DHR about the alleged abuse. Based on the foregoing, we conclude that Terry complied with DHR policy and procedures because she "personally observe[d] the affected areas" of Collins's body. Accordingly, Washington has failed to establish, through his expert, that Terry is not entitled to State-agent immunity. We further find unavailing VanBuskirk's opinion that Terry violated DHR policy and procedures by failing to inspect 25 1160087 Forrester's entire home in order to get a full picture of the home. The portion of DHR policy and procedures that requires the social worker "to get a full picture of the home" relates to unannounced visits; as previously indicated, Terry did not make an unannounced visit to Forrester's home before Collins's death. DHR policy and procedures require the social worker to personally observe the condition of the home, i.e., the kitchen, the bathroom, and the client's bedroom, only when there have been allegations of neglect and/or self-neglect.3 It is undisputed that there was no report of neglect in this case, and VanBuskirk concedes as much in her deposition. 3The DHR policy and procedures manual defines neglect as follows: "Neglect, according to Section 38-9-2, [Ala. Code 1975,] Amended, means, 'The failure of a caregiver to provide food, shelter, clothing, medical services or health care for the person unable to care for himself or herself; or the failure of the person to provide these basic needs for himself or herself when the failure is the result of the person's mental or physical inability.' Lack of supervision, while not specifically defined in the statute, may meet the definition of neglect when lack of supervision results in lack of food, shelter, clothing, medical services or health care." 26 1160087 Based on the foregoing, we conclude that Washington failed to meet his burden of presenting substantial evidence, through his expert, that Terry acted beyond her authority by failing to discharge her duties, i.e., investigating the report that Collins was being abused, pursuant to DHR policy and procedures, because Terry complied with DHR policy and procedures concerning unannounced investigative visits, the need for involving law enforcement, private interviews of clients, inspections of the affected areas of a client's body, and inspections of the entire home. Conclusion Terry is entitled to State-agent immunity under the test set forth in Cranman. We hereby issue the writ of mandamus and direct the circuit court to vacate its order denying Terry's summary-judgment motion and to enter a summary judgment in her favor. PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Parker, Shaw, Main, Wise, and Bryan, JJ., concur. Murdock, J., concurs in the result. 27 1160087 MURDOCK, Justice (concurring in the result). In 2000, this Court attempted to articulate five defined categories within which allegedly wrongful conduct must fit to qualify for State-agent immunity, abandoning the general "discretionary public function" standard against which State- employee conduct had been measured up until that time. See Ex parte Butts, 775 So. 2d 173 (Ala. 2000), adopting the analysis of the plurality in Ex parte Cranman, 792 So. 2d 392, 405 (Ala. 2000). For the most part, the Cranman analysis attempted to delineate the activities that fall on the immunity side of a line "between conduct involved in planning or decision-making in the administration of government and the conduct of those required to carry out the orders of others or to administer the law with little choice as to when, where, how, or under what circumstances their acts are to be done." Cranman, 792 So. 2d at 402. Such an endeavor, of course, ran the risk that the attempt to articulate such defined and limited categories would fail to anticipate every circumstance that should qualify a state actor for immunity and/or that would be captured by an appropriately worded general standard. 28 1160087 The conduct of a Department of Human Resources ("DHR") social worker conducting a field investigation and deciding upon appropriate actions in response thereto is an example of the type of activity that is quintessentially governmental in nature and that involves substantial "public-function discretion" but that was not fairly captured by any of the five so-called Cranman categories. In particular, I do not believe it is captured by category 3, which applies only "insofar as [a] statute, rule or regulation prescribes the manner for performing ... duties" and "the State agent performs the duties in that manner." 792 So. 2d at 405. It does not appear to me that the "rules" at issue in this case "prescribe the manner" in which a DHR field agent must perform the duties at issue in a case like this but, instead, as thoroughly explained in the main opinion, imbue the DHR employee with meaningful discretion at almost every turn. (Instead of applying to discretionary activity such as that at issue in this case, a notion incompatible in my view with a plain reading of the language of category 3, it appears to me that category 3, unlike the other categories of Cranman immunity, was intended merely to refer to the execution by 29 1160087 state employees of simple "ministerial duties.") In my special writing in Ex parte Randall, 971 So. 2d 652, 672 (Ala. 2007) (Murdock, J., dissenting), I expressed these concerns. In deference to the fact that the Court in Randall nonetheless chose to treat such DHR social-worker investigative activity as falling into category 3, I since have concurred in such cases as Ex parte Jefferson County Department of Human Resources, 63 So. 3d 621 (Ala. 2010), and Ex parte Jones, 52 So. 3d 475 (Ala. 2010). In hindsight, perhaps I should have, at most, "concurred in the result" in such cases so as not to suggest agreement with the notion that the type of conduct at issue in those cases actually fell within the category of conduct articulated in category 3 in Cranman. That is the approach I take today. In other words, in today's case, I vote to "concur in the result" reached by the main opinion because, although I can agree that such investigative activity is of the discretionary, quintessentially governmental nature that should qualify the actor for State-agent immunity, I cannot agree that category 3 as articulated in Cranman describes this activity. I believe we should acknowledge the latter fact and consider the 30 1160087 need for a more general standard or, if we are to continue attempting to articulate defined "buckets" within which activity must fall in order to qualify for State-agent immunity, the need for an additional "bucket" that actually describes the type of activity at issue in cases such as this. See generally Ex parte Randall, 971 So. 2d at 670 (Murdock, J., dissenting) ("If this Court is of the opinion that there is or should be some additional catchall category for the discretionary execution of governmental policy generally, it is incumbent upon us to so state and to express the parameters of that category."). My vote to concur in the result in the present case also is a function of my disagreement with the "beyond-authority" exception to State-agent immunity that has been adopted by this court and that, understandably, is reflected in the main opinion. See Ex parte Ingram, [Ms. 1131228, Feb. 24, 2017] ___ So. 3d ___, ___ (Ala. 2017) (Murdock, J., concurring specially). In fact, this case highlights a significant reason why, in my opinion, the beyond-authority exception to State-agent immunity is misplaced. 31 1160087 The attempted application of the beyond-authority exception, at least as that exception has been understood by this Court, in a case like this one, in which the qualifying category for immunity is category 3 in the Cranman restatement, inherently requires us to engage in an analysis that either is redundant or risks contradictory results. I am not sure how, on the one hand, we can conclude that category 3 immunity applies because we have determined that a "statute, rule, or regulation prescribes the manner for performing the duties and the State agent perform[ed] the duties in that manner," Cranman, 792 So. 2d at 405 (emphasis added), only to follow that very conclusion with a second inquiry, this time for purposes of the beyond-authority exception, into whether the State actor has "failed to discharge duties pursuant to detailed rules or regulations," Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006) (emphasis added). This analytical inconsistency seems to serve as further verification that the beyond-authority exception simply is out of place in State-agent-immunity analysis (and should not have been imported by Cranman from the State-immunity cases where it was and is recognized as an exception to the prohibition of actions for injunctive relief 32 1160087 against state actors in their official capacities). See Ingram, supra (Murdock, J., concurring specially). 33

May 5, 2017

013afeb7-eb32-4acb-8648-8b9963eef9bc

Family Security Credit Union v. Etheredge

N/A

1151000, 1151001, 1151002, 1151003, 1151004, 1151005, 1151006, 1151007

Alabama

Alabama Supreme Court

Rel: 05/19/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151000 ____________________ Family Security Credit Union v. Richard W. Etheredge ____________________ 1151001 ____________________ Family Security Credit Union v. Kendrick M. Nettles ____________________ 1151002 ____________________ Family Security Credit Union v. Wanda J. Pezent ____________________ 1151003 ____________________ Family Security Credit Union v. David Moore ____________________ 1151004 ____________________ Family Security Credit Union v. Martha H. Dunagan ____________________ 1151005 ____________________ Family Security Credit Union v. Gene McClure __________________ 1151006 ____________________ Family Security Credit Union v. Kayla N. Williams ____________________ 1151007 ____________________ Family Security Credit Union v. Dana Dunn and Timothy Dunn Appeals from Clarke Circuit Court (CV-15-16; CV-15-20; CV-15-21; CV-15-22; CV-15-24; CV-15-28; CV-15-30, and CV-15-38) MAIN, Justice. Family Security Credit Union ("FSCU") appeals the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. We reverse and remand. I. Facts and Procedural History Action Auto Sales ("Action Auto") is a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held the titles to the vehicles in the inventory it financed and released a title only when a vehicle was sold and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off 3 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU.1 Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third- party claims against FSCU are based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration, and, to support its motions, FSCU attached a copy of a "Retail Installment Sale Contract" and a "Dealer's Assignment and Buyer's Consent to Assignment" that each purchaser had executed when he or she purchased the vehicle. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After hearing oral arguments, the trial 1Those purchasers are Richard W. Etheredge, Kendrick M. Nettles, Wanda J. Pezent, David Moore, Martha H. Dunagan, Gene McClure, Kayla N. Williams, and Dana Dunn and Timothy Dunn, the appellees in these appeals. Action Auto sued each purchaser, along with Pine City, in a separate case. 4 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 court denied all eight motions to compel arbitration. FSCU filed these eight appeals, which this Court consolidated for the purpose of issuing one opinion. As part of the purchase of the vehicle, each purchaser executed a "Retail Installment Sale Contract" with Pine City and a "Dealer's Assignment and Buyer's Consent to Assignment," which assigned the sale contract to FSCU. The "Dealer's Assignment and Buyer's Consent to Assignment" contained the following arbitration provision immediately above the signature lines: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration. Dealer and Buyer further agree that any such arbitration shall take place in Morgan County, Alabama. Judgment upon any award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator shall determine the prevailing party, and the costs and expenses of the arbitration proceeding, including the arbitrator's fees, shall be borne by the non- prevailing party, unless otherwise required by law. No provision of this Agreement, nor the exercise of any right under this Agreement, shall limit the right of the Credit Union to (1) obtain provisional or ancillary remedies, such as injunctive relief, writ of attachment, or protective order from a court having jurisdiction before, during, or after the pendency of any arbitration; (2) exercise self-help remedies, such as set-off; (3) foreclose against or sell any real or personal property collateral by the exercise of a power of sale under a mortgage or 5 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 other security agreement or instrument, a deed of trust, or applicable law; (4) exercise any other rights under this Agreement upon the breach of any term or condition herein; or, (5) ... proceed with collection of the account through all other legal methods, including, but not limited to, proceeding in court to obtain judgment. Any and all arbitration under this contract will take place on an individual basis; class arbitrations and class actions are not permitted. DEALER AND BUYER FURTHER AGREE THAT YOU ARE WAIVING THE RIGHT TO TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION." (Capitalization in original.) In denying FSCU's motions to compel arbitration, the trial court held that "FSCU's promise to arbitrate is merely illusory and does not serve as valid consideration to support the arbitration agreement" because "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." Further, the trial court held that the arbitration provision was unconscionable. Specifically, the court stated: "In the present case, the terms of the arbitration clause contained in the Assignment are grossly favorable to FSCU. Although consumer debtors such as [the purchasers] are required to arbitrate 6 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 all disputes they may have against FSCU, FSCU has the option of pursuing several alternative remedies to arbitration, including the filing of a judicial lawsuit. The huge disparity in the rights of the contracting parties is one-sided and unreasonably favors FSCU. "In addition, FSCU, a large and sophisticated business entity, has overwhelming bargaining power. To obtain the financing needed to purchase a used car from Pine City, [the purchaser] had no choice but to execute FSCU's boilerplate Assignment containing the arbitration clause, along with FSCU's form applications for membership to the credit union and for credit financing. "Under the circumstances, the used car sales transaction evinces the necessary elements to support a finding of unconscionability. Hence, the arbitration requirement contained in the Assignment should be declared invalid and unenforceable, and FSCU's motion to compel arbitration should be denied." (Citations omitted.) II. Standard of Review "'This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration 7 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on application for rehearing).'" Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000)). III. Discussion It is undisputed that FSCU moved to compel arbitration and supported its motions with contracts that were executed by the purchasers and that each contract contained the above- quoted arbitration provision. It was also undisputed that the contracts evidenced a transaction affecting interstate commerce. Thus, the burden shifted to the purchasers to present evidence that the arbitration agreements were not valid or that they did not apply to the disputes in question. The purchasers did not present any additional evidence. They presented only argument. Therefore, unless on its face the arbitration provision is not valid or does not apply to the 8 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 dispute in question, the trial court's decision to deny the motions to compel arbitration was erroneous. A. Unconscionability The trial court held that the arbitration provision in each contract is unconscionable on its face. Concerning unconscionability, this Court has stated: "'Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala. 1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52–53 (Ala. 1998).' Fleetwood Enters., [Inc. V. Bruno,] 784 So. 2d [277] at 281 [(Ala. 2000)]. In order to meet that burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas: "'Substantive unconscionability "'"'relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, 9 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 fine-print terms or provisions that seek to negate the reasonable expectations of the n o n d r a f t i n g p a r t y , o r unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.'" "'Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n.4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook's Pest Control, Inc., 902 So. 2d 641 (Ala. 2004). "'Procedural unconscionability, on the other hand, "deals with 'procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction.'" Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n.4, quoting in turn 8 Williston on Contracts § 18:10).' "923 So. 2d at 1086–87." Newell v. SCI Alabama Funeral Servs., LLC, [Ms. 1151078, March 17, 2017] ___ So. 3d ___, ___ (Ala. 2017) (emphasis added). In the present case, to invalidate the arbitration provision on the basis of unconscionability, the purchasers were required to establish both procedural and substantive 10 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 unconscionability. The purchasers presented no evidence of procedural unconscionability, i.e, they did not present any evidence concerning the contract-formation process. The argument the trial court found persuasive -- that on its face the arbitration provision is grossly favorable to FSCU because FSCU reserved the right to avail itself of the courts while forcing the purchasers to arbitrate every conceivable claim –- concerns only substantive unconscionability. Having no evidence of procedural unconscionability before it, the trial court erred in holding that the arbitration provision in each contract is unconscionable. B. Consideration Like its holding concerning unconscionability, the trial court held that the arbitration provision in each contract failed for lack of consideration because, allegedly, "the arbitration clause does not preclude FSCU from pursuing several alternative avenues of relief against the borrower, including the filing of a judicial lawsuit," but "requires that borrowers ... settle '[a]ny controversy or claim arising out of or relating to this Agreement' through binding arbitration." This holding was based on the allegation that 11 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 the arbitration provision lacked mutuality of remedy. However, this Court has stated that, "properly understood, the concept of mutuality of remedy has no application to arbitration agreements." Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998). Further, "'[t]he doctrine of mutuality of remedy is limited to the availability of the ultimate redress for a wrong suffered by a plaintiff, not the means by which that ultimate redress is sought. A plaintiff does not seek as his ultimate redress an arbitration proceeding or a court proceeding. Instead, he seeks legal relief (e.g., damages) or equitable relief (e.g., specific performance) for his injury, and he uses the proceeding as a means to obtain that result.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 504 (Ala. 1999) (quoting Ex parte McNaughton, 728 So. 2d 592, 598 (Ala. 1998)). Therefore, the trial court's holding was erroneous. Also, to the extent that the trial court's holding might have been based on the argument that consideration separate and distinct from that which supports the contract as a whole is required to enforce an arbitration provision, this Court 12 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 has repeatedly rejected that argument. See Vintson, 753 So. 2d at 502 n.3. Although not addressed in the trial court's order, on appeal the purchasers allege that the contract as a whole lacked consideration. This Court has stated: "'"A test of good consideration for a contract is whether the promisee at the instance of the promisor has done, forborne or undertaken to do anything real, or whether he has suffered any detriment, or whether in return for the promise he has done something he was not bound to do, or has promised to do some act or to abstain from doing something." "'Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala. 1987).'" Merchants Bank v. Head, 161 So. 3d 1151, 1155-56 (Ala. 2014) (quoting Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)). In the present case, the first paragraph of each of the contracts containing the arbitration provision states: "The Buyer has purchased an automobile from Dealer, both of whom have executed the attached agreement setting forth the Buyer's obligation to 13 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 pay (said obligation hereinafter 'Contract'). Buyer has executed the Contract in order to purchase the automobile described in the Contract (said vehicle hereinafter 'Vehicle'). The Buyer is a Credit Union member who requests the Credit Union purchase the contract from Dealer so that Buyer may make payments directly to the Credit Union. The Dealer hereby assigns the Contract, to the Credit Union." Each purchaser executed the contract in order to purchase a vehicle through a loan from FSCU, and FSCU purchased the contracts at the purchasers' request so that the purchasers could make payments directly to FSCU. Those acts constitute valid consideration for the contract as a whole. Therefore, the arbitration provision in the contract does not fail for lack of consideration. C. Scope of the Arbitration Provision The purchasers allege that their tort claims against FSCU fall outside the scope of the arbitration provision. "[T]he burden of proving that the dispute falls outside the scope of the arbitration agreement shifts to the nonmovant after the movant proves the existence of a contract containing an arbitration provision and that the transaction that is the subject of the contract had an impact on interstate commerce." Edwards Motors, Inc. v. Hudgins, 957 So. 2d 444, 447 (Ala. 14 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 2006). "Whether an arbitration provision encompasses a party's claims 'is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Vintson, 753 So. 2d at 505 (quoting Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995)). This Court has stated: "'"[There is a] strong presumption in favor of arbitration" created by the Federal Arbitration Act. See, generally, Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1083 (Ala. 2005). "In interpreting an arbitration provision, 'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" The Dunes of GP, L.L.C. v. Bradford, 966 So. 2d 924, 927 (Ala. 2007) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)) (emphasis omitted). Indeed, "'a motion to compel arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."'" Id. (quoting Ex parte Colquitt, 808 So. 2d 1018, 1024 (Ala. 2001), quoting in turn United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)) (emphasis omitted). "While, 'as with any other contract, the parties' intentions control, ... those intentions are generously construed as to issues of arbitrability.'" Carroll v. W.L. Petrey Wholesale Co., 941 So. 2d 234, 237 (Ala. 2006) (quoting 15 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985)).'" Green Tree-AL LLC v. White, 55 So. 3d 1186, 1192 (Ala. 2010) (quoting Kenworth of Mobile, Inc. v. Dolphin Line, Inc., 988 So. 2d 534, 544–45 (Ala. 2008)). In the present situation, the contract states: "Any controversy or claim arising out of or relating to this Agreement shall be settled by binding arbitration." This Court has stated that "the phrase 'any controversy or claim arising out of or relating to' in arbitration agreements covers a broad range of disputes." Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 754 (Ala. 2002). In fact, "'[t]his Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims "arising out of or relating to" the contract, that clause has a broader application than an arbitration clause that refers only to claims "arising from" the agreement.'" Vintson, 753 So. 2d at 505 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1, 2–3 (Ala. 1996)). The purchasers claimed that FSCU negligently and wantonly deprived them of clear title to their vehicles and that FSCU, 16 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Action Auto, and Pine City conspired to deprive them of clear title to their vehicles. The purchasers alleged that the purchases of their vehicles were "financed by a purchase money loan obtained from [FSCU], which loan was secured by an alleged lien on the [vehicle] in favor of [FSCU]," and that FSCU failed to perfect its security interest in the vehicles by failing to ensure that title was properly applied for and issued by the State of Alabama for the purchased vehicles. The purchasers further alleged that they were damaged by being required to "pay[] loan on vehicle without clear title." Those claims against FSCU clearly "aris[e] out of or relat[e] to" the contract containing the arbitration provision. All the claims relate to the title of the vehicles purchased through contracts that were assigned to FSCU through the agreements containing the arbitration provision. Without the agreement containing the arbitration provision, no relationship as to the vehicles would exist between the purchasers and FSCU. Accordingly, the broad language of the arbitration provision encompasses the purchasers' claims against FSCU. D. Jury Waiver 17 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Finally, although not mentioned in the trial court's order, the purchasers make the argument on appeal that "the lack of any valid jury trial waiver provides another viable basis for the setting aside of the Assignment's arbitration requirement." Purchasers' brief, at 54. They further argue: "Although a party may contractually waive his or her fundamental right to a jury trial, such a waiver must be narrowly and strictly construed. Ex parte Cupps, 782 So. 2d 772, 775 (Ala. 2000). The court is to 'indulge every reasonable presumption against waiver.' Aetna Ins. Co. v. Kennedy ex rel. to Use of Boqash, 301 U.S. 389, 393, 57 S. Ct. 809, 812, 81 L. Ed. 1177 (1937)." Purchasers' brief, at 54-55. However, the purchasers' argument confuses jury-waiver provisions, like the one at issue in Ex parte Cupps, 782 So. 2d 772 (Ala. 2000), and the other cases cited in the purchasers' brief, and arbitration provisions, like the one at issue in the present case. This Court has previously recognized the distinction between those two types of provisions: "[A]nalogy [of jury-waiver provisions] to arbitration cases is inappropriate because of the inapplicability of the Supremacy Clause of the United States Constitution based on cases from the United States Supreme 18 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 Court construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and the resulting application of opposite presumptions in interpreting arbitration and jury-waiver provisions." Ex parte Carter, 66 So. 3d 231, 239 (Ala. 2010) (plurality opinion); see also Ex parte Carter, 66 So. 3d at 241 (Murdock, J., concurring in the result) ("I agree with the skepticism expressed in the main opinion as to the appropriateness of analogizing principles distilled from arbitration cases to cases involving jury-waiver provisions. As the main opinion notes, the Supremacy Clause of the United States Constitution applied in relation to cases construing the Federal Arbitration Act, 9 U.S.C. § 1 et seq., on the one hand, and the constitutional right to a trial by jury, on the other hand, result in 'opposite presumptions in interpreting arbitration and jury-waiver provisions.'"). The issue before us is whether the trial court erred in denying FSCU's motions to compel arbitration under the arbitration provision in the "Dealer's Assignment and Buyer's Consent to Assignment." No issue concerning a jury-waiver provision is properly before this Court. Therefore, this 19 1151000; 1151001; 1151002; 1151003; 1151004; 1151005; 1151006; 1151007 argument does not present a basis on which to affirm the trial court's judgment. IV. Conclusion Based on the foregoing, we conclude that the trial court erred in denying FSCU's motions to compel arbitration. Accordingly, we reverse the trial court's judgment and remand these cases for proceedings consistent with this opinion. 1151000 –- REVERSED AND REMANDED. 1151001 –- REVERSED AND REMANDED. 1151002 –- REVERSED AND REMANDED. 1151003 –- REVERSED AND REMANDED. 1151004 –- REVERSED AND REMANDED. 1151005 –- REVERSED AND REMANDED. 1151006 –- REVERSED AND REMANDED. 1151007 –- REVERSED AND REMANDED. Stuart, C.J., and Parker and Bryan, JJ., concur. Bolin, Murdock, and Shaw, JJ., concur in the result. 20

May 19, 2017

23315236-e2f6-4040-8e30-8500cc15c7d4

Ex parte Austal USA, LLC.

N/A

1151244

Alabama

Alabama Supreme Court

Rel: 03/03/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151138 ____________________ Ex parte Austal USA, LLC PETITION FOR WRIT OF MANDAMUS (In re: Michael Keshock et al. v. Metabowerke GMBH et al.) ____________________ 1151244 ____________________ Ex parte Austal USA, LLC PETITION FOR WRIT OF MANDAMUS (In re: Michael Keshock et al. v. Metabowerke GMBH et al.) (Mobile Circuit Court, CV-15-901370) MAIN, Justice. Austal USA, LLC ("Austal"), filed two petitions for a writ of mandamus directing the Mobile Circuit Court to dismiss certain claims asserted against it by plaintiffs Michael Keshock, Martin Osborn, Richard Fitzgerald, Tyrone Lucas, Riley Bodiford, Tommie Brandon, Justin Reed, and William White (hereinafter referred to collectively as "the plaintiffs"). We deny the petitions. I. Facts and Procedural History Austal operates a shipyard in Mobile that builds naval vessels. Each of the plaintiffs is an employee of Austal who claims to have been injured while working in the course of his or her employment. Specifically, each plaintiff claims to have been injured by a tool known as a "Miller saw." The plaintiffs filed this action against Austal and three other companies not parties to these petitions.1 The 1The plaintiffs sued Metabowerke GMBH and Metabo Corporation, foreign corporations alleged to have manufactured 2 1151138, 1151244 plaintiffs' third amendment complaint asserted two counts against Austal. Count I asserted a tort-of-outrage claim against Austal. Austal filed a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss the tort-of-outrage claim. The trial court granted the motion to dismiss count I and entered an order dismissing that claim with prejudice; the tort-of- outrage claim is not now before us. Count VII of the third amended complaint alleged a claim of "intentional misconduct," specifically alleging that Austal had "intentionally provided Plaintiff[s] with a dangerous and defective Miller saw with the specific intent that it would cause injury to Plaintiffs." Austal filed a separate Rule 12(b)(6) motion seeking to dismiss count VII. Austal argued that it was immune from the claim asserted in count VII by virtue of the exclusivity provisions of the Longshore & Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. ("the LHWCA"), and the Alabama Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975. On June 16, 2016, the trial court the Miller saw, and Southern Gas and Supply, Inc., a company that allegedly played a role in the design and distribution of the saw. The plaintiffs asserted claims of negligence, wantonness, and product liability against those three defendants. The claims against those three defendants are not at issue in Austal's petitions. 3 1151138, 1151244 entered an order denying Austal's motion to dismiss count VII. On June 27, 2016, Austal moved the trial court to vacate its order or to certify its order for a permissive appeal under Rule 5, Ala. R. App. P. On June 28, 2016, the plaintiffs filed a fourth amended complaint. The plaintiffs' fourth amended complaint restated the count VII "intentional-misconduct" claim and added five more counts, each alleging that Austal intentionally injured them. Count VIII asserted a claim of assault and battery against Austal. Count XII asserted a claim of fraud and alleged that Austal "intentionally made false statements regarding the safety of the Miller Saw" and that those statements were made "with the conscious and deliberate intent to injure its workmen, including plaintiffs, with the Miller Saw so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work." Count XIII alleged that Austal fraudulently "suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the known safety hazards associated with the Miller Saw ... and that Austal knew the tool was unsafe and had made the conscious and deliberate 4 1151138, 1151244 decision to intentionally injure its workmen with the tool so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work." Count XIV alleged that, after the injured plaintiffs returned to work, Austal "intentionally made false statements regarding the safety of the Miller saw with a conscious and deliberate intent directed to the purpose of inflicting severe emotional distress on the Plaintiffs by inducing them to use the same Miller Saws in their work that had previously caused serious injury to Plaintiffs." Count XV, a fraudulent-suppression claim, similarly alleged that Austal "intentionally suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the safety of the Miller saw with a conscious and deliberate intent directed to the purpose of inflicting severe emotional distress on the Plaintiffs by inducing them to use the same Miller Saws in their work that had previously caused serious injury to Plaintiffs." On July 18, 2016, Austal moved to dismiss counts VIII, XII, XIII, XIV, and XV of the fourth amended complaint.2 2The fourth amended complaint also restated the previously dismissed tort-of-outrage claim. Austal moved to dismiss that 5 1151138, 1151244 Again, Austal contended that the claims were barred by the exclusivity provisions of the Alabama Workers' Compensation Act and/or the LHWCA. On July 19, 2016, the trial court granted Austal's motion to certify for permissive appeal the question whether count VII of the third amended complaint stated a claim upon which relief could be granted. On August 2, 2016, Austal filed with this Court a petition for permission to appeal or, in the alternative, for a writ of mandamus (no. 1151138). On August 30, 2016, the trial court denied Austal's motion to dismiss counts VIII, XII, XIII, XIV, and XV, but also certified for immediate appeal the question whether those counts asserted claims upon which relief could be granted. On September 8, 2016, Austal filed with this Court a second petition for permission to appeal or, in the alternative, for a writ of mandamus (no 1151244). This Court consolidated both petitions. We elected to treat the two petitions for permissive appeal as petitions for the writ of mandamus and ordered answers and briefs. claim on the ground that the trial court had previously dismissed the claim with prejudice. The trial court again entered an order dismissing the tort-of-outrage claim. 6 1151138, 1151244 II. Standard of Review "'"'The writ of mandamus is a drastic and extraordinary writ, to be "issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala. 1993); see also Ex parte Ziglar, 669 So. 2d 133, 134 (Ala. 1995).' Ex parte Carter, [807 So. 2d 534,] 536 [(Ala. 2001)]." "'Ex parte McWilliams, 812 So. 2d 318, 321 (Ala. 2001). "'"Subject to certain narrow exceptions ..., we have held that, because an 'adequate remedy' exists by way of an appeal, the denial of a motion to dismiss or a motion for a summary judgment is not reviewable by petition for writ of mandamus." Ex parte Liberty Nat'l Life Ins. Co., 825 So. 2d 758, 761–62 (Ala. 2002).' "Ex parte Kohlberg Kravis Roberts & Co., 78 So. 3d 959, 965–66 (Ala. 2011)." Ex parte MERSCORP, Inc., 141 So. 3d 984, 990 (Ala. 2013). One of the exceptions to the general rule prohibiting mandamus review of the denial of a motion to dismiss is where the 7 1151138, 1151244 motion to dismiss asserts a defense of immunity based on the exclusivity provisions of the Alabama Workers' Compensation Act. Ex parte Rock Wool Mfg. Co., 202 So. 3d 669, 671-72 (Ala. 2016). See also Ex parte McCartney Constr. Co., 720 So. 2d 910 (Ala. 1998). "'"In reviewing the denial of a motion to dismiss by means of a mandamus petition, we do not change our standard of review ...."' Drummond Co. v. Alabama Dep't of Transp., 937 So. 2d 56, 57 (Ala. 2006) (quoting Ex parte Haralson, 853 So. 2d 928, 931 (Ala. 2003)). "'In Newman v. Savas, 878 So. 2d 1147 (Ala. 2003), this Court set out the standard of review of a ruling on a motion to dismiss for lack of subject-matter jurisdiction: "'"A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002). Furthermore, in reviewing a ruling on a motion to dismiss we will not consider whether the pleader will ultimately prevail but whether the pleader may possibly prevail. Nance, 622 So. 2d at 299." "'878 So. 2d at 1148-49.' 8 1151138, 1151244 "Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557, 563 (Ala. 2005). We construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff. Drummond Co., 937 So. 2d at 58." Ex parte Alabama Dep't of Transp., 978 So. 2d 17, 21 (Ala. 2007). III. Analysis There is no dispute that each of the plaintiffs was engaged in maritime employment sufficient to qualify for coverage under the LHWCA. Austal argues that, because the plaintiffs were injured within the line and scope of their maritime employment, Austal enjoys immunity from tort claims by virtue of the exclusivity provision of the LHWCA.3 In Rodriguez-Flores v. U.S. Coatings, Inc., 133 So. 3d 874 (Ala. 2013), we described the exclusivity provision of the LHWCA: "Section 904 of the LHWCA provides, in part, that '[e]very employer shall be liable for and shall secure the payment to his employees of the compensation payable under sections 907, 908, and 3Austal also argues that, to the extent it applies, the Alabama Workers' Compensation Act bars the plaintiffs' tort claims. This argument appears to made out of an abundance of caution, given the possibility of concurrent LHWCA and state- law workers' compensation benefits. See Sun Ship, Inc. v. Pennsylvania, 447 U.S. 715 (1980). Nevertheless, based on the briefs before us, it appears that the parties consider this case to be ultimately governed by the LHWCA. Accordingly, we do not address the applicability of the exclusivity bar of the Alabama Workers' Compensation Act. 9 1151138, 1151244 909 of this title' and that such compensation 'shall be payable irrespective of fault as a cause for the injury.' Section 905(a) of the LHWCA provides, in part, that '[t]he liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee' and that, in such action, 'the defendant may not plead as a defense that the injury was caused by the negligence of a fellow servant, or that the employee assumed the risk of his employment, or that the injury was due to the contributory negligence of the employee.' The exclusivity provision of the LHWCA has been explained as follows: "'The LHWCA, at 33 U.S.C. § 905, precludes a personal injury action against any employer who complies with the LHWCA. Just as Ala. Code 1975, § 25-5-53, provides that workers' compensation benefits are the exclusive remedy for injuries received in a work-related accident, the LHWCA provides, in 33 U.S.C. § 905(a), that an injured worker may not maintain a tort action against his employer for any negligence of the employer giving rise to the injury; the injured worker's exclusive remedy is under the LHWCA. In International Paper Co. v. Murray, 490 So. 2d 1234 (Ala. Civ. App. 1985), aff'd in part, rev'd in part on other grounds, Ex parte Murray, 490 So. 2d 1238 (1986), this court noted: "'"The LHWCA was adopted in 1927 as a federal compensation plan for maritime workers, and was patterned after existing state workers' compensation laws.... The LHWCA is a workmen's compensation statute similar to our own, where employers have 'relinquished their defenses to 10 1151138, 1151244 tort actions in exchange for limited and predictable liability.'" "'490 So. 2d at 1236 (quoting Morrison Knudsen Constr. Co. v. Director, Office of Workers' Compensation Programs, United States Department of Labor, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983)).' "Jarrell v. Bender Shipbuilding & Repair Co., 681 So. 2d 1092, 1094 (Ala. Civ. App. 1996). Thus, employers enjoy immunity from tort claims under the LHWCA as they do under the [Workers’ Compensation] Act." Rodriguez-Flores, 133 So. 3d at 880-81. In Rodriquez-Flores, we also recognized that there is an "exceedingly narrow" exception to an employer's tort immunity under the LHWCA where the employer has committed an intentional tort with the specific intent or desire that the injury occur: "Some courts have recognized an exception to the exclusivity provision of the LHWCA where the employer has committed an intentional tort. Fisher v. Halliburton, 667 F.3d 602 (5th Cir. 2012). However, these 'cases take a very narrow view of the types of intentional injury that lie outside of the LHWCA--the cases consistently require that the employer have had a specific intent or desire that the injury occur.' Id. at 618. See Sample v. Johnson, 771 F.2d 1335, 1346 (9th Cir. 1985); Roy v. Bethlehem Steel Corp., 838 F. Supp. 312, 316 (E.D. Tex. 1993) ('The employer can be sued under LHWCA, however, if he committed an intentional tort, i.e., genuine, intentional injury.'); Houston v. Bechtel 11 1151138, 1151244 Assocs. Prof'l Corp., D.C., 522 F. Supp. [1094] at 1096 [(D.D.C. 1981)] (observing that '[t]he courts have ... carved out an exception to exclusive liability provisions where the injury inflicted is the result of an intentional act'); Austin v. Johns–Manville Sales Corp., 508 F. Supp. 313, 316 (D. Me. 1981) ('Nothing short of a specific intent to injure the employee falls outside the scope of the [LHWCA].'); Sharp v. Elkins, 616 F. Supp. 1561 (D. La. 1985); and Rustin v. District of Columbia, 491 A.2d 496, 501 (D.C. 1985) (observing that the exclusivity provision of the LHWCA 'does not reach actions where the employer specifically intended to injure the employee')." 133 So. 3d at 881-82. Austal contends that the claims of each of the plaintiffs are barred by the exclusivity provision of the LHWCA. The plaintiffs' allegations taken as a whole, Austal argues, allege merely that each plaintiff suffered accidental injury when a tool Austal supplied them to perform their work kicked back and contacted their bodies. Thus, Austal argues, the claims of each of the plaintiffs arise from a workplace accident, for which tort liability is barred by the provisions of the LHWCA. The plaintiffs respond that they have indeed pleaded facts in their complaint and subsequent amendments sufficient to invoke the intent-to-injure exception to LHWCA exclusivity. The plaintiffs have, in fact, expressly alleged that Austal 12 1151138, 1151244 specifically intended to injure them. Count VII alleges that "defendants intentionally provided Plaintiff[s] with a dangerous and defective Miller saw with the specific intent that it would cause injury to Plaintiffs."4 (Emphasis added.) Count XII alleges a "deliberate intent to injure its workmen, including plaintiffs." (Emphasis added.) Count XIII similarly alleges that Austal "made the conscious and deliberate decision to intentionally injure its workmen." Likewise, each of counts XIV and XV alleges that Austal acted with "a conscious and deliberate intent directed to the purpose of inflicting emotional distress on the Plaintiffs." (Emphasis added.) Austal, however, dismisses those allegations as conclusory and presented solely for the purpose of invoking the narrow intent-to-injure exception to LHWCA exclusivity. Austal urges this Court to look only to the specific factual allegations pleaded in the plaintiffs' complaint concerning how the injuries occurred and the alleged business motivations Austal had for requiring the plaintiffs to work with a dangerous tool. Those allegations, Austal 4Whether count VII, which asserts a claim of "intentional misconduct," states an independent cognizable claim under Alabama law is not an issue presently before this Court. 13 1151138, 1151244 contends, describe precisely the type of workplace accidental injuries for which it is immune from tort liability under the LHWCA. At the motion-to-dismiss stage, however, a court's ability to pick and choose which allegations of the complaint to accept as true is constrained by Alabama's broad and well settled standard for the dismissal of claims under Rule 12(b)(6). In this case, there is no question that the plaintiffs have pleaded that Austal "made the conscious and deliberate decision to intentionally injure its workmen." That allegation -- that a company would deliberately injure multiple specific employees -- is so shocking that it invites skepticism. Moreover, we agree with Austal that a specific intent or desire to cause injury to its employees is not particularly consistent with the alleged cost-saving motivation for causing such injuries. Nevertheless, our standard of review does not permit this Court to consider the plausibility of the allegations. Rather, in considering whether a complaint is sufficient to withstand a motion to dismiss, we must take the allegations of the complaint as true, Ussery v. Terry, 201 So. 3d 544, 546 (Ala. 2016); we do 14 1151138, 1151244 not consider "'whether the pleader will ultimately prevail but whether the pleader may possibly prevail,'" Daniel v. Moye, [Ms. 1140819, November 10, 2016] ___ So. 3d ___, ___ (Ala. 2016) (quoting Newman v. Savas, 878 So. 2d 1147, 1149 (Ala. 2003) (emphasis added)); and "[w]e construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff." Daniel, ___ So. 3d at ___. Furthermore, a Rule 12(b)(6) dismissal is proper "'only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.'" Knox v. Western World Ins. Co., 893 So. 2d 321, 322 (Ala. 2004) (quoting Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993)). In this case, regardless of our view on the likelihood of the plaintiffs' ultimate ability to establish the truth of the intent-to-injure allegations, or even to survive the summary- judgment stage, we cannot deny that there is at least some possibility that those allegations are true. Accordingly, the plaintiffs are entitled to at least limited discovery on the issue whether their claims are subject to the exclusivity 15 1151138, 1151244 provision of the LHWCA.5 Thus, Austal has not shown a clear legal right to a Rule 12(b)(6) dismissal. IV. Conclusion Austal has not demonstrated a clear legal right to an order granting its Rule 12(b)(6) motions to dismiss. Therefore, we deny the petitions. 1151138 -- PETITION DENIED. 1151244 -- PETITION DENIED. Stuart, Bolin, Parker, Murdock, Wise, and Bryan, JJ., concur. Shaw, J., concurs in the result. 5It is not uncommon that some discovery may be necessary to establish an immunity defense. See, e.g., Ex parte Alabama Dep’t of Mental Health & Retardation, 837 So. 2d 808, 813-14 (Ala. 2002) ("We agree that a motion to dismiss is typically not the appropriate vehicle by which to assert qualified immunity or State-agent immunity and that normally the determination as to the existence of such a defense should be reserved until the summary-judgment stage, following appropriate discovery."). 16

March 3, 2017

630c56d9-d913-46f0-9007-4b21a424c9f5

Simmons Group, LTD v. Caine O'Rear, Jr. Family Trust

N/A

1150475

Alabama

Alabama Supreme Court

Rel: 03/24/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150475 ____________________ Simmons Group, LTD v. Caine O'Rear, Jr. Family Trust et al. Appeal from Walker Circuit Court (CV-11-900396) BRYAN, Justice. This case began as an interpleader action filed by El Paso E&P Production, L.P. ("El Paso"), to determine who owns the mineral interest in a piece of property located in Walker County, Alabama ("the Landon parcel"), on which El Paso 1150475 operates a methane well.1 The competing claimants for the mineral interest are Simmons Group, LTD ("Simmons Group"), on the one hand, and the Caine O'Rear, Jr. Family Trust, Mary Lou Foy, Susan Foy Spratling, Paula Robertson Rose, Stacy Baker Carson, and Warren Dane Baker (hereafter referred to collectively as "O'Rear"), on the other hand. Simmons Group claims ownership by an unbroken chain of conveyances starting with an 1883 quitclaim deed from one Elizer Taylor to Musgrove Bros. purporting to convey the mineral interest ("the 1883 deed"). O'Rear claims ownership by a separate chain of conveyances originating in the adverse possession of the Landon parcel by one J.K.P. Chilton and allegedly ripening into ownership sometime before 1921. O'Rear does not argue that Chilton adversely possessed the mineral interest separate from the surface estate.2 Rather, O'Rear argues that the 1883 1The original owner of the disputed interest was John W. Landon, who acquired the property by patent from the United States government in 1858. 2When the mineral interest in a property is severed from the surface estate, adverse possession of the surface does not constitute adverse possession of the mineral interest. Sanford v. Alabama Power Co., 256 Ala. 280, 288, 54 So. 2d 562, 569 (1951) ("To acquire by adverse possession the title to the mineral interests so severed, there must be an actual taking or use under claim of right of the minerals from the land for the period necessary to affect the bar."). 2 1150475 deed did not validly convey the mineral interest and that the mineral interest was not severed from the surface estate until after Chilton adversely possessed the Landon parcel.3 O'Rear does not dispute Simmons Group's chain of title subsequent to the 1883 deed. Thus, it is undisputed that, if the 1883 deed validly conveyed the mineral interest to Musgrove Bros., Simmons Group is the rightful owner. Ownership of the mineral interest is the dispositive issue in this case. The case was tried before the circuit court upon stipulations, admissions of fact, and briefs. The court did not hear oral testimony. The circuit court determined that Chilton had adversely possessed the Landon parcel with the mineral interest still attached and that O'Rear therefore owns the mineral interest. 3When the mineral interest has not been severed from the surface estate, adverse possession of the surface is sufficient for adverse possession of the mineral interest. Black Warrior Coal Co. v. West, 170 Ala. 346, 351, 54 So. 200, 201 (1910) ("Had [the adverse possessor not attempted to sever] the coal and mineral interest in said lands ... there could be no question but that his adverse possession would have ripened into a perfect title to the entire interest in the land several years before his death." (emphasis added)). 3 1150475 Standard of Review Because the circuit court did not hear oral testimony, our standard of review is de novo. § 12-2-7, Ala. Code 1975 ("[I]n deciding appeals, no weight shall be given the decision of the trial judge upon the facts where the evidence is not taken orally before the judge, but in such cases the Supreme Court shall weigh the evidence and give judgment as it deems just."). See also Eubanks v. Hale, 752 So. 2d 1113, 1122 (Ala. 1999) (stating that "where no testimony is presented ore tenus, a reviewing court will not apply the presumption of correctness to a trial court's findings of fact and ... the reviewing court will review the evidence de novo"). Discussion Neither Simmons Group nor O'Rear can trace its chain of title to Landon, the original owner. Indeed, there is a break in the chain of title to the Landon parcel because in 1877 a fire destroyed the Walker County courthouse along with the Walker County land records. Consequently, Simmons Group argues that its chain of title, which begins with the 1883 deed, is superior to O'Rear's under Whitehead v. Hester, 512 So. 2d 1297 (Ala. 1987). In Whitehead, this Court held that 4 1150475 when all land records have been destroyed, the first conveyance recorded thereafter becomes the new beginning point of the chain of title. In this case, the first recorded conveyance subsequent to the total destruction of the land records in Walker County is the 1883 deed. O'Rear argues that Whitehead is distinguishable from the present case for two reasons. First, O'Rear argues that Simmons Group failed to establish that all land records in Walker County were destroyed in the 1877 fire and that, therefore, Whitehead does not apply. Second, O'Rear argues that the evidence shows that Elizer Taylor did not own the mineral interest when she executed the 1883 deed and that the deed was therefore ineffective to sever the mineral interest from the surface estate. I. Destruction of the Walker County Land Records This Court based its decision in Whitehead on the fact that "neither side in th[at] case [could] trace its title back to the sovereign or to a common grantor because of the total destruction of all the land records by the 1890 fire that also destroyed the Franklin County Courthouse." Whitehead, 512 So. 2d at 1301. O'Rear argues that Simmons Group failed to 5 1150475 establish that all the land records were destroyed in the 1877 fire and that, therefore, Whitehead is inapplicable. We disagree. It is undisputed that the Walker County courthouse burned to the ground in 1877. Furthermore, the record on appeal contains no evidence of any land records having survived that fire. The total destruction of the building housing the county records, along with the absence in the record of any surviving records, is substantial evidence that the Walker County land records were totally destroyed in the 1877 fire. O'Rear has offered no evidence to suggest that any records survived. Accordingly, the rule from Whitehead applies to reestablish the beginning point of the chain of title to the disputed mineral interest. II. Evidence That Elizer Taylor Did Not Own the Mineral Interest in 1883 Under Whitehead, this Court presumes that the first recorded conveyance after the total destruction of land records to a property is the beginning point of a disputed chain of title. The Court looks to instruments that actually purport to convey an interest, rather than instruments merely 6 1150475 concerning ownership of the land.4 This is because the purpose of the Whitehead rule is to bring clarity to title disputes where the best evidence of ownership -- i.e., the intact chain of title -- is lost.5 Only instruments that actually purport to convey an interest can serve the purpose of Whitehead; instruments that, by their terms, cannot convey an interest also cannot form part of the chain of title. Furthermore, by pinning the new beginning point of the chain of title to the first conveyance recorded after the destruction of the land records, the Whitehead rule protects parties from undertaking the onerous task of showing who owned certain property more than a century after the best evidence of ownership has been lost. As the Court stated in Whitehead: "To require [the parties] to somehow locate the originals of the instruments that were destroyed in the fire and, thus, establish their chain of title from the present date completely back to a government patent or to a common grantor, would 4We say "purports to convey" because in lost-chain-of- title cases it is not possible to unequivocally determine the true owner of the disputed property at the time of the first- recorded conveyance. Indeed, this is the problem the Whitehead rule is intended to remedy. 5"While the legal title to real property can be shown by a valid deed, the record title is the highest evidence of ownership of real property and is not easily defeated." 63C Am. Jur. 2d Property § 39 (2009) (emphasis added). 7 1150475 place an unreasonable burden on them, or on others similarly situated." 512 So. 2d at 1302. Of course, the Whitehead rule does nothing to disturb the basic property rule that a grantor cannot convey more than the grantor actually owns. See, e.g., Chancy v. Chancy Lake Homeowners Ass'n, Inc., 55 So. 3d 287, 297 (Ala. Civ. App. 2010)(stating that "[a] landowner cannot convey a greater interest in property than he possesses"). Thus, proof that the grantor of the first-recorded deed did not actually own the property at the time of the purported conveyance will defeat the presumption underpinning the Whitehead rule. O'Rear, however, presents no such proof. In this case, the only post-fire evidence concerning ownership of the mineral interest before the 1883 deed is an 1871 agreement, recorded in 1879, between one Nancy Landon and one Luiza Taylor ("the 1871 agreement"), and three 1920 affidavits sworn to by G.W. Kilgore, E.S. Hutto, and W.R. Brown ("the 1920 affidavits"). The 1871 agreement states, in pertinent part: "Contract made and executed the 28th day of November one thousand eight hundred and seventy one by and between Nancy Landon of the first part and Luiza 8 1150475 Taylor of the second part both of the County of Walker and the State of Alabama[.] [T]he said Nancy Landon agrees to give to her daughter Luiza Taylor her property to take care of her her life time and the said Luiza Taylor agrees to take care of her mother Nancy Landon her life time for the property of her mother all the following described Land ... [describing the Landon parcel] ... and if either of the above named parties fails to comply with the above named duty this obligation is void and set aside." O'Rear argues that this agreement shows that the mineral interest had not been severed from the surface estate of the Landon parcel and that, therefore, Elizer Taylor did not own the mineral interest when she purported to convey it to Musgrove Bros. in 1883. This argument is unpersuasive. At most, the 1871 agreement is evidence that someone besides Elizer Taylor owned the mineral interest in 1871. Evidence that Elizer Taylor did not own the mineral interest in 1871 is not inconsistent with her ownership of the interest 12 years later in 1883. Thus, the 1871 agreement cannot defeat the presumption that the 1883 deed is the beginning point of the chain of title.6 6Furthermore, the 1871 agreement cannot itself serve as the presumed beginning point of the chain of title under Whitehead. The agreement is executory in nature and does not purport to convey an interest in the Landon parcel. 9 1150475 The 1920 affidavits, which are each identical in substance, allege that, when the 1883 deed was executed, Elizer Taylor had been in adverse possession of both the mineral interest and surface of the Landon parcel for "more than one year." O'Rear argues that, because those affidavits establish that Taylor had been in adverse possession of the as-yet-unsevered mineral interest for less than the prescriptive period when she executed the 1883 deed, that deed could not convey title. This argument is also unpersuasive. The assertion in the 1920 affidavits that Taylor was in adverse possession of the mineral interest is a legal conclusion, not a factual allegation.7 Furthermore, the nonspecific assertion that Taylor had been in adverse possession for longer than a year does not support O'Rear's argument that Taylor had been in adverse possession for less than the prescriptive period. That assertion is, in fact, fully consistent with Taylor's possession for the prescriptive period. The 1920 affidavits contain no factual allegations 7Section 35-4-70, Ala. Code 1975, governs the admissibility of affidavits as evidence in litigation over title to land and states that affidavits "shall be admissible as evidence of the facts therein recited and shall be sufficient to prima facie establish such facts." (Emphasis added.) 10 1150475 inconsistent with Taylor's actual ownership of the mineral interest and therefore cannot defeat the presumption that the 1883 deed is the beginning point of the chain of title to the mineral interest. Conclusion In this case, the first conveyance of the mineral interest recorded after the total destruction of the Walker County land records is the 1883 deed. As such, the 1883 deed is the presumed beginning point of the chain of title under the Whitehead rule. O'Rear has offered no evidence sufficient to rebut this presumption. Therefore, we hold that title to the mineral interest in the Landon parcel vests in Simmons Group. Accordingly, we reverse the circuit court's judgment and remand the case for further proceedings consistent with this opinion. REVERSED AND REMANDED. Bolin, Main, Wise, and Bryan, JJ., concur. Shaw, J., concurs specially. Murdock, J., concurs in the result. Stuart and Parker, JJ., concur in the result in part and dissent in part. 11 1150475 SHAW, Justice (concurring specially). I concur. I write specially to note the following, which I discuss not as an independent theory on which to decide this case, but simply as a broader discussion of the facts presented here. There are two chains of title to two different estates. One chain shows a transfer of a mineral estate only. This is the chain claimed by the appellant, Simmons Group, LTD ("Simmons"). The other, with some aberrations, shows a transfer of a surface estate. This is the chain claimed by the appellees. The evidence before us tends to explain how these two chains came into being. We have evidence indicating that John Landon received the property from the United States. We have an agreement dated 1871 indicating that a later Landon, Nancy, agreed to transfer the property to her daughter, Luiza Taylor. In 1883, another Taylor, Elizer, transferred the mineral estate to Simmons's predecessor in title. Then, there is the 1887 deed by R.A. Baker and J.A. Baker conveying the property to A.H. Johnston; the nature of the interest they owned is not clear. However, in 1898, Johnston conveyed the surface rights of the property 12 1150475 to William M. Wallace. Thus, we see Taylors receiving the property from Landons, and then Taylors selling the mineral estate. Subsequent history shows that the mineral estate and the surface estate were being separately transferred. All of this appears to help explain what happened: The Landons transferred the property to the Taylors, and the surface estate and mineral estates where subsequently transferred separately by the Taylors. We have some evidence confirming or tending to confirm those transfers, but records showing other transfers were lost in the 1877 fire that destroyed the Walker County courthouse. Nevertheless, we do have some explanation as to how the two chains of title exist, and it tends to confirm the holding that results in this case by the application of the rule in Whitehead v. Hester, 512 So. 2d 1297 (Ala. 1987). 13 1150475 PARKER, Justice (concurring in the result in part and dissenting in part). I concur in the result insofar as the majority reverses the circuit court's judgment in favor of the O'Rear defendants. I dissent in part because I believe that the main opinion unnecessarily limits a trial court's discretion in considering relevant evidence in a property dispute when it is presented with the situation, as in this case, where competing chains of title cannot be traced to a common grantor or to a patent deed from the United States as a result of the destruction of the relevant land records. I agree that the rule from Whitehead v. Hester, 512 So. 2d 1297 (Ala. 1987), applies in this case; I disagree, however, with the majority's interpretation and application of this rule. Initially, I note that the Whitehead rule was created by this Court in 1987 to resolve a very specific factual situation before it and that it has not been applied since.8 8Not surprisingly, given that the Whitehead rule has been applied only once, Jesse Evans's Alabama Property Rights and Remedies, the preeminent property treatise in the state, does not cite Whitehead or provide any discussion of the Whitehead rule. I have researched cases from other jurisdictions and have not discovered any uniform rule concerning disposition of 14 1150475 The Whitehead Court made very clear that its decision announcing this novel, judicially created rule was to be limited to the facts before it. See Whitehead, 512 So. 2d at 1301-02 (using language like "under the facts of this case" and "[i]n such circumstances"). The Whitehead Court did not have before it any evidence of recorded instruments other than deeds. The question now before this Court was not decided by the Whitehead Court. I do not think it would be wise to try to make the rule created by the Whitehead Court -- intended to resolve a specific factual situation before it -- into a "one- size-fits-all" rule with rigid application. With this in mind, I turn to a discussion of Whitehead. In Whitehead, the parties disputed the ownership of a mineral interest. This Court stated that "[t]he parties derive their respective claims of title to the minerals under two separate chains of title which do not emanate from a common grantor and which are not traced back to a patent from the United States." 512 So. 2d at 1298. This Court noted that the parties were unable to trace their claims of title property given the situation raised in this case. Rather, in such a situation the various states have appeared to develop differing rules based on the specific facts before the respective courts. 15 1150475 back to the patent title from the United States "because in 1890, a fire destroyed the courthouse in which land records were maintained." Id. Accordingly, there was a "break in each party's chain of title." Id. The appellees in Whitehead claimed ownership of the mineral interest "by virtue of a direct and unbroken chain of conveyances commencing in 1892." 512 So. 2d at 1298. The original conveyance in the appellees' chain of title was a quitclaim deed dated October 7, 1892. It was undisputed that the October 7, 1892, deed was "the first documentary evidence," 512 So. 2d at 1298-99, concerning the ownership of the at-issue mineral interest following the 1890 fire that had destroyed the relevant land records. The appellants in Whitehead "trace[d] their surface ownership through a chain of conveyances commencing with a warranty deed ... dated October 27, 1906, which was 14 years after the initial quitclaim deed conveying the mineral interest to [the appellees'] predecessor." 512 So. 2d at 1299. The trial court in Whitehead had held that the quitclaim deed dated October 7, 1892, severed the mineral interest from the surface estate of the at-issue property. The appellants 16 1150475 argued that the October 7, 1892, deed was "ineffective to transfer title, because there [was] no evidence which trace[d] title back to the United States or to a common grantor." 512 So. 2d at 1301. This Court noted that, "[o]f course, neither side in this case can trace its title back to the sovereign or to a common grantor because of the total destruction of all the land records by the 1890 fire." Id. This Court then stated: "We cannot accept the assertion that [the grantor of the October 7, 1892, deed] was not the holder of legal title to the land and was not legally empowered to sever the mineral interest, under the facts of this case. The first conveyance covering the disputed mineral interest which was filed for record after the destruction of county records by fire was the conveyance in 1892 from [the grantor of the October 7, 1892, deed] to [the grantee]. This conveyance was competent and relevant evidence of a separate mineral estate, in which [the grantor of the October 7, 1892, deed] claimed an interest. Since the conveyance from [the grantor of the October 7, 1892, deed] to [the grantee] in 1892, the mineral interest has passed through a clear and unbroken chain of title directly to [the appellees]. If the argument of the [appellants] were sustained, then one who acquired a mineral interest created in Franklin County prior to 1890 might have difficulty in establishing the validity of his title. To require [the appellees] to somehow locate the originals of the instruments that were destroyed in the fire and, thus, establish their chain of title from the present date completely back to a government patent or to a common grantor, would 17 1150475 place an unreasonable burden on them, or on others similarly situated. "The initial conveyance in the [appellants'] chain of title was from W.H. Tipton to J.A. Thorn in 1906. Again, because of the destruction of the courthouse records by fire, there is nothing in the records to indicate that W.H. Tipton had any title whatsoever to convey in 1906. After the patent in 1844, the next conveyance concerning the subject property filed for record -- so far as the present records indicate -- was the 1892 quitclaim deed from [the grantor of the October 7, 1892, deed] to [the grantee]. Some 14 years later, the [appellants'] chain of title begins with a deed from one W.H. Tipton to J.A. Thorn. In such circumstances, when dealing with two separate and distinct titles to the same property, as here, the Court should acknowledge the superiority of the title of those obtaining interests by the earliest recorded instruments. Pollard v. Simpson, 240 Ala. 401, 199 So. 560 (1941)." 512 So. 2d at 1301-02. Thus, this Court concluded that the appellees had established "paramount legal title" to the mineral interest. 512 So. 2d at 1304. In summary, this Court determined in Whitehead that, in that it was impossible for the claimants of the property to trace their chains of title to the original grantor because the land records needed to do so had been destroyed by fire, the Court presumed that the grantor of the earliest recorded instrument subsequent to the destruction of the land records owned a fee-simple interest in the land the grantor was 18 1150475 conveying. Accordingly, this Court determined that the party able to trace his chain of title to the earliest recorded instrument indicating ownership of the land had paramount legal title. The Whitehead rule is one of practicality; it operates to establish a new starting point when there is a break in the chain of ownership concerning a disputed property as the result of the destruction of the relevant land records. The purpose of the Whitehead rule is to establish this new starting point as close in time as possible to the destruction of the relevant land records. Unlike the majority, I believe that the trial court should be permitted to consider any admissible evidence in applying the Whitehead rule in order to be as certain as possible that the new starting point begins with the actual owner of the property. The majority decision, however, interprets Whitehead to hold that the earliest recorded instrument purporting to convey title is the only evidence that can establish a new starting point under the Whitehead rule. I disagree with this interpretation of the Whitehead rule because it deprives the trial court of the discretion to consider admissible evidence, 19 1150475 other than a recorded deed, for purposes of establishing a new starting point.9 Whitehead did not establish such a rigid precedent, and I see no reason to make the judicially created, fact-specific Whitehead rule rigid at this time. In Whitehead, this Court noted that the first recorded documentary evidence concerning ownership of the at-issue property following the destruction of the land records was the October 7, 1892, deed. However, nothing in Whitehead indicates that the first documentary evidence must be a deed. It just so happened that in Whitehead a recorded deed was the first documentary evidence; deeds were the only evidence 9I note that the majority decision includes the following statement: "Of course, the Whitehead rule does nothing to disturb the basic property rule that a grantor cannot convey more than the grantor actually owns. See, e.g., Chancy v. Chancy Lake Homeowners Ass'n, Inc., 55 So. 3d 287, 297 (Ala. Civ. App. 2010)(stating that '[a] landowner cannot convey a greater interest in property than he possesses'). Thus, proof that the grantor of the first-recorded deed did not actually own the property at the time of the purported conveyance will defeat the presumption underpinning the Whitehead rule. O'Rear, however, presents no such proof." ___ So. 3d at ___. However, based on its interpretation of the Whitehead rule, the only evidence contemplated by the majority that may be considered by the trial court concerning ownership of the property is a recorded deed. 20 1150475 presented concerning ownership of the property in Whitehead. It is within this context that the Whitehead Court stated: "In such circumstances, when dealing with two separate and distinct titles to the same property, as here, the Court should acknowledge the superiority of the title of those obtaining interests by the earliest recorded instruments." 512 So. 2d at 1302 (emphasis added). Black's Law Dictionary defines "instrument" as "[a] written document; a formal or legal document in writing, such as a contract, deed, will, bond, or lease." Black's Law Dictionary 719 (5th ed. 1979). In the present case, the earliest recorded instrument concerning ownership of the property following the alleged destruction of all the land records is the November 28, 1871, agreement between Nancy Landon and Luiza Taylor, a legal instrument recorded in the Walker County Probate Court on March 21, 1879. The agreement does not convey an interest in the property; however, I do not find this fact to be dispositive. The agreement is reliable evidence. It even has all the formalities of a deed: It is signed by both parties, witnessed by two parties, contains a metes-and-bounds description of the property, and is recorded in the deed book 21 1150475 of the probate court. Why is this agreement, which clearly identifies the owner of the property as Nancy Landon, any less reliable than a quitclaim deed in determining the actual owner of the property after the destruction of all the relevant land records?10 I also present the following hypothetical to demonstrate the danger of adopting the majority's position of divesting the trial court of discretion to consider admissible evidence for the purpose of establishing a new starting point under the Whitehead rule in cases such as the present one. Suppose in 10The earliest recorded instrument in Whitehead was a quitclaim deed, which does not always convey an interest in property. Of course, "if a grantor in a quitclaim deed has a good legal title, the quitclaim is as effectual to pass the title as a warranty deed." Jesse P. Evans III, Alabama Property Rights and Remedies § 4.5 (5th ed. 2012). However, "[a] quitclaim conveys nothing more than the interest owned by the grantor at the time of this execution and no more." Id. Further, "[a] quitclaim deed purports to convey only the grantor's present interest in the land, if any, rather than the land itself. Since such a deed purports to convey whatever interest the grantor has at the time, its use excludes any implication that he has good title, or any title at all. Such a deed in no way obligates the grantor. If he has no interest, none will be conveyed." Robert Kratovil and Raymond J. Werner, Real Estate Law 60 (8th ed. 1983) (final emphasis added). 22 1150475 the present case that, instead of the recorded agreement, Nancy Landon had recorded an affidavit concerning the ownership of the property. Assume that Nancy Landon had, at some time before the courthouse was destroyed and with it all of the land records, obtained an easement over her neighbor's property. Also assume that Nancy Landon recorded the instrument conveying to her the easement before the land records were destroyed. The land records are then destroyed by fire. Suppose that Nancy Landon and the subservient property owner did not have a copy of the instrument conveying to Nancy Landon the easement to re-record. However, after the land records were destroyed, wanting to protect their respective interests, assume that Nancy Landon and the subservient property owner recorded a joint affidavit in the probate court stating that Nancy Landon owned her property and had obtained an easement over the property of the subservient property owner sometime prior to the destruction of the courthouse and the land records. Adopting the majority's strict application of the Whitehead rule, the trial court would not be allowed to consider this admissible evidence concerning the actual 23 1150475 ownership of the property for purposes of establishing a new starting point. I do not see the wisdom in adopting such a strict application of the Whitehead rule. I suggest that allowing courts to consider evidence beyond recorded deeds in order to determine the owner of the property following the destruction of all records is consistent with the spirit of the Whitehead rule. Under the actual facts of the present case, the November 28, 1871, agreement precedes the May 14, 1883, deed, which was not recorded until March 8, 1884; it is the first documentary evidence concerning the ownership of the property following the alleged destruction of all the records concerning the conveyances of property in Walker County.11 Accordingly, as 11Nancy Landon's agreement with Luiza Taylor was recorded on March 21, 1879, more than four years before Elizer Taylor executed the May 14, 1883, deed in favor of Musgrove Bros. This Court has stated that "[t]he purpose of recording is to affect purchasers subsequent to the recording ... with notice." Williams v. White, 165 Ala. 336, 337, 51 So. 559, 559 (1910); see also Jesse P. Evans III, Alabama Property Rights and Remedies § 5.3[a] (5th ed. 2012) ("[T]he recording of an instrument under the recording statutes is conclusive notice to any third person of everything that appears on the face of an instrument so recorded."(footnote omitted)). As the earliest recorded instrument, the agreement put Elizer Taylor, Musgrove Bros., and all other third parties on notice of the fact that Nancy Landon claimed fee-simple ownership of the property. 24 1150475 did the circuit court, I would apply the Whitehead rule in the present case to presume that Nancy Landon, not Elizer Taylor, owned a fee-simple interest in the property. The practical result of my approach would be that Elizer Taylor's deed to Musgrove Bros. did not severe the mineral interest from the property because, at that time, Elizer Taylor had no interest in the property to convey. Therefore, I would affirm the circuit court's judgment against Simmons Group. However, I do not agree with the circuit court's judgment in favor of the O'Rear defendants because I believe that Simmons Group has demonstrated that the trial court erred in determining that "Chilton was the owner of the property in fee by adverse possession as of 1921." The evidence in the record does not support the trial court's conclusion. Therefore, having concluded that the mineral interest had never been severed from the property, I would send the matter back to the circuit court and allow it to conduct further fact-finding in light of this holding. The property remaining one entire "bundle of sticks," either party could then establish ownership of the property through the principle of adverse possession of the surface. Stuart, J., concurs. 25

March 24, 2017

dbee6b37-54e8-4fea-9f9a-413454a77858

Ex parte Marshall County Department of Human Resources.

N/A

1151039

Alabama

Alabama Supreme Court

REL: 03/31/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151039 ____________________ Ex parte Marshall County Department of Human Resources PETITION FOR WRIT OF MANDAMUS (In re: Marshall County Department of Human Resources v. J.V.) (Marshall Juvenile Court, JU-09-300067.05) MURDOCK, Justice. J.J.V. ("the child") is the daughter of J.V. ("the father"). The Marshall County Department of Human Resources 1151039 ("DHR") has filed with this Court a petition for a writ of mandamus by which it seeks an order directing the Marshall Juvenile Court to set aside or vacate its order of April 3, 2016, addressing the transfer of legal custody and physical custody of the child to the father.1 The child was born in October 2006. The pertinent facts, as summarized in an earlier Court of Civil Appeals' opinion involving the same parties, are as follows: "In 2009, the Marshall County Department of Human Resources ('DHR') removed J.J.V. ('the child') from the custody of M.M.T. ('the mother'). At that time, the child's father, J.V. ('the father'), was living in Florida, where the child and the mother had resided until the mother left the father.[2] The father came to Alabama to locate the mother and the child only to learn that DHR had removed the child from the mother's home. "The father, without the aid of counsel, attempted to work with DHR, and he briefly reunited with the mother. However, when a DHR caseworker informed him that the child would not be returned to the parents if they resided together, the father left the mother's residence. The father retained an 1DHR's petition asks this Court to direct the Court of Civil Appeals to order the Marshall Juvenile Court to vacate the April 3, 2016, order. Because the Court of Civil Appeals denied DHR's petition for a writ of mandamus, we treat the petition to this Court as a petition seeking a writ directed to the trial judge. See Rule 21(e), Ala. R. App. P. 2The father and the mother were not married. 2 1151039 attorney and secured supervised visitation with the child in the fall of 2010. In December 2010 and January 2011, the father was granted unsupervised visitation with the child; he had a total of five unsupervised visits with the child. "On January 8, 2011, a few hours after the child had returned from an unsupervised visit with the father, the child's foster parents contacted the child's DHR caseworker, who was, at that time, Tracy Burrage. B.B. ('the foster father') told Burrage that the child had reported that the father had 'hurt her butt.' At Burrage's instruction, the foster parents took the child to the emergency room, which then referred the child to Crisis Services of North Alabama for an examination by a forensic nurse examiner. "After the accusation, the father's visitation was changed to supervised visitation. The child cried and said that she did not want to attend visits with the father. When at the visits, the child barely interacted with the father. "In October 2011, the father was charged with sexual abuse. He was arrested and placed in the Marshall County jail, where he remained for approximately 18 months. DHR filed a petition to terminate the father's parental rights; however, the juvenile court denied that petition. DHR appealed, and this court reversed the juvenile court's judgment declining to terminate the father's parental rights and remanded the cause for the juvenile court to reconsider DHR's termination-of- parental-rights petition based on the evidence already adduced at trial, indicating in our opinion that the juvenile court had perhaps mistakenly believed that late perfection of service of process on the father had prevented the juvenile court from considering the termination-of-parental-rights petition at the time of the termination-of-parental- rights trial. See Marshall Cty. Dep't of Human Res. 3 1151039 v. J.V., 152 So. 3d 370 (Ala. Civ. App. 2014). On remand, the juvenile court entered another judgment declining to terminate the father's parental rights; no appeal was taken from that judgment." Marshall Cty. Dep't Human Res. v. J.V., 203 So. 3d 1243, 1244- 45 (Ala. Civ. App. 2016)("J.V. I"). In August 2013, the father agreed to submit to a polygraph examination in the criminal proceeding arising from the sexual-abuse charge. The results from that examination indicated that the father provided truthful answers to the questions posed to him. Based on those results, the sexual- abuse charge against the father was dismissed with prejudice on February 11, 2014. Thereafter, the father, who was an illegal immigrant, was transferred to a Louisiana detention facility. The father was released from the detention facility in September 2014 after his immigration status was changed to "an alien lawfully admitted for permanent residence." 8 U.S.C. § 1229b(b)(1). The father then moved to Canton, Georgia, where his sister resided. The Court of Civil Appeals in J.V. I summarized the procedural history as follows: "The father filed a petition in the juvenile court on November 6, 2014, seeking an award of 4 1151039 custody of the child. After a three-day hearing in December 2014, the juvenile court entered an order on December 29, 2014, stating the following: "'1. This matter is set for further review on disposition on January 20, 2015, at 9:00 a.m. "'2. At that time, DHR shall: "'a. Present a plan to transition physical custody of the child to her father by the time the child completes her spring semester of school. This plan shall include the name of a licensed psychologist near the father's residence in Georgia who can counsel the child and the father. This plan shall also include a proposal of gradually increased visitation, which visitation schedule shall take into account the father's work schedule. "'b. Present a home study of the father's residence in Georgia. "'3. Between now and January 20, 2015, DHR shall ensure that the father is able to visit with his child as frequently as once per week for a period of no less than two hours. These visitations may be supervised by DHR. The visitations shall be at times when the father is not working. The foster parents shall not attend the visitations or provide transportation to the visits. "'4. DHR shall pay the costs of any home study, and until further Orders, any and all counseling fees. 5 1151039 "'5. On January 20, 2015, the father shall present photos of his house -- both inside and out. At that time the father shall identify the school the child would attend, should the child live in the house. Also, the father should describe the provisions he will make for child care when he is at work and the child is not in school.'" J.V. I, 203 So. 3d at 1245-46. The January 20, 2015, review hearing was rescheduled. On March 27, 2015, the juvenile court entered an order incorporating the transition plan that had been created by the parties and setting the matter for further review on May 12, 2015. The March 2015 order further stated: "'It is the intention of the parties and Court upon the receipt of an approved Home Study from Georgia that the father's visits with his child shall transition to supervised visitation in his home. The Marshall County Department of Human Resources has agreed to provide a Spanish interpreter in addition to an in home service provider. The father's visitation shall be as [set out in the following omitted subparagraphs]: "'.... "'... On June 12, 2015, physical custody of the minor child shall be placed with her father pending further Order of the court. "'.... 6 1151039 "'... The child and father shall continue to participate and cooperate with counseling with Dr. Eassa, a licensed psychologist.'" J.V. I, 203 So. 3d at 1246. The Court of Civil Appeals continued: "After the review hearing was held on May 12, 2015, an amended order regarding the transition plan was entered on May 18, 2015. The May 2015 order, like the March 2015 order, set out the specific transition plan and stated that the child would be permanently transitioned to the father's physical and legal custody no later than July 27, 2015. The May 2015 order also contained the following provisions referencing a home study: "'3. It is the intention of the parties and Court upon the receipt of an approved Home Study from Georgia through the Interstate Compact [on the Placement of Children ('ICPC'), codified at Ala. Code 1975, § 44–2–20 et seq.], that the father's visits with his child shall transition to supervised visitation in his home. "'.... "'4. On July 27, 2015, physical custody of the minor child shall be placed with her father pending further Order of the Court upon the receipt of an approved Home Study from Georgia through the ... ICPC.' "On June 23, 2015, DHR moved for an evidentiary hearing. In its motion, which was amended June 30, 2015, DHR alleged that the home study conducted pursuant to the Interstate Compact on the Placement of Children ('the ICPC'), codified at Ala. Code 1975, § 44–2–20 et seq., had not been approved and that the child was not prepared to transition to the 7 1151039 home of the father on July 27, 2015. The juvenile court held a hearing on July 2, 2015, at which the parties presented testimony regarding the progress of the father and the child toward reunification and the basis for the disapproval of the ICPC home study." J.V. I, 203 So. 3d at 1246-47. We note that the home study submitted by the Georgia Division of Family and Children Services reflects that the father resided with his sister and her four children in a six-bedroom townhome that was adequate for the child. The home study notes that "[t]he room identified for [the child] is painted pink and has a full size bed with night stand and chest of drawers. There is bedding on the bed. The closet in the room is empty. It would be sufficient in size and space for an 8 year old child." The home had not been approved, however, because of concerns about the above-referenced sexual-abuse charges against the father and because of concerns that the father was single and worked full time, that he had never parented independently, that continued therapy was needed to strengthen the child's relationship with the father, and that the father's financial stability could not be verified to the satisfaction of the person conducting the home study. 8 1151039 On July 2, 2015, the juvenile court entered a "Transition Review Hearing Order," which states: "1. The physical transition of the child to the child's father shall occur absolutely no later than the previously agreed upon date of July 27, 2015. The occurrence of this final transition is no longer conditioned upon anything. "2. Between this date and July 27, 2015, the Department of Human Resources shall continue to provide the services set out in previously agreed to Orders. "3. For a period of one year after July 27, 2015, the father and the child shall continue counseling with Dr. Elaine Eassa. The Department of Human Resources shall be responsible for the costs of said counseling sessions for the first six months of said year. The father of the child shall be responsible for the costs of the counseling sessions for the second six months of the year. The Department of Human Resources, the Guardian ad Litem and the father's attorney shall be provided copies of the progress reports from the counselor. The frequency of the counseling sessions shall not be more frequent than the frequency to date, but at the discretion of the counselor, the frequency of the counseling sessions may be reduced during the counseling period. "4. In an effort to be perfectly clear, all physical custody, all legal custody and all authority over the child shall be returned to the father no later than July 27, 2015." 9 1151039 DHR appealed the July 2015 order to the Court of Civil Appeals.3 See J.V. I. On appeal, DHR argued that the 3In S.P. v. E.T., 957 So. 2d 1127 (Ala. Civ. App. 2005), the Court of Civil Appeals noted: "Unlike many other types of cases, dependency proceedings often involve a series of appealable dispositional custody orders. Eventually the trial court enters an order in a dependency proceeding that is intended to be its 'final'• dispositional order as to the pending case, i.e., a custodial placement that is intended to be permanent, to the extent custody awards can be permanent. See Ex parte J.P., 641 So. 2d [276,] 278 [(Ala. 1994)] ('by its very nature, custody is always temporary and never permanent' because it is always subject to change based upon an appropriate petition and evidence). Under ideal circumstances, such final dispositional orders coincide with the end of the child's dependency, i.e., the child has a proper custodian 'and'• is no longer 'in need of care or supervision'• by persons other than the custodian. See Ala. Code 1975, § 12-15-1(10)n. In other words, under ideal circumstances, the final dispositional order results in a custody award wherein the parent or custodian is able and willing to have the care, custody, and control of the child, free from any intervention or supervision by the state under the dependency statutes." 957 So. 2d at 1131. Title 15 of Chapter 12, Ala. Code 1975, has been significantly amended and renumbered. See Ala. Code 1975, § 12-15-102(8)a.8 (providing that a "dependent child" includes a child "[w]ho ... is in need of the care and protection of the state."). See also Ala. Code 1975, § 12- 10 1151039 evidence did not support the juvenile court's conclusion that the child should be returned to the father's custody. The Court of Civil Appeals rejected that argument, noting that "[t]he evidence in the record regarding the father's alleged abuse of the child was sharply conflicting, and the juvenile court, not this court, is the proper arbiter of the factual disputes presented by the conflicting evidence." 203 So. 3d at 1253. The J.V. I court agreed with DHR, however, that "the juvenile court's order that the child be returned to the custody of the father no later than July 27, 2015, is not in the child's best interest." 203 So. 3d at 1253. That court stated: "To support the July 2, 2015, judgment ordering the transition of custody to occur no later than July 27, 2015, the juvenile court must have determined that reuniting the child with the father immediately would serve the child's best interest. We agree with DHR that the record lacks evidence that would support the finding that the child's best interest would be served by placing her in the custody of the father without further transitioning. 15-314(a) ("If a child is found to be dependent, the juvenile court may make any of the following orders of disposition to protect the welfare of the child: (1) Permit the child to remain with the parent, legal guardian, or other legal custodian of the child, subject to conditions and limitations as the juvenile court may prescribe. ... (4) Make any other order as the juvenile court in its discretion shall deem to be for the welfare and best interests of the child."). 11 1151039 "The record is replete with evidence indicating that the child believes that the father abused her, that she fears the father, and that she does not want to be alone with the father, much less be placed in his custody. According to Dr. Eassa, the child has indicated that she might run away or possibly harm herself if forced to spend time alone with the father. The evidence presented at both the December 2014 hearing and July 2015 hearing further indicates that the child treats the father with disrespect, including going so far as to throw rocks at him, or indifference and establishes that she feels no familial affection for him. Similarly, the evidence indicates that the father is not fully prepared to handle the behavior the child is expected to display if she is placed in his custody; Dr. Eassa testified that the father would often ignore the child's misbehavior and give in to the child. Placing a child who is expected to display oppositional and defiant behaviors with a father who is ill-prepared to handle those behaviors would not serve the child's best interest. At this time, the father and the child do not have a relationship strong enough to accomplish the transition of custody. "The record does not support a conclusion that the child's best interest would be served by immediately awarding custody to the father. Both the child and the father would be ill-served by a transition of custody at this time and under these circumstances. Accordingly, we reverse the judgment of the juvenile court insofar as it ordered an immediate transfer of the child's custody to the father, and we remand the cause for proceedings consistent with this opinion." 203 So. 3d at 1253-54. On remand, DHR and the father again agreed to a transition plan as to custody of the child. On April 3, 2016, 12 1151039 the juvenile court entered an order incorporating that plan, which included increasingly longer periods of visitation. The order provided that the father was to have supervised visitation at his home beginning on April 2, 2016, with a transition to periods of unsupervised visitation over the next few weeks. Beginning on April 29, 2016, the father was to have unsupervised overnight visitation at his home, increasing to multiple days of unsupervised visitation over the next few weeks. The order then stated: "2. On July 1, 2016 legal and physical custody of the minor child ... shall be transferred to her father .... "3. The child and father shall continue to participate and cooperate with counseling with Dr. Eassa, a licensed psychologist. "4. The child and father shall participate in language classes to assist with communication. "5. The Marshall County Department of Human Resources shall supervise the custody and placement of the minor child and father after July 1, 2016 for three (3) months. "6. This matter is set for further review on disposition on October 3, 2016 at 9:00 a.m." On May 24, 2016, DHR filed a "Motion for Emergency Order to Cease Visitation Before May 27, 2016" in the juvenile court. The motion alleged that, 13 1151039 "[i]n early May, 2016, for the second time, [the child] attempted to harm herself by cutting herself to avoid having to be with the father (the first incident was her attempt to electrocute herself). She has also threatened to run away from his home. Her behaviors indicate that her safety is at risk at the father's home. Despite regular counseling sessions with Dr. Eassa, the child's conduct or condition is not improving, but rather, is worsening. According to the foster parent, [the child] has exhibited disturbing behaviors, to wit: she cut herself intentionally because she said she would rather live in a hospital than with her father; she refused to bathe, brush her teeth, brush her hair, or have a bowel movement at her father’s home; she refused to eat food prepared at her father’s home; and she has become more withdrawn at school and at the foster home. The effect of forced visitation has been harmful to the child." The "Motion for Emergency Order to Cease Visitation Before May 27, 2016" further referenced a report prepared by Lois W. Petrella, a clinical psychologist who had evaluated the child on May 13, 2016. A copy of the report was attached to the motion. According to the report, the child "has consistently been resistant to visits with her biological father, whom she refers to as 'J---.' She continues to assert that he sexually molested her, that she is afraid that he will hurt her again, and that she wants nothing to do with him. Regarding her biological father, [the child] stated, 'I don’t usually talk to him.' She explained that she does not like him because, 'He hurt me a long time ago when I was little -- he hurt me in my privates.' She was adamant that she does not want to see her biological father again. She stated she does not like to talk about her father or the abuse, 14 1151039 and kept herself distracted during this line of questioning, e.g., exploring the office, playing with puzzles, trying to change the topic, etc. She stated, 'I don’t like going there,' indicating that she feels as though 'people' make her go there against her will. She stated, 'I want to live with [the foster parents].' She said she feels 'sad' and 'mad' about being forced to visit and ultimately live with her biological father. She explained, 'I don't play with kids right when I get there, but after a little while I start playing with them.' The children [the child] was referring to are her cousins .... She explained that she eventually starts to play with them because, 'it's either that or be bored.'" The report notes that the child "reportedly has never been hospitalized for psychiatric purposes and has no history of taking routine psychiatric medications." The report further notes that the child "stated that she cries 'sometimes, when I have to leave my mommy,' referring to [the foster mother], and that she is always sad 'whenever I have to leave my mommy and daddy.' She has concentration problems and distracted herself in various ways when reporting her history, particularly when the subject was her biological father. Her affect was different when discussing her father, and at times she appeared to be dissociative. [The child] showed the examiner a cut on her finger and explained, 'It happened when I was at [the father's] house –- I picked up a can and just cut myself.' She said she did this intentionally because, 'It would be better living in a hospital instead of having to live with him -- that's my opinion.' She reported that on another occasion, 'I got tweezers and I stuck it in a cord and it made a shock, which was not smart to do.' She explained, 'That was when I was with [the 15 1151039 foster parents] 'cause I wanted to go to the hospital.' She said she would intentionally harm herself if she is forced to go back to [the father's] house. She has also threatened to run away if she is forced to go to live with him." Petrella concluded in her report that the child was "experiencing some paranoia about her father, as well as passive suicidal ideation." The report concludes: "The transition from foster care to her biological father's custody would be detrimental to [the child's] health and safety. This child firmly believes that [the father] sexually molested her when she was younger, and clearly she still seems to fear him. Additionally, since she apparently has not yet bonded with her biological father after all of his encouragement, it appears unlikely that she will do so in the future. "Regressive behaviors, i.e., regression to a previous stage of development, would be expected if [the child] is forced into a relationship with her biological father. Such behaviors might include reverting to baby talk, a decline in grades at school, lack of self care, and possibly more serious problems such as enuresis or encopresis. This becomes increasing important since [the child] soon will be entering another developmental stage, adolescence, which can be difficult for parents and children alike under the best of circumstances. "Since [the child] has already made two small but significant attempts at self-harm and has thought of plans to run away from her biological father's home, it certainly is possible that continuing extended visits and/or placing her in her biological father's care would pose a threat of harm to herself or others. For the child's health and safety, and continued emotional development, it 16 1151039 would be in [the child's] best interest if the visits were terminated." The "Motion for Emergency Order to Cease Visitation Before May 27, 2016" requested that the juvenile court enter an emergency order "ceasing visitation between the child and the father" and that the juvenile court "enter an Order continuing the minor child in the custody of [DHR]." The juvenile court denied the "Motion for Emergency Order to Cease Visitation Before May 27, 2016," and it denied a motion DHR had filed seeking to stay the impending May 27 through May 30, 2016, visitation with the father. On May 26, 2016, DHR filed an emergency motion to stay and a petition for the writ of mandamus in the Court of Civil Appeals. Marshall Cty. Dep't Human Res. v. J.V., [Ms. 2150709, July 1, 2016] ___ So. 3d ___ (Ala. Civ. App. 2016)("J.V. II"). In denying that petition, the Court of Civil Appeals stated: "The mandamus petition seeks an order from this court compelling the juvenile court to 'terminate visitation between the child and the father,' based on the premise that the juvenile court abused its discretion in not terminating visitation as requested. This court granted the stay pending resolution of this petition, which we now deny. ... "'....' 17 1151039 "DHR cannot show a clear legal right to the relief it seeks in its petition. The visitation of which DHR now complains is not true visitation. The visitation awarded in the April 3, 2016, order is transitional visitation aimed at preparing the child for the transition of custody to the father. DHR's request that we order the juvenile court to 'terminate' the father's visitation is in essence a request that we order the juvenile court to modify the award of custody to the father. "However, this court has affirmed the award of custody of the child to the father. J.V., ___ So. 3d at ___. DHR did not seek certiorari review of this court's February 26, 2016, decision. The award of custody to the father has therefore become the law of the case. Ex parte S.T.S., 806 So. 2d 336, 341 (Ala. 2001). "'The issues decided by an appellate court become the law of the case on remand to the trial court, and the trial court is not free to reconsider those issues. Murphree v. Murphree, 600 So. 2d 301 (Ala. Civ. App. 1992). According to the doctrine of the law of the case, "whatever is once established between the same parties in the same case continues to be the law of that case, whether or not correct on general principles, so long as the facts on which the decision was predicated continue to be the facts of the case."• Blumberg v. Touche Ross & Co., 514 So. 2d 922, 924 (Ala. 1987).' "Ex parte S.T.S., 806 So. 2d at 341. The child's custody is to be vested in the father at the completion of the transitional period, and the juvenile court is not free to alter the custody award merely upon motion of the parties. 18 1151039 "DHR's allegations that the child has harmed herself and has threatened to run away from the father's residence, although nearly identical to testimony presented at the July 2015 evidentiary hearing before the entry of the July 2, 2015, judgment giving rise to the appeal in J.V. [I], are, in fact, allegations, presumably supported by new evidence, regarding the child's best interests. The juvenile court may consider those allegations and any such new evidence in a modification action. However, DHR's attempt to present new evidence to alter the award of custody in this action cannot succeed. "Accordingly, DHR's petition for the writ of mandamus is denied. This court's stay order is lifted." ___ So. 3d at ___. On May 27, 2016, while the mandamus petition in J.V. II was pending in the Court of Civil Appeals, DHR filed in the juvenile court a "Motion to Set Aside Custody Order." DHR made similar allegations to those set forth in its "Motion for Emergency Order to Cease Visitation" and again referenced the report prepared by Petrella. The "Motion to Set Aside Custody Order" alleged that there "ha[d] been a material change in circumstances and that it [was] in the child's best interests that the prior order awarding legal and physical custody of the child to the father be set aside." (Emphasis added.) DHR requested that the April 2016 order awarding the father 19 1151039 custody be set aside and that the juvenile court order that the child remain in DHR's custody. On June 24, 2016, before the decision in J.V. II was issued, DHR filed a second petition for a writ of mandamus in the Court of Civil Appeals. The second petition was assigned case no. 2150795. The second petition noted that no further visitation had occurred between the father and the child after the Court of Civil Appeals granted DHR's motion to stay while J.V. II was pending. The second petition continued: "But currently there is no order preventing or stopping the transfer of custody of the child to the father on July 1, 2016. On May 27, 2016, DHR filed a Motion to Set Aside Custody Order in the juvenile court asserting that the new evidence that the child's emotional and physical health is at risk and a transfer of custody to the father is contrary to the child's best interests. The trial court failed to conduct a hearing on said motion and failed to enter any order on the motion."4 (Emphasis and reference to exhibit omitted.) DHR requested that the Court of Civil Appeals order the juvenile court to set aside its April 2016 order awarding custody to the father 4In its petition to this Court, DHR states that "[t]he trial court failed to conduct a hearing on said motion and failed to enter any order on the motion." We note that the motion did not include a request for a hearing. 20 1151039 and that that Court consolidate the second petition with the petition then pending in J.V. II. The Court of Civil Appeals did not enter a order consolidating DHR's petitions. On July 1, 2016, the Court of Civil Appeals issued its decision in J.V. II. Also on July 1, 2016, the Court of Civil Appeals issued an order in case no. 2150795 denying DHR's second petition for a writ of mandamus and denying a motion to stay DHR had filed with its second petition. DHR then petitioned this Court for a writ of mandamus, and DHR filed a motion to stay the custody transfer scheduled for July 1, 2016. This Court granted the motion to stay pending our resolution of the petition for a writ of mandamus. In its petition, DHR seeks an order from this Court directing that the April 2016 order "transferring legal and physical custody of [the child] to [the father] on July 1, 2016" be vacated or set aside. As this Court has stated: "Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of 21 1151039 another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995). The Court of Civil Appeals erred as to its conclusion in J.V. II that "the juvenile court is not free to alter the custody award merely upon motion of the parties," ___ So. 3d at ___, and that DHR must file a new action in order to present evidence to the juvenile court as to facts that arose after the entry of the April 2016 order. The underlying proceeding is a dependency case and, as discussed in note 3, supra, "[u]nlike many other types of cases, dependency proceedings often involve a series of appealable dispositional custody orders." S.P. v. E.T., 957 So. 2d 1127, 1131 (Ala. Civ. App. 2005). Although the April 2016 order at issue purported to award legal custody and physical custody of the child to the father as of July 1, 2016, that order further provided: "3. The child and father shall continue to participate and cooperate with counseling with Dr. Eassa, a licensed psychologist. "4. The child and father shall participate in language classes to assist with communication. 22 1151039 "5. The Marshall County Department of Human Resources shall supervise the custody and placement of the minor child and father after July 1, 2016 for three (3) months. "6. This matter is set for further review on disposition on October 3, 2016 at 9:00 a.m." In light of foregoing "restrictions" as to the custody award to the father, it is clear that the juvenile court did not intend the April 2016 order "to be its 'final'• dispositional order as to the pending case," "free from any intervention or supervision by the state under the dependency statutes" and regardless of what might transpire -- or fail to transpire -- during the transition of custody. 957 So. 2d at 1131. See also Ala. Code 1975, § 12-15-102(8)a.8 (providing that a "dependent child" includes a child "[w]ho ... is in need of the care and protection of the state"); Ala. Code 1975, § 12- 15-314(a) ("If a child is found to be dependent, the juvenile court may make any of the following orders of disposition to protect the welfare of the child: (1) Permit the child to remain with the parent, legal guardian, or other legal custodian of the child, subject to conditions and limitations as the juvenile court may prescribe. ... (4) Make any other 23 1151039 order as the juvenile court in its discretion shall deem to be for the welfare and best interests of the child."). Thus, the juvenile court was free to take into account evidence regarding matters occurring after the entry of its April 2016 order and before any order it might issue on October 3, 2016, in determining whether a modification of the terms of transition was warranted. For example, the juvenile court was free to take into account the failure of transitional efforts (which it had previously ordered) to achieve the results that were contemplated by it and that would be necessary for an eventual transfer of custody that would serve the child's best interest. Presiding Judge Thompson commented in his dissenting opinion in J.V. II that the decision in J.V. I "reversed that part of the judgment of the Marshall Juvenile Court ('the juvenile court') transferring immediate custody of J.J.V. ('the child') to J.V. ('the father') because of our concern for the welfare and safety of the child and to allow a more appropriate relationship between the father and the child to develop. [J.V. I.] This court held that the father and the child did not 'have a relationship strong enough to accomplish the transition of custody' and that '[b]oth the child and the father would be ill-served by a transition of custody at this time and under these circumstances.' [J.V. I], 203 So. 3d at 1254. 24 1151039 "Following this court's decision in [J.V. I], the parties arrived at and the juvenile court sanctioned a 'visitation plan to transition to legal and physical custody' of the child to the father, which began with supervised visitation and gradually increased to unsupervised, overnight visitation. The ultimate goal of the transition was to have the father assume legal and physical custody of the child on July 1, 2016. The transition plan also provided that '[t]he child and [the] father shall continue to participate and cooperate with counseling with Dr. [Elaine] Eassa, a licensed psychologist.' "In its petition for a writ of mandamus filed in this court, the Marshall County Department of Human Resources ('DHR') alleges that certain events have occurred during the transition period, and it requests that this court order the juvenile court to 'cease visitation in order to preserve the health and safety of the child.' In support of its petition, DHR presented evidence indicating that Dr. Lois W. Petrella, a licensed psychologist, evaluated the nine-year-old child in mid-May 2016. Dr. Petrella diagnosed the child as having post- traumatic stress disorder, among other things. The child cut herself with a can while visiting her father and attempted to shock or electrocute herself in order to avoid being forced to visit the father. This child has also stated that –- at nine years of age -- she has had thoughts of suicide when faced with having to visit the father. The evidence presented in [J.V. I] indicated that, because the Georgia home study regarding the father's home had not been approved, the Georgia child-protection agency would not monitor the family in connection with this case when the child visits the father or after the child is placed in the father's custody in Georgia. ".... 25 1151039 "Regardless of whether this court affirmed the initial award of custody to the father, the juvenile court possesses the power to halt visitation based upon the best interests and welfare of the child and to consider any properly filed modification action. Although I understand that the juvenile court is attempting to meet one of the goals of the Alabama Juvenile Justice Act ('the AJJA'), § 12-15-101 et seq., Ala. Code 1975, by seeking to reunite the father and the child, I note that the AJJA requires that reunification be achieved in a manner that ensures the child's safety. See § 12-15-101(b)(3), Ala. Code 1975 (A goal of the AJJA is '[t]o reunite a child with his or her parent or parents as quickly and as safely as possible when the child has been removed from the custody of his or her parent or parents unless reunification is judicially determined not to be in the best interests of the child.'). "The evidence from the most recent psychological evaluation of the child is consistent with previous evidence indicating that the child has engaged in self-destructive behavior, and it appears to me that the situation has deteriorated rather than improved since the issuance of our last opinion. I can see no reason to alter my position that an immediate transfer of custody to the father is not presently in the best interests of the child. It is the function of the courts of this state to protect the children before them. J.C. v. State Dep't of Human Res., 986 So. 2d 1172, 1211 (Ala. Civ. App. 2007); C.S. v. Mobile Cty. Dep't of Human Res., 166 So. 3d 680, 684 (Ala. Civ. App. 2014). The juvenile court appears to have rejected the allegations that the father sexually abused the child. In any regard, whether the child needs protection from the father or not, it is clear that the child needs protection from her own potential conduct if she is forced to visit the father or transition to his home." ___ So. 3d at ___ (Thompson, P.J., dissenting). 26 1151039 The materials before us support the above-stated concerns of Presiding Judge Thompson and raise a substantial question as to whether the father can communicate with and control the child in a manner sufficient to ensure her safety upon the transfer of custody to him. We note, however, that no evidentiary hearing was conducted by the juvenile court as to the matters raised by DHR in its May 2016 filings. Given the allegations made by DHR and the contents of the report prepared by Petrella, the clinical psychologist, the juvenile court could not conclude that the concerns raised by DHR and Petrella could be ignored as a matter of law. Instead, the juvenile court should have scheduled a hearing so that it could properly evaluate any evidence DHR might present (including any testimony from Petrella) as to the alleged change in the child's circumstances after the entry of the April 2016 order. Ex parte Fann, 810 So. 2d 631, 638 (Ala. 2001) ("It is the court's duty to scrupulously guard and protect the interests of children."). Based on the foregoing, the petition is granted; the juvenile court's order of April 3, 2016, transferring legal and physical custody of the child to the father is vacated. 27 1151039 PETITION GRANTED; WRIT ISSUED. Stuart, Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur. 28

March 31, 2017

448e9989-825b-4c07-9091-7042c4e140a7

Miller v. City of Birmingham et al.

N/A

1151084

Alabama

Alabama Supreme Court

Rel: 04/21/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151084 ____________________ Laura Miller v. City of Birmingham et al. Appeal from Jefferson Circuit Court (CV-15-145) PARKER, Justice. Laura Miller appeals from a summary judgment entered by the Jefferson Circuit Court ("the circuit court") in favor of the City of Birmingham ("the City"), Sandy Roberts, and Alice 1151084 Crutchfield (hereinafter referred to collectively as "the City defendants"). I. Facts and Procedural History Robert Jeffrey Miller, Mrs. Miller's husband, was employed by the City as a firefighter. Unum Life Insurance Company of America ("Unum") issued a group life and accidental death and dismemberment policy, identification number 293964 001, to the City on July 1, 2011 ("the policy"). The policy provided life-insurance benefits to eligible employees of the City. The policy itself has not been submitted into evidence; however, a summary of the benefits of the policy was submitted by Mrs. Miller. According to the summary of benefits, the policy included different life-insurance benefits for active employees and for retired employees. Under the policy, as an active employee, the City paid Mr. Miller's insurance premiums and Mr. Miller was entitled to a life-insurance benefit of $151,000, a result reached by multiplying his annual earnings by 1.75. However, if Mr. Miller were to become a retiree, he would be required to pay his life-insurance premiums and would be entitled to only a $50,000 life-insurance benefit. The summary of benefits also included the following provision: 2 1151084 "What happens to your life insurance coverage if you become disabled? Your life insurance coverage may be continued for a specific time and your life insurance premium will be waived if you qualify as described below." The summary of benefits specified that, in order to be eligible for a waiver of the life-insurance premiums, the insured had to "be disabled through your elimination period," which is nine months. The summary of benefits further stated: "When will your life insurance premium waiver begin? ".... "Your life insurance premium waiver will begin when we approve your claim, if the elimination period has ended and you meet the following conditions. Your Employer may continue premium payments until Unum notifies your Employer of the date your life insurance premium waiver begins. "Your life insurance premium will be waived if you meet these conditions: "you are less than 60 and insured under the plan. "you become disabled and remain disabled during the elimination period. "you meet the notice and proof of claim requirements for disability while your life insurance is in effect or within three months after it ends. 3 1151084 "your claim is approved by Unum. "After we approve your claim, Unum does not require further premium payments for you while you remain disabled according to the terms and provisions of the plan. "Your life insurance amount will not increase while your life insurance premiums are being waived. Your life insurance amount will reduce or cease at any time it would reduce or cease if you had not been disabled." In May 2012, Mr. Miller was diagnosed with brain cancer and soon became unable to perform the duties of his job. Mrs. Miller's affidavit states that when the Millers discovered that Mr. Miller's condition was terminal, they "sought to obtain information about [Mr. Miller's] life insurance benefit and all other benefits that might be available." The Millers did not have a copy of the policy or the summary of benefits at that time. On March 28, 2013, the Millers and Ed Bluemly, Mrs. Miller's brother-in-law, met with Sandy Roberts, the assistant benefit administrator and the pension coordinator for the Jefferson County Personnel Board, and Alice Crutchfield, a personnel technician for the Jefferson County Personnel Board, to learn about the benefits available to Mr. Miller. In her affidavit, Mrs. Miller states the following concerning that meeting: 4 1151084 "At that meeting, we were told that if [Mr. Miller] could not return to work, he would have to 'retire.' We wanted to know how we could keep his group life insurance. We were told by [Roberts and Crutchfield], without any hesitation, that the only option we had was to convert the life insurance to retiree life insurance. That meant that the life insurance level of coverage at $151,000.00 would drop to $50,000.00. We did not like this, but [Roberts and Crutchfield] were very clear and firm in their statements. They provided forms and indicated to me and [Mr. Miller] that [Mr. Miller] would have to sign the forms to convert the policy. "[Mr. Miller] and I went over the forms and he signed them before leaving the meeting. ... However, [Roberts and Crutchfield] spoke very clearly as if they knew what they were doing and as if they were the authority on the subject for the City. "I still wanted a copy of the policy or certificate, as did my brother-in-law, Ed Bluemly, and we both requested a copy of the policy. [Roberts and Crutchfield] told us there was not a copy of the policy or certificate. They could not obtain one, nor could they tell us how to obtain one."1 Also concerning the March 28, 2013, meeting, Roberts's affidavit states that she "did hear ... Crutchfield referencing UNUM Life Insurance products and specifically telling [the Millers] that their life insurance policy was with Unum Insurance." Roberts's affidavit also states that she did not recall "any persons requesting a copy of an 1As discussed below, the circuit court struck some of the quoted portions of Mrs. Miller's affidavit. 5 1151084 insurance plan from me during the meeting on or about March 28, 2013, nor do I recall any other person requesting an insurance plan from me on behalf of the Millers at any time after this meeting." Nothing in Roberts's affidavit disputed Mrs. Miller's and Bluemly's assertion that Roberts and Crutchfield told the Millers that they had to convert Mr. Miller's life insurance from active-employee to retiree life insurance. Crutchfield's affidavit states that, at the March 28, 2013, meeting, Crutchfield "referenced Unum Life Insurance beneficiary forms" and that no one "request[ed] a copy of a life insurance policy." Crutchfield's affidavit further states that, after the March 28, 2013, meeting, she "never had any discussions with [the Millers] concerning life insurance benefits and/or life insurance policies" and that the Millers never requested "any life insurance policy and/or certificate of insurance." Nothing in Crutchfield's affidavit disputed Mrs. Miller's assertion that Roberts and Crutchfield told the Millers that they had to convert Mr. Miller's life insurance from active-employee to retiree life insurance. After the meeting, the Millers continued to try to obtain a copy of the policy. To this end, the Millers asked several 6 1151084 of Mr. Miller's coworkers if they had a copy of the policy and, if so, if they would share it with the Millers. On April 11, 2014, a coworker of Mr. Miller's gave Mrs. Miller a copy of "a supplemental group life policy" from Unum under which Mr. Miller's coworker had coverage; it is undisputed that that supplemental group life policy did not apply to Mr. Miller. On May 5, 2014, Mr. Miller died. In November 2014, Mrs. Miller's attorney sent the City a letter requesting a copy of the policy. On November 24, 2014, Peggy Polk, director of the City's office of personnel, sent Mrs. Miller's attorney a letter and a copy of the summary of the benefits of the policy. The subject line of Polk's letter to Mrs. Miller's attorney stated: "Life Insurance Errors as to Robert [M]iller (Deceased)." Mrs. Miller's affidavit states that the letter from Polk was not received until "early December 2014." Mrs. Miller's affidavit states that, upon reviewing the summary of benefits, the Millers learned that the policy included "a disability waiver of premium benefit." Mrs. Miller's affidavit further states: "It appears that [Mr. Miller] and I were misinformed by Sandy Roberts and Alice Crutchfield as to the existence of the disability waiver of premium benefit. This benefit would have saved us 7 1151084 from having to pay for 'retiree life insurance' and [Mr. Miller] should have instead been able to keep the full policy benefit of $151,000.00, at no cost to us, rather than just $50,000.00." The City defendants do not dispute the accuracy of this portion of Mrs. Miller's affidavit. On January 16, 2015, Mrs. Miller filed a claim with the City alleging that Roberts and Crutchfield had been negligent in failing to inform the Millers "as to the existence of the disability waiver of premium benefit" and requesting $101,000. In a letter to the City accompanying Mrs. Miller's claim, Mrs. Miller's attorney stated that Mrs. Miller "does not contend she will be damaged unless Unum refuses to undo or correct the issues involved in this matter." The letter also stated: "We will be sending a copy of this also to Unum to request and demand that they pay the full life insurance proceeds which should have been paid, but for the incorrect information being provided [by Roberts and Crutchfield]. In any event, it appears to be prudent to provide this claim notwithstanding. We will be working with Unum to accomplish this and if this is not successful we will let the City of Birmingham know." Unum denied Mrs. Miller's request; Unum was under no obligation to honor Mrs. Miller's request because Mr. Miller had voluntarily converted his life insurance to "retiree life insurance" and Unum acted accordingly. 8 1151084 On May 4, 2015, Mrs. Miller sued the City defendants, alleging one claim of misrepresentation. The complaint alleged that the City defendants "made false representations as to material facts as to the amount of life insurance Mr. Miller was allowed to keep in place" and that "these representations were reckless, wanton, grossly negligent, and/or negligent." The complaint further alleged that Mrs. Miller "reasonably relied on these representations and had no evidence that the representations were false until after receiving a copy of the [policy] provided by [Polk] in December of 2014." Mrs. Miller requested, among other things, damages in the amount of $101,000 "in lost life insurance proceeds." On January 20, 2016, the City defendants filed a motion for a summary judgment. The City defendants argued that they were entitled to a summary judgment because (1) Mrs. Miller's claim was barred both by the statute of limitations set forth in § 6-2-38, Ala. Code 1975, and by § 11-47-23, Ala. Code 1975, the notice-of-claim statute for municipalities, (2) the City is immune from Mrs. Miller's misrepresentation claim under § 11-47-190, Ala. Code 1975, (3) Mrs. Miller failed to 9 1151084 add Unum, an allegedly indispensable party, which, the City defendants argued, deprived the circuit court of subject- matter jurisdiction, and (4) Unum is jointly liable with the City defendants and, thus, required to be joined as a party under § 11-47-191, Ala. Code 1975. At some point thereafter, Mrs. Miller filed notices of depositions of Roberts and Crutchfield. On January 29, 2016, the City defendants filed a "motion to quash" Mrs. Miller's notices of depositions of Roberts and Crutchfield. The sole basis for the City defendants' motion to quash the depositions was that Unum was an indispensable party under Rule 19. The City defendants also argued that Unum's absence from the action deprived the circuit court of subject-matter jurisdiction over Mrs. Miller's claim against them. Mrs. Miller filed a response to the City defendants' motion to quash. On February 27, 2016, Mrs. Miller filed a "motion for partial summary judgment on the issue of liability." Mrs. Miller argued that she had presented substantial evidence to support each element of her misrepresentation claim and that there was no genuine issue of material fact. In support of 10 1151084 her summary-judgment motion, Mrs. Miller presented, among other things, a copy of the summary of benefits and several other documents concerning the policy, the affidavit of Bluemly, and Mrs. Miller's own affidavit. On March 4, 2016, the City defendants filed a motion to strike certain exhibits to Mrs. Miller's summary-judgment motion and references to those exhibits in the motion. Specifically, the City defendants argued that Mrs. Miller's summary-judgment motion contained facts that were not supported by specific references to Mrs. Miller's exhibits. The City defendants requested that the circuit court strike the following portions of Mrs. Miller's brief in support of her summary-judgment motion and the following evidence she submitted in support of her summary-judgment motion: "(1) strike all unsupported allegations of [Mrs. Miller's] Brief or instruct [Mrs. Miller] to resubmit the brief in compliance with Rule 56(c)(1)[, Ala. R. Civ. P.]; (2) exclude all UNUM insurance documents constituting hearsay ([Mrs. Miller's] Exhibit D & F)[2]; (3) exclude the Bluemly Affidavit ([Mrs. Miller's] Exhibit C) as 2In the heading pertaining to this particular argument, the City defendants generally stated that the circuit court "must exclude all Unum ... documents." However, the City defendants presented argument pertaining only to "Exhibit D & F." Accordingly, the City defendants limited their motion to strike to those two exhibits. 11 1151084 impermissible hearsay; and (4) exclude all portions of [Mrs.] Miller['s] Affidavit ([Mrs. Miller's] Exhibit B) that are not based on personal knowledge or admissible evidence."3 The City defendants identified the following specific portions of Mrs. Miller's affidavit they sought to strike: "I still wanted a copy of the policy or certificate, as did my brother-in-law, Ed Bluemly, and we both requested a copy of the policy. ... ".... "... Finally, less than 30 days before Jeffrey died, a fellow battalion friend of Jeffery’s named Buddy logged into his computer and found a supplemental group life policy .... [H]e claimed he obtained a copy off his computer at work and then e-mailed it to his wife and then his wife e-mailed it to me. I am not saying that I was there when his friend obtained a copy from the computer at work, nor was I there when his wife, Sabrina, e-mailed the document to me. ... "I do not know too much about policies, but my brother-in-law, Ed Bluemly, does and I let him look it over. He assured me that his was not the correct policy, as it did not have the correct terms and information. ..." On March 7, 2016, Mrs. Miller responded to the City defendants' summary-judgment motion. Mrs. Miller argued that she had asserted her claim within the applicable statutory 3The City defendants did not move to strike the exhibit Mrs. Miller identified as "Exhibit E." This exhibit is the copy of the summary of the benefits of the policy sent to Mrs. Miller by Polk. 12 1151084 limitations period and that the City defendants were barred by the doctrine of equitable estoppel from asserting that § 11- 47-23 barred her misrepresentation claim. Mrs. Miller also argued that Unum is not an indispensable party under Rule 19, Ala. R. Civ. P. Mrs. Miller attached to her response most of the same exhibits that she had submitted in support of her motion for a partial summary judgment. Further, Mrs. Miller presented a Rule 56(f), Ala. R. Civ. P., affidavit of her trial counsel explaining Mrs. Miller's need for the City to respond to the entirety of her interrogatories and for the need to depose Roberts and Crutchfield. On March 8, 2016, the City defendants filed a reply to Mrs. Miller's response to their motion for a summary judgment. On the same day, the City defendants also filed a motion to strike portions of Mrs. Miller's response, for the same reasons they had moved to strike portions of her summary- judgment motion. The City defendants requested that the same portions of Mrs. Miller's affidavit be struck that they had requested be stricken in their March 4, 2016, motion to strike. 13 1151084 On March 31, 2016, Mrs. Miller filed the affidavit of Jamie L. Langlois, an implementation consultant for Unum Group, Unum's parent company, in support of her summary- judgment motion. On April 5, 2016, the City defendants filed a motion to strike Langlois's affidavit. The City defendants argued that Langlois's affidavit was inadmissible hearsay and was barred by the "best evidence rule." On April 21, 2016, the City defendants filed a response to Mrs. Miller's summary-judgment motion. The City defendants argued that Mrs. Miller's summary-judgment motion should be denied for the following reasons: "(1) [G]enuine issues of material fact exist[]; (2) [Mrs. Miller's] claim[] against [the City defendants is] barred by the statute of limitations; (3) the City is immune to all claims arising from alleged intentional and/or wanton conduct of its employees; (4) [Mrs. Miller] failed to name all indispensable/jointly liable parties to allow the court to enter any final judgment in this matter; and (5) Defendants, Crutchfield and Roberts, have qualified immunity to the claim[] [as to which Mrs. Miller] seeks summary judgment." On April 22, 2016, Mrs. Miller filed a reply, arguing that further discovery was necessary to develop the record. On June 6, 2016, the circuit court granted the City defendants' summary-judgment motion and denied Mrs. Miller's 14 1151084 summary-judgment motion.4 Contemporaneously, the circuit court granted the City defendants' "motion to strike." The circuit court granted a singular motion to strike; it did not specify which one of the City defendants' three pending motions to strike it was granting. On July 8, 2016, Mrs. Miller appealed. II. Standard of Review Our standard of review of a summary judgment is well settled: "'The standard of review applicable to a summary judgment is the same as the standard for granting the motion....' McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992). "'A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact 4The parties agree on appeal that Mrs. Miller withdrew her summary-judgment motion. See Mrs. Miller's brief, at p. 6 n. 3, and the City defendants' brief, at p. 34. The only thing that the parties direct this Court's attention to in support of this assertion is a statement in Mrs. Miller's reply to the City defendants' response to Mrs. Miller's summary-judgment motion that she had "agreed to withdraw her motion for [a] summary judgment without prejudice." However, nothing in the record indicates that Mrs. Miller's summary-judgment motion was ever actually withdrawn. Mrs. Miller's summary-judgment motion remained pending when the circuit court ruled upon it. 15 1151084 and that it is entitled to a judgment as a matter of law. In determining whether the movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving party must present "substantial evidence" creating a genuine issue of material fact -- "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala. Code 1975, § 12–21–12; West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).' "Capital Alliance Ins. Co. v. Thorough–Clean, Inc., 639 So. 2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So. 2d 337, 342 (Ala. 2004)." Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935 (Ala. 2006). In arriving at its decision on the summary-judgment motions, the circuit court also ruled on several discovery matters. "Our standard of review in matters involving discovery is limited to determining whether the trial court exceeded its discretion in making its discovery decision. Rankin v. First Nat'l Bank of Alabama, 437 So. 2d 503 (Ala. 1983). An appellate court will not reverse the trial court's decision regarding a discovery matter unless there is a clear showing that the trial court exceeded its 16 1151084 discretion. Ex parte McTier, 414 So. 2d 460 (Ala. 1982)." Wheeler v. George, 39 So. 3d 1061, 1078 (Ala. 2009). III. Discussion Initially, we note that Mrs. Miller argues that the circuit court exceeded its discretion in entering several discovery orders. We address some of her arguments insofar as they relate to her arguments that the circuit court erred in granting the City defendants' summary-judgment motion. However, our conclusion that the circuit court erred in certain respects in granting the City defendants' summary- judgment motion pretermits our discussion of the remainder of Mrs. Miller's discovery arguments. As set forth above, the City defendants asserted various arguments in support of their summary-judgment motion. Specifically, the City defendants argued below that they were entitled to a summary judgment based on the following grounds: (1) Mrs. Miller failed to join Unum as an allegedly indispensable party; (2) Mrs. Miller failed to join Unum as a jointly liable party under § 11-47-191; (3) Mrs. Miller's claim is barred under both § 11-47-23 and § 6-2-38; and (4) the City is immune from liability under § 11-47-190. The 17 1151084 circuit court entered a general order granting the City defendants' summary-judgment motion; it did not provide any explanation. Mrs. Miller argues that none of the arguments asserted by the City defendants in support of their summary- judgment motion provides a valid basis for the circuit court's judgment. A. Are the City defendants entitled to a summary judgment because Mrs. Miller failed to join Unum as an indispensable party? Mrs. Miller argues that the City defendants' argument that they are entitled to a summary judgment based on her failure to add Unum as an indispensable party does not provide a basis for the summary judgment in the City defendants' favor. Rule 19, Ala. R. Civ. P., requires that the plaintiff in an action join any indispensable parties if feasible: "(a) Persons to Be Joined If Feasible. A person who is subject to jurisdiction of the court shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or 18 1151084 otherwise inconsistent obligations by reason of the claimed interest. If the person has not been so joined, the court shall order that the person be made a party. If the person should join as a plaintiff but refuses to do so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and joinder of that party would render the venue of the action improper, that party shall be dismissed from the action. "(b) Determination by Court Whenever Joinder Not Feasible. If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder." This Court discussed the application of Rule 19 in Liberty National Life Insurance Co. v. University of Alabama Health Services Foundation, P.C., 881 So. 2d 1013 (Ala. 2003): "We have discussed the application of Rule 19 as follows: "'"Rule 19, Ala. R. Civ. P., provides for joinder of persons needed for just adjudication. Its purposes include the 19 1151084 promotion of judicial efficiency and the final determination of litigation by including all parties directly interested in the controversy. Hooper v. Huey, 293 Ala. 63, 69, 300 So. 2d 100, 105 (1974), overruled on other grounds, Bardin v. Jones, 371 So. 2d 23 (Ala. 1979)."' "Dawkins v. Walker, 794 So. 2d 333, 336 (Ala. 2001) (quoting Byrd Cos. v. Smith, 591 So. 2d 844, 846 (Ala. 1991)). "'Rule 19, [Ala.] R. Civ. P., provides a two-step process for the trial court to follow in determining whether a party is necessary or indispensable. Ross v. Luton, 456 So. 2d 249, 256 (Ala. 1984), citing Note, Rule 19 in Alabama, 33 Ala. L. Rev. 439, 446 (1982). First, the court must determine whether the absentee is one who should be joined if feasible under subdivision (a). If the court determines that the absentee should be joined but cannot be made a party, the provisions of (b) are used to determine whether an action can proceed in the absence of such a person. Loving v. Wilson, 494 So. 2d 68 (Ala. 1986); Ross v. Luton, 456 So. 2d 249 (Ala. 1984). It is the plaintiff's duty under this rule to join as a party anyone required to be joined. J.C. Jacobs Banking Co. v. Campbell, 406 So. 2d 834 (Ala. 1981). "'"...." "'We note that the interest to be protected must be a legally protected interest, not just a financial interest. Ross, supra; see Realty Growth Investors v. Commercial & Indus. Bank, 370 So. 2d 297 (Ala. Civ. App. 1979), cert. denied, 370 20 1151084 So. 2d 306 (Ala. 1979). There is no prescribed formula for determining whether a party is a necessary one or an indispensable one. This question is to be decided in the context of each particular case. J.R. McClenney & Son v. Reimer, 435 So. 2d 50 (Ala. 1983), citing Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S. Ct. 733, 19 L. Ed. 2d 936 (1968).' "Holland v. City of Alabaster, 566 So. 2d 224, 226-27 (Ala. 1990) (emphasis omitted). 'The absence of a necessary and indispensable party necessitates the dismissal of the cause without prejudice or a reversal with directions to allow the cause to stand over for amendment.' J.C. Jacobs Banking Co. v. Campbell, 406 So. 2d 834, 850-51 (Ala. 1981). See also Stamps v. Jefferson County Bd. of Educ., 642 So. 2d 941, 945 (Ala. 1994) (Almon, J., concurring in part and dissenting in part)." 881 So. 2d at 1021-22. Initially, we note that it does not appear that the circuit court granted the City defendants' summary-judgment motion on this ground. In granting the City defendants' summary-judgment motion, the circuit court specifically stated: "This case i[s] dismissed with prejudice." (Emphasis added.) However, as immediately set forth above, this Court has stated that "'[t]he absence of a necessary and indispensable party necessitates the dismissal of the cause without prejudice or a reversal with directions to allow the 21 1151084 cause to stand over for amendment.' J.C. Jacobs Banking Co. v. Campbell, 406 So. 2d 834, 850-51 (Ala. 1981)." Liberty National, 881 So. 2d at 1022 (emphasis added). Therefore, because the circuit court "dismissed" Mrs. Miller's action with prejudice, it appears that the circuit court did not find this argument of the City defendants convincing and entered the summary judgment based on an argument going to the actual merits of the case. Regardless, out of an abundance of caution, we will address Mrs. Miller's argument that Unum is not an indispensable party. Further, we note that the City defendants argued that Mrs. Miller's failure to join Unum as an indispensable party deprived the circuit court of subject-matter jurisdiction. The City defendants are incorrect. In Campbell v. Taylor, 159 So. 3d 4 (Ala. 2014), this Court definitively stated that the failure to join an indispensable party does not affect the subject-matter jurisdiction of a court: "This Court has long referred to a failure to join a 'necessary' or 'indispensable' party as a 'jurisdictional defect.' See Gilbert v. Nicholson, 845 So. 2d 785, 790 (Ala. 2002) ('The absence of an indispensable party is a jurisdictional defect that renders the proceeding void.' (citing Davis v. Burnette, 341 So. 2d 118 (Ala. 1976))); Rogers v. Smith, 287 Ala. 118, 123, 248 So. 2d 713, 717 (1971) 22 1151084 ('[T]he absence of necessary or indispensable parties ... is a jurisdictional defect....'). See also J.C. Jacobs Banking Co. v. Campbell, 406 So. 2d 834 (Ala. 1981); Johnston v. White–Spunner, 342 So. 2d 754, 759 (Ala. 1977); and Burnett v. Munoz, 853 So. 2d 963 (Ala. Civ. App. 2002). But see Holland v. City of Alabaster, 566 So. 2d 224 (Ala. 1990) (addressing the issue of the absence of an indispensable party as one of error on the part of the trial court). This is so, even after the adoption in 1973 of Rule 19, Ala. R. Civ. P., which addresses the 'Joinder of Persons Needed for Just Adjudication.' Indeed, Rule 19 wholly fails to speak in terms of jurisdiction, and nothing in that rule indicates that if the court fails to address the necessity or indispensability of a particular party or does address, and errs with regard to the resolution of, Rule 19 concerns, any ensuing judgment is void. See Adams v. Boyles, 610 So. 2d 1156, 1157 n. 1 (Ala. 1992) (reiterating 'that failure to join even an indispensable party does not automatically compel dismissal')." 159 So. 3d at 9. See also Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1611 (3d ed. 2001)("Because an objection to the failure to join a person who should be regarded as indispensable under Rule 19(b) may be raised as late as on an appeal from a final judgment or by the court on its own motion, the impression is created that a failure to join is jurisdictional, since ordinarily only jurisdictional defects are treated in this fashion. Thus, it is not surprising that cases can be found that speak of nonjoinder as ousting the court of jurisdiction. 23 1151084 Since the indispensable-party doctrine is equitable both in its origin and nature, however, scholarly commentary as well as the vast majority of courts reject this 'jurisdictional' characterization." (footnotes omitted)). Under Campbell, it is clear that the absence of an indispensable party does not deprive the circuit court of subject-matter jurisdiction. "[A] circuit court's subject-matter jurisdiction is derived from the Alabama Constitution and the Alabama Code." Campbell, 159 So. 3d at 10. Here, the circuit court had subject-matter jurisdiction over Mrs. Miller's tort claim against the City defendants pursuant to § 12-11-30(a), Ala. Code 1975, which states, in pertinent part: "The circuit court shall have exclusive original jurisdiction of all civil actions in which the matter in controversy exceeds ten thousand dollars ($10,000), exclusive of interest and costs ...." Even assuming Unum is an indispensable party, its inclusion in this action is not what would provide the circuit court with subject-matter jurisdiction to hear the case. Campbell, 159 So. 3d at 10. 24 1151084 Rather, the circuit court already had jurisdiction over the case pursuant to § 12-11-30.5 We now address Mrs. Miller's argument that Unum is not an indispensable party. Below, the City defendants argued that Unum is an indispensable party to this action because Mrs. Miller is seeking "lost life insurance proceeds" as damages. The City defendants argued that, under the policy, Unum is the party obligated to pay Mrs. Miller any life-insurance benefits to which she is entitled. The City defendants argued that Mrs. Miller's claim is actually one alleging breach of contract, not misrepresentation, and that, as a party to the policy, Unum is an indispensable party. Mrs. Miller argues on appeal that the City defendants have mischaracterized her claim. Mrs. Miller argues that her claim is not one alleging breach of contract against Unum, but one alleging misrepresentation against the City defendants. Mrs. Miller specifically states that Unum has no contractual 5Although not essential to our ruling, we note that the City defendants asserted this same argument as the sole basis for their motion to quash, seeking to prohibit Mrs. Miller from deposing Roberts and Crutchfield. Because the failure to join an indispensable party does not deprive a circuit court of subject-matter jurisdiction over a case, the circuit court's granting of the City defendants's motion to quash was in error. 25 1151084 obligation to pay her $151,000 in life-insurance benefits. This is so, Mrs. Miller argues, because the Millers acted on the misrepresentation made by Roberts and Crutchfield and converted Mr. Miller's insurance to retiree life insurance, thereby diminishing the amount of life-insurance benefit to which Mrs. Miller was contractually entitled from $151,000 to $50,000. Mrs. Miller is not alleging breach of contract. In fact, Mrs. Miller acknowledges that Unum paid her exactly what was required under the policy. See Mrs. Miller's brief, at p. 19. Instead, Mrs. Miller's claim alleges misrepresentation against the City defendants. Mrs. Miller alleges that Roberts and Crutchfield misrepresented to the Millers the terms of the policy, which the Millers did not have a copy of and which the City defendants did not aid the Millers in obtaining a copy of even though requested to do so by Mrs. Miller. The specific misrepresentation alleged is that Roberts and Crutchfield informed the Millers that their only option was to convert Mr. Miller's life insurance from active-employee to retiree life insurance, thereby decreasing the amount of life insurance Mrs. Miller would be entitled to upon Mr. Miller's death from 26 1151084 $151,000 to $50,000. Neither Roberts nor Crutchfield informed the Millers of the "disability waiver of premium benefit" to which Mr. Miller was allegedly entitled under the policy. That benefit would have allowed Mr. Miller to not convert his life insurance to retiree life insurance and keep his active- employee life insurance, thereby entitling Mrs. Miller to the full $151,000 upon Mr. Miller's death. Mrs. Miller alleges that the Millers acted on the misrepresentation made by Roberts and Crutchfield to Mrs. Miller's detriment. We find Mrs. Miller's argument persuasive. Mrs. Miller is not asserting a breach-of-contract claim against Unum. Mrs. Miller is clearly asserting a misrepresentation claim against the City defendants. It is not alleged, nor is there any evidence indicating, that Unum had anything to do with the misrepresentation allegedly made by Roberts and Crutchfield. Accordingly, Unum is not an indispensable party to this action. Therefore, to the extent, if any, the circuit court based its summary judgment in favor of the City defendants on this argument of the City defendants, it erred. B. Is Unum required to be joined as a party under § 11-47-191? 27 1151084 The City defendants argued below that Mrs. Miller was required to join Unum as a party under § 11-47-191, which states, in pertinent part: "(a) The injured party, if he institutes a civil action against the municipality for damages suffered by him, shall also join such other person or persons or corporation so liable as defendant or defendants of the civil action, and no judgment shall be entered against the city or town unless judgment is entered against such other person or corporation so liable for such injury ... and if a civil action be brought against the city or town alone and it is made to appear that any person or corporation ought to be joined as a defendant in the action according to the provisions in Section 11-47-190, the action shall be dismissed ...." The City defendants correctly note that Mrs. Miller has not made any argument directly related to the application of § 11- 47-191. However, although Mrs. Miller has not specifically discussed the application of § 11-47-191, Mrs. Miller has thoroughly argued and demonstrated that Unum has no potential liability based on Mrs. Miller's misrepresentation claim. As discussed in the previous section, Mrs. Miller has alleged that Roberts and Crutchfield made a misrepresentation to the Millers that caused them to act to Mrs. Miller's detriment. Mrs. Miller has alleged that this is the sole cause of her 28 1151084 claimed damages. Mrs. Miller has made no allegation that Unum breached the policy or acted in a tortious manner. Mrs. Miller did request that Unum treat Mr. Miller's life-insurance policy as that of an active employee rather than a retired employee. Unum refused Mrs. Miller's request; Mrs. Miller acknowledges that Unum was under no contractual obligation to honor her request. There is no evidence indicating that Unum is liable for Mrs. Miller's damages, if any. Accordingly, although Mrs. Miller did not cite § 11-47-191 in her original brief before this Court, she has demonstrated that Unum has no potential liability based on her sole claim of misrepresentation. Therefore, the circuit court erred insofar as it based its summary judgment in favor of the City defendants on this argument. C. Is Mrs. Miller's misrepresentation claim barred under § 11- 47-23 or § 6-2-38? Mrs. Miller addresses the City defendants' argument asserted below that her misrepresentation claim is barred by § 11-47-23, which states: "All claims against the municipality ... shall be presented to the clerk for payment within two years from the accrual of said claim or shall be barred. 29 1151084 Claims for damages growing out of torts shall be presented within six months from the accrual thereof or shall be barred." (Emphasis added.) Mrs. Miller also addresses the City defendants' argument that her claim was barred by the statute of limitations in § 6-2-38. The determinative issue is when Mrs. Miller's misrepresentation claim accrued. Below, the City defendants argued that Mrs. Miller's claim against them accrued on March 28, 2013, the day Roberts and Crutchfield made the alleged misrepresentation complained of by Mrs. Miller. The City defendants argued that, under § 11-47-23, Mrs. Miller had to file her claim with the City within six months of March 28, 2013. Mrs. Miller did not do so; she filed her claim with the City on January 16, 2015, which is more than six months from March 28, 2013. Accordingly, the City defendants argued that Mrs. Miller's action against the City defendants was barred by § 11-47-23. The City defendants also argued below that, pursuant to § 6-2- 38, Mrs. Miller was required to file her action against them within two years of March 28, 2013. Mrs. Miller did not file her action against the City defendants until May 4, 2015, more than two years from March 28, 2013. Accordingly, the City 30 1151084 defendants argued that Mrs. Miller's action was barred under § 6-2-38. Mrs. Miller argues on appeal that her misrepresentation claim did not accrue on March 28, 2013, the day Roberts and Crutchfield made the alleged misrepresentation that is the basis of Mrs. Miller's claim against the City defendants. Instead, Mrs. Miller argues that her misrepresentation claim did not accrue until she discovered that Roberts and Crutchfield actually had made a misrepresentation. Mrs. Miller argues that she did not discover, and could not have discovered, the misrepresentation until she received a copy of the summary of the benefits of the policy from the City in December 2014. Mrs. Miller is correct. In City of Mobile v. Cooks, 915 So. 2d 29, 33 (Ala. 2005), this Court set forth the following concerning when a cause of action accrues under § 11-47-23: "A cause of action accrues under § 11–47–23 when an action can be maintained. Couch v. City of Sheffield, 708 So. 2d 144 (Ala. 1998); Hill v. City of Huntsville, 590 So. 2d 876 (Ala. 1991). This Court has stated the following with regard to when a cause of action accrues: "'"The very basic and long settled rule of construction of our courts is that a statute of limitations begins to run in 31 1151084 favor of the party liable from the time the cause of action 'accrues.' The cause of action 'accrues' as soon as the party in whose favor it arises is entitled to maintain an action thereon."'" (Quoting Ex parte Floyd, 796 So. 2d 303, 308 (Ala. 2001), quoting in turn Garrett v. Raytheon Co., 368 So. 2d 516, 518–19 (Ala. 1979).) In Bryant Bank v. Talmage Kirkland & Co., 155 So. 3d 231, 235-37 (Ala. 2014), a case relied upon by Mrs. Miller, this Court set forth the following concerning when a misrepresentation claim accrues: "A negligent misrepresentation constitutes legal fraud. See § 6–5–101, Ala. Code 1975 ('Misrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party, or if made by mistake and innocently and acted on by the opposite party, constitute legal fraud.'). Therefore, negligent-misrepresentation claims are subject to a two-year statute of limitations, which begins running when the plaintiff discovers, or should have discovered, the fact constituting the fraud. See § 6–2–38(l) ('All actions for any injury to the person or rights of another not arising from contract and not specifically enumerated in this section must be brought within two years.'); § 6–2–3, Ala. Code 1975 ('In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his 32 1151084 action.').[6] In Auto–Owners Insurance Co. v. Abston, 822 So. 2d 1187, 1194–95 (Ala. 2001), this Court set forth the standard for evaluating when a fraud claim accrues and, therefore, when the statutory limitations period commences: "'.... "'... For [fraud] cases ... § 6–2–3 does not "save" a plaintiff's fraud claim so that the statutory limitations period does not begin to run until that plaintiff has some sort of actual knowledge of fraud. Instead, under Foremost [Insurance Co. v. Parham, 693 So. 2d 409 (Ala. 1997)], the limitations period begins to run when the plaintiff was privy to facts which would "provoke inquiry in the mind of a [person] of reasonable prudence, and which, if followed up, would have led to the discovery of the fraud." Willcutt v. Union Oil Co., 432 So. 2d 1217, 1219 (Ala. 1983) (quoting Johnson v. Shenandoah Life Ins. Co., 291 Ala. 389, 397, 281 So. 2d 636 (1973)); see also Jefferson County Truck Growers Ass'n v. Tanner, 341 So. 2d 485, 488 (Ala. 1977) ("Fraud is deemed to have been discovered when it ought to have been discovered. It is sufficient to begin the running of the statute of limitations that facts were known which would put a reasonable mind on notice that facts to support a claim of fraud might be discovered upon inquiry.").' "(Final emphasis added.) 6In the present case, the City defendants argue that Mrs. Miller's claim is also subject to the six-month statute of limitations for claims against a municipality set forth in § 11-47-23. 33 1151084 "The question of when a person of reasonable prudence would have discovered the alleged fraud is generally a question of fact within the purview of a jury. As this Court stated in Jim Walter Homes, Inc. v. Kendrick, 810 So. 2d 645, 650 (Ala. 2001): "'"When a claim accrues, for statute-of-limitations purposes, is a question of law if the facts are undisputed and the evidence warrants but one conclusion. However, when a disputed issue of fact is raised, the determination of the date of accrual of a cause o f a c t i o n f o r statute-of-limitations purposes is a question of fact to be submitted to and decided by a jury." "'Kindred v. Burlington Northern R.R., 742 So. 2d 155, 157 (Ala. 1999) (citations omitted). "'"A fraud action is subject to a two-year statute of limitations. Ala. Code 1975, § 6–2–38. However, the fraud claim accrues only when the plaintiff discovers the fraud or when the plaintiff, acting as a reasonable person, should have discovered the fraud. Ala. Code 1975, § 6–2–3.... 'The question of when a plaintiff should have discovered fraud should be taken away from the jury and decided as a matter of law only in cases in which the plaintiff actually knew of facts that would have put a reasonable person on notice of fraud.' Hicks v. Globe Life & Accident 34 1151084 Insurance Co., 584 So. 2d 458, 463 (Ala. 1991)(emphasis in original)." "'Liberty Nat'l Life Ins. Co. v. McAllister, 675 So. 2d 1292, 1297 (Ala. 1995)(some citations omitted).'" In the present case, Mrs. Miller discovered the misrepresentation allegedly made by Roberts and Crutchfield when Mrs. Miller obtained a copy of the summary of benefits and discovered that Roberts and Crutchfield had misinformed the Millers about the benefits available to Mr. Miller under the policy. The City defendants have not offered any argument indicating that Mrs. Miller could have discovered the misrepresentation made by Roberts and Crutchfield without knowing what the policy actually provided. Instead, the City defendants argue that Mrs. Miller "should have discovered any alleged misrepresentation on March 28, 2013, when Roberts and Crutchfield gave [the] Miller[s] documents identifying Unum ... as [Mr. Miller's] insurer." The City defendants' brief, at p. 47. It is undisputed that Roberts and Crutchfield did not provide the Millers with a copy of the policy at the March 28, 2013, meeting. Apparently, the City defendants are arguing that Mrs. Miller should have discovered the 35 1151084 misrepresentation on March 28, 2013, because Mrs. Miller should have, immediately following the meeting with Roberts and Crutchfield, contacted Unum to confirm the information Roberts and Crutchfield had given the Millers about the policy. The City defendants have not presented any evidence indicating that the Millers had any reason to doubt the information Roberts and Crutchfield gave the Millers on March 28, 2013. In fact, Roberts's affidavit states: "One of my duties as a Pension Coordinator is to answer questions that employees may have regarding pension benefits. The City of Birmingham has authorized me, in my capacity as a Pension Coordinator, to answer employee questions concerning pension benefits." Similarly, Crutchfield's affidavit states: "One of my duties as a Personnel Technician is to answer questions that employees may have regarding employee life insurance benefits. The City of Birmingham has authorized me, in my capacity as a Personnel Technician, to answer employee questions concerning life insurance benefits." Roberts and Crutchfield had the authority to answer the Millers' questions about the policy. There is evidence indicating that Roberts 36 1151084 and Crutchfield informed the Millers that Unum was the insurer, but there is no evidence indicating that Roberts or Crutchfield instructed the Millers to contact Unum if they had any further questions regarding the benefits to which Mr. Miller was entitled under the policy. Mrs. Miller's affidavit indicates that she did request a copy of the policy at the March 28, 2013, meeting.7 In their affidavits, Roberts and Crutchfield state that no one requested a copy of the policy at the meeting. Viewing the facts in a light most favorable to Mrs. Miller, the nonmovant, we assume that Mrs. Miller did request a copy of the policy on March 28, 2013. Further, the facts indicate that the Millers attempted to obtain a copy of the policy by requesting it from some of Mr. Miller's coworkers. There are no facts, however, 7We note that the City defendants filed a motion to strike this portion of Mrs. Miller's affidavit as hearsay. The City defendants argued below that this portion of Mrs. Miller's affidavit was not based on her personal knowledge. As explained above, it is unclear if the circuit court granted the City defendants' motion to strike. To the extent the circuit court did grant this particular motion to strike filed by the City defendants, it exceeded its discretion in doing so. Clearly, Mrs. Miller has personal knowledge of whether she personally requested a copy of the policy at the March 28, 2013, meeting with Roberts and Crutchfield. We also note that the City defendants do not argue on appeal, as they did below, that this portion of Mrs. Miller's affidavit is hearsay. See the City defendants' brief, at pp. 31-33. 37 1151084 indicating that the Millers ever requested a copy of the policy from Unum directly. The Millers finally obtained a copy of the summary of the benefits of the policy in December 2014, at which time they learned that Roberts and Crutchfield had misrepresented the terms of the policy. "When a claim accrues, for statute-of-limitations purposes, is a question of law if the facts are undisputed and the evidence warrants but one conclusion." Kindred v. Burlington Northern R.R., 742 So. 2d 155, 157 (Ala. 1999) (emphasis added). Further, "[t]he question of when a plaintiff should have discovered fraud should be taken away from the jury and decided as a matter of law only in cases in which the plaintiff actually knew of facts that would have put a reasonable person on notice of fraud." Hicks v. Globe Life & Accident Ins. Co., 584 So. 2d 458, 463 (Ala. 1991). The facts concerning when Mrs. Miller's cause of action accrued are, with the exception of one rather insignificant fact, undisputed. However, we cannot say that these undisputed facts warrant but one conclusion. There are no facts indicating that Mrs. Miller actually knew of Roberts's and Crutchfield's alleged misrepresentation until December 2014. 38 1151084 The City defendants argue, however, that Mrs. Miller should have known of the alleged misrepresentation on March 28, 2013. However, the City defendants have presented no evidence indicating that Unum would have provided Mrs. Miller with a copy of the policy or, even if Unum were to have complied with a request from Mrs. Miller for the policy, when Mrs. Miller would have obtained a copy of the policy. The question to be answered is whether facts existed before December 2014 (when Mrs. Miller actually knew of the alleged misrepresentation made by Roberts and Crutchfield) that would have put a reasonable person on notice of fraud. Although the facts are not disputed, the facts do not warrant only one conclusion. This is a question for the jury to decide. Accordingly, the City defendants' argument that Mrs. Miller's misrepresentation claim is barred under § 11-47-23 and/or § 6-2-38 does not present a valid basis for the summary judgment in favor of the City defendants. The summary judgment is in error to the extent it is based upon this ground. D. Is the City entitled to immunity under § 11-47-190? 39 1151084 Lastly, Mrs. Miller argues that the City is not entitled to immunity under § 11-47-190 from any liability arising from her claim of misrepresentation. Mrs. Miller argues that her misrepresentation claim is "beyond the scope of immunity under Ala. Code [1975,] § 11-47-190." Mrs. Miller's brief, at p. 50. Section 11-47-190 states, in pertinent part: "No city or town shall be liable for damages for injury done to or wrong suffered by any person or corporation, unless such injury or wrong was done or suffered through the neglect, carelessness, or unskillfulness of some agent, officer, or employee of the municipality engaged in work therefor and while acting in the line of his or her duty ...." In interpreting § 11-47-190, this Court has stated: "Section 11–47–190, Ala. 1975, provides that a municipality is immune from tort liability 'unless such injury or wrong was done or suffered through the neglect, carelessness or unskillfulness of some agent, officer or employee of the municipality engaged in work therefor and while acting in the line of his or her duty.' This statute limits a municipality's liability for the acts of its agents to those acts that are negligent, careless, or unskillful. Section 11–47–190 provides a municipality immunity from liability for the acts of its agents that are carried out in bad faith or with malice. Borders [v. City of Huntsville], 875 So. 2d [1168] at 1183 [(Ala. 2003)] (quoting Ex parte City of Gadsden, 718 So. 2d 716, 721 (Ala. 1998))." 40 1151084 Ex parte City of Tuskegee, 932 So. 2d 895, 910 (Ala. 2005). See also Cremeens v. City of Montgomery, 779 So. 2d 1190, 1201 (Ala. 2000)("A municipality cannot be held liable for the intentional torts of its employees. See Ala. Code 1975, § 11–47–190."); Town of Loxley v. Coleman, 720 So. 2d 907, 909 (Ala. 1998) ("This Court has construed § 11–47–190 to exclude liability for wanton misconduct."). Mrs. Miller alleged in her complaint that the statements made by Roberts and Crutchfield "were reckless, wanton, grossly negligent, and/or negligent." As part of her misrepresentation claim, Mrs. Miller alleged that the City defendants were wanton in their alleged misrepresentation to the Millers. In Hilliard v. City of Huntsville, 585 So. 2d 889, 892 (Ala. 1991), this Court stated: "Section 11–47–190 limits the liability of municipalities to injuries suffered through 'neglect, carelessness or unskillfulness.' Neighbors v. City of Birmingham, 384 So. 2d 113 (Ala. 1980). To construe this statute to include an action for wanton conduct would expand the language of the statute beyond its plain meaning." (Emphasis added.) Section 11-47-190 limits the City's liability for claims arising from wanton misconduct. 41 1151084 Therefore, the circuit court's summary judgment in favor of the City was not in error insofar as it was based on the City defendants' argument that the City is immune from liability for Mrs. Miller's claim that the City defendants were wanton in their alleged misrepresentation to the Millers. This does not end our analysis, however, because Mrs. Miller also alleged in her complaint that the City defendants were negligent and reckless in their alleged misrepresentation to the Millers. Other than § 11-47-190, Mrs. Miller does not cite any authority in her brief to support her argument. It is evident under the plain language of § 11-47-190 that the City may be held liable for damages arising out of the negligence of Roberts and Crutchfield.8 Therefore, we reverse the summary judgment insofar as it held that the City could not be held liable for damages arising out of Mrs. Miller's claim that Roberts and Crutchfield made a negligent misrepresentation to the Millers. 8We note that Mrs. Miller also alleged that the City defendants were "grossly negligent." In Town of Loxley v. Coleman, 720 So. 2d 907, 909 (Ala. 1998), this Court stated that "[t]he word 'gross,' when used in connection with the word 'negligence,' implies nothing more than simple negligence. Stringer v. Alabama Midland R.R., 99 Ala. 397, 13 So. 75 (1893)." 42 1151084 However, Mrs. Miller has not cited any authority indicating that a municipality is not immune from liability arising from the reckless conduct of its agents. In Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9 (Ala. 2007), this Court stated: "Rule 28(a)(10), Ala. R. App. P., requires that arguments in an appellant's brief contain 'citations to the cases, statutes, other authorities, and parts of the record relied on.' Further, 'it is well settled that a failure to comply with the requirements of Rule 28(a)(10) requiring citation of authority in support of the arguments presented provides this Court with a basis for disregarding those arguments.' State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 822 (Ala. 2005)(citing Ex parte Showers, 812 So. 2d 277, 281 (Ala. 2001)). This is so, because '"it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."' Butler v. Town of Argo, 871 So. 2d 1, 20 (Ala. 2003)(quoting Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994))." Therefore, to the extent Mrs. Miller is arguing that the circuit court erred in determining that the City is immune from any liability arising out of her allegation that Roberts and Crutchfield were reckless in their alleged misrepresentation to the Millers, we decline to address this issue. 43 1151084 In summary, to the extent the circuit court based its summary judgment in favor of the City defendants on the City defendants' argument that the City is entitled to immunity under § 11-47-190, we affirm the summary judgment as to Mrs. Miller's claim that Roberts and Crutchfield were wanton and reckless in their alleged misrepresentation to the Millers, and we reverse the summary judgment as to Mrs. Miller's claim that Roberts and Crutchfield were negligent in their alleged misrepresentation to the Millers. IV. Conclusion Based on the foregoing, we affirm the circuit court's summary judgment in favor of the City insofar as the circuit court based its summary judgment in favor of the City on the City defendants' argument that the City is entitled to immunity under § 11-47-190 from Mrs. Miller's claim alleging wanton and reckless misrepresentation. However, we reverse the circuit court's summary judgment in favor of the City defendants in all other respects. We remand this cause to the circuit court for further proceedings consistent with this opinion. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. Stuart, Main, and Wise, JJ., concur. Shaw, J., concurs in the result. 44

April 21, 2017

8163200b-2881-4dae-a66f-2e23b54b59f6

Ex parte Walter B. Price

N/A

1151041

Alabama

Alabama Supreme Court

Rel:04/14/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151041 ____________________ Ex parte Walter B. Price PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: Walter B. Price v. Alabama One Credit Union and William A. Lunsford) (Tuscaloosa Circuit Court, CV-14-901523; Court of Civil Appeals, 2141012) PER CURIAM. This Court granted certiorari review to determine whether the Court of Civil Appeals applied the correct standard when reviewing the Tuscaloosa Circuit Court's order. 1151041 Facts and Procedural History In 2004, Walter B. Price, Alan H. Goode, William A. Lunsford ("Lunsford"), and Cathy Lunsford (Lunsford's wife) formed Riverfront Development, LLC ("Riverfront"), with the goal of developing certain real estate located in Tuscaloosa ("the Riverwalk property"). Price and Goode each owned a one- third interest in the property, and Lunsford owned the remaining third. They took title to the Riverwalk property individually, not through Riverfront. Apparently, Price and Lunsford were involved in other real-estate ventures together. On August 1, 2005, Price loaned Lunsford one million dollars for "Summit," a venture unrelated to the Riverwalk property. In October 2008, Lunsford was in default on the August 1, 2005, loan. Price made several proposals to Lunsford regarding curing Lunsford's default on the loan. On November 19, 2008, Lunsford wrote Price a letter agreeing with Price's proposal that Price would not have to pay his current capital contribution related to the Riverwalk property in exchange for his ameliorating part of Lunsford's debt to Price on the unrelated venture. Lunsford stated in the letter that he had first and second 2 1151041 mortgages on all the property he owned and that, because the construction business had slowed, he had little cash with which to operate his construction business. Lunsford wrote that he thought his only alternative was to sell his interest the Riverwalk property. However, one month earlier, Lunsford had purchased Goode's one-third interest in the Riverwalk property.1 Price states that he was unaware at that time that Lunsford had purchased Goode's interest. Riverfront obtained the building permits and environmental permits to construct condominiums and retail businesses on the Riverwalk property. In early 2009, Lunsford told Price that he was still having financial difficulties. In June 2009, Lunsford told Price that Danny Butler was interested in purchasing the Lunsfords' interests and Price's interests in the Riverwalk property and in Riverfront. On July 9, 2009, Lunsford sent Price an e-mail stating that Alabama One Credit Union ("Alabama One") had approved a loan for the purchase of the Riverwalk property and suggesting a closing on the property on Monday, July 13. On July 10, 1It is unclear from the record whether Goode still has an interest in Riverfront. 3 1151041 2009, Lunsford sent Price another e-mail stating, in pertinent part: "Wally thanks for returning my voice mail. I fully understand how you feel. I have spent a ton [of] time and expense on Summit and have not realized any personal profit from the deal and still have my neck stuck out on loans associated with it, but we had no way of knowing the market would turn on us. The only consolation is there is good equity still there although a far cry from what we expected. It has been very frustrating to have to continue to work to make sales just to keep the banks satisfied. "I understand your frustration with projects that don't turn out like you plan. I have 4 subdivisions that I would just like for someone to take over the loans. I have to put $ in them every month because we have few lot sales and it's not fun. I desperately need the cash that my construction company has in Riverwalk to keep the banks satisfied on other projects and that's the main reason to close as soon as we can. I too want to come back in Riverwalk if I have enough cash left to do so. I'm taking Danny at his word that he will let me back in. ".... "Debbie [Nichols] said she has the closing papers ready for Monday so talk to Danny and he can let her know." On July 10, 2009, Price sent Lunsford an e-mail stating that he would not be able to close on Monday. Price stated that he was talking to "Danny [Butler] about [Price's] buying back in the deal at some percentage but that has not been 4 1151041 resolved. Going to try to see him later today or this weekend. Danny [Butler] said you may come back in the Riverwalk project as well." On July 13, 2009, Lunsford sent Price an e-mail stating that he had talked to Butler and that Butler was ready to close and that if they did not close by Wednesday, July 15, 2009, then Butler was not interested. On July 13, 2009, Alabama One sent Price a proposed settlement statement that provided that the borrower was Riverfront and that the sellers were "Wm. Lunsford and Wally Price." On July 15, 2009, Price transferred all of his interest in Riverfront to the Lunsfords. That same day, Price signed a final settlement statement regarding the Riverwalk property, which listed Lunsford and Price as the sellers and Riverfront as the buyer. At the time Price signed as the seller, Lunsford had not signed the settlement statement. According to Price, Lunsford later signed the statement as a seller and as the manager and borrower for Riverfront. Price believed, based on representations made by Lunsford, Butler, and Alabama One, that Butler would be the borrower and agent for Riverfront after Butler purchased Riverfront from the Lunsfords. Price closed his part of the sale on July 15, 5 1151041 2009, by executing documents presented by Debra Nichols, a commercial loan officer for Alabama One. According to Price, the purpose of those documents was to convey all of Price's and Lunsford's interest in the Riverwalk property to Riverfront so Lunsford could then complete the sale of Riverfront to Butler with financing by Alabama One. On July 21, 2009, Lunsford and Price signed a deed conveying their interests in the Riverwalk property to Riverfront. Lunsford, as "manager/member" of Riverfront, borrowed money in 2010 and in November 2012 completed the condominiums and retail space on the Riverwalk property. On December 29, 2012, Price was told by Jerry Griffin that Butler was not the owner or a member of Riverfront. According to Griffin, Butler was promised a discounted condominium at the Riverwalk property in exchange for misrepresenting to Price his interest in purchasing Riverwalk. On December 28, 2014, Price sued Lunsford and Alabama One alleging fraudulent misrepresentation, fraudulent suppression, promissory fraud, breach of the duty of care, breach of the duty of loyalty, tortious interference with a business relationship, and civil conspiracy. Price attached 12 6 1151041 documents to his complaint: 1) the articles of organization of Riverfront; 2) the 2004 deed from the Tuscaloosa Department of Education to Lunsford, Goode, and Price for the Riverwalk property; 3) the August 1, 2005, security agreement/promissory note between Lunsford and Price regarding the Summit real- estate venture; 4) the November 19, 2008, letter from Lunsford to Price; 5) the 2008 property deed transferring Goode's interest in the Riverwalk property to Lunsford; 6) the July 9, 2009, e-mail from Lunsford to Price; 7) the July 10, 2009, e- mail from Lunsford to Price; 8) the July 10, 2009, e-mail from Price to Lunsford along with the July 13, 2009, e-mail from Lunsford to Price; 9) the proposed settlement statement; 10) the July 15, 2009, settlement statement; 11) the July 21, 2009, property deed from Lunsford and Price to Riverfront; and 12) the July 21, 2009 mortgage agreement between Alabama One and Riverfront (signed by Lunsford as manager/member), along with an October 25, 2010, increase in mortgage-indebtedness agreement. On January 20, 2015, Alabama One filed a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss, arguing that all of Price's claims were barred by the applicable two-year statutes 7 1151041 of limitations. Alabama One attached a copy of a July 16, 2013, complaint with attached exhibits Price had filed against Alabama One, Lunsford, and Butler, among others, involving the same facts as in the present case, which Price had voluntarily dismissed. In discussing the statutes of limitations, Alabama One stated that the differences between Price's July 16, 2013, complaint and attached exhibits and his December 28, 2014, complaint and attached exhibits highlight that the December 28, 2014, complaint should be dismissed. Alabama One also attached a copy of the assignment-of-interest agreement dated July 15, 2009, which transferred Price's interest in Riverfront to the Lunsfords. On January 27, 2015, Lunsford filed a Rule 12(b)(6) motion to dismiss, adopting all of Alabama One's arguments. Lunsford argued that Price failed to plead fraud with particularity, that Price failed to allege a basis for tolling the statutes of limitations regarding his fraud claims, and that Price's claims were barred by the Statute of Frauds because the final settlement statement and assignment-of- interest agreement made any prior oral representations irrelevant. 8 1151041 On March 20, 2015, Price filed responses to both motions to dismiss. In the responses, Price noted that, if the trial court were to consider the materials submitted with Alabama One's motion that were external to Price's complaint, the motion would be converted into a motion for a summary judgment and the trial court would be required to treat the motion as having been filed pursuant to Rule 56, Ala. R. Civ. P. In response to the contention that his claims were time- barred, Price argued that the statutes of limitations were tolled as to his claims pursuant to § 6-2-3, Ala. Code 1975. Price alleged that he did not discover the fraudulent activities of Lunsford and/or Alabama One until his conversation with Griffin on December 29, 2012. Price submitted his affidavit and an affidavit from Griffin. Both testified that, during a conversation on December 29, 2012, Griffin informed Price that he understood that Butler had not purchased the Riverwalk property and that he did not hold any interest in Riverfront. Price further argued that he could not have discovered the allegedly fraudulent activities of Lunsford and Alabama One when he executed the documents for the closing of the sale of the Riverwalk property. 9 1151041 On June 12, 2015, the trial court conducted a hearing in which it heard arguments from counsel of all parties on the motions filed by Alabama One and Lunsford. On June 29, 2015, the trial court entered a judgment, finding: "1. [Price's] claims are barred by the statute[s] of limitations. "2. Price has not [pleaded] facts in the Complaint showing that he is entitled to tolling pursuant to Ala. Code [1975,] § 6-2-3, nor is tolling applicable. See DGB, LLC v. Hinds, 55 So. 3d 218, 226 (Ala. 2010)." In the judgment, the trial court granted the motions to dismiss filed by Alabama One and Lunsford, and it dismissed Price's complaint with prejudice. On July 17, 2015, Price filed a Rule 59, Ala. R. Civ. P., motion to alter, amend, or vacate the judgment, arguing that his claims were not time-barred. He also argued that, because the trial court had not excluded materials outside the pleadings in reaching its judgment, the motions to dismiss had been converted into motions for a summary judgment, and, thus, he argued, he should have been permitted to conduct discovery. Along with the Rule 59 motion, Price filed a motion for leave to amend his complaint, attaching a proposed amended complaint. Alabama One and Lunsford both filed responses to 10 1151041 Price's postjudgment motions. On August 19, 2015, the trial court denied Price's Rule 59 postjudgment motion. There is no ruling in the record on the postjudgment motion to amend the complaint. On August 31, 2015, Price filed a notice of appeal to this Court. This Court transferred the appeal to the Court of Civil Appeals pursuant to § 12-2-7(6), Ala. Code 1975. The Court of Civil Appeals held that the motions to dismiss should have been treated as summary-judgment motions because Alabama One attached to its motion the assignment-of-interest agreement between Price and the Lunsfords. The Court of Civil Appeals noted that Price, in his responses to the motions, recognized that Alabama One had submitted materials outside the pleadings. The Court of Civil Appeals further held that Price was not prejudiced by the conversion of the motions because, although there had been no discovery, Price had had sufficient opportunity to present the materials relevant to the motions and did in fact present two affidavits. The Court of Civil Appeals went on to hold that Price's claims were barred by the applicable statutes of limitations because, it reasoned, the reasonable-reliance standard applies 11 1151041 to assertions of reliance on fraudulent misrepresentations in determining when the statute of limitations begins to run. The Court of Civil Appeals explained that, according to the evidence in the record, Price had experience with real-estate ventures and he had offered no evidence or allegations to show that he could not understand the various agreements he executed relating to Riverfront and the Riverwalk property. That court further held that the plain terms of the agreements Price executed contradicted the alleged misrepresentations that Butler was purchasing Price's and the Lunsfords' interests in Riverfront. The court reasoned that Price therefore could not have reasonably relied on the alleged misrepresentations to persist in that belief and that he had knowledge of facts that alerted him to the potential for fraud. As a result, the Court of Civil Appeals concluded that the statute of limitations began to run on July 15, 2009, and that Price's claims were time-barred when he filed the complaint initiating this case on December 28, 2014. Price v. Alabama One Credit Union, [Ms. 2141012, June 17, 2016] So. 3d (Ala. Civ. App. 2016). Discussion 12 1151041 The Court of Civil Appeals reviewed the trial court's order under the standard of review appropriate for a summary judgment. Both sides assert that the applicable standard of review in this case is the standard applicable to a Rule 12(b)(6), Ala. R. Civ. P., dismissal for failure to state a claim, namely, that the reviewing court does not consider whether the plaintiff will ultimately prevail, but only whether the plaintiff may possibly prevail. See Nance v. Matthews, 622 So. 2d 297 (Ala. 1993). In order to determine the appropriate standard of review, we must first determine whether the motions to dismiss were converted to motions for a summary judgment. In Universal Underwriters Insurance Co. v. Thompson, 776 So. 2d 81, 83 (Ala. 2000), this Court stated: "[T]he affidavit of Anderson did not require conversion of the motion for a judgment on the pleadings into a motion for a summary judgment, because the record is silent as to whether the trial court considered that affidavit. See Stockman [v. Echlin, Inc.], 604 So. 2d [393] at 394 [(Ala. 1992)]. The trial court, in its order, did not indicate whether it considered Anderson's affidavit, and the record on appeal contains no transcript of the hearing on Thompson's motion. Because the record gives no indication that the trial court considered matters outside the pleadings, we treat the motion as a motion for a judgment on the pleadings. Accordingly, we look only to the pleadings in 13 1151041 determining whether the trial court erred in granting Thompson's motion." (Emphasis added.) Thompson involved a motion for a judgment on the pleadings, but the Court's rationale is applicable to a motion to dismiss. Likewise, in Stockman v. Echlin, Inc., 604 So. 2d 393, 394 (Ala. 1992), this Court did not consider a motion for a judgment on the pleadings to have been converted into a motion for a summary judgment when "the trial court did not indicate whether it considered matters outside the pleadings in making its determination." In Stockman, the trial court held a hearing on the motion, but there was no transcript of the hearing and the record was silent as to whether the trial court had considered affidavits presented by both parties. The trial court's order indicated that the matter was before the court on a motion for a judgment on the pleadings and that, after considering the arguments and briefs of the parties, it was granting the motion. Similarly, in Sims v. Lewis, 374 So. 2d 298, 302 (Ala. 1979), this Court declined to convert a Rule 12(b)(6) motion to a summary- judgment motion because "there [was] no indication ... that the trial court considered [affidavits submitted outside the 14 1151041 pleadings] in making its determination on the 12(b)(6) motion." It is true that this Court also has stated that, "unless the trial court expressly declines to consider the extraneous material, its conclusions may be construed to include the extraneous material." Phillips v. AmSouth Bank, 833 So. 2d 29, 31 (Ala. 2002)(emphasis on "may" added). The Phillips Court did not state, however, that this Court must presume that a trial court considered extraneous materials submitted with a motion, thereby putting the trial court in error. We recognize, as Justice Bryan correctly points out in his dissent, that this Court has treated motions with materials attached as summary-judgment motions, relying on the language in Phillips and with no discussion of whether this Court had any discretion in presuming that the trial court considered the outside materials. See, e.g., Ex parte Novus Utils., Inc., 85 So. 3d 988, 995 (Ala. 2011). Nevertheless, this Court has not adopted a bright-line rule as evidenced by the reasoning in Thompson, Stockman, and Sims. Rule 12(b) provides that, if "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated 15 1151041 as one for summary judgment." (Emphasis added.) Whether additional materials attached to a Rule 12(b)(6) motion will be considered is within the trial court's discretion. If an appellate court's review automatically converts a motion to dismiss supported by additional materials to a motion for a summary judgment, the discretion provided the trial court to determine whether to exclude matters outside the pleadings would be constrained. In the present case, Price attached numerous exhibits to his complaint that were central to or referenced in the complaint. Exhibits attached to a pleading become part of the pleading. See Rule 10(c), Ala. R. Civ. P. ("A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes."); McCullough v. Alabama By-Products Corp., 343 So. 2d 508 (Ala. 1977)(holding that an exhibit attached to a complaint became part of the complaint and that, if there is any variance between the allegations in the pleading and the exhibit attached, the exhibit controls). Alabama One attached to its motion to dismiss Price's previously filed complaint along with the assignment-of- interest agreement. In his motion to dismiss, Lunsford 16 1151041 adopted the arguments raised in Alabama One's motion to dismiss. In response to the motions to dismiss, Price filed affidavits in support of his position. Price also noted that, if the trial court were to consider the materials submitted with Alabama One's motion that were external to his complaint, the motion would be converted into a motion for a summary judgment and the trial court would be required to treat the motion as one filed pursuant to Rule 56. The trial court held a hearing on the motions to dismiss, but the transcript from that hearing is not in the record. The trial court's order does not refer to or indicate that it considered any document other than the complaint, nor does it state that the court expressly excluded matters outside the pleadings. The order refers only to the motions to dismiss, and it dismisses the complaint with prejudice. The trial court also cited DGB, LLC v. Hinds, 55 So. 3d 218 (Ala. 2010), which involved only a motion to dismiss and its corresponding standard of review. The trial court's judgment was phrased entirely in terms of a motion to dismiss. Based on the foregoing, we cannot say that the trial court considered matters outside the complaint. Therefore, 17 1151041 the motions to dismiss were not converted to motions for a summary judgment. We now turn to the merits of Lunsford's and Alabama One's motions to dismiss. In Nance v. Matthews, 622 So. 2d at 299, this Court set forth the standard of review applicable to an order granting a motion to dismiss: "The appropriate standard of review under Rule 12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief. Raley v. Citibanc of Alabama/Andalusia, 474 So. 2d 640, 641 (Ala. 1985); Hill v. Falletta, 589 So. 2d 746 (Ala. Civ. App. 1991). In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [he] may possibly prevail. Fontenot v. Bramlett, 470 So. 2d 669, 671 (Ala. 1985); Rice v. United Ins. Co. of America, 465 So. 2d 1100, 1101 (Ala. 1984). We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." Price alleged in his complaint that he agreed to sell his interest in the Riverwalk property on July 15, 2009. According to Price, he was told that he and Lunsford were selling their interests in the Riverwalk property to Danny Butler. Lunsford told Price that he was having financial difficulties and that he would have to sell his interest in 18 1151041 the property. Price could not continue the development of the Riverwalk property without Lunsford. Price also alleged that Lunsford told him that "together they would sale [sic] the property in combination with all interests in Riverfront Development, LLC to Butler." Price alleged that, despite the representations made to him, Butler did not purchase any interest in Riverfront or the Riverwalk property. Price claimed that the purpose of Lunsford's alleged deception was to divest Price of his interest in the Riverwalk property. Price further alleged that Alabama One participated in the deception by representing that Butler was purchasing the Riverwalk property. Specifically, Price alleged that Alabama One intentionally held the signing of the settlement statement at different times so that it could conceal the fact that Lunsford, not Butler, was purchasing the Riverwalk property. Price alleged that on December 29, 2012, Jerry Griffin told him that Butler was not the owner, manager, or a member of Riverfront. According to the complaint, Butler was promised a discounted condominium in exchange for misrepresenting to Price his interest in purchasing the Riverwalk property. Price filed his complaint on December 28, 2014. 19 1151041 In their motions to dismiss, Lunsford and Alabama One argue that Price's claims are untimely and are barred by the applicable two-year statute of limitations. Price argues that his claims fall within the savings clause of § 6-2-3, which provides: "In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his action." In DGB, LLC v. Hinds, 55 So. 3d at 226, this Court stated: "This Court has stated: 'When, as in this case, the plaintiff's complaint on its face is barred by the statute of limitations, the complaint must also show that he or she falls within the savings clause of § 6–2–3.' Miller v. Mobile County Bd. of Health, 409 So. 2d 420, 422 (Ala. 1981). '[T]he burden is upon he who claims the benefit of § 6–2–3 to show that he comes within it.' Amason v. First State Bank of Lineville, 369 So. 2d 547, 551 (Ala. 1979). However, a 'dismissal based on the statute of limitations is proper only if, from the face of the complaint, it is apparent that the tolling provisions do not apply.' Travis v. Ziter, 681 So. 2d 1348, 1351 (Ala. 1996). "This Court has held that to show that a plaintiff's claims fall within the savings clause of § 6-2-3 a complaint must allege the time and circumstances of the discovery of the cause of action. See, e.g., Angell v. Shannon, 455 So. 2d 823, 823–24 (Ala. 1984); Papastefan v. B & L Constr. 20 1151041 Co., 356 So. 2d 158, 160 (Ala. 1978). The complaint must also allege the facts or circumstances by which the defendants concealed the cause of action or injury and what prevented the plaintiff from discovering the facts surrounding the injury. See, e.g., Smith v. National Sec. Ins. Co., 860 So. 2d 343, 345, 347 (Ala. 2003); Lowe v. East End Mem'l Hosp. & Health Ctrs., 477 So. 2d 339, 341–42 (Ala. 1985); Miller, 409 So. 2d at 422. See also Amason, 369 So. 2d at 550." Here, viewed in a light most favorable to Price, see Nance, supra, the complaint alleges the time and circumstances of his discovery of the claims by virtue of his conversation with Griffin, the facts and circumstances by which Lunsford and Alabama One concealed their fraud, i.e., the circumstances of the signing of the settlement statement, and the circumstances that prevented Price from discovering the fraud within the statutory limitations period, i.e., the publicly recorded property deed attached to the complaint did not indicate who owned or managed Riverfront, the entity that was purchasing the Riverwalk property. Therefore, the trial court erred in granting Lunsford's and Alabama One's motions to dismiss.2 2The savings clause of § 6-2-3 generally applies not only to fraud, but also to any cause of action fraudulently concealed. DGB, LLC v. Hinds, 55 So. 3d at 225 n. 3. This would include Price's breach-of-duty and tortious-interference claims. 21 1151041 We note that, even if we reviewed the trial court's order as a summary judgment, as did the Court of Civil Appeals, a genuine issue of material fact exists, thereby making inappropriate either a dismissal based on the complaint alone or a summary judgment based on the voluntarily dismissed complaint3 and assignment-of-interest agreement attached to Alabama One's motion to dismiss along with Price's affidavits. Considering the attachments to the motion to dismiss and 3It is undisputed that Price voluntarily dismissed the prior complaint. The Court of Civil Appeals did not discuss this attachment to the motion to dismiss in their analysis of the treatment of the motions to dismiss. Price did not refer to his voluntarily dismissed complaint in the present complaint; thus, the attachment was outside the pleadings. We recognize that the effect of a voluntary dismissal is to render the proceedings a nullity and to leave the parties as if the action had never been brought. Gallagher Bassett Servs., Inc. v. Phillips, 991 So. 2d 697, 700 (Ala. 2008). A voluntary dismissal is of no effect -- it is a legal nullity. A voluntary dismissal places the parties in a position as if the suit had never been filed. Ex parte Sealy, LLC, 904 So. 2d 1230 (Ala. 2004). However, we cannot say that the trial court could not consider the voluntarily dismissed complaint in this case. There is still a court record of the voluntarily dismissed complaint, though the complaint is considered a nullity. Both Price's voluntarily dismissed complaint and the complaint in this case involve fraud claims against Lunsford and Alabama One. Cf. Marrero v. Costco Wholesale Corp., 52 F. Supp. 3d 437, 441 (D. P.R. 2014)(holding that the defendant's attachment to its motion to dismiss of the plaintiff's prior voluntarily dismissed complaint could not be considered where the voluntarily dismissed complaint asserted different claims). 22 1151041 Price's affidavits, as the Court of Civil Appeals assumed the trial court did, Price has presented a jury question, making a summary judgment inappropriate. Price alleged that he did not discover, and reasonably could not have discovered, the fraudulent activities of Lunsford and/or Alabama One until his conversation with Griffin on December 29, 2012. Price submitted his own affidavit and one from Griffin. Both testified that, during a conversation on December 29, 2012, Griffin informed Price that he understood that Butler had not purchased the Riverwalk property and did not hold any interest in Riverfront. Price further argued that he reasonably failed to discover the allegedly fraudulent activities of Lunsford and Alabama One when he executed the documents for the closing of the sale of the Riverwalk property because of the misrepresentations by Lunsford and employees of Alabama One. His affidavit in support of his responses contained the following testimony: "11. On July 13, 2009, I was sent a proposed HUD One Settlement Statement sent to me by facsimile from [Alabama One]. The borrower was listed as [Riverfront]. This in no way as alleged in the Motion to Dismiss filed by [Alabama One] would have alerted me that Danny Ray Butler was not the purchaser of the Riverwalk property or [Riverfront] nor led me to inquire. In fact, I was told that 23 1151041 Danny Ray Butler was purchasing our entire interest in [the Riverwalk property] through [Riverfront] by W.A. Lunsford and Danny Ray Butler. I believed it because Debbie Nichols, [Alabama One's] Loan Officer in charge of conducting the closing, made representations to me that Danny Ray Butler had to close by that date, I relied upon these representations and this HUD One proposed settlement statement and statements by W.A. Lunsford and Danny Ray Butler to believe that the Lunsfords were conveying their entire interest out of financial necessity and that Danny Ray Butler was the purchaser and would lose his financing if I didn't act to close on that day. I had no interest in divesting myself of my interest in [the Riverwalk property] that I had worked so diligently to procure. I would have never sold my interest to the Lunsfords, any LLC or other business entity which they owned, I specifically stated to W.A. Lunsford and Danny Ray Butler that I did not want to sell, but was doing so because I could not stand alone financially to continue the project. ... "12. On July, 15, 2009, I was misled by [Alabama One's] closing officer and by the final HUD Settlement Statement presented to me at closing. At the time this document was signed by me, W.A. Lunsford's line for signature as Seller was unsigned and the line for signature of the Borrowers and Manager of [Riverfront] was unsigned. At the time I signed all the closing documents, I asked the closing officer when W.A. Lunsford and Danny Ray Butler would be by to sign the closing documents. The [Alabama One] closing officer replied that they would be by later that day to sign all the necessary documents. I did not receive copies of the fully executed documents, including the HUD statements, until January of 2013. Up until my December 29, 2012, conversation with Jerry Griffin, it was my firm belief that the Lunsfords and I had sold all our interest in the Riverwalk Property and [Riverfront]. 24 1151041 "13. I believed the false representations made by W.A. Lunsford that he was forced to sell his interest in the ... Riverwalk [property] and [Riverfront] to Danny Ray Butler, because of his poor financial condition. I also believed the false representations made by Debbie Nichols an officer at [Alabama One], along with the misrepresentations made by Danny Ray Butler that he was the purchaser and he was the one obtaining the financing from [Alabama One]. These false representations were made in order to remove me as a partner from [Riverfront] and as a co-owner of [the Riverwalk property]." In his "Amended Response to Defendant's Motion to Dismiss Filed by Alabama One Credit Union," Price noted that Alabama One had attached certain closing documents to its motion, but he argued that "[t]he documents alleged would fit within what [Price] was told by Lunsford: that Danny Butler was buying both Riverfront Development, LLC and the Riverwalk Property." It is true that the assignment-of-interest agreement shows that Price was transferring his interest in Riverfront to Lunsford, but Price alleged that he was told this was one of the intermediate steps necessary before Butler ultimately purchased the entire enterprise. He also presented testimony that it was necessary that the closing happen immediately or that Butler would back out. The assignment-of-interest agreement alone does not negate Price's allegations in his complaint with regard to the transfer of the Riverwalk 25 1151041 property. The evidence, on balance, may favor Lunsford and Alabama One's version of events, but it cannot be said that Price did not present a genuine issue of fact as to a scenario under which he could possibly prevail. That is, Price detailed and supplied evidence of a fraudulent scheme, the true nature of which he did not discover until years after the transaction occurred, and, therefore, the applicable statutes of limitations were tolled. For these reasons, the judgment of the Court of Civil Appeals is reversed and the case remanded for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Bolin, Parker, and Main, JJ., concur. Murdock, J., concurs specially. Shaw and Bryan, JJ., dissent. Wise, J., recuses herself. 26 1151041 MURDOCK, Justice (concurring specially). I concur in the main opinion, except that I decline the opportunity to reaffirm the absolute nature of the rule stated in McCullough v. Alabama By-Products Corp., 343 So. 2d 508 (Ala. 1977). Aside from that comment, I write separately to comment briefly on (1) the notion that the complaint filed in Walter B. Price's 2013 action was a nullity, as discussed in note 3 of the main opinion and (2) the issue of how to treat the July 15, 2009, assignment-of-interest agreement attached to Alabama One Credit Union's motion to dismiss. As the main opinion explains, Price's 2013 complaint, having been previously dismissed, is a nullity in the sense that it cannot be revived or reviewed as a basis for a pending action. That is not to say, and I do not read the main opinion as saying, that statements in the 2013 complaint (assuming that complaint to have been properly submitted to the trial court otherwise) could not be considered by the trial court in the underlying action. "A party's pleading in a prior case is admissible in a subsequent action as an admission of the truth of the facts stated in the pleading if such pleading was filed [on] behalf of the party in another action, and was drawn under the party's direction or with his knowledge of its content." 27 1151041 Yates v. Christian Benevolent Funeral Homes, Inc., 356 So. 2d 135, 137 (Ala. 1978). See also City of Gulf Shores v. Harbert Int'l, 608 So. 2d 348, 354 (Ala. 1992) (noting that "a party's pleadings in a prior case are admissible against that party in a subsequent action as an admission against interest"). Thus, hypothetically, if statements in Price's July 16, 2013, complaint contained statements evidencing knowledge by Price more than two years before the filing of the December 28, 2014, complaint that Danny Butler was not involved in the transaction at issue, then the 2013 complaint would be relevant to the statute-of-limitations defense presented in Alabama One's motion to dismiss. In point of fact, though, Price's 2013 complaint contains no such statements. Thus, Price's 2013 complaint is irrelevant to the motions to dismiss ruled upon by the trial court in the present case. The same cannot necessarily be said, however, as to the July 15, 2009, assignment (by which Price transferred his interest in Riverfront Development, LLC, to William A. Lunsford), a copy of which was attached to Alabama One's motion to dismiss. It might be argued that we must determine 28 1151041 whether the trial court did or did not consider this attachment in order to know whether the motion is to be treated as one seeking a dismissal or a summary judgment. As the main opinion explains, however, the resolution of this issue ultimately is not dispositive in the present case because, even if we were to assume the trial court considered this attachment, the affidavits submitted by Price nonetheless create a genuine issue of material fact, thereby requiring the reversal of the trial court's judgment in any event. 29 1151041 SHAW, Justice (dissenting). I respectfully dissent. The plaintiff below, Walter B. Price, owned an interest in Riverfront Development, LLC ("Riverfront"), and an interest in a piece of real estate ("the Riverwalk property") that was to be developed by Riverfront. Price alleged in his complaint that his business partner in Riverfront and co-owner of the Riverwalk property, William A. Lunsford, convinced him to sell both Riverfront and the Riverwalk property to Danny Butler. He further alleged that Lunsford and Alabama One Credit Union ("Alabama One") fraudulently represented that a transaction in which Price engaged on July 15, 2009, was transferring both to Butler. In this transaction, Price signed, as a "seller," a Department of Housing and Urban Development settlement statement that detailed the sale of the Riverwalk property to Riverfront and Riverfront's borrowing of funds from Alabama One to finance the purchase. In his verified complaint, Price alleged that he believed that Butler "would be the borrower- in-fact, acting as an agent for Riverfront." In its motion to dismiss, Alabama One claimed that there was evidence showing that Price knew, or should have known, in 30 1151041 July 2009 of the alleged fraud and, thus, that the applicable two-year statute of limitations began to run at that time and expired before the complaint was filed in 2014. It specifically referred, among other things, to the settlement statement, a deed, and a document titled "Assignment of Interest in Limited Liability Company," dated July 15, 2009, in which Price assigned his interest in Riverfront to Lunsford, and not the purported purchaser, Butler. This assignment, which Alabama One attached to its motion, had not been included as an attachment to the complaint. Alabama One argued that Price "knew that Mr. Lunsford was receiving [Price's] share of the company. Indeed, [Price] signed an Assignment of Interest in Limited Liability Company agreement on July 15, 2009, transferring his interest in the company to Bill Lunsford." In his response and in an amended response to the motion to dismiss, Price argued that the settlement statement and the deed did not alert him to any potential fraud.4 He also filed an affidavit. However, in both of his responses to Alabama 4As to the settlement statement, Price asserted that it was not yet signed by Lunsford when Price signed it. 31 1151041 One's motion to dismiss, he completely failed to address whether the assignment showed that he transferred his interest in Riverfront to Lunsford or whether that should have alerted him that he was transferring his interest in Riverfront to Lunsford and not Butler. Further, the affidavit states nothing about the assignment. The trial court, in issuing its judgment, could have concluded that the assignment Price failed to address showed that he knew that his interest in Riverfront was being transferred to Lunsford and not to Butler. These would have been facts alerting him to the possibility that Lunsford was actually purchasing Riverfront and that the statute of limitations began to run at that time. Price's initial brief filed in the Court of Civil Appeals similarly failed to specifically address the significance of the assignment and whether it could be deemed to have alerted him to the nature of the alleged fraud. Instead, at most, Price alleged that there was an arrangement whereby he would assign all of his interest in Riverfront to Lunsford and Lunsford would then transfer the company to Butler. On page two of his initial brief to the Court of Civil Appeals, he stated, without citation to the record: "Price closed his part 32 1151041 of the sale to Butler on July 15, 2009 by executing documents. ... The purpose of these documents was, in pertinent part, to convey all Price's and Lunsford's title to [Riverfront] so that Lunsford could complete the sale to and financing by Butler that same afternoon." However, I see no evidence in the record substantiating an assertion that Price was to convey his interest in Riverfront to Lunsford so that Lunsford could later convey the entire company to Butler. No argument or assertion to this effect was made in Price's responses to the motions to dismiss filed in the trial court. Nothing in the verified complaint, its attachments, or in the affidavit mention this factual assertion. In his reply brief to the Court of Civil Appeals, Price for the first time directly addressed the significance of the assignment. He stated in response to the appellee's arguments: "The record, as Price points out in his initial brief, clearly shows the basis for Price's reasonable belief and reliance on the Defendants' false representation that Butler, Alabama One and [Riverfront's] managing member Lunsford would complete the [Riverfront] sale closing and financing with Danny Butler that same afternoon." Again, I 33 1151041 see no evidence in the record stating that ownership in Riverfront was to be placed in Lunsford's hands so that it could be transferred to Butler later that day. Price did not make any such argument in the trial court in opposition to Alabama One's claim that the assignment showed Price that he was not, in fact, transferring his interest in Riverfront to Butler. The affidavit is silent as to this issue. In its opinion, the Court of Civil Appeals held, as Alabama One argued in the trial court, that the assignment should have, in July 2009, alerted Price to the fact that Riverfront was not being transferred to Butler, thus putting Price on notice of alleged fraud and starting the running of the statute of limitations. Price cannot now dispute this holding because he failed to properly address the issue both in the trial court and on appeal. The main opinion in the instant case states: "It is true that the assignment-of-interest agreement shows that Price was transferring his interest in Riverfront to Lunsford, but Price alleged that he was told this was one of the intermediate steps necessary before Butler ultimately purchased the entire enterprise." ___ So. 3d at ___. This is merely an 34 1151041 "allegation" because (1) Price presented no evidence indicating that such "intermediate steps" were ever contemplated; (2) he failed to allege so in his complaint; (3) when presented in the trial court with the argument that the assignment should have alerted him that Butler was not purchasing Riverfront, he remained silent; and (4) his first allegation explaining this unsupported assertion came in his reply brief filed in the Court of Civil Appeals. Price's response to the assignment is untimely and unsupported by substantial evidence. I cannot hold the Court of Civil Appeals in error for failing to reverse the trial court's judgment on a factual assertion explained for the first time on appeal in a reply brief and not supported by substantial evidence. As to the issue whether Alabama One's motion to dismiss was converted to a motion for summary judgment, Rule 12(b), Ala. R. Civ. P., requires that "[i]f ... matters outside the pleading are presented to and not excluded by the court," then a Rule 12(b)(6) motion "shall be treated as one for summary judgment." (Emphasis added.) As noted above, the motion to dismiss specifically argued and referenced the assignment, a 35 1151041 matter outside the pleading. This was the strongest piece of evidence showing when Price should have understood that Riverfront was not being purchased by Butler. Price did not address it in his response. I think that it is appropriate to assume that the strongest piece of evidence supporting the trial court's judgment, which was "not excluded by the trial court" and which Price did not attempt to rebut, was considered by it. Thus, the motion to dismiss was converted to a motion for a summary judgment. I think that the Court of Civil Appeals, addressing the narrow issues argued in the trial court and the evidence presented, correctly affirmed the judgment. I therefore respectfully dissent. 36 1151041 BRYAN, Justice (dissenting). I write specially to address the tension in the law concerning when a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss is converted into a summary-judgment motion. The main opinion relies on precedent stating that, when the record is silent as to whether the trial court considered matters submitted outside the pleadings, no conversion occurred. ___ So. 3d at ___ (citing Universal Underwriters Ins. Co. v. Thompson, 776 So. 2d 81, 83 (Ala. 2000); Stockman v. Echlin, Inc., 604 So. 2d 393, 394 (Ala. 1992); and Sims v. Lewis, 374 So. 2d 298, 302 (Ala. 1979)). In this case, the trial court gave the parties no notice that it would consider the submitted evidence and treat the motions to dismiss as summary-judgment motions. Thus, the main opinion concludes that, under the above-cited precedent, no conversion occurred and that it is reviewing a ruling on a motion to dismiss. In resolving this issue, the main opinion deals with a case possibly at tension with the main opinion's resolution, Phillips v. AmSouth Bank, 833 So. 2d 29 (Ala. 2002). The Court in Phillips stated that, "unless the trial court expressly declines to consider the extraneous material, its 37 1151041 conclusions may be construed to include the extraneous material." Phillips, 833 So. 2d at 31. The main opinion deals with Phillips by emphasizing that, if the trial court did not expressly decline to consider the material, a reviewing court "may" –– but is not required to –– conclude that a conversion occurred. However, since Phillips was decided in 2002, both this Court and the Court of Civil Appeals have decided cases citing Phillips but going further than Phillips regarding the effect of the trial court's silence. For example, in Ex parte Novus Utilities, Inc., 85 So. 3d 988, 995 (Ala. 2011), this Court, citing Phillips, stated: "Although Novus styled its motion as a motion to dismiss, the trial court had before it materials outside the pleadings, and it did not expressly decline to consider those materials in making its ruling. Therefore, the motion to dismiss was converted into a motion for a summary judgment." In Ex parte Novus, the trial court's failure to expressly decline to consider the materials submitted led to the conclusion that a conversion had in fact occurred; this conflicts with the authority relied on in the main opinion, which says that the trial court's silence indicates that no 38 1151041 conversion occurred. I read Ex parte Novus as stating that the trial court's failure to expressly decline to consider materials outside the pleadings automatically causes a conversion in the trial court; as a natural consequence, a reviewing court cannot treat the motion any differently after the fact (as one reading of Phillips may suggest). There was no discussion in Ex parte Novus as to whether, relying on Phillips, this Court was exercising discretion to consider the motion as one seeking a summary judgment. Because the parties need to know what type of motion they are dealing with in the trial court, an "automatic" conversion before the trial court makes more sense than allowing a reviewing court to construe the motion as one or the other after the fact. There are several cases similar to Ex parte Novus indicating that a trial court's failure to expressly decline to consider materials outside the pleadings causes a conversion to occur: Adams v. Tractor & Equip. Co., 180 So. 3d 860, 864 (Ala. 2015) ("There is no indication in the record that the circuit court excluded the affidavits attached to the motion to dismiss. ... Accordingly, the motion to dismiss had been converted to a motion for a summary judgment."); Ex parte 39 1151041 Ismail, 78 So. 3d 399, 402 n.1 (Ala. 2011) ("Dr. Ismail styled his motion as a motion to dismiss. However, the trial court had before it materials outside the pleadings, and it did not expressly decline to consider those materials in making its ruling. Therefore, the motion to dismiss was converted into a motion for a summary judgment."); Hoff v. Goyer, 160 So. 3d 768, 770 (Ala. Civ. App. 2014) (quoting Ex parte Ismail and Phillips); Ex parte Vest, 130 So. 3d 574, 577-78 (Ala. Civ. App. 2013) ("Because (1) the mother had supported her motions [for dismissal] with the matter outside the pleadings and (2) the Elmore Circuit Court, in ruling on those motions, did not expressly decline to consider the matter outside the pleadings, those motions were automatically converted to motions for a summary judgment."); and Casa Invs. Co. v. Boles, 931 So. 2d 53, 57 (Ala. Civ. App. 2005) ("Although the trial court characterizes its ... judgment as one granting a motion to dismiss, because both sides submitted supporting evidentiary materials and the trial court did not expressly exclude consideration of those evidentiary materials the motion is properly treated as one for a summary judgment."); cf. Turner v. Moore, 76 So. 3d 842, 845 (Ala. Civ. App. 2011) 40 1151041 (concerning whether a motion for a judgment on the pleadings was converted under Rule 12(c): "We cannot determine from the record whether the trial court considered the exhibits attached to the defendants' motion when it entered the judgment. ... For purposes of this opinion, we will assume that the trial court did consider the evidence the defendants submitted in support of their motion; therefore, we will use the standard applicable in reviewing the propriety of a summary judgment."). The above line of cases indicates that, unless the trial court expressly declines to consider the submitted materials, the motion to dismiss is converted to a summary-judgment motion. That is, a conversion occurs if the trial court simply remains silent about the submitted materials. That proposition conflicts with the precedent relied on in the main opinion, which states that silence by the trial court means that no conversion occurred. Thus, it appears to me that the main opinion has effectively overruled the post-Phillips cases discussed above. However, the parties have not asked us to overrule any of those cases, and I am therefore disinclined to do so. See Moore v. Prudential Residential Servs. Ltd. 41 1151041 P'ship, 849 So. 2d 914, 926 (Ala. 2002) ("Stare decisis commands, at a minimum, a degree of respect from this Court that makes it disinclined to overrule controlling precedent when it is not invited to do so."). Thus, I would not hold the Court of Civil Appeals in error for concluding that the motions to dismiss had been converted into summary-judgment motions. In its alternative conclusion, the main opinion concludes that, even assuming such a conversion occurred, a genuine issue of material fact exists, which precludes the entry of a summary judgment. However, I disagree with that conclusion for the reasons stated by Justice Shaw in his dissent. Thus, because I believe the Court of Civil Appeals correctly affirmed the trial court's judgment, I respectfully dissent.5 5The conflicting precedent outlined above parallels differing views by federal courts construing Rule 12(d), Fed. R. Civ. P., which is substantially similar to the conversion provision in Rule 12(b). See, e.g., Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 18-19 (1st Cir. 1992), and cases cited therein. The position reflected in the main opinion appears to be the majority rule. Id.; 73 Am. Jur. 2d Summary Judgment § 19 (2012) ("A motion to dismiss is not automatically transformed into a motion for summary judgment simply because matters outside pleadings are filed with the court. The test is whether the court actually takes cognizance of the supplementary materials. The decision to convert a motion into a motion for summary judgment takes place at the discretion of the court and at the time that the 42 1151041 court decides not to exclude the extraneous matters." (footnotes omitted)); and Motion to Dismiss –– Conversion to Summary Judgment Motion, 12 No. 7 Fed. Litigator 194 (1997) (noting that the "view that conversion of a Rule 12(b)(6) motion to dismiss into a summary judgment motion does not occur until the district court affirmatively decides not to exclude materials outside the pleadings from its consideration of the motion is the way most courts look at it"). 43

April 14, 2017

049f9c7d-5f3f-4bc9-9f8d-c36473f27e9b

Barnwell v. CLP Corporation

N/A

1151329

Alabama

Alabama Supreme Court

Rel: 04/21/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151329 ____________________ Andre Barnwell v. CLP Corporation Appeal from Calhoun Circuit Court (CV-14-900270) PARKER, Justice. Andrew Barnwell appeals a summary judgment entered by the Calhoun Circuit Court ("the circuit court") in favor of CLP Corporation ("CLP"). Facts and Procedural History 1151329 CLP owns and operates a McDonald's fast-food restaurant ("the restaurant"). The following facts are derived from Barnwell's deposition testimony. On April 25, 2013, Barnwell visited the restaurant. Barnwell stated that after he entered the restaurant, he went straight to the restroom to wash his hands. Barnwell's deposition testimony explains what happened next: "[Barnwell:] I just come out and started walking straight back and the door -- the entrance door would be on my left and the counter would be on the right. "[CLP's trial counsel:] What happened after that? "[Barnwell:] I had -- I was going to turn and go to the counter, I planted my left foot. When I did, it just kind of slipped out from under me sort of sideways and I went back down on my left hip and pushed myself just kind of all one motion, just down and hit and then back up. "[CLP's trial counsel:] I'm going to walk through what we just talked about. You're coming out of the restroom and you're going to make a right turn to head towards the counter? "[Barnwell:] Yes. [CLP's trial counsel:] I take it you're headed to the counter. Were you going to order? "[Barnwell:] Yes. 2 1151329 "[CLP's trial counsel:] And you plant your left foot? "[Barnwell:] Right. "[CLP's trial counsel:] What happens immediately after you plant your left foot? "[Barnwell:] It slides away from me. "[CLP's trial counsel:] And you're indicating it went out sideways? "[Barnwell:] Yes. "[CLP's trial counsel:] And that it went out from underneath you? "[Barnwell:] Yes. "[CLP's trial counsel:] What happens after the left foot comes out from underneath you? "[Barnwell:] I just go down that way and kind of hit on my hip sort of turned like that and then I stuck my hands and pushed myself and I got back up. "[CLP's trial counsel:] So your left foot goes out from underneath you? "[Barnwell:] Right. "[CLP's trial counsel:] You fall to the ground? "[Barnwell:] Right, and I'm trying to put my hand out. "[CLP's trial counsel:] You're indicating when you're falling to the ground you put your hand out to catch you? "[Barnwell:] Yes. 3 1151329 "[CLP's trial counsel:] Was it just one of your hands or both? "[Barnwell:] Just one. "[CLP's trial counsel:] Your left hand? "[Barnwell:] Right. "[CLP's trial counsel:] Do you catch yourself with your left hand? "[Barnwell:] I make impact and I'm kind of trying to push up when I hit. "[CLP's trial counsel:] I think you had also said, does your left hip make contact with the ground? "[Barnwell:] Right. "[CLP's trial counsel:] You go to the ground, you tried to brace the fall with your left hand, made contact with your left hip, what is the next thing you do after that? "[Barnwell:] I started pushing myself up. "[CLP's trial counsel:] How long would you say you were on the ground? "[Barnwell:] Instantly back up. "[CLP's trial counsel:] What happens after you're able to get yourself back up? "[Barnwell:] I just stand there. I'm sort of addled. I know you may not know what that word means. "[CLP's trial counsel:] I'm with you. 4 1151329 "[Barnwell:] Kind of shook up. "[CLP's trial counsel:] You stand in the spot where you had fallen a minute ago? "[Barnwell:] Yes. "[CLP's trial counsel:] How long would you say you just kind of stood there? "[Barnwell:] I don't know. "[CLP's trial counsel:] What happens after you're able to get your bearings? "[Barnwell:] I head to the counter." Barnwell's deposition testimony states that, once he arrived at the counter, there were a couple of people ahead of him in line; Barnwell waited to place his order. Barnwell's deposition testimony indicates that, once he reached the front of the line and was asked for his order, he was not able to order because he was "just sort of disillusioned." Barnwell stated that the cashier asked him if he was "okay." Barnwell indicated that he responded in the affirmative to the cashier's question by nodding his head. Barnwell then left the restaurant without ordering. CLP presented as evidence two digital files containing surveillance-video footage taken from two different cameras in the restaurant. The surveillance-video cameras recorded two 5 1151329 different, but partially overlapping, parts of the restaurant. The surveillance-video footage from both cameras is a simultaneous recording of the same time. It is evident from pictures included in the record that the surveillance-video cameras did not capture the entirety of the interior of the restaurant. Specifically, the surveillance-video cameras did not provide footage of the area of the restaurant immediately outside the restroom Barnwell was exiting. The surveillance- video footage from that date and time shows several employees and patrons. The surveillance-video footage from one of the cameras shows an employee mopping the floor immediately in front of the counter at which restaurant patrons placed their orders; the employee placed a warning sign in the area he had mopped indicating that the floor was wet. The surveillance- video footage from both cameras does not include footage of anyone slipping and falling to the floor of the restaurant. Apparently, Barnwell appears in the surveillance-video footage; however, there is no affidavit testimony accompanying the surveillance-video footage to explain its contents, and it is unclear which of the people appearing in the surveillance- video footage is Barnwell. The surveillance-video footage 6 1151329 from one of the cameras does show a patron slipping on the recently mopped floor in the restaurant in front of the counter; that person is apparently Barnwell. After viewing the surveillance-video footage, Barnwell submitted an affidavit, which states, in pertinent part: "Those clips do not show the slip and fall, which I believe primarily caused my injuries, but where I again slipped as I was going to get in line at the counter. I did not actually fall that time. The accident where I did slip and fall was blocked from the view of those two cameras." Barnwell's affidavit further states he "slipped and fell right after [he] came out of the restroom, and before reaching the area shown by those [surveillance] videos." Barnwell also attached as an exhibit to his affidavit a photograph of the area of the restaurant immediately outside the restroom. The photograph of the area immediately outside the restroom shows that, upon exiting the restroom, Barnwell would have had to have made a right turn in order to walk toward the counter. After reaching the front of the restaurant, Barnwell would have had to have made another right turn to approach the counter. After leaving the restaurant, Barnwell got in his vehicle, in which his girlfriend, Jerri Ann Dulaney, was 7 1151329 waiting, and drove away from the restaurant. Barnwell's deposition testimony indicates that, at this point, he was experiencing pain in his back and left leg. As he was driving, Barnwell began "hurting worse and worse." Dulaney convinced Barnwell to return to the restaurant to speak with the manager, Sheila D'Anna, about the incident. Barnwell agreed. Dulaney spoke with D'Anna, and, according to Barnwell's and Dulaney's deposition testimony, D'Anna told Dulaney that she had witnessed Barnwell fall. Barnwell stated that D'Anna filled out a written report detailing Barnwell's fall. Dulaney's affidavit testimony also indicates that D'Anna filled out an accident report detailing Barnwell's fall. After leaving the restaurant the second time, Barnwell and Dulaney went to an emergency room seeking medical treatment for Barnwell's alleged injuries. On May 9, 2014, Barnwell sued CLP, asserting a claim of negligence. On the same day, Barnwell also served on CLP interrogatories and requests for the production of certain documents. Of particular relevance are the following interrogatories: 8 1151329 "4. Have you or anyone acting on your behalf or on the behalf of [CLP] interviewed any individual concerning the incident? If so, for each individual, state their name, address, telephone number, date of the interview and the name address and telephone number of the person conducting the interview. ".... "6. Was a report made by any person concerning the incident? If so, state the name, title, identification number and employer of the person who made the report along with the date and type of report and who the report was made for. "7. Did you or anyone acting on your behalf cause an investigation to be conducted at any time in connection with the incident? If so, please state date and location of each investigation along with who conducted the investigation and if a report was made from said investigation." Also relevant to this appeal, Barnwell requested the following documents: "1. Any and all photographs both prior to and subsequent to [Barnwell's] injury-incident which depict the area where [Barnwell] alleges he slipped and fell on the floor of [the restaurant] on or about the 25th day of April, 2013, in Oxford, Alabama. ".... "3. Any and all reports and documents taken or prepared by [CLP] regarding [Barnwell's] slip and fall incident." On October 1, 2014, Barnwell filed a motion objecting to certain of CLP's responses to Barnwell's interrogatories and 9 1151329 requesting that the circuit court compel CLP to comply with Barnwell's discovery requests. Specifically, Barnwell requested that the circuit court compel CLP to answer interrogatories 4, 6, and 7 and to produce the discovery sought in requests for production 1 and 3. On May 16, 2016, the circuit court entered an order setting the matter for trial on September 12, 2016. On June 22, 2016, Barnwell "noticed the depositions of the [restaurant] manager ... and employees of the [restaurant] at issue." On June 23, 2016, CLP filed a motion for a summary judgment. CLP argued that Barnwell's testimony should not be considered by the circuit court because, CLP argued, it is false. CLP argued that the surveillance-video footage definitively proves that Barnwell did not slip and fall in the restaurant. Based on its request that Barnwell's deposition testimony not be considered, CLP argued that Barnwell had failed to present any evidence, let alone substantial evidence, to support the allegations in his complaint. CLP alternatively argued that, even if Barnwell did slip and fall, 10 1151329 the danger of the wet floor in front of the counter where, CLP argued, Barnwell slipped and fell was open and obvious. On June 29, 2016, Barnwell filed a second motion to compel discovery before the circuit court conducted a hearing or ruled on CLP's summary-judgment motion. Specifically, Barnwell requested that the circuit court "compel [CLP] to permit the previously requested depositions of its store manager and employee witnesses." On June 30, 2016, CLP filed a response to Barnwell's motion to compel. CLP argued that it had already prepared for the trial scheduled for September 12, 2016, and argued "that essentially starting discovery from scratch would unfairly prejudice [CLP] as [it] would be force[d] to incur significant cost in defending multiple depositions, responding to additional discovery, and re-preparing for trial." On July 7, 2016, the circuit court entered an order denying Barnwell's October 1, 2014, motion to compel. On July 11, 2016, the circuit court entered an order denying Barnwell's June 29, 2016, motion to compel. On August 12, 2016, CLP filed a motion to strike portions of Barnwell's deposition testimony and the entirety of 11 1151329 Barnwell's affidavit testimony. CLP argued that Barnwell's deposition testimony conflicted with his affidavit testimony. CLP argued that Barnwell did not mention during his deposition testimony the fact that, after he slipped and fell near the restroom, he later slipped, but did not fall, near the counter. As a result, CLP argued, Barnwell offered conflicting testimony, which, it says, must be disregarded. On August 25, 2016, the circuit court granted CLP's summary-judgment motion. The circuit court specifically stated that it had considered "all the evidence." Barnwell appealed. We reverse and remand. Standard of Review Our standard of review of a summary judgment is well settled: "'The standard of review applicable to a summary judgment is the same as the standard for granting the motion....' McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So. 2d 957, 958 (Ala. 1992). "'A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law. In determining whether the 12 1151329 movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving party must present "substantial evidence" creating a genuine issue of material fact -- "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala. Code 1975, § 12–21–12; West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).' "Capital Alliance Ins. Co. v. Thorough–Clean, Inc., 639 So. 2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So. 2d 337, 342 (Ala. 2004)." Pritchett v. ICN Med. Alliance, Inc., 938 So. 2d 933, 935 (Ala. 2006). Discussion CLP made two arguments in support of its summary-judgment motion. First, CLP argued that the circuit court should ignore the deposition and affidavit testimony of Barnwell, which, it says, is the only direct evidence in the record concerning Barnwell's alleged slip and fall, based on the alleged inconsistencies between them. Second, CLP argued that, assuming Barnwell did slip and fall as he alleged, the dangerous condition was open and obvious. 13 1151329 The circuit court rejected CLP's argument that Barnwell's deposition and affidavit testimony not be considered. CLP argued below that Barnwell's deposition and affidavit testimony is the only evidence supporting Barnwell's allegation that he slipped and fell in the restaurant. Of course, if that evidence were not considered by the circuit court, there would be no evidence supporting the allegations in Barnwell's complaint and, thus, CLP would be entitled to a summary judgment in its favor. See Moore v. Prudential Residential Servs. Ltd. P'ship, 849 So. 2d 914, 926 (Ala. 2002)(holding that a defendant is entitled to a summary judgment if a plaintiff fails to present any evidence in support of his claim). CLP filed a motion to strike Barnwell's deposition and affidavit testimony. The circuit court did not enter an order specifically denying CLP's motion to strike. However, in entering its summary judgment in favor of CLP, the circuit court specifically stated that it had considered all the evidence before it. The circuit court clearly did not find CLP's argument convincing. Therefore, we conclude that the circuit court did not enter its summary 14 1151329 judgment in favor of CLP on the basis that Barnwell failed to present any evidence in support of his claim against CLP. Accordingly, the circuit court must have granted CLP's summary-judgment motion based on CLP's argument that the water on the floor in front fo the counter, on which Barnwell allegedly slipped and which allegedly caused him to fall, was an open and obvious danger. This Court set forth the following applicable law in determining whether a condition on a premises presents an open and obvious danger: "The liability of a premises owner to an invitee is well settled. "'In a premises-liability setting, we use an objective standard to assess whether a hazard is open and obvious. As discussed in Sessions [v. Nonnenmann, 842 So. 2d 649 (Ala. 2002)], the question is whether the danger should have been observed, not whether in fact it was consciously appreciated: "'"[I]n order for a defendant-invitor in a premises-liability case to win a summary judgment or a judgment as a matter of law grounded on the absence of a duty on the invitor to eliminate open and obvious hazards or to warn the invitee about them, the record need not contain undisputed evidence that the plaintiff-invitee consciously appreciated the danger at the 15 1151329 moment of the mishap. While Breeden [v. Hardy Corp., 562 So. 2d 159 (Ala. 1990)], does recite that '[a]ll ordinary risks present are assumed by the invitee,' 562 So. 2d at 160, this recitation cannot mean that the invitor's duty before a mishap is determined by the invitee's subjective state of mind at the moment of the mishap. This Court has expressly rejected the notion that an invitor owes a duty to eliminate open and obvious hazards or to warn the invitee about them if the invitor 'should anticipate the harm despite such knowledge or obviousness.' Ex parte Gold Kist, Inc., 686 So. 2d 260, 261 (Ala. 1996) ...." "'842 So. 2d at 653–54 (some emphasis added).' "Jones Food Co. v. Shipman, 981 So. 2d 355, 362–63 (Ala. 2006). Similarly, this Court has stated that '"[t]he owner of premises has no duty to warn an invitee of open and obvious defects in the premises which the invitee is aware of, or should be aware of, in the exercise of reasonable care on the invitee's part."' [Ex parte] Mountain Top Indoor Flea Market, 699 So. 2d [158,] 161 [(Ala. 1997)] (quoting Shaw v. City of Lipscomb, 380 So. 2d 812, 814 (Ala. 1980), citing in turn Tice v. Tice, 361 So. 2d 1051 (Ala. 1978)). The test for determining whether a hazard is open and obvious '"'is an objective one.'"' Id. (quoting Hines v. Hardy, 567 So. 2d 1283, 1284 (Ala. 1990), quoting in turn Restatement (Second) of Torts § 343A (1965))." 16 1151329 Dolgencorp, Inc. v. Taylor, 28 So. 3d 737, 741-42 (Ala. 2009). Further, we note that "[t]he question whether a danger is open and obvious is generally one of fact. Harris v. Flagstar Enterprises, Inc., 685 So. 2d 760, 762-63 (Ala. Civ. App. 1996). '[T]he plaintiff's appreciation of the danger is, almost always, a question of fact for the determination of the jury.' F.W. Woolworth Co. v. Bradbury, 273 Ala. 392, 394, 140 So. 2d 824, 825-26 (1962)." Howard v. Andy's Store for Men, 757 So. 2d 1208, 1211 (Ala. Civ. App. 2000). CLP's argument that the condition that allegedly caused Barnwell to fall "was open and obvious is an affirmative defense, for which [CLP] bears the ultimate burden of proof." Dolgencorp, 28 So. 3d at 742 (citing Horne v. Gregerson's Foods, Inc., 849 So. 2d 173, 176 (Ala. Civ. App. 2002), citing in turn Ex parte Neese, 819 So. 2d 584 (Ala. 2001), and Furgerson v. Dresser Indus., Inc., 438 So. 2d 732, 734 (Ala. 1983)). See also Denmark v. Mercantile Stores Co., 844 So. 2d 1189, 1194 (Ala. 2002)(stating that "[an invitor's] argument that the condition that caused [an invitee's] fall was open and obvious is an affirmative defense, on which [the invitor] bears the ultimate burden of proof"). 17 1151329 CLP argued below, and argues on appeal, that the allegedly open and obvious danger that caused Barnwell's fall was the water on the floor of the restaurant in front of the counter left by the employee's mopping of the area. However, the affidavit testimony of Barnwell makes clear that he alleges that he did not slip on water near the counter, but on "a slick spot" outside the restroom. Barnwell's affidavit also states that D'Anna told him "the floor was greasy there." CLP has not offered any evidence indicating that the "slick spot" outside the restroom upon which Barnwell alleges he slipped was an open and obvious danger. Neither has CLP presented any evidence indicating that an employee of the restaurant had recently mopped the area of the restaurant immediately outside the restroom. In fact, the only evidence presented by CLP indicates that the area outside the restroom had not been mopped immediately before Barnwell alleges that he slipped and fell. Therefore, because CLP has not offered any evidence, let alone substantial evidence, indicating that the "slick spot" upon which Barnwell claims to have slipped was an open and obvious danger, the circuit court erred in entering a summary judgment on this ground. 18 1151329 We note that, although CLP does not offer any evidence concerning whether the "slick spot" Barnwell allegedly slipped on was an open and obvious danger, CLP does argue that Barnwell is lying when he claims to have slipped on "a slick spot" outside the restroom and fallen instead of slipping on the water near the counter. The entire basis of CLP's argument is that the surveillance-video footage proves that Barnwell is lying because the surveillance-video footage does not show Barnwell slipping and falling, but it does show him slipping. However, CLP has not offered any explanation of the fact that the surveillance-video cameras do not include footage of the area of the restaurant outside the restroom where Barnwell alleges to have slipped and fallen. Regardless, CLP argues that "[t]he court may not consider deposition or affidavit testimony that directly contradicts earlier deposition or affidavit testimony without adequate explanation." McGough v. G&A, Inc., 999 So. 2d 898, 904 (Ala. 2007). CLP argues that Barnwell's later affidavit testimony directly contradicts his earlier deposition testimony. Specifically, CLP directs this Court's attention to the following deposition testimony of Barnwell: 19 1151329 "[CLP's trial counsel:] After you wash your hands in the restroom, what happens after that? "[Barnwell:] I just come out and started walking straight back and the door -- the entrance door would be on my left and the counter would be on the right. "[CLP's trial counsel:] What happened after that? "[Barnwell:] I had -- I was going to turn and go to the counter, I planted my left foot. When I did, it just kind of slipped out from under me sort of sideways and I went back down on my left hip and pushed myself just kind of all one motion, just down and hit and then back up. "[CLP's trial counsel:] I'm going to walk through what we just talked about. You're coming out of the restroom and you're going to make a right turn to head towards the counter? "[Barnwell:] Yes." CLP argues that this portion of Barnwell's deposition testimony directly contradicts Barnwell's affidavit testimony in which Barnwell states that he fell outside the restroom. We do not find CLP's argument convincing. Barnwell's deposition testimony indicates that he slipped and fell at some point after he exited the restroom and before he arrived at the counter. Barnwell's deposition testimony indicates that he slipped while making a right turn. As set forth above, it would have been necessary for Barnwell to make 20 1151329 two right turns to get to the counter from the restroom. First, Barnwell would have had to have made a right turn upon exiting the restroom and, second, Barnwell would have had to have made another right turn, after walking a few feet away from the restroom, to approach the counter. Barnwell was generally heading toward the counter in making both right turns. The above-quoted deposition testimony of Barnwell could be read as indicating that Barnwell fell while making either right turn. Nothing in Barnwell's deposition testimony indicates exactly where he allegedly fell. CLP's trial attorney did not ask Barnwell during his deposition where exactly in the restaurant he fell; Barnwell's deposition testimony leaves this fact ambiguous. CLP also notes that the surveillance-video footage shows an individual slipping on the water from the mopping of the floor near the counter. As noted above, there is no evidence explaining the contents of the surveillance-video footage. Regardless, for purposes of this appeal, we will assume that the individual who slips on the water near the counter on the surveillance-video footage is Barnwell. CLP notes that, assuming Barnwell did fall outside the restroom, Barnwell 21 1151329 never mentioned this "second slip" in his deposition testimony. According to CLP, this alone proves that Barnwell is lying in his affidavit testimony when Barnwell explains that he fell outside the restroom and not near the counter. We do not find this argument convincing. Barnwell stated in his deposition testimony that he was "addled" and "disillusioned" after his alleged slip and fall. It is plausible that as a result Barnwell simply did not remember the "second slip." Finally, CLP takes issue with a portion of Barnwell's deposition testimony in which Barnwell states that "the lady at the cash register" saw him fall. CLP argues that photographs of the restaurant show that there is a wall between the counter, where the cash registers are located, and the restroom. CLP argues that it would have been impossible for "the lady at the cash register" to have seen Barnwell fall if he fell outside the restroom. CLP fails to mention, however, that a photograph in evidence shows that the wall between the counter and the restroom does not reach all the way to the ceiling. There is a cutout in the wall that allows employees working behind the counter to see the area near the 22 1151329 outside of the restroom, although not the area immediately outside the restroom. Further, Barnwell's deposition testimony does not indicate that "the lady at the cash register" saw him fall while she was working at the cash register. CLP's argument is not convincing. As did the circuit court, we will also consider Barnwell's deposition and affidavit testimony. Doing so and viewing the evidence in a light most favorable to Barnwell, the nonmovant, we do not conclude that Barnwell's later affidavit testimony directly contradicts his earlier deposition testimony so as to be irreconcilable. Conclusion Based on the foregoing, we hold that the circuit court erred in entering a summary judgment in favor of CLP. CLP failed to present substantial evidence supporting its affirmative defense that the condition that allegedly caused Barnwell to slip and fall was an open and obvious danger. Accordingly, we reverse the circuit court's judgment and remand the matter for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Murdock, Main, and Wise, JJ., concur. 23

April 21, 2017

15d8a263-d6c4-47b9-a68c-9693f63c5852

Ex parte Paudriciquez Martez Fuller.

N/A

1150487

Alabama

Alabama Supreme Court

Rel: 3/03/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150487 ____________________ Ex parte Paudriciquez Martez Fuller PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CRIMINAL APPEALS (In re: Paudriciquez Martez Fuller v. State of Alabama) (Jefferson Circuit Court, Bessemer Division, CC-14-422; Court of Criminal Appeals, CR-14-0368) PER CURIAM. WRIT QUASHED. NO OPINION. 1150487 Stuart, Bolin, Shaw, and Main, JJ., concur. Parker, Murdock, and Bryan, JJ., dissent. Wise, J., recuses herself. 2 1150487 PARKER, Justice (dissenting). I respectfully dissent from the majority's decision to quash the writ of certiorari this Court previously issued. This Court granted certiorari review to consider whether the Court of Criminal Appeals erred in holding that the Jefferson Circuit Court ("the trial court") did not commit reversible error in refusing to give two jury instructions requested by Paudriciquez Martez Fuller. Fuller v. State, [Ms. CR-14-0368, December 18, 2015] ___ So. 3d ___ (Ala. Crim. App. 2015). Specifically, we granted certiorari review to consider 1) whether Fuller was entitled to a jury instruction under Alabama's stand-your-ground law, § 13A-3-23(b), Ala. Code 1975, and 2) whether Fuller was entitled to a jury instruction on a lesser-included offense. I would affirm the Court of Criminal Appeals' judgment as to the first issue and reverse it as to the second issue. Alabama law defines self-defense in § 13A-3-23, Ala. Code 1975, which states, in pertinent part: "(a) A person is justified in using physical force upon another person in order to defend himself or herself or a third person from what he or she reasonably believes to be the use or imminent use of unlawful physical force by that other person, and he or she may use a degree of force which he or she 3 1150487 reasonably believes to be necessary for the purpose. ... "(b) A person who is justified under subsection (a) in using physical force, including deadly physical force, and who is not engaged in an unlawful activity and is in any place where he or she has the right to be has no duty to retreat and has the right to stand his or her ground." Although not explicitly stated in § 13A-3-23, the Court of Criminal Appeals explained in Malone v. State, [Ms. CR-14- 1326, June 3, 2016] ___ So. 3d ___, ___ (Ala. Crim. App. 2016), that the duty-to-retreat requirement, which was part of Alabama's common law, is still applicable under § 13A-3-23, as follows: "Before it was amended in 2006, § 13A–3–23(b), Ala. Code 1975, provided, in relevant part: "'(b) Notwithstanding the provisions of subsection (a), a person is not justified in using deadly physical force upon another person if it reasonably appears or he knows that he can avoid the necessity of using such force with complete safety: "'(1) By retreating, except that the actor is not required to retreat: "'a. If he is in his dwelling or at his place of work and was not the original aggressor; or 4 1150487 "'b. If he is a peace officer or a private person lawfully assisting a peace officer at his discretion.' "As noted in the Commentary to the Code section, § 13A–3–23 in 1975 'codifie[d] much of the contemporary doctrine on self-defense and the protection of others. Little distinction exists between former Alabama law and that of these codifications, except in the aspect pertaining to third persons in whose aid defendant has acted.' With regard to former subsection (b) specifically, the Commentary stated: "'Subsection (b) further qualifies the use of deadly force. If the defendant can avoid the necessity of taking life by retreating, in general he must give way. Former Alabama law required retreat if it is "reasonably apparent" that it can be done without increasing the danger. Some contemporary codifications require the defendant to "know" that safe retreat is possible. The Criminal Code retains the obligation to retreat in the interest of preserving life, but gives the defendant the benefit of reasonable appearances rather than actual knowledge of an alternative. Not requiring retreat from "in" one's dwelling or place of business conforms to Alabama case law.' "Thus, former subsection (b) was a codification of the common-law rules regarding a duty to retreat before using deadly force. As noted by one commentator, before its codification in former subsection (b), the duty to retreat had been recognized in Alabama cases for almost a century. See Jason W. Bobo, Following the Trend: Alabama Abandons the Duty to Retreat and Encourages Citizens to Stand Their Ground, 38 Cumb. L. Rev. 339, 354–58 5 1150487 (2008) (discussing the history of the duty to retreat in Alabama cases). "The 2006 amendment to § 13A–3–23 removed former subsection (b) and replaced it with the following: "'A person who is justified under subsection (a) in using physical force, including deadly physical force, and who is not engaged in an unlawful activity and is in any place where he or she has the right to be has no duty to retreat and has the right to stand his or her ground.' "As amended, § 13A–3–23 no longer includes an express codification of the common-law rules regarding the duty to retreat. In recognizing that there is no duty to retreat under certain conditions, however, § 13A–3–23 assumes that the common-law rules regarding a duty to retreat generally remain in effect in evaluating a claim of justified deadly force under § 13A–3–23. Otherwise, the no-duty-to-retreat provision of § 13A–3–23(b) makes no sense. Indeed, as this Court has recently explained: "'Section 13A–3–23(b) provides a qualified exception to the common-law rule that required a person to retreat rather than use deadly physical force if that person can retreat without increasing his or her peril. See Kyser v. State, 513 So. 2d 68 (Ala. Crim. App. 1987) (setting forth the standard concerning a person's duty to retreat under the common law and under a prior version of § 13A–3–23). Section 13A–3–23(b) exempts people who are not engaged in an unlawful activity and are in any place where they have the right to be from the common-law rule.' 6 1150487 "Wallace v. State, [Ms. CR–14–0595, Dec. 18, 2015] ___ So. 3d ___, ___ (Ala. Crim. App. 2015) (quoting Fuller v. State, [Ms. CR–14–0368, Dec. 18, 2015] ___ So. 3d ___, ___ (Ala. Crim. App. 2015) (emphasis added)). Accordingly, an accused who claims to have been justified in using deadly force under § 13A–3–23 must have complied with the common-law rules regarding the duty to retreat unless he or she meets the requirements of § 13A–3–23(b)." In my view, the pivotal issue in this case is whether Fuller presented evidence indicating that he was not engaged in unlawful activity so as to be entitled to a jury instruction under § 13A-3-23(b). Fuller does not dispute the fact that he was prohibited from possessing a firearm under § 13A-11-72(a), Ala. Code 1975. However, Fuller argues that he presented evidence indicating that he was justified in possessing the firearm before he needed it to actually defend himself, which, Fuller argues, entitled him to a jury instruction under § 13A-3-23(b). Fuller's actual argument is that he presented evidence indicating that he was justified in using the firearm to defend himself and, thus, that he was justified in possessing the firearm prior to his needing it to defend himself. See Fuller's brief, at pp. 8-9. Fuller argues that he presented evidence indicating that he reasonably believed that Romaine 7 1150487 Witherspoon, the victim, was going to use unlawful physical force on him as evidenced by the fact that Witherspoon pointed a gun at Fuller. Fuller also argues that he presented evidence indicating that he had no reasonable opportunity to retreat. Essentially, Fuller argues that he presented evidence indicating that he is entitled to a jury instruction under § 13A-3-23(a). Fuller then appears to argue that, on this basis, he was entitled to a jury instruction under § 13A- 3-23(b). There is no question that Fuller has demonstrated that he was entitled to a jury instruction on self-defense; the trial court agreed and so instructed the jury. It is well settled in Alabama that a person prohibited from possessing a firearm under § 13A-11-72(a) may be justified in possessing a firearm for purposes of self-defense.1 See Ex parte Taylor, 636 So. 1In his dissent, Justice Murdock quotes this sentence and states: "As a matter of logic, then, would it not be true that the relevant time for the application of this principle is the time at which the defendant actually uses the firearm?" ___ So. 3d at ___ (Murdock, J., dissenting). Of course Justice Murdock's statement would be true if the issue presented in this case was whether Fuller was entitled to a jury instruction on whether he was justified in using a firearm in defending himself. However, that is not the issue. Rather, the issue presented is whether a person prohibited from possessing a firearm under § 13A-11-72(a) is engaged in an unlawful activity and, thus, is not entitled to a stand-your- 8 1150487 2d 1246, 1247 (Ala. 1993). However, Ex parte Taylor and its progeny do not give a person prohibited from possessing a firearm under § 13A-11-72(a) carte blanche to possess a firearm at all times. This Court stated in Ex parte Taylor: "'We hold that when a felon is in imminent peril of great bodily harm, or reasonably believes himself or others to be in such danger, he may take possession ground jury instruction under § 13A-3-23(b). For purposes of this case, we are not concerned with whether Fuller was justified in possessing a firearm at the time he used it to defend himself -- that is irrelevant for purposes of § 13A-3- 23(b). Instead, § 13A-3-23(b) concerns the time at which a person still has the opportunity to retreat. The real issue is whether Fuller, assuming he had the opportunity to retreat, was justified in possessing the firearm during that time, in the moments before retreat became no longer possible. If he was not justified in possessing a firearm at that time, then Fuller was engaged in unlawful activity and, thus, was not entitled to a jury instruction under § 13A-3-23(b). Alabama's common-law rule has long been that "[t]he right to kill in self-defense does not arise until the defendant has offered or attempted to retreat, or to decline the offered combat, provided, however, there be open to him a reasonably safe mode, and that retreat would not increase his danger." Oldacre v. State, 196 Ala. 690, 693, 72 So. 303, 304 (1906) (emphasis added). Under Alabama's common law, before a person had the right to use deadly force to defend himself, he was required to retreat if retreat was reasonable; if the person failed to retreat he was not entitled to use deadly force. Obviously, if a person has an opportunity to retreat, that opportunity to retreat exists in a moment in time prior to there no longer being an opportunity to retreat and the use of deadly force becomes justifiable to defend onself. Section 13A-3-23(b) operates to remove the requirement of retreat, even if retreat is reasonable, and allows a person who is not engaged in unlawful activity to stand his ground. 9 1150487 of a weapon for a period no longer than is necessary or apparently necessary to use it in self-defense, or in defense of others. In such situation justification is a defense to the charge of felon in possession of a firearm.'" 636 So. 2d at 1247 (quoting State v. Blache, 480 So. 2d 304, 308 (La. 1985)(emphasis added)). Accordingly, Fuller does not demonstrate that he presented evidence indicating that he was justified in possessing the firearm before he needed it for his self-defense. Section 13A-3-23(b) operates to remove the requirement that a person claiming justification under § 13A-3-23(a) retreat if there is a reasonable opportunity to do so. Section 13A-3-23(b) applies, however, only if the person claiming its application is not engaged in an unlawful activity. The evidence supporting Fuller's argument that he was justified in possessing a firearm to defend himself is not evidence indicating that he was justified in possessing a firearm before he needed the firearm to defend himself. Evidence necessitating a jury instruction under § 13A-3-23(b) must relate to the time preceding the need to use physical force to defend oneself, whereas evidence necessitating a jury instruction under § 13A-3-23(a) must relate to the time at 10 1150487 which a person uses physical force to defend himself. Fuller has presented evidence concerning only the latter; he has not presented any evidence indicating that he was justified in possessing the firearm before his need to use it in self- defense arose. Fuller relies on Diggs v. State, 168 So. 3d 156 (Ala. Crim. App. 2016), in support of his argument. Fuller alleges that "[t]he Court of Criminal Appeals first ruled correctly in Diggs v. State ... where it ruled that a convicted felon does not have a duty to retreat and the stand your ground law applied to convicted felons." Fuller's brief, at pp. 10-11 (emphasis omitted). Fuller has misinterpreted Diggs. Ellis Andrel Diggs was a convicted felon who was prohibited from possessing a firearm under § 13A-11-72. On February 4, 2014, Diggs's girlfriend had had an altercation with Gary Blackwell; Blackwell hit Diggs's girlfriend, spit on her, and threatened to kill Diggs. Diggs's girlfriend told Diggs of the altercation she had had with Blackwell, and Diggs went to find Blackwell in order to verify Diggs's girlfriend's account of the incident. Diggs took a firearm with him to his meeting with Blackwell for his personal protection and because 11 1150487 Diggs's girlfriend had told Diggs that Blackwell also had a firearm. Diggs found Blackwell and began discussing the altercation that Blackwell had had with Diggs's girlfriend. The conversation became hostile, and Diggs and Blackwell shot their firearms at each other. Diggs shot Blackwell five times; Blackwell died from multiple gunshot wounds. At trial, Diggs requested that the jury be instructed on self-defense; the trial court refused to give Diggs's requested self-defense jury instruction. The jury returned a verdict finding Diggs guilty and Diggs appealed. On appeal, Diggs argued that the trial court erred in refusing to instruct the jury on self-defense. The State argued that Diggs was not entitled to a jury instruction on self-defense because, the State argued, Diggs was the initial aggressor. The State also argued "that because Diggs was a convicted felon, his arming himself with a pistol constituted unlawful activity; thus, according to the State, because Diggs was engaged in unlawful activity when he went to [Blackwell's place of business], his presence at [Blackwell's place of business] was unlawful and thus negates the defense of self-defense." 168 So. 3d at 161. 12 1150487 The Court of Criminal Appeals held that the evidence presented by Diggs, if believed by the jury, established Blackwell as the initial aggressor. The Court of Criminal Appeals also held: "[C]ontrary to the State's assertion, a felon is not deprived of the right to use a firearm against the immediate need to defend his life. "'"[W]hen a felon is in imminent peril of great bodily harm, or reasonably believes himself or others to be in such danger, he may take possession of a weapon for a period no longer than is necessary or apparently necessary to use it in self-defense, or in defense of others. In such a situation justification is a defense to the charge of felon in possession of a firearm."' "Ex parte Taylor, 636 So. 2d 1246, 1247 (Ala. 1993)(quoting State v. Blache, 480 So. 2d 304 (La. 1985)). Diggs's possession of a firearm before his need to defend his life may have been an event in violation of the law. However, his possession of a firearm was justified at the moment it became necessary for his self-defense." 168 So. 3d at 162. Accordingly, the Court of Criminal Appeals held that the trial court erred in refusing to give Diggs's requested self-defense jury instruction and reversed the trial court's judgment entered on the jury's verdict. In the present case, Fuller argues that the holding in Diggs supports his position that he is entitled to a jury 13 1150487 instruction under § 13A-3-23(b). I disagree. The Court of Criminal Appeals held in Diggs only that a person prohibited from possessing a firearm under § 13A-11-72 is nevertheless entitled to use a firearm "at the moment it [becomes] necessary for his self-defense." 168 So. 3d at 162. In Diggs, the Court of Criminal Appeals held that a person prohibited from possessing a firearm under § 13A-11-72 is justified in possessing a firearm only so long as is necessary to defend himself. The Court of Criminal Appeals even noted that "Diggs's possession of a firearm before his need to defend his life may have been an event in violation of the law." 168 So. 3d at 162. Indeed, such activity is unlawful activity. However, the issue in Diggs was not whether Diggs was entitled to a jury instruction under § 13A-3-23(b), but whether he was justified in possessing a firearm in the moment Diggs needed the firearm to defend himself, thereby entitling Diggs to a self-defense jury instruction under § 13A-2-23(a). Diggs is consistent with Alabama law, and nothing in Diggs pertains to the issue before us in the present case -- whether a person prohibited from possessing a firearm under § 13A-11- 14 1150487 72(a) is engaged in an unlawful activity and, thus, is not entitled to a jury instruction under § 13A-3-23(b). Accordingly, Fuller has failed to demonstrate that the Court of Criminal Appeals erred in affirming the trial court's denial of Fuller's requested stand-your-ground jury instruction. Fuller failed to present any evidence indicating that he was justified in possessing the firearm before he needed it for his self-defense. I conclude that the trial court did not exceed its discretion in refusing to give Fuller a jury instruction under § 13A-3-23(b). Based on the above reasoning, rather than quash the writ, I would affirm the portion of the Court of Criminal Appeals' decision affirming the trial court's decision refusing to give Fuller's requested jury instruction under § 13A-3-23(b). However, I would reverse the Court of Criminal Appeals' decision insofar as it affirmed the trial court's refusal to give Fuller's requested jury instruction on manslaughter as a lesser-included offense of capital murder. Fuller argues that "the trial court committed reversible error when it failed to charge the jury on the lesser included offense of 'provocation manslaughter.'" Fuller's brief, at pp. 11-12. In Fuller, the 15 1150487 Court of Criminal Appeals set forth the following applicable law concerning this issue: "'"'A person accused of the greater offense has a right to have the court charge on lesser included offenses when there is a reasonable theory from the evidence supporting those lesser included offenses.' MacEwan v. State, 701 So. 2d 66, 69 (Ala. Crim. App. 1997). An accused has the right to have the jury charged on '"any material hypothesis which the evidence in his favor tends to establish."' Ex parte Stork, 475 So. 2d 623, 624 (Ala. 1985). '[E]very accused is entitled to have charges given, which would not be misleading, which correctly state the law of his case, and which are supported by any evidence, however[] weak, insufficient, or doubtful in credibility,' Ex parte Chavers, 361 So. 2d 1106, 1107 (Ala. 1978), 'even if the evidence supporting the charge is offered by the State.' Ex parte Myers, 699 So. 2d 1285, 1290-91 (Ala. 1997), cert. denied, 522 U.S. 1054, 118 S. Ct. 706, 139 L. Ed. 2d 648 (1998). However, '[t]he court shall not charge the jury with respect to an included offense unless there is a rational basis for a verdict convicting the defendant of the included offense.' § 13A-1-9(b), Ala. Code 1975. 'The basis of a charge on a lesser-included 16 1150487 offense must be derived from the evidence presented at trial and cannot be based on speculation or conjecture.' Broadnax v. State, 825 So. 2d 134, 200 (Ala. Crim. App. 2000), aff'd, 825 So. 2d 233 (Ala. 2001), cert. denied, 536 U.S. 964, 122 S. Ct. 2675, 153 L. Ed. 2d 847 (2002). '"A court may properly refuse to charge on a lesser included offense only when (1) it is clear to the judicial mind that there is no evidence tending to bring the offense within the definition of the lesser offense, or (2) the requested charge would have a tendency to mislead or confuse the jury."' Williams v. State, 675 So. 2d 537, 540-41 (Ala. Crim. App. 1996), quoting Anderson v. State, 507 So. 2d 580, 582 (Ala. Crim. App. 1987)." "'Clark v. State, 896 So. 2d 584, 641 (Ala. Crim. App. 2000) (opinion on return to remand).' "Harbin v. State, 14 So. 3d 898, 909 (Ala. Crim. App. 2008). "Section 13A-6-3(a), Ala. Code 1975, provides, in pertinent part: "'A person commits the crime of manslaughter if: "'.... "'(2) He causes the death of another person under circumstances that would constitute murder under Section 13A-6-2[, 17 1150487 Ala. Code 1975]; except, that he causes the death due to a sudden heat of passion caused by provocation recognized by law, and before a reasonable time for the passion to cool and for reason to reassert itself.' "In Spencer v. State, 201 So. 3d 573 (Ala. Crim. App. 2015), this Court stated: "'"Alabama courts have, in fact, recognized three legal provocations sufficient to reduce murder to manslaughter: (1) when the accused witnesses his or her spouse in the act of adultery; (2) when the accused is assaulted or faced with an imminent assault on himself; and (3) when the accused witnesses an assault on a family member or close relative." "'Rogers v. State, 819 So. 2d 643, 662 (Ala. Crim. App. 2001). "'In discussing what constitutes "imminent assault" in regard to provocation manslaughter, this Court has stated: "'"'"'Mere words, no matter how insulting, never reduce a homicide to manslaughter. Manslaughter is the unlawful killing of a human being without malice; that is, the unpremeditated result of passion –- heated blood –- caused by a sudden, sufficient provocation. And such provocation can, in no case, be less than an assault, either actually committed, or menaced under such pending 18 1150487 circumstances as reasonable to convince the mind that the accused has cause for believing, and did believe, he would be presently assaulted, and that he struck, not in consequence of a previously formed design, general or special, but in consequence of the passion suddenly aroused by the blow given, or apparently about to be given.' ..." Reeves v. State, 186 Ala. 14, 65 So. 160, 161 [(1914)].' Easley v. State, 246 Ala. 359, at 362, 20 So. 2d 519, 522 (Ala. 1944). Thus, the mere appearance of imminent assault may be sufficient to arouse heat of passion." "'Cox v. State, 500 So. 2d 1296, 1298 (Ala. Crim. App. 1986). "What constitutes legal provocation is left to the trial judge's interpretation." Gray v. State, 574 So. 2d 1010, 1011 (Ala. Crim. App. 1990) (citing Shultz v. State, 480 So. 2d 73, 76 (Ala. Crim. App. 1985)).' "Spencer, 201 So. 3d at 596-97. "'"In addition, '[p]rovocation has been defined as that treatment by another which arouses anger or passion, which produces in the minds of persons ordinarily constituted the highest degree of exasperation, rage, anger, sudden resentment, or terror. Johnson v. State, 129 Wis. 146, 108 N.W. 55 (1906).' Nelson v. State, 511 So. 2d 225, 240 (Ala. Crim. App. 1986), aff'd, 511 So. 2d 248 (Ala. 1987), cert. denied, 486 U.S. 1017, 108 S. Ct. 1755, 100 L. Ed. 2d 217 (1988)."' James v. State, 24 So. 3d 1157, 1163 (Ala. Crim App. 2009), quoting McDowell v. State, 740 So. 2d 465, 468 (Ala. Crim. App. 1998). 19 1150487 Furthermore, '[s]elf-defense and provocation manslaughter are not mutually exclusive.' James, 24 So. 3d at 1164." Fuller, ___ So. 3d at ___. The Court of Criminal Appeals then concluded that there was no evidence indicating that Fuller was provoked by Witherspoon's actions. The Court of Criminal Appeals stated: "Fuller testified that the reason he fired the shots at Witherspoon was to protect himself and his 'family,' i.e., Fuller testified that he decided to 'do what [he] had to do' and fire the shots in self- defense. However, there was no testimony indicating that Fuller fired the shots as a result of 'heated blood,' i.e., as a result of 'the highest degree' of rage, terror, or anger." Fuller, ___ So. 3d at ___. Fuller's argument that the Court of Criminal Appeals erred in affirming the trial court's decision not to instruct the jury on provocation manslaughter as a lesser-included offense of capital murder is based almost exclusively on the dissenting portion of Judge Kellum's special writing, concurring in part and dissenting in part, in Fuller. I find the following reasoning set forth in Judge Kellum's writing persuasive: "'The "safer" practice is to charge upon all degrees of homicide: "(I)t is much the safer rule to charge upon all the 20 1150487 degrees of homicide included in the indictment, when a party is on trial for murder, unless it is perfectly clear to the judicial mind that there is no evidence tending to bring the offense within some particular degree." Pierson v. State, 99 Ala. 148, 153, 13 So. 550 (1892), approved in Williams v. State, 251 Ala. 397, 399, 39 So. 2d 37 (1948).' "Phelps v. State, 435 So. 2d 158, 163 (Ala. Crim. App. 1983). In determining whether an accused is entitled to a jury instruction on a lesser-included offense, this Court must view the evidence in the light most favorable to the accused. See Ex parte McGriff, 908 So. 2d 1024 (Ala. 2004). 'The mere appearance of an imminent assault may be sufficient to constitute legal provocation to support heat-of-passion manslaughter.' Harris v. State, 683 So. 2d 26, 28 (Ala. Crim. App. 1996). '"To constitute adequate legal provocation, it must be of a nature calculated to influence the passions of the ordinary reasonable man."' Id. (quoting Biggs v. State, 441 So. 2d 989, 992 (Ala. Crim. App. 1983)). "Contrary to the majority's conclusion, the fact that Fuller testified that he fired the shots to protect his 'family,' who he believed was in danger, does not preclude a jury instruction on heat-of- passion manslaughter. '[S]elf-defense and provocation manslaughter are not mutually exclusive concepts.' Lane v. State, 38 So. 3d 126, 130 (Ala. Crim. App. 2009). Indeed, heat-of-passion manslaughter '"is designed to cover those situations where the jury does not believe a defendant is guilty of murder but also does not believe the killing was totally justified by self-defense."' Williams v. State, 675 So. 2d 537, 541 (Ala. Crim. App. 1996). In McDowell v. State, 740 So. 2d 465 (Ala. Crim. App. 1998), we said: 21 1150487 "'In denying McDowell's requested charges on manslaughter, the trial court stated that because McDowell had testified that his purpose in returning to the scene was to effect a reconciliation, it would be improper to instruct the jury on heat-of-passion manslaughter because McDowell was not "in such a blind fury that he acted regardless of the admonition of the law, in other words, that he was beside himself with fury in the shooting." The trial court failed to recognize that passion encompasses more than the single emotion of fury or rage. Black's Law Dictionary 1124 (6th ed. 1990) defines passion as it relates to manslaughter as "any of the emotions of the mind known as rage, anger, hatred, furious resentment, or terror, rendering the mind incapable of cool reflection." J. Miller, Handbook of Criminal Law § 92(d) (1934), states: "Although the passion of manslaughter is frequently referred to as a passion of anger it may be any of the other emotional outbursts which are referred to as passion as for instance sudden resentment, or fear, or terror, provided only that it result from adequate provocation and that it be actually the cause of the killing." There was evidence presented that, if believed by the jury, would support a finding that in those moments when Simon was approaching him, McDowell believed that Simon was about to assault him and that McDowell acted out of fear.' "740 So. 2d at 468-69. In Cox v. State, 500 So. 2d 1296 (Ala. Crim. App. 1986), we said: "'Under the present facts, the appellant fired the first shot during a fight between his wife, the deceased's 22 1150487 ex-wife, and the deceased. The deceased then verbally threatened the appellant and made a movement towards him, whereupon the appellant shot the deceased in the stomach, which resulted in his death. The jury could have reasonably found that the appellant believed that he was about to be assaulted, and, therefore acted out of the heat of passion.' "500 So. 2d at 1298. In Wylie v. State, 445 So. 2d 958 (Ala. Crim. App. 1983), we further stated: "'Appellant's testimony was presented in support of her claim of self-defense to prove that she was, indeed, justified in killing her husband. Implicit in appellant's version of the facts was the theory that she was provoked by her husband's imminent attack upon her. If believed, appellant's version of the facts might have provided a "rational basis" for a conviction of manslaughter pursuant to § 13A-6-3(a)(2), Code of Alabama 1975. But see, Pennell v. State, [429 So. 2d 679 (Ala. Crim. App. 1983)] (evidence did not justify a manslaughter instruction [where evidence established there was no provocation recognized by law and, even if there were, there was sufficient time for the accused to cool off]). However incredible appellant's version of the facts might have been, in light of the state's convincing evidence to the contrary, there was evidence of sufficient provocation to reduce the offense from murder to manslaughter. See, Reeves v. State, 186 Ala. 14, 65 So. 160 (1914); Roberson v. State, 217 Ala. 696, 117 So. 412 (1928). Under these circumstances the jury would have been authorized to find the appellant 23 1150487 guilty of only manslaughter, as the result of an imperfect claim of self-defense.' "445 So. 2d at 963. "Similarly, here, implicit in Fuller's testimony that he fired the shots to protect himself and his 'family,' who he believed was in danger, was the theory that Fuller was provoked by the victim's pointing a gun at him and, therefore, that he acted out of fear. Simply put, viewing the evidence in the light most favorable to Fuller, there was evidence presented that, if believed by the jury, would support a finding that Fuller believed that the victim was about to shoot him and that Fuller, therefore, fired his gun in a sudden heat of passion. The question whether Fuller, in fact, shot and killed the victim because of a sudden passion caused by seeing the victim point a gun at him was a question that should have been submitted to the jury. See, e.g., Rogers v. State, 819 So. 2d 643, 661 (Ala. Crim. App. 2001) ('The question whether Rogers shot and killed Angelo Gordon and Michael Davis because of a sudden passion caused by seeing his brother Rudolph engaged in a fight with Gordon, seeing Gordon with a gun, and knowing that Gordon had shot and seriously injured Rudolph the year before, was a question for the jury.'); and Cox, 500 So. 2d at 1298 ('This court has previously addressed this issue and held that "[w]hether heat of passion was sufficiently proven was for the jury to determine."')." Fuller, ___ So. 3d at ___ (Kellum, J., concurring in part and dissenting in part). I agree with the reasoning set forth in Judge Kellum's writing. Based on the authorities and analysis in that writing, I am of the opinion that the trial court exceeded its 24 1150487 discretion in refusing to give Fuller's requested jury instruction on provocation manslaughter as a lesser-included offense of capital murder. Fuller presented evidence entitling him to this requested jury instruction. Accordingly, I would reverse the Court of Criminal Appeals' decision in Fuller insofar as it affirmed the trial court's refusal to give Fuller's requested jury instruction on provocation manslaughter as a lesser-included offense of capital murder. 25 1150487 MURDOCK, Justice (dissenting). I dissent from quashing the writ of certiorari previously issued. I believe this Court should examine critically the conclusion of the trial court and the Court of Criminal Appeals that Paudriciquez Martez Fuller was not entitled to a stand-your-ground instruction. I also believe a manslaughter charge should have been given. As to the latter issue, I agree in the main with Justice Parker's special writing and the dissenting portion of Judge Kellum’s special writing below, concurring in part and dissenting in part. I write separately, however, to address the former issue, whether Fuller was entitled to a stand-your-ground instruction. One possible justification for the outcome of this case as it relates to the application of Alabama's stand-your- ground statute is expressed by Justice Parker in his special writing. I am struggling with the proposition, however, that the dispositive issue is simply a temporal one, i.e., that what matters is whether the defendant was "engaged in an unlawful activity" before the time the defendant stands his or her ground. 26 1150487 Justice Parker’s analysis of this issue begins with the following premise with which I do agree: "It is well settled in Alabama that a person prohibited from possessing a firearm under § 13A-11- 72(a)[, Ala. Code 1975,] may be justified in possessing a firearm for purposes of self-defense." ___ So. 3d at ___ (Parker, J., dissenting). As a matter of logic, then, would it not be true that the relevant time for the application of this principle is the time at which the defendant actually uses the firearm? If the defendant is justified in using the weapon at that time, then he or she is justified in having possession of it at that time. If timing is dispositive, would not that be the relevant time? Whether the defendant was in possession of, or justified in being in possession of, the firearm at some previous moment in time is not the issue, is it? As to the present case, then, the only question would appear to be whether Fuller was engaged in an unlawful activity at the time during which Fuller actually used the firearm. It is posited, however, that "[e]vidence necessitating a jury instruction under § 13A-3-23(b)[, Ala. Code 1975,] must relate to the time preceding the need to use physical force to defend oneself, whereas evidence necessitating a jury 27 1150487 instruction under § 13A-3-23(a) must relate to the time at which a person uses physical force to defend himself." ___ So. 3d at ___ (Parker, J., dissenting). But there may not be such a "time preceding the need to use physical force to defend oneself." The threat could arise so suddenly that there is only time for one choice in the moment: retreating or defending. And more fundamentally, I do not see any textual basis (or other authority) for such a temporal difference. To the contrary, both subsections speak in the present tense, referring to a person who "is justified" and "is not engaged in an unlawful activity and is in any place where he or she has the right to be." In addition, it is clear that the two provisions were drafted to work in tandem. Both relate to the time when the person is using the physical force in question and address whether the person’s actions are justified at that time. My thoughts on the foregoing issue find support in the following statement in Diggs v. State, 168 So. 3d 156, 162 (Ala. Crim App. 2015): "'[The defendant's] possession of a firearm before his need to defend his life may have been an event 28 1150487 in violation of the law. However his possession of a firearm was justified at the moment it became necessary for his self-defense.'" Ultimately, therefore, I cannot agree that what matters is simply whether any "unlawful activity" occurred and whether it occurred for some time (how much is not clear) before the defendant "stood" his or her ground. What I do think matters is whether an unlawful activity takes place before the defendant's standing of his or her ground that materially contributes to the defendant’s being in a position where he or she must choose either to retreat or to defend. That is, I believe the legislature intended that the unlawful activity be tied to, or be a part of, the confrontation that ensues -- that it bear sufficient causal relation to that confrontation. If a felon in possession of a firearm brandishes it in such a way as to cause another to perceive a threat and thereby cause an escalation that subsequently results in a deadly confrontation, that is one thing. But I cannot believe that the legislature intended that a minor who is in possession of a stolen package of cigarettes from a convenience store or a woman who is driving a car one mile per hour over the speed limit is unable to defend himself or herself under the stand- 29 1150487 your-ground doctrine when approached by an aggressor seeking to cause the unlawful actor great bodily harm completely unrelated to these prior (and continuing) transgressions. And I do not believe the text chosen by our legislature requires such an understanding. To the contrary, I believe the text permits the meaning I assert. See, e.g., Beal v. State, [No. 2014-KA-01424-COA, July 19, 2016] ___ So. 3d ___, ___ (Miss. Ct. App. 2016) (Barnes, J., dissenting); cf. City of Jackson v. Perry, 764 So. 2d 373, 379 (Miss. 2000) (holding that, for recovery under the Mississippi Tort Claims Act to be barred because of a victim's criminal activity at the time of the injury, "it must be shown that the criminal activity has some causal nexus to the wrongdoing of the tortfeasor"). I believe the facts of the present case should be examined under this understanding of Alabama’s stand-your-ground statute. 30

March 3, 2017

7a1aae7a-8fd4-4889-8dac-c2d8fc17dccf

Nix v. Franklin County Dept. of Human Resources

N/A

1160494

Alabama

Alabama Supreme Court

Rel: 04/14/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1160494 ____________________ Jerry Nix v. Franklin County Department of Human Resources Appeal from Franklin Circuit Court (CV-15-900196) MAIN, Justice. Jerry Nix appeals from a summary judgment entered by the Franklin Circuit Court finding that he is an adult in need of protective services under the Adult Protective Services Act of 1160494 1976, §§ 38-9-1 to -11, Ala. Code 1975 ("the Act"). We reverse and remand. I. Facts and Procedural History On December 7, 2015, the Franklin County Department of Human Resources ("DHR") filed a petition in the Franklin Circuit Court pursuant to § 38-9-5, Ala. Code 1975, and § 38- 9-6, Ala. Code 1975, seeking emergency protective placement for Nix. DHR alleged that Nix, then 78 years old, was an "adult in need of protective services" as that term is defined by the Act. The petition claimed that Nix had not been taking his medications for diabetes and hypertension and that he had been the victim of a postal scam costing him thousands of dollars. DHR further alleged that Nix urgently required nursing-home care to protect his health and safety and that, otherwise, Nix was in immediate danger. DHR requested emergency-protective placement for Nix and that the court set a hearing pursuant to § 38-9-6 to determine Nix's need for protective services. On the same day the petition for emergency placement was filed, the trial court entered an order declaring that Nix was indigent, that he was in need of protective services, and that 2 1160494 he needed a conservator and a guardian to administer his estate and to see to his medical needs. The trial court ordered DHR to provide protective services for Nix, appointed a guardian ad litem to represent Nix in the proceedings, and appointed Nix's son, Darren Nix, as conservator of Nix's estate and guardian of his person. The trial court set a hearing on the matter for December 21, 2015. Nix was removed from his home and was placed in the Shoals Hospital Senior Care Center in Muscle Shoals. On December 14, 2015, Nix, represented by his guardian ad litem, filed an answer to DHR's petition, denying all material allegations. The trial court set the matter for a jury trial on February 29, 2016. On January 12, 2016, DHR filed a motion to replace Darren Nix as Nix's guardian and conservator with the Franklin County sheriff. DHR informed the court that Darren Nix no longer wished to serve as his father's guardian or conservator. DHR also requested that the new guardian/conservator be allowed to sell Nix's house to pay for his care and that Nix be transported from Shoals Hospital Senior Care Center to an assisted-living facility. Nix, through his guardian ad litem, 3 1160494 responded that he had no objection to the removal of his son as guardian and conservator and the appointment of the Franklin County sheriff as his guardian and conservator, but he objected to the sale of his house or any of his assets "before there has been an adjudication by a jury that [Nix] is an adult in need of protective services." On January 13, 2016, the trial court removed Darren Nix as guardian and conservator and replaced him with the Franklin County sheriff. The trial court also entered an order authorizing the newly appointed guardian and conservator to sell Nix's house at or above fair-market value. For reasons unclear from the record, the case did not proceed to trial as scheduled on February 29. On May 18, 2016, Nix, through his guardian ad litem, filed a motion for an independent mental evaluation. Nix contended that the doctors who had previously evaluated him were employed or retained by DHR and therefore were not independent. He also requested that he be permitted an independent medical exam by a doctor specializing in geriatrics. Nix alleged that he was financially able to pay for the mental evaluation. Nix further requested that the case be set for a final hearing. 4 1160494 On May 23, 2016, the trial court entered an order denying Nix's request for an independent mental evaluation. On June 17, 2016, DHR filed a "Petition for the Sale of Real Estate," seeking to be allowed to sell Nix's house. DHR asserted that it had found a buyer for the house and attached a sales contract showing a $70,000 purchase price. DHR contended that the funds from the sale of the house would be used to pay for Nix's stay at the assisted-living facility. The trial court granted DHR's petition on June 20, 2016. On June 22, 2016, Nix, through his guardian ad litem, filed an objection to the sale of his house and a motion to set the case for trial. Nix argued: "1. The defendant, Jerry Nix, has been held in the custody of the Franklin County Department of Human Resources since December 7, 2015, without a trial in this matter. "2. The defendant is opposed to his home being sold, and in the event he is determined not to be an adult in need of protective services, he would need to be able to return to his home. "3. Under Code of Alabama Section 38-9-6 the defendant is entitled to a hearing not more than thirty days from the filing of the petition, and a jury of six persons shall be empaneled for said hearing to serve as a trier of facts. 5 1160494 "4. Under Code of Alabama Section 38-9-6(c), the Court shall give preference in making a determination to the least drastic alternative considered to be proper under the circumstances, including a preference for non- institutional care whenever possible. "5. Defendant maintains that non-institutional care such [as] return to his home with home health services would be proper in this case. Defendant would further consent to a conservator being appointed to assist the management of his affairs upon his returning to his home." In response to Nix's objection, the trial court entered the following order: "The Court has been made aware that [DHR] is filing a motion for summary judgment. This motion will have to be ruled on before a final sale of the home can be made. If the Motion is denied then the Court will address the sale of the home." On June 27, 2016, DHR filed a motion for a summary judgment. DHR requested that the trial court "enter a final order determining that Jerry Nix is an adult in need of protective services and ... allowing for the sale of Jerry Nix’s home." DHR contended that the undisputed facts establish that Nix is an adult in need of protective services under § 38-9-6. In support of its motion, DHR attached a number of exhibits, including the report of a United States postal inspector stating that Nix had been the victim of an 6 1160494 illegal mail-lottery-prize scam. According to the postal inspector, Nix had fallen victim to a scam in which he mailed sums of money to out-of-state addresses known to be associated with foreign-lottery scams to claim promised -- but nonexistent -- lottery prizes. The postal inspector stated that some of Nix's mail had been seized by the United States Postal Service and that "[e]xamination of the contents of the letters revealed Mr. Nix sent cash, checks, money orders, and credit card information for the purpose of claiming prizes." The postal inspector said it had been explained to Nix that the prize schemes were fraudulent and illegal and that Nix promised not to participate further. Nevertheless, Nix continued to send money to addresses associated with the illegal scheme. DHR also attached letters and medical records from three of Nix's physicians who had treated Nix both before and since he was removed from his home.1 Each doctor wrote that Nix was suffering from dementia. Dr. Leonides Santos, Nix's longtime 1Although no sworn, certified, or otherwise authenticated documents were attached to DHR’s motion, Nix did not object to the admissibility of, or move to strike, any of the exhibits offered by DHR and does not argue on appeal that the trial court erred in considering those documents. 7 1160494 physician, stated that Nix suffers from "major neurocognitive disorder" and recommended that he be admitted to a long-term- care assisted-living facility to protect him from harm and manipulation. Dr. Timothy L. Carpenter, the attending psychiatrist at Shoals Hospital Senior Care Center, wrote that Nix suffers from "Major Neurocognitive Disorder, Alzheimer’s Type." Dr. Carpenter stated that he believes Nix is at high risk of being harmed or of harming others and recommended in his January 6, 2016, letter that Nix be provided a court- appointed guardian. Dr. Loren McCoy wrote that he evaluated Nix on January 26, 2016. Dr. McCoy wrote that he had concluded that Nix was not competent to make decisions for himself regarding his finances or medical care and that Nix needed to be in an assisted-living facility. In its summary-judgment motion, DHR also argued that the sale of Nix's house was necessary because Nix's assets were "depleted to the point that he no longer can afford to pay to reside at [the assisted-living] facility without selling his home."2 2No evidence of Nix's assets was submitted. 8 1160494 On June 27, the same day DHR filed the motion for a summary judgment, the trial court entered an order granting the motion and authorizing the sale of Nix's house to proceed. On June 29, 2016, Nix moved to set aside the summary judgment, arguing that the entry of the court's order granting DHR's summary-judgment motion on the date the motion was filed violated the time and notice requirements of Rule 56(c)(2), Ala. R. Civ. P. The trial court set aside its summary judgment and set a hearing on the summary-judgment motion for July 8, 2016. On July 7, 2016, Nix, through his guardian ad item, filed a response in opposition to DHR's summary-judgment motion. Nix argued that under the Act he was entitled to a jury trial to determine whether he was an adult in need of protective services. He also argued that, even if he was in need of protective services, there was no evidence indicating that institutionalization was the least drastic alternative available. Nix submitted his own affidavit in opposition to summary judgment. In that affidavit, Nix testified: "My name is Jerry Nix and I am over the age of 19 years and have full knowledge of the matters and facts alleged herein. 9 1160494 "I am currently residing at the Brentwood Assisted Living facility against my will. Since December 7, 2015, I have been in the custody of the Franklin County Department of Human Resources, who placed me at Shoals Senior Care/Shoals Hospital. I am not an adult in need of protective services. I disagree with any medical opinion that says I cannot adequately live at my home alone and take care of myself. My home is located at 247 Woodmont Drive, Russellville, Alabama. While I have some minor medical issues, I can live at home with the assistance of home health services, and make adequate decisions regarding my care. While I also believe that I have the ability to manage my assets, I am not opposed to a conservator, if the Court would allow me to return to my home. Although I am well aware of the allegations that I have lost a lot of money due to scams, I do not deny that I have lost a significant amount of money but it is my money and it would be no different than if I went to Las Vegas or Tunica and lost all the money gambling. I simply made some poor financial decisions but those decisions were not based upon me being mentally incompetent. "I am a veteran and fought for my country and feel like my rights are being taken away from me because the Franklin County Department of Human Resources believes I cannot take care of myself the way they see fit. I own my own home, I have an adequate monthly income, and just want to be left alone to live my life the way I see fit. "I would like a hearing in front of a jury of my peers to plead my case to them." DHR moved to strike Nix’s affidavit on the ground that Nix was not mentally competent to testify on his own behalf. The trial court did not rule on the motion to strike. 10 1160494 At the summary-judgment hearing, Nix was present, and the trial court permitted him to testify on his own behalf. Although he had trouble remembering the names of the medications he was taking and seemed confused about the different doctors he had seen, Nix's testimony was, for the most part, lucid and responsive, as the following transcribed portion indicates: "Q: Tell the Court your full name, Jerry. "A: Jerry Clayton Nix. "Q: Okay. And what's your date of birth? "A: August 28, 1937. ".... "Q: And do you know where you're living at? "A: Yes. "Q: Tell us where you're living. "A: You talking about the home that I'm in now? "Q: No. No. Your house. Where is your house at? "A: It's at 247 Woodmont Drive in Russellville. "Q: And then, of course, you haven't been there for a while. Do you know when you were removed from your home? "A: Seven months ago. It was December 5. 11 1160494 ".... "Q: And where are you currently at? "A: I'm at the retirement home in, it's Muscle Shoals. I don't know the exact address, but it's in Brentwood. "Q: And do you have any kind of income? Do you draw a Social Security check? "A: Yes. "Q: Do you know what you're drawing? "A: I think it's [$]1901, I think it is. "Q: Okay. And, of course, Jerry, you understand that –- or do you understand that DHR has alleged that you don't have the ability to take care of yourself any longer? That you are what they call an adult in need of protective services? Are you aware of that information? "A: Yes. ".... "Q: Okay. And again, today, for the record, do you disagree with DHR that you are an adult in need of protective services? "A: No, I do not need protective services. I'm fully capable of doing anything that any normal person can on a given day. Because I'm a trained cook so I can cook. I was in the military, I've been in all kinds of situations and still capable today of taking care of myself and providing for myself." 12 1160494 Nix also admitted that he had lost a significant amount of weight before he was placed in the assisted-living facility. He explained that around the time of his weight loss he had just lost his wife of 16 years, had recently moved to Russellville from Atlanta, and, given these circumstances, simply had not been cooking as he normally would. Nix also agreed that he had lost some money but did not admit to being scammed. He testified: "Well, I was completely aware of what I was doing. I didn't think that I was going to win, you know, probably, but I knew that I had an option to possibly winning, and it wasn't a large amount of money." Nix further testified that he would be willing to undergo further evaluation by an independent doctor; that he would consent to someone helping him with his money; and that he was open to home-health services. On cross-examination, Nix admitted that he had no medical records to dispute the opinions of Dr. Santos, Dr. Carpenter, and Dr. McCoy. On July 15, 2016, the trial court entered a summary judgment for DHR "based on the medical records submitted with 13 1160494 the motion." Further, the trial court lifted the stay it had imposed on the sale of Nix's house.3 Nix appealed.4 3Although the trial court's final order did not specifically provide for the appropriate placement of Nix, it is clear from the record and the testimony that the placement made the basis of the summary judgment was Nix's continued residence at the assisted-living facility. It is apparent from the record and submissions of the parties that the trial court and the parties considered the order a final disposition of all the issues pending before the trial court. Thus, we treat the order as a final order. 4Nix appealed to the Court of Civil Appeals. On March 15, 2017, the Court of Civil Appeals transferred Nix's appeal to this Court on the basis that it had no subject-matter jurisdiction. We agree that appellate jurisdiction of this case properly lies in this Court. This appeal is from a final judgment in a civil action brought under the Act. The Act contains no specific provision concerning an appeal. Nevertheless, § 12-22-2, Ala. Code 1975, confers to all parties a right of appeal "to the appropriate appellate court" from any final judgment of the circuit court. This Court has been empowered to "exercise appellate jurisdiction coextensive with the state," unless otherwise provided by law. § 12-2-7, Ala. Code 1975. The Court of Civil Appeals' appellate jurisdiction, on the other hand, is limited. That court "shall have exclusive appellate jurisdiction of all civil cases where the amount involved, exclusive of interest and costs, does not exceed $50,000, all appeals from administrative agencies other than the Alabama Public Service Commission, all appeals in workers' compensation cases, all appeals in domestic relations cases, including annulment, divorce, adoption, and child custody cases and all extraordinary writs arising from appeals in said cases." § 12-3-10, Ala. Code 1975. The present case is not one of the types of cases upon which appellate jurisdiction has been expressly assigned to that court by § 12-3-10. Accordingly, the Court of Civil Appeals properly transferred this appeal to this Court. 14 1160494 II. Analysis On appeal, Nix argues that the trial court erred in granting DHR's motion for a summary judgment. He contends that questions of fact exist as to whether he was an adult in need of protective services and, if so, whether a less drastic protective placement was available and would be more appropriate. Our standard of review from a summary judgment is well settled: "We review a summary judgment de novo. Potter v. First Real Estate Co., 844 So. 2d 540, 545 (Ala. 2002)(citing American Liberty Ins. Co. v. AmSouth Bank, 825 So. 2d 786 (Ala. 2002)). "'"We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once a party moving for a summary judgment establishes that no genuine issue of material fact exists, the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. 'Substantial evidence' is 'evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' In reviewing a summary judgment, we view the evidence in a light most favorable to the nonmovant and entertain such reasonable inferences as the jury would have been free to draw."' 15 1160494 "844 So. 2d at 545 (quoting Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So. 2d 369, 372 (Ala. 2000))(citations omitted). "Summary judgment is appropriate only when there is no genuine issue of any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P." Hooper v. Columbus Reg'l Healthcare Sys., Inc., 956 So. 2d 1135, 1139 (Ala. 2006). At the summary-judgment stage, it is not the trial court’s function "'to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'" Camp v. Yeager, 601 So. 2d 924, 927 (Ala. 1992) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). Furthermore, "'"a court may not determine the credibility of witnesses on a motion for summary judgment."'" Wilson v. Teng, 786 So. 2d 485, 498 (Ala. 2000) (quoting Ex parte Usrey, 777 So. 2d 66, 68 (Ala. 2000), quoting in turn Phillps v. Wayne’s Pest Control Co., 623 So. 2d 1099, 1102 (Ala. 1993)). In the present case, DHR petitioned the trial court to order protective placement for Nix. Section 38-9-6 governs the procedure for a judicial determination ordering protective placement of or protective services for an adult. That section provides, in part: 16 1160494 "(a) An interested person may petition the court to order protective placement or other protective services for an adult in need of protective services. No protective placement or other protective services may be ordered unless there is a determination by the court that the person is unable to provide for his or her own protection from abuse, neglect, exploitation, sexual abuse, or emotional abuse. Upon a petition, setting forth the facts and name, age, sex, and residence of the person, the court of the circuit in which the person resides shall appoint a day, not more than 30 days from the filing of the petition, for a hearing on the petition. If, on the hearing of a petition, the person is not represented by counsel, the court shall appoint a guardian ad litem to represent him or her. A jury of six persons shall be impaneled for the hearing to serve as the trier of facts." A condition precedent to ordering protective placement is a determination that the person as to whom protective placement is being sought is an "adult in need of protective services." The Act defines that term as follows: "A person 18 years of age or old whose behavior indicates that he or she is mentally incapable of adequately caring for himself or herself and his or her interests without serious consequences to himself or herself or others, or who, because of physical or mental impairment, is unable to protect himself or herself from abuse, neglect, exploitation, sexual abuse, or emotional abuse by others, and who has no guardian, relative, or other appropriate person able, willing, and available to assume the kind and degree of protection and supervision required under the circumstances." § 38-9-2(2), Ala. Code 1975. 17 1160494 The drafters of the Act were keenly aware of the tensions between ensuring the public health and protecting individual liberties and expressed an intent to strike a balance between the two. The statement of legislative findings and intent in the Act provides that "[t]his chapter is designed to establish [protective] services and assure their availability to all persons when in need of them, and to place the least possible restriction on personal liberty and exercise of constitutional rights consistent with due process and protection from abuse, exploitation and neglect." § 38-9-3, Ala. Code 1975. In that regard, and in addition to the promise in § 38-9-6(a), Ala. Code 1975, of a speedy jury trial, the Act requires a court to "give preference in making a determination to the least drastic alternative considered to be proper under the circumstances, including a preference for noninstitutional care whenever possible." § 38-9-6(c), Ala. Code 1975. Further, the Act requires the court to obtain a "comprehensive evaluation of the adult in need of services," id.; guarantees that "[n]o civil rights are relinquished as a result of any protective placement under this chapter," § 38-9-6(i), Ala. Code 1975; and provides that, "[a]s far as is compatible with 18 1160494 the mental and physical condition of the adult in need of services or claimed to be in need of services under this chapter, every reasonable effort shall be made to assure that no action is taken without the full and informed consent of the person." § 38-9-6(j), Ala. Code 1975. In this case, DHR sought to establish that Nix was an adult in need of protective services, specifically protective placement in an assisted-living facility; that Nix was unable to protect himself from abuse, neglect, or exploitation; and that, therefore, it was entitled to a summary judgment. In support of its motion, DHR offered medical records and letters from three physicians who had personally examined Nix and who had each determined that Nix suffers from dementia and is unable to care for himself and evidence indicating that Nix had fallen victim to a lottery scam. Nix countered this evidence by testifying that he was, in fact, capable of taking care of himself and not in need of protective services. He further testified that he could live at home with the aid of home-health services and that he was open to the appointment of a conservator to oversee his estate. The question directly before this Court, therefore, is whether Nix's testimony 19 1160494 established a genuine issue of material fact precluding a summary judgment. It did. In this case, from the evidence in the record, we fail to see how the weighty issues before the court are fully resolved so as to entitle DHR to a judgment as a matter of law. Even if we agreed that Nix was an adult in need of protective services, there are, at the very least, questions of fact bearing on his need for protective placement and the "least drastic alternative" appropriate for Nix. Nix presented testimony concerning his abilities to live at home and to take care of himself, as well as testimony regarding his preference to remain in his home. That testimony was sufficient to establish a genuine issue of material fact. Accordingly, summary judgment was improper. Moreover, although we do not question that all involved in this case desire the best for Nix, we are troubled by the apparent lack of urgency and attention to statutory formalities in the prosecution of this petition for protective services. The trial court granted DHR's emergency petition on December 7, 2015. Under the Act, Nix was entitled to a hearing within 30 days. Nevertheless, 7 months passed before 20 1160494 the trial court entered the summary judgment finding Nix to be an adult in need of supervision, and it is now more than 15 months since Nix was removed from his home. It may very well be that an assisted-living facility is the appropriate and lawful protective placement for Nix, but he is still entitled to all the procedural safeguards due him under the Act, including a timely adjudication of his need for such services. Indeed, without a faithful adherence to the Act and the due- process protections owed to each person protected by the Act, we risk unnecessary and wrongful deprivation of liberty and property. For those "protected persons" dispossessed of their house and their assets, this may seem a fate far worse than a foreign-lottery postal scam. III. Conclusion For the above reasons, the summary judgment, as well as the order authorizing the sale of Nix's house, is reversed, and the case is remanded for the trial court to conduct, as soon as practicable, a formal hearing as required by § 38-9-6. REVERSED AND REMANDED. Stuart, Bolin, Parker, Murdock, Shaw, Wise, and Bryan, JJ., concur. 21

April 14, 2017

3406a23d-9b47-49f1-aa91-775f0efd0a96

Moore v. Alabama Judicial Inquiry Commission

N/A

1160002

Alabama

Alabama Supreme Court

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1160002 _________________________ Roy S. Moore, Chief Justice of the Supreme Court of Alabama v. Alabama Judicial Inquiry Commission Appeal from the Court of the Judiciary (No. 46) PER CURIAM.1 1Section 157(b), Ala. Const. 1901 (Off. Recomp.), provides that "[a] judge aggrieved by a decision of the Court of the Judiciary may appeal to the Supreme Court." Following the filing of the notice of appeal in this case on October 3, 2016, the members of the Alabama Supreme Court acknowledged that Canon 3 of the Alabama Canons of Judicial Ethics required their recusal from consideration of this appeal. In an order dated October 24, 2016, the Court, pursuant to § 149 and § 161(h), Ala. Const. 1901 (Off. Recomp.), and Ala. Code 1975, § 12-2-14, authorized "the Acting Chief Justice to participate with the Governor in causing the names of 50 judges to be drawn at random from a pool of all retired appellate justices and judges, retired circuit court judges, and retired district court judges, who are members of the Alabama State Bar, capable of service, and residents of the State of Alabama." 1 1160002 Facts and Procedural History The facts of this case are undisputed. On January 23, 2015, Judge Callie Granade, district judge for the United States District Court for the Southern District of Alabama, issued an order declaring unconstitutional both the Alabama Sanctity of Marriage Amendment, Ala. Const. 1901, Art. I, § 36.03, and the Alabama Marriage Protection Act, Ala. Code 1975, § 30-1-19, as violating the Due Process Clause and the The order further provided that "the first 7 judges shall constitute the special Supreme Court that will hear Chief Justice Moore's appeal. In the event any judge so selected is not willing and able to serve, then that judge's place shall be filled by the next judge on that list in order of selection who is willing and able to serve, until seven judges willing and able to serve have been selected. The names of such judges shall then be certified to the Governor." The drawing took place on October 27, 2016. On October 31, 2016, in compliance with the random-selection procedure, then Governor Robert Bentley appointed the following seven judges to serve as the special Supreme Court of Alabama in case no. 1160002, Roy S. Moore, Chief Justice of the Supreme Court of Alabama v. Alabama Judicial Inquiry Commission: the Honorable James Harvey Reid, Jr., of Baldwin County, Special Chief Justice; the Honorable Harris Edward McFerrin of Butler County; the Honorable Robert George Cahill of Jefferson County; the Honorable William Reddoch King of Crenshaw County; the Honorable Lynn Clardy Bright of Montgomery County; the Honorable Ralph Alton Ferguson, Jr., of Jefferson County, and the Honorable John David Coggin of Cherokee County, Special Associate Justices. Also on October 31, 2016, prior to her recusal, Acting Chief Justice Lyn Stuart, to the extent she retained the authority to do so, also appointed the same seven judges as previously appointed by Governor Bentley. 2 1160002 Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. Searcy v. Strange, 81 F. Supp. 3d 1285 (S.D. Ala. 2015). On January 26, 2015, Judge Granade entered an injunction prohibiting the Alabama Attorney General from enforcing any Alabama law that prohibits same-sex marriage. The injunction was stayed until February 9, 2015, to allow time for an appeal of her decision to the United States Court of Appeals for the Eleventh Circuit. Strawser v. Strange, 44 F. Supp. 3d 1206 (S.D. Ala. 2015). On January 27, 2015, Roy S. Moore, Chief Justice of the Alabama Supreme Court,2 sent a letter, on Supreme Court of Alabama letterhead, to then Governor Robert Bentley regarding Judge Granade’s orders, expressing "legitimate concerns about the propriety of federal court jurisdiction over the Alabama Sanctity of Marriage Amendment." In his three-page letter, Chief Justice Moore laid out his arguments as to why Judge Granade’s federal-court orders were not binding upon the State of Alabama and avowed: "As Chief Justice of the Alabama Supreme Court, I will continue to recognize the Alabama 2Chief Justice Moore was elected Chief Justice in November 2012 and assumed office in January 2013, for a six-year term that expires in January 2019. 3 1160002 Constitution and the will of the people overwhelmingly expressed in the Sanctity of Marriage Amendment." He also asked Governor Bentley "to continue to uphold and support the Alabama Constitution with respect to marriage" and advised that "I stand with you to stop judicial tyranny and any unlawful opinions issued without constitutional authority." On February 3, 2015, Chief Justice Moore penned another letter, on Administrative Office of Courts3 letterhead, addressed to the probate judges of Alabama and entitled "Federal Intrusion into State Sovereignty." To this 4-page letter, Chief Justice Moore also attached a 27-page memorandum of law, which concluded: "In fulfillment of my obligations as Administrative Head of the Unified Judicial System, I have herein offered you my considered guidance on how the recent orders from the United States District Court in Mobile affect your duties as an Alabama probate judge. Because, as demonstrated above, Alabama probate judges are not bound by Judge Granade's orders in the Searcy [v. Strange, 81 F. Supp. 3d 1285 (S.D. Ala. 2015),] and Strawser [v. Strange, No. 1:14-CV-424-CG-C (S.D. Ala. Jan. 26, 2015),] cases, they would in my view be acting in violation of their oaths to uphold the Alabama Constitution if they issued marriage licenses prohibited under Alabama law." 3The Chief Justice of the Alabama Supreme Court is also the administrative head of the Alabama Administrative Office of Courts. Ala. Const. 1901, § 149 (Off. Recomp.). 4 1160002 On February 8, 2015, Chief Justice Moore issued an administrative order to Alabama's probate judges, which provided: "WHEREAS, neither the Supreme Court of the United States nor the Supreme Court of Alabama has ruled on the constitutionality of either the Sanctity of Marriage Amendment or the Marriage Protection Act: "NOW THEREFORE, IT IS ORDERED AND DIRECTED THAT: "To ensure the orderly administration of justice within the State of Alabama, to alleviate a situation adversely affecting the administration of justice within the State, and to harmonize the administration of justice between the Alabama judicial branch and the federal courts in Alabama: "Effective immediately, no Probate Judge of the State of Alabama nor any agent or employee of any Alabama Probate Judge shall issue or recognize a marriage license that is inconsistent with Article 1, Section 36.03, of the Alabama Constitution or § 30-1-19, Ala. Code 1975. "Should any Probate Judge of this state fail to follow the Constitution and statutes of Alabama as stated, it would be the responsibility of the Chief Executive Officer of the State of Alabama, Governor Robert Bentley, in whom the Constitution vests 'the supreme executive power of this state,' Art. V, § 113, Ala. Const. 1901, to ensure the execution of the law. 'The Governor shall take care that the laws be faithfully executed.' Art. V, § 120, Ala. Const. 1901. '"If the governor's '"supreme executive power"' means anything, it means that when the governor makes a determination that the laws are not being faithfully executed, he can act using the legal means that are at his disposal."' Tyson v. Jones, 60 So. 3d 831, 850 (Ala. 2010)(quoting Riley 5 1160002 v. Cornerstone, 57 So. 3d 704, 733 (Ala. 2010))." (Boldface type in original.) From February through June 2015, Chief Justice Moore also conducted several interviews with representatives of national and local media outlets. On March 3, 2015, the Alabama Supreme Court released a decision in Ex parte State of Alabama ex rel. Alabama Policy Institute, 200 So. 3d 495 (Ala. 2015)("API I"), a per curiam opinion ordering the probate judges named as respondents to discontinue issuing marriage licenses to same-sex couples in compliance with Alabama law. Chief Justice Moore’s name did not appear in the vote line of this opinion, nor did he author or join any of the special writings. On March 10, 2015, the API I Court issued an order stating that API I "serves as binding statewide precedent," joining Judge Don Davis as a respondent, and enjoining Judge Davis "from issuing any further marriage licenses contrary to Alabama law." Ex parte State of Alabama ex rel. Alabama Policy Institute, 200 So. 3d at 557, 558. Chief Justice Moore’s name did not appear in the vote line of the order. On March 12, 2015, the Court issued another order declaring that all previously non-named probate judges within the State were to be respondents and were to be bound by its March 3, 2015, opinion in API I. 6 1160002 Chief Justice Moore’s name did not appear in the vote line of that order. On May 21, 2015, Judge Granade issued an order certifying a plaintiff class as "all persons in Alabama who wish to obtain a marriage license in order to marry a person of the same sex and to have that marriage recognized under Alabama law, and who are unable to do so because of enforcement of Alabama’s laws prohibiting the issuance of marriage licenses to same-sex couples and barring recognition of their marriages," and certifying a defendant class as "all Alabama county probate judges who are enforcing or in the future may enforce Alabama's laws barring the issuance of marriage licenses to same-sex couples and refusing to recognize their marriages." Strawser v. Strange, 307 F.R.D. 604, 614-15 (S.D. Ala. 2015). That same day, Judge Granade also issued an order declaring the Alabama Sanctity of Marriage Amendment and the Alabama Marriage Protection Act unconstitutional as violating the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution and enjoining the enforcement of any Alabama laws, including any injunction issued by the Alabama Supreme Court, that would prevent the issuance of a same-sex marriage license or the recognition of a same-sex marriage license. By that same 7 1160002 order, Judge Granade stayed her injunction until such time as the United States Supreme Court issued its ruling in a then pending appeal that raised many of the same issues -- Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015). Strawser v. Strange, 105 F. Supp. 3d 1323 (S.D. Ala. 2015). On June 26, 2015, the United States Supreme Court issued its opinion in Obergefell, holding that "same-sex couples may exercise the fundamental right to marry in all States" and that "there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character." 576 U.S. at ___, 135 S. Ct. at 2607-08. On June 29, 2015, the Alabama Supreme Court invited the parties to Ex parte State of Alabama ex rel. Alabama Policy Institute ("API") to submit any motions or briefs addressing the effect of the Obergefell decision on the existing orders in API. On July 1, 2015, Judge Granade issued an order clarifying that her May 21 order enjoining the enforcement of any Alabama laws, including any injunction issued by the Alabama Supreme Court, that would prevent the issuance of a same-sex marriage license or the recognition of a same-sex marriage license was 8 1160002 in effect and binding on all Alabama probate judges. Strawser, No. 14-0424-CG-C (S.D. Ala. July 1, 2015). On July 7, 2015, the Alabama probate judges filed in the federal district court an opposition to making Judge Granade's injunction a permanent injunction, stating: "The U.S. Supreme Court has now resolved the conflict between this Court's rulings and the ruling of the Alabama Supreme Court. Both Courts are entitled to interpret the U.S. Constitution, and the U.S. Supreme Court decided that this Court's interpretation was correct, essentially overruling the Alabama Supreme Court's determination. The bottom line is this: probate judges in this State were following Court orders when they either refused to issue marriage licenses or refused to issue same-sex marriage licenses. Now that the confusion about the law has been cleared up by the U.S. Supreme Court, there is no indication that the probate judges will violate their oath and refuse to follow what the Supreme Court has established, and what the Alabama Attorney General and the Governor of the State have said is now the law of the land." On September 2, 2015, Chief Justice Moore sent a memorandum he authored4 to Alabama Supreme Court Associate Justices Lyn Stuart, Michael F. Bolin, Tom Parker, Glenn Murdock, Greg Shaw, James Allen Main, Alisa Kelli Wise, and Tommy Bryan regarding the Court’s June 29 invitation for further briefing in API. In that memorandum, Chief Justice 4The copy of the memorandum included in the record on appeal is partially redacted. 9 1160002 Moore stated: "I believe it is time for us to make a decision in this case ... to acquiesce in Obergefell and retreat from our March orders or to reject Obergefell and maintain our orders in place." Chief Justice Moore then implored the Court to render guidance on this issue because, he said, "Obergefell is particularly egregious because it mandates submission in violation of religious conscience" and "ominous developments are already occurring in other states." On October 7, 2015, Chief Justice Moore sent a second memorandum regarding API to the same Alabama Supreme Court Justices.5 Chief Justice Moore wrote to inform his fellow Justices of an article published on AL.com, an online news service, entitled "Where is the Supreme Court of Alabama on gay marriage?"6 The article noted the Alabama Supreme Court's delay in addressing the effect of Obergefell on API I and the subsequent orders issued in API. Chief Justice Moore also reminded the Justices of their obligation to discharge their duties in a timely fashion and his "responsibility to respond 5The copy of the memorandum included in the record on appeal is partially redacted. 6A printed copy of the article was attached to the memorandum. 10 1160002 to the continuing delay of this Court in addressing an issue of serious public concern, as well as an obligation to answer the probate judges of this State who have asked for our assistance in protecting their religious liberty." On October 20, 2015, the United States Court of Appeals for the Eleventh Circuit summarily affirmed Judge Granade’s May 21, 2015, order "granting a preliminary injunction requiring the issuance of marriage licenses to same-sex couples." Strawser v. Alabama, No. 15-12508-CC (11th Cir. Oct. 20, 2015). On January 6, 2016, Chief Justice Moore issued a four- page administrative order to Alabama probate judges. That order stated, in part: "IT IS ORDERED AND DIRECTED THAT: "Until further decision by the Alabama Supreme Court, the existing orders of the Alabama Supreme Court that Alabama probate judges have a ministerial duty not to issue any marriage license contrary to the Alabama Sanctity of Marriage Amendment or the Alabama Marriage Protection Act remain in full force and effect." Chief Justice Moore, although citing several federal-court decisions questioning the extent of the application of Obergefell, did not address, discuss, cite, or otherwise alert 11 1160002 the probate judges to Judge Granade's May 21, 2015, order or the Eleventh Circuit’s affirmance of that order. On March 4, 2016, the Alabama Supreme Court issued an order dismissing all pending motions and petitions submitted in API ("API II"). Chief Justice Moore's name appeared in the vote line of this order as concurring specially, and, in addition to his special writing concurring specially, Chief Justice Moore issued a lengthy statement of nonrecusal explaining why his recusal from the matter was not necessary. On May 5, 2016, the Judicial Inquiry Commission filed a formal six-count complaint against Chief Justice Moore in the Court of the Judiciary, charging Chief Justice Moore with violating Canons 1, 2, 2A, 2B, 3, and 3A(6), Alabama Canons of Judicial Ethics. The Canons Chief Justice Moore is charged with violating read as follows: "Canon 1. A Judge Should Uphold the Integrity and Independence of the Judiciary "An independent and honorable judiciary is indispensable to justice in our society. A judge should participate in establishing, maintaining, and enforcing, and should himself observe, high standards of conduct so that the integrity and independence of the judiciary may be preserved. The provisions of this Code should be construed as applied to further that objective." ___________________ 12 1160002 "Canon 2. A Judge Should Avoid Impropriety and the Appearance of Impropriety in All His Activities "A. A judge should respect and comply with the law and should conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary. "B. A judge should at all times maintain the decorum and temperance befitting his office and should avoid conduct prejudicial to the administration of justice which brings the judicial office into disrepute. "...." ___________________ "Canon 3. A Judge Should Perform the Duties of His Office Impartially and Diligently "The judicial activities of a judge take precedence over his other activities. His judicial duties include all the duties of his office prescribed by law. In the performance of these duties, the following standards apply: "A. Adjudicative Responsibilities. ".... "(6) A judge should abstain from public comment about a pending or impending proceeding in any court, and should require similar abstention on the part of court personnel subject to his direction and control. This subsection does not prohibit judges from making public statements in the course of their official duties or from explaining for public information the procedures of the court." The secretary of the Court of the Judiciary personally served Chief Justice Moore with a copy of the complaint the same day 13 1160002 it was filed. As of the filing of the complaint, Chief Justice Moore was automatically disqualified from acting as a judge and was no longer able to perform his duties as Chief Justice, pending the resolution of the charges by the Court of the Judiciary. Ala. Const. 1901, § 159 (Off. Recomp.). On September 30, 2016, after considering the evidence, most of which was not disputed, the Court of the Judiciary rendered its judgment and issued a unanimous opinion holding that Chief Justice Moore had violated the Alabama Canons of Judicial Ethics as charged in the complaint. Although the majority of the Court of the Judiciary agreed that the appropriate sanction for Chief Justice Moore was removal from office, the court did not reach the necessary unanimous agreement for removal. However, the Court of the Judiciary did reach unanimous agreement on the sanction it ultimately imposed: "suspension from office without pay for the remainder of his term." Chief Justice Moore filed his notice of appeal with this Court on October 3, 2016. Scope of Review "The Court of the Judiciary is a 14 1160002 constitutionally created court with limited jurisdiction. Ala. Const. 1901, Amend. No. 581, § 6.18 [now § 157, Ala. Const. 1901 (Off. Recomp.)] (proclaimed ratified June 19, 1996). It can decide only cases involving charges brought against judges by the Judicial Inquiry Commission. § 6.18(a) [now § 157(a)]. 'A judge aggrieved by a decision of the Court of the Judiciary may appeal to the Supreme Court [of Alabama]. The Supreme Court shall review the record of the proceedings on the law and the facts.' § 6.18(b) [now § 157(b)]." Moore v. Judicial Inquiry Comm’n of Alabama, 891 So. 2d 848, 855 (Ala. 2004). Standard of Review "'The applicable standard of review for an order from the Court of the Judiciary is that the evidence must be clear and convincing. That is, "orders of the Court of the Judiciary are entitled to a presumption of correctness if the charge is supported by 'clear and convincing evidence.'"' In re Sheffield, 465 So. 2d 350, 355 (Ala. 1984) (quoting In re Samford, 352 So. 2d 1126, 1129 (Ala. 1977)). With regard to questions of law, this Court's review is de novo. Rogers Found. Repair, Inc. v. Powell, 748 So. 2d 869, 871 (Ala. 1999)(quoting Ex parte Graham, 702 So. 2d 1215 (Ala. 1997)). However, factual findings of the Court of the Judiciary based on ore tenus evidence are presumed correct, and '[the Court of the Judiciary's] judgment based on those findings will not be disturbed unless the appellate court, after considering all the evidence and all reasonable inferences that can be drawn therefrom, concludes that the judgment is plainly and palpably wrong, manifestly unjust, or without supporting evidence.' Boggan v. Judicial Inquiry Comm'n, 759 So. 2d 550, 555 (Ala. 1999). In the absence of specific factual findings, 'this court will assume that the trial court made those findings necessary to support its 15 1160002 judgment, unless such findings would be clearly erroneous and against the great weight and preponderance of the evidence.' 759 So. 2d at 555 (quoting Powers v. Judicial Inquiry Comm'n, 434 So. 2d 745, 749 (Ala. 1983)). Further, in reviewing an appeal from a judgment of the Court of the Judiciary finding the judge guilty of the charges against him or her, the Supreme Court 'must consider the evidence ... in the light most favorable to the Judicial Inquiry Commission, the prevailing party.' Boggan, 759 So. 2d at 555. "Our review is also guided by the Supremacy Clause of the United States Constitution: 'This Constitution, and the laws of the United States which shall be made in pursuance thereof ... shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any state to the contrary notwithstanding.' U.S. Const., art. VI, cl. 2." Moore, 891 So. 2d at 855 (footnote omitted). Issues on Appeal I. Chief Justice Moore argues that the Judicial Inquiry Commission and the Court of the Judiciary lack jurisdiction to investigate any complaint related to his issuance of the January 6, 2016, administrative order because, he says, only the Alabama Supreme Court may review an administrative order issued by a Chief Justice. Alabama Const. 1901, Art. VI, § 149, established the Chief Justice of the Alabama Supreme Court as the 16 1160002 administrative head of the Alabama judicial system. Section 12-5-20, Ala. Code 1975, grants the Justices of the Alabama Supreme Court the authority to "review, countermand, overrule, modify or amend any administrative decision by either the Chief Justice or the Administrative Director of Courts." When a complaint was submitted to the Judicial Inquiry Commission, that entity was tasked with investigating whether Chief Justice Moore, in issuing the order, violated a Canon of Judicial Ethics. In turn, once a formal complaint was filed, the Court of the Judiciary was tasked with determining whether clear and convincing evidence existed to show that issuance of the order violated a Canon of Judicial Ethics. Neither the Judicial Inquiry Commission nor the Court of the Judiciary was asked to "review, countermand, overrule, modify or amend" the January 6 order. The Court of the Judiciary is not an appellate court tasked with reviewing, overruling, modifying, reversing, or remanding any judicial order. Rather, the Court of the Judiciary is tasked with reviewing judicial conduct. The Court of the Judiciary may consider the content of a judicial order as it speaks to the conduct or motivations leading to the entry of the order or to whether that conduct or 17 1160002 motivation constituted a violation of a Canon, but the Court of the Judiciary can neither affirm nor reverse such an order; that authority lies exclusively with the appropriate appellate court. See §§ 12-2-7, 12-3-9, and 12-3-10, and 12-5-20, Ala. Code 1975. See In re Sheffield, 465 So. 2d 350, 357 (Ala. 1984)("In certain circumstances erroneous legal rulings may indeed amount to a failure to respect and comply with the law which undermines 'the public confidence in the integrity and impartiality of the judiciary' (Canon 2A), or to 'conduct prejudicial to the administration of justice which brings the judicial office into disrepute' (Canon 2B)."). Therefore, to the extent the Judicial Inquiry Commission investigated and the Court of the Judiciary considered the January 6, 2016, administrative order to determine whether its issuance undermined the public confidence in the integrity and impartiality of the judiciary, whether it was prejudicial to the administration of justice, or whether it violated any other Canon of Judicial Ethics, both entities acted within their jurisdiction. II. Chief Justice Moore argues that all charges asserted against him should be dismissed because, he says, the Judicial 18 1160002 Inquiry Commission failed to prove by clear and convincing evidence that he violated any of the Canons of Judicial Ethics as charged. Count I Count I of the complaint charged: "By willfully issuing his Administrative Order of January 6, 2016, in which he directed or appeared to direct all Alabama probate judges to follow Alabama's marriage laws, completely disregarding a federal court injunction when he knew or should have known every Alabama probate judge was enjoined from using the Alabama marriage laws or any Alabama Supreme Court order to deny marriage licenses to same-sex couples. Chief Justice Roy S. Moore violated the following Alabama Canons of Judicial Ethics in that he, separately and severally: "a. Failed to uphold the integrity and independence of the judiciary, Canon 1; "b. Failed to participate in establishing, maintaining, and enforcing and to himself observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the 19 1160002 administration of justice that brings the judicial office into disrepute, Canon 2B; and/or "g. Failed to perform the duties of his office impartially, Canon 3." Chief Justice Moore argues that the Court of the Judiciary's finding that his January 6, 2016, administrative order is anything other than a "status update" is unsupported by the text of the order itself. He argues that the order was a mere "status update" to clarify the confused state of the law for the probate judges and that he "did not direct the probate judges to do anything or [to] disregard federal law." (Chief Justice Moore's brief, at 53.) After reviewing the documents in evidence and Chief Justice Moore's testimony, the Court of the Judiciary held: "This court does not find credible Chief Justice Moore's claim that the purpose of the January 6, 2016, order was merely to provide a 'status update' to the State's probate judges. Chief Justice Moore repeatedly has asserted to this Court that he wanted to draw attention to the 'conflicting orders' of API I and the injunction in Strawser [v. Strange, 105 F. Supp. 3d 1323 (S.D. Ala. 2015)]. Thus, Chief Justice Moore clearly knew about the contrary, binding injunction in Strawser. Chief Justice Moore’s failure in the January 6, 2016, order to acknowledge the recipients' obligations under the binding federal injunction in Strawser -– and the potential dire implications of open defiance of that injunction -– did not negate the existence of the injunction in Strawser (or Obergefell's clear 20 1160002 holdings ...). Moreover, the failure to mention the Strawser injunction did not prevent the January 6, 2016, order –- with its clear statement that probate judges could not issue same–sex marriage licenses -– from being in direct conflict with Strawser .... "We likewise do not accept Chief Justice Moore's repeated argument that the disclaimer in paragraph 10 of the January 6, 2016, order -– in which Chief Justice Moore asserted he was 'not at liberty to provide any guidance ... on the effect of Obergefell on the existing orders of the Alabama Supreme Court' –- negated the reality that Chief Justice Moore was in fact 'order[ing] and direct[ing]' the probate judges to comply with the API orders regardless of Obergefell or the injunction in Strawser. ".... "... [I]t is clear to this court that Chief Justice Moore in fact took a legal position in the January 6, 2016, order, despite his claim that he was not taking any such position. "Further, Chief Justice Moore's use of legal authority in support of that position was incomplete to the point that this court finds it was intended to be misleading. First, his brief description of Obergefell in the January 6, 2016, order as holding 'unconstitutional certain marriage laws in the states of Michigan, Kentucky, Ohio, and Tennessee' is, as the JIC [Judicial Inquiry Commission] explains, at best incomplete and at worst intentionally misleading. That brief description of Obergefell did not address the clear holding of Obergefell -– that same-sex couples may exercise the right to marry in all states, not just Michigan, Kentucky, Ohio, and Tennessee. "Second, Chief Justice Moore's use of authority from the Eighth and Tenth Circuits was selective and misleading. In each of the cases Chief Justice Moore cited in the January 6, 2016, order, the lower 21 1160002 federal courts had issued injunctions before Obergefell was decided -- and each of those injunctions was consistent with what Obergefell later held. Thus, the question was whether Obergefell had rendered moot the need for the lower federal courts to continue to exercise jurisdiction to enforce the injunctions they had already entered before Obergefell was decided. In each case, as the JIC explains, 'it appears the courts remained unconvinced that the states would actually abide by Obergefell's mandate. To say that these cases somehow indicate that Obergefell does not impact Alabama law has no basis.' At best, as the JIC asserts, the 'selective inclusion' and 'selective omission' of authority was 'one-sided'; at worst, it was 'fully misleading' and was a 'thinly-veiled order directing probate judges to defy federal law.' Indeed, as we have already noted, Chief Justice Moore's own attorney in this proceeding interpreted the January 6, 2016, order as a call for open defiance of federal court decisions and issued a press release to that effect on the date the order was released. "In sum, this court rejects Chief Justice Moore's argument that the January 6, 2016, order 'merely recited the status of the API orders' and 'did not offer an opinion, pro or con, as to their validity.' The order clearly asserts that the 'existing orders of the Alabama Supreme Court that Alabama probate judges have a ministerial duty not to issue any marriage license contrary to the Alabama Sanctity of Marriage Amendment or the Alabama Marriage Protection Act remain in full force and effect.' (Boldface type in original.) "Beyond question, at the time he issued the January 6, 2016, order Chief Justice Moore knew about Obergefell and its clear holding that the United States Constitution protects the right of same-sex couples to marry. Similarly, at the time he issued the January 6, 2016, order he knew the binding application of the federal injunction in 22 1160002 Strawser. Accordingly, we conclude that the omission from the January 6, 2016, order of any mention of the federal injunction in Strawser was intentional. Further, this intentional omission was a failure to follow clear law and a failure to uphold the integrity and independence of the judiciary. "As noted, Chief Justice Moore's use of caselaw in the order was incomplete, misleading, and manipulative. We find that, when coupled with the intentional omission of binding federal authority, the clear purpose of the January 6, 2016, order was to order and direct the probate judges -– most of whom have never been admitted to practice law in Alabama -– to stop complying with binding federal law until the Alabama Supreme Court decided what effect that federal law would have. "Based on the foregoing, this court finds that the JIC has proved by clear and convincing evidence that Chief Justice Moore is guilty of charges nos. 1-5. As to charge no. 1, by willfully issuing the January 6, 2016, order, in which he directed or appeared to direct all Alabama probate judges to follow Alabama's marriage laws, completely disregarding a federal court injunction when he knew or should have known every Alabama probate judge was enjoined from using the Alabama marriage laws or any Alabama Supreme Court order to deny marriage licenses to same-sex couples, the evidence that Chief Justice Moore violated Canons 1, 2, 2A, 2B, and 3 is clear and convincing." The record before this Court supports the findings of the Court of the Judiciary; therefore, we cannot conclude that its judgment is plainly and palpably wrong, manifestly unjust, or without supporting evidence. By his own admission, Chief Justice Moore had an interest in the Strawser and the Searcy 23 1160002 cases. The early developments in those cases inspired Chief Justice Moore to pen a letter to the Governor and to issue the February 8, 2015, administrative order enjoining any probate judge in the State from issuing a marriage license to a same- sex couple. Chief Justice Moore further testified that he agreed at the time he issued his January 6, 2016, administrative order that the probate judges had filed an acknowledgment in Strawser that there was no longer a conflict and the United States Supreme Court’s decision in Obergefell was the supreme law of the land.7 Chief Justice Moore also testified that Judge Granade had jurisdiction to enter the injunction. There is no question that Chief Justice Moore was aware that Judge Granade had issued an injunction that was binding on all parties to API, including all Alabama probate judges. Despite his knowledge and despite his agreement that Judge Granade had jurisdiction to enter the injunction, Chief Justice Moore testified that Judge Granade's order created what he perceived to be a 7The probate judges’ filing on July 7, 2015, was in opposition to a motion to make Judge Granade’s injunction a permanent injunction. Their argument was that because the issue was settled, there was no longer a need for a permanent injunction. 24 1160002 conflict with API I, a conflict he felt compelled to address. Chief Justice Moore also testified that he issued the January 6, 2016, administrative order because he "felt it necessary to inform the public that the Alabama Supreme Court was still deliberating" the effect of Obergefell on API I. Chief Justice Moore knew, or should have known, that such an act was unnecessary because the public was already aware of the continued deliberation as evidenced by the news article Chief Justice Moore attached to his October 7, 2015, memorandum to the Justices of the Court. There was no reason for him to issue the January 6, 2016, administrative order. Even if this Court were to agree that the January 6, 2016, administrative order was merely a "status update," Chief Justice Moore, with willful deliberation, failed to address the existence of Judge Granade's injunction or the Eleventh Circuit’s affirmance of that injunction. Issuing such a partial "status update" served no purpose, other than to create confusion among the probate judges. Although some of the probate judges disagreed with Obergefell and some requested the Supreme Court revisit API I and issue an order alleviating them from complying with Obergefell and with Judge Granade's injunction, it is clear from the probate judges' 25 1160002 July 7, 2015, filing in Strawser that they were no longer confused as to the meaning of Obergefell or of their obligations under Judge Granade's injunction. Further, this Court cannot agree with Chief Justice Moore that the January 6, 2016, administrative order was a mere "status update." The order itself betrays that interpretation. With full knowledge that every probate judge in Alabama was subject to a federal-court injunction prohibiting the enforcement of the Alabama Sanctity of Marriage Amendment, the Alabama Marriage Protection Act, or any injunction issued by the Alabama Supreme Court prohibiting the issuance of a marriage license to a same-sex couple, Chief Justice Moore "ordered and directed" each of those same probate judges that, "[u]ntil further decision by the Alabama Supreme Court, the existing orders of the Alabama Supreme Court that Alabama probate judges have a ministerial duty not to issue any marriage license contrary to the Alabama Sanctity of Marriage Amendment or the Alabama Marriage Protection Act remain in full force and effect." For these reasons, this Court concludes that the Court of the Judiciary had before it clear and convincing evidence to support its finding that Chief Justice Moore willfully issued an order directing the probate judges to disregard a binding 26 1160002 federal-court injunction in violation of the Alabama Canons of Judicial Ethics as charged in Count I of the complaint. We affirm the judgment of the Court of the Judiciary as to Count I. Count II Count II charged: "In demonstrating his unwillingness in his Administrative Order of January 6, 2016, to follow clear law, Chief Justice Roy S. Moore violated the following Alabama Canons of Judicial Ethics in that he, separately and severally: "a. Failed to uphold the integrity and independence of the judiciary, Canon 1; "b. Failed to participate in establishing, maintaining, and enforcing and to himself observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, Canon 2B; and/or 27 1160002 "h. Failed to perform the duties of his office impartially, Canon 3." Chief Justice Moore argues that because his January 6, 2016, administrative order did not decide the issue pending before the Alabama Supreme Court, i.e., the effect of Obergefell on API I, he could not have been ignoring or failing to follow clear law. He maintains that he "did not direct or order probate judges to violate any federal court order or precedent." We disagree. We concur with the Court of the Judiciary, which found: "Beyond question, at the time he issued the January 6, 2016, order Chief Justice Moore knew about Obergefell and its clear holding that the United States Constitution protects the right of same-sex couples to marry. Similarly, at the time he issued the January 6, 2016, order he knew the binding application of the federal injunction in Strawser. Accordingly, we conclude that the omission from the January 6, 2016, order of any mention of the federal injunction in Strawser was intentional. Further, this intentional omission was a failure to follow clear law and a failure to uphold the integrity and independence of the judiciary." Chief Justice Moore's failure to mention the Strawser injunction in his January 6, 2016, order does not absolve him of inciting those bound by it to disobey. There is clear and convincing evidence in the record before us, including Chief 28 1160002 Justice Moore's public writings leading up to his issuance of the administrative order, the administrative order itself, and Chief Justice Moore's testimony before the Court of the Judiciary, to support that court's finding that Chief Justice Moore "demonstrated an unwillingness to follow clear law, and Chief Justice Moore thereby violated Canons 1, 2, 2A, 2B, and 3." We affirm the judgment of the Court of the Judiciary as to Count II. Count III Count III charged: "In issuing his Administrative Order of January 6, 2016, and in abusing his administrative authority by addressing and/or deciding substantive legal issues while acting in his administrative capacity, Chief Justice Roy S. Moore violated the following Alabama Canons of Judicial Ethics in that he, separately and severally, "a. Failed to uphold the integrity and independence of the judiciary, Canon 1; "b. Failed to participate in establishing, maintaining, and enforcing and to himself observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; 29 1160002 "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, Canon 2B; and/or "g. Failed to perform the duties of his office impartially, Canon 3." Chief Justice Moore argues there is insufficient evidence in support of Count III because, he says, he did not determine any substantive legal issues in his January 6, 2016, administrative order. Chief Justice Moore maintains that he left the determination of all substantive issues to the Alabama Supreme Court and that his use of the phrase "[u]ntil further decision by the Alabama Supreme Court" insulates him from any culpability. We disagree. By ordering and directing the probate judges that "the existing orders of the Alabama Supreme Court ... remain in full force and effect" (boldface type in original), Chief Justice Moore decided on his own and in his administrative capacity as head of the State's judicial system that 30 1160002 Obergefell had no effect on API I. He did indeed address the very issue pending before the Alabama Supreme Court, and he decided that issue. The fact that his decision was limited until such time as the whole Court issued a decision in API does not diminish his act of rendering a decision when he lacked authority to do so. We agree that in "deciding substantive legal issues while purporting to act in his administrative capacity, Chief Justice Moore violated Canons 1, 2, 2A, 2B, and 3." We affirm the judgment of the Court of the Judiciary as to Count III. Count IV Count IV charged: "In issuing his Administrative Order of January 6, 2016, and thereby substituting his judgment for the judgment of the entire Alabama Supreme Court on a substantive legal issue in a case then pending in that Court, i.e., the effect of the decision of the United States Supreme Court in Obergefell, Chief Justice Roy S. Moore violated the following Alabama Canons of Judicial Ethics in that he, separately and severally: "a. Failed to uphold the integrity and independence the judiciary, Canon 1; "b. Failed to observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; 31 1160002 "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, Canon 2B; "g. Failed to perform the duties of his office impartially, Canon 3; and/or "h. Failed to abstain from public comment about a pending proceeding in his own court, Canon 3A(6)." Chief Justice Moore argues that the plain text of his administrative order belies a finding that he substituted his own opinion for that of the Alabama Supreme Court. Chief Justice Moore argues that the following language in the order is unequivocal evidence that he did not substitute his opinion for that of the Court: "I am not at liberty to provide any guidance to Alabama probate judges on the effect of Obergefell on the existing orders of the Alabama Supreme Court. That issue remains before the entire Court which continues to deliberate on the matter." We disagree. Stating that one is not at liberty to provide guidance while taking great pains to include several pages of legal 32 1160002 analysis and argument is disingenuous. Chief Justice Moore knew the Alabama Supreme Court had asked for briefing on the issue of the effect of Obergefell on API I. At the time he issued his administrative order, he knew that the issue was still pending before the Court. Chief Justice Moore testified at length that he believed the Alabama Supreme Court was taking too long to decide the issue. Deciding he could wait no longer, he substituted his opinion for that of the Court. He decided when to release his order, and he decided to inform the probate judges that Obergefell had no effect on API I. The evidence clearly and convincingly supports the Court of the Judiciary's finding that "Chief Justice Moore substituted his judgment for the judgment of the entire Alabama Supreme Court on a substantive legal issue in a case then pending in that Court -– the effect of the decision of the United States Supreme Court in Obergefell -– and thereby violated Canons 1, 2, 2A, 2B, 3, 3A(6)." We affirm the judgment of the Court of the Judiciary as to Count IV. Count V Count V charged: "By issuing his Administrative Order of January 6, 2016, and willfully abusing his administrative authority to issue the Administrative Order of 33 1160002 January 6, 2016, Chief Justice Roy S. Moore interfered with legal process and remedies in the United States District Court and/or the Alabama Supreme Court available through those courts to address the status of any proceeding to which Alabama's probate judges were parties. In so doing, Chief Justice Moore, separately and severally, violated the following Alabama Canons of Judicial Ethics: "a. Failed to uphold the integrity and independence of the judiciary, Canon 1; "b. Failed to observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, Canon 2B; and/or "g. Failed to perform the duties of his office impartially, Canon 3." Chief Justice Moore argues that his January 6, 2016, administrative order could not possibly have interfered with proceedings in another court when, he says, his order "merely stated that the impact of Obergefell on the orders of this 34 1160002 Court was for the full Court to determine" and "said nothing of other proceedings before the lower federal District Court because that issue was not before this Court." (Chief Justice Moore's brief, at 73-74.) Chief Justice Moore again omits from his argument the fact that he "ordered and directed" probate judges who were, at the time, unquestionably bound by a federal-court injunction that the orders issued by the Alabama Supreme Court in API remained in "full force and effect." At the time Chief Justice Moore issued his January 6, 2016, administrative order, the probate judges had already agreed and accepted that they were parties to and were bound by the Strawser injunction. Chief Justice Moore testified that Judge Granade had jurisdiction to enter the injunction. At the time Chief Justice Moore issued his January 6, 2016, administrative order, the Eleventh Circuit Court of Appeals had already affirmed the injunction in Strawser. Therefore, by ordering and directing the same probate judges who were bound by the Strawser injunction that they had a "ministerial duty not to issue any marriage license contrary to the Alabama Sanctity of Marriage Amendment or the Alabama Marriage Protection Act," Chief Justice Moore clearly sought to interfere with the legal 35 1160002 processes in the United States District Court and the Eleventh Circuit Court of Appeals. Furthermore, by issuing his order and prematurely deciding the effect of Obergefell on API I, Chief Justice Moore also interfered with a case pending in the Alabama Supreme Court. Consequently, we agree that "the evidence is clear and convincing that, by issuing the January 6, 2016, order Chief Justice Moore interfered with the legal process and remedies in the United States District Court and/or the Alabama Supreme Court available through those courts to address the status of any proceeding to which Alabama's probate judges were parties. In so doing, Chief Justice Moore violated Canons 1, 2, 2A, 2B, and 3." We affirm the judgment of the Court of the Judiciary as to Count V. Count VI Count VI charged: "By taking legal positions in his Administrative Order of January 6, 2016, on a matter pending before the Alabama Supreme Court in API, Chief Justice Roy S. Moore placed his impartiality into question on those issues, thus disqualifying himself from further proceedings in that case; yet he participated in further proceedings in API, after having disqualified himself by his actions, in violation of the following Alabama Canons of Judicial Ethics, separately and severally: "a. Failed to uphold the integrity and independence of the judiciary, Canon 1; 36 1160002 "b. Failed to observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, Canon 1; "c. Failed to avoid impropriety and the appearance of impropriety in all his activities, Canon 2; "d. Failed to respect and comply with the law, Canon 2A; "e. Failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, Canon 2A; "f. Failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, Canon 2B; and/or "g. Failed to perform the duties of his office impartially and diligently, Canon 3." Chief Justice Moore initially argues that, as to Count VI, there was no verified complaint filed with the Judicial Inquiry Commission. This argument was not presented to the Court of the Judiciary for its consideration. Because jurisdictional issues may be raised at any time, to the extent this argument may impact the Judicial Inquiry Commission's jurisdiction to investigate the allegations set out in Count VI, we address it. Initially, we note that Chief Justice Moore does not frame his argument in terms of a jurisdictional challenge; he 37 1160002 argues only that the Judicial Inquiry Commission failed to follow its own procedures and that, therefore, Count VI must be dismissed. Chief Justice Moore does not challenge the validity of the verified complaint with regard to Counts I-V. Therefore, it is undisputed that Chief Justice Moore had adequate notice that his issuance of the January 6, 2016, administrative order was under investigation when he participated in and issued a writing in API II. The length and tone of his statement of nonrecusal indicates that he was clearly aware that his failure to recuse himself would be questioned. He was aware that the impact of the administrative order on the integrity and independence of the judiciary, the impropriety or appearance of impropriety of his actions, and whether he was conducting himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary were already being investigated. Because the investigation into whether Chief Justice Moore's issuance of the January 6, 2016, administrative order necessitated his recusal in API II arises directly from the investigation into the impact of the issuance of the administrative order, the Judicial Inquiry Commission was not divested of jurisdiction to engage in the investigation. 38 1160002 We now turn to Chief Justice Moore's argument that the Judicial Inquiry Commission failed to afford him proper written notice of Count VI as required under Rule 6.C and Rule 6.D of the Rules of Procedure of the Judicial Inquiry Commission. Rule 6.C and Rule 6.D provide, in pertinent part: "C. If a complaint is not dismissed on preliminary review pursuant to Rule 6.B., the commission, within 14 days of its decision to conduct some investigation of the complaint, and in no event more than 84 days after a complaint is filed, shall serve upon the judge who is the subject of the complaint copies of the complaint and all other documents or other materials of any nature whatsoever constituting, supporting, or accompanying the complaint, or accumulated by the commission before such service upon the judge. Further, the commission shall advise the judge of those aspects of the complaint that it then considers worthy of some investigation. "D. Every six weeks after serving the judge pursuant to Rule 6.C., the commission shall serve on the judge being investigated copies of all materials of any nature whatsoever not already served upon him or her tending to establish that the conduct either did or did not occur or that the investigation is or is not still appropriate, and shall serve upon the judge a full statement of whether the commission intends to continue the investigation and any modification of the previous advice as to aspects of the complaint that it then deems worthy of some investigation. ..." (Emphasis added.) Regarding this argument, the Court of the Judiciary 39 1160002 found: "The JIC [Judicial Inquiry Commission] introduced evidence indicating that Chief Justice Moore actually was given an opportunity to address the charge at an April [78] hearing before the JIC. At that April [7] hearing, in response to questioning about his participation in API I, Chief Justice Moore distributed copies of his statement of nonrecusal in API II. The JIC also asserts: "'The requirements of due process –- which are at the heart of the Chief Justice's claim here -– "are not necessarily the same as those in a criminal matter." ... This is because the purpose of the disciplinary proceeding is "to protect the public interest" –- not to punish the judge .... In fact, "the majority view holds that virtually no notice is required by the due process clause in investigatory proceedings. This view does not extend to adjudicative proceedings. Even there, though, due process demands only the amount of notice necessary to give a judge a general idea of the charges against him." ... With this in mind, there is simply no question that the Chief Justice has been provided robust notice under the JIC Rules, above and beyond what the majority of jurisdictions require at the investigatory stage -– and his own testimony at the April [7], 2016, hearing proves he had, at the very least, a general idea of the charges against him, if not specific knowledge of the [JIC's] investigation into these matters. 8The Court of the Judiciary states the investigatory hearing before the Judicial Inquiry Commission took place on April 17, 2016, but the record reflects that hearing took place on April 7, 2016. 40 1160002 "'But ... even if ... Charge Six was not adequately noticed by the [JIC] -– which the [JIC] does not concede –- and even if formal notice and strict adherence to the JIC procedures is required –- which it is not -– the Chief Justice has not shown any prejudice by this lack of notice, as required by Rule 19 and the majority of jurisdictions.' "We agree with the JIC. Chief Justice Moore had adequate notice of charge no. 6, and, even if he did not, he has not demonstrated prejudice -– despite having multiple opportunities to do so -– by any alleged lack of notice." Chief Justice Moore does not dispute that he attended the April 7 hearing before the Judicial Inquiry Commission and that his nonrecusal in API II was a topic of discussion at that hearing. Therefore, it does appear that Chief Justice Moore had notice that the Judicial Inquiry Commission was investigating his nonrecusal in API II. Chief Justice Moore argues that the Judicial Inquiry Commission's "failure to follow its own mandatory process regarding Count VI signaled to the Chief Justice that the issue was not a serious one." (Chief Justice Moore's brief, at 46-47.) We disagree. Rule 6.B allows the Judicial Inquiry Commission, after finding that a complaint is not worthy of investigation, to dismiss a complaint without ever notifying the judge being investigated 41 1160002 of the filing of the complaint. The fact that the Judicial Inquiry Commission requested Chief Justice Moore to appear and to address questions related to his nonrecusal in API II, rather than summarily dismissing that portion of the investigation, denotes the importance of the issue. Chief Justice Moore does not dispute that he failed to demonstrate that he suffered any harm or prejudice from the Judicial Inquiry Commission's failure to provide written notice of the aspect of its investigation leading to Count VI. Rather, he argues that he has no burden to demonstrate harm or prejudice. The Judicial Inquiry Commission argues that Chief Justice Moore is required under Rule 19, Rules of Procedure of the Judicial Inquiry Commission, to demonstrate that he has been prejudiced or aggrieved by the alleged lack of notice. See In re Storie, 574 S.W.2d 369, 372 (Mo. 1978)("Absent a showing of prejudice, respondent cannot complain of alleged irregularities in the informal notice."); and McCartney v. Commission on Judicial Qualifications, 12 Cal. 3d 512, 519, 526 P.2d 268, 273, 116 Cal. Rptr. 260, 265 (1974) ("[N]otice to the judge under investigation as to the nature of the complaints against him is not compelled as a matter of due 42 1160002 process. ... Hence, relief from the deleterious effect, if any, of the Commission's failure to follow rule 904(b) may be secured by petitioner only upon a showing of actual prejudice." (citing Hannah v. Larche, 363 U.S. 420 (1960))). (Judicial Inquiry Commission's brief, at 74.) Chief Justice Moore offers no legal argument in rebuttal, and we find the Judicial Inquiry Commission's argument persuasive. Chief Justice Moore complains that he did not have sufficient notice during only the investigatory phase, not the adjudication phase. "[W]hen governmental agencies adjudicate or make binding determinations which directly affect the legal rights of individuals, it is imperative that those agencies use the procedures which have traditionally been associated with the judicial process. On the other hand, when governmental action does not partake of an adjudication, as for example, when a general fact-finding investigation is being conducted, it is not necessary that the full panoply of judicial procedures be used." Hannah v. Larche, 363 U.S. at 442. Chief Justice Moore does not allege that the failure to provide written notice prevented him from offering evidence or rebutting evidence that would have prevented the filing of a formal charge with the Court of the Judiciary. In fact, Chief 43 1160002 Justice Moore did provide rebuttal evidence during the April 7, 2016, hearing in the form of his statement of nonrecusal in API II. Without more, we cannot conclude that Chief Justice Moore was "aggrieved" by the Judicial Inquiry Commission's failure to provide written notice of the investigation regarding the administrative order and Chief Justice Moore's participation in API II. With regard to the merits of Count VI, Chief Justice Moore argues that he did not take a position as to the effect of Obergefell on API I in his January 6, 2016, administrative order. Further, he says that he stated specifically in his administrative order that he could not give any guidance to the probate judges. The Court of the Judiciary found: "Chief Justice Moore in fact took legal positions in the January 6, 2016, order on a matter pending before the Alabama Supreme Court -– namely, he stated that the 'existing orders' of the Alabama Supreme Court remained in effect until vacated by the Alabama Supreme Court, and he argued that Obergefell bound (or might only bind) the parties to it but no one else. "As the JIC [Judicial Inquiry Commission] points out: "'[T]he Chief Justice's guilt here is self-evident upon a simple comparison that 44 1160002 reveals that significant portions of his January 6th Order are actually just copied and pasted verbatim into his subsequent -– and substantive –- legal opinion in API II. "'.... "'... Considering that the substantive legal content of his API II concurrence is identical to the language in his January 6th Order, the Chief Justice's assertion that his January 6th Order somehow does not also address substantive legal issues is plainly disingenuous and transparent.' "Further, we agree with the JIC's argument that, under an objective standard, Chief Justice Moore's decision to issue the January 6, 2016, order was a decision to make a public comment about a pending proceeding in his own Court, thereby placing his impartiality into question. See Canon 3A(6), Canons of Jud. Ethics ('A judge should abstain from public comment about a pending or impending proceeding in any court, and should require similar abstention on the part of court personnel subject to his direction and control.'). Thus, under an objective standard, by virtue of the issuance of the January 6, 2016, order, Chief Justice Moore was disqualified from additional participation in API II. "In his statement of nonrecusal in API II, Chief Justice Moore asserted: "'The effect of Obergefell on this Court's writ of mandamus ordering that the probate judges are bound to issue marriage licenses in conformity with Alabama law is a new issue before this Court. ... "'.... "'In joining this case to consider the effect of Obergefell, I am not sitting in 45 1160002 review of [the January 6, 2016,] order, nor have I made any public statement on the effect of Obergefell on this Court’s opinion and order of March 3, 2015.' "As noted above, in the January 6, 2016, order, Chief Justice Moore, in fact, took legal positions on the effect of Obergefell, and that order was, in fact, a public comment on the issue. And, as noted above, he copied and pasted substantial portions of those legal positions and public comment into his special concurrence in API II. Accordingly, this court finds that the evidence is clear and convincing that Chief Justice Moore is guilty of charge no. 6." We agree. "Recusal is required under Canon 3 C(1) when 'facts are shown which make it reasonable for members of the public or a party, or counsel opposed to question the impartiality of the judge.'" In re Sheffield, 465 So. 2d 350, 355-56 (Ala. 1984)(quoting Acromag-Viking v. Blalock, 420 So. 2d 60, 61 (Ala. 1982)). "'"[T]he Canon 3(C) test is: 'Would a person of ordinary prudence in the judge's position knowing all the facts known to the judge find that there is a reasonable basis for questioning the judge's impartiality?' The question is not whether the judge was impartial in fact, but whether another person, knowing all the circumstances, might reasonably question the judge's impartiality -– whether there is an appearance of impropriety."'" Ex parte Monsanto Co., 862 So. 2d 595, 605 (Ala. 2003)(quoting Ex parte City of 46 1160002 Dothan Pers. Bd., 831 So. 2d 1, 5 (Ala. 2002), quoting in turn Ex parte Duncan, 638 So. 2d 1332, 1334 (Ala. 1994)). The January 6, 2016, administrative order was completely silent as to relevant federal-court injunctions and as to the true effect of Obergefell on API I. Chief Justice Moore chose to include only that legal analysis leading to his ultimate conclusion that Obergefell had no effect on the Court's decision in API I. Despite Chief Justice Moore's including qualifying language in his administrative order, there is no question that he concluded that Obergefell had no effect and that he correspondingly ordered and directed that the "probate judges have a ministerial duty not to issue any marriage license contrary to the Alabama Sanctity of Marriage Amendment or the Alabama Marriage Protection Act." Having made such a decision and having issued such an order, Chief Justice Moore was ethically obligated to recuse himself from participation in API II, which involved the sole issue of the effect, if any, of Obergefell on API I. Because Chief Justice Moore had already decided the pivotal legal question at issue in API II, there can be no question that a person of ordinary prudence would or could question Chief Justice Moore's impartiality in API II. 47 1160002 By participating in API II, Chief Justice Moore failed to uphold the integrity and independence of the judiciary, failed to observe high standards of conduct so that the integrity and independence of the judiciary may be preserved, failed to avoid impropriety and the appearance of impropriety, failed to respect and to comply with the law, failed to conduct himself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary, failed to avoid conduct prejudicial to the administration of justice that brings the judicial office into disrepute, and failed to perform the duties of his office impartially and diligently. We, therefore, affirm the judgment of the Court of the Judiciary as to Count VI. III. Chief Justice Moore argues that the Court of Judiciary committed reversible error by improperly considering the 2003 opinion of Court of the Judiciary removing him from office and the 2004 Alabama Supreme Court opinion affirming that removal.9 The Court of the Judiciary admitted those exhibits 9At trial, Chief Justice Moore objected to the admissibility of evidence involving his removal from office in 2003, but on appeal he challenges only the manner in which the evidence was considered. 48 1160002 for the limited purposes for which they were offered by the Judicial Inquiry Commission, which were (1) to determine the appropriate sanction, and (2) as evidence that Chief Justice Moore had notice of the potentially damaging effect of his January 6, 2016, administrative order. Despite the limited purposes for which those exhibits were admitted pursuant to Rule 404, Ala. R. Evid., Chief Justice Moore contends that the Court of the Judiciary considered those exhibits as evidence of his guilt. (Chief Justice Moore's brief, at 74-82.) Rule 404 provides, in pertinent part:10 "(a) Character Evidence Generally. Evidence of a person’s character or a trait of character is not admissible for the purpose of proving action in conformity therewith on a particular occasion .... "(b) Other Crimes, Wrongs, or Acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident ...." (Emphasis added.) Chief Justice Moore argues that the following portion of 10The Alabama Rules of Civil Procedure and the Alabama Rules of Evidence govern proceedings in the Court of the Judiciary. See Rule 10, Rules of Procedure for the Alabama Court of the Judiciary. 49 1160002 the Court of the Judiciary's opinion demonstrates that court's improper use of his 2003 removal from office: "Chief Justice Moore's arguments that his actions and words mean something other than what they clearly express is not a new strategy. In 2003, this court's order removing Chief Justice Moore quoted the following testimony from him before the JIC [Judicial Inquiry Commission]: "'I did what I did because I upheld my oath. And that's what I did, so I have no apologies for it. I would do it again. I didn't say I would defy the court order. I said I wouldn't move the monument. And I didn't move the monument, which you can take as you will.' "Just as Chief Justice Moore’s decision that he 'wouldn't move the monument' was, in fact, defiance of the federal court order binding him, a disinterested reasonable observer, fully informed of all the relevant facts, would conclude that the undeniable consequence of the January 6, 2016, order was to order and direct the probate judges to deny marriage licenses in direct defiance of the decision of the United States Supreme Court in Obergefell and the Strawser injunction." The Judicial Inquiry Commission argues that this language appears because the Court of the Judiciary must decide guilt and, if warranted, impose a sanction in the same opinion. The Judicial Inquiry Commission maintains that nothing indicates that the above-quoted language was not part of the Court of the Judiciary's determination as to the severity of the 50 1160002 sanction to be imposed. We disagree with the Judicial Inquiry Commission's interpretation of the above-quoted text. The Court of the Judiciary devoted a separate section of its opinion to determining the appropriate sanction. In that section, the Court of the Judiciary does reference Chief Justice Moore's 2003 removal from office and considers that removal in determining the appropriate sanction to impose in this case. Because the references to the 2003 removal also appear in the adjudication portion of the Court of the Judiciary's opinion, we cannot conclude that that court considered Chief Justice Moore's 2003 removal solely for the purpose of imposing a sanction. However, we also disagree with Chief Justice Moore's interpretation of the above-quoted text. The language quoted above was but one portion of a long discussion as to why that court disagreed with Chief Justice Moore's testimony that his January 6, 2016, administrative order was merely a "status update." Based on the full context of the portion of the Court of the Judiciary's opinion quoted by Chief Justice Moore, we conclude that the Court of the Judiciary relied on a passage 51 1160002 from a previous opinion of that court to demonstrate that Chief Justice Moore had knowledge, i.e., that he knew or should have known, that his January 6, 2016, administrative order would be interpreted as a directive to disobey Obergefell and the binding Strawser injunction, not as a mere status update. For that limited purpose, the Court of the Judiciary's consideration of its previous opinion involving Chief Justice Moore is permissible under Rule 404(b). Chief Justice Moore further argues the Court of the Judiciary impermissibly considered his 2003 removal from office, as evidenced by the following passage: "Chief Justice Moore recognized the holding and validity of Cooper[11] in 2003, when he argued then that his case was distinguishable from Cooper. Chief Justice Moore's understanding of Cooper -- as evidenced by his arguments in 2003 -– means that he could not have actually thought that Obergefell bound only the parties to that case. Thus, we agree with the [Judicial Inquiry Commission's] contention that Chief Justice Moore is disingenuous in his suggestion in the January 6, 2016, order that 'recent developments of potential relevance since Obergefell may impact' whether Obergefell abrogated API." This passage, like the previous one cited by Chief Justice Moore, appears in the Court of the Judiciary's 10- 11Cooper v. Aaron, 358 U.S. 1 (1958). 52 1160002 page discussion as to whether the January 6, 2016, administrative order could be deemed a "status update." Before the passage quoted above, the Court of the Judiciary included a lengthy quote from Cooper v. Aaron, 358 U.S. 1 (1958), that explains that, once the United States Supreme Court interprets a provision of the Constitution, that interpretation is binding on all states, not just those party to the decision. Cooper, 358 U.S. at 17-19. The Court of the Judiciary cited materials relating to Chief Justice Moore's 2003 removal from office for the purpose of establishing that Chief Justice Moore was aware of or had knowledge of the Cooper decision and specifically of the binding nature of the United States Supreme Court's rulings as to the interpretation of Constitutional provisions. As stated above, evidence of prior acts is admissible for the purpose of establishing knowledge.12 Nothing in the Court of the Judiciary's opinion indicates that the court improperly considered Chief Justice Moore's 2003 removal from office as evidence of his character or a 12The Judicial Inquiry Commission uses the term "notice." We note that the list of permissible purposes under Rule 404(b) is not an exhaustive list and that, in this context of this case, notice and knowledge are synonymous. 53 1160002 trait of character or that in issuing the January 6, 2016, administrative order he acted in conformity therewith. IV. Chief Justice Moore also contends that Art. VI, § 159, Ala. Const. 1901, violates his due-process rights enumerated in the Fourteenth Amendment of the United States Constitution by immediately disqualifying a judge "from acting as a judge, without loss of salary, while there is pending ... a complaint against him filed by the judicial inquiry commission with the court of the judiciary." The Judicial Inquiry Commission argues that this issue was not preserved for appeal because Chief Justice Moore failed to brief the issue before the Court of the Judiciary. "If a party makes a constitutional argument to the trial court before a decision in the case is rendered, the constitutional issue is preserved for appellate review. See Alabama Power Co. v. Capps, 519 So. 2d 1328, 1330 (Ala. 1988)(holding that if a party raises a constitutional issue 'at the pleading stage, during the taking of the evidence, or even during the instructions to the jury, the trial court [is] presented with the constitutional arguments ..., and if it had accepted the argument, could have saved the time and expense of trial under the allegedly unconstitutional [statute]')." Ex parte J.W.B., [Ms. 1150075, July 1, 2016] __ So. 3d __, __ (Ala. 2016). 54 1160002 Chief Justice Moore raised this issue, with particularity, in his answer. The Court of the Judiciary addressed this issue in its opinion. For these reasons, this issue is properly before this Court. The Judicial Inquiry Commission also argues in a single footnote that this issue was rendered moot when the temporary suspension with pay under § 159 terminated upon the Court of the Judiciary's determination of Chief Justice Moore's guilt and the imposition of sanctions. See Triano v. Supervisor of Elections in Palm Beach Cty., Fla., 382 F.3d 1276, 1282 (11th Cir. 2004)("[A] case is moot when it no longer presents a live controversy with respect to which the court can give meaningful relief."). We first note that whether an issue is moot can rarely be adequately argued in a single footnote. Indeed, the Judicial Inquiry Commission addresses only one aspect of mootness. In this instance, the controversy over § 159 is at an end for Chief Justice Moore. There is no action or remedy this Court may provide. Pursuant to § 159, Chief Justice Moore was automatically suspended upon the filing of a complaint with the Court of the Judiciary, which prohibited him from performing his job duties. During that period, however, he 55 1160002 retained his salary, his retirement benefits, and all other benefits of his office, pending the outcome of his trial. Chief Justice Moore's inability to perform his job duties during that time is not something this Court can remedy at this juncture. Because he is suspended for the remainder of his term and because he is also prohibited from running for public office as a judge in the future because of his age, the provisions of § 159 will no longer apply to him. In these respects, Chief Justice Moore's argument with regard to § 159 is moot. However, despite the Judicial Inquiry Commission's contention, that is not the end of the analysis. "'Alabama courts do not give opinions in which there is no longer a justiciable controversy; yet, Alabama has recognized two exceptions to the mootness doctrine: questions of great public interest and questions that are likely of repetition of the situation.'" Underwood v. Alabama State Bd. of Educ., 39 So. 3d 120, 127 (Ala. 2009). We now turn to whether this issue of the automatic suspension provided in § 159 is a question of great public importance. "'The criteria for applying the public interest exception to the mootness doctrine include the public nature of the question, the desirability of an authoritative determination for the purpose of guiding public officers, and the likelihood that the question will generally recur.' However, this 56 1160002 'exception is construed narrowly ... and a clear showing of each criterion is required to bring a case within its terms.'" Chapman v. Gooden, 974 So. 2d 972, 989 (Ala. 2007)(internal citations omitted). Here, both criteria are met. The issue raised has the potential to affect publicly elected judges in the State of Alabama. The Judicial Inquiry Commission, unfortunately, has had cause to file formal charges with the Court of the Judiciary on numerous occasions before it filed the charges against Chief Justice Moore and, unfortunately, will continue to have occasion to file formal charges against sitting judges. Therefore, there exists a "desirability of an authoritative determination for the purpose of guiding public officers," and there exists "the likelihood that the question will generally recur." For these reasons, we address this issue. "'[P]rocedural due process, protected by the Constitutions of the United States and this State, requires notice and an opportunity to be heard when one's life, liberty, or property interests are about to be affected by governmental action.' Brown's Ferry Waste Disposal Ctr., Inc. v. Trent, 611 So. 2d 226, 228 (Ala. 1992); see also Carter v. City of Haleyville, 669 So. 2d 812 (Ala. 1995). The United States Supreme Court has held that a procedural-due-process violation that is potentially actionable is not complete when the deprivation takes place; such a violation does not occur 'unless and until the State fails to provide due process.' 57 1160002 Zinermon v. Burch, 494 U.S. 113, 126, 110 S. Ct. 975, 108 L. Ed. 2d 100 (1990). In Zinermon, the Supreme Court noted that '[p]rocedural due process rules are meant to protect persons not from the deprivation, but from the mistaken or unjustified deprivation of life, liberty, or property.' 494 U.S. at 125-26, 110 S. Ct. 975, 108 L. Ed. 2d 100 (quoting Carey v. Piphus, 435 U.S. 247, 259, 98 S. Ct. 1042, 55 L. Ed.2d 252 (1978))." City of Orange Beach v. Duggan, 788 So. 2d 146, 151 (Ala. 2000). Chief Justice Moore asserts he has a vested property interest in holding the office of Chief Justice. The Judicial Inquiry Commission disputes that assertion, arguing instead that a public office is not provided for the benefit of the officeholder but as a public necessity. We need not reach that issue, however, because we conclude that whether Chief Justice Moore has a vested property interest in his office, adequate due process was provided. "The Supreme Court held that tenured government employees almost always must be afforded at least a limited pretermination hearing before they can be constitutionally terminated. [Cleveland Bd. of Educ. v. Loudermill,] 470 U.S. [532,] at 542-43, 105 S. Ct. 1487 [(1985)]. The Supreme Court, however, held that the pretermination hearing need not be elaborate and need not be a full evidentiary hearing. Id. at 545, 105 S. Ct. 1487. The Supreme Court reasoned that the purpose of a pretermination hearing is not to 'definitively resolve the propriety of the discharge,' but, rather, to 'be an initial check against mistaken decisions-- 58 1160002 essentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action.' Id. at 545-46, 105 S. Ct. 1487. The Supreme Court also noted that under state law the terminated government employee was later entitled to a full and adequate administrative posttermination hearing and judicial review. Id. at 545, 105 S. Ct. 1487. Therefore, the Supreme Court concluded that under federal procedural-due-process law all that is required in a pretermination hearing is 'oral or written notice of the charges against [the employee], an explanation of the employer's evidence, and an opportunity [for the employee] to present his side of the story.' Id. at 546, 105 S. Ct. 1487. The Supreme Court then stated that '[t]o require more than this prior to termination would intrude to an unwarranted extent on the government's interest in quickly removing an unsatisfactory employee.'Id." City of Orange Beach, 788 So. 2d at 152. Even when an employee has a vested property interest in his or her job, due process requires only a pre-termination hearing. Rule 6.C and Rule 6.D, Rules of Procedure of the Judicial Inquiry Commission, require that any judge under investigation be given a copy of the verified complaint asserted against him or her and a copy of any materials in support of that complaint, along with notice of those issues the Judicial Inquiry Commission finds worthy of investigation. The judge under investigation is also entitled to an update as to the progress of the investigation every six weeks until the 59 1160002 complaint is dismissed or formal charges are filed with the Court of the Judiciary. Further, if the investigation culminates in formal charges, those charges must be filed in the nature of a complaint with the Court of the Judiciary. That complaint must state "in plain and concise language the charges against the judge and the allegations of fact upon which such charges are based." Rule 3, Rules of Procedure for the Alabama Court of the Judiciary. Therefore, the rules governing the investigation and the rules governing the pre- discipline hearing provide an accused judge with ample notice of the charges against him or her. The trial held by the Court of the Judiciary affords an accused judge of ample opportunity to hear and to challenge the Judicial Inquiry Commission's evidence and to present his or her "side of the story." Notice and the ability to respond are all that are required in a pre-termination/pre- disciplinary hearing. Chief Justice Moore challenges his suspension with pay pending the outcome of his pre-disciplinary hearing. However, "in those situations where the employer perceives a significant hazard in keeping the employee on the job, it can avoid the problem by suspending with pay." Cleveland Bd. of 60 1160002 Educ. v. Loudermill, 470 U.S. 532, 544-45 (1985). The legislature that drafted § 159, and the people of Alabama, who ratified § 159, were justified in so doing to protect the orderly administration of justice. The people of Alabama, subject to the jurisdiction of a duly elected judge, must be free to lodge complaints against a judge who they believe may be in violation of the Canons of Judicial Ethics. If that complaint is deemed to have merit and formal charges are brought, the complaining individuals, who may still have matters pending before that judge, must be protected from retaliation -- real or imagined. Furthermore, the government has a vested interest in protecting the integrity of the administration of justice so that immediately removing the charged judge who may indeed be violating the Canons of Judicial Ethics is desirable and necessary. Therefore, suspending such a judge with pay pending the outcome of a disciplinary hearing does not deprive that judge of due process. Therefore, no reversible error occurred as to this issue. V. Chief Justice Moore argues that the Court of the Judiciary erred by failing to dismiss all the charges against 61 1160002 him because, he says, the Judicial Inquiry Commission violated the confidentiality provisions of Rule 5, Rules of Procedure of the Judicial Inquiry Commission. With regard to this issue, the Court of the Judiciary held: "According to an affidavit from Mat Staver, one of Chief Justice Moore's counsel in these proceedings and one of the counsel of record for the petitioners in API, Staver received a telephone call from a reporter at the New York Times on May 5, 2016, indicating that the reporter's 'sources' had told him that the JIC [Judicial Inquiry Commission] would be filing a complaint as early as May 5 or May 6. Citing the requirements that all proceedings before the JIC are to be confidential, see, e.g., § 156, Ala. Const. 1901 (Off. Recomp.), and Rule 5, Ala. R.P. Jud. Inq. Comm'n, Chief Justice Moore maintains that this telephone call from a reporter the day before the charges were filed in this court indicates that the JIC breached its duty of confidentiality. Chief Justice Moore asks this court to find that the JIC breached its duty of confidentiality, and, as a remedy, he seeks dismissal of the charges against him. Although Chief Justice Moore contends that the JIC is the only possible 'source' of the information alleged to have been disclosed, no evidence was offered during the hearing identifying the reporter's 'source.' Thus, to conclude that the JIC was the 'source' would require this court to speculate, and we decline to do so." The Court of the Judiciary also noted that in support of his argument Chief Justice Moore offered an article from the Montgomery Advertiser, which also alleged that an unnamed 62 1160002 source had indicated that charges would be filed against Chief Justice Moore. We agree with the Court of the Judiciary that, without more evidence, a resolution of this issue requires speculation on the part of the Court. Because no evidence was presented as to who the "source" might be, we see no error in the Court of the Judiciary's declining to grant relief on this basis. We affirm the judgment of the Court of the Judiciary as to this issue. VI. Chief Justice Moore argues that, by suspending him for the remainder of his term, effectively removing him from office, the Court of the Judiciary violated Rule 16, Rules of Procedure of the Alabama Court of the Judiciary, which provides: "With respect to all matters other than removal from office, the Court shall convict only with the concurrence of no fewer than six of its nine members. With respect to removal from office, the Court shall convict only with the concurrence of all members sitting." The Judicial Inquiry Commission, quoting Boggan v. Judicial Inquiry Commission, 759 So. 2d 550, 555 (Ala. 1999), argues that this Court "'has repeatedly held that when it reviews the 63 1160002 record of the proceedings of the Court of the Judiciary on the law and the facts, if the records shows by clear and convincing evidence that the charge or charges have been committed, then this Court does not have the authority to reduce or reject the sanction imposed by the Court of the Judiciary.'" This Court is obligated to follow prior precedent holding that, assuming the charges below were proven by clear and convincing evidence, this Court has no authority to disturb the sanction imposed by the Court of the Judiciary. See also Hayes v. Alabama Court of the Judiciary, 437 So. 2d 1276, 1279 (Ala. 1983); Powers v. Judicial Inquiry Comm'n, 434 So. 2d 745 (Ala. 1983); and In re Samford, 352 So. 2d 1126 (Ala. 1977). In so doing, this Court notes that, although only a majority of the Court of Judiciary agreed that removal from office was the appropriate sanction in this case, the Court of the Judiciary unanimously suspended Chief Justice Moore for the remainder of his term. Presumably, the Court of the Judiciary was aware that the suspension was in excess of two years, because it is common knowledge that an appellate judge's term of office is six years and the Court of the Judiciary stated in note 2 of its opinion that Chief Justice Moore took office 64 1160002 in January 2013. The Court of the Judiciary was also presumably aware that such a suspension would preclude Chief Justice Moore from reassuming his duties at any point before the expiration of his term but unanimously agreed that such a suspension was warranted. Even though both sanctions are similarly severe, because the Court of the Judiciary was unanimous in its imposition of such a serious sanction, we cannot conclude that the Court of the Judiciary violated Rule 16 of the Rules of Procedure of the Alabama Court of the Judiciary. Chief Justice Moore also argues his suspension (2 years, 3 months, and 14 days) is four times longer than any suspension imposed on any other judge since the revision of Rule 16 in 2001. However, Chief Justice Moore fails to offer the Court examples of comparable offenses. Chief Justice Moore does not argue that other similarly situated judges have received lesser suspensions. Because we have previously determined that the charges were proven by clear and convincing evidence and there is no indication that the sanction imposed was plainly and palpably wrong, manifestly unjust, or without supporting evidence, we shall not disturb the sanction imposed. 65 1160002 Conclusion For the reasons stated above, we affirm the judgment of the Court of the Judiciary in all respects. AFFIRMED. James Harvey Reid, Jr., Special Chief Justice, and Robert George Cahill, William Reddoch King, Lynn Clardy Bright, Ralph Alton Ferguson, Jr., and John David Coggin, Special Justices, concur. Harris Edward McFerrin, Special Justice, concurs in the result. 66

April 19, 2017

75cbb500-c7e8-4af9-a54d-7963e9430c76

Ex parte City of Homewood

N/A

1151310

Alabama

Alabama Supreme Court

rel: 03/24/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151310 ____________________ Ex parte City of Homewood et al. PETITION FOR WRIT OF MANDAMUS (In re: Bria Mines v. City of Homewood et al.) (Jefferson Circuit Court, CV-15-904768) STUART, Justice. Officer J.C. Clifton and Officer Jason Davis, law- enforcement officers for the City of Homewood, and the City of 1151310 Homewood petition this Court for a writ of mandamus directing the Jefferson Circuit Court to enter a summary judgment in their favor on the ground of immunity. We grant the petition and issue the writ. Facts and Procedural History In December 14, 2013, Officer Clifton and Officer Davis were dispatched to the Babies "R" Us specialty retail store located in the Wildwood Shopping Center in response to a shoplifting incident involving Bristinia Fuller and Bria Mines. When the officers arrived, they learned that Fuller and Mines were leaving the parking lot of the store in a vehicle being driven by Fuller. Officer Clifton and Officer Davis, driving separate patrol cars, attempted to stop the vehicle. Instead of stopping, Fuller eluded the officers by speeding through the parking area and onto Lakeshore Drive. The officers pursued. Fuller continued speeding on Lakeshore Drive and ran through multiple red traffic lights before losing control of her vehicle while attempting to turn onto Oxmoor Road. Fuller's vehicle struck a light pole and a vehicle stopped at the intersection. Fuller was killed and Mines was seriously injured. 2 1151310 On December 13, 2015, Mines sued Officer Clifton and Officer Davis, both in their official and individual capacities; Homewood; and others not before this Court in the petition.1 Mines alleged that she was injured as a result of the negligent, reckless, and/or wanton conduct of the officers and Homewood during the officers' pursuit of Fuller's vehicle. She also alleged that Homewood was vicariously liable for the officers' conduct and was negligent in hiring and supervising the officers. Mines served interrogatories with the complaint. On March 11, 2016, Homewood, Officer Clifton, and Officer Davis moved to dismiss the claims against them on the bases that Homewood was statutorily immune from the wantonness claim, see § 11-47-190, Ala. Code 1975; that the claim alleging negligent training and supervision against Homewood was not a cognizable claim, see Ott v. City of Mobile, 169 F. Supp. 2d 1301 (S.D. Ala. 2001); that Alabama does not recognize an independent cause of action for liability arising out of a law-enforcement officer's pursuit of a criminal 1The others were Fuller's estate and ACCC Insurance Company. The claim against ACCC was dismissed on April 8, 2016. 3 1151310 suspect, see Ex parte Brown, 182 So. 3d 495 (Ala. 2015), Gooden v. City of Talladega, 966 So. 2d 232 (Ala. 2007), and Doran v. City of Madison, 519 So. 2d 1308 (Ala. 1988); that the officers are entitled to peace-officer immunity (§ 6-5- 640, Ala. Code 1975); that the officers are entitled to State- agent immunity, see Ex parte Hayles, 852 So. 2d 117 (Ala. 2002), and Hollis v. City of Brighton, 950 So. 2d 300 (Ala. 2006); and that all of Mines's claims are barred by Fuller's intervening criminal acts, see Gooden, supra, and Prill v. Marrone, 23 So. 3d 1 (Ala. 2009). Homewood, Officer Clifton, and Officer Davis attached to the motion to dismiss a copy of a video recording of the pursuit and Fuller's accident made by the dashboard camera in Officer Clifton's vehicle. The video recording indicates that the officers were engaged in a high-speed pursuit of Fuller's vehicle, that Officer Clifton was driving the lead vehicle in pursuit of Fuller's vehicle, that Fuller was driving recklessly, and that, as Mines stated in her complaint, "Fuller lost control of the vehicle while attempting to turn onto Oxmoor Road [and] struck a pole and another vehicle." The video recording shows Officer Clifton slowing his vehicle 4 1151310 at times during the pursuit to safely negotiate the traffic and shows that, although law-enforcement vehicles were pursuing Fuller's vehicle, no law-enforcement vehicle made contact with Fuller's vehicle during the pursuit. Indeed, the video recording establishes unequivocally that no law- enforcement vehicle was near Fuller's vehicle when Fuller attempted to turn onto Oxmoor Road and struck a light pole and another vehicle. On May 9, 2016, Mines filed her opposition to the motion to dismiss, maintaining that because Homewood, Officer Clifton, and Officer Davis had relied on matters outside the pleadings in their motion, the motion to dismiss had been converted to a summary-judgment motion. She argued that because the motion had been converted to a summary-judgment motion she needed a reasonable opportunity to discover evidence and to respond. Mines did not attach an affidavit proffering what she expected discovery to reveal, and she did not challenge the authenticity of the video recording. On July 6, 2016, the trial court conducted a hearing on the motion to dismiss. 5 1151310 On August 4, 2016, Mines moved the trial court to order Homewood, Officer Clifton, and Officer Davis to answer the interrogatories she had served with her complaint. 2 On August 10, 2016, the trial court ordered: "This matter comes before the court on the defendants' motion to dismiss under Rule 12(b)(6) of the Ala. R. Civ. P. Since the defendants request that this court consider matters outside the pleadings, the court will treat this motion as a motion for summary judgment under Rule 56 of the Ala. R. Civ. P.. "Is therefore ORDERED, ADJUDGED, and DECREED that the defendants' motion for summary judgment is hereby DENIED. "Both parties are hereby informed that the court will again entertain those issues presented in the defendants' motion after the discovery phase of this litigation, upon the filing of a properly crafted motion." On August 19, 2016, Homewood, Officer Clifton, and Officer Davis moved the trial court to alter, amend, or vacate the order denying their motion, arguing that the trial court erred in not entering a summary judgment in their favor because, they said, they were entitled to immunity from liability as a matter of law and that, in light of the video recording, discovery would not establish otherwise. They 2Mines did not attach a copy of the interrogatories to her response to the petition for the writ of mandamus. 6 1151310 pointed out that Mines did not identify what specific discovery was necessary to respond to any of the grounds asserted in their motion. On September 13, 2016, the trial court conducted a hearing on the motion to alter, amend, or vacate. Mines argued that additional discovery was needed but again did not state what evidence she expected discovery to reveal that would create a genuine issue of material fact with regard to the issue of immunity. On September 21, 2016, Homewood, Officer Clifton, and Officer Davis timely petitioned this Court for a writ of mandamus directing the trial court to vacate its order denying their motion for a summary judgment and to enter a summary judgment in their favor. On January 8, 2017, Mines filed her response to the petition. Standard of Review "'"This Court has stated: "'"'"While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion grounded on a claim of immunity is reviewable by petition for writ of 7 1151310 mandamus. Ex parte Purvis, 689 So. 2d 794 (Ala. 1996).... "'"'"...."' "'"Ex parte Turner, 840 So. 2d 132, 135 (Ala. 2002)(quoting Ex parte Rizk, 791 So. 2d 911, 912–13 (Ala. 2000)). A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: '"(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court."' Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003)(quoting Ex parte BOC Group, Inc., 823 So. 2d 1270, 1272 (Ala. 2001))." "'Ex parte Yancey, 8 So. 3d 299, 303–04 (Ala. 2008).' "Ex parte Jones, 52 So. 3d 475, 478–79 (Ala. 2010). "'In reviewing a trial court's ruling on a motion for a summary judgment, we apply the same standard the trial court applied initially in granting or denying the motion. Ex parte Alfa Mut. Gen. Ins. Co., 742 So. 2d 182, 184 (Ala. 1999). "'"The principles of law applicable to a motion for summary judgment are well settled. To grant such a motion, 8 1151310 the trial court must determine that the evidence does not create a genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. When the movant makes a prima facie showing that those two conditions are satisfied, the burden shifts to the nonmovant to present 'substantial evidence' creating a genuine issue of material fact." "'742 So. 2d at 184. "[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).' "Swan v. City of Hueytown, 920 So. 2d 1075, 1077–78 (Ala. 2005)." Ex parte Brown, 182 So. 3d 495, 502 (Ala. 2015). Discussion Officer Clifton and Officer Davis contend that the trial court erred in refusing to enter a summary judgment in their favor because, they say, at the time of the accident they were acting as agents of the State, that none of the exceptions to State-agent immunity apply, and that, therefore, they are 9 1151310 entitled to immunity from suit by Mines, pursuant to § 6-5- 338(a), Ala. Code 1975. In Ex parte City of Midfield, 161 So. 3d 1158, 1163-64 (Ala. 2014), this Court recognized: "'Section 6–5–338(a)[, Ala. Code 1975,] provides: "'"Every peace officer, except constables, who is employed or appointed pursuant to the Constitution or statutes of this state ... and whose duties prescribed by law, or by the lawful terms of their employment or appointment, include the enforcement of, or the investigation and reporting of violations of, the criminal laws of this state, and who is empowered by the laws of this state to execute warrants, to arrest and to take into custody persons who violate, or who are lawfully charged by warrant, indictment, or other lawful process, with violations of, the criminal laws of this state, shall at all times be deemed to be officers of this state, and as such shall have immunity from tort liability arising out of his or her conduct in performance of any discretionary function within the line and scope of his or her law enforcement duties." "'The restatement of State-agent immunity as set out by this Court in Ex parte 10 1151310 Cranman, [792 So. 2d 392 (Ala. 2000)], governs the determination of whether a peace officer is entitled to immunity under § 6–5–338(a). Ex parte City of Tuskegee, 932 So. 2d 895, 904 (Ala. 2005). This Court, in Cranman, stated the test for State-agent immunity as follows: "'"A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'".... "'"(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, l a w - e n f o r c e m e n t officers' arresting or attempting to arrest persons; ... "'".... "'"Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity "'"(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, 11 1151310 rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or "'"(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a m i s t a k e n interpretation of the law." "'Cranman, 792 So. 2d at 405. Because the scope of immunity for law-enforcement officers set forth in § 6–5–338(a) was broader than category (4) of the restatement adopted in Cranman, this Court, in Hollis v. City of Brighton, 950 So. 2d 300, 309 (Ala. 2006), expanded and modified category (4) of the Cranman test to read as follows: "'"'A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'".... "'"'(4) exercising judgment in the enforcement of the criminal laws of the State, including, but 12 1151310 not limited to, l a w - e n f o r c e m e n t officers' arresting or attempting to arrest persons, or serving as peace officers under circumstances entitling such officers to immunity pursuant to § 6–5–338(a), Ala. Code 1975.'" "'Hollis, 950 So. 2d at 309. Additionally: "'"'This Court has established a "burden-shifting" process when a party raises the defense of State-agent immunity.' Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006). A State agent asserting State-agent immunity 'bears the burden of demonstrating that the plaintiff's claims arise from a function that would entitle the State agent to immunity.' 946 So. 2d at 452. Should the State agent make such a showing, the burden then shifts to the plaintiff to show that one of the two categories of exceptions to State-agent immunity recognized in Cranman is applicable. ..."' "Ex parte City of Montgomery, 99 So. 3d at 291–94 (quoting Ex parte Kennedy, 992 So. 2d 1276, 1282–83 (Ala. 2008))." Thus, for Officer Clifton and Officer Davis to demonstrate that they are entitled to immunity from Mines's 13 1151310 claims against them in their official and individual capacities, they must establish (1) that they were peace officers (2) performing law-enforcement duties at the time of the accident and (3) exercising judgment and discretion. If they can do so, the burden then shifts to Mines to show that one of the Cranman exceptions applies. If Mines does not satisfy this burden, then the officers are entitled to immunity. With regard to the first two factors to determine immunity, the materials before us establish that it is undisputed that Officer Clifton and Officer Davis were employed as law-enforcement officers by Homewood; therefore, they are "peace officers" for the purposes of § 6-5-338(a), Ala. Code 1975. Additionally, the parties agree that Officer Clifton and Officer Davis were performing law-enforcement duties at the time of the accident. Therefore, no genuine issue of fact exists as to the first two factors. With regard to the third-factor determining immunity –- whether the officers were exercising proper judgment and discretion –- in Hollis v. City of Brighton, 950 So. 2d 300, 309 (Ala. 2006), this Court held that arresting or attempting 14 1151310 to arrest an individual is a discretionary function. It is undisputed that Officer Clifton and Officer Davis pursued Fuller's vehicle in an attempt to arrest Fuller and Mines for allegedly shoplifting. Additionally, the video recording establishes that the officers were engaged in a high-speed pursuit of Fuller's vehicle, that Fuller was driving recklessly, that no law-enforcement vehicle made any contact with Fuller's vehicle during the pursuit, and that no law- enforcement vehicle was near Fuller's vehicle when Fuller attempted to turn onto Oxmoor Road and struck a light pole and another vehicle. The video recording demonstrates that the officers were exercising discretion and judgment during the pursuit of Fuller's vehicle. See Doran v. City of Madison, 519 So. 2d 1308, 1314 (Ala. 1998)(quoting Madison v. Weldon, 446 So. 2d 21, 28 (Ala. 1984), quoting in turn City of Miami v. Horne, 198 So. 2d 10, 13 (Fla. 1967))("'"The rule governing the conduct of [a] police [officer] in pursuit of an escaping offender is that he must operate his vehicle with due care and in doing so he is not responsible for the acts of the offender. Although pursuit may contribute to the reckless driving of the pursued, the officer is not obliged to allow 15 1151310 him to escape."' (Emphasis added.)"). Therefore, Officer Clifton and Officer Davis satisfied their burden of showing the third-factor for immunity. Because the materials submitted by the officers established that they qualified for immunity, the burden then shifted to Mines to show that one of the two Cranman exceptions to immunity applied. In her complaint, Mines alleged that Officer Clifton and Officer Davis "acted beyond their authority as police officers employed by [Homewood], in derogation of and/or under a mistaken interpretation of the laws enacted and/or promulgated for the purpose of regulating the boundaries of permissible activities of law enforcement personnel in the manner in which they allowed the police cruisers to pursue the vehicle driven by [Fuller] and also occupied by [Mines]." Mines offered nothing to refute the evidence of the officers' appropriate conduct captured by the dashboard camera of the police vehicle, nor did Mines proffer any facts in her complaint to contradict the facts developed in the pleadings. Instead of addressing the merits of the summary-judgment motion, that is, refuting the evidence of the officers' appropriate conduct captured on the dashboard camera, Mines made the conclusory argument that, because the officers had 16 1151310 not responded to her requests for discovery, she needed time to gather evidence before addressing the motion. In effect, Mines moved, pursuant to Rule 56(f), Ala. R. Civ. P., for a continuance to permit discovery of evidence to oppose the motion. Mines did not support her motion with an affidavit proffering any facts she expected from the requested discovery that would contradict the facts developed and show that a genuine issue of material fact existed with regard to whether the officers were entitled to immunity. In Reeves v. Porter, 521 So. 2d 963 (Ala. 1988), this Court addressed the propriety of a trial court entering a summary judgment for the defendants before the defendants had complied with discovery requests, stating: "The mere pendency of discovery does not bar summary judgment. If the trial court from the evidence before it, or the appellate court from the record, can ascertain that the matter subject to production was crucial to the non-moving party's case (Parrish v. Board of Commissioners of Alabama State Bar, 533 F.2d 942 (5th Cir. 1976)) or that the answers to the interrogatories were crucial to the non-moving party's case (Noble v. McManus, 504 So. 2d 248 (Ala. 1987)), then it is error for the trial court to grant summary judgment before the items have been produced or the answers given. However, the burden of showing that these items are crucial is upon the non-moving party. He can do so by complying with Rule 56(f), Ala. R. Civ. P., Water View Developments, Inc. v. Eureka, Inc., 512 So. 2d 17 1151310 916 (Ala. 1987). Rule 56(f) provides: 'Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.'[3] A pending motion to compel production (Parrish, supra) and a motion to compel answers to interrogatories, which has been granted (Noble, supra) when the evidence before the court clearly shows that the evidence sought is crucial to the non-moving party's case, have been held sufficient compliance with Rule 56(f). However, when no such crucial evidence would be supplied by the production or by the answers to the interrogatories, it is not error for the trial court to grant summary judgment with discovery pending. Wallace v. Brownell Pontiac–GMC Co., 703 F.2d 525 (11th Cir. 1983); Noble v. McManus, supra. In Wallace, Judge Kravitch noted: 'Most, if not all, cases involving a Rule 56(f) issue will be factually dissimilar. For this very reason, a blanket rule would be inappropriate.' 703 [F.]2d at 528. The burden is upon the non-moving party to comply with Rule 56(f) or to prove that the matter sought by discovery is or may be crucial to the non-moving party's case...." 521 So. 2d at 965 (emphasis added). Here, in light of the caselaw with regard to immunity and law-enforcement-officer pursuit of a suspect and the evidence presented in the video recording, Mines's argument that additional discovery is required before she can address the 3Rule 56(f), Ala. R. Civ. P., was amended effective August 1, 1992, and no longer reads exactly as quoted here. 18 1151310 summary-judgment motion is not supported by the record and is unpersuasive. Mines did not attach an affidavit to her opposition to the summary-judgment motion explaining what she expected the requested discovery to reveal with regard to her contention that the officers were not entitled to immunity and why the discovery was crucial to her ability to oppose the officers' immunity argument. For example, Mines did not assert that the requested discovery will demonstrate that Officer Clifton and Officer Davis did not act as "reasonably prudent emergency driver[s] exercising [their] discretion under the prevailing circumstances" Blackwood v. City of Hanceville, 936 So. 2d 495, 507 (Ala. 2006), or that the discovery would show that the officers were acting "willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law," Ex parte Cranman, 792 So. 2d 392, 405 (Ala. 2000). To the extent that Mines may have asserted that additional discovery will show that Officer Clifton and Officer Davis "caused" Fuller to lose control of her vehicle, the video quite clearly establishes otherwise. The video recording demonstrates that the officers were exercising due care in the operation of 19 1151310 their vehicles and were not responsible for Fuller's actions. Doran, supra. In light of the evidence presented in the video recording, Mines cannot demonstrate through additional discovery that a genuine issue of material fact exists with regard to the immunity of Officer Clifton and Officer Davis. The trial court had before it evidence that clearly showed the accident and the surrounding circumstances. Additionally, the evidence clearly showed that the officers were engaged in conduct that qualifies for immunity and that the officers were not the proximate cause of Mines's injuries. Mines did not refute this evidence, nor did she proffer any evidence indicating that additional discovery would challenge the officers' immunity defense. Therefore, the trial court erred in denying Officer Clifton and Officer Davis's summary- judgment motion based on immunity. Likewise, the materials before us demonstrate that Homewood is entitled to immunity. Section 6–5–338(b), Ala. Code 1975, provides that the immunity enjoyed by peace officers extends to "governmental units or agencies authorized to appoint peace officers." See also Ex parte City of Gadsden, 781 So.2d 936 (Ala. 2000)(holding that because the 20 1151310 officer's decision to pursue the suspect was a discretionary act entitled to immunity, the plain language of § 6–5–338(b), Ala. Code 1975, extended that immunity to the municipality that employed the officer). Accordingly, because Officer Clifton and Officer Davis were engaged in a discretionary act entitling them to immunity from Mines's suit, Homewood, the municipality that employed them, is also entitled to immunity from Mines's suit. Conclusion Officer Clifton and Officer Davis have established that they are entitled to immunity as to Mines's claims against them in both their official and individual capacities. Moreover, because Officer Clifton and Officer Davis are entitled to immunity, Homewood is also entitled to immunity. Officer Clifton, Officer Davis, and Homewood have demonstrated a clear, legal right to a summary judgment in their favor. Therefore, we grant their petition and issue the writ, directing the trial court to enter a summary judgment for Officer Clifton, Officer Davis, and Homewood. PETITION GRANTED; WRIT ISSUED. Bolin, Parker, Murdock, Shaw, Main, Wise, and Bryan, JJ., concur. 21

March 24, 2017

dec28477-8072-4365-8e38-c73581497b58

Ex parte Ingram

N/A

1131228

Alabama

Alabama Supreme Court

REL: 02/24/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1131228 ____________________ Ex parte Becky Ingram and Nancy Wilkinson PETITION FOR WRIT OF MANDAMUS (In re: L.L., a minor child, by and through her mother and next friend L.L. v. Suzanne Sterling et al.) (Tuscaloosa Circuit Court, CV-13-900480) MURDOCK, Justice. Becky Ingram and Nancy Wilkinson (sometimes hereinafter collectively referred to as "the teachers") petition this 1131228 Court for a writ of mandamus directing the Tuscaloosa Circuit Court to vacate its order denying their motion for a summary judgment based on State-agent immunity as to all claims asserted against them in an action filed by L.L., by and through her mother, and to enter a summary judgment in their favor. We grant the petition as to Wilkinson and deny the petition as to Ingram. I. Facts and Procedural History Oak Hill School is a self-contained facility operated within the Tuscaloosa City School System and designated for students with significant disabilities. At the time of the incident at issue, L.L. was an 11-year-old eighth-grade student at Oak Hill. L.L., who suffers from spina bifida, is paralyzed from the waist down; she is confined to a wheelchair; she does not have full use of her arms and hands; she requires a urinary catheter; and she wears a diaper. L.L. also has significant mental impairment: she has an I.Q. of 55, impaired speech, and other mental complications. The other eighth-grade student involved in the incident in question, M.M., has a chromosome-2 deletion, which results in mental retardation, verbal disability, shortened limbs, and impaired manual dexterity. M.M. often communicates by 2 1131228 grunting and shaking his head; he also signs to communicate, but he uses words, too. In 2007 when the incident underlying the case occurred, Ingram was the eighth-grade science teacher and Wilkinson was a teacher's aide (also referred to as a "paraprofessional") assigned to Ingram's class. Before the incident in May 2007, M.M. had a history of aggressive behavior toward teachers and other students. On November 6, 2006, M.M. was suspended from the school bus for the remainder of the month of November for rude, discourteous, and annoying behavior and unacceptable language, which included sexual references and gestures. On November 9, 2006, Melissa Mitchell, a reading and language arts teacher at Oak Hill, referred M.M. to the principal, Suzanne Sterling, because of his disruptive behavior. Specifically, M.M. tried to remove his belt and indicated that he was going to use it on Mitchell, and he used an obscene gesture toward Mitchell. Mitchell noted to Sterling that "this behavior has been going on for a while." On November 16, 2006, M.M. was suspended from Oak Hill for two days for "repeated offenses" of threatening others, making obscene gestures toward faculty and staff members, and being a disruption on the school bus. On November 29, 2006, Sterling held a conference with M.M. during 3 1131228 which she warned him against "touching others," to keep his hands to himself, and not to "say the wrong things" because such behavior could get him suspended from school. On December 13, 2006, M.M. was suspended for three weeks from the school bus for "shooting the bird," biting, hitting, and pinching other students, and telling the bus driver "f__ you" while pulling on his own privates. On April 19, 2007, Wilkinson found M.M. standing in front of A.J., a female classmate who uses a walker and who needs assistance when she uses the bathroom, in the hallway between the lunchroom and Ingram's classroom, and A.J.'s pants were pulled down. When M.M. saw Wilkinson he ran around the corner as if to hide. When Wilkinson asked M.M. what he was doing, he pointed to his private area and began to whine and cry. M.M. was suspended for the incident involving A.J., and Ingram was told about it, although she testified in her affidavit that the incident, "as it was reported to me, [was not] sexual in nature." School officials had a conference with M.M.'s mother about the incident with A.J. M.M.'s mother testified in an affidavit that "I was told by Ms. Sterling and Ms. Ingram and other school officials that my son admitted to them that he had pulled the student's clothes down and had attempted some 4 1131228 sort of sexual contact." M.M.'s mother also stated that "[r]epeatedly, prior to [the incident involving L.L.], when I met with my son's teachers and school officials, including Mrs. Sterling and Mrs. Ingram, I told them that I did not believe they were giving my son the constant supervision he needed to help control his increasing sexual misbehavior." Ingram admitted in her affidavit that "[w]hen M.M. became frustrated or angry, he would make inappropriate gestures toward me or Ms. Wilkinson, such as 'shooting the bird,' touching his hand to his lips and then to his bottom, or point to his groin area." Dr. Ashraf Syed, a child neurologist, testified by affidavit that he had been treating M.M. since 2002. He stated that on March 22, 2007, M.M.'s mother contacted him and reported that "M.M. was sexually aggressive and reported to me that M.M. was having problems with sexual aggression in school." Dr. Syed stated that "a treatment plan was developed for M.M. to manage his sexual aggression. Because there is no specific medication for these types of aggression, I recommended an aide be assigned to him to prevent any inappropriate or indecent behavior." Dr. Syed also stated that, "[g]iven M.M.'s severe mental retardation, he does not 5 1131228 understand the nature of his actions in the context of 'sexually aggressive behavior' and needs an aide to monitor his actions." There is no record, however, that Dr. Syed ever communicated with Oak Hill school officials about M.M.'s behavior. It is undisputed that the doors to all the rooms facing hallways at Oak Hill were supposed to be set to lock automatically when they closed. Ingram testified in her deposition that Oak Hill administration "wanted us to keep every door to the hallway locked." In their depositions, both Deborah Anderson, director of special education for the Tuscaloosa City Schools, and Sterling confirmed that Oak Hill policy required that all classroom and office doors that opened to hallways remain locked. It is also undisputed that Ingram's science classroom was next to Mitchell's classroom and that Mitchell's classroom had a bathroom attached to it. There was a shared office between Ingram's classroom and Mitchell's classroom. A person could access either of those classrooms by directly entering the hallway door to the classroom or by entering the hallway door to the shared office and then opening the connecting door between the office and the classroom. 6 1131228 On May 7, 2007, Ingram's class of 11 students was returning to her classroom from the lunchroom. In order to reach Ingram's classroom, students had to proceed down a main hallway past the doors to several other classrooms, including the main door to Mitchell's classroom, which was on the left side of the main hallway as the students returned from the lunchroom. To reach Ingram's classroom, the students would pass Mitchell's classroom and then make two 45-degree turns and proceed a shorter distance down a secondary hallway to Ingram's classroom, which would be on the left side of the secondary hallway. Between the two 45-degree turns was a relatively short wall in which was located the door to the small office shared by Ingram's and Mitchell's classrooms. Ingram testified that, before she left the lunchroom with the students, Wilkinson told Ingram that Wilkinson was going to stop in the hallway along the way to help A.J. go to the bathroom. Wilkinson also was going to assist a male student in a wheelchair. According to the teachers, Ingram led the students from the front of the line and Wilkinson was at the back of the line as the students walked down the main hallway toward Ingram's classroom. 7 1131228 The above-described procedure for transitioning the students from the lunchroom to the science classroom was performed pursuant to Oak Hill policy. The Oak Hill School Faculty Handbook provided: "Students should always be accompanied by adults during class change and should never be left unattended in the classroom or locke[r ]rooms. There are no exceptions." Additionally, Ingram testified that it "is an Oak Hill policy ... that the teacher is at the front of the line and the para[professional] is at the back" when students are transitioned through the building. Sterling confirmed this transition policy. According to Ingram, she led the students down the main hallway, and, when she arrived at the corner to the secondary hallway leading to the science classroom, she looked back and confirmed that all the students were in the line -- including M.M. and L.L. -- before she walked down the secondary hallway and arrived at the door to the science classroom. She then unlocked the door to the science classroom and walked into the classroom, and her students followed immediately behind her. Ingram testified that she had expected Wilkinson to take A.J. to a bathroom on the main hallway, specifically the bathroom 8 1131228 "next to the Home Economics room, which is on the main hall between the dining area and my classroom. I expected, as is the normal procedure, that Ms. Wilkinson would wait outside that bathroom where she would have been able to see the other students in the hall before they turned the corner to [my] classroom. ... I later learned that the restroom in the main hall was occupied, and that Ms. Wilkinson instead had to take the student to the girls' restroom on the hall toward the gym. She came into the classroom three to five minutes after I did, with the student she had been assisting." According to Wilkinson, when she started down the main hallway with A.J. and the male student in a wheelchair, A.J. started to act upset, which usually indicated urgency in her need to go to the bathroom.1 Wilkinson testified that it was then that she told Ingram that she was going to take A.J. to the bathroom and that Ingram acknowledged this and continued down the main hallway with the other students. Wilkinson 1Wilkinson testified in her deposition: "Q. And so were you ever under the impression that 'AJ' was irritated because she needed to use the bathroom? "A. Yes, because that [is] usually how she do[es it]. "Q. And at what point did you make the decision to take 'AJ' to the bathroom? "A. After she wouldn't move her walker and she started screaming in the hallway." 9 1131228 stated that she went immediately to the restroom near the gym with A.J. and the male student in a wheelchair. Wilkinson testified that it took "just a few minutes" to take A.J. to the restroom. Wilkinson then took the male student in a wheelchair down another hallway to a room where an aide could change his diaper. Wilkinson left the male student with the aide and returned to the science classroom with A.J. Wilkinson testified that she did not know where M.M. and L.L. were during this time. Mitchell testified that she returned to her classroom from lunch at 12:45 p.m. In two statements recounting the events, Mitchell indicated that she entered her classroom through the hallway door into the shared office and, from there, through the connecting door to her classroom. In one of those statements, Mitchell recalled that she found the hallway door to the office "ajar" and then discovered that the connecting door to the classroom also was open. In her deposition, however, Mitchell testified that she entered her classroom by unlocking her classroom door located on the main hallway. When she entered the classroom, Mitchell observed M.M. leaving the bathroom in her classroom. She stated that M.M. had his hands on his pants as if he had been fastening 10 1131228 them. Mitchell asked M.M. what he was doing in the bathroom, but he did not answer. She told M.M. to return to his classroom and he left. Mitchell then heard noises coming from the bathroom, and she went to investigate. Mitchell discovered L.L. lying on the toilet with her legs dangling, her pants down around her ankles with her genitals fully exposed, her shirt up around her neck and one arm out of a sleeve of her shirt, and her bra pulled down, exposing one breast. Mitchell testified that she asked L.L. what M.M. had done and that L.L. stated that M.M. "was messing with her." Mitchell asked L.L. how M.M. was messing with her and L.L. pointed to her genital area. Mitchell then left the bathroom to find another witness and to get some help. After Wilkinson returned to the science classroom, Ingram left the classroom to take a document to Sterling's office. Ingram testified that while she was in the classroom she had not noticed that M.M. and L.L. had not returned to the classroom from the lunchroom because she was focused on other students. Ingram testified that she was unable to find Sterling and that she started to return to her classroom. As she was returning, Mitchell got Ingram's attention and asked her to come into the bathroom in Mitchell's classroom. Ingram 11 1131228 then witnessed L.L. in the same condition in which Mitchell had discovered her. Ingram proceeded to try to console L.L., who was very upset. Several minutes later M.M. was questioned by school officials. M.M. immediately began to sign that he was sorry. When he was asked what he was sorry for, M.M. pointed to his private area. M.M. was asked three times if he had had sex with L.L., and each time he nodded his head in the affirmative. L.L. was examined by a physician later that day, however, and no evidence of sexual contact was found. L.L. introduced video-surveillance footage at Oak Hill from the date of the incident. The working cameras during that day showed the cafeteria and all secondary hallways that branch off of the main hallway, but there was no operational camera showing the main hallway. The video-surveillance footage showed the students leaving the cafeteria, but they were not in an organized line. It showed Wilkinson in the cafeteria with A.J. and the male student in a wheelchair at a table after the other students had left the cafeteria. It also showed Wilkinson leaving the cafeteria with A.J. and the male student in the wheelchair. Forty-five seconds later, the camera in one branch hallway showed Wilkinson parking the male 12 1131228 student in front of a door and knocking on the door and then leaving. The door opened and the male student was moved inside the room. During the same period, the camera in the science classroom hallway showed students coming down the hallway toward the science classroom with no adult leading them. When the first students arrived at the door of the science classroom, the door was closed. The first students to arrive waited at the door for a moment and then the door opened from the inside and the students began to walk into the classroom. One male student walked to the open classroom door and stood there for a full minute before walking back down the hallway and was not shown to return to the classroom. Five minutes after the students entered the science classroom, Wilkinson walked into the science classroom with A.J. just behind her. Two minutes after Wilkinson returned to the science classroom, the cafeteria camera showed Ingram standing in the cafeteria for two minutes holding a sheet of paper and then walking out of the cafeteria in a direction opposite to the main hallway. A camera in another branch hallway then showed Ingram walking to the door of a room, opening the door and checking inside the room, and then leaving in the direction from which she had come. A moment later, Ingram is 13 1131228 seen walking back through the cafeteria. Ingram never appeared on the video footage of the science-classroom hallway throughout the entire 10-minute period shown in the video footage. L.L. did not return to Oak Hill for the remainder of the 2006-2007 school year after this incident, and, at the request of her parents, she was transferred to another school the following school year. L.L., by and through her mother and next friend L.L., originally filed an action in the United States District Court for the Northern District of Alabama against the Tuscaloosa City Board of Education, Sterling, and Ingram, alleging violations of her civil rights under 42 U.S.C. § 1983; Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681 et seq.; Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; and the Americans with Disabilities Act, 42 U.S.C. § 12132, for conduct that she said effectively denied L.L. safe access to Oak Hill, a federally assisted public facility. She also brought Alabama state-law claims, asking the federal court to exercise its supplemental jurisdiction. The federal district court entered a summary judgment in favor of all defendants on L.L.'s federal claims. It declined to 14 1131228 exercise supplemental jurisdiction over L.L.'s state-law claims. In April 2013, L.L. filed an action by and through her mother and next friend in the Tuscaloosa Circuit Court against Sterling, Mitchell, Ingram, and Wilkinson in their individual capacities, alleging negligent, wanton, and willful failure to perform ministerial tasks and other state-law claims. The defendants filed a motion for a summary judgment based on State-agent immunity. The circuit court entered a summary judgment in favor of Sterling and Mitchell, but it denied the summary-judgment motion as to Ingram and Wilkinson. Specifically, the circuit court concluded that L.L. had "failed to offer any evidence that any defendant acted willfully, maliciously, fraudulently, or in bad faith. The only remaining issue is whether any defendant acted beyond her authority and is therefore not entitled to state agent immunity when she failed to discharge duties pursuant to detailed rules or regulation. "4. [L.L.] failed to present sufficient evidence that defendants Suzanne Sterling and Melissa Mitchell acted beyond their authority. "5. Viewing the evidentiary submissions of the parties in the light most favorable to the non-movant, the court for purpose of summary judgment finds that Defendant Becky Ingram acted beyond her authority when she violated the following policies: 15 1131228 "1. 'Students should always be accompanied by adults during class change and should never be left unattended in the classroom or locker rooms. There are no exceptions.' "2. Policies and procedures at Oak Hill School require that all classroom and office doors connected to hallways remain locked. "3. Oak Hill policies require staff members to be at the front and end of each line when transitioning students through the building. "6. Again viewing the evidentiary submissions of the parties in the light most favorable to the non-movant, the court for purpose of summary judgment finds that Defendant Nancy Wilkinson acted beyond her authority when she violated the following policies: "1. 'Students should always be accompanied by adults during class change and should never be left unattended in the classroom or locker rooms. There are no exceptions.' "2. Oak Hill policies require staff members to be at the front and end of each line when transitioning students through the building ...." Ingram and Wilkinson filed this petition for a writ of mandamus asking this Court to direct the circuit court to enter a summary judgment in their favor on the basis of State- agent immunity. 16 1131228 II. Standard of Review "'While the general rule is that denial of a summary-judgment motion is not immediately reviewable by an appellate court, the exception to the general rule is that a denial of a motion for a summary judgment grounded on a claim of immunity is immediately reviewable by a petition for a writ of mandamus ....' "Ex parte Wood, 852 So. 2d 705, 708 (Ala. 2002). "'A writ of mandamus is an extraordinary remedy, and is appropriate when the petitioner can show (1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.' "Ex parte BOC Group, Inc., 823 So. 2d 1270, 1272 (Ala. 2001). "'This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant 17 1131228 makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce "substantial evidence" as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12. "[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assur. Co. of Fla., 547 So. 2d 870, 871 (Ala.1989).' "Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004)." Ex parte Jackson Cty. Bd. of Educ., 4 So. 3d 1099, 1101-02 (Ala. 2008). III. Analysis "'In Ex parte Cranman, 792 So. 2d 392 (Ala. 2000), a plurality of this Court restated the test for determining when a State employee is entitled to State-agent immunity: "'"A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "'"(1) formulating plans, policies, or designs; or "'"(2) exercising his or her judgment in the administration of a department or agency of government, including, but not limited to, examples such as: 18 1131228 "'"(a) making administrative adjudications; "'"(b) allocating resources; " ' " ( c ) n e g o t i a t i n g contracts; "'"(d) hiring, firing, transferring, assigning, supervising personnel; or "'"(3) discharging duties imposed on a department or agency by statute, rule, or regulation, insofar as the statute, rule, or regulation prescribes the manner for performing the duties and the State agent performs the duties in that manner; or "'"(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, law-enforcement officers' arresting or attempting to arrest persons; or "'"(5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students. "'"Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity "'"(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating 19 1131228 the activities of a governmental agency require otherwise; or "'"(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law.' "'792 So. 2d at 405. Although Cranman was a plurality decision, the restatement of law as it pertains to State-agent immunity set forth in Cranman was subsequently adopted by this Court in Ex parte Rizk, 791 So. 2d 911 (Ala. 2000), and Ex parte Butts, 775 So. 2d 173 (Ala. 2000). "'Additionally, this Court has stated: "'"This Court has established a 'burden-shifting' process when a party raises the defense of State-agent immunity. Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003). In order to claim State-agent immunity, a State agent bears the burden of demonstrating that the plaintiff's claims arise from a function that would entitle the State agent to immunity. Giambrone, 874 So. 2d at 1052; Ex parte Wood, 852 So. 2d 705, 709 (Ala. 2002). If the State agent makes such a showing, the burden then shifts to the plaintiff to show that the State agent acted willfully, maliciously, fraudulently, in bad faith, or beyond his or her authority. Giambrone, 874 So. 2d at 1052; Wood, 852 So. 2d at 709; Ex parte Davis, 721 So. 2d 685, 689 (Ala. 1998). 'A State agent acts beyond authority and is therefore not immune when he or she "fail[s] to discharge duties pursuant to detailed rules or regulations, such as those stated on a checklist."' Giambrone, 874 So. 2d at 1052 (quoting Ex parte Butts, 775 So. 2d 173, 178 (Ala. 2000))." 20 1131228 "'Ex parte Estate of Reynolds, 946 So. 2d 450, 452 (Ala. 2006).'" Ex parte Jones, 52 So. 3d 475, 479-80 (Ala. 2010) (quoting Ex parte Yancey, 8 So. 3d 299, 304-05 (Ala. 2008)). The teachers argue that the rules in question are not sufficiently detailed to establish that the teachers acted "beyond their authority" in regard to the circumstances with which they were confronted in this case. The teachers argue, in the alternative, that this Court should overrule a number of recent cases addressing the "beyond-authority" exception identified in Ex parte Cranman, 792 So. 2d 392 (Ala. 2002).2 Although we decline today to overrule Cranman in the manner urged by the teachers, as to the first argument made by the teachers, we do recognize that there must be a fact- intensive inquiry into whether a relevant guideline leaves room for the exercise of any discretion or professional judgment by the employee in relation to the particular circumstances with which the employee may be presented. This 2As to this argument, at least one Justice on this Court has in fact argued in favor of limiting the beyond-authority exception under Cranman to instances where the employee is not acting in the general line and scope of his or her employment. See, e.g., Ex parte Watson, 37 So. 3d 752, 765 (Ala. 2009) (Murdock, J., concurring in part and dissenting in part). 21 1131228 understanding, in fact, underlay our recent decision in Ex parte Sumerlin, 26 So. 3d 1178 (Ala. 2009). In Sumerlin, this Court recognized the practical reality that workplace regulations or guidelines cannot always anticipate all circumstances and exigencies. Specifically, in Sumerlin, this Court considered whether a Jefferson County Department of Human Resources ("DHR") supervisor acted beyond her authority by failing to follow policies in the DHR Policy Manual. A 12-month-old child, Austin Terry, was admitted to Children's Hospital on Friday September 6, 2002, with injuries indicating child abuse. A social worker notified DHR, designated the case as one requiring an "immediate" response, and recommended to Sumerlin, a DHR supervisor, that Terry not be allowed to go home with his mother until DHR investigated. The DHR Policy Manual required that "immediate" response cases be investigated "'as soon as possible after a report is received, but no later than twelve (12) hours from receipt of the intake information.'" 26 So. 3d at 1186. But no investigator was available, so Sumerlin did not assign one until Monday, September 9. She did determine that Terry could remain at Children's Hospital until September 9 and asked that the hospital notify her before discharging him. Terry's 22 1131228 father also reported Terry's injury to DHR on September 6. The on-call DHR worker who responded learned that the mother and her boyfriend had been with the child on the day of his injury and submitted a report that Terry should not return home with his mother. On September 9, Children's Hospital contacted Sumerlin to ascertain DHR's plan. Sumerlin had not received the report recommending that Terry not go home with his mother, and she allowed him to do so. Terry subsequently died from injuries inflicted by his mother's boyfriend. In a wrongful-death suit filed by Terry's estate against Sumerlin and others, Sumerlin moved for a summary judgment based on State-agent immunity. The plaintiff argued that Sumerlin was not entitled to immunity because, the plaintiff said, she acted beyond her authority in failing to follow detailed mandatory procedures in the DHR manual. The trial court denied Sumerlin's motion, and she petitioned this Court for a writ of mandamus. Granting the petition, this Court stated: "Because Terry was in a safe environment, Sumerlin exercised her judgment and determined that an investigator could be assigned to Terry's case on Monday when the threat of serious harm to Terry might return. The materials before us support a finding that Sumerlin did not ignore her responsibility; rather, she exercised her judgment 23 1131228 in her supervisory capacity to deal with exigent circumstances. Indeed, nothing before us indicates that Sumerlin exceeded the scope of her discretion in light of the facts that she had no personnel to assign to Terry's case on Friday afternoon and that Terry was not at that time in a life-threatening situation. Consequently, [the plaintiff] has not established that Sumerlin acted beyond her authority in this regard." 26 So. 3d at 1187. See also Ex parte Coleman, 45 So. 3d 751 (Ala. 2013) (holding, inter alia, that a statute did not deprive a police officer of the authority to use his professional judgment in regard to continuous versus intermittent use of his siren in a particular circumstance and that, therefore, the police officer had not acted "beyond his authority"). A survey of other states reveals that few states, if any, analyze issues such as the one that arose in Sumerlin under a "beyond-authority" exception. Indeed, few states explicitly articulate a "beyond-authority" exception like the one applied in recent years by this Court to employee handbooks and similar workplace guidelines. Instead, other states typically frame the issue as simply whether the employee's act or omission was within his or her "discretion," given the particular circumstances presented. That is, does the handbook or guideline remove from the 24 1131228 employee any room for professional judgment in the particular circumstances presented? Indicative of the approach followed in most states, the Texas Supreme Court asks whether a statute is "sufficiently specific so as to leave no choice to an officer in the performance of [his or her] duties." City of Lancaster v. Chambers, 883 S.W.2d 650, 655 (Tex. 2003) (emphasis added). Similarly, in Downing v. Brown, 935 S.W.2d 112 (Tex. 1996), the court considered whether guidelines applicable to a public-school teacher deprived her of immunity. It analyzed the question, however, not in terms of whether, in fact, the teacher ultimately was deemed to have acted "beyond her authority" but whether the guideline was so specific to the particular circumstances presented as to leave no room for professional judgment or discretion on the part of the teacher. Downing itself was explained in a subsequent case as follows: "Ministerial acts are those '"[w]here the law prescribes and defines the duties to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment."' Ministerial actions require obedience to orders or the performance of a duty as to which the actor has no choice. On the other hand, if an action involves 25 1131228 personal deliberation, decision, and judgment, it is discretionary. ... "Enriquez relies primarily on Downing v. Brown. In that case, the Texas Supreme Court addressed whether a teacher's maintenance of classroom discipline in accordance with a school district's policy's Discipline Management Plan was ministerial or discretionary. In finding that the teacher possessed immunity, the Court stated that the focus should be on whether maintaining classroom discipline was a discretionary function. ..." Enriquez v. Khouri, 13 S.W.3d 458, 462 (Tex. Ct. App. 2000) (emphasis added; footnote omitted). In a statement that sums up the issue as to the effect of the guidelines in this or any case, the court then explained: "The Plan did not define the teacher's responsibilities with such precision to leave nothing to the exercise of the teacher's discretion or judgment. For example, the Plan did not inform her of what types of discipline to use, what forms of student misconduct should result in disciplinary sanctions, or when or where to discipline the students. The Court reasoned that each of these decisions, which Texas schools routinely leave to its teachers, required the use of professional judgment and discretion." Enriquez, 13 S.W.3d at 462-63 (emphasis added; footnote omitted). The same result is reached in federal qualified-immunity analysis by the requirement that the right the defendant is alleged to have violated must be "clearly established," by 26 1131228 which the federal cases mean not only that the rule must be one of which the employee has fair and clear notice, but it also must clearly apply to the particular circumstances: "A government-officer defendant is entitled to qualified immunity unless, at the time of the incident, the 'preexisting law dictates, that is, truly compel[s],' the conclusion for all reasonable, similarly situated public officials that what Defendant was doing violated Plaintiffs' federal rights in the circumstances. [Lassiter v. Alabama A&M Univ., 28 F.3d 1146,] 1150 [(11th Cir. 1994)]. "... Two sets of circumstances may be 'nearly' the same, but 'nearly' can make a great legal difference at the edge. Because fair and clear notice to government officials is the cornerstone of qualified immunity, courts must diligently analyze the preexisting case law to determine whether it really did provide plain notice to every reasonable government official that the pertinent conduct, in the specific circumstances, would clearly violate preexisting federal law." Marsh v. Butler Cty., Ala., 268 F.3d 1014, 1030-31 (11th Cir. 2001) (emphasis added). In Vinyard v. Wilson, 311 F.3d 1340 (11th Cir. 2002), the United States Court of Appeals for the Eleventh Circuit explained what it referred to as a rule-of-obvious-clarity standard: "In Saucier [v. Katz, 533 U.S. 194, 121 S.Ct. 2151 (2001)], the Supreme Court emphasized that determining whether a constitutional right was clearly established 'must be undertaken in light of the specific context of the case, not as a broad 27 1131228 general proposition.' 533 U.S. at 201, 121 S.C. 2151; Lee [v. Ferraro], 284 F.3d [1188] at 1194 [(11th Cir. 2002),] (quoting Saucier and stating '[t]his second inquiry "must be undertaken in light of the specific context of the case, not as a broad general proposition"'); see also Marsh v. Butler County, 268 F.3d 1014, 1031–33 (11th Cir. 2001) (en banc). 'The relevant, dispositive inquiry in determining whether a right is clearly established is whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted.' Saucier, 533 U.S. at 202, 121 S.C. 2151 (emphasis added). Saucier further instructs that '[i]f the law did not put the officer on notice that his conduct would be clearly unlawful, summary judgment based on qualified immunity is appropriate.' Id. (emphasis added)." Indicative of the simplified approach to individual state-employee immunity generally found in both state and federal jurisprudence, the Restatement (Second) of Torts § 895D(3) (1979) continues to frame the issue simply as whether "[a] public officer acting within the general scope of his authority is ... engaged in the exercise of a discretionary function." Echoing the policy concerns underlying this Court's own analysis in Cranman, Comment b to § 895D of the Restatement (Second) of Torts elaborates on the reasons the law is reluctant to second-guess officials so long as the otherwise applicable rule leaves room for a reasonable exercise of judgment in the circumstances presented: 28 1131228 "The complex process of the administration of government requires that officers and employees be charged with the duty of making decisions, either of law or of fact, and of acting in accordance with their determinations. ... The basis of the immunity has been not so much a desire to protect an erring officer as it has been a recognition of the need of preserving independence of action without deterrence or intimidation by the fear of personal liability and vexatious suits. This, together with the manifest unfairness of placing any person in a position in which he is required to exercise his judgment and at the same time is held responsible according to the judgment of others, who may have no experience in the area and may be much less qualified than he to pass judgment in a discerning fashion or who may now be acting largely on the basis of hindsight, has led to a general rule that tort liability should not be imposed for conduct of a type for which the imposition of liability would substantially impair the effective performance of a discretionary function." Restatement (Second) of Torts § 895D, cmt. b (1979) (emphasis added). And in a similar vein, the United States Supreme Court has observed: "Nor is it always fair, or sound policy, to demand official compliance with statute and regulation on pain of money damages. Such officials as police officers or prison wardens, to say nothing of higher level executives who enjoy only qualified immunity, routinely make close decisions in the exercise of the broad authority that necessarily is delegated to them. These officials are subject to a plethora of rules, 'often so voluminous, ambiguous, and contradictory, and in such flux that officials can only comply with or enforce them selectively.' See P. Schuck, Suing Government 66 (1983). In these 29 1131228 circumstances, officials should not err always on the side of caution. '[O]fficials with a broad range of duties and authority must often act swiftly and firmly at the risk that action deferred will be futile or constitute virtual abdication of office.' Scheuer v. Rhodes, 416 U.S. [232], at 246 [(1974)]." Davis v. Scherer, 468 U.S. 183, 196 (1984). We cannot say that the policies at issue in this case are sufficiently specific as to have removed from Wilkinson the measure of professional judgment and discretion she used in the particular circumstance she faced. Among the policies urged against Wilkinson is one that states that students shall not be left unaccompanied in a classroom or locker room and that this policy has "no exceptions." But Wilkinson is not alleged to have violated this policy; she did not leave students unattended, and her actions occurred in neither a classroom nor a locker room. There also is a written policy requiring that students be escorted back to their classrooms by teachers, but Ingram reportedly did escort the students back to their classroom, and we see no basis for holding Wilkinson, who served merely as an aide to the classroom teacher, Ingram, responsible for any failure by Ingram in her execution of this policy. 30 1131228 The allegations against Wilkinson center on evidence of a school policy calling for a teacher to be at the front of a line of students being transitioned throughout the building and a paraprofessional to be at the back of the line. We first note that, in contrast to the policy against leaving students unaccompanied in a classroom or locker room, this policy does not come with a "no-exceptions" addendum. Moreover, in this case, Wilkinson perceived an urgent need to take two students to the bathroom just before, or immediately after, Ingram began leading the rest of the class down the hall to their classroom. There were between 10 and 14 students in the class, and there is no dispute that Wilkinson had responsibility for aiding students with such personal needs. Compare D.S. v. County of Montgomery, Ala., 286 F. App'x 629, 639 n.12 (11th Cir. 2008) (not selected for publication in the Federal Reporter) (noting that "this is not a case in which the alleged failure to supervise a particular detainee could arguably be considered discretionary because of other concurrent duties imposed upon the Officers that conflicted with the duty to supervise (for example, where an officer must divert his attention from one detainee to render medical aid to another, or where for some 31 1131228 reason it is impossible or impracticable to watch all detainees simultaneously)"). And of course, Wilkinson was not aware in advance of the circumstances that would subsequently unfold so as to provide M.M. an opportunity for time alone with L.L. We cannot say that the policy in question deprived Wilkinson of the authority to use her professional judgment to respond as she did to the exigent circumstances presented to her. A similar conclusion, however, cannot be reached so readily for Ingram. For starters, Ingram testified that she was informed by Wilkinson that Wilkinson needed to help two students to the bathroom while Ingram was still in the lunchroom with the other students. If she was informed of this while she and the students were still in the lunchroom, did the policy require her to hold the other students in the lunchroom until Wilkinson returned to assist with the transfer or until some other teacher or aide could be recruited to help in Wilkinson's place? For that matter, there is some inference that might be drawn from the videotape that Ingram was not in close proximity to the students as they left the lunchroom. Likewise, there is a genuine issue of fact as to what exactly Ingram did upon 32 1131228 reaching the classroom area. Even if the students were following relatively closely behind her as she moved down the hall from the lunchroom to the classroom (and based on the record, a fact-finder would be free to find that they were not), it is possible to infer from the evidence before us that Ingram entered her classroom by way of the common office doorway between the two classrooms and left the students unescorted in the hallway by themselves for a period, after which she then let them into the classroom through its main door. Similarly, the evidence allows the inference that, when Ingram did open the main door of the classroom to let the students in, she did so without accounting for all the students at that time or during the ensuing several minutes that she and some of the students were in the classroom. There also is evidence from which it reasonably may be deduced that, after using the common door, she left it unlocked. Based on the conflicting evidence and the obligation at this stage of the proceedings to view the record in the light most favorable to L.L., the nonmovant, we decline to overturn the circuit court's decision to deny Ingram's motion for a summary judgment. 33 1131228 PETITION GRANTED AS TO WILKINSON AND DENIED AS TO INGRAM; WRIT ISSUED. Main and Wise, JJ., concur. Stuart and Murdock, JJ., concur specially. Parker and Bryan, JJ., concur in the result. Shaw, J., concurs in the result in part and dissents in part. 34 1131228 MURDOCK, Justice (concurring specially). While in the past I have advocated limiting the "beyond- authority" exception to instances where an employee is shown not to be acting within the general line and scope of his or her employment (rather than in violation of some specific provision of an employee handbook), see, e.g., Ex parte Watson, 37 So. 3d 752, 766-67 (Ala. 2009) (Murdock, J., concurring in part and dissenting in part), upon further reflection engendered by my consideration of the present case, I would simply eliminate the beyond-authority and the mistaken-interpretation-of-law exceptions to State-agent immunity. The general-line-and-scope requirement is a given,3 and continued inclusion of these two exceptions, in my view, at best creates confusion and at worst is at cross purposes with the policy concerns underlying our decisions in Ex parte 3 "A public officer acting within the general scope of his authority is not subject to tort liability for an administrative act or omission if "(a) he is immune because engaged in the exercise of a discretionary function ...." Restatement (Second) of Torts § 895D(3) (1979). 35 1131228 Cranman, 792 So. 2d 392 (Ala. 2000), and Ex parte Butts, 775 So. 2d 173 (Ala. 2000). Before Cranman and Butts, the test in our cases -– or at least the articulated test -– for whether a State employee or official could be subjected personally to claims for monetary damages for acts committed in the line and scope of his or her employment was whether the act or omission complained of was discretionary in nature. See, e.g., DeStafney v. University of Alabama, 413 So. 2d 391, 395-96 (Ala. 1982) (opinion on application for rehearing). Cranman and Butts expressly limited such immunity, which they re-labeled as "State-agent immunity," to certain affirmatively identified categories of conduct aligned with issues of policy-making, planning, and other functions unique to the State as the state. See 792 So. 2d at 401-02; 775 So. 2d at 175. In so doing, Cranman and Butts sought to avoid confusion created when employees not engaged in uniquely governmental activities nonetheless sought immunity on the ground that they also exercised discretion in the performance of their duties, e.g., a truck driver exercising discretion in 36 1131228 deciding whether to drive over or around a pothole. See Cranman, 792 So. 2d at 404.4 4Cranman sought to reach a balance between such fundamental concerns as the separation of powers, the sovereignty of the state itself, and the right of individuals to a remedy for wrongs done: "We cannot ignore precedents ... clearly recognizing an open door to lawsuits against State agents and written by Justices of this Court who lived, worked, and wrote in an era much closer to the drafting of the Constitution of 1901 than we do. Yet, at the same time, we cannot ignore the strong policy against judicial interference in the affairs of State government as articulated in § 14 and mandated by § 43. Although § 14 is, by its terms, restricted to prohibiting lawsuits against the State, we cannot disregard its impact upon our obligation to observe the constitutional separation of powers. ... We must, as far as possible, construe §§ 13, 14, 36, and 43 and § 6.01 of Amendment No. 328 [now § 139, Ala. Const. 1901 (Off. Recomp.),] 'as a whole and in the light of [the] entire instrument and to harmonize with other provisions.' State Docks Comm'n v. State ex rel. Cummings, 227 Ala. 414, 417, 150 So. 345, 346 (1933). ".... "... The time has come to face the necessity of defining 'injury,' as that word is used in § 13, in lawsuits against State employees alleging torts committed in the line of duty, in a manner that neither violates § 13 nor prefers § 14 or § 6.01 of the Judicial Article over § 13. We decline to label all discretionary acts by an agent of the State, or all acts by such an agent involving skill or judgment, as 'immune' simply because the State has empowered the agent to act. Such an expansive view 37 1131228 But while restricting the application of its newly labeled "State-agent immunity" to certain expressly identified types of activities, nowhere did the Cranman Court eliminate consideration of whether, within the context of any such activities, the employee was in fact engaged in an exercise of discretion. To the contrary, all but one of the five categories articulated in Cranman clearly anticipate an activity that requires the exercise of discretion or judgment. And three of those, including the "educating- students" category at issue here, explicitly require that the employee be involved in the "exercise of judgment" in relation to the activity at issue. 792 So. 2d at 405. of the power of the State to act with immunity for its agents would be inconsistent with the rights secured by § 13." Cranman, 792 So. 2d at 401-05. Although most states continue to frame their test as simply a distinction between "discretionary" acts and ministerial or operational acts, without identifying specific types or categories of qualifying conduct, they nonetheless -— and no less than did this Court in Cranman -— recognize that immunity for State officials and employees "is based on the separation of powers doctrine" and is available only in relation to "certain policy-making, planning, or judgmental governmental functions which are inherent in the act of governing and therefore ought not be subjected to scrutiny by judge or jury ... because it would inappropriately entangle the courts in fundamental questions of planning and policy." Seguine v. City of Miami, 627 So. 2d 14, 16-17 (Fla. Dist. Ct. App. 1993). 38 1131228 Further, the first four exceptions to State-agent immunity listed in Cranman -– acts done willfully, maliciously, fraudulently, or in bad faith5 -– contemplate activity that does not involve the exercise of such discretion. Obviously, no employee has "discretion" to act in any of these four ways. Moreover, by their very nature, each of these four exceptions require a volitional culpability or scienter on the part of the employee. By definition, an employee cannot act willfully, maliciously, fraudulently, or in bad faith without knowing that he or she is doing so. But the last two matters included by Cranman in the referenced list of exceptions to State-agent immunity -- acts that are "beyond authority" or under "a mistaken 5 "Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity ".... "... when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law." Ex parte Cranman, 792 So. 2d at 405. 39 1131228 interpretation of law"6 -- do not operate in the same manner. The very nature of the activities included in the various Cranman categories often involve, indeed require, the exercise of discretion -- the making of a "judgment call" if you will -- as to what the law or some policy manual requires, how to interpret a statute or rule, or how to apply a statute or a rule to a particular circumstance. Such decisions commonly are themselves quintessentially discretionary governmental functions. Yet, given the manner in which these latter two exceptions are articulated in our cases, it appears that an employee loses his or her immunity whenever a court can say, even in hindsight, that the employee was wrong in his or her judgment about such a matter, i.e, that his or her act in fact was contrary to some provision of an employee handbook or was not authorized under some section of the Alabama Code. I am concerned that, as framed in our cases, it matters not that the employee's mistake was innocent or that it was made in a reasonable, good-faith effort to exercise the very type of judgment entrusted to that official to discern, interpret, and apply 6See note 5, supra. 40 1131228 relevant rules of law and employment guidelines. This, in my view, should not be the law. And I do not think it was intended to be by Cranman inasmuch as it actually is at odds with the fundamental constitutional and policy concerns that drove the Cranman analysis. See 792 So. 2d at 396-407. In fact, although the "beyond-authority" and the "mistaken-interpretation-of-law" exceptions were pulled into the list of exceptions set out in Cranman, the Cranman opinion engaged in a wide-ranging discussion of our precedents as to both individual, or discretionary-function, immunity and State sovereign immunity under § 14 of the Alabama Constitution, and these two exceptions are in reality traceable to pre-Cranman cases in the latter category. Specifically, they are traceable to cases where they were articulated as exceptions to claims of State (not State- agent) immunity where a plaintiff seeks injunctive relief against an official in his or her official capacity to force an official to do his or her job properly or in accordance with applicable law. See, e.g., Wallace v. Board of Educ. of Montgomery Cty., 280 Ala. 635, 197 So. 2d 428 (1967), and St. Clair Cty. v. Town of Riverside, 272 Ala. 294, 128 So. 2d 333 (1961). And of course they properly remain to this day 41 1131228 as exceptions to State sovereign immunity when injunctive or declaratory relief is sought against a State official in his or her official capacity. See, e.g., Ex parte Alabama Dep't of Transp., 978 So. 2d 17, 22 (2007). That is, in my view, their only necessary and proper role. Stuart, J., concurs. 42 1131228 SHAW, Justice (concurring in the result in part and dissenting in part). I concur in the result of the main opinion insofar as it denies the petition for the writ of mandamus as to Becky Ingram; I respectfully dissent from the main opinion insofar as it grants the petition as to Nancy Wilkinson. "Generally, State agents are afforded immunity from civil liability when the conduct made the basis of the claim is based on the exercise of judgment in supervising and educating students." Ex parte Nall, 879 So. 2d 541, 544 (Ala. 2003). However, "[a] State agent acts beyond authority and is therefore not immune when he or she 'fail[s] to discharge duties pursuant to detailed rules or regulations ....'" Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003) (quoting Ex parte Butts, 775 So. 2d 173, 178 (Ala. 2000)). The Oak Hill School Faculty Handbook contains detailed rules, policies, and procedures that the faculty, including Ingram and Wilkinson, were undisputedly required to follow. The following two rules are pertinent: (1) without "exceptions," "[s]tudents should always be accompanied by adults during class change," and (2) it is "require[d] [that] 43 1131228 staff members are to be at the front and end of each line when transitioning students through the building." The assault the plaintiff, L.L., alleges occurred in this case illustrates why these rules must be followed. Apparently, on the day of the alleged assault, both Ingram and Wilkinson initially escorted the students from the lunchroom as the rules required. Ingram testified that she led the line of students to their classroom. Other evidence indicates that, at the end of the transition between the lunchroom and the classroom, no staff members were at the front and end of the line, which resulted in L.L. and M.M.'s leaving the line, being in a secluded room unsupervised, and the alleged assault. As noted in the main opinion, we must review the evidence in the light most favorable to the nonmovant, namely, L.L. The main opinion appears to conclude that the disputed facts tended to indicate that Ingram violated the rule by not remaining with the students and, thus, that, as a matter of law, she was not entitled to a summary judgment based on State-agent immunity. That conclusion is based on a viewing of the facts in the light most favorable to L.L.: Although 44 1131228 Ingram testified that she led the students all the way to the classroom, other evidence showed that she did not. Wilkinson also deviated from the rules in order to take a student, A.J., to the bathroom and to take another student to have his diaper changed. The main opinion appears to hold that the rule noted above--staff members are required to be in the front and at the end of the line transitioning students in the building--is vague as to whether it leaves room for discretion or judgment in relation to particular exigent circumstances, thus requiring a "fact-intensive inquiry." ___ So. 3d at ___. Engaging in such inquiry, the main opinion makes the factual conclusion that Wilkinson's attending to the personal needs of those two students amounted to exigent circumstances granting Wilkinson the authority to deviate from the requirement to escort the remaining students. I am not convinced that this conclusion results when the facts are viewed in the light most favorable to L.L. Outside the context of the rules governing searches and seizures, the term "exigent circumstances" is defined as follows: "A situation that demands unusual or immediate action and that may allow people to circumvent usual 45 1131228 procedures, as when a neighbor breaks through a window of a burning house to save someone inside." Black's Law Dictionary 296 (10th ed. 2014). If it is possible to conclude that A.J.'s urgency to use the bathroom7 was extreme enough to constitute legally recognizable exigent circumstances that, as a matter of law, granted Wilkinson the authority to deviate from the rules, is it not also possible to conclude that A.J.'s urgency was not so extreme? Our standard of review would require that, if both possibilities are reasonable, then we must select the latter, because that would be viewing the facts most favorably to L.L. In other words, the facts in this case are either so extreme that an exigent-circumstances exception to the rules resulted, or they are not. In order for this Court to reach its conclusion that the facts are indeed so extreme, it must hold that there is no basis on which to reach the conclusion that they are not so extreme. I cannot conclude that there is no basis to find a lack of exigent circumstances: (1) nothing stated indicates that 7I see nothing in the main opinion indicating that the need to have the other student's diaper changed constituted an extreme circumstance that could not wait the few minutes it required to escort the students back to the classroom. 46 1131228 Wilkinson (or A.J.) could not have waited the few minutes it took to finish escorting the students to the classroom before taking A.J. to the bathroom; (2) nothing stated indicates that Wilkinson was required to take A.J. to the bathroom located by the gym, instead of the one in the main hall, from which Wilkinson could still see the end of the line of students; and (3) nothing stated indicates that preventing A.J. from having an accident outweighed the need to supervise the children. Even if it is reasonable to conclude from the facts in this case that exigent circumstances existed, the opposite conclusion is equally reasonable, and it is this second conclusion that the standard of review requires us to accept. State-agent immunity exists to protect government employees who have to make difficult decisions required in their role of executing the duties the people require their government to perform. These employees, such as police officers, child-welfare workers, and those who educate children with special needs, must perform duties that are particularly prone to result in civil liability and that, for that reason, among others, the private sector is unwilling or unable to perform. Nevertheless, I do not believe that, at this point in this case, Wilkinson is 47 1131228 entitled to immunity as a matter of law. Instead, factual disputes exist as to whether Wilkinson is entitled to State- agent immunity under the exigent-circumstance exception recognized in this case (and also to whether Ingram is entitled to State-agent immunity generally). These disputes, in my opinion, are for the jury to decide. N.C. v. Caldwell, 77 So. 3d 561, 569 (Ala. 2011) (holding that there existed genuine issues of material fact as to whether a school employee was entitled to State-agent immunity, thus preventing a summary judgment in the employee's favor). 48

February 24, 2017

5ff1803c-8f87-481b-ba99-19ad113f518d

Equity Trust Co. v. Breland

N/A

1150302, 1150876

Alabama

Alabama Supreme Court

Rel: 02/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150302 ____________________ Equity Trust Company, as custodian f/b/o David E. Hudgens IRA #41458, et al. v. Charles K. Breland et al. ____________________ 1150876 ____________________ Charles K. Breland et al. v. Equity Trust Company, as custodian f/b/o David E. Hudgens IRA #41458, et al. Appeals from Mobile Circuit Court (CV-14-900631) 1150302, 1150876 BRYAN, Justice. Facts and Procedural History Charles K. Breland is a developer of real property who, through his ownership of multiple companies, has owned and developed real property in Alabama and Florida. In 2002, Breland hired David E. Hudgens to provide legal services for him and his companies. According to Hudgens, Breland informed him early during their professional relationship that he "was suffering significant cash flow problems." As a result, Hudgens says, the various law firms with which Hudgens worked while providing Breland and his companies with legal services delayed billing "a significant portion of the attorneys' fees and costs" for those services. Breland disputes that contention and claims that he and/or his companies paid Hudgens more than $2.7 million for Hudgens's legal services between 2004 and 2010. According to Hudgens, Hudgens & Associates, LLC ("H&A"), is "the holder of the rights to the attorney's fees" allegedly incurred by Breland and his companies over the course of Hudgens's representation of Breland. 2 1150302, 1150876 Hudgens also contends that in 2004 Breland informed him that Shores of Panama, Inc. ("Panama"), one of Breland's companies, had insufficient funds to begin a condominium project in Florida. As a result, Hudgens caused Equity Trust Company ("ETC"), as custodian for the benefit of Hudgens's individual retirement account #41457 ("IRA #41457") and individual retirement account #41458 ("IRA #41458"), to loan Panama $390,000 and $80,000 from those IRAs, respectively, so that Panama could begin the project. Breland guaranteed payment of those loans in separate promissory notes. On March 11, 2009, Breland filed a Chapter 11 bankruptcy petition ("the Breland bankruptcy") in the United States Bankruptcy Court for the Southern District of Alabama ("the bankruptcy court"). Breland subsequently filed the required schedules, required disclosure statement, and a proposed plan 1 2 of reorganization that identified H&A as an unsecured 3 creditor holding a $1 million claim and identified ETC as an unsecured creditor holding a $390,000 claim. On May 3, 2010, See 11 U.S.C. § 521. 1 See 11 U.S.C. § 1125. 2 See 11 U.S.C. § 1121. 3 3 1150302, 1150876 Hudgens filed a proof of claim in the Breland bankruptcy on behalf of H&A for "legal fees" in the amount of $2,334,987.08 and filed proofs of claim on behalf of ETC for "guaranty of note" in the amounts of $879,929.55 (as to IRA #41457) and $180,498.37 (as to IRA #41458). According to Hudgens, Breland telephoned him on May 4, 2010, and "berated [him] and complained vociferously about the H&A proof of claim, including claiming that it was fraudulent." Later that day, Breland informed Hudgens in writing that he was "shocked" that Hudgens had filed claims in the Breland bankruptcy alleging that Breland had "outstanding legal bills ... amounting to several million dollars" and asked Hudgens to provide him with itemized billing of those fees. On October 1, 2010, Breland amended his disclosure statement and proposed plan of reorganization to reflect that the H&A and ETC claims were disputed but that settlement negotiations were then ongoing. On December 6, 2010, Breland and Ohana Cabo, LLC ("Ohana Cabo"), a creditor in the Breland bankruptcy, filed with the bankruptcy court a proposed plan of reorganization ("the Plan"). The Plan provided that "each holder of an allowed unsecured claim" would be paid in full and identified ETC as 4 1150302, 1150876 custodian of IRA #41457 and of IRA #41458 as a "holder[] with agreed allowed amounts" of $879,929 and $180,498, respectively. The Plan also provided that "holders of unsecured claims" that were not identified as "holders with agreed allowed amounts," a group that included H&A, held claims that were disputed and that Breland was preserving his objection to those claims. However, it appears that, later that day, Breland and Hudgens reached a settlement of the H&A and ETC claims, the terms of which are set forth in a December 6, 2010, e-mail from Robert Galloway, Breland's attorney, to Hudgens: "David, this letter will confirm our settlement of your claims. We will allow your claims for your retirement plans in the full amount of $1,080,000. With regard to your fees, we have agreed to a claim of $1,500,000 to be evidenced by a note and mortgage on the Grand Bay property due [in] one year with 6% interest." (Emphasis added.) It is undisputed that the Grand Bay property, located entirely in Mobile County, consists of 6 distinct parcels of property comprising approximately 508 acres that, at that time, were owned by Breland. On December 8, 2010, the bankruptcy court held a hearing regarding confirmation of the Plan. At that hearing, the 5 1150302, 1150876 following colloquy occurred between Galloway and the bankruptcy court. "MR. GALLOWAY: Judge, I'm proud to announce that we have settled everything. ".... "MR. GALLOWAY: I might announce some of the things that were said today with Mr. Hudgens. "THE COURT: All right. "MR. GALLOWAY: We have reached a settlement of his attorney's fee claim. ".... "MR. GALLOWAY: We are going to give him a mortgage on the Grand Bay property. We'll put this in the order. ".... "MR. GALLOWAY: Of $1,500,000 which is the additional amount he has agreed to accept. "THE COURT: All right. "MR. GALLOWAY: Now when we -- he has his retirement plan claims too. "THE COURT: Yes, right. "MR. GALLOWAY: And we're going to work with him as to how we apportion the cash, but he will have a mortgage left for $1,500,000 -- he's going to get $1,080,000 cash. There's going to be a mortgage for a million-five; but some of that might be retirement plan and some of it attorney's fee, depending on how he wants that paid this year versus next year." 6 1150302, 1150876 In light of those agreements, on December 10, 2010, Breland and Ohana Cabo filed a proposed amended version of the Plan that added a new provision (hereinafter referred to as "Section 3.2.3"), which provided: "3.2.3 Hudgens & Associates LLC and Equity Trust Company fbo David E. Hudgens IRA Claims. [The ETC claim on behalf of IRA #41457] shall be paid $0.00. [The H&A claim and the ETC claim on behalf of IRA #41458] shall be Allowed in the cumulative amount of $2,580,000, of which $1,080,000 shall be paid on the Distribution Date .... The $1,500,000 balance, together with interest from the Confirmation Date at the rate of 6% per annum, shall be paid on or before December 31, 2011[,] in accordance with the terms ... of a promissory note and mortgage to be agreed upon by the parties. The Debtor shall execute and deliver said promissory note and mortgage to his attorney Robert M. Galloway immediately upon confirmation of the Plan. On the Distribution Date, Mr. Galloway shall record said mortgage in the real property records maintained in the Office of the Judge of Probate of Mobile County, Alabama, and shall deliver said promissory note to David E. Hudgens as agent for [H&A] and [ETC] as Custodian for the benefit of David E. Hudgens IRA [#]41458." (Emphasis added.) On December 10, 2010, the bankruptcy court entered an order confirming the Plan, as amended, and Breland subsequently made the initial $1.08 million payment as required by Section 3.2.3. However, on December 23, 2011, approximately one week before Breland was required to make the 7 1150302, 1150876 $1.5 million payment required by Section 3.2.3, John H. Adams, an attorney then representing Breland, sent Hudgens a letter indicating that Breland had potential claims against Hudgens "stemming from events that transpired while [Hudgens was acting as Breland's] counsel" and that the value of those claims would equal or exceed the $1.5 million due under Section 3.2.3. Included with that letter was a copy of a complaint asserting claims against Hudgens alleging breach of a fiduciary duty and fraudulent suppression that, Adams said, Breland was prepared to file if he and Hudgens could not reach a resolution of Breland's claims. Breland never made the $1.5 million payment required by Section 3.2.3, and, although Hudgens made, he says, "numerous requests" for Galloway to deliver the promissory note and to record the mortgage as required by Section 3.2.3, Galloway neither delivered a promissory note to Hudgens nor recorded a mortgage securing the H&A and ETC claims. As a result, and given his concern that Breland was "selling off a lot of property," Hudgens recorded the Plan, as amended, in the Mobile Probate Court on March 5, 2012. 8 1150302, 1150876 On November 20, 2012, Breland conveyed the Grand Bay property by quitclaim deed to Gulf Beach Investment Company of Perdido, LLC ("Gulf Beach"), a company owned by Breland. Hudgens says that he discovered that conveyance in April 2013, and, upon that discovery, Hudgens executed and filed in the Mobile Probate Court an affidavit ("the Hudgens affidavit") in which he stated that the Grand Bay property was the property Breland had agreed under Section 3.2.3 of the Plan, as amended, to mortgage but that, instead of performing his obligations, Breland had transferred the Grand Bay property to Gulf Beach. On March 6, 2014, H&A and ETC (hereinafter collectively referred to as "the plaintiffs") filed in the Mobile Circuit Court ("the trial court") a complaint against Breland and Gulf Beach in which they brought the following claims: (1) a claim seeking enforcement of the Plan, as amended, through a judgment ordering Breland to deliver the promissory note to Hudgens and to record a mortgage on the Grand Bay property for the plaintiffs' benefit; (2) a claim seeking enforcement of the Plan, as amended, through a judgment awarding the plaintiffs $1.5 million, plus interest; (3) a fraudulent- 9 1150302, 1150876 transfer claim seeking a judgment voiding the conveyance of the Grand Bay property to Gulf Beach; enjoining Breland from further conveyances of the Grand Bay property; awarding damages for the allegedly fraudulent transfer of the Grand Bay property; and imposing a constructive trust on the Grand Bay property for the plaintiffs' benefit; and (4) a claim seeking a judicial foreclosure of the Grand Bay property for the plaintiffs' benefit. On April 21, 2014, Hudgens filed in the Mobile Probate Court a notice of lis pendens as to the Grand Bay property as required by § 35-4-131(a), Ala. Code 1975.4 Section 35-4-131(a) provides, in pertinent part: 4 "When any civil action or proceeding shall be brought in any court to enforce any lien upon, right to or interest in, or to recover any land, or where an application has been made to the probate judge of any county for an order of condemnation of land, or any interest therein, the person, corporation, or governmental body commencing such action or proceeding or making such application shall file with the judge of probate of each county where the land or any part thereof is situated a notice containing the names of all of the parties to the action or proceeding, or the persons named as those having an interest in the land in the application for an order of condemnation, a description of the real estate and a brief statement of the nature of the lien, writ, application, or action sought to be enforced. ..." 10 1150302, 1150876 On April 28, 2014, Adams sent Hudgens a letter that stated, in pertinent part: "As you will note, the [Plan] expressly stated that ... Breland would provide you with a mortgage the terms of which were to be agreed upon by the parties. In [the Hudgens] affidavit you expressly state that the property in the Gulf Beach deed was the property to be mortgaged. The [P]lan does not describe any property to be mortgaged and there was no agreement whereby ... Breland agreed to pledge any specific property to secure this obligation. As such, by filing [the Hudgens] affidavit you have unilaterally encumbered ... all of the property owned by Gulf Beach ... and likely slandered title to the property. ".... "While this litigation is pending, you cannot continue to encumber [500] plus acres of property which was never intended to be encumbered and which has a value well in excess of your alleged claim of $1,500,000." On May 21, 2014, Breland and Gulf Beach filed an answer and a counterclaim against the plaintiffs and a third-party complaint against Hudgens in which they claimed that Breland had refused to make the $1.5 million payment required by Section 3.2.3 because, they said, the plaintiffs and Hudgens "knew that the ... proofs of claim [filed in the Breland bankruptcy] were false" and because, they said, Breland "had become aware of certain fraudulent activities conducted by 11 1150302, 1150876 Hudgens, H&A, and [ETC] and raised these events as set offs to any amounts remaining to be paid." Given those allegations and the filings of the Hudgens affidavit and the notice of lis pendens, Breland and Gulf Beach brought the following claims against the plaintiffs and Hudgens: (1) a fraud claim and a breach-of-contract claim seeking a judgment "cancelling all obligations of Breland that are set forth in the Plan" and awarding Breland $1.08 million in damages -- the amount Breland had previously paid in accordance with Section 3.2.3; (2) a slander-of-title claim; and (3) a quiet-title claim seeking a judgment quieting title to the Grand Bay property in favor of Gulf Beach. On September 8, 2014, the plaintiffs and Hudgens filed a motion for a partial summary judgment as to the plaintiffs' "enforcement" claims and as to Breland and Gulf Beach's fraud, breach-of-contract, and slander-of-title claims. That same day, Breland and Gulf Beach filed a "motion to cancel and modify notice of lis pendens and motion for partial summary judgment" in which they argued that, although Breland had agreed to give Hudgens a mortgage to secure the plaintiffs' claims in the Breland bankruptcy, he had never specified which 12 1150302, 1150876 property he would mortgage. As a result, Breland and Gulf Beach sought a judgment "quashing, cancelling and removing" the Hudgens affidavit; modifying the notice of lis pendens so that it encumbered only parcel 4 of the Grand Bay property, which, Breland and Gulf Beach contended, provided sufficient security for the plaintiffs' claims; and authorizing Gulf Beach to transfer the Grand Bay property, excluding parcel 4, to Grand Oaks Plantation, LLC ("Grand Oaks"), a company owned by Breland. Before the trial court issued any order, Gulf Beach on October 24, 2014, deeded parcels 1, 2, 3, and 6 of the Grand Bay property to Grand Oaks. The plaintiffs subsequently amended their complaint to add Grand Oaks as a defendant. (Breland, Gulf Beach, and Grand Oaks are hereinafter collectively referred to as "the defendants.") On December 17, 2014, before the plaintiffs filed their amended complaint, Breland and Gulf Beach filed a "motion for a determination of collateral under contract" in which they reiterated that Breland was challenging the $1.5 million obligation imposed on him by Section 3.2.3 of the Plan, as amended, but indicated that Breland was "willing to post sufficient security during the pendency of the litigation as 13 1150302, 1150876 contemplated under the Plan." Breland and Gulf Beach requested a hearing so they could present evidence of the value of the Grand Bay property, which, they said, would allow the trial court to modify the notice of lis pendens so that it encumbered only as much of the Grand Bay property as necessary to secure the plaintiffs' $1.5 million claim. The trial court held an evidentiary hearing regarding the value of the Grand Bay property and, on September 17, 2015, entered an order ("the September 2015 order") in which it found that Hudgens was not entitled to encumber the entirety of the Grand Bay property because the Plan, as amended, did not specify the property Breland was required to mortgage. The trial court also found that the Plan, as amended, reserved Breland's right to challenge the validity of the $1.5 million obligation imposed on him by Section 3.2.3 but that the defendants "agree that ... [the] Plan ... contemplated that Breland would provide some collateral until a determination was reached as to the validity of the [p]laintiffs' claim." Thus, the trial court, after hearing conflicting evidence of the value of the Grand Bay property, found that parcel 4 of the Grand Bay property "would alone provide sufficient 14 1150302, 1150876 collateral to secure the [p]laintiffs' claim." However, "in an abundance of caution," the trial court ordered that the notice of lis pendens "is hereby modified such that it encumbers only Parcel 1, Parcel 4, Parcel 5, and [part] of Parcel 6." The trial court authorized the defendants to "convey, transfer, sale, encumber, and pledge" that part of the Grand Bay property unencumbered by the September 2015 order and directed the plaintiffs not to further encumber the Grand Bay property. On October 23, 2015, the defendants filed a motion requesting that the trial court certify the September 2015 order as final pursuant to Rule 54(b), Ala. R. Civ. P. The trial court granted that motion, and on December 18, 2015, the plaintiffs and Hudgens appealed. That case was assigned case no. 1150302.5 On March 24, 2016, the trial court entered a judgment ("the March 2016 judgment") on the parties' motions for a partial summary judgment. In that judgment, the trial court On March 1, 2016, the plaintiffs, the defendants, and 5 Hudgens filed a "joint motion for consent order authorizing sale of real property free and clear of liens and encumbrances" in which they indicated that the plaintiffs and Hudgens agreed to the sale of that part of the Grand Bay property unencumbered by the September 2015 order, provided that the proceeds from the sale would be placed in escrow pending the outcome of this appeal. 15 1150302, 1150876 noted that it was not addressing the plaintiffs' "mortgage claim" because it had denied that claim in the September 2015 order. After setting forth extensive findings of fact and conclusions of law, the trial court awarded the plaintiffs $2,189,342.96 (consisting of $1.5 million in principal, plus interest); "denied and dismissed" the defendants' fraud, breach-of-contract, and slander-of-title claims; and certified the judgment as final pursuant to Rule 54(b). The trial 6 court denied the defendants' postjudgment motion, and the defendants appealed. That case was assigned case no. 1150876, and this Court consolidated case nos. 1150302 and 1150876 for the purpose of writing one opinion. We now dismiss both appeals. Discussion The trial court did not expressly reference Rule 54(b) 6 in the March 2016 judgment but did state "that there is no just reason for delay in entry of judgment in accordance with the terms hereof and judgment is expressly so entered as to all matters decided herein." Because the trial court quoted Rule 54(b), it is "'clear and obvious from the language used by the trial court ... that the court intended to enter a final order pursuant to Rule 54(b).'" Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007) (quoting Schneider Nat'l Carriers, Inc. v. Tinney, 776 So. 2d 753, 755 (Ala. 2000)). 16 1150302, 1150876 Before addressing the arguments raised by the parties' appeals, we must determine whether we have jurisdiction to do so because the plaintiffs' fraudulent-transfer and judicial- foreclosure claims and the defendants' quiet-title claim remain pending. "An appeal will ordinarily lie only from a 7 final judgment; that is, a judgment that conclusively determines the issues before the court and ascertains and declares the rights of the parties." Palughi v. Dow, 659 So. 2d 112, 113 (Ala. 1995). However, "'[w]ith respect to the finality of judgments adjudicating fewer than all claims in a case, Rule 54(b), Ala. R. Civ. P., provides: "'"When more than one claim for relief is presented in an action, ... or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment .... [I]n the absence Even if we assume that the judicial-foreclosure and 7 quiet-title claims have been implicitly adjudicated and/or abandoned as to that part of the Grand Bay property that was declared unencumbered in the September 2015 order, those claims might still be viable as to that part of the Grand Bay property that remained encumbered. 17 1150302, 1150876 of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." "'"If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment." Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007) (emphasis added). However, this Court will not consider an appeal from a judgment certified as final under Rule 54(b) if it determines that the trial court exceeded its discretion in concluding that there is "no just reason for delay." Rule 54(b); see also Scrushy v. Tucker, 955 So. 2d 988, 996 (Ala. 2006) ("Whether there was 'no just reason for delay' is an inquiry committed to the sound discretion of the trial court, and, as to that issue, we must determine whether the trial court exceeded its discretion."). "'A trial court exceeds its discretion in determining that there is "no just reason for delay" when "the issues in the claim being certified and a claim that will remain pending in the trial court '"are so closely intertwined that separate adjudication would pose an unreasonable 18 1150302, 1150876 risk of inconsistent results."'" Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006) (quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987)). See also Centennial Assocs., Ltd. v. Guthrie, 20 So. 3d 1277, 1281 (Ala. 2009) ("'It is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties.'" (quoting 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998))).' "Loachapoka Water Auth., Inc. v. Water Works Bd. of Auburn, 74 So. 3d 419, 422–23 (Ala. 2011)." Grant v. Breland Homes, LLC, 156 So. 3d 391, 395-96 (Ala. 2014) (second and third emphasis added). "This Court looks with some disfavor upon certifications under Rule 54(b). "'It bears repeating, here, that "'[c]ertifications under Rule 54(b) should be entered only in exceptional cases and should not be entered routinely.'" State v. Lawhorn, 830 So. 2d 720, 725 (Ala. 2002) (quoting Baker v. Bennett, 644 So. 2d 901, 903 (Ala. 1994), citing in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373 (Ala. 1987)). "'"Appellate review in a piecemeal fashion is not favored."'" Goldome Credit Corp. [v. Player, 869 So. 2d 1146, 1148 (Ala. Civ. App. 2003)] (quoting 19 1150302, 1150876 Harper Sales Co. v. Brown, Stagner, Richardson, Inc., 742 So. 2d 190, 192 (Ala. Civ. App. 1999), quoting in turn Brown v. Whitaker Contracting Corp., 681 So. 2d 226, 229 (Ala. Civ. App. 1996)) (emphasis added).' "Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004)." Schlarb v. Lee, 955 So. 2d 418, 419-20 (Ala. 2006). In this case, the plaintiffs' mortgage, fraudulent- transfer, and judicial-foreclosure claims were all based on the plaintiffs' contention that Breland was obligated to give Hudgens a mortgage on the Grand Bay property but refused to do so. Conversely, the defendants' slander-of-title and quiet- title claims were based on their contentions that the Plan, as amended, does not specify which property was to be mortgaged and that Breland had never agreed to mortgage the Grand Bay property specifically. Thus, it is clear that the central issue with respect to resolution of certain of the adjudicated claims and the pending claims is the parties' rights and interests in the Grand Bay property. In Schlarb v. Lee, supra, Lisa Schlarb, claiming that she had an ownership interest in Job Source, L.L.C. ("Job Source"), a limited liability company owned by Davis Lee and 20 1150302, 1150876 Danny Yancey, sued Lee and Yancey alleging fraud, breach of contract, and unlawful conversion of her claimed ownership interest in Job Source after they terminated her employment from Job Source. The circuit court entered a summary judgment against Schlarb on the fraud and conversion claims and certified that judgment as final pursuant to Rule 54(b), and Schlarb appealed. In dismissing Schlarb's appeal, this Court noted that "[t]he essence of both Schlarb's fraud claim and her breach- of-contract claim is that Lee and Yancey agreed to, but did not, give her an ownership interest in Job Source" and concluded that, "in the interest of justice, Schlarb's fraud and conversion claims should not be adjudicated separately from the breach-of-contract claim." 955 So. 2d at 420. Just like the essence of Schlarb's fraud and breach-of-contract claims was her contention that she had an ownership interest in Job Source, the essence of the plaintiffs' mortgage, fraudulent-transfer, and judicial-foreclosure claims and the defendants' slander-of-title and quiet-title claims against the plaintiffs and Hudgens is the parties' competing claims to rights in the Grand Bay property. Thus, in the interest of 21 1150302, 1150876 justice, those claims should be completely adjudicated together. See also Pavilion Dev., L.L.C. v. JBJ P'ship, 142 So. 3d 535, 542 (Ala. 2013) (concluding, in a redemption case, that a trial court exceeded its discretion in entering a Rule 54(b) certification "[i]n light of the fact that the trial court's order failed to address the claims of all the assorted parties claiming an interest in the subject property"). Furthermore, as noted above, this Court has held that a trial court exceeded its discretion in entering a Rule 54(b) certification where "[r]epeated appellate review of the same underlying facts would be a probability" because "'"[i]t is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties."'" Smith v. Slack Alost Dev. Servs. of Alabama, LLC, 32 So. 3d 556, 562 (Ala. 2009) (quoting Centennial Assocs., Ltd. v. Guthrie, 20 So. 3d 1277, 1281 (Ala. 2008), quoting in turn 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998)). See also Fuller v. Birmingham-Jefferson Cty. Transit Auth., 22 1150302, 1150876 147 So. 3d 907, 913 (Ala. 2013) (noting that a Rule 54(b) certification was not appropriate "where '[t]he factual underpinnings of the adjudicated and nonadjudicated counts are ... inextricably intertwined'" (quoting Spiegel v. Trustees of Tufts Coll., 843 F.2d 38, 45 (1st Cir. 1988))); and Bella Inv., Inc. v. Multi Family Serv., Inc., 80 So. 3d 921, 924 (Ala. Civ. App. 2011) (noting that a Rule 54(b) certification would not have been appropriate because the adjudicated claims "ar[o]se out of the same set of common facts" as the remaining pending claims). Here, there is more than a probability that accepting the trial court's Rule 54(b) certifications would require this Court to review the same facts again should it be presented with a future appeal (or appeals) after the pending claims are adjudicated; this Court would without question have to do so because the "factual underpinnings" of the adjudicated claims -- those facts giving rise to the Breland bankruptcy, the plaintiffs' claims in the Breland bankruptcy, and the parties' agreements settling those claims -- are "inextricably intertwined" with the pending claims. Fuller, supra. Thus, given the interrelated nature of the adjudicated claims and 23 1150302, 1150876 the pending claims, separate adjudications would lead to piecemeal appellate review of the same facts and issues if this Court were to review the parties' arguments in these appeals and then later be presented with an appeal from a judgment adjudicating the pending claims. See Pavilion, 142 So. 3d at 542 (noting "the general disfavor with which both piecemeal appellate review and Rule 54(b) certifications are viewed"); and Stephens v. Fines Recycling, Inc., 84 So. 3d 867, 879 (Ala. 2011) (dismissing an appeal because the "possibility of a future appeal and this Court's general disfavor of Rule 54(b) certifications, coupled with the interrelated nature of the still pending [claims]," would result "in appellate review in piecemeal fashion"). The particular circumstances of this case dictate that the pending claims should be adjudicated or otherwise disposed of with those claims that have already been adjudicated. Accordingly, we hold that the trial court exceeded its discretion in certifying as final the orders from which these 24 1150302, 1150876 appeals lie. In the absence of final judgments, the appeals must be dismissed. Stephens, supra. 1150302 -– DISMISSED. 1150876 –- DISMISSED. Bolin, Murdock, Shaw, and Main, JJ., concur. 25

February 17, 2017

7b68c52d-0b4c-4d0e-83d0-84afe833f3f1

Ex parte Robert Przybysz, Ingenuity International, LLC, David Byker, and Global Asset Management Holdings, LLC.

N/A

1160383

Alabama

Alabama Supreme Court

Rel: 09/01/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160381 ____________________ Ex parte Robert Przybysz, Ingenuity International, LLC, David Byker, and Global Asset Management Holdings, LLC PETITION FOR WRIT OF MANDAMUS (In re: Nannette Smith and B2K Systems, Inc. v. B2K Systems, LLC, et al.) (Jefferson Circuit Court, CV-14-163) ____________________ 1160383 ____________________ Ex parte Robert Przybysz, Ingenuity International, LLC, David Byker, and Global Asset Management Holdings, LLC PETITION FOR WRIT OF MANDAMUS (In re: Global Asset Management Holdings, LLC v. B2K Systems, LLC) (Jefferson Circuit Court, CV-14-369) PARKER, Justice. Robert Przybysz, Ingenuity International, LLC ("Ingenuity"), David Byker, and Global Asset Management Holdings, LLC ("GAM") (hereinafter collectively referred to as "the defendants"), filed two petitions for a writ of mandamus in this Court.1 Both petitions seek a writ ordering the Jefferson Circuit Court ("the circuit court") to vacate the portion of its order requiring Przybysz, Byker, and GAM to dismiss an action they filed in the United States District Court for the Northern District of Alabama ("the federal 1Each petition is directed to a different circuit court number. It appears from the materials before this Court that the two cases were consolidated in the circuit court early in these proceedings and have traveled together since. The order to which these petitions are addressed concerns both circuit court case numbers. 2 1160381, 1160383 district court") against Nannette Smith alleging breach of a settlement agreement between the parties.2 Facts and Procedural History The parties have been involved in litigation concerning a business dispute for several years. A detailed recitation of the facts concerning the business dispute is not necessary to analyze the issue raised in the defendants' mandamus petitions. In summary, Smith and B2K Systems, Inc. ("B2K Inc."), filed an action against the defendants and B2K Systems, LLC ("B2K LLC"), in the circuit court asserting various claims, and, at some point, GAM filed an action in the circuit court against B2K LLC. The two cases were consolidated in the circuit court. On November 15, 2016, after years of litigation, the parties entered into a settlement agreement, settling both cases. As part of the settlement agreement, Byker and/or GAM were to make an initial payment to Smith and then additional payments over a 30-month period.3 In exchange, Smith agreed 2Ingenuity is named as a petitioner in both petitions even though it was not a party in the action in the federal district court. 3Przybysz and Ingenuity were involved with other aspects of the settlement agreement, a detailed explanation of which 3 1160381, 1160383 to provide a business asset, which is the object of the underlying litigation, to the defendants. Because the settlement agreement required payments to be made over a 30- month period, the circuit court did not enter a final judgment on the settlement agreement, but placed the case on its administrative docket with the intention of leaving it there until the payments to Smith were satisfied. There is no indication that a final judgment has been entered in the underlying cases. On December 19, 2016, Przybysz, Byker, and GAM sued Smith in the federal district court asserting various claims based on Smith's alleged breach of the settlement agreement. On December 28, 2016, Smith and B2K Inc. filed an amended complaint in the circuit court asserting additional claims based on the defendants' alleged breach of the settlement agreement. Smith and B2K Inc. also filed a motion requesting that the circuit court find the defendants in contempt for filing the action in the federal district court and assessing sanctions against them. Lastly, Smith and B2K Inc. requested is not necessary for purposes of resolving the petitions that are the subject of this opinion. 4 1160381, 1160383 that the circuit court enter a consent judgment in their favor in the amount of $750,000. On January 30, 2017, following a hearing, the circuit court entered an order denying Smith and B2K Inc.'s motion to find the defendants in contempt. However, the circuit court ordered Przybysz, Byker, and GAM to dismiss their action in the federal district court: "4. The court continues to retain jurisdiction of this matter and of the execution of the settlement per the agreement of the parties. "5. The defendants are ORDERED and DIRECTED to promptly dismiss any and all federal lawsuits filed ... pertaining to the settlement of this case or purporting to seek enforcement of the settlement of this case or relief from the terms of the settlement." (Capitalization in original.) The defendants then filed their petitions with this Court seeking mandamus relief. Standard of Review "A writ of mandamus will be granted where there is "'"'(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly 5 1160381, 1160383 invoked jurisdiction of the court.'" "'Ex parte Ocwen Federal Bank, FSB, 872 So. 2d 810, 813 (Ala. 2003) (quoting Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala. 1991)). Mandamus will lie to direct a trial court to vacate a void judgment or order. Ex parte Chamblee, 899 So. 2d 244, 249 (Ala. 2004).' "Ex parte Sealy, L.L.C., 904 So. 2d 1230, 1232 (Ala. 2004)." Ex parte Courtyard Citiflats, LLC, 191 So. 3d 787, 789-90 (Ala. 2015). Discussion The defendants ask this Court to issue writs of mandamus ordering the circuit court to vacate the portion of its January 30, 2017, order requiring Przybysz, Byker, and GAM to dismiss their federal lawsuit against Smith. Relying on Donovan v. City of Dallas, 377 U.S. 408 (1964), the defendants argue that the circuit court lacked the authority to order Przybysz, Byker, and GAM to dismiss their federal lawsuit against Smith. We agree and issue the writs. In Donovan, a group of property owners near a municipal airport filed a class action in a Texas trial court against the municipality to restrain it from building a runway to 6 1160381, 1160383 service the municipal airport and from funding the project through the issuance of bonds. The trial court entered a summary judgment in favor of the municipality, and the summary judgment was affirmed on appeal. Later, a group of citizens of the municipality, including several members of the class who filed the initial lawsuit in the Texas state court, filed a class action in the United States District Court for the Northern District of Texas against the municipality, among others, seeking similar relief. The municipality filed an answer to the class action in the federal court, but also "applied to the Texas Court of Civil Appeals for a writ of prohibition to bar all the plaintiffs in the case in the United States District Court from prosecuting their case there." 377 U.S. at 409. Initially, the Texas Court of Civil Appeals denied the municipality's application. However, after being reversed by the Supreme Court of Texas, the Texas Court of Civil Appeals "issued a writ prohibiting all the plaintiffs in the United States District Court case from any further prosecution of that case and enjoined them 'individually and as a class ... from filing or instituting ... any further litigation, law suits or actions in any court, the purpose of which is to contest the validity of the airport revenue bonds 7 1160381, 1160383 ... or from in any manner interfering with the proposed bonds ....'" 377 U.S. at 410. Subsequently, the United States District Court for the Northern District of Texas dismissed the class action, and the class-action plaintiffs appealed. After the class-action plaintiffs appealed, the Texas Court of Civil Appeals determined that several of the class- action plaintiffs had violated the court's prohibition and sanctioned the class-action plaintiffs. Although the United States Supreme Court denied certiorari review of the United States District Court for the Northern District of Texas's dismissal of the class action, the United States Supreme Court granted certiorari review "to review the State Supreme Court's judgment directing the Civil Court of Appeals to enjoin petitioners from prosecuting their action in the federal courts." Donovan, 377 U.S. at 411. In analyzing this issue, the United States Supreme Court stated: "Early in the history of our country a general rule was established that state and federal courts would not interfere with or try to restrain each other's proceedings. That rule has continued substantially unchanged to this time. An exception has been made in cases where a court has custody of property, that is, proceedings in rem or quasi in rem. In such cases this Court has said that the state or federal court having custody of such 8 1160381, 1160383 property has exclusive jurisdiction to proceed. Princess Lida v. Thompson, 305 U.S. 456, 465—468 [(1939)]. In Princess Lida this Court said 'where the judgment sought is strictly in personam, both the state court and the federal court, having concurrent jurisdiction, may proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other.' Id., 305 U.S. at 466. See also Kline v. Burke Construction Co., 260 U.S. 226 [(1922)]. It may be that a full hearing in an appropriate court would justify a finding that the state-court judgment in favor of [the municipality] in the first suit barred the issues raised in the second suit, a question as to which we express no opinion. But plaintiffs in the second suit chose to file that case in the federal court. They had a right to do this, a right which is theirs by reason of congressional enactments passed pursuant to congressional policy. And whether or not a plea of res judicata in the second suit would be good is a question for the federal court to decide. While Congress has seen fit to authorize courts of the United States to restrain state-court proceedings in some special circumstances, it has in no way relaxed the old and well-established judicially declared rule that state courts are completely without power to restrain federal-court proceedings in in personam actions like the one here. And it does not matter that the prohibition here was addressed to the parties rather than to the federal court itself. For the heart of the rule as declared by this Court is that: "'... where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceedings in another court. ... The fact, therefore, that an injunction issues only to the parties before the court, and not to the court, is no evasion of the 9 1160381, 1160383 difficulties that are the necessary result of an attempt to exercise that power over a party ... who is a litigant in another and independent forum.'12 "____________________ "12Peck v. Jenness, 7 How. 612, 625 [(1849)]. See also Central National Bank v. Stevens, 169 U.S. 432 [(1898)]; cf. Baltimore & O.R. Co. v. Kepner, 314 U.S. 44, 54, n. 23 ([1941)]." Donovan, 377 U.S. at 412-13 (emphasis added; some footnotes omitted).4 See also General Atomic Co. v. Felter, 434 U.S. 12, 17 (1977)("It is ... clear from Donovan [v. Dallas, 377 U.S. 408 (1964),] that the rights conferred by Congress to bring in personam actions in federal courts are not subject to abridgment by state-court injunctions, regardless of whether the federal litigation is pending or prospective."). The United States Supreme Court concluded that "[t]he Texas courts were without power to take away this federal right by contempt 4This well established principle from Donovan has been adopted in Alabama. See Moody v. State ex rel. Payne, 295 Ala. 299, 307, 329 So. 2d 73, 79 (1976)(recognizing "the proposition stated in Donovan v. City of Dallas, 377 U.S 408, 84 S. Ct. 1579, 12 L. Ed. 2d 409 (1964), that 'state courts are completely without power to restrain federal-court proceedings in in personam actions'" and noting that this principle was previously "cited and applied by this [C]ourt in Johnson v. Brown-Service Ins. Co., 293 Ala. 549, 307 So. 2d 518 (1974)"). 10 1160381, 1160383 proceedings or otherwise." Donovan, 377 U.S. at 413-14 (emphasis added). The defendants argue that, "because this is an in personam breach of contract action, as opposed to an in rem proceeding, [the circuit court] is without authority to enjoin the federal action or order the [d]efendants to dismiss the federal action." In their response, Smith and B2K Inc.5 recognize the application of the above-discussed principles from Donovan. However, Smith and B2K Inc. appear to argue that the circuit court has the authority to decide if a federal district court would have jurisdiction over a pending suit in the federal district court. Smith and B2K Inc. conclude that, if the circuit court determines that a federal district court does not have jurisdiction over the case, then the circuit court may enjoin the action pending in the federal district court. In support of their argument, Smith and B2K Inc. cite some cases for the unrelated proposition that "state courts have the power and duty to construe questions of federal law." 5B2K Inc. is named as a respondent in both cases even though it was not a party in the action in the federal district court. 11 1160381, 1160383 However, none of those authorities stand for the proposition asserted by Smith and B2K Inc. that a state court may determine whether a federal court has jurisdiction over a case filed in that federal court. Smith and B2K Inc.'s argument is not supported by any relevant authority; thus, we need not consider it further. See Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9 (Ala. 2007)("Rule 28(a)(10), Ala. R. App. P., requires that arguments in an appellant's brief contain 'citations to the cases, statutes, other authorities, and parts of the record relied on.' Further, 'it is well settled that a failure to comply with the requirements of Rule 28(a)(10) requiring citation of authority in support of the arguments presented provides this Court with a basis for disregarding those arguments.' State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 822 (Ala. 2005)(citing Ex parte Showers, 812 So. 2d 277, 281 (Ala. 2001)). This is so, because '"it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."' Butler v. Town of Argo, 12 1160381, 1160383 871 So. 2d 1, 20 (Ala. 2003)(quoting Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994))."). We agree with the defendants. Donovan makes clear that the circuit court does not have the authority to order Przybysz, Byker, and GAM to dismiss their federal action against Smith; the defendants have demonstrated a clear legal right to the relief they seek. Conclusion We grant the defendants' petitions and direct the circuit court to vacate that portion of its order requiring Pryzbysz, Byker, and GAM to dismiss their federal action against Smith. 1160381 -- PETITION GRANTED; WRIT ISSUED. 1160383 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Shaw, Main, Wise, Bryan, and Sellers, JJ., concur. Murdock, J., concurs in the result. 13

September 1, 2017

ed715077-908f-4735-866a-1eb16185b7c1

Ex parte Austal USA, LLC.

N/A

1151138, 1151244

Alabama

Alabama Supreme Court

Rel: 03/03/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151138 ____________________ Ex parte Austal USA, LLC PETITION FOR WRIT OF MANDAMUS (In re: Michael Keshock et al. v. Metabowerke GMBH et al.) ____________________ 1151244 ____________________ Ex parte Austal USA, LLC PETITION FOR WRIT OF MANDAMUS (In re: Michael Keshock et al. v. Metabowerke GMBH et al.) (Mobile Circuit Court, CV-15-901370) MAIN, Justice. Austal USA, LLC ("Austal"), filed two petitions for a writ of mandamus directing the Mobile Circuit Court to dismiss certain claims asserted against it by plaintiffs Michael Keshock, Martin Osborn, Richard Fitzgerald, Tyrone Lucas, Riley Bodiford, Tommie Brandon, Justin Reed, and William White (hereinafter referred to collectively as "the plaintiffs"). We deny the petitions. I. Facts and Procedural History Austal operates a shipyard in Mobile that builds naval vessels. Each of the plaintiffs is an employee of Austal who claims to have been injured while working in the course of his or her employment. Specifically, each plaintiff claims to have been injured by a tool known as a "Miller saw." The plaintiffs filed this action against Austal and three other companies not parties to these petitions.1 The 1The plaintiffs sued Metabowerke GMBH and Metabo Corporation, foreign corporations alleged to have manufactured 2 1151138, 1151244 plaintiffs' third amendment complaint asserted two counts against Austal. Count I asserted a tort-of-outrage claim against Austal. Austal filed a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss the tort-of-outrage claim. The trial court granted the motion to dismiss count I and entered an order dismissing that claim with prejudice; the tort-of- outrage claim is not now before us. Count VII of the third amended complaint alleged a claim of "intentional misconduct," specifically alleging that Austal had "intentionally provided Plaintiff[s] with a dangerous and defective Miller saw with the specific intent that it would cause injury to Plaintiffs." Austal filed a separate Rule 12(b)(6) motion seeking to dismiss count VII. Austal argued that it was immune from the claim asserted in count VII by virtue of the exclusivity provisions of the Longshore & Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. ("the LHWCA"), and the Alabama Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975. On June 16, 2016, the trial court the Miller saw, and Southern Gas and Supply, Inc., a company that allegedly played a role in the design and distribution of the saw. The plaintiffs asserted claims of negligence, wantonness, and product liability against those three defendants. The claims against those three defendants are not at issue in Austal's petitions. 3 1151138, 1151244 entered an order denying Austal's motion to dismiss count VII. On June 27, 2016, Austal moved the trial court to vacate its order or to certify its order for a permissive appeal under Rule 5, Ala. R. App. P. On June 28, 2016, the plaintiffs filed a fourth amended complaint. The plaintiffs' fourth amended complaint restated the count VII "intentional-misconduct" claim and added five more counts, each alleging that Austal intentionally injured them. Count VIII asserted a claim of assault and battery against Austal. Count XII asserted a claim of fraud and alleged that Austal "intentionally made false statements regarding the safety of the Miller Saw" and that those statements were made "with the conscious and deliberate intent to injure its workmen, including plaintiffs, with the Miller Saw so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work." Count XIII alleged that Austal fraudulently "suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the known safety hazards associated with the Miller Saw ... and that Austal knew the tool was unsafe and had made the conscious and deliberate 4 1151138, 1151244 decision to intentionally injure its workmen with the tool so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work." Count XIV alleged that, after the injured plaintiffs returned to work, Austal "intentionally made false statements regarding the safety of the Miller saw with a conscious and deliberate intent directed to the purpose of inflicting severe emotional distress on the Plaintiffs by inducing them to use the same Miller Saws in their work that had previously caused serious injury to Plaintiffs." Count XV, a fraudulent-suppression claim, similarly alleged that Austal "intentionally suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the safety of the Miller saw with a conscious and deliberate intent directed to the purpose of inflicting severe emotional distress on the Plaintiffs by inducing them to use the same Miller Saws in their work that had previously caused serious injury to Plaintiffs." On July 18, 2016, Austal moved to dismiss counts VIII, XII, XIII, XIV, and XV of the fourth amended complaint.2 2The fourth amended complaint also restated the previously dismissed tort-of-outrage claim. Austal moved to dismiss that 5 1151138, 1151244 Again, Austal contended that the claims were barred by the exclusivity provisions of the Alabama Workers' Compensation Act and/or the LHWCA. On July 19, 2016, the trial court granted Austal's motion to certify for permissive appeal the question whether count VII of the third amended complaint stated a claim upon which relief could be granted. On August 2, 2016, Austal filed with this Court a petition for permission to appeal or, in the alternative, for a writ of mandamus (no. 1151138). On August 30, 2016, the trial court denied Austal's motion to dismiss counts VIII, XII, XIII, XIV, and XV, but also certified for immediate appeal the question whether those counts asserted claims upon which relief could be granted. On September 8, 2016, Austal filed with this Court a second petition for permission to appeal or, in the alternative, for a writ of mandamus (no 1151244). This Court consolidated both petitions. We elected to treat the two petitions for permissive appeal as petitions for the writ of mandamus and ordered answers and briefs. claim on the ground that the trial court had previously dismissed the claim with prejudice. The trial court again entered an order dismissing the tort-of-outrage claim. 6 1151138, 1151244 II. Standard of Review "'"'The writ of mandamus is a drastic and extraordinary writ, to be "issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala. 1993); see also Ex parte Ziglar, 669 So. 2d 133, 134 (Ala. 1995).' Ex parte Carter, [807 So. 2d 534,] 536 [(Ala. 2001)]." "'Ex parte McWilliams, 812 So. 2d 318, 321 (Ala. 2001). "'"Subject to certain narrow exceptions ..., we have held that, because an 'adequate remedy' exists by way of an appeal, the denial of a motion to dismiss or a motion for a summary judgment is not reviewable by petition for writ of mandamus." Ex parte Liberty Nat'l Life Ins. Co., 825 So. 2d 758, 761–62 (Ala. 2002).' "Ex parte Kohlberg Kravis Roberts & Co., 78 So. 3d 959, 965–66 (Ala. 2011)." Ex parte MERSCORP, Inc., 141 So. 3d 984, 990 (Ala. 2013). One of the exceptions to the general rule prohibiting mandamus review of the denial of a motion to dismiss is where the 7 1151138, 1151244 motion to dismiss asserts a defense of immunity based on the exclusivity provisions of the Alabama Workers' Compensation Act. Ex parte Rock Wool Mfg. Co., 202 So. 3d 669, 671-72 (Ala. 2016). See also Ex parte McCartney Constr. Co., 720 So. 2d 910 (Ala. 1998). "'"In reviewing the denial of a motion to dismiss by means of a mandamus petition, we do not change our standard of review ...."' Drummond Co. v. Alabama Dep't of Transp., 937 So. 2d 56, 57 (Ala. 2006) (quoting Ex parte Haralson, 853 So. 2d 928, 931 (Ala. 2003)). "'In Newman v. Savas, 878 So. 2d 1147 (Ala. 2003), this Court set out the standard of review of a ruling on a motion to dismiss for lack of subject-matter jurisdiction: "'"A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002). Furthermore, in reviewing a ruling on a motion to dismiss we will not consider whether the pleader will ultimately prevail but whether the pleader may possibly prevail. Nance, 622 So. 2d at 299." "'878 So. 2d at 1148-49.' 8 1151138, 1151244 "Pontius v. State Farm Mut. Auto. Ins. Co., 915 So. 2d 557, 563 (Ala. 2005). We construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff. Drummond Co., 937 So. 2d at 58." Ex parte Alabama Dep't of Transp., 978 So. 2d 17, 21 (Ala. 2007). III. Analysis There is no dispute that each of the plaintiffs was engaged in maritime employment sufficient to qualify for coverage under the LHWCA. Austal argues that, because the plaintiffs were injured within the line and scope of their maritime employment, Austal enjoys immunity from tort claims by virtue of the exclusivity provision of the LHWCA.3 In Rodriguez-Flores v. U.S. Coatings, Inc., 133 So. 3d 874 (Ala. 2013), we described the exclusivity provision of the LHWCA: "Section 904 of the LHWCA provides, in part, that '[e]very employer shall be liable for and shall secure the payment to his employees of the compensation payable under sections 907, 908, and 3Austal also argues that, to the extent it applies, the Alabama Workers' Compensation Act bars the plaintiffs' tort claims. This argument appears to made out of an abundance of caution, given the possibility of concurrent LHWCA and state- law workers' compensation benefits. See Sun Ship, Inc. v. Pennsylvania, 447 U.S. 715 (1980). Nevertheless, based on the briefs before us, it appears that the parties consider this case to be ultimately governed by the LHWCA. Accordingly, we do not address the applicability of the exclusivity bar of the Alabama Workers' Compensation Act. 9 1151138, 1151244 909 of this title' and that such compensation 'shall be payable irrespective of fault as a cause for the injury.' Section 905(a) of the LHWCA provides, in part, that '[t]he liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee' and that, in such action, 'the defendant may not plead as a defense that the injury was caused by the negligence of a fellow servant, or that the employee assumed the risk of his employment, or that the injury was due to the contributory negligence of the employee.' The exclusivity provision of the LHWCA has been explained as follows: "'The LHWCA, at 33 U.S.C. § 905, precludes a personal injury action against any employer who complies with the LHWCA. Just as Ala. Code 1975, § 25-5-53, provides that workers' compensation benefits are the exclusive remedy for injuries received in a work-related accident, the LHWCA provides, in 33 U.S.C. § 905(a), that an injured worker may not maintain a tort action against his employer for any negligence of the employer giving rise to the injury; the injured worker's exclusive remedy is under the LHWCA. In International Paper Co. v. Murray, 490 So. 2d 1234 (Ala. Civ. App. 1985), aff'd in part, rev'd in part on other grounds, Ex parte Murray, 490 So. 2d 1238 (1986), this court noted: "'"The LHWCA was adopted in 1927 as a federal compensation plan for maritime workers, and was patterned after existing state workers' compensation laws.... The LHWCA is a workmen's compensation statute similar to our own, where employers have 'relinquished their defenses to 10 1151138, 1151244 tort actions in exchange for limited and predictable liability.'" "'490 So. 2d at 1236 (quoting Morrison Knudsen Constr. Co. v. Director, Office of Workers' Compensation Programs, United States Department of Labor, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983)).' "Jarrell v. Bender Shipbuilding & Repair Co., 681 So. 2d 1092, 1094 (Ala. Civ. App. 1996). Thus, employers enjoy immunity from tort claims under the LHWCA as they do under the [Workers’ Compensation] Act." Rodriguez-Flores, 133 So. 3d at 880-81. In Rodriquez-Flores, we also recognized that there is an "exceedingly narrow" exception to an employer's tort immunity under the LHWCA where the employer has committed an intentional tort with the specific intent or desire that the injury occur: "Some courts have recognized an exception to the exclusivity provision of the LHWCA where the employer has committed an intentional tort. Fisher v. Halliburton, 667 F.3d 602 (5th Cir. 2012). However, these 'cases take a very narrow view of the types of intentional injury that lie outside of the LHWCA--the cases consistently require that the employer have had a specific intent or desire that the injury occur.' Id. at 618. See Sample v. Johnson, 771 F.2d 1335, 1346 (9th Cir. 1985); Roy v. Bethlehem Steel Corp., 838 F. Supp. 312, 316 (E.D. Tex. 1993) ('The employer can be sued under LHWCA, however, if he committed an intentional tort, i.e., genuine, intentional injury.'); Houston v. Bechtel 11 1151138, 1151244 Assocs. Prof'l Corp., D.C., 522 F. Supp. [1094] at 1096 [(D.D.C. 1981)] (observing that '[t]he courts have ... carved out an exception to exclusive liability provisions where the injury inflicted is the result of an intentional act'); Austin v. Johns–Manville Sales Corp., 508 F. Supp. 313, 316 (D. Me. 1981) ('Nothing short of a specific intent to injure the employee falls outside the scope of the [LHWCA].'); Sharp v. Elkins, 616 F. Supp. 1561 (D. La. 1985); and Rustin v. District of Columbia, 491 A.2d 496, 501 (D.C. 1985) (observing that the exclusivity provision of the LHWCA 'does not reach actions where the employer specifically intended to injure the employee')." 133 So. 3d at 881-82. Austal contends that the claims of each of the plaintiffs are barred by the exclusivity provision of the LHWCA. The plaintiffs' allegations taken as a whole, Austal argues, allege merely that each plaintiff suffered accidental injury when a tool Austal supplied them to perform their work kicked back and contacted their bodies. Thus, Austal argues, the claims of each of the plaintiffs arise from a workplace accident, for which tort liability is barred by the provisions of the LHWCA. The plaintiffs respond that they have indeed pleaded facts in their complaint and subsequent amendments sufficient to invoke the intent-to-injure exception to LHWCA exclusivity. The plaintiffs have, in fact, expressly alleged that Austal 12 1151138, 1151244 specifically intended to injure them. Count VII alleges that "defendants intentionally provided Plaintiff[s] with a dangerous and defective Miller saw with the specific intent that it would cause injury to Plaintiffs."4 (Emphasis added.) Count XII alleges a "deliberate intent to injure its workmen, including plaintiffs." (Emphasis added.) Count XIII similarly alleges that Austal "made the conscious and deliberate decision to intentionally injure its workmen." Likewise, each of counts XIV and XV alleges that Austal acted with "a conscious and deliberate intent directed to the purpose of inflicting emotional distress on the Plaintiffs." (Emphasis added.) Austal, however, dismisses those allegations as conclusory and presented solely for the purpose of invoking the narrow intent-to-injure exception to LHWCA exclusivity. Austal urges this Court to look only to the specific factual allegations pleaded in the plaintiffs' complaint concerning how the injuries occurred and the alleged business motivations Austal had for requiring the plaintiffs to work with a dangerous tool. Those allegations, Austal 4Whether count VII, which asserts a claim of "intentional misconduct," states an independent cognizable claim under Alabama law is not an issue presently before this Court. 13 1151138, 1151244 contends, describe precisely the type of workplace accidental injuries for which it is immune from tort liability under the LHWCA. At the motion-to-dismiss stage, however, a court's ability to pick and choose which allegations of the complaint to accept as true is constrained by Alabama's broad and well settled standard for the dismissal of claims under Rule 12(b)(6). In this case, there is no question that the plaintiffs have pleaded that Austal "made the conscious and deliberate decision to intentionally injure its workmen." That allegation -- that a company would deliberately injure multiple specific employees -- is so shocking that it invites skepticism. Moreover, we agree with Austal that a specific intent or desire to cause injury to its employees is not particularly consistent with the alleged cost-saving motivation for causing such injuries. Nevertheless, our standard of review does not permit this Court to consider the plausibility of the allegations. Rather, in considering whether a complaint is sufficient to withstand a motion to dismiss, we must take the allegations of the complaint as true, Ussery v. Terry, 201 So. 3d 544, 546 (Ala. 2016); we do 14 1151138, 1151244 not consider "'whether the pleader will ultimately prevail but whether the pleader may possibly prevail,'" Daniel v. Moye, [Ms. 1140819, November 10, 2016] ___ So. 3d ___, ___ (Ala. 2016) (quoting Newman v. Savas, 878 So. 2d 1147, 1149 (Ala. 2003) (emphasis added)); and "[w]e construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff." Daniel, ___ So. 3d at ___. Furthermore, a Rule 12(b)(6) dismissal is proper "'only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.'" Knox v. Western World Ins. Co., 893 So. 2d 321, 322 (Ala. 2004) (quoting Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993)). In this case, regardless of our view on the likelihood of the plaintiffs' ultimate ability to establish the truth of the intent-to-injure allegations, or even to survive the summary- judgment stage, we cannot deny that there is at least some possibility that those allegations are true. Accordingly, the plaintiffs are entitled to at least limited discovery on the issue whether their claims are subject to the exclusivity 15 1151138, 1151244 provision of the LHWCA.5 Thus, Austal has not shown a clear legal right to a Rule 12(b)(6) dismissal. IV. Conclusion Austal has not demonstrated a clear legal right to an order granting its Rule 12(b)(6) motions to dismiss. Therefore, we deny the petitions. 1151138 -- PETITION DENIED. 1151244 -- PETITION DENIED. Stuart, Bolin, Parker, Murdock, Wise, and Bryan, JJ., concur. Shaw, J., concurs in the result. 5It is not uncommon that some discovery may be necessary to establish an immunity defense. See, e.g., Ex parte Alabama Dep’t of Mental Health & Retardation, 837 So. 2d 808, 813-14 (Ala. 2002) ("We agree that a motion to dismiss is typically not the appropriate vehicle by which to assert qualified immunity or State-agent immunity and that normally the determination as to the existence of such a defense should be reserved until the summary-judgment stage, following appropriate discovery."). 16

March 3, 2017

5b1a4e0e-8e07-442e-a69d-21e67081fefd

City of Birmingham Retirement & Relief System v. McGough

N/A

1150997

Alabama

Alabama Supreme Court

Rel: 03/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150997 ____________________ The City of Birmingham Retirement and Relief System v. Kevin McGough Appeal from Jefferson Circuit Court (CV-14-902954) PARKER, Justice. The City of Birmingham Retirement and Relief System ("the Retirement System") appeals the Jefferson Circuit Court's judgment in favor of Kevin McGough. We reverse and remand. Facts and Procedural History 1150997 McGough, then a firefighter employed by the City of Birmingham ("the city"), alleges that he sustained an injury to his left knee on April 30, 2011, during the course of his employment. For approximately one year after he injured his left knee, McGough received medical treatment from numerous doctors and continued to work as much as he was able. On August 20, 2012, McGough filed a claim with the Retirement System for extraordinary-disability benefits1 and 1Section 45-37A-51.226(b)(1), Ala. Code 1975 (Local Laws, Jefferson County), states that extraordinary-disability benefits are available to those who "shall become totally disabled to perform his or her customary duties by reason of personal injury received as a result of an accident arising out of and in the course of his or her employment in the service and occurring at a definite time and place" and that, "in the event such total disability shall continue until the participant ceases to draw salary as an employee of the city, such disabled participant shall be entitled to a monthly allowance from the fund equal to 70 percent of his or her monthly salary at the time of the application for extraordinary disability benefits arising from the accident which resulted in such total disability. If such participant shall be eligible for extraordinary disability benefits subsequent to August 1, 2009, the extraordinary disability benefit shall be subject to the offset for any workers' compensation benefit or other such disability benefit payable by the city as set forth hereafter." (Emphasis added.) 2 1150997 ordinary-disability benefits2 to be paid out of "the retirement and relief fund." See § 45-37A-51.120(a)(27), Ala. Code 1975 (Local Laws, Jefferson County). McGough signed a form entitled "disability procedure" that stated that "[t]he Retirement and Relief Pension Board[3] is the authoritative entity which will consider the medical evidence and determine whether you will be approved to receive a disability benefit." The "disability-procedure" form also stated: "I understand that if my disability claim is denied, ... I have the opportunity to appeal the Board's decision, through the circuit court, within 90 days of the denial of my claim." 2Section 45-37A-51.225(a), Ala. Code 1975 (Local Laws, Jefferson County), states that ordinary-disability benefits are available to those who "shall become totally disabled to perform his or her customary duties as an employee of the city and not be entitled to an extraordinary disability allowance" and that those employees shall be "be entitled to a monthly ordinary disability allowance equal to two percent of such participant's final average salary multiplied by his or her years of credited service at the date of disability." 3Although not explained by the parties, it appears that "the Retirement and Relief Pension Board" is the Retirement System's board of managers. See § 45-37A-51.120(a)(6) and § 45-37A-51.130, Ala. Code 1975 (Local Laws, Jefferson County). 3 1150997 On November 14, 2012, the Retirement System denied McGough's request for extraordinary-disability benefits and granted McGough's request for ordinary-disability benefits. It is undisputed that the Retirement System did not notify McGough by certified mail of its decision.4 Instead, on November 26, 2012, Lorren Oliver, the Retirement System's secretary, sent McGough a non-certified letter stating that the Retirement System "approved your application for ordinary disability at the rate of $722.31 per month, effective September 22, 2012, ... based on the doctor's recommendation." On February 18, 2013, less than 90 days after McGough received Oliver's letter dated November 26, 2012, McGough sent a letter to Oliver stating: "This is in response to your letter dated November 26, 2012, in reference to the ... Retirement ... System's denial of my application for extraordinary disability. I wish to appeal the [Retirement System's] decision and request information as to the appeal process as well as any other information I need to formally appeal. "If nothing more than this letter is required it will stand as formal request for the appeal of the [Retirement System's] decision." 4Notification of the Retirement System's final decision is significant for the appeals process set forth in § 45-37A- 51.139(a), Ala. Code 1975 (Local Laws, Jefferson County), which is set forth and discussed below. 4 1150997 McGough received nothing from the Retirement System in response to his February 18, 2013, letter. On July 15, 2013, McGough sent another letter to Oliver. McGough's letter stated that he had not received a certified letter notifying him of the Retirement System's denial of his application for extraordinary-disability benefits and that, in February 2013, he had telephoned the Retirement System "to inquire about the certified letter." McGough's letter states that he was told by an employee of the Retirement System that she "would make sure [the certified letter] gets sent and that [McGough] would have 30 days from the date of the letter to appeal." McGough's letter further states that, "[a]s of July 10, 2013, [he] still [had] not received the certified letter." McGough requested a certified letter from the Retirement System "so that [he could] proceed with the appeal process." On the same day, McGough sent the same letter to Sandy Roberts, an employee of the Retirement System. On August 1, 2013, McGough's attorney e-mailed Oliver and Roberts, requesting that McGough be permitted to appeal the Retirement System's decision denying McGough's application for extraordinary-disability benefits. 5 1150997 On December 3, 2013, more than one year after the Retirement System's final decision denying McGough's application for extraordinary-disability benefits, the Retirement System sent McGough a certified letter. The parties submitted to the circuit court two different certified letters sent by the Retirement System to McGough, both dated December 3, 2013. One notified him of the Retirement System's November 14, 2012, decision to approve McGough's application for ordinary-disability benefits; the other notified him of the Retirement System's November 14, 2012, decision to deny McGough's application for extraordinary-disability benefits. The latter certified letter was delivered to McGough on December 5, 2013. On July 15, 2014, in accordance with § 45-37A-51.139, Ala. Code 1975 (Local Laws, Jefferson County), McGough filed a mandamus petition in the Jefferson Circuit Court ("the circuit court") in an effort to challenge the Retirement System's decision denying his application for extraordinary- disability benefits. On August 18, 2014, the Retirement System filed a motion to dismiss McGough's mandamus petition or, in the alternative, 6 1150997 for a summary judgment. The Retirement System argued that McGough's mandamus petition was barred as untimely under § 45- 37A-51.139(a). On October 22, 2014, following a hearing, the circuit court denied the Retirement System's motion to dismiss or, in the alternative, for a summary judgment. On December 5, 2014, the Retirement System petitioned this Court for a writ of mandamus directing the circuit court to dismiss McGough's challenge to the Retirement System's decision to the circuit court as untimely. This Court denied the Retirement System's petition for a writ of mandamus, without an opinion. See Ex parte City of Birmingham Ret. & Relief Sys. (No. 1140223, June 30, 2015), ___ So. 3d ___ (Ala. 2015)(table). On October 30, 2015, the Retirement System again filed in the circuit court a motion to dismiss or, in the alternative, for a summary judgment, arguing that McGough's mandamus petition challenging the Retirement System's decision was barred under § 45-37A-51.139(a) as untimely. On November 27, 2015, McGough filed a response to the Retirement System's motion. On November 30, 2015, following a hearing, the 7 1150997 circuit court denied the Retirement System's motion to dismiss or, in the alternative, for a summary judgment. On May 9, 2016, following a bench trial, the circuit court granted McGough's petition for a writ of mandamus and ordered that the Retirement System grant McGough's application for extraordinary-disability benefits. The circuit court again held that McGough had "timely and properly appealed his request for a determination of extraordinary disability benefits." On May 23, 2016, McGough filed a motion to tax costs. McGough requested reimbursement for $5,497.79 in costs and supported his motion with extensive documentary evidence. On June 6, 2016, the circuit court granted McGough's motion. Also on June 6, 2016, the Retirement System filed a motion requesting that the circuit court reconsider its order granting McGough's motion to tax costs. On June 22, 2016, after the Retirement System had filed its notice of appeal, the circuit court purported to deny the Retirement System's motion. Standard of Review "'Because the trial court heard ore tenus evidence during the bench trial, the ore tenus 8 1150997 standard of review applies.' Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67 (Ala. 2010). "'"'"[W]hen a trial court hears ore tenus testimony, its findings on disputed facts are presumed correct and its judgment based on those findings will not be reversed unless the judgment is palpably erroneous or manifestly unjust."'" Water Works & Sanitary Sewer Bd. v. Parks, 977 So. 2d 440, 443 (Ala. 2007) (quoting Fadalla v. Fadalla, 929 So. 2d 429, 433 (Ala. 2005), quoting in turn Philpot v. State, 843 So. 2d 122, 125 (Ala. 2002)). "'The presumption of correctness, however, is rebuttable and may be overcome where there is insufficient evidence presented to the trial court to sustain its judgment.'" Waltman v. Rowell, 913 So. 2d 1083, 1086 (Ala. 2005) (quoting Dennis v. Dobbs, 474 So. 2d 77, 79 (Ala. 1985)). "Additionally, the ore tenus rule does not extend to cloak with a presumption of correctness a trial judge's conclusions of law or the incorrect application of law to the facts." Waltman v. Rowell, 913 So. 2d at 1086.' "Retail Developers of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So. 2d 924, 929 (Ala. 2007). 'Questions of law are reviewed de novo.' Alabama Republican Party v. McGinley, 893 So. 2d 337, 342 (Ala. 2004)." Moultrie v. Wall, 172 So. 3d 828, 839 (Ala. 2015). Discussion The appeals process from a final decision by the Retirement System is set forth in § 45-37A-51.139. The first issue raised by the Retirement System concerns the timeliness 9 1150997 of McGough's petition for a writ of mandamus challenging the Retirement System's denial of McGough's application for extraordinary-disability benefits. Section 45-37A-51.139(a) sets forth the following procedure for challenging a final decision of the Retirement System: "Any decision of the board denying a benefit claimed may be subject to review by the circuit court, in the manner and subject to the limitations herein provided. An employee may secure a review of a decision of the board by mandamus proceedings in the circuit court, which proceedings the employee shall institute, in the court by filing therein a petition for mandamus. The petition may designate the board as respondent or the members thereof as respondents. Each respondent shall be served with process, unless the respondent or his or her or its attorney accepts service. The petition for mandamus shall be barred if it is not filed within 90 days from the date whereon the board of managers makes its final decision on the benefit claimed, provided written notice of such final decision of the board shall be given by certified or registered mail, postage prepaid, and properly addressed, to the claimant or his or her attorney within 10 days after such final decision of the board. If timely notice shall not be given as provided in the last preceding sentence, claimant shall not be barred from filing mandamus until the expiration of 80 days from the mailing of notice as above provided; but in no event, anything therein to the contrary notwithstanding, shall mandamus be filed after one year from the date of such final decision of the board ...." The plain language of § 45-37A-51.139(a) contemplates three situations regarding the timeliness of an employee's 10 1150997 filing of a mandamus petition in the circuit court challenging a final decision of the Retirement System. First, § 45-37A- 51.139(a) states that a claimant's petition for mandamus challenging a final decision of the Retirement System will be barred "if it is not filed within 90 days from the date" of the Retirement System's final decision. However, this 90-day period applies only if the Retirement System provides written notice to the claimant "by certified or registered mail, postage prepaid, and properly addressed, to the claimant or his or her attorney within 10 days after such final decision." (Emphasis added.) Second, § 45-37A-51.139(a) states that, if the Retirement System fails to send, by certified or registered mail, the claimant notice of its final decision within 10 days of that final decision, then the claimant "shall not be barred from filing mandamus until the expiration of 80 days from the mailing of notice as above provided." Third, § 45-37A-51.139(a) states, "but in no event, anything therein to the contrary notwithstanding, shall mandamus be filed after one year from the date of such final decision of the board." 11 1150997 The Retirement System argues that McGough's mandamus petition challenging the Retirement System's denial of his application for extraordinary-disability benefits was untimely under the second and third timeliness clauses of § 45-37A- 51.139(a).5 First, the Retirement System argues that McGough's mandamus petition is barred under the third timeliness clause of § 45-37A-51.139(a), which states: "[B]ut in no event, anything therein to the contrary notwithstanding, shall mandamus be filed after one year from the date of such final decision of the board." The Retirement System notes that it rendered its final decision denying McGough's application for extraordinary-disability benefits on November 14, 2012. The Retirement System further notes that McGough did not file his mandamus petition in the circuit court until 5We note that McGough argues that this Court cannot consider the Retirement System's arguments pertaining to the timeliness of his mandamus petition, because, he says, "there is no appeal of the denial of a motion to dismiss except by permission of the circuit court, a procedure the [Retirement] System did not use. See Rules 4 and 5, Ala. R. App. P." McGough's petition, at pp. 35-36. Of course, this rule applies only if a party seeks interlocutory appellate review of such an order. However, as McGough recognizes, we are not reviewing the interlocutory denial of the Retirement System's motion to dismiss, but the final judgment of the circuit court, which specifically addressed these arguments. These arguments, therefore, are properly before us. 12 1150997 July 15, 2014, considerably more than one year after the Retirement System's final decision. These facts are undisputed. The Retirement System argues that, by operation of the plain language of the third timeliness clause of § 45- 37A-51.139(a), McGough's mandamus petition was untimely and that the circuit court erred in concluding otherwise. McGough does not offer any argument in response to the Retirement System's interpretation of the third timeliness clause of § 45-37A-51.139(a). In fact, the plain language of that clause is clear: A mandamus petition challenging a final decision of the Retirement System cannot be filed more than one year after the final decision. Instead, McGough argues that the Retirement System should be estopped from asserting that McGough's mandamus petition is time-barred under § 45- 37A-51.139(a) because of the actions taken by the Retirement System to allegedly mislead McGough. McGough directs this Court's attention to the letter he wrote Oliver on February 18, 2013, in which McGough expressed his desire to appeal and as to which he received no response from the Retirement System. McGough also directs this Court's attention to the letters he wrote Oliver and Roberts dated July 15, 2013, which 13 1150997 are summarized above. In short, in those letters, McGough states that he had been assured by an employee of the Retirement System that he would receive a certified letter and that, once he received the certified letter, he would have 30 days to appeal the Retirement System's final decision. McGough argues that these facts demonstrate that the Retirement System "was aware, at least constructively, by way of [McGough's] letters and other communication that he wanted to appeal, but [he] was acting under a misapprehension of the appeal procedure that they had created in him." McGough's brief, at p. 43 (footnote omitted). For purposes of this decision, however, we need not determine whether the Retirement System is estopped from arguing that McGough's petition is barred by the third timeliness clause in § 45-37A-51.139(a). This is so because the Retirement System argues, in the alternative, that McGough's mandamus petition challenging the Retirement System's denial of his application for extraordinary- disability benefits was untimely under the second timeliness clause of § 45-37A-51.139(a), which states: "If timely notice shall not be given as provided in the last preceding sentence, 14 1150997 claimant shall not be barred from filing mandamus until the expiration of 80 days from the mailing of notice as above provided." We find the Retirement System's argument in this regard convincing.6 The second timeliness clause of § 45-37A-51.139(a) references the first timeliness clause of § 45-37A-51.139(a); the interplay between these two timeliness clauses is explained above. It is undisputed that the Retirement System did not send McGough a certified letter within 10 days of its November 14, 2012, final decision, as contemplated in the first timeliness clause of § 45-37A-51.139(a). Instead, the Retirement System sent McGough a certified letter on December 3, 2013, notifying McGough that his application for extraordinary-disability benefits had been denied. Accordingly, the second timeliness clause applies.7 Pursuant 6McGough's estoppel argument does not apply to this argument raised by the Retirement System. McGough has not directed this Court's attention to any evidence indicating that the Retirement System took any action to try and mislead or to dissuade McGough from filing his mandamus petition challenging the Retirement System's final decision denying his application for extraordinary-disability benefits after McGough was sent the December 3, 2013, certified letter giving him notice of the Retirement System's final decision. 7Again, for purposes of this analysis we are assuming that the Retirement System is estopped from arguing that the third 15 1150997 to the second timeliness clause of § 45-37A-51.139(a), McGough's mandamus petition would not be barred as untimely so long as he filed it before "the expiration of 80 days from the mailing of notice as above provided." McGough did not file his mandamus petition in the circuit court before the expiration of 80 days from the mailing of the December 3, 2013, letter. McGough did not file his mandamus petition in the circuit court until July 15, 2013, more than 200 days from the time the Retirement System mailed him a certified letter notifying him of the Retirement System's final decision. Clearly, McGough's mandamus petition is barred under the plain language of the second timeliness clause of § 45-37A- 51.139(a). McGough offers no argument concerning the interpretation of the second timeliness clause of § 45-37A-51.139(a). Instead, McGough argues that he received a certified letter from the Retirement System dated December 3, 2013, notifying him that the Retirement System had approved his application timeliness clause of § 45-37A-51.139(a) -- which prohibits an employee from filing a mandamus petition challenging a final decision of the Retirement System more than one year after the final decision has been reached -- bars McGough's mandamus petition. 16 1150997 for ordinary-disability benefits.8 McGough attached this letter to his mandamus petition filed in the circuit court. This alone is not evidence indicating that the Retirement System did not send McGough a certified letter giving him notice of the Retirement System's final decision concerning McGough's application for extraordinary-disability benefits. In fact, during the bench trial, the Retirement System introduced into evidence a certified letter it sent to McGough on December 3, 2013, notifying McGough that the Retirement System had denied his application for extraordinary-disability benefits.9 The circuit court specifically certified that this letter was an exhibit admitted during the course of the bench 8McGough notes in his brief before this Court that he actually stated in his mandamus petition that he filed with the circuit court that he received "a certified letter from [the Retirement System] informing him of the denial of his claim for extraordinary disability benefits." McGough states that that statement was simply a "scrivener's error." McGough's brief, at p. 37. 9Although not required to do so under § 45-37A-51.139(a), the Retirement System also presented evidence indicating that someone with the last name "McGough" signed a form indicating that he had received the certified letter on December 5, 2013. The second timeliness clause of § 45-37A-51.139(a) requires that notice be given to the claimant "by certified or registered mail, postage prepaid, and properly addressed, to the claimant or his attorney." McGough has not argued that the Retirement System failed to comply with those requirements. 17 1150997 trial. McGough has not directed this Court's attention to anything in the record indicating that he objected to the admission of this evidence at trial. Nor does McGough argue that this Court should not consider the certified letter. The fact that McGough was sent two certified letters on the same date is not contradictory evidence to which the ore tenus standard of review would be applicable. The record simply indicates that the Retirement System sent McGough two certified letters on December 3, 2013; one certified letter notified him of the Retirement System's decision granting his application for ordinary-disability benefits; the other certified letter notified him of the Retirement System's decision denying his application for extraordinary-disability benefits. McGough's argument does not demonstrate that the Retirement System failed to send him a certified letter notifying him of the Retirement System's final decision denying McGough's application for extraordinary-disability benefits. For these reasons, we conclude that McGough's mandamus petition is barred by the second timeliness clause of § 45- 18 1150997 37A-51.139(a). Our conclusion pretermits discussion of the other arguments raised by the parties. Conclusion Based on the foregoing, we conclude that McGough's mandamus petition challenging the Retirement System's final decision denying McGough's application for extraordinary- disability benefits is untimely under § 45-37A-51.139(a). Accordingly, we reverse the circuit court's judgment and remand the matter for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Shaw, Wise, and Bryan, JJ., concur. 19

March 17, 2017

85917eca-1009-42f4-89ed-efdb5ac47d73

Ex parte Terrence Venter & City of Selma.

N/A

1160539

Alabama

Alabama Supreme Court

REL: 09/22/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1160539 ____________________ Ex parte Terrence Venter and the City of Selma PETITION FOR WRIT OF MANDAMUS (In re: Mary Vick, as administrator of the Estate of Aubrey Vick, deceased v. Terrence Venter and the City of Selma) (Dallas Circuit Court, CV-10-160) SELLERS, Justice. Terrence Venter and the City of Selma ("the City") petition this Court for a writ of mandamus directing the 1160539 Dallas Circuit Court to vacate its February 20, 2017, order denying their motion for a summary judgment based on Venter's State-agent immunity and to enter an order based on that defense. We deny the petition. Facts and Procedural History On September 19, 2008, Aubrey Vick was killed when the vehicle he was driving collided with a fire truck being driven by Venter; the collision occurred at the intersection of Old Orrville Road and Vaughan Memorial Drive in Selma. Mary Vick, as administrator of Aubrey's estate ("the estate"), filed a wrongful-death complaint against Venter and the City. In count one of the complaint, the estate alleged that Venter, "while acting in the line and scope of his employment with the City of Selma's fire department, and operating a vehicle owned by the City of Selma, negligently drove the vehicle into the vehicle owned by plaintiff's decedent." The estate claimed that the City was vicariously liable for Venter's alleged negligence. Count two of the complaint alleged that the City had negligently installed, maintained, and/or designed the traffic light at the intersection where the accident occurred. On October 10 2010, Venter and the City filed a motion 2 1160539 for a summary judgment pursuant to Rule 56, Ala. R. Civ. P., raising as to count one the defense of discretionary-function immunity, now referred to as State-agent immunity, see Ex parte Cranman, 792 So. 2d 392 (Ala. 2000), and as to count two the defense of substantive immunity. In support of the motion for a summary judgment as to count one, Venter and the City relied on Venter's affidavit, which states, in relevant part: "On September 19, 2008, right around lunch time, I was traveling down Old Orrville Road with Captain Coley Byrd and fellow fireman Kenny Brown. We were traveling in fire truck #104 and were returning to Selma Fire Station #4 after riding around assigned territory within the City of Selma. We had been patrolling areas around the City of Selma, learning streets and areas, inspecting streets and layout of the City of Selma and to simply cover our territory in case someone is in need of assistance. These patrols are an essential part of our duties as firemen. In addition, the patrols often serve as a sort of training exercise so we can learn about our fire territory and our duties as City of Selma firemen. Similar to a police officer, if we are not directly responding to a call or at the scene of a fire, we are often simply patrolling, looking for people in need of help or waiting for an emergency call. During these patrols, if someone needs help from us, we will pull over and assist in any possible way. "On the day of the accident, as I approached the intersection of Old Orrville Road and Vaughan Memorial Drive, the traffic light was green, giving me the right of way. The light was green as I approached the intersection and remained green as I prepared to pass through the intersection. The fire 3 1160539 truck was traveling approximately 30 miles per hour as I approached the intersection. Just prior to entering the intersection, I noticed a silver Nissan truck approaching the intersection at a speed indicating the truck was going to enter the intersection. It was later determined that the truck was driven by Aubrey Vick. I noticed the truck immediately before entering the intersection and took my foot off the accelerator to prepare to brake. The truck then began slowing down and looked like it was going to stop at the stop light. But the other truck did not stop and entered the intersection, proceeding through the red light. The vehicles arrived at the intersection simultaneously, with my vehicle proceeding through the intersection on a green light. For no apparent reason, the other truck, Vick, was looking to his right. Vick drove his truck directly into the path of the City of Selma fire truck." Venter and the City also attached to the summary-judgment motion the affidavits of Captain Richard Coley Byrd and Kenny Brown, both of whom were passengers in the fire truck at the time of the accident and both of whom provided similar accounts of the events leading up to the accident. The estate responded by filing a motion requesting a continuance of the hearing on the summary-judgment motion until after the City had responded to the estate's discovery request concerning the traffic light at the intersection.1 On February 20, 2017, following a hearing, the trial court entered an order, denying 1The materials before us do not indicate whether the trial court ruled on the estate's motion for a continuance. 4 1160539 the motion for a summary judgment. Venter and the City filed this petition for a writ of mandamus asking this Court to direct the trial court to enter a summary judgment for Venter and the City on the basis of both State-agent immunity and substantive immunity. This Court ordered answers and briefs as to only the issue whether Venter is entitled to State-agent immunity. Standard of Review "A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: '"(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court."' Ex parte Nall, 879 So. 2d 541, 543 (Ala. 2003) (quoting Ex parte BOC Grp., Inc., 823 So. 2d 1270, 1272 (Ala. 2001))." Ex part Alabama Dep't of Corr., [Ms. 1160413, August 25, 2017] ___ So. 3d ___, ___ (Ala. 2017). "'While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion grounded on a claim of immunity is reviewable by petition for writ of mandamus. Ex parte Purvis, 689 So. 2d 794 (Ala. 1996).... "'Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." 5 1160539 Rule 56(c)(3), Ala. R. Civ. P., Young v. La Quinta Inns, Inc., 682 So. 2d 402 (Ala. 1996). A court considering a motion for summary judgment will view the record in the light most favorable to the nonmoving party, Hurst v. Alabama Power Co., 675 So. 2d 397 (Ala. 1996), Fuqua v. Ingersoll–Rand Co., 591 So. 2d 486 (Ala. 1991); will accord the nonmoving party all reasonable favorable inferences from the evidence, Fuqua, supra, Aldridge v. Valley Steel Constr., Inc., 603 So. 2d 981 (Ala. 1992); and will resolve all reasonable doubts against the moving party, Hurst, supra, Ex parte Brislin, 719 So. 2d 185 (Ala. 1998). "'An appellate court reviewing a ruling on a motion for summary judgment will, de novo, apply these same standards applicable in the trial court. Fuqua, supra, Brislin, supra. Likewise, the appellate court will consider only that factual material available of record to the trial court for its consideration in deciding the motion. Dynasty Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala. 1991), Boland v. Fort Rucker Nat'l Bank, 599 So. 2d 595 (Ala. 1992), Rowe v. Isbell, 599 So. 2d 35 (Ala. 1992).'" Ex parte Turner, 840 So. 2d 132, 135 (Ala. 2002) (quoting Ex parte Rizk, 791 So. 2d 911, 912–13 (Ala. 2000)). Analysis 6 1160539 In Ex parte Cranman, supra, this Court restated the rule for determining when a State agent sued in his or her individual capacity is entitled to State-agent immunity: 2 "A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's "(1) formulating plans, policies, or designs; or "(2) exercising his or her judgment in the administration of a department or agency of government, including, but not limited to, examples such as: "(a) making administrative adjudications; "(b) allocating resources; "(c) negotiating contracts; "(d) hiring, firing, transferring, assigning, or supervising personnel; or "(3) discharging duties imposed on a department or agency by statute, rule, or regulation, insofar as the statute, rule, or regulation prescribes the manner for performing the duties and the State agent performs the duties in that manner; or "(4) exercising judgment in the enforcement of the criminal laws of the State, including, but not 2Although Cranman was a plurality decision, the restatement of law as it pertains to State-agent immunity set forth in Cranman was subsequently adopted by this Court in Ex parte Butts, 775 So. 2d 173 (Ala. 2000). 7 1160539 limited to, law-enforcement officers' arresting or attempting to arrest persons; or "(5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students. "Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity "(1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or "(2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law." 792 So. 2d at 405. It is undisputed that, at the time of the accident, Venter was employed by the City as a firefighter. See City of Birmingham v. Brown, 969 So. 2d 910, 916 (Ala. 2007)("Immunity applies to employees of municipalities in the same manner that immunity applies to employees of the State."); see also Taylor v. Adams, 221 F.3d 1254, 1261 (11th Cir. 2000)(holding that Alabama's State-agent-immunity doctrine is applicable to municipal firemedic). In order to claim State-agent immunity, 8 1160539 Venter and the City bore the initial burden of demonstrating that the wrongful-death claim based on Venter's alleged negligence arose from a function that would entitle Venter to immunity. Giambrone v. Douglas, 874 So. 2d 1046, 1052 (Ala. 2003). Venter and the City assert in the petition that Venter is entitled to State-agent immunity under category (1) of the Cranman restatement because, they say, at the time of the accident, Venter was formulating plans and policies on behalf of the fire department by "patrolling" fire-rescue routes. It is undisputed that, at the time of the accident, Venter was not responding to an emergency call. Rather, according to Venter's affidavit, he was "patrolling," a term he describes as "exploring and identifying fire rescue routes" and/or "looking for people in need of help or waiting for an emergency call." Venter and the City have not provided this Court with any caselaw from this State or any other jurisdiction in which immunity has been extended to a fireman who was engaged in routine patrolling when an alleged tort occurred. And, assuming, without deciding, that the act of "patrolling" could somehow be equated with formulating policy or procedure, Venter, by his own admission, was not engaged in 9 1160539 the act of patrolling when the accident occurred. Rather, Venter stated in his affidavit that, at the time of the accident, he was "returning" to the fire department "after riding around assigned territory within the City of Selma." Furthermore, in the narrative summary of undisputed facts in the summary-judgment motion, Venter and the City add that, in the process of returning to the fire department, Venter had stopped at a grocery store. Venter's action in returning to the fire department after an afternoon of patrolling, in conjunction with stopping at the grocery store, cannot be equated with performing a function that would entitle him to State-agent immunity; rather, such action can be characterized only as a routine action requiring the exercise of due care. See, e.g., Ex parte Coleman, 145 So. 3d 751, 758 (Ala. 2013)("It is undisputed that Coleman is a peace officer entitled to the immunity established in § 6–5–338(a)[, Ala. Code 1975,3] and that at the time of the accident he was performing a function--responding to an emergency call--that entitles Coleman to immunity." (emphasis added)); DeStafney 3Section 6-5-338(a) provides immunity to peace officers under certain circumstances. In Hollis v. City of Brighton, 950 So. 2d 300, 309 (Ala. 2006), it was engrafted onto category (4) for which a State agent is immune under Cranman. 10 1160539 v. University of Alabama, 413 So. 2d 391 (Ala. 1981)(rejecting immunity claim of individual defendant, an aide at the University's day-care center who allegedly allowed the plaintiff's child to fall off playground equipment, on basis that defendant was engaged in a function that clearly required the exercise of due care rather than difficult decision- making); cf. Gill v. Sewell, 356 So. 2d 1196 (Ala. 1978)(holding the director of a work-release center sued for releasing a convicted felon who then shot the plaintiff was performing discretionary duties). Accordingly, because Venter has failed to demonstrate that, at the time of the accident, he was performing a function that would entitle him to State- agent immunity, he and the City are not entitled to the relief requested. Conclusion Based on the foregoing, we conclude that the trial court properly denied Venter and the City's motion for a summary judgment based on the defense of State-agent immunity. PETITION DENIED. Stuart, C.J., and Parker and Main, JJ., concur. Murdock, J., concurs specially. Bolin, Shaw, Wise, and Bryan, JJ., dissent. 11 1160539 MURDOCK, Justice (concurring specially). I fully concur in the main opinion. Ex parte Cranman, 792 So. 2d 392 (Ala. 2000), provides the foundation for much of the analysis in that opinion and in Ex parte Butts, 775 So. 2d 173 (Ala. 2000), in which a majority of this Court adopted the Cranman restatement, by stating: "The Constitution and cases construing it require that we not ignore § 13[, Ala. Const. 1901, guaranteeing every person a remedy for wrong,] in order to protect State agents from suit. However, the vulnerability of State agents to suit, if not constrained, could lead to excessive judicial interference in the affairs of coequal branches of government, contrary to § 43[, Ala. Const. 1901].... ".... "... In applying the doctrine of separation of powers, we must recognize § 14[, Ala. Const. 1901,] as an expression of a strong public policy against the intrusion of the judiciary into the management of the State while, at the same time, acknowledging that it speaks only to a prohibition of lawsuits against the State and does not mention lawsuits against individuals." 792 So. 2d at 400-01 (emphasis added). In this context, Cranman explained that, in applying State-agent immunity, it was important to strike a balance that would recognize the right of individuals to a remedy to the extent practicable while guarding against "the effect upon the rendition of governmental services if agents are inclined 12 1160539 to indecision rather than risk personal liability." 792 So. 2d at 404. Under the circumstances presented in this case, I agree that the duty owed by Terrence Venter as the driver of a vehicle on a public roadway was no different than the duty of the driver in the illustration chosen in Cranman itself of a circumstance to which the doctrine of State-agent immunity would not apply. See Cranman, 792 So. 2d at 404 (explaining the difference in legal consequences between an exercise of judgment in a personnel-related matter and "a decision by the driver of a pickup truck on how to drive through or around potholes while transporting prisoners"). 13 1160539 SHAW, Justice (dissenting). I respectfully dissent. This Court in Ex parte Cranman, 792 So. 2d 392, 405 (Ala. 2000), held that "[a] State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's ... formulating plans, policies, or designs ...." I believe that the firefighter's activities in the instant case of driving around the City of Selma, "learning streets and areas, [and] inspecting streets and layout" of the area are part of "formulating plans" for purposes of Cranman State-agent immunity. Specifically, it appears that in the instant case the firefighter was both learning and determining routes and locations in the City as part of planning responses to future fires or other emergencies. Wise, J., concurs. 14

September 22, 2017

7d797478-b85d-43b9-8bc8-a3e015407311

Woodfin v. Bender

N/A

1150797

Alabama

Alabama Supreme Court

Rel: 03/31/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1150797 _________________________ Randall Woodfin et al. v. General Bender et al. Appeal from Jefferson Circuit Court (CV-11-904600) MAIN, Justice. Members of the Birmingham Board of Education and the superintendent of the Birmingham City School System (hereinafter collectively referred to as "the defendants") appeal the Jefferson Circuit Court's judgment in favor of 24 1150797 "classified employees"1 of the Birmingham Board of Education (hereinafter collectively referred to as "the plaintiffs").2 The trial court held that the plaintiffs' salaries had been miscalculated and awarded them monetary relief. The defendants argue, among other things, that they are entitled to immunity from the plaintiffs' claims. We agree that the defendants are entitled to immunity. For that reason, the trial court lacked subject-matter jurisdiction, and its judgment is void. Accordingly, we dismiss the appeal. Facts and Procedural History On December 30, 2011, numerous classified employees of the Birmingham Board of Education ("the Board") sued the Board, the Board's members in their official capacities, and the superintendent of the Birmingham City School System, in his official capacity. The plaintiffs claimed that when the 1"Classified employees" are support personnel who are not required to have a professional-educator certificate, i.e., non-teachers. 2Those 24 employees are: Scott Armstrong, Larry Batain, General Bender, Odessa Beville, Abram Bolden, Harold Childress, Freddie Clark, Walter Cook, Gwendolyn Cotton, Beverly Crosby, Vince Eaton, Lillie Edmond, Lucius Gregg, Edward Ingram, Eloise Gray Ingram, Paul Marzette, Sharon Miles, Kelvin Newsome, Frances Rowser, Anthony Taylor, Vickie Townes, Nathaniel Walton, Jacqueline Welch, and Phyllis Williams. 2 1150797 Board adopted a new salary schedule in August 2004, existing employees, including the plaintiffs, were not reassigned to the proper "steps" on the new salary schedule and, thus, that their wages were miscalculated. Specifically, in their amended complaint, the plaintiffs alleged: "... Defendants adopted a new pay schedule about August of 2004. "... The [Board] instituted a policy of assigning employees to pay steps correspondent to the total number of years of service. Through the implementation of the new schedule and pay policy, defendants determine salary rates on the basis of total years of experience. "... Defendants did not implement the new pay schedule with existing employees who occupied positions encompassed by the new pay schedule and policy in August 2004. Rather, the defendants continued to pay plaintiffs at their present rates of pay that did not recognize their years of experience. "... With the implementation of the new 16-step pay schedule, defendants failed to make corresponding adjustments to plaintiffs' step assignments to reflect prior experience in the like manner to the pay rates set for the new supervisory hires or their newly promoted peers. As a result, defendants place the newly hired or newly promoted personnel at pay steps above the veteran employees. Hence, the new hires and newly promoted employees now make substantially more money than their more experienced peers. "... Despite numerous meetings and discussions with the defendants pointing out the mistake and the 3 1150797 obvious pay inequity, the defendants have stubbornly, willfully, arbitrarily and maliciously refused to adjust plaintiffs' salary to reflect total years of experience. Defendants have made no effort to correct the ministerial error of assigning plaintiffs to the proper pay step to reflect years of experience." It is undisputed that in August 2004 the Board implemented a new salary schedule that included multiple pay "steps." The then current employees were placed on the step of the new salary schedule that most closely approximated their then current pay, and none of those employees received a reduction in pay. The plaintiffs argued that current employees were assigned to a step on the new salary schedule that most closely corresponded to their then current rate of pay. They argued that each employee should have been assigned to the step that directly corresponded to his or her years of experience, which, they say, would have resulted in a significant pay increase for each of the plaintiffs. According to the plaintiffs, the Board's official policy stated that an employee's "step" on the new pay schedule must correspond to the employee's total years of experience. Further, according to the plaintiffs, assigning each employee to the step that corresponded with his or her years of 4 1150797 experience was a ministerial act, and the defendants had no discretion in determining each employee's salary step. The plaintiffs contended that, because the defendants did not assign the plaintiffs to "steps" that corresponded to their years of experience, the plaintiffs' salaries were miscalculated and incorrect payments were made on their behalfs to the Retirement System of Alabama, which resulted in reduced pension benefits for the plaintiffs. The plaintiffs' claims are based on the following language found in the "introduction" to the salary schedule that was first adopted by the Board in August 2004: "Certified salaries (teacher) in the salary schedule are based on years of experience, degree/certification and/or assignment. Effective February 1, 1996, certified employees (teachers) were approved to be paid on their highest degree, regardless of the teaching assignment. Years of experience are categorized as 'STEPS' on the schedule. Experience for teachers will be granted based on public education in this system, other public education experience in the State of Alabama, or other public education experience outside the state. It is the responsibility of the employee to submit the appropriate information pertaining to experience, degree/certification and to verify the receipt of the accurate salary." (Emphasis added.) 5 1150797 In their complaint, the plaintiffs requested declaratory, mandamus, and injunctive relief. Specifically, the plaintiffs requested that the defendants be directed to pay the plaintiffs at the proper rate of pay reflecting their years of experience, that the trial court "issue a declaratory judgment finding that the defendants' purported actions of inequitably paying [the plaintiffs] shall be corrected such that all employees' salaries shall be based upon their years of experience," and that the trial court "declare[] that the plaintiffs are entitled to back pay and adjustment of their current salary to reflect years of service." Further, the plaintiffs alleged that the "defendants' actions constitute unlawful, unreasonable, capricious, and arbitrary conduct and represent an abuse of the defendants' official power and discretion" and that "the Board's failure and refusal to establish proper salary schedules which include length of service steps for all classes of employees does not entail a discretionary act but rather is the ignoring of a duty exacted by law." The trial court dismissed the Board from the case on the basis of State immunity but allowed the action to proceed against the defendants in their official capacities. After 6 1150797 conducting a bench trial, the trial court found that the plaintiffs' salaries had been miscalculated and awarded them the monetary relief they requested. The defendants appealed. Discussion On appeal, the defendants argue, among other things, that they are entitled to immunity from the plaintiffs' claims. The plaintiffs respond that "the Birmingham Board of Education must follow its own duly adopted salary schedule. An employee can sue when the school system fails to do that; and immunity does not bar monetary relief in such a case." Plaintiffs' brief, at 30. Further, the plaintiffs argue that "state sovereign immunity does not bar an order against official capacity defendants, regarding proper payment for work actually performed, including proper placement on the salary schedule." Id., at 34. "[T]he State of Alabama shall never be made a defendant in any court of law or equity." Article I, § 14, Ala. Const. 1901. "Section 14 immunity is more than a defense; when applicable, it divests the trial courts of this State of subject-matter jurisdiction." Alabama State Univ. v. Danley, [Ms. 1140907, April 8, 2016] ___ So. 3d ___, ___ (Ala. 2016). Concerning § 14 immunity, this Court has stated: 7 1150797 "'The wall of immunity erected by § 14 is nearly impregnable. Sanders Lead Co. v. Levine, 370 F. Supp. 1115, 1117 (M.D. Ala. 1973); Taylor v. Troy State Univ., 437 So. 2d 472, 474 (Ala. 1983); Hutchinson v. Board of Trustees of Univ. of Alabama, 288 Ala. 20, 24, 256 So. 2d 281, 284 (1971). This immunity may not be waived. Larkins v. Department of Mental Health & Mental Retardation, 806 So. 2d 358, 363 (Ala. 2001) ("The State is immune from suit, and its immunity cannot be waived by the Legislature or by any other State authority."); Druid City Hosp. Bd. v. Epperson, 378 So. 2d 696 (Ala. 1979) (same); Opinion of the Justices No. 69, 247 Ala. 195, 23 So. 2d 505 (1945) (same); see also Dunn Constr. Co. v. State Bd. of Adjustment, 234 Ala. 372, 175 So. 383 (1937). "This means not only that the state itself may not be sued, but that this cannot be indirectly accomplished by suing its officers or agents in their official capacity, when a result favorable to plaintiff would be directly to affect the financial status of the state treasury." State Docks Comm'n v. Barnes, 225 Ala. 403, 405, 143 So. 581, 582 (1932) (emphasis added); see also Southall v. Stricos Corp., 275 Ala. 156, 153 So. 2d 234 (1963).' "Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002)." Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867, 872-73 (Ala. 2004). "Section 14 immunity is not absolute; there are actions that are not barred by the general rule of immunity. 8 1150797 "'[C]ertain actions are not barred by § 14. There are six general categories of actions that do not come within the prohibition of § 14: (1) actions brought to compel State officials to perform their legal duties; (2) actions brought to enjoin State officials from enforcing an unconstitutional law; (3) actions to compel State officials to perform ministerial acts; (4) actions brought against State officials under the Declaratory Judgments Act, Ala. Code 1975, § 6–6–220 et seq., seeking construction of a statute and its application in a given situation; (5) valid inverse condemnation actions brought against State officials in their representative capacity; and (6) actions for injunction or damages brought against State officials in their representative capacity and individually where it was alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law. See Drummond Co. v. Alabama Dep't of Transp., 937 So. 2d 56, 58 (Ala. 2006) (quoting Ex parte Carter, 395 So. 2d 65, 68 (Ala. 1980)); Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831 (Ala. 2008) (holding that the exception for declaratory-judgment actions applies only to actions against State officials). As we confirmed in Harbert, these "exceptions" to sovereign immunity apply only to actions brought against State officials; they do not apply to actions against the State or against State agencies. See Alabama Dep't of Transp., 990 So. 2d at 840–41.' "Ex parte Alabama Dep't of Fin., 991 So. 2d 1254, 1256–57 (Ala. 2008). The sixth 'exception' to § 14 immunity was restated in Ex parte Moulton, 116 So. 3d 1119, 1141 (Ala. 2013), as follows: 9 1150797 "'(6)(a) actions for injunction brought against State officials in their representative capacity where it is alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law, Wallace v. Board of Education of Montgomery County, 280 Ala. 635, 197 So. 2d 428 (1967), and (b) actions for damages brought against State officials in their individual capacity where it is alleged that they had acted fraudulently, in bad faith, beyond their authority, or in a mistaken interpretation of law, subject to the limitation that the action not be, in effect, one against the State. Phillips v. Thomas, 555 So. 2d 81, 83 (Ala. 1989).'" Ex parte Hampton, 189 So. 3d 14, 17-18 (Ala. 2015). "'These actions are sometimes referred to as "exceptions" to § 14; however, in actuality these actions are simply not considered to be actions "'against the State' for § 14 purposes." Patterson v. Gladwin Corp., 835 So. 2d 137, 142 (Ala. 2002). This Court has qualified those "exceptions," noting that "'[a]n action is one against the [S]tate when a favorable result for the plaintiff would directly affect a contract or property right of the State, or would result in the plaintiff's recovery of money from the [S]tate.'" Alabama Agric. & Mech. Univ. v. Jones, 895 So. 2d 867, 873 (Ala. 2004) (quoting Shoals Cmty. Coll. v. Colagross, 674 So. 2d 1311, 1314 (Ala. Civ. App. 1995)) (emphasis added in Jones).' "Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831, 840 (Ala. 2008)." 10 1150797 Vandenberg v. Aramark Educ. Servs., Inc., 81 So. 3d 326, 332 (Ala. 2011). "'To determine whether an action against a State officer is, in fact, one against the State, this Court considers "'"whether 'a result favorable to the plaintiff would directly affect a contract or property right of the State,' Mitchell [v. Davis, 598 So. 2d 801, 806 (Ala. 1992)], whether the defendant is simply a 'conduit' through which the plaintiff seeks recovery of damages from the State, Barnes v. Dale, 530 So. 2d 770, 784 (Ala. 1988), and whether 'a judgment against the officer would directly affect the financial status of the State treasury,' Lyons [v. River Road Constr., Inc.], 858 So. 2d [257] at 261 [(Ala. 2003)]." "'Haley [v. Barbour County], 885 So. 2d [783] at 788 [(Ala. 2004)]. Additionally, "[i]n determining whether an action against a state officer is barred by § 14, the Court considers the nature of the suit or the relief demanded, not the character of the office of the person against whom the suit is brought." Ex parte Carter, 395 So. 2d 65, 67–68 (Ala. 1980).'" Ex parte Moulton, 116 So. 3d 1119, 1130-31 (Ala. 2013) (quoting Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831, 839-40 (Ala. 2008)). In the present case, we note that the plaintiffs did not "seek[] construction of a statute and its application in a given situation." See Hampton, 189 So. 3d at 18. Instead, the 11 1150797 plaintiffs sought a construction of the Board's policy and monetary relief. Thus, the declaratory-judgment "exception" to § 14 immunity does not apply. See Ex parte Town of Lowndesboro, 950 So. 2d 1203, 1211 (Ala. 2006) (stating that "[t]he exception afforded declaratory-judgment actions under § 14 generally applies only when the action seeks 'construction of a statute and how it should be applied in a given situation,' Aland v. Graham, 287 Ala. 226, 230, 250 So. 2d 677, 679 (1971), and not when an action seeks other relief"). Nevertheless, in addition to seeking declaratory relief, the plaintiffs sought mandamus and injunctive relief. In Alabama Department of Transportation v. Harbert International, Inc., 990 So. 2d 831 (Ala. 2008), this Court stated: "Generally, mandamus relief is available in certain situations to compel a State officer to perform the ministerial act of tendering payment of liquidated or certain sums the State is legally obligated to pay under a contract. State Highway Dep't v. Milton Constr. Co., 586 So. 2d 872, 875 (Ala. 1991); see also [Alabama Agric. and Mech. Univ. v.] Jones, 895 So. 2d [867] at 877-79 [(Ala. 2004)](describing as 'well-established [the] rule that a writ of mandamus will issue to compel payment of only such claims as are liquidated' and noting that prior caselaw had held 'that payment for goods or services, for which the State had contracted and accepted, could be compelled by mandamus'); and State Bd. of Admin. v. Roquemore, 218 Ala. 120, 124, 12 1150797 117 So. 757, 760 (1928) ('the claim asserted [against the State was] for an amount fixed or determinable by the terms of the contract of sale,' and was 'definite and certain, ... and not an unliquidated claim, in the sense that would render mandamus unavailable'). "We find our opinions in Milton Construction Co. v. State Highway Department, 568 So. 2d 784 (Ala. 1990) ('Milton I'), and State Highway Department v. Milton Construction Co., 586 So. 2d 872 (Ala. 1991) ('Milton II'), dispositive on this issue. In Milton I, the plaintiff, Milton Construction Company, asked the trial court to declare the disincentive clause of an 'incentive/disincentive-payments provision' in two highway-construction contracts it had entered into with ALDOT (then called 'the Highway Department') void and unenforceable as a penalty. Milton Construction further asked the trial court to order the defendants –- the State, ALDOT, and ALDOT's director –- to pay it the amounts of 'disincentive payments' ALDOT had allegedly wrongfully withheld. On appeal, this Court held that the 'disincentive clause' in the contracts was 'void as a penalty and therefore unenforceable,' 568 So. 2d at 791, and remanded the case. "On return to remand, the defendants claimed that § 14 barred the trial court from ordering them to pay the money they had withheld from Milton Construction under the void disincentive clause. In Milton II, this Court disagreed, stating: "'It is true that § 14 of the Constitution prevents a suit against the state as well as suits against its agencies. See Phillips v. Thomas, 555 So. 2d 81 (Ala. 1989); Rutledge v. Baldwin County Comm'n, 495 So. 2d 49 (Ala. 1986). However, this Court has also recognized that there are certain established exceptions to the protection afforded the state or its agencies by sovereign 13 1150797 immunity. See Ex parte Carter, 395 So. 2d 65, 68 (Ala. 1981). Among those recognized exceptions are actions brought to force state employees or agencies to perform their legal duties. Id. See also Nix and Vercelli, Immunities Available In Alabama For Cities, Counties And Other Governmental Entities, And Their Officials, 13 Am. J. Trial Advoc. 615 (1989). "'... Once the Highway Department has legally contracted under state law for goods or services and accepts such goods or services, the Highway Department also becomes legally obligated to pay for the goods or services accepted in accordance with the terms of the contract. It follows that this obligation is not subject to the doctrine of sovereign immunity and is enforceable in the courts. See, e.g., Gunter v. Beasley, 414 So. 2d 41 (Ala. 1982); State Board of Administration v. Roquemore, 218 Ala. 120, 117 So. 757 (1928). "'It is undisputed that Milton Construction has already rendered the services called for under the contract. Consequently, we hold that this lawsuit is not barred by the doctrine of sovereign immunity, because it is in the nature of an action to compel state officers to perform their legal duties and pay Milton Construction for services contracted for and rendered. Gunter, supra; Roquemore, supra. "'For example, in Roquemore the Highway Department contracted with Roquemore to purchase hay. After Roquemore had delivered a substantial amount of hay to the Highway Department, it refused to accept any further deliveries of hay and 14 1150797 refused to pay for the hay that it had already received. Roquemore petitioned this Court for a writ of mandamus ordering the State Board of Administration and the Highway Department to pay him for the hay that he had delivered. This Court held that the writ was proper and was not barred by the doctrine of sovereign immunity because, under the applicable statutes, the Highway Department could not refuse to pay for goods that it had already accepted. This Court held that the suit in Roquemore was one to force a state agency to perform its legal duty, i.e., to force the Highway Department to pay for the hay that it had already accepted. Likewise, in this case, Milton Construction's action against the Highway Department is not barred by the doctrine of sovereign immunity.' "Milton II, 586 So. 2d at 875. This Court thus upheld the trial court's judgment holding that the moneys withheld under the disincentive clause were due to be paid to Milton Construction. "Like the plaintiff in Milton I and Milton II, Harbert contended that a provision in a contract with ALDOT was void as a penalty. Harbert thus sought mandamus relief directing that State officers pay the funds withheld by ALDOT. The trial court agreed and, like the trial court in Milton II, ordered that the withheld funds be paid. In their initial brief on appeal, the Governor and the director do not appear to contest the trial court's holding that the liquidated-damages provision was unlawfully applied in this case. Thus, under the authority of Milton II, the trial court's mandamus relief directing that the funds withheld as liquidated damages are due to be returned to Harbert is affirmed. See Hardin v. Fullilove Excavating Co., 353 So. 2d 779, 783 (Ala. 1977) (agreeing with the trial court's factual findings and legal conclusions interpreting a contract between a State agency and 15 1150797 a contractor 'as calling for payment of the disputed sum' and affirming the issuance of the writ of mandamus to compel State officers to tender payment)." 990 So. 2d at 842-44. Further, "the trial court can generally, by writ of mandamus, order State officers in certain situations to pay liquidated damages or contractually specified debts. The payment of these certain, liquidated amounts would be only a ministerial act that State officers do not have the discretion to avoid. [Alabama Agric. and Mech. Univ. v.] Jones, 895 So. 2d [867] at 878- 79 [(Ala. 2004)];[State Bd. of Admin. v.] Roquemore, 218 Ala. [120] at 124, 117 So. [757] at 760 [(1928)]. Furthermore, although the payment of the funds 'may ultimately touch the State treasury,' Horn v. Dunn Bros., 262 Ala. 404, 410, 79 So. 2d 11, 17 (1955), the payment does not 'affect the financial status of the State treasury,' Lyons [v. River Road Constr., Inc.], 858 So. 2d [257] at 261 [(Ala. 2003)], because the funds 'do not belong to the State,' Alabama Dep't of Envtl. Mgmt. v. Lowndesboro, 950 So. 2d 1180, 1190 n.6 (Ala. Civ. App. 2005) (two-judge opinion), and the State treasury 'suffers no more than it would' had the State officers originally performed their duties and paid the debts. Horn, 262 Ala. at 410, 79 So. 2d at 17. The trial court may not, however, award retroactive relief in the nature of unliquidated damages or compensatory damages, because such relief affects a property or contract right of the State. Stark [v. Troy State Univ., 514 So. 2d 46 (Ala. 1987)]; Williams [v. Hank's Ambulance Serv., Inc., 699 So. 2d 1230 (Ala. 1997)]; Roquemore; J.B. McCrary Co. v. Brunson, 204 Ala. 85, 86, 85 So. 396, 396 (1920) ('mandamus will not lie to compel the payment of unliquidated claims'); and Vaughan [v. Sibley, 709 So. 2d 482 (Ala. Civ. App. 1997)]. ... 16 1150797 "Although the trial court cannot award compensatory damages or unliquidated damages in this case, the trial court does have the ability to compel State officers who are acting arbitrarily and capriciously to properly perform their duties. Stark, 514 So. 2d at 50 (holding that an action seeking to compel State officers who are acting arbitrarily to perform their legal duties 'will not be barred by the sovereign immunity clause of the Alabama Constitution of 1901'); McDowell-Purcell, [Inc. v. Bass,] 370 So. 2d [942] at 944 [(Ala. 1979)] ('If judgment or discretion is abused, and exercised in an arbitrary or capricious manner, mandamus will lie to compel a proper exercise thereof.'); St. Clair County v. Town of Riverside, 272 Ala. 294, 296, 128 So. 2d 333, 334 (1961) ('Injunctive action may be maintained against a state official, if the official is acting beyond the scope of his authority or acting illegally, in bad faith, or fraudulently.') ...." Harbert, 990 So. 2d at 845-46. As Justice Murdock correctly noted in his special concurrence in Harbert: "[I]t becomes critical ... to recognize that the reference in the cases cited in the above-quoted passage from the main opinion to claims that are 'liquidated,' when considered in context, are references not merely to claims for amounts that have been reduced to sums certain, but claims as to which there is no room for dispute as to liability, i.e., whether the amounts at issue are owed." 990 So. 2d at 849 (Murdock, J., concurring specially). Harbert and the cases cited therein dealt with contracts. In Ex parte Bessemer Board of Education, 68 So. 3d 782 (Ala. 2011), however, a public-school teacher sued the members of 17 1150797 the Bessemer Board of Education in their official capacities, alleging that her statutory pay increase had been miscalculated. This Court stated that "it is undisputed that the Bessemer Board members have a statutory duty to pay [the teacher] the appropriate salary increase under [the statute]." Bessemer Bd. of Educ., 68 So. 3d at 790 (emphasis added). Thus, this Court held that § 14 immunity did not bar the teacher's claim because, it reasoned, the members of the Bessemer Board of Education had a legal duty to pay the teacher the correctly calculated pay increase under the statute, and the payment of that salary increase was a ministerial act that involved no discretion. 68 So. 3d at 790- 91. Therefore, in the present case, assuming that a school- board policy should be treated like a contract or a statute,3 3The Court of Civil Appeals has stated: "'A board of education must comply with the policies it adopts.' Ex parte Board of Sch. Comm'rs of Mobile County, 824 So. 2d 759, 761 (Ala. 2001). 'Salaries are a matter of school board policy. Once the Board adopts a policy, it is bound to follow that policy until the policy is modified or amended by the Board in accordance with the procedures set forth in [§ 16-1-30, Ala. Code 1975].' Beverly v. Board of Sch. Comm'rs of Mobile County, 678 So. 2d 113, 115 (Ala. Civ. App. 1995) (citations omitted)." 18 1150797 the issue is whether the defendants acted arbitrarily in interpreting and implementing the Board's policy. If they did not act arbitrarily, they are entitled to § 14 immunity. Specifically, the issue in the present case is whether the language in the introduction to the salary schedule unambiguously created a legal duty for the defendants to assign then classified employees to steps on the salary schedule that directly corresponded to their years of service when they were converted to the new salary schedule. If so, the payment of the claimed backpay and benefits would be a ministerial act the defendants had no discretion to avoid, and § 14 would not bar the plaintiffs' claims insofar as they seek to compel the defendants to pay the backpay and benefits. In that situation, this action would not be an action seeking damages from the State but, rather, an action to compel the performance of a ministerial act, and the payment would not effect a property right of the State because the funds would not belong to the State. Limestone Cty. Educ. Ass'n v. Limestone Cty. Bd. of Educ., 880 So. 2d 446, 450 (Ala. Civ. App. 2003)(footnote omitted). See also Ex parte Etowah Cty. Bd. of Educ., 584 So. 2d 528, 530 (Ala. 1991) ("It is well recognized that the School Board is bound to follow its adopted policies."). 19 1150797 The above-cited decisions contemplate a lack of discretion by State officials when there is no dispute that a particular payment is required. However, in the present case, there is a legitimate dispute as to whether the Board's policy required the defendants to assign existing classified employees to steps on the new salary schedule that directly corresponded to their years of service rather than to their then current rate of pay when they were converted to the new salary schedule. The defendants' interpretation and implementation of the policy was not arbitrary. The sentence upon which the plaintiffs rely simply states: "Years of experience are categorized as 'STEPS' on the schedule." Neither that sentence nor the sentences that surround it say anything specifically about how to initially place existing employees on the new salary schedule. Furthermore, the paragraph containing that sentence refers only to "certified" employees or "teachers," not classified employees like the plaintiffs. Therefore, the defendants did not exceed their discretion or act arbitrarily when they interpreted and implemented the policy with regard to initially placing classified employees on the new salary schedule. Thus, the defendants cannot be compelled to accept the plaintiffs' 20 1150797 interpretation. Accordingly, the defendants were entitled to § 14 immunity, and the trial court was divested of subject- matter jurisdiction over this case. Conclusion Because the trial court lacked subject-matter jurisdiction, its judgment is void, and the appeal is dismissed. APPEAL DISMISSED. Stuart and Wise, JJ., concur. Bolin,* Parker, Murdock, Shaw, and Bryan, JJ., concur in the result. *Although Justice Bolin was not present at oral argument in this case, he has listened to the audiotape of the oral argument. 21 1150797 MURDOCK, Justice (concurring in the result). I concur in the result. The main opinion quotes from cases such as Alabama Department of Transportation v. Harbert International, Inc., 990 So. 2d 831, 840 (Ala. 2008), and Ex parte Bessemer Board of Education, 68 So. 3d 782 (Ala. 2011), from which can be drawn the proposition that the bar of § 14, Ala. Const. 1901, immunity does not prevent a court from requiring a State official to pay an undisputed sum-certain debt for goods or services accepted by the State. The main opinion follows its discussion of these cases, however, with the following statement: "[T]he issue is whether the defendants acted arbitrarily in interpreting and implementing the Board's policy. If they did not act arbitrarily, they are entitled to § 14 immunity." ___ So. 3d at ___. Elsewhere, the main opinion suggests that the issue is whether a State official can be said to have "exceed[ed] his discretion" in making a decision about the payment of an alleged debt. ___ So. 3d at ___. The latter standards -– arbitrariness and excess of discretion -- are not the equivalent of the principles governing such cases as Harbert and Bessemer. Nor have those latter standards ever been articulated previously in our 22 1150797 precedents. Instead, the principle suggested by cases such as Harbert and Bessemer is simply whether the amount owed is undisputed in the sense and for the reasons referenced above. If it is not, then there is immunity, regardless whether the State official's decision regarding it might, in retrospect, be deemed by a court of law to have been "arbitrary" or "in excess of the official's discretion." For that matter, to accept the latter standards seems to me to be a major step toward outright abolishment of § 14 immunity in relation to suits against State officials. When a decision is challenged by an alleged creditor on the ground that the State official's decision is contrary to law (or the facts), such error is too easily framed by a litigant and a court alike as one that was "arbitrary" or in "excess" of the official's discretion. Indeed, our cases have equated decisions that are simply contrary to the law as ones that are arbitrary or in excess of discretion. E.g., Corner Stone Funeral Chapel, Inc. v. MVMG, LLC, 170 So. 3d 626, 630 (Ala. 2014) ("'"A court exceeds its discretion when its ruling is based on an erroneous conclusion of law or when it has acted arbitrarily without employing conscientious judgment, has exceeded the bounds of reason in view of all circumstances, or 23 1150797 has so far ignored recognized principles of law or practice as to cause substantial injustice."'" (quoting Wright Therapy Equip., LLC v. Blue Cross & Blue Shield of Alabama, 991 So. 2d 701, 705 (Ala. 2008), quoting, in turn, Edwards v. Allied Home Mortg. Capital Corp., 962 So. 2d 194, 213 (Ala. 2007)) (emphasis added)). Such a step is a bridge farther than even this writer has previously suggested. Compare Alabama State Univ. v. Danley, [Ms. 1140907, April 8, 2016] ___ So. 3d ___, ___ (Ala. 2016) (Murdock, J., concurring specially in case no. 1140907 and concurring in the result in case no. 1141241) (suggesting that there should not be § 14 immunity as to claims for moneys owed for conforming goods or services tendered to, but not yet accepted by, the State). 24 1150797 SHAW, Justice (concurring in the result). I concur in the result. "In limited circumstances the writ of mandamus will lie to require action of state officials. This is true where discretion is exhausted and that which remains to be done is a ministerial act." McDowell–Purcell, Inc. v. Bass, 370 So. 2d 942, 944 (Ala. 1979). Under Alabama Department of Transportation v. Harbert International, Inc., 990 So. 2d 831 (Ala. 2008), and the numerous cases cited in it, as discussed in the main opinion, when a plaintiff seeks payment of money from the State, the "limited circumstances" in which a writ will lie to compel payment depends on whether the amount sought is "certain" and the State's obligation to pay is "undisputed." If there is doubt as to those, the analysis ends and § 14 bars the action. In the instant case, the parties dispute the proper interpretation of the new salary schedule at issue. In McDowell–Purcell, we held that a writ of mandamus will not lie to compel a State official "to exercise his discretion and apply the ascertained facts or existing conditions under [a] contract so as to approve payment to [a plaintiff] according to [the plaintiff's] interpretation of the contract rather than his." 370 So. 2d at 944. Here, the Board members have 25 1150797 not exhausted their discretion, and they cannot be compelled to accept the plaintiffs' interpretation of the salary schedule. A suit against the State, i.e., the Board members in their official capacities, is untenable in this case. Bryan, J., concurs. 26

March 31, 2017

e4f7930f-420a-40b8-b056-b0124ddff546

Hasting v. Roberts

N/A

1150813

Alabama

Alabama Supreme Court

Rel:02/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150813 ____________________ Melvin Hasting v. Christopher Roberts, individually and in his capacity as the director of the Office of Indigent Defense Services Appeal from Montgomery Circuit Court (CV-15-901412) BOLIN, Justice. Melvin Hasting appeals from the trial court's order dismissing his claim seeking injunctive relief against Christopher Roberts, individually and in his official capacity 1150813 as the director of the Office of Indigent Defense Services ("OIDS"). Facts and Procedural History Section 41-4-321, Ala. Code 1975, created OIDS within the Department of Finance. OIDS is tasked with "develop[ing] and improv[ing] programs to provide legal representation to indigents" in the State. § 41-4-322(a), Ala. Code 1975. OIDS has to have a director who is tasked with "develop[ing] standards governing the provision of defense services," which standards shall include "prescribing minimum experience, training, and other qualifications for appointed counsel [or] contract counsel." § 41-4-322(c), Ala. Code 1975. Roberts was appointed director of OIDS in April 2015. Section 15-12-4, Ala. Code 1975, provides for the establishment in each judicial circuit in the State of a voluntary indigent-defense advisory board ("the advisory board"). The advisory board shall consist of five members who are residents of the judicial circuit; those five members shall include the presiding circuit judge as the chair, the president of the local circuit bar association, and three attorneys who are selected by the bar commissioner for the 2 1150813 circuit. § 15-12-4(b), Ala. Code 1975. The advisory board in each circuit is required by statute to determine the method for delivering indigent-defense services in the circuit and shall certify its system to the Indigent Defense Review Panel ("the review panel") on or before October 1 of each year. § 15-12-4(e), Ala. Code 1975; § 41-4-322(d), Ala. Code 1975. If the advisory board chooses to use a contract-counsel system for indigent defense, the advisory board "shall follow the procedures of the director for requesting and accepting applications or proposals for such contracts and shall make a recommendation for contract counsel to the director." § 15-12- 26(b), Ala. Code 1975. The director may appeal the determination of the advisory board to the review panel, which "shall make a decision in a timely manner, which decision shall be deemed final." § 15-12-4(e)(1), Ala. Code 1975. The review panel consists of five members who each serve a three- year term. Two members of the review panel are appointed by the president of the Alabama State Bar, one member is appointed by the president of the Alabama Circuit Judges Association, one member is appointed by the president of the District Judges Association, and one member is appointed by 3 1150813 the president of the Alabama Lawyers Association. § 41-4-324, Ala. Code 1975. For the fiscal years 2012-2013, 2013-2014, and 2014- 2015, the advisory board in Cullman County chose the contract- counsel system as its method of providing indigent defense in that county and submitted recommendations to the director of OIDS of the attorneys it had determined should receive the contracts to provide the indigent defense. Hasting was one of the attorneys recommended by the advisory board to receive a felony indigent-defense contract for a shortened term in 2013 and for the fiscal years 2013-2014 and 2014-2015. OIDS accepted the advisory board’s recommendations and awarded Hasting an indigent-defense contract in each of those fiscal years. For the fiscal year 2015-2016 the advisory board again determined that the contract-counsel system should be the method of providing indigent defense in Cullman County and submitted its recommendations to Roberts of the attorneys who should receive the indigent-defense contracts. The advisory board did not recommend Hasting as one of those attorneys who 4 1150813 should receive an indigent-defense contract for fiscal year 2015-2016. On September 1, 2015, Hasting sued Roberts, individually and in his official capacity, seeking certain injunctive and declaratory relief. Hasting alleged, among other things, 1 that Roberts, as the director of OIDS, was required to develop standards governing the provision of indigent-defense services in Cullman County and that Roberts had failed to develop those standards; that the advisory board was in violation of the law because, Hasting said, its membership was not composed as mandated by statute; that the advisory board operated without "guidelines and criteria" for how it chose contract counsel; and that the advisory board recommends giving indigent-defense contracts to attorneys who have obvious conflicts of interest, including members of the advisory board themselves. Hasting sought a judgment declaring that the advisory board in Cullman County was operating outside the confines of On September 11, 2015, a second action filed by another 1 attorney arising from the advisory board's recommendation of contract counsel in Cullman County for the fiscal year 2015- 2016 was filed against Roberts and the members of the advisory board. That action asserted both tort claims and claims for injunctive and declaratory relief. That second action was subsequently consolidated with Hasting's action, but it is not the subject of this appeal. 5 1150813 the applicable statutes; that Roberts was required to dissolve the advisory board if he determined that its composition was unlawful; that Roberts was required to develop standards governing the provision of indigent-defense services in the circuits; that the advisory board was required to have procedures and criteria in place for recommending contract counsel given that the contract-counsel system was the method chosen to provide indigent defense in Cullman County; and that the recommendations of the advisory board were not to be considered if it was determined that they were made unlawfully. Hasting's claim for injunctive relief sought to enjoin Roberts from accepting and approving the advisory board's recommendations for the indigent-defense-service contracts for the fiscal year 2015-2016; from terminating preexisting indigent-defense contracts; and from implementing any indigent-defense method without first developing a procedures manual. On September 9, 2015, the trial court entered an order setting Hasting's request for a preliminary injunction for a hearing on October 1, 2015. On September 28, 2015, Roberts 6 1150813 notified Judge Gregory Nicholas, the presiding judge of Cullman County and chair of the advisory board, that it was his "intention pursuant to Alabama Code [1975,] Section 15-12- 26[,] to not enter into any indigent defense service contracts" for the 2015-2016 fiscal year and that his decision was based on "pending litigation." After Roberts notified Judge Nicholas of his intention not to enter into any indigent-defense contracts, indigent defense in Cullman County was provided by the appointment method. On September 29, 2015, both Hasting and Roberts jointly moved the trial court to cancel the hearing scheduled for October 1, 2015, on Hasting's request for a preliminary injunction, stating that "both parties agree that said hearing is unnecessary at this time." In October 2015, Roberts appealed to the review panel the advisory board's recommendations for the 2015-2016 fiscal year. Roberts stated the following as the basis for his appeal to the review panel: "1. Currently two civil litigations have been commenced and are pending regarding the composition, procedure, meetings and actions of the Indigent Advisory Board in the 32nd Judicial Circuit. ... 7 1150813 "2. Each action alleges inappropriate composition, procedure, meetings and actions on the part of the Indigent Defense Advisory Board for the 32nd Judicial Circuit. "3. Of particular note, Alabama Code [1975,] Section 15-12-4[,] establishes the composition, meetings, powers and duties of the Indigent Advisory Board. The code section sets forth that the presiding circuit judge shall serve as chair of the committee with members of said committee to include the local bar association president and three members selected by the bar commissioner for that circuit. "4. For the 32nd Judicial Circuit, the Presiding Judge, Gregory Nicholas, recused himself from all board activities due to a potential conflict of interest. Further, it appears two members of the 2015 advisory board received contracts pursuant to the board's actions. Information has also been provided that the local bar president did not participate in the meeting and actions of the indigent defense advisory board. Thus, there exists a material issue as to whether the Indigent Defense Advisory Board meets the statutory requirements of Alabama Code [1975,] Section 41-4-322(d)." On October 29, 2015, members of the advisory board filed with the review panel a response to Roberts's appeal and/or a cross-appeal from Roberts's decision to not follow the recommendations of the advisory board for the 2015-2016 fiscal year and to appeal those recommendations to the review panel. In their filing, the members of the advisory board denied the allegations contained in Roberts's appeal to the review panel 8 1150813 and requested that his appeal be denied and that the review panel reverse Roberts's decision not to approve the advisory board's recommendations. While Roberts's appeal and the advisory board's cross- appeal were pending, OIDS promulgated rules and standards relative to the establishment of the contract-counsel system of indigent defense, which became effective on January 4, 2016. On January 8, 2016, the review panel, following a hearing, entered an order denying Roberts's appeal, stating, in part: "After review of the evidence and testimony provided, it is the unanimous determination of the Panel that the process used by the local board of the 32nd Judicial Circuit (Cullman County) in selecting the method of local delivery of services and in selecting the attorneys to whom contracts were awarded was exemplary. Therefore, the appeal of the Director is denied and the cross-appeal of the 32nd Judicial Circuit (Cullman County) local indigent defense advisory board as it relates to the reinstatement of the contract system is granted and should be reinstated immediately." Pursuant to the review panel's final decision and subsequent to the rules and standards applicable to the contract-counsel system becoming effective, the contract-counsel system was reinstated in Cullman County in January 2016, and OIDS entered into indigent-defense contracts with the attorneys previously 9 1150813 recommended by the advisory board for the 2015-2016 fiscal year. On January 11, 2016, Hasting moved the trial court to reset the hearing on his request for a preliminary injunction that had been previously canceled upon the joint motion of Hasting and Roberts following Roberts's decision not to enter into indigent-defense contracts. The trial court granted the motion to reset the hearing for March 15, 2016. Hasting argued at the hearing that the indigent-defense contracts entered into in January 2016 were based on the recommendations made by the advisory board in October 2015, while, Hasting says, the advisory board was acting in contravention of the statute and without rules and standards in place relative to the establishment of the contract-counsel system of indigent defense. Roberts argued that Hasting had failed to show any irreparable harm because the indigent- defense contracts are entered into on a year-by-year basis, and there is no guarantee that an attorney who had received a contract in the prior year would receive one. Roberts also contended that the issue was moot because the contracts had been entered into and were then being paid. 10 1150813 On March 15, 2016, the trial court entered an order dismissing Hasting's claim seeking to enjoin Roberts from approving the contract recommendations of the advisory board. On March 21, 2016, the trial court entered an order, pursuant to Rule 54(b), Ala. R. Civ. P., certifying as final its order dismissing Hasting's claim for injunctive relief. Hasting appeals. For the reasons stated, we dismiss the appeal. Discussion In South Alabama Gas District v. Knight, 138 So. 3d 971, 974-76 (Ala. 2013), this Court stated: "When an action becomes moot during its pendency, the court lacks power to further adjudicate the matter. "'"The test for mootness is commonly stated as whether the court's action on the merits would affect the rights of the parties." Crawford v. State, 153 S.W.3d 497, 501 (Tex. App. 2004) (citing VE Corp. v. Ernst & Young, 860 S.W.2d 83, 84 (Tex. 1993)). "A case becomes moot if at any stage there ceases to be an actual controversy between the parties." Id. (citing National Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999)).' "Chapman v. Gooden, 974 So. 2d 972, 983 (Ala. 2007) (first emphasis added). See also Steffel v. Thompson, 415 U.S. 452, 459 n. 10, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974) ('[A]n actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.'). 11 1150813 ".... "Events occurring subsequent to the entry or denial of an injunction in the trial court may properly be considered by this Court to determine whether a cause, justiciable at the time the injunction order is entered, has been rendered moot on appeal. '[I]t is the duty of an appellate court to consider lack of subject matter jurisdiction....' Ex parte Smith, 438 So. 2d 766, 768 (Ala. 1983). '[J]usticiability is jurisdictional.' Ex parte State ex rel. James, 711 So. 2d 952, 960 n. 2 (Ala. 1998). A justiciable controversy is one that 'is definite and concrete, touching the legal relations of the parties in adverse legal interest, and it must be a real and substantial controversy admitting of specific relief through a decree.' Copeland v. Jefferson Cnty., 284 Ala. 558, 561, 226 So. 2d 385, 387 (1969). A case lacking ripeness has yet to come into existence; a moot case has died. Between the two lies the realm of justiciability. See 13B Charles Alan Wright et al., Federal Practice and Procedure § 3533 (3d ed. 2008) ('It is not enough that the initial requirements of standing and ripeness have been satisfied; the suit must remain alive throughout the course of litigation, to the moment of final appellate disposition.')." (Footnotes omitted.) Hasting received an indigent-defense contract for a shortened term in 2013 and contracts for the fiscal years 2013-2014 and 2014-2015. The advisory board again determined that for the 2015-2016 fiscal year the contract-counsel system should be the method of providing indigent defense in Cullman County and submitted to Roberts its recommendations of the 12 1150813 attorneys to receive those indigent-defense contracts. Hasting was not on the recommended list to receive an indigent-defense contract for the fiscal year 2015-2016. Hasting then sued Roberts seeking to enjoin him from accepting and approving the advisory board's recommendations for the indigent-defense-service contracts for the fiscal year 2015- 2016. Based on the pending litigation and the allegations that the advisory board had acted outside the confines of the statute, Roberts chose not to accept the recommendations of the advisory board and appealed those recommendations to the review panel. Following a hearing, the review panel determined that the process used by the advisory board in selecting the method of local delivery of indigent services and in selecting the attorneys to whom contracts were awarded was "exemplary." The review panel also ordered that the contract-counsel system be reinstated immediately for the 2015-2016 fiscal year. In January 2016, Roberts entered into the indigent-defense contracts for the 2015-2016 fiscal year that had been recommended by the advisory board. Those indigent-defense contracts had expired at the beginning of the new fiscal year on October 1, 2016, because the statute 13 1150813 requires the advisory board to make a new recommendation to the director regarding the method of indigent defense each year on or before October 1. § 15-12-4(e), Ala. Code 1975; § 41-4-322(d), Ala. Code 1975. Because a new fiscal year –- 2016-2017 -- began on October 1, 2016, Hasting's claim seeking to enjoin Roberts from accepting and approving the advisory board's recommendations for the indigent-defense-service contracts for the fiscal year 2015-2016 is now moot, and there is no longer an actual controversy to be decided by this Court. Because there is no longer a justiciable issue before this Court, the Court lacks subject-matter jurisdiction, and the appeal must be dismissed. Knight, supra. APPEAL DISMISSED. Stuart, Murdock, Main, and Bryan, JJ., concur. 14

February 17, 2017

944710a5-cadf-4c5e-afe1-7f705283039c

Timothy Joel Thomas v. Randell Heard and Donna Heard

N/A

1150118

Alabama

Alabama Supreme Court

Rel: 03/24/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150118 ____________________ Timothy Joel Thomas v. Randell Heard and Donna Heard Appeal from Geneva Circuit Court (CV-14-900015) ____________________ 1150119 ____________________ Timothy Joel Thomas v. Laura Wells, as guardian ad litem and next friend of M.A., a minor Appeal from Geneva Circuit Court (CV-13-900145) On Application for Rehearing PER CURIAM. This Court's no-opinion order of affirmance of November 4, 2016, is withdrawn, and the following is substituted therefor. Timothy Joel Thomas appeals following the denial of his numerous postjudgment motions by the Geneva Circuit Court ("the trial court") challenging a judgment entered by the trial court on a jury verdict in favor of Randell Heard and Donna Heard and Laura Wells, as guardian ad litem and next friend of M.A., a minor. Facts and Procedural History This case arises out of an automobile accident that occurred on October 15, 2013, at approximately 5:00 p.m. A vehicle driven by Thomas, in which M.A. was a passenger, collided with a vehicle driven by Randell Heard, in which Donna Heard was a passenger. Thomas testified that, on the day of the accident, he visited Amber Foster's house between 3:15 p.m. and 3:30 p.m. Foster testified that, after Thomas had been at her house for 2 1150118, 1150119 approximately 20 minutes, Thomas drove two of Foster's children, one of whom was M.A., to a Dollar General discount store.1 Foster testified that Thomas and her two children returned to her house approximately 30 minutes later. Foster then testified that Thomas again left her house with M.A., approximately 20 minutes later. Foster testified that she did not notice anything unusual about Thomas while he was at her house. Foster also testified that she did not see Thomas consume any alcohol or prescription medications while he was at her house. Foster further testified that she would not have allowed M.A. to leave with Thomas if Foster had thought that Thomas was intoxicated, impaired, or unable to operate a vehicle. Thomas testified that, while he was at Foster's house, he took Seroquel, a prescription drug, and drank beer. Thomas 1Although M.A. was Foster's biological child and was living with Foster at the time of the accident, Foster testified that she did not have legal custody of M.A. Foster testified that she had legal custody of M.A. at the time of the trial, but did not specify on what date she had regained legal custody. Nothing in the record indicates who actually had legal custody of M.A. at the time of the accident or when Wells filed her underlying action. Wells states in her brief that, at the time of the accident and the commencement of her action, "legal custody of M.A. was lawfully vested in a third party, the Department of Human Resources." Wells's brief, at p. 58. 3 1150118, 1150119 also testified that, in addition to his prescription for Seroquel, he had prescriptions for other drugs; Thomas testified that it was possible that he had taken some of those prescription drugs in addition to the Seroquel within 24 hours of the accident. Thomas also testified that he purchased beer -- "a tallboy" -- while on his errand to the Dollar General discount store. When asked if it was possible that he had purchased more than one beer, Thomas responded, "[a]nything is possible." Thomas further testified that while he was at Foster's house he drank "one tallboy beer" and that he was not sure if he had drunk more than the one beer. Thomas also testified that he "could have" drunk more than one beer. Thomas testified that he "remember[ed] not being impaired when [he] left the driveway" of Foster's house with M.A. When asked whether he was impaired at the time he was driving toward the intersection just before the accident, Thomas replied, "[n]o, sir, not that I know of." Jack Sewell, a pharmacist at the pharmacy where Thomas filled his prescriptions, testified that some of the prescriptions he filled for Thomas, including Seroquel, cause 4 1150118, 1150119 drowsiness. Sewell testified that drinking alcohol with these prescriptions would "just add[] to" that drowsiness effect. Thomas left Foster's house at approximately 4:40 p.m. with M.A. in his vehicle and drove south on County Road 41. At approximately 5:00 p.m., Thomas was approaching the intersection of County Road 41 and State Highway 167 ("the intersection"), which is where the accident occurred. There are stop signs on County Road 41 requiring the traffic traveling on County Road 41 to yield to the traffic traveling on State Highway 167; there are no stop signs halting traffic traveling on State Highway 167. Thomas testified that he drove over several "rumble strips"2 on County Road 41 as he approached the intersection. Thomas drove his vehicle into the intersection without stopping at the stop sign on County Road 41. Thomas's vehicle collided with the vehicle being driven by Randell Heard. Thomas testified: "[Wells's trial counsel:] Why didn't you see the stop sign? "[Thomas:] I can't tell you that. 2Alabama State Trooper Darren Pert testified that rumble strips, or "speed breakers," are used "to warn [motorists] of the intersection." 5 1150118, 1150119 "[Wells's trial counsel:] Why didn't you stop at the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you see the Heards traveling in their silver car to your right? "[Thomas:] I can't tell you that." Elizabeth Mims witnessed the accident. Mims testified that it appeared that Thomas slowed his vehicle before entering the intersection but did not completely stop his vehicle. Mims testified that she witnessed Thomas drive his vehicle into the intersection in front of the Heards' vehicle, which, she said, caused the accident. After the accident occurred, Mims checked on the occupants of both vehicles. Mims testified that "when [she] got to" Thomas's vehicle she could smell alcohol. Mims later clarified that, although she was certain that the odor of alcohol was coming from Thomas's vehicle, she could not identify the source of the odor of alcohol. Mims also testified that she spoke with another woman at the scene of the accident who also indicated that she smelled alcohol. However, Mims did not indicate where at the scene of the accident this other woman had smelled alcohol; specifically, 6 1150118, 1150119 Mims did not testify that this other woman smelled alcohol emanating from Thomas or his vehicle. Chris Sirois, an emergency medical technician dispatched to the scene, testified that he did not smell alcohol while he was "treating or paying attention to" M.A., who was in the vehicle driven by Thomas. Thomas, M.A., and the Heards sustained serious injuries as a result of the accident and were transported to medical facilities for emergency care; Thomas was transported to Southeast Alabama Medical Center ("SAMC"). Upon Thomas's arrival at SAMC's emergency room, Danielle Stanridge, a laboratory technician at SAMC, testified that she drew blood from Thomas in order to run a medical analysis of Thomas's blood, which she said was the "common and customary" practice. Stanridge used an alcohol swab to sterilize Thomas's arm before she drew his blood sample. SAMC conducted a "medical-alcohol test" as part of the analysis performed on Thomas's blood sample. Dr. Jack Kalin, the former chief toxicologist of the Alabama Department of Forensic Sciences and a private consultant in forensic technology certified in forensic technology by the American 7 1150118, 1150119 Board of Forensic Technology, explained that the medical- alcohol test performed by SAMC on Thomas's blood sample tested for the concentration of ethanol in Thomas's blood sample. Jeff Sheppard, who was SAMC's laboratory director at the time of the accident, testified that the presence and amount of alcohol in a patient's blood sample is important information for the treating physician to have in deciding whether to use anesthesia on the patient or to prescribe prescription drugs. Sheppard testified that the medical-alcohol test conducted on Thomas's blood sample indicated that Thomas's blood sample had a "value" of "68 milligrams per deciliter." Sheppard testified that this was an "abnormal" result, which was explained as follows: "[Wells's trial counsel:] For example, if I've had a cholesterol test done, it tells me here's the normal range, and if mine is high, it will report back above normal. Is that kind of what this is telling us? "[Sheppard:] Yes." Dr. Kalin testified that, based on Thomas's blood sample containing 68 milligrams of alcohol per deciliter, Thomas's blood-alcohol concentration "would have been somewhere between a .05 grams percent and a .06 grams percent." Dr. Kalin 8 1150118, 1150119 testified that, based on Thomas's blood-alcohol concentration of .05% to .06%, he opined that Thomas would have consumed "two to three beers, rather than just one." Dr. Jimmie Valentine, a consultant in clinical pharmacology and toxicology, who was called as a witness by Thomas, testified that the method used to collect Thomas's blood sample and to test for the presence of alcohol was not performed pursuant to forensic standards. For instance, Dr. Valentine testified that, if a sample of Thomas's blood had been taken for the specific purpose of testing it to determine Thomas's blood-alcohol concentration, an alcohol swab should not have been used to sterilize Thomas's arm before his blood was drawn. Dr. Valentine testified that, when an alcohol swab is used to clean the skin, some of the alcohol could be absorbed into the skin, which could contaminate the blood sample drawn. Dr. Valentine explained that the test conducted by SAMC on Thomas's blood sample to determine the presence of alcohol did not reveal the specific type of alcohol present in Thomas's blood sample. Dr. Valentine explained that the alcohol swab used by Stanridge to sterilize Thomas's arm probably contained isopropyl alcohol, while the beer Thomas 9 1150118, 1150119 drank contained ethanol alcohol. Dr. Valentine further explained that the test run by SAMC on Thomas's blood sample would have detected both kinds of alcohol, among other things, generally; there was no way to tell if Thomas's blood sample had been contaminated with the isopropyl alcohol from the alcohol swab. Dr. Valentine testified that the preferred method "for doing alcohol analysis" is a method called "gas chromatograph." SAMC did not use the gas-chromatograph method in determining that Thomas's blood sample contained 68 milligrams per deciliter. Regardless, accepting that Thomas's blood sample contained 68 milligrams of ethanol per deciliter, Dr. Valentine agreed with Dr. Kalin's assessment of Thomas's blood-alcohol concentration. Dr. Kalin testified that it is possible for people with a blood-alcohol concentration of less than .08% to be impaired and to have difficulty driving: "[Heards' trial counsel:] And a blood/alcohol of a .08, you use the word intoxicated, in your area of expertise, can individuals be impaired such as they are unsafe and unfit to drive an automobile at less than a level of .08? ".... "[Dr. Kalin:] State law provides a presumption that .08 or greater, then you are under the 10 1150118, 1150119 influence of alcohol. However, state law also recognizes the scientific reality that people below .08 can be impaired and have difficulty driving. So, if someone can be demonstrated to be impaired with an ethanol concentration of less than .08, they can be convicted of drunk driving."3 Dr. Kalin explained the effects Thomas may have experienced as a result of his blood-alcohol concentration of .05% to .06%: "[Heards' trial counsel:] ... What effect could you expect to see in Mr. Thomas with the level of 3It appears that the "state law" to which Dr. Kalin was referring is § 32-5A-191, Ala. Code 1975, which states, in pertinent part: "(a) A person shall not drive or be in actual physical control of any vehicle while: "(1) There is 0.08 percent or more by weight of alcohol in his or her blood; "(2) Under the influence of alcohol; "(3) Under the influence of a controlled substance to a degree which renders him or her incapable of safely driving; "(4) Under the combined influence of alcohol and a controlled substance to a degree which renders him or her incapable of safely driving; or "(5) Under the influence of any substance which impairs the mental or physical faculties of such person to a degree which renders him or her incapable of safely driving." 11 1150118, 1150119 blood/alcohol content of .05 to .06 that you've described? "[Dr. Kalin:] I'm going to answer your question literally -- you would see nothing. "[Heards' trial counsel:] In other words, would someone be able to visually tell if you were intoxicated or impaired? "[Dr. Kalin:] Quite possibly not. "[Heards' trial counsel:] Would there be effects to Mr. Thomas at that level? "[Dr. Kalin:] Yes, there would be. "[Heards' trial counsel:] And in reaching that opinion, are you trained in that regard in all of your training with the State Of Alabama and your toxicological research? "[Dr. Kalin:] Yes. "[Heards' trial counsel:] And is that part of what you have always done for the State Of Alabama? "[Dr. Kalin:] Yes. "[Heards' trial counsel:] Can you tell us what those affects would be? "[Dr. Kalin:] The .05 to .06 you would expect the person's inhibitions to be inhibited. Ethanol is a central nervous system depressant, which means it turns things off. The first thing it turns off is your higher mental functions and that's the little voice in the back of your head that tells you to behave. That's why a couple of drinks at a party make you talk, maybe you shouldn't say what you're saying, but nonetheless you do. That's a little bit of a buzz, you feel a little bit of euphoria, you 12 1150118, 1150119 may be at the greater risk -- well, more prone to risky activity. You would be surprised over how many people get in fights over these levels of alcohol because their inhibitions are inhibited. You're going to have some fine motor skill problems, how many things can you juggle at one time. You may do okay, but you're certainly not going to do as well as you would otherwise without the ethanol. Your judgment is going to be a problem in what you see, what you perceive, what you think, what you know. That's all impaired even by low levels of ethanol. That's what the buzz is, the buzz is something that makes you care less about your circumstances than you probably otherwise should. "You may experience some visual acuity problems, you may have difficulty focusing and you may not see very -- as well as you would otherwise, or you may see well enough, but one of the things that you do lose is your peripheral vision, where people can't see what's coming on the sides. I'm sorry I'm holding up my hand in front of the Court Reporter, but that's a demonstration of what peripheral vision is. I can see something out the side of my head, I don't have to turn left or right to see traffic coming. This is a common problem that some people experience with low levels of alcohol, the loss of that capability, you just don't see it, you never see it coming. "So, you're not going to have a problem typically with your speech, other than you're probably going to use much more of it than you should. "You're not going to have problems with your balance. You can probably stand up and move around and not have much of a problem, but that doesn't mean that you will have all your faculties sufficiently to do complicated tasks." 13 1150118, 1150119 However, Dr. Kalin also testified that, although everyone experiences the same effects of alcohol, not everyone experiences them at the same blood alcohol concentration. (R. 203.) For instance, Dr. Kalin testified: "[Thomas's trial counsel:] And that was the purpose in asking that because although you describe that there may be visual acuity, there may be peripheral vision impacted, there may be judgment impacted with this level of blood/alcohol concentration that you say existed, does not mean that Mr. Thomas was experiencing those things, does it? "[Dr. Kalin:] That's correct." On November 29, 2013, Wells, "in her capacity as guardian ad litem and next friend" of M.A., sued Thomas, among others, asserting claims of negligence and wantonness. On January 24, 2014, in a separate action, the Heards sued Thomas, among others, asserting claims of negligence and wantonness.4 Thomas answered both complaints. The trial court consolidated the two actions for purposes of discovery and trial. 4The Heards and Wells also asserted claims of negligent entrustment against Peggy Anderson, the owner of the vehicle Thomas was driving at the time of the accident; those claims were later voluntarily dismissed without prejudice. The Heards also filed a claim for uninsured/underinsured-motorist benefits against Automobile Club Inter-Insurance Exchange. Automobile Club Inter-Insurance Exchange later opted out of the litigation. 14 1150118, 1150119 On August 11, 2015, Thomas filed a motion to "strike, dismiss, and/or remove" Wells as the "representative" of M.A. Thomas noted that the Houston Juvenile Court had appointed Wells as M.A.'s "juvenile attorney" on June 26, 2012. However, Thomas argued that, pursuant to § 6-5-390, Ala. Code 1975, Wells had no legal authority to file the underlying action against Thomas. Section 6-5-390 states: "A father or a mother, provided they are lawfully living together as husband and wife, shall have an equal right to commence an action for an injury to their minor child, a member of the family; provided, however, that in the event such mother and father are not lawfully living together as husband and wife, or in the event legal custody of such minor child has been lawfully vested in either of the parties or some third party, then and in either event the party having legal custody of such minor child shall have the exclusive right to commence such action." On August 13, 2015, Wells filed a response, arguing that the underlying action "was properly commenced in the name of the guardian ad litem for the benefit of" M.A. The trial court did not rule on Thomas's motion. Instead, on August 21, 2015, the trial court entered an order appointing Wells as guardian ad litem and next of friend of M.A. Trial began on August 24, 2015. At the close of the Heards' and Wells's cases, Thomas filed a motion for a 15 1150118, 1150119 judgment as a matter of law ("JML"). Generally, Thomas alleged that the Heards and Wells had failed to present sufficient evidence to support their negligence and wantonness claims. The trial court denied Thomas's motion for a JML. At the close of all the evidence, Thomas again filed a motion for a JML, raising the same issues he had raised in his initial motion. The trial court denied Thomas's second JML motion, and the case was submitted to the jury. On August 28, 2015, the jury returned a verdict against Thomas and in favor of the Heards, upon which the trial court entered the following judgment: "Case tried to a jury and the jury returned the following verdict: "'We, the jury, find for the plaintiffs and against the defendant and assess plaintiffs' damages as follows: "'Randell Heard "'Compensatory: Eight hundred fifty thousand dollars ($850,000). "'Punitive: Seven hundred fifty thousand dollars ($750,000). "'Donna Heard "'Compensatory: Four hundred fifty thousand dollars ($450,000). 16 1150118, 1150119 "'Punitive: Seven hundred fifty thousand dollars ($750,000).' "The Court enters the judgment in accordance with the jury’s verdict." The jury also returned a verdict in favor of Wells, upon which the trial court entered its judgment, as follows: "Case tried to a jury and the jury returned the following verdict: "'We, the jury, find for the plaintiff and against the defendant and assess plaintiff's damages as follows: "'[M.A.] "'Compensatory: Five hundred thousand dollars ($500,000). "'Punitive: Five hundred thousand dollars ($500,000).' "The Court enters the judgment in accordance with the jury’s verdict." On September 11, 2015, the Heards filed a "motion for costs" requesting costs in the amount of $21,140.30. On September 15, 2015, Wells also filed a "motion to tax costs" requesting costs in the amount of $17,221.54. Each motion was supported with extensive documentary evidence. On September 25, 2015, Thomas filed a motion to alter, amend or vacate the trial court's August 28, 2015, judgments. 17 1150118, 1150119 Thomas argued, among other things, that the "jury's award of damages based on wantonness was against the great weight of the evidence" and that the "jury's award of punitive damages was not supported by clear and convincing evidence." Thomas also argued that, under § 6-5-390, "Wells was not entitled to make any claim on behalf of [M.A.]" Also on September 25, 2015, Thomas filed a renewed motion for a JML. As he did in his first two JML motions, Thomas argued that the Heards and Wells had failed to present sufficient evidence to support their negligence and wantonness claims and that they had failed to present sufficient evidence to support the jury's award of punitive damages. Thomas also argued that, pursuant to § 6-5-390, "Wells is not allowed under Alabama law to pursue damages for [M.A.]" Also on September 25, 2015, Thomas filed a motion for a remittitur, which he amended on October 9, 2015. On October 19, 2015, following a hearing, the trial court denied Thomas's postjudgment motions and granted the motions for costs filed by the Heards and Wells. Thomas separately appealed as to the Heards and Wells. We have consolidated the two appeals for the purpose of writing one opinion. 18 1150118, 1150119 Standard of Review In Cheshire v. Putman, 54 So. 3d 336, 340 (Ala. 2010), this Court set forth the following standard of review applicable to our review of a ruling on a motion for a JML: "In American National Fire Insurance Co. v. Hughes, 624 So. 2d 1362 (Ala. 1993), this Court set out the standard that applies to the appellate review of a trial court's ruling on a motion for a JML: "'The standard of review applicable to a ruling on a motion for JNOV [now referred to as a renewed motion for a JML] is identical to the standard used by the trial court in granting or denying a motion for directed verdict [now referred to as a motion for a JML]. Thus, in reviewing the trial court's ruling on the motion, we review the evidence in a light most favorable to the nonmovant, and we determine whether the party with the burden of proof has produced sufficient evidence to require a jury determination.' "624 So. 2d at 1366 (citations omitted). Further, in Cessna Aircraft Co. v. Trzcinski, 682 So. 2d 17 (Ala. 1996), this Court held: "'The motion for a J.N.O.V. [now referred to as a renewed motion for a JML] is a procedural device used to challenge the sufficiency of the evidence to support the jury's verdict. See, Rule 50(b), [Ala.] R. Civ. P.; Luker v. City of Brantley, 520 So. 2d 517 (Ala. 1987). Ordinarily, the denial of a directed verdict [now referred to as a JML] or a J.N.O.V. is proper where the nonmoving party has produced 19 1150118, 1150119 substantial evidence to support each element of his claim. However, if punitive damages are at issue in a motion for a directed verdict or a J.N.O.V., then the "clear and convincing" standard applies. Senn v. Alabama Gas Corp., 619 So. 2d 1320 (Ala. 1993).' "682 So. 2d at 19 (footnote omitted). '[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co., 547 So. 2d 870, 871 (Ala. 1989). See § 12–21–12(d), Ala. Code 1975." In Classroomdirect.com, LLC v. Draphix, LLC, 992 So. 2d 692, 710 (Ala. 2008), this Court set forth the following standard of review concerning the taxation of costs under Rule 54(d), Ala. R. Civ. P.: "[T]his Court's caselaw is well settled that the taxation of costs is discretionary with the trial court. See, e.g., Smith v. Smith, 482 So. 2d 1172, 1175 (Ala. 1985) ('The taxation of costs pursuant to [Rule 54(d), Ala. R. Civ. P.,] is generally left to the sound discretion of the trial judge.'); Vulcan Oil Co. v. Gorman, 434 So. 2d 760, 762 (Ala. 1983) ('[T]he taxation of costs ... rests in the discretion of the trial judge, whose decision will not be reversed unless clear abuse is shown.')." Discussion Initially, we must consider Thomas's argument that Wells is not the appropriate party under § 6-5-390 to commence the underlying action in case no. 1150119 on behalf of M.A. 20 1150118, 1150119 Thomas directs this Court's attention to the following language in § 6-5-390: "[T]he party having legal custody of [the] minor child shall have the exclusive right to commence such action." Thomas argues that because Wells did not have legal custody of M.A., she did not have the authority to commence the underlying action against Thomas. Thomas's argument, however, ignores the purpose of § 6-5- 390, which appears to have no application in the present case. Section 6-5-390, or a predecessor, has been in effect since 1852. In 1893, this Court stated the following in McNamara v. Logan, 100 Ala. 187, 14 So. 175 (1893), regarding the purpose of what is now codified as § 6-5-390: "It merely secures to the father, and, in certain contingencies, the mother, the right to sue for injuries to a minor child, a member of the family, and in such suit to recover the damages which they themselves -- the father or mother, as the case may be -- have sustained through the injury of a child, whose minority so long, and only so long as it continued entitled them to his services and involved reciprocal obligations of care and support. But it is not provided, and it was clearly not the intention of the codifiers or the legislature which adopted the Code to provide, that the recovery of these, in a sense, special damages by the parent should deprive the minor of his own right of compensation for the injuries he had received and which in no case could be taken into the account in assessing the damages sustained by the parent. ... And where the wrong and injury is to a minor, and is 21 1150118, 1150119 not fatal ...: suits may be maintained both by the parent and the child. Iron Co. v. Brawley, 83 Ala. 371, 3 South. 555 [(1888)]; Railroad Co. v. Donovan, 84 Ala. 141, 4 South. 142 [(1888)]." 100 Ala. at 195-96, 14 So. at 177. More recently, in Thorne v. Odom, 349 So. 2d 1126, 1129 (Ala. 1977), this Court stated concerning the purpose of what is now codified as § 6-5-390: "The object of [what is now codified as § 6-5-390] is to provide a right of action for the parent's damages for loss of services, expense of treatment, etc. for the child's injury." Further, this principle is summarized in Alabama Law of Damages, as follows: "The parent's action for loss of services is separate and distinct from an action by the child for his personal injury, pain, suffering, and diminution of earning capacity after attainment of majority." Jenelle Mims Marsh, Alabama Law of Damages § 20:4 (6th ed. 2012)(citing Propst v. Georgia Pac. Ry., 83 Ala. 518, 3 So. 764 (1888), and McNamara, supra). This principle is also stated in 67A C.J.S. Parent and Child § 350 (2013): "When a person negligently injures a minor, two separate causes of action arise: the minor child has a cause of action for injuries suffered by it, and the parent or parents of the minor child have a cause of action for the loss of services and for medical expenses incurred by the parent for the treatment of the minor's injuries, and in the 22 1150118, 1150119 absence of any waiver or estoppel, the damages peculiar to one of these causes of action may not properly be recovered in an action based on the other. "That is, in a case of an injury to an unemancipated infant by a wrongful act, two causes of action ordinarily arise; one cause of action is on behalf of the infant to recover damages for pain and suffering, permanent injury, and impairment of earning capacity after attaining majority, and the other is on behalf of the parent for loss of services during minority and necessary expenses incurred for the infant's treatment. The objective of the common-law rule that an injury to a child gave rise to two causes of action, one on behalf of the child and one on behalf of the parents, was to allow a party who actually suffered damages to recover the loss from the tortfeasor and to prevent double recoveries." (Footnotes omitted.) It is well settled that M.A.'s cause of action for her injuries is separate and distinct from any cause of action M.A.'s legal guardian would bring under § 6-5- 390. As Wells argues in her brief before this Court, M.A.'s action against Thomas seeks recovery of damages for injuries M.A. incurred as a result of Thomas's actions. M.A. has not filed an action under § 6-5-390 seeking reimbursement on behalf of her legal guardians. In fact, M.A. has no personal action under § 6-5-390; only her legal guardian would have such a cause of action. Instead, M.A. sued Thomas through 23 1150118, 1150119 Wells, her guardian ad litem and next friend. Alabama Law of Damages § 11:16 states: "A minor has no capacity as a plaintiff in an action or special proceeding except through a general guardian or like fiduciary. If an infant does not have such a general guardian or like fiduciary, the Alabama Rules of Civil Procedure provide that the minor may sue by his next friend or a court-appointed guardian ad litem.1 Whenever a person sues as the next friend of a minor, the minor is the real party to the suit, and recovery belongs to him because his rights are those litigated.2 "____________________ "1Ala. R. Civ. P. 17(c) (applying also to incompetent persons); Citizens Walgreen Drug Agency, Inc. v. Gulf Ins. Co., 282 Ala. 648, 213 So. 2d 814 (1968); Pate v. Perry's Pride, Inc., 348 So. 2d 1038 (Ala. 1977). See also Flippo v. Pope, 834 So. 2d 83, 87 (Ala. 2002) (an action commenced by a next friend on behalf of a minor does not abate when the minor reaches the age of majority even though the authority of the next friend expires if the former minor elects to proceed). "2Maples v. Chinese Palace, Inc., 389 So. 2d 120 (Ala. 1980)." Thomas's argument is without merit. Wells, as M.A.'s guardian ad litem and next friend, properly filed M.A.'s action against Thomas. Next, Thomas argues that the trial court erred in denying his motions for a JML concerning the Heards' and Wells's wantonness claims against him because, Thomas argues, the 24 1150118, 1150119 Heards and Wells failed to present substantial evidence that Thomas acted wantonly.5 In Joyner v. B & P Pest Control, Inc., 853 So. 2d 991, 999 (Ala. Civ. App. 2002), the Court of Civil Appeals stated: "A JML is appropriate on a wantonness claim if the plaintiff has failed to offer substantial evidence showing that the defendant knew that its act or omission would likely or probably result in injury. See Anderson v. Moore Coal Co., 567 So. 2d 1314, 1317 (Ala. 1990)." "Substantial evidence" is defined as "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989). This Court defined wantonness in Ex parte Essary, 992 So. 2d 5, 9-10 (Ala. 2007), as follows: "'Wantonness has been defined by this Court as the conscious doing of some act or the omission of some duty while knowing of the existing conditions and being conscious that, from doing or omitting to do an act, injury will likely or probably result. Bozeman v. Central Bank of the South, 646 So. 2d 601 (Ala. 1994). To constitute wantonness, it is not necessary that the actor know that a person is 5Thomas does not challenge on appeal the trial court's denial of his motions for a JML concerning the Heards' and Wells's negligence claims against him. 25 1150118, 1150119 within the zone made dangerous by his conduct; it is enough that he knows that a strong possibility exists that others may rightfully come within that zone. Joseph v. Staggs, 519 So. 2d 952, 954 (Ala. 1988). Also, it is not essential that the actor should have entertained a specific design or intent to injure the plaintiff, only that the actor is 'conscious' that injury will likely or probably result from his actions. Id. 'Conscious' has been defined as '"perceiving, apprehending, or noticing with a degree of controlled thought or observation: capable of or marked by thought, will, design, or perception"'; '"having an awareness of one's own existence, sensations, and thoughts, and of one's environment; capable of complex response to environment; deliberate."' Berry v. Fife, 590 So. 2d 884, 885 (Ala. 1991) (quoting Webster's New Collegiate Dictionary 239 (1981) and The American Heritage Dictionary of the English Language 283 (1969), respectively). "Additionally, when determining if a defendant's actions constitute wanton conduct, it is important for the court to distinguish between wantonness and negligence. "'"'Wantonness is not merely a higher degree of culpability than negligence. Negligence and wantonness, plainly and simply, are qualitatively different tort concepts of actionable culpability. Implicit in wanton, willful, or reckless misconduct is an acting, with knowledge of danger, or with consciousness, that the doing or not doing of some act will likely result in injury .... "'"'Negligence is usually characterized as an inattention, thoughtlessness, or heedlessness, a lack of due care; whereas wantonness is characterized as ... a conscious ... act. 26 1150118, 1150119 "Simple negligence is the inadvertent omission of duty; and wanton or willful misconduct is characterized as such by the state of mind with which the act or omission is done or omitted." McNeil v. Munson S.S. Lines, 184 Ala. 420, [423], 63 So. 992 (1913)....'"' "Tolbert v. Tolbert, 903 So. 2d 103, 114–15 (Ala. 2004) (quoting Ex parte Anderson, 682 So. 2d 467, 470 (Ala. 1996), quoting in turn Lynn Strickland Sales & Serv., Inc. v. Aero–Lane Fabricators, Inc., 510 So. 2d 142, 145–46 (Ala. 1987)) (emphasis added)." This Court further stated in Ex parte Essary that "[t]he determination whether a defendant's acts constitute wanton conduct depends on the facts in each particular case. Ex parte Anderson, 682 So. 2d [467,] 470 [(Ala. 1996)]." 992 So. 2d at 10. In the present case, it is undisputed that Thomas drove his vehicle into the intersection without coming to a complete stop at the stop sign regulating traffic traveling south on County Road 41. The evidence indicates that Thomas slowed his vehicle as he approached the intersection but that he did not bring his vehicle to a complete stop before he drove into the intersection, where the collision occurred. There is no evidence indicating that Thomas was driving his vehicle at an unsafe speed. There is evidence indicating that Thomas drank at least one "tallboy" beer and that he took a Seroquel pill 27 1150118, 1150119 before leaving Foster's house. There was testimony presented that Seroquel causes drowsiness and that that effect would be exacerbated by alcohol. There was also evidence presented indicating that Thomas drank more than one beer. In fact, the evidence indicates that Thomas's blood-alcohol concentration "would have been somewhere between a .05 grams percent and a .06 grams percent." The evidence also indicates that witnesses smelled alcohol in the area of Thomas's vehicle immediately after the accident. Dr. Kalin testified as to the effects a person with a blood-alcohol concentration of .05% to .06% may experience. Dr. Kalin testified that a person with a blood-alcohol concentration of .05% to .06% may be "more prone to risky activity"; may have "some fine motor skill problems, how many things can you juggle at one time"; and "may experience some visual acuity problems," including potential loss of peripheral vision. However, Dr. Kalin testified that there was no evidence indicating that Thomas was actually experiencing these effects. Further, Thomas explicitly testified that he was not impaired when he left Foster's house. 28 1150118, 1150119 Viewing these facts in a light most favorable to the Heards and Wells, as we must, there is substantial evidence that Thomas drove his vehicle into the intersection without stopping at the stop sign regulating traffic on County Road 41, and that his driving so caused the accident. There is substantial evidence that Thomas drove his vehicle while he had a blood-alcohol concentration of .05% to .06%. There is also substantial evidence from which the jury could infer that, while Thomas was driving his vehicle with a blood- alcohol concentration of .05% to .06%, Thomas was experiencing the above-mentioned effects testified to by Dr. Kalin. Thomas argues that, based on this Court's decision in Ex parte Essary, these facts are not substantial evidence of wantonness. In Ex parte Essary, Essary failed to completely stop at a stop sign before he drove his vehicle into an intersection, thereby causing an accident. Essary's vehicle collided with another vehicle, causing serious injuries to the occupants of the other vehicle. The facts indicated that Essary had come to a "rolling stop" and had tried to "shoot the gap" between two vehicles. The occupants of the vehicle Essary's vehicle collided with sued Essary, alleging 29 1150118, 1150119 negligence and wantonness. Essary filed a motion for a JML as to the wantonness claim. The trial court granted Essary's JML motion, but the Court of Civil Appeals reversed the trial court's judgment. On appeal, this Court reversed the Court of Civil Appeals' decision, stating: "Although the evidence indicates that Essary knowingly entered the intersection, there is nothing from which the trier of fact could infer that, in moving his vehicle through the intersection, Essary's state of mind contained the requisite consciousness, awareness, or perception that injury was likely to, or would probably, result. Indeed, the risk of injury to Essary himself was as real as any risk of injury to the plaintiffs. Absent some evidence of impaired judgment, such as from the consumption of alcohol, we do not expect an individual to engage in self-destructive behavior. See Griffin Lumber Co. v. Harper, 252 Ala. 93, 95, 39 So. 2d 399, 401 (1949) ('There is a rebuttable presumption recognized by the law that every person in possession of his normal faculties in a situation known to be dangerous to himself, will give heed to instincts of safety and self-preservation to exercise ordinary care for his own personal protection. It is founded on a law of nature and has [as] its motive the fear of pain or death. Atlantic Coast Line R. Co. v. Wetherington, 245 Ala. 313(9), 16 So. 2d 720 [(1944)].'). "The facts here presented do not establish any basis from which to conclude that Essary was not possessed of his normal faculties, such as from voluntary intoxication, rendering him indifferent to the risk of injury to himself when crossing the intersection if he collided with another vehicle. Nor is the act as described by [the plaintiff] so inherently reckless that we might otherwise impute 30 1150118, 1150119 to Essary a depravity consistent with disregard of instincts of safety and self-preservation. We therefore conclude that, as a matter of law, the plaintiffs failed to offer substantial evidence indicating that Essary was conscious that injury would likely or probably result from his actions." Ex parte Essary, 992 So. 2d at 12. This Court concluded in Ex parte Essary that, based on the facts of that case, a motorist who failed to come to a complete stop at a stop sign and who drove his vehicle into an intersection with knowledge that a car was approaching, which resulted in an accident, was not guilty of wantonness. This conclusion was based on the rebuttable presumption that, unless their judgment is impaired, humans will act in their own self-interest. In other words, the Court in Ex parte Essary assumed that the motorist who caused the accident had no consciousness that an injury would likely occur from his actions because presumably he would not engage in activity that would knowingly result in harm to himself. However, this Court did indicate that that presumption could be rebutted if there were substantial evidence that the motorist was not in possession of his "normal faculties" as a result of "voluntary intoxication" such that he was indifferent to the risk of injury to himself. 31 1150118, 1150119 The present case raises the same issue. Unlike the motorist in Ex parte Essary, however, Thomas voluntarily consumed alcohol and at least one prescription drug before causing the accident. Dr. Kalin testified to the following effect, among others, that Thomas was potentially experiencing as a result of his voluntary consumption of alcohol: "Your judgment is going to be a problem in what you see, what you perceive, what you think, what you know. That's all impaired even by low levels of ethanol. That's what the buzz is, the buzz is something that makes you care less about your circumstances than you probably otherwise should." This constitutes substantial evidence from which a jury could infer that Thomas was not in possession of his "normal faculties" as a result of voluntary intoxication such that he was indifferent to the risk of injury to himself. Or, as alternatively stated by this Court in Roberts v. Brown, 384 So. 2d 1047, 1051 (Ala. 1980), Thomas "voluntarily created the conditions which led to the accident" by his consumption of alcohol. Accordingly, we do not find convincing Thomas's argument that the Heards and Wells failed to present substantial evidence of wantonness; there was substantial evidence from which the jury could have reasonably inferred that Thomas was not in possession of his normal faculties at 32 1150118, 1150119 the time of the accident as the result of his voluntary consumption of alcohol and at least one prescription drug. Thomas argues that, based on the evidence presented, a judgment in favor of the Heards and Wells on their wantonness claims requires "the impermissible stacking of multiple inferences to imply that Thomas was impaired." Thomas's brief, at p. 33. We disagree. There was direct evidence that Thomas's blood-alcohol concentration was .05% to .06% shortly following the accident.6 There was direct evidence that a person with .05% to .06% blood-alcohol concentration may experience the effects Dr. Kalin testified to. The only inference the jury needed to make was that Thomas was actually experiencing those effects at the time of the accident. The jury's inference that Thomas was experiencing those effects is 6Thomas argues that it required inferences to conclude that his blood-alcohol concentration was between .05% and .06%. However, both Dr. Kalin and Dr. Valentine, Thomas's own expert witness, testified to this fact. The jury was not required to infer that Thomas's blood-alcohol concentration was between .05% and .06%; that was an undisputed fact below. We note that Thomas raises some concern as to the weight to be accorded certain evidence; however, the right to accord evidence is solely within the province of the jury. See Bell v. Greer, 853 So. 2d 1015, 1018 (Ala. Civ. App. 2003)("It is the jury's responsibility, not this court's, 'to determine the credibility of the evidence, to resolve conflicts therein, to find the facts, and to express its findings in its verdict.' Jones v. Baltazar, 658 So. 2d 420, 422 (Ala. 1995)."). 33 1150118, 1150119 reasonable, given the substantial evidence presented by the Heards and Wells. Thomas's argument is not persuasive. Next, Thomas argues that the Heards and Wells "failed to present clear and convincing evidence of wantonness so as to support submission of punitive damages to the jury." Thomas's brief, at p. 40. In Cessna Aircraft Co. v. Trzcinski, 682 So. 2d 17, 19-20 (Ala. 1996), this Court discussed the following pertinent principles: "The [renewed] motion for a [JML] is a procedural device used to challenge the sufficiency of the evidence to support the jury's verdict. See, Rule 50(b), [Ala.] R. Civ. P.; Luker v. City of Brantley, 520 So. 2d 517 (Ala. 1987). Ordinarily, the denial of a [motion for a JML] or a [renewed motion for a JML] is proper where the nonmoving party has produced substantial evidence to support each element of his claim. However, if punitive damages are at issue in a motion for a [JML] or a [renewed motion for a JML], then the 'clear and convincing' standard applies. Senn v. Alabama Gas Corp., 619 So. 2d 1320 (Ala. 1993). "Section 6–11–20(a), Ala. Code 1975, provides that punitive damages may be awarded in tort actions 'where it is proven by clear and convincing evidence that the defendant consciously or deliberately engaged in ... wantonness' that caused injury to the plaintiff. 'Clear and convincing evidence' is defined in the Code: "'Evidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim 34 1150118, 1150119 and a high probability as to the correctness of the conclusion. Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt.' "Ala. Code 1975, § 6–11–20(b)(4). "Thus, the 'clear and convincing' standard requires the trial judge to do more than merely determine whether the nonmoving party has presented substantial evidence to support the claim for punitive damages. It is not the trial judge's function when ruling on a [motion for a JML] or [renewed motion for a JML] to weigh the evidence; rather, he must view the evidence in a light most favorable to the nonmoving party. If in viewing the evidence in that light the judge reasonably can conclude that a jury could find the facts in favor of the nonmovant and that the jury could be firmly convinced of that decision after considering the evidence in opposition, then the judge should deny the motion." (Footnote omitted.) As made clear by the facts presented in Ex parte Essary, Thomas's failure to bring his vehicle to a complete stop at the stop sign regulating traffic on County Road 41 before driving his vehicle into the intersection and causing the accident is not, in and of itself, substantial evidence of wantonness. This is so, the Court in Ex parte Essary made clear, because there is a presumption that a person will not 35 1150118, 1150119 consciously do something that will cause himself harm. However, the self-preservation presumption may be rebutted by, among other things, evidence indicating that the actor did not have possession of his or her normal faculties such that he or she did not appreciate the danger the actor's actions posed to himself or herself. We have determined that the Heards and Wells presented substantial evidence sufficient to rebut the self-preservation presumption. We must now determine if the Heards and Wells have presented clear and convincing evidence rebutting the self-preservation presumption. As set forth above, the Heards and Wells had to present: "Evidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim and a high probability as to the correctness of the conclusion. Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt." § 6-11-20(b)(4), Ala. Code 1975. The Heards and Wells presented clear and convincing evidence of Thomas's voluntary intoxication sufficient to rebut the self-preservation presumption. The evidence indicates that Thomas consumed alcohol and at least one 36 1150118, 1150119 prescription drug before driving his vehicle away from Foster's house. As Thomas approached the stop sign, he slowed the vehicle he was driving and then, without coming to a complete stop, drove his vehicle into the intersection; this is clear and convincing evidence that Thomas was aware of the presence of the stop sign and that he consciously chose to disregard it. From Thomas's equivocal testimony as to how much he drank, the jury could have concluded that he drank more than one beer. There is clear and convincing evidence to support such a conclusion given that Thomas's blood-alcohol concentration was between .05% and .06% at the time of the accident. Testimony was unequivocal that several of the drugs Thomas could have possibly taken, including Seroquel, which he did take, cause drowsiness and that alcohol would exacerbate that effect. Dr. Kalin testified that it is possible for people with Thomas's blood-alcohol concentration to be impaired; that one "would expect" their "inhibitions to be inhibited"; that they would be "more prone to risky activity"; that they would have "some fine motor skill problems"; that their "judgment is going to be a problem in what [they] see, what [they] 37 1150118, 1150119 perceive, what [they] think, [and] what [they] know. That's all impaired even by low levels of ethanol." Additionally, a person with Thomas's blood-alcohol concentration "may experience some visual acuity problems," may "have difficulty focusing," "may not see ... as well as [he] would otherwise," and will lose peripheral vision. Dr. Kalin did testify that not everyone experiences the same effects at the same blood-alcohol concentration. Further, he did discuss the impact of the alcohol on Thomas in terms of what "may" occur. However, if there is any lingering doubt as to whether there was clear and convincing evidence to rebut the self-preservation presumption, Thomas's own testimony indicated that he was impaired: "[Wells's trial counsel:] Why didn't you see the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you stop at the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you see the Heards traveling in their silver car to your right? "[Thomas:] I can't tell you that." 38 1150118, 1150119 The above-summarized evidence in conjunction with Thomas's own testimony constitutes clear and convincing evidence from which a jury could derive a firm conviction that Thomas was not in possession of his "normal faculties" as a result of voluntary intoxication so that he was indifferent to the risk of injury to himself. Accordingly, Thomas's argument that the Heards and Wells failed to present clear and convincing evidence of wantonness is not convincing. Next, Thomas argues that, even if this Court determines that the Heards and Wells presented clear and convincing evidence sufficient to support an award of punitive damages on their wantonness claims, the jury's punitive-damages awards were excessive. Thomas first notes that, in denying his motion for a remittitur, the trial court simply stated: "Defendant’s Motion for Remittitur is denied." Thomas argues that the trial court's cursory denial of his motion for a remittitur is in violation of Alabama law because the trial court did not include a written statement of the reasons for that denial. In making this argument, Thomas relies on the following portion of Williford v. Emerton, 935 So. 2d 1150, 1156 (Ala. 2004): 39 1150118, 1150119 "As we explained in Love v. Johnson, 775 So. 2d 127, 127–28 (Ala. 2000), such a written statement is necessary before this Court can conduct a proper review on appeal: "'In Hammond [v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986)], this Court required that a trial court "reflect in the record the reasons for interfering with a jury verdict, or refusing to do so, on the grounds of excessiveness of the damages." 493 So. 2d at 1379; see also ALFA Mut. Ins. Co. v. Brewton, 554 So. 2d 953 (Ala. 1989). In Hammond, this Court stated the reason for the requirement: "'"[T]he trial judge is better positioned to decide whether the verdict is ... flawed [as excessive]. He has the advantage of observing all of the parties to the trial -- plaintiff and defendant and their respective attorneys, as well as the jury and its reaction to all of the others. There are many facets of a trial that can never be captured in a record, so that the appellate courts are at a special disadvantage when they are called upon to review [a] trial [court's] action in this sensitive area...." "'493 So. 2d at 1378–79.' "When a trial court fails to put in writing its reasons for denying a motion to review a punitive-damages award for excessiveness, this Court's practice has been to remand the cause for the trial court to enter an order in compliance with Hammond. See, e.g., Love, 775 So. 2d at 128; Spencer 40 1150118, 1150119 v. Lawson, 815 So. 2d 502 (Ala. 2001); Southern Pine Elec. Coop. v. Burch, 878 So. 2d 1120 (Ala. 2003)." Thomas is correct. The trial court failed to put into writing its reasons for denying Thomas's motion for a remittitur of the punitive-damages awards. Therefore, we remand this case to the trial court for the entry of an order that complies with the requirements of Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986). Lastly, Thomas argues that the trial court "erred by awarding all of the costs claimed by" the Heards and Wells. Thomas's brief, at p. 56. Thomas does not argue that the Heards and Wells failed to present evidence supporting their motions for costs. Rather, Thomas's argument is limited to arguing that the trial court had no authority to award certain kinds of costs it awarded to the Heards and Wells. The awarding of costs by a trial court is governed by Rule 54(d), Ala. R. Civ. P., which states, in pertinent part: "Except when express provision therefor is made in a statute, costs shall be allowed as of course to the prevailing party unless the court otherwise directs ...." In Bundrick v. McAllister, 882 So. 2d 864, 866 (Ala. 2003), this Court stated: "[O]ur review of a trial court's order taxing costs 41 1150118, 1150119 pursuant to Rule 54(d) is limited to determining whether 'a clear abuse of discretion' is present. Garrett[ v. Whatley], 694 So. 2d [1390,] 1391 [(Ala. Civ. App. 1997)]." Thomas first argues that the trial court erred in awarding the Heards and Wells "medical expert witness fees." Thomas's brief, at p. 58. Thomas correctly notes that Bundrick stands for the proposition "'that compensation of experts cannot be allowed and taxed against the parties as costs in litigation unless so provided by statute.'" 882 So. 2d at 867 (quoting Hartley v. Alabama Nat'l Bank of Montgomery, 247 Ala. 651, 656, 25 So. 2d 680, 683 (1946)). However, Thomas has not set forth any facts in his brief before this Court indicating that the Heards or Wells were reimbursed for compensation they paid to experts. Thomas asserts that the Heards "recovered $4,200.00 in costs for medical depositions." Thomas's brief, at p. 58. Thomas does not allege that the Heards sought reimbursement for compensation they had paid to experts, only that they recovered costs for "medical depositions." It is well established that, 42 1150118, 1150119 "under Ala. Code 1975, § 12-21-144,[7] as interpreted by our Supreme Court in Ex parte Strickland, 401 So. 2d 33 (Ala. 1981), a trial court may, in its discretion, tax all of the costs of any deposition taken in a case, regardless of whether the deposition was used at trial, if the deposition was reasonably necessary." Bundrick, 882 So. 2d at 866. Therefore, Thomas's argument concerning the Heards' recovery of costs for "medical depositions" is not convincing. Based on the above-quoted language from Bundrick, Thomas's arguments concerning the "deposition fees" recovered by the Heards and Wells are likewise unconvincing. See Thomas's brief, at pp. 61-62. Concerning Wells, Thomas asserts that "Wells recovered $1,950.00 associated with payments for deposition testimony of medical experts." Thomas's brief, at p. 58. However, Thomas has not directed this Court's attention to any portion of the voluminous record in this case so indicating. Rule 28(a)(10), Ala. R. App. P., requires a party to provide "citations to the 7Section 12-21-144, Ala. Code 1975, states: "The costs of any deposition introduced, in whole or in part, into evidence at the trial by the party taking it shall be taxed as costs in the case upon the certificate of the person before whom the deposition was taken; the costs of depositions in other cases shall be taxed as costs in the case only if the court so directs." 43 1150118, 1150119 ... parts of the record relied on," which Thomas has failed to do. Accordingly, we decline to consider Thomas's argument. Thomas also raises other arguments concerning costs awarded to the Heards and Wells pertaining to travel, investigation, "audio/visual during trial," and "trial exhibits and copying costs." However, Thomas's arguments concerning those costs are either not supported with binding precedent or not supported with any authority whatsoever. "Rule 28(a)(10), Ala. R. App. P., requires that arguments in an appellant's brief contain 'citations to the cases, statutes, other authorities, and parts of the record relied on.' Further, 'it is well settled that a failure to comply with the requirements of Rule 28(a)(10) requiring citation of authority in support of the arguments presented provides this Court with a basis for disregarding those arguments.' State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 822 (Ala. 2005)(citing Ex parte Showers, 812 So. 2d 277, 281 (Ala. 2001)). This is so, because '"it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."' Butler v. Town of Argo, 871 So. 2d 1, 20 (Ala. 2003)(quoting Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994))." Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9 (Ala. 2007). Accordingly, we will not consider Thomas's unsupported arguments. 44 1150118, 1150119 Conclusion Based on the foregoing, we conclude that the trial court correctly denied Thomas's renewed motion for a JML, and we affirm the trial court's judgments on the Heards' and Wells's wantonness claims. We also affirm the trial court's award of costs to the Heards and Wells. However, we remand the cause for the trial court to take such steps as are necessary to enter an order in compliance with Hammond on the punitive- damages awards. The trial court shall make a return to this Court within 90 days from the date this opinion is released. On return to remand, Thomas can renew his argument to this Court, if he so desires, that the punitive damages awards are excessive. 1150118 -- APPLICATION GRANTED; NO-OPINION ORDER OF AFFIRMANCE OF NOVEMBER 4, 2016, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; AND REMANDED WITH INSTRUCTIONS. Parker, Main, and Wise, JJ., concur. Bryan, J., concurs in part and concurs in the result. Shaw, J., concurs in the result. Stuart, Bolin, and Murdock, JJ., dissent. 1150119 -- APPLICATION GRANTED; NO-OPINION ORDER OF AFFIRMANCE OF NOVEMBER 4, 2016, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; AND REMANDED WITH INSTRUCTIONS. 45 1150118, 1150119 Parker, Main, and Wise, JJ., concur. Bryan, J., concurs in part and concurs in the result. Shaw, J., concurs in the result. Murdock, J., concurs in the result in part and dissents in part. Stuart and Bolin, JJ., dissent. 46 1150118, 1150119 BRYAN, Justice (concurring in part and concurring in the result). Regarding the discussion in the main opinion affirming the trial court's judgment on the Heards' and Wells's wantonness claims, I concur only in the result. As to the remaining issues, I concur. 47 1150118, 1150119 MURDOCK, Justice (concurring in the result in part and dissenting in part in case no. 1150119 and dissenting in case no. 1150118). I concur in the result reached by the main opinion as it relates to the meaning of § 6-5-390, Ala. Code 1975, in case no. 1150119. I respectfully dissent as to the merits of the other issues presented in both cases. Finally, I do not think a remand of the case to the trial court is necessary. "'Wantonness'•has been defined by this Court as the conscious doing of some act or the omission of some duty while knowing of the existing conditions and being conscious that, from doing or omitting to do an act, injury will likely or probably result." Ex parte Essary, 992 So. 2d 5, 9 (Ala. 2007). I see no evidence of wantonness on the part of Timothy Joel Thomas in connection with his pulling into the intersection in which the accident occurred. For example, there is no evidence indicating that Thomas saw one or more approaching vehicles and decided to try and "shoot the gap," as did the defendant in Essary, a case in which this Court nevertheless found there to be insufficient evidence of wantonness. 48 1150118, 1150119 Although there is much discussion in the main opinion of the fact that Thomas had a blood-alcohol content of .05% or .06%, I find little in that fact to support a wantonness claim, especially when the "legal limit" is .08% (and formerly was .10%). Of course, there is the added factor in this case of the prescription drug also taken by Thomas, along with testimony that the alcohol consumed by Thomas might enhance the tendency of the prescription drug to cause drowsiness. But by how much? Was Thomas aware that this might occur? What degree of impairment did Thomas experience above and beyond the normal impairing effect of a .05% or .06% blood- alcohol measurement? I do not believe the records before us contain answers to these questions, leaving us to speculate as to the answers. To my mind, then, the evidence before us is not evidence of wanton conduct on the part of Thomas. Negligence, yes. But not wantonness. And in any event, not evidence from which a jury could find wantonness to be "clearly and convincingly" established. The main opinion appears to deal with this deficiency, at least in part, by comparing and contrasting this case with Essary. It is true that this Court in Essary, in finding 49 1150118, 1150119 insufficient evidence of wantonness, took note of the lack of any evidence that the defendant was impaired. But the negative inference drawn by the main opinion from this notation in Essary is not warranted and was not intended by Essary. In particular, the fact that Thomas may not have been "'in possession of his normal faculties'" does not readily correspond, but in fact would seem to be at odds with, the requisite "'"'consciousness ... that the doing or not doing of some act will likely result in injury.'"'" Essary, 992 So. 2d at 12, 9 (emphasis omitted) (quoting, respectively, Griffin Lumber Co. v. Harper, 252 Ala. 93, 95, 39 So. 2d 399, 401 (1949), and Tolbert v. Tolbert, 903 So. 2d 103, 114–15 (Ala. 2004), quoting, in turn, Ex parte Anderson, 682 So. 2d 467, 470 (Ala. 1996), quoting in turn Lynn Strickland Sales & Serv., Inc. v. Aero–Lane Fabricators, Inc., 510 So. 2d 142, 145–46 (Ala. 1987)). And again, my struggle with this issue only increases when one turns to the question whether there was sufficient evidence from which the jury could find 50 1150118, 1150119 wantonness under a "clear and convincing" evidence standard as required for the awards of punitive damages.8 Finally as to the merits, I cannot agree with the analysis offered by the main opinion with respect to the issue of the costs awarded to the Heards and to Wells in relation to certain medical-deposition testimony. Aside from my position as to the merits of various issues as discussed above, I do not believe it is necessary for the Court today to remand this cause to the trial court. Although we have said, as the main opinion notes, that a trial court is to express the reasons for its denial of a motion for a remittitur in a written order to give this Court the benefit of the trial court's evaluation of the verdict, that is not an ironclad rule. See Phillips Colleges of Alabama, Inc. v. Lester, 622 So. 2d 308, 314 (Ala. 1993)(addressing the issue of whether a verdict that included a punitive-damages award was excessive and noting that "since Hammond [v. City of 8It should be noted that the appellate-review standard is not whether this Court can find wantonness to have been clearly and convincingly established, but rather whether the record is such that a jury could have done so. See, e.g., Ex parte Norwood Hodges Motor Co., 680 So. 2d 245, 249 (Ala. 1996). 51 1150118, 1150119 Gadsden, 493 So.2d 1374 (Ala. 1986)], we have pointed out that it was never our intention to automatically remand every case in which excessiveness was at issue. Where the record on appeal is sufficient for this Court to review the excessiveness issue, as it is in the present case, a Hammond remand is not necessary." (citation omitted)). In this regard, it is also worth noting that we employ a de novo standard on appellate review of a punitive-damages award. See, e.g., Schaeffer v. Poellnitz, 154 So. 3d 979, 986 (Ala. 2014). 52

March 24, 2017

e74ca1c5-3453-4aaa-b07e-5f665167d7ca

Bevel v. Marine Group, LLC

N/A

1150941

Alabama

Alabama Supreme Court

Rel: 03/03/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150941 ____________________ Timothy Bevel v. Marine Group, LLC, et al. Appeal from Marshall Circuit Court (CV-16-900022) BRYAN, Justice. Timothy Bevel appeals from an order granting a motion to compel arbitration. We reverse and remand. In March 2015, Bevel financed the purchase of a used Bennington brand boat and a Yamaha brand boat motor from 1150941 Guntersville Boat Mart, Inc., and he rented a boat slip on Lake Guntersville to dock the boat. The sale and boat-slip rental are documented by a one-page bill of sale, which contains an arbitration provision. According to Bevel, the boat was seized several months after the transaction for allegedly defaulting on payments on the boat and boat-slip rental. Bevel disputes that he owed those payments. Bevel sued Guntersville Boat Mart and related entities Marine Group, LLC, d/b/a Boat Mart, and JD & L Enterprises, Inc. In his complaint, Bevel asserted several claims, including breach of contract. The defendants filed a motion to compel arbitration, citing the arbitration provision in the bill of sale. Bevel argued that his claims were not subject to the arbitration provision in the bill of sale because, he said, he had not actually agreed to that provision. Bevel noted that he had not initialed a box directly below the arbitration provision, although he had signed or initialed the document in other places. Following a hearing, the trial court granted the motion to compel arbitration. Bevel appealed to this Court under Rule 4(d), Ala. R. App. P., which 2 1150941 authorizes an appeal from an order either granting or denying a motion to compel arbitration. "'This Court's review of an order granting or denying a motion to compel arbitration is de novo. ...' "United Wisconsin Life Ins. Co. v. Tankersley, 880 So. 2d 385, 389 (Ala. 2003). Furthermore: "'"A motion to compel arbitration is analogous to a motion for summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that that contract evidences a transaction affecting interstate commerce. Id. 'After a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.'" "'Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000) (quoting Jim Burke Auto., Inc. v. Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala. 1995) (emphasis omitted)).' "Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 753 (Ala. 2002)." Cartwright v. Maitland, 30 So. 3d 405, 408–09 (Ala. 2009). 3 1150941 Bevel argues that the trial court erred in granting the motion to compel arbitration because, he says, he did not agree to the arbitration provision in the bill of sale. Thus, he argues, the arbitration provision never became part of the contract between the parties. Bevel's argument focuses on what he did and did not initial or sign on the one-page bill of sale. Bevel signed or initialed the bill of sale in two places –– he initialed a box indicating that the boat was being sold "as is," and he signed on a line at the bottom of the document regarding his receipt of the boat and the acknowledgment of the boat's condition. He did not, however, initial the box under the arbitration provision, and he did not initial the box under the trade-in section (the sale did not involve a trade-in). The arbitration provision is on the bottom half of the bill of sale. Directly below the arbitration provision, on the left side of the document, is an indented box for the purchaser's initials. Bevel, however, did not initial that box. Also below the arbitration provision, on the right side of the document but slightly lower than the left-side box, is an indented box for the purchaser's initials labeled "BOAT 4 1150941 SOLD AS IS"; Bevel did initial that box. Directly below the two boxes is the following text concerning Bevel's receipt of the boat and the boat's condition: "I have received all of the above listed in good condition and accept final delivery. "The purchaser herein acknowledges that this vehicle may have had mechanical and/or body repair. Said vehicle may have suffered damage during production, transit, while in the possession of a prior owner, or in the possession of the seller. The seller makes no representations as to former damage, if any, nor warranties as to repair of same." Below that provision is a signature line, which Bevel signed.1 1The defendants contend that both the box under the arbitration provision on the left side and the box under the arbitration provision on the right side labeled "BOAT SOLD AS IS" relate to the arbitration provision. That is, the defendants contend that one initialing the box on the right shows assent to the arbitration provision when the boat is "sold as is" and one initialing the box on the left shows assent to the arbitration provision when the boat is not "sold as is." We do not read the bill of sale this way. Rather, we read the box on the left as applying to the arbitration provision and the box on the right as indicating that the boat is "sold as is." The sold-as-is box, which is positioned slightly lower than the box on the left, actually seems to correspond in substance with the final three sentences above Bevel's signature, suggesting that the box may be misaligned. Further, the bill of sale is a single page that has text to the end of the page; it seems more likely that the sold-as-is box was placed in the open space under the arbitration provision to keep the bill of sale to a single page than it is that each box was intended to cover more than one issue, i.e., arbitration and the boat being sold as is. 5 1150941 Bevel argues that, because he did not initial the box directly below the arbitration provision, he did not agree to that provision. Thus, Bevel argues, the arbitration provision is not part of the contract, and, therefore, he says, he is not bound by it. "'[A]rbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'" AT & T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 648 (1986) (quoting United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). The issue whether the parties agreed to arbitrate their disputes is determined by "ordinary state-law principles that govern the formation of contracts." Chicago v. Kaplan, 514 U.S. 938, 944 (1995). Bevel relies primarily on Ex parte Pointer, 714 So. 2d 971 (Ala. 1997). Because this Court in Ex parte Pointer relied primarily on Crown Pontiac, Inc. v. McCarrell, 695 So. 2d 615 (Ala. 1997), we will discuss Crown Pontiac first. In Crown Pontiac, McCarrell purchased an automobile from a dealership. McCarrell signed the contract in four places –– under the trade-in section, in the disclaimer-of-warranties 6 1150941 box, under the merger clause, and at the bottom of the page. However, McCarrell did not sign the box accompanying the arbitration provision in the contract. The Court in Crown Pontiac concluded that the unsigned arbitration provision had not become part of the contract between the parties. Thus, the Court concluded that McCarrell could not be compelled to arbitrate the disputes arising from the purchase. The Court reasoned: "The purpose of a signature is to show 'mutuality and assent,' which are required for a contract to be binding. Lawler Mobile Homes, Inc. v. Tarver, 492 So. 2d 297, 304 (Ala. 1986). Conversely, in this case the absence of a signature under the arbitration clause shows a lack of mutuality and assent, where the contract contains a signature line specifically for the arbitration clause, but where McCarrell did not sign on that line, although he signed on other lines that similarly indicated agreement to specific terms. Crown Pontiac argues that it told McCarrell of the arbitration agreement and that McCarrell did not object to it. However, his lack of objection is not the same as an acceptance of the term, and it does not override the fact that McCarrell did not sign the arbitration clause, but signed every other part of the contract." Crown Pontiac, 695 So. 2d at 618-19. Shortly after releasing Crown Pontiac, this Court decided Ex parte Pointer, a case very similar to Crown Pontiac. In Ex parte Pointer, Pointer purchased an automobile from a 7 1150941 dealership. The contract included numerous sections enclosed in boxes, and each section contained a space for Pointer's signature or initials. Pointer signed or initialed each section except the section containing an arbitration provision. Pointer later sued the dealership, asserting, among other claims, breach of contract. When the dealership sought to compel arbitration, Pointer resisted, arguing that the unsigned arbitration clause was not a binding term of the contract. This Court agreed, relying on Crown Pontiac. Because "[t]here was no mutual agreement to submit to arbitration" Pointer's claims, he could not be compelled to arbitrate those claims. 714 So. 2d at 972. The arbitration provision simply never became part of the contract. In arguing that Bevel is bound by the arbitration provision, the defendants rely on America's Home Place, Inc. v. Rampey, 166 So. 3d 655 (Ala. 2014). In Rampey, Rampey and a homebuilder entered into a contract calling for the homebuilder to build Rampey a house. After the house was built, Rampey sued the homebuilder, alleging, among several other claims, breach of contract. The contract contained several provisions with a line beside the provision for 8 1150941 Rampey's initials. Rampey initialed all the applicable provisions –– including an arbitration provision. Rampey also initialed a provision indicating that each of the other applicable provisions had been explained and that he "'initial[ed] acceptance of same.'" 166 So. 3d at 657 (emphasis omitted). Rampey also signed the bottom of the contract under a provision stating that the contact would be binding on the parties thereto. Rampey pinned his hopes of avoiding arbitration on his argument that he had not signed a signature line under the arbitration provision; this was a different line from the one he initialed beside the arbitration provision. That signature line under the arbitration provision bore a signature purporting to be Rampey's, but he claimed the signature was forged. Rampey argued that his failure to sign the signature line below the arbitration provision indicated that he had not agreed to that provision. This Court disagreed, stating: "The fact that Rampey's signature immediately beneath the arbitration provision was (allegedly) forged is of no consequence because his signature was not required immediately beneath the arbitration provision and, furthermore, Rampey assented to be bound by that provision when he admittedly wrote his initials on the line next to the arbitration provision." 9 1150941 166 So. 3d at 659. In concluding that Rampey's signature beneath the arbitration provision was not required, the Court quoted from Stiles v. Home Cable Concepts, Inc., 994 F. Supp. 1410 (M.D. Ala. 1998): "'While written agreement is required for arbitration, however, there is no requirement that every single provision of a contract, including the arbitration clause, must be signed in order to form part of the agreement. Indeed, it is axiomatic that "parties may become bound by the terms of a contract, even though they do not sign it, where their assent is otherwise indicated." 17A Am. Jur. 2d § 185. ... The [Federal Arbitration Act] has no separate requirement of a signed arbitration clause. As noted by the Northern District of Alabama, "[i]t is well established that a written agreement to arbitrate need not be signed by the parties as a prerequisite to the enforcement of the agreement." Middlebrooks v. Merrill Lynch, Pierce, Fenner & Smith, Inc., [No. CV 89-HM-5015-NW, April 5, 1989] (N.D. Ala. 1989) [not reported in F. Supp.].'" Rampey, 166 So. 3d at 659 (quoting Stiles, 994 F. Supp. at 1416 (emphasis added in Rampey)). This Court in Rampey then stated: "Furthermore, it is well settled that "'[a] plaintiff cannot seek the benefits of a contract but at the same time avoid the arbitration provision in the contract. Wolff Motor Co. [v. White], 869 So. 2d [1129,] 1136 [(Ala. 2003)]. Instead, "she must accept or reject the 10 1150941 entire contract." Credit Sales, Inc. v. Crimm, 815 So. 2d 540, 546 (Ala. 2001). Britta's claims, including her breach-of-contract claim, rely on the contract to support her claims for damages. Therefore, she is bound by the arbitration provision in the contract. Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42, 48 (Ala. 1999); Delta Constr. Corp. v. Gooden, 714 So. 2d 975, 981 (Ala. 1998).' "Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1143 (Ala. 2003) (emphasis added). See also Southern Energy Homes, Inc. v. Ard, 772 So. 2d 1131, 1134-35 (Ala. 2000) ('A plaintiff cannot simultaneously claim the benefits of a contract and repudiate its burdens and conditions.' (citing Value Auto Credit, Inc. v. Talley, 727 So. 2d 61 (Ala. 1999); Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42 (Ala. 1999); Georgia Power Co. v. Partin, 727 So. 2d 2 (Ala. 1998); Delta Constr. Corp. v. Gooden, 714 So. 2d 975 (Ala. 1998); and Ex parte Dyess, 709 So. 2d 447 (Ala. 1997))). "Here, Rampey, whose claims are all predicated on alleged breaches and violations of the contract, attempts to claim the benefits of the contract while repudiating one of its conditions, i.e., the binding arbitration provision. However, as noted, Rampey must '"accept or reject the entire contract."' Bowen, 879 So. 2d at 1143 (quoting Credit Sales, Inc. v. Crimm, 815 So. 2d 540, 546 (Ala. 2001)). As was the case in Bowen, Rampey's claims, including his breach-of-contract claim, rely on the contract for support. Thus, Rampey is bound by all the provisions of the contract, including the arbitration provision. Accordingly, we conclude that the trial court erred in denying AHP's motion to compel arbitration." Rampey, 166 So. 3d at 660-61 (footnote omitted). 11 1150941 At first glance, there may appear to be tension between Crown Pontiac and Ex parte Pointer, on the one hand, which enforced arbitration provisions, and Rampey, on the other hand, which did not enforce an arbitration provision. However, the cases must be read in the context of their facts, and Rampey is factually distinguishable from the earlier two cases. In both Crown Pontiac and Ex parte Pointer, although the consumer signed the contract in various places, the consumer did not sign the designated place specifically corresponding to the arbitration provision. Thus, the consumers in those cases did not assent to the arbitration provisions in those contracts, and those provisions did not become part of the contracts. In Rampey, Rampey initialed a box by the arbitration provision and thus "assented to be bound by that provision." 166 So. 3d at 659. Rampey showed his consent to the arbitration provision by initialing the box, despite failing to additionally indicate assent by signing the signature line beneath the provision. In Rampey, as noted, the Court also observed that parties "'may become bound by the terms of a contract, even though they do not sign it, where their assent is otherwise 12 1150941 indicated.'" 166 So. 3d at 659 (quoting 17A Am. Jur. 2d § 185 (emphasis omitted)). For instance, even if a contract is not signed at all, mutuality and assent may be shown by "accept[ing] and act[ing] upon" the contract. Lawler Mobile Homes, Inc. v. Tarver, 492 So. 2d 297, 304 (Ala. 1986). However, in Rampey, Rampey showed his assent to the various contract terms by both signing or initialing those terms and by accepting and acting on the contract. That is unlike the situation in Crown Pontiac and Ex parte Pointer, where the consumers did not sign a signature line specifically corresponding to the arbitration provision, but did sign lines corresponding to other provisions. In those cases, this Court concluded that, when some other contract provision is signed, the failure to sign the signature line corresponding to an arbitration provision is a compelling indication of failure to assent to that provision. That is the situation here. The Court in Rampey also observed that a plaintiff cannot seek to enforce the contract but at the same time seek to avoid an arbitration provision in the contract; rather, a plaintiff must accept or reject the entire contract. However, for that principle to be applicable, the arbitration provision 13 1150941 must actually be a part of the contract sought to be enforced. For example, in Ex parte Pointer, the fact that Pointer alleged breach of contract did not thwart his challenge to the enforcement of the arbitration provision; that provision was not part of the contract because of his lack of assent. In Rampey, the arbitration provision was a part of the contract; Rampey assented to be bound by that provision by initialing the line next to the arbitration provision. 166 So. 3d at 659. However, in light of Crown Pontiac and Ex parte Pointer, the arbitration provision in this case was not part of the contract because Bevel did not initial the box corresponding to the arbitration provision despite signing and initialing other parts of the contract. In short, the above language from Rampey should not be read to conflict with the principle that, "[w]hen one party proposes a standard contract to another party, the parties may, of course, agree to be bound by certain of the clauses in the proposed contract and not to be bound by others." Ex parte McNaughton, 728 So. 2d 592, 595 (Ala. 1998) (citing Crown Pontiac as an example). As noted, only those disputes a party has agreed to arbitrate may be submitted to arbitration. AT & T Techs., 475 U.S. at 648. 14 1150941 This case is controlled by Crown Pontiac and Ex parte Pointer. Bevel did not initial the box corresponding to the arbitration provision despite initialing and signing the bill of sale in other places; under Crown Pontiac and Ex parte Pointer, that is a compelling indication that Bevel did not assent to the arbitration provision. The arbitration provision did not become part of the contract between the parties, and, thus, it cannot be enforced against Bevel. Accordingly, we reverse the trial court's order compelling arbitration, and we remand the case for proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Parker, Murdock, Shaw, Main, and Wise, JJ., concur. Bolin, J., concurs in the result. 15 1150941 BOLIN, Justice (concurring in the result). I concur in the result reached by the main opinion reversing the trial court's judgment granting the motion to compel arbitration filed by Marine Group, LLC, and remanding the case. However, I do not agree with the breadth of the rationale concerning the controlling precedent stated in the main opinion. The particular facts of this case limit its precedential value, because the patent ambiguity on the face of the portion of bill of sale attached as an appendix to this writing makes a decision as to exactly what the buyer, Timothy Bevel, was agreeing to less clear than the main opinion suggests. "'A patent ambiguity results when a document, on its face, contains unclear or unintelligible language or language that suggests multiple meanings.'" Kelmor, LLC v. Alabama Dynamics, Inc., 20 So. 3d 783, 790-91 (Ala. 2009) (quoting Smith v. Ledbetter, 961 So. 2d 141, 145 (Ala. Civ. App. 2006)). The wording of the actual arbitration provision is not atypical of such provisions. However, the positioning of the signature areas in relation to the arbitration provision on the bill of sale is clearly susceptible to different interpretations. Beneath the arbitration provision are two 16 1150941 "boxes" for a purchaser's initials –- unlike any other provision in the bill of sale requiring initials. The box on the left is simply beneath the arbitration provision set out above it. The box on the right, however, which Bevel initialed, is preceded by the words "BOAT SOLD AS IS" -- phraseology that generally pertains to warranties or, as perhaps the case here, to the lack of a warranty –- that is in no way related to the subject of arbitration. The box on the right is slightly lower on the page than the box on the left, and the phrase preceding the box –- "BOAT SOLD AS IS" -- is either a different font from the arbitration provision or may have been superimposed upon a form agreement. How to interpret the document is the valid subject of argument as asserted by Marine Group, the seller, but what is not subject to argument is that the peculiarly configured document is ambiguous, and it was drafted by Marine Group. Marine Group contends that a purchaser initialing the box on the right would be assenting to the immediately preceding arbitration provision when, as here, the boat is "sold as is," whereas a purchaser initialing the box on the left would be assenting to the arbitration provision when the boat is not "sold as is." 17 1150941 Stated differently, the two boxes beneath the arbitration provision could reasonably be construed to be arbitration alternatives, to be used depending on the new or used condition of the boat being purchased. Marine Group's interpretation could objectively explain the configuration of the portion of the bill of sale reproduced in the appendix just as easily as the interpretation ensconced in the main opinion. It is speculative to say, but such an interpretation as contended by Marine Group could have been the unstated rationale by which the trial court reached the decision to compel arbitration in this matter. However, although not argued by the parties, "it is a familiar rule of contract construction that 'any ambiguity must be construed against the drafter of the contract.'" Ex parte Palm Harbor Homes, Inc., 798 So. 2d 656, 661 (Ala. 2001)(quoting Homes of Legend, Inc. v. McCollough, 776 So. 2d 741, 746 (Ala. 2000)). Despite this familiar rule of contract construction, the main opinion, in concluding that Bevel did not assent to the arbitration provision because he did not initial the box on the left "corresponding to the arbitration provision," ___ So. 3d at ___, finds controlling this Court's 18 1150941 decisions in Ex parte Pointer, 714 So. 2d 971 (Ala. 1997), and Crown Pontiac, Inc. v. McCarrell, 695 So. 2d 615 (Ala. 1997). I find these cases distinguishable in that they do not present circumstances where, as here, the document containing the arbitration provision is susceptible to multiple meanings. Specifically, in Ex parte Pointer, the printed contract form between the parties included numerous sections, all of which were set off in boxes; each box contained a boldface heading, as well as a location for the purchaser's signature and/or initials. Pointer signed and/or initialed all the sections except the one entitled "Arbitration Clause." The trial court compelled arbitration. Pointer argued on appeal that the unsigned arbitration clause was not a binding term of the contract. The defendants, an automobile dealership and a finance company, on the other hand, argued that the signature line in the section entitled "Arbitration Clause" did not apply to the arbitration terms. This Court rejected the defendants' argument, concluding: "The different terms of the contract ['DESCRIPTION OF TRADE A,' 'ARBITRATION CLAUSE,' 'TOTAL CASH DELIVERY PRICE,' 'OPTIONAL EQUIPMENT TO BE INSTALLED OR DELETED,' 'VEHICLE CONDITION STATEMENT,' and 'CUSTOMER DISCLOSURE STATEMENT'] are divided into boxes, with each box containing a boldface heading. 19 1150941 If the signature line that is included in the box entitled 'Arbitration Clause' was for some other term or clause of the contract, it would have been set off with a boldface heading, as was every other term or clause." 714 So. 2d at 972. Implicit in this Court's holding is the nonexistence of any ambiguity. The circumstances presented in Crown Pontiac are even more distinguishable insofar as the issue there involved a merger clause. Specifically, in Crown Pontiac, the purchaser of an automobile signed a preliminary retail-buyer's order form, which included an arbitration provision. The purchaser later executed a final version of the contract, signing in four places; however, he did not sign in the box accompanying the arbitration provision. The trial court denied Crown Pontiac's motion to compel arbitration. Crown Pontiac argued on appeal that the arbitration clause in the final executed contract was enforceable merely because it had been included in the preliminary retail-buyer's order form. This Court agreed with the purchaser that the preliminary retail-buyer's order form he signed containing the arbitration provision did not become part of the final executed contract because a merger clause in the final executed contract caused the terms in the preliminary retail- 20 1150941 buyer's order form to be superseded by the terms of final executed contract. This Court noted that "Crown Pontiac should have known that any terms contained in the [preliminary] retail buyer's order were nullified by the merger clause in the [final executed contract]." 695 So. 2d at 619. This Court further noted that Crown Pontiac "was the drafter of this retail buyer's order form, and it cannot escape from the terms that it drafted simply because it now finds those terms inconvenient." Id. at 618. In other words, there were no ambiguities in the documents signed by the purchaser in Crown Pontiac, whereas there are here. Accordingly, because the ambiguous bill of sale in this case was drafted by Marine Group, I believe the Court correctly decided the case, even though I concur only in the result, because the rationale of the main opinion, in my judgment, should be limited to the particular circumstances of this case. 21 1150941 APPENDIX

March 3, 2017

c086aca2-e0dc-4ac3-9c01-a2cfae21d7ef

Timothy Joel Thomas v. Laura Wells, as guardian ad litem and next friend of M.A., a minor

N/A

1150119

Alabama

Alabama Supreme Court

Rel: 03/24/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150118 ____________________ Timothy Joel Thomas v. Randell Heard and Donna Heard Appeal from Geneva Circuit Court (CV-14-900015) ____________________ 1150119 ____________________ Timothy Joel Thomas v. Laura Wells, as guardian ad litem and next friend of M.A., a minor Appeal from Geneva Circuit Court (CV-13-900145) On Application for Rehearing PER CURIAM. This Court's no-opinion order of affirmance of November 4, 2016, is withdrawn, and the following is substituted therefor. Timothy Joel Thomas appeals following the denial of his numerous postjudgment motions by the Geneva Circuit Court ("the trial court") challenging a judgment entered by the trial court on a jury verdict in favor of Randell Heard and Donna Heard and Laura Wells, as guardian ad litem and next friend of M.A., a minor. Facts and Procedural History This case arises out of an automobile accident that occurred on October 15, 2013, at approximately 5:00 p.m. A vehicle driven by Thomas, in which M.A. was a passenger, collided with a vehicle driven by Randell Heard, in which Donna Heard was a passenger. Thomas testified that, on the day of the accident, he visited Amber Foster's house between 3:15 p.m. and 3:30 p.m. Foster testified that, after Thomas had been at her house for 2 1150118, 1150119 approximately 20 minutes, Thomas drove two of Foster's children, one of whom was M.A., to a Dollar General discount store.1 Foster testified that Thomas and her two children returned to her house approximately 30 minutes later. Foster then testified that Thomas again left her house with M.A., approximately 20 minutes later. Foster testified that she did not notice anything unusual about Thomas while he was at her house. Foster also testified that she did not see Thomas consume any alcohol or prescription medications while he was at her house. Foster further testified that she would not have allowed M.A. to leave with Thomas if Foster had thought that Thomas was intoxicated, impaired, or unable to operate a vehicle. Thomas testified that, while he was at Foster's house, he took Seroquel, a prescription drug, and drank beer. Thomas 1Although M.A. was Foster's biological child and was living with Foster at the time of the accident, Foster testified that she did not have legal custody of M.A. Foster testified that she had legal custody of M.A. at the time of the trial, but did not specify on what date she had regained legal custody. Nothing in the record indicates who actually had legal custody of M.A. at the time of the accident or when Wells filed her underlying action. Wells states in her brief that, at the time of the accident and the commencement of her action, "legal custody of M.A. was lawfully vested in a third party, the Department of Human Resources." Wells's brief, at p. 58. 3 1150118, 1150119 also testified that, in addition to his prescription for Seroquel, he had prescriptions for other drugs; Thomas testified that it was possible that he had taken some of those prescription drugs in addition to the Seroquel within 24 hours of the accident. Thomas also testified that he purchased beer -- "a tallboy" -- while on his errand to the Dollar General discount store. When asked if it was possible that he had purchased more than one beer, Thomas responded, "[a]nything is possible." Thomas further testified that while he was at Foster's house he drank "one tallboy beer" and that he was not sure if he had drunk more than the one beer. Thomas also testified that he "could have" drunk more than one beer. Thomas testified that he "remember[ed] not being impaired when [he] left the driveway" of Foster's house with M.A. When asked whether he was impaired at the time he was driving toward the intersection just before the accident, Thomas replied, "[n]o, sir, not that I know of." Jack Sewell, a pharmacist at the pharmacy where Thomas filled his prescriptions, testified that some of the prescriptions he filled for Thomas, including Seroquel, cause 4 1150118, 1150119 drowsiness. Sewell testified that drinking alcohol with these prescriptions would "just add[] to" that drowsiness effect. Thomas left Foster's house at approximately 4:40 p.m. with M.A. in his vehicle and drove south on County Road 41. At approximately 5:00 p.m., Thomas was approaching the intersection of County Road 41 and State Highway 167 ("the intersection"), which is where the accident occurred. There are stop signs on County Road 41 requiring the traffic traveling on County Road 41 to yield to the traffic traveling on State Highway 167; there are no stop signs halting traffic traveling on State Highway 167. Thomas testified that he drove over several "rumble strips"2 on County Road 41 as he approached the intersection. Thomas drove his vehicle into the intersection without stopping at the stop sign on County Road 41. Thomas's vehicle collided with the vehicle being driven by Randell Heard. Thomas testified: "[Wells's trial counsel:] Why didn't you see the stop sign? "[Thomas:] I can't tell you that. 2Alabama State Trooper Darren Pert testified that rumble strips, or "speed breakers," are used "to warn [motorists] of the intersection." 5 1150118, 1150119 "[Wells's trial counsel:] Why didn't you stop at the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you see the Heards traveling in their silver car to your right? "[Thomas:] I can't tell you that." Elizabeth Mims witnessed the accident. Mims testified that it appeared that Thomas slowed his vehicle before entering the intersection but did not completely stop his vehicle. Mims testified that she witnessed Thomas drive his vehicle into the intersection in front of the Heards' vehicle, which, she said, caused the accident. After the accident occurred, Mims checked on the occupants of both vehicles. Mims testified that "when [she] got to" Thomas's vehicle she could smell alcohol. Mims later clarified that, although she was certain that the odor of alcohol was coming from Thomas's vehicle, she could not identify the source of the odor of alcohol. Mims also testified that she spoke with another woman at the scene of the accident who also indicated that she smelled alcohol. However, Mims did not indicate where at the scene of the accident this other woman had smelled alcohol; specifically, 6 1150118, 1150119 Mims did not testify that this other woman smelled alcohol emanating from Thomas or his vehicle. Chris Sirois, an emergency medical technician dispatched to the scene, testified that he did not smell alcohol while he was "treating or paying attention to" M.A., who was in the vehicle driven by Thomas. Thomas, M.A., and the Heards sustained serious injuries as a result of the accident and were transported to medical facilities for emergency care; Thomas was transported to Southeast Alabama Medical Center ("SAMC"). Upon Thomas's arrival at SAMC's emergency room, Danielle Stanridge, a laboratory technician at SAMC, testified that she drew blood from Thomas in order to run a medical analysis of Thomas's blood, which she said was the "common and customary" practice. Stanridge used an alcohol swab to sterilize Thomas's arm before she drew his blood sample. SAMC conducted a "medical-alcohol test" as part of the analysis performed on Thomas's blood sample. Dr. Jack Kalin, the former chief toxicologist of the Alabama Department of Forensic Sciences and a private consultant in forensic technology certified in forensic technology by the American 7 1150118, 1150119 Board of Forensic Technology, explained that the medical- alcohol test performed by SAMC on Thomas's blood sample tested for the concentration of ethanol in Thomas's blood sample. Jeff Sheppard, who was SAMC's laboratory director at the time of the accident, testified that the presence and amount of alcohol in a patient's blood sample is important information for the treating physician to have in deciding whether to use anesthesia on the patient or to prescribe prescription drugs. Sheppard testified that the medical-alcohol test conducted on Thomas's blood sample indicated that Thomas's blood sample had a "value" of "68 milligrams per deciliter." Sheppard testified that this was an "abnormal" result, which was explained as follows: "[Wells's trial counsel:] For example, if I've had a cholesterol test done, it tells me here's the normal range, and if mine is high, it will report back above normal. Is that kind of what this is telling us? "[Sheppard:] Yes." Dr. Kalin testified that, based on Thomas's blood sample containing 68 milligrams of alcohol per deciliter, Thomas's blood-alcohol concentration "would have been somewhere between a .05 grams percent and a .06 grams percent." Dr. Kalin 8 1150118, 1150119 testified that, based on Thomas's blood-alcohol concentration of .05% to .06%, he opined that Thomas would have consumed "two to three beers, rather than just one." Dr. Jimmie Valentine, a consultant in clinical pharmacology and toxicology, who was called as a witness by Thomas, testified that the method used to collect Thomas's blood sample and to test for the presence of alcohol was not performed pursuant to forensic standards. For instance, Dr. Valentine testified that, if a sample of Thomas's blood had been taken for the specific purpose of testing it to determine Thomas's blood-alcohol concentration, an alcohol swab should not have been used to sterilize Thomas's arm before his blood was drawn. Dr. Valentine testified that, when an alcohol swab is used to clean the skin, some of the alcohol could be absorbed into the skin, which could contaminate the blood sample drawn. Dr. Valentine explained that the test conducted by SAMC on Thomas's blood sample to determine the presence of alcohol did not reveal the specific type of alcohol present in Thomas's blood sample. Dr. Valentine explained that the alcohol swab used by Stanridge to sterilize Thomas's arm probably contained isopropyl alcohol, while the beer Thomas 9 1150118, 1150119 drank contained ethanol alcohol. Dr. Valentine further explained that the test run by SAMC on Thomas's blood sample would have detected both kinds of alcohol, among other things, generally; there was no way to tell if Thomas's blood sample had been contaminated with the isopropyl alcohol from the alcohol swab. Dr. Valentine testified that the preferred method "for doing alcohol analysis" is a method called "gas chromatograph." SAMC did not use the gas-chromatograph method in determining that Thomas's blood sample contained 68 milligrams per deciliter. Regardless, accepting that Thomas's blood sample contained 68 milligrams of ethanol per deciliter, Dr. Valentine agreed with Dr. Kalin's assessment of Thomas's blood-alcohol concentration. Dr. Kalin testified that it is possible for people with a blood-alcohol concentration of less than .08% to be impaired and to have difficulty driving: "[Heards' trial counsel:] And a blood/alcohol of a .08, you use the word intoxicated, in your area of expertise, can individuals be impaired such as they are unsafe and unfit to drive an automobile at less than a level of .08? ".... "[Dr. Kalin:] State law provides a presumption that .08 or greater, then you are under the 10 1150118, 1150119 influence of alcohol. However, state law also recognizes the scientific reality that people below .08 can be impaired and have difficulty driving. So, if someone can be demonstrated to be impaired with an ethanol concentration of less than .08, they can be convicted of drunk driving."3 Dr. Kalin explained the effects Thomas may have experienced as a result of his blood-alcohol concentration of .05% to .06%: "[Heards' trial counsel:] ... What effect could you expect to see in Mr. Thomas with the level of 3It appears that the "state law" to which Dr. Kalin was referring is § 32-5A-191, Ala. Code 1975, which states, in pertinent part: "(a) A person shall not drive or be in actual physical control of any vehicle while: "(1) There is 0.08 percent or more by weight of alcohol in his or her blood; "(2) Under the influence of alcohol; "(3) Under the influence of a controlled substance to a degree which renders him or her incapable of safely driving; "(4) Under the combined influence of alcohol and a controlled substance to a degree which renders him or her incapable of safely driving; or "(5) Under the influence of any substance which impairs the mental or physical faculties of such person to a degree which renders him or her incapable of safely driving." 11 1150118, 1150119 blood/alcohol content of .05 to .06 that you've described? "[Dr. Kalin:] I'm going to answer your question literally -- you would see nothing. "[Heards' trial counsel:] In other words, would someone be able to visually tell if you were intoxicated or impaired? "[Dr. Kalin:] Quite possibly not. "[Heards' trial counsel:] Would there be effects to Mr. Thomas at that level? "[Dr. Kalin:] Yes, there would be. "[Heards' trial counsel:] And in reaching that opinion, are you trained in that regard in all of your training with the State Of Alabama and your toxicological research? "[Dr. Kalin:] Yes. "[Heards' trial counsel:] And is that part of what you have always done for the State Of Alabama? "[Dr. Kalin:] Yes. "[Heards' trial counsel:] Can you tell us what those affects would be? "[Dr. Kalin:] The .05 to .06 you would expect the person's inhibitions to be inhibited. Ethanol is a central nervous system depressant, which means it turns things off. The first thing it turns off is your higher mental functions and that's the little voice in the back of your head that tells you to behave. That's why a couple of drinks at a party make you talk, maybe you shouldn't say what you're saying, but nonetheless you do. That's a little bit of a buzz, you feel a little bit of euphoria, you 12 1150118, 1150119 may be at the greater risk -- well, more prone to risky activity. You would be surprised over how many people get in fights over these levels of alcohol because their inhibitions are inhibited. You're going to have some fine motor skill problems, how many things can you juggle at one time. You may do okay, but you're certainly not going to do as well as you would otherwise without the ethanol. Your judgment is going to be a problem in what you see, what you perceive, what you think, what you know. That's all impaired even by low levels of ethanol. That's what the buzz is, the buzz is something that makes you care less about your circumstances than you probably otherwise should. "You may experience some visual acuity problems, you may have difficulty focusing and you may not see very -- as well as you would otherwise, or you may see well enough, but one of the things that you do lose is your peripheral vision, where people can't see what's coming on the sides. I'm sorry I'm holding up my hand in front of the Court Reporter, but that's a demonstration of what peripheral vision is. I can see something out the side of my head, I don't have to turn left or right to see traffic coming. This is a common problem that some people experience with low levels of alcohol, the loss of that capability, you just don't see it, you never see it coming. "So, you're not going to have a problem typically with your speech, other than you're probably going to use much more of it than you should. "You're not going to have problems with your balance. You can probably stand up and move around and not have much of a problem, but that doesn't mean that you will have all your faculties sufficiently to do complicated tasks." 13 1150118, 1150119 However, Dr. Kalin also testified that, although everyone experiences the same effects of alcohol, not everyone experiences them at the same blood alcohol concentration. (R. 203.) For instance, Dr. Kalin testified: "[Thomas's trial counsel:] And that was the purpose in asking that because although you describe that there may be visual acuity, there may be peripheral vision impacted, there may be judgment impacted with this level of blood/alcohol concentration that you say existed, does not mean that Mr. Thomas was experiencing those things, does it? "[Dr. Kalin:] That's correct." On November 29, 2013, Wells, "in her capacity as guardian ad litem and next friend" of M.A., sued Thomas, among others, asserting claims of negligence and wantonness. On January 24, 2014, in a separate action, the Heards sued Thomas, among others, asserting claims of negligence and wantonness.4 Thomas answered both complaints. The trial court consolidated the two actions for purposes of discovery and trial. 4The Heards and Wells also asserted claims of negligent entrustment against Peggy Anderson, the owner of the vehicle Thomas was driving at the time of the accident; those claims were later voluntarily dismissed without prejudice. The Heards also filed a claim for uninsured/underinsured-motorist benefits against Automobile Club Inter-Insurance Exchange. Automobile Club Inter-Insurance Exchange later opted out of the litigation. 14 1150118, 1150119 On August 11, 2015, Thomas filed a motion to "strike, dismiss, and/or remove" Wells as the "representative" of M.A. Thomas noted that the Houston Juvenile Court had appointed Wells as M.A.'s "juvenile attorney" on June 26, 2012. However, Thomas argued that, pursuant to § 6-5-390, Ala. Code 1975, Wells had no legal authority to file the underlying action against Thomas. Section 6-5-390 states: "A father or a mother, provided they are lawfully living together as husband and wife, shall have an equal right to commence an action for an injury to their minor child, a member of the family; provided, however, that in the event such mother and father are not lawfully living together as husband and wife, or in the event legal custody of such minor child has been lawfully vested in either of the parties or some third party, then and in either event the party having legal custody of such minor child shall have the exclusive right to commence such action." On August 13, 2015, Wells filed a response, arguing that the underlying action "was properly commenced in the name of the guardian ad litem for the benefit of" M.A. The trial court did not rule on Thomas's motion. Instead, on August 21, 2015, the trial court entered an order appointing Wells as guardian ad litem and next of friend of M.A. Trial began on August 24, 2015. At the close of the Heards' and Wells's cases, Thomas filed a motion for a 15 1150118, 1150119 judgment as a matter of law ("JML"). Generally, Thomas alleged that the Heards and Wells had failed to present sufficient evidence to support their negligence and wantonness claims. The trial court denied Thomas's motion for a JML. At the close of all the evidence, Thomas again filed a motion for a JML, raising the same issues he had raised in his initial motion. The trial court denied Thomas's second JML motion, and the case was submitted to the jury. On August 28, 2015, the jury returned a verdict against Thomas and in favor of the Heards, upon which the trial court entered the following judgment: "Case tried to a jury and the jury returned the following verdict: "'We, the jury, find for the plaintiffs and against the defendant and assess plaintiffs' damages as follows: "'Randell Heard "'Compensatory: Eight hundred fifty thousand dollars ($850,000). "'Punitive: Seven hundred fifty thousand dollars ($750,000). "'Donna Heard "'Compensatory: Four hundred fifty thousand dollars ($450,000). 16 1150118, 1150119 "'Punitive: Seven hundred fifty thousand dollars ($750,000).' "The Court enters the judgment in accordance with the jury’s verdict." The jury also returned a verdict in favor of Wells, upon which the trial court entered its judgment, as follows: "Case tried to a jury and the jury returned the following verdict: "'We, the jury, find for the plaintiff and against the defendant and assess plaintiff's damages as follows: "'[M.A.] "'Compensatory: Five hundred thousand dollars ($500,000). "'Punitive: Five hundred thousand dollars ($500,000).' "The Court enters the judgment in accordance with the jury’s verdict." On September 11, 2015, the Heards filed a "motion for costs" requesting costs in the amount of $21,140.30. On September 15, 2015, Wells also filed a "motion to tax costs" requesting costs in the amount of $17,221.54. Each motion was supported with extensive documentary evidence. On September 25, 2015, Thomas filed a motion to alter, amend or vacate the trial court's August 28, 2015, judgments. 17 1150118, 1150119 Thomas argued, among other things, that the "jury's award of damages based on wantonness was against the great weight of the evidence" and that the "jury's award of punitive damages was not supported by clear and convincing evidence." Thomas also argued that, under § 6-5-390, "Wells was not entitled to make any claim on behalf of [M.A.]" Also on September 25, 2015, Thomas filed a renewed motion for a JML. As he did in his first two JML motions, Thomas argued that the Heards and Wells had failed to present sufficient evidence to support their negligence and wantonness claims and that they had failed to present sufficient evidence to support the jury's award of punitive damages. Thomas also argued that, pursuant to § 6-5-390, "Wells is not allowed under Alabama law to pursue damages for [M.A.]" Also on September 25, 2015, Thomas filed a motion for a remittitur, which he amended on October 9, 2015. On October 19, 2015, following a hearing, the trial court denied Thomas's postjudgment motions and granted the motions for costs filed by the Heards and Wells. Thomas separately appealed as to the Heards and Wells. We have consolidated the two appeals for the purpose of writing one opinion. 18 1150118, 1150119 Standard of Review In Cheshire v. Putman, 54 So. 3d 336, 340 (Ala. 2010), this Court set forth the following standard of review applicable to our review of a ruling on a motion for a JML: "In American National Fire Insurance Co. v. Hughes, 624 So. 2d 1362 (Ala. 1993), this Court set out the standard that applies to the appellate review of a trial court's ruling on a motion for a JML: "'The standard of review applicable to a ruling on a motion for JNOV [now referred to as a renewed motion for a JML] is identical to the standard used by the trial court in granting or denying a motion for directed verdict [now referred to as a motion for a JML]. Thus, in reviewing the trial court's ruling on the motion, we review the evidence in a light most favorable to the nonmovant, and we determine whether the party with the burden of proof has produced sufficient evidence to require a jury determination.' "624 So. 2d at 1366 (citations omitted). Further, in Cessna Aircraft Co. v. Trzcinski, 682 So. 2d 17 (Ala. 1996), this Court held: "'The motion for a J.N.O.V. [now referred to as a renewed motion for a JML] is a procedural device used to challenge the sufficiency of the evidence to support the jury's verdict. See, Rule 50(b), [Ala.] R. Civ. P.; Luker v. City of Brantley, 520 So. 2d 517 (Ala. 1987). Ordinarily, the denial of a directed verdict [now referred to as a JML] or a J.N.O.V. is proper where the nonmoving party has produced 19 1150118, 1150119 substantial evidence to support each element of his claim. However, if punitive damages are at issue in a motion for a directed verdict or a J.N.O.V., then the "clear and convincing" standard applies. Senn v. Alabama Gas Corp., 619 So. 2d 1320 (Ala. 1993).' "682 So. 2d at 19 (footnote omitted). '[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co., 547 So. 2d 870, 871 (Ala. 1989). See § 12–21–12(d), Ala. Code 1975." In Classroomdirect.com, LLC v. Draphix, LLC, 992 So. 2d 692, 710 (Ala. 2008), this Court set forth the following standard of review concerning the taxation of costs under Rule 54(d), Ala. R. Civ. P.: "[T]his Court's caselaw is well settled that the taxation of costs is discretionary with the trial court. See, e.g., Smith v. Smith, 482 So. 2d 1172, 1175 (Ala. 1985) ('The taxation of costs pursuant to [Rule 54(d), Ala. R. Civ. P.,] is generally left to the sound discretion of the trial judge.'); Vulcan Oil Co. v. Gorman, 434 So. 2d 760, 762 (Ala. 1983) ('[T]he taxation of costs ... rests in the discretion of the trial judge, whose decision will not be reversed unless clear abuse is shown.')." Discussion Initially, we must consider Thomas's argument that Wells is not the appropriate party under § 6-5-390 to commence the underlying action in case no. 1150119 on behalf of M.A. 20 1150118, 1150119 Thomas directs this Court's attention to the following language in § 6-5-390: "[T]he party having legal custody of [the] minor child shall have the exclusive right to commence such action." Thomas argues that because Wells did not have legal custody of M.A., she did not have the authority to commence the underlying action against Thomas. Thomas's argument, however, ignores the purpose of § 6-5- 390, which appears to have no application in the present case. Section 6-5-390, or a predecessor, has been in effect since 1852. In 1893, this Court stated the following in McNamara v. Logan, 100 Ala. 187, 14 So. 175 (1893), regarding the purpose of what is now codified as § 6-5-390: "It merely secures to the father, and, in certain contingencies, the mother, the right to sue for injuries to a minor child, a member of the family, and in such suit to recover the damages which they themselves -- the father or mother, as the case may be -- have sustained through the injury of a child, whose minority so long, and only so long as it continued entitled them to his services and involved reciprocal obligations of care and support. But it is not provided, and it was clearly not the intention of the codifiers or the legislature which adopted the Code to provide, that the recovery of these, in a sense, special damages by the parent should deprive the minor of his own right of compensation for the injuries he had received and which in no case could be taken into the account in assessing the damages sustained by the parent. ... And where the wrong and injury is to a minor, and is 21 1150118, 1150119 not fatal ...: suits may be maintained both by the parent and the child. Iron Co. v. Brawley, 83 Ala. 371, 3 South. 555 [(1888)]; Railroad Co. v. Donovan, 84 Ala. 141, 4 South. 142 [(1888)]." 100 Ala. at 195-96, 14 So. at 177. More recently, in Thorne v. Odom, 349 So. 2d 1126, 1129 (Ala. 1977), this Court stated concerning the purpose of what is now codified as § 6-5-390: "The object of [what is now codified as § 6-5-390] is to provide a right of action for the parent's damages for loss of services, expense of treatment, etc. for the child's injury." Further, this principle is summarized in Alabama Law of Damages, as follows: "The parent's action for loss of services is separate and distinct from an action by the child for his personal injury, pain, suffering, and diminution of earning capacity after attainment of majority." Jenelle Mims Marsh, Alabama Law of Damages § 20:4 (6th ed. 2012)(citing Propst v. Georgia Pac. Ry., 83 Ala. 518, 3 So. 764 (1888), and McNamara, supra). This principle is also stated in 67A C.J.S. Parent and Child § 350 (2013): "When a person negligently injures a minor, two separate causes of action arise: the minor child has a cause of action for injuries suffered by it, and the parent or parents of the minor child have a cause of action for the loss of services and for medical expenses incurred by the parent for the treatment of the minor's injuries, and in the 22 1150118, 1150119 absence of any waiver or estoppel, the damages peculiar to one of these causes of action may not properly be recovered in an action based on the other. "That is, in a case of an injury to an unemancipated infant by a wrongful act, two causes of action ordinarily arise; one cause of action is on behalf of the infant to recover damages for pain and suffering, permanent injury, and impairment of earning capacity after attaining majority, and the other is on behalf of the parent for loss of services during minority and necessary expenses incurred for the infant's treatment. The objective of the common-law rule that an injury to a child gave rise to two causes of action, one on behalf of the child and one on behalf of the parents, was to allow a party who actually suffered damages to recover the loss from the tortfeasor and to prevent double recoveries." (Footnotes omitted.) It is well settled that M.A.'s cause of action for her injuries is separate and distinct from any cause of action M.A.'s legal guardian would bring under § 6-5- 390. As Wells argues in her brief before this Court, M.A.'s action against Thomas seeks recovery of damages for injuries M.A. incurred as a result of Thomas's actions. M.A. has not filed an action under § 6-5-390 seeking reimbursement on behalf of her legal guardians. In fact, M.A. has no personal action under § 6-5-390; only her legal guardian would have such a cause of action. Instead, M.A. sued Thomas through 23 1150118, 1150119 Wells, her guardian ad litem and next friend. Alabama Law of Damages § 11:16 states: "A minor has no capacity as a plaintiff in an action or special proceeding except through a general guardian or like fiduciary. If an infant does not have such a general guardian or like fiduciary, the Alabama Rules of Civil Procedure provide that the minor may sue by his next friend or a court-appointed guardian ad litem.1 Whenever a person sues as the next friend of a minor, the minor is the real party to the suit, and recovery belongs to him because his rights are those litigated.2 "____________________ "1Ala. R. Civ. P. 17(c) (applying also to incompetent persons); Citizens Walgreen Drug Agency, Inc. v. Gulf Ins. Co., 282 Ala. 648, 213 So. 2d 814 (1968); Pate v. Perry's Pride, Inc., 348 So. 2d 1038 (Ala. 1977). See also Flippo v. Pope, 834 So. 2d 83, 87 (Ala. 2002) (an action commenced by a next friend on behalf of a minor does not abate when the minor reaches the age of majority even though the authority of the next friend expires if the former minor elects to proceed). "2Maples v. Chinese Palace, Inc., 389 So. 2d 120 (Ala. 1980)." Thomas's argument is without merit. Wells, as M.A.'s guardian ad litem and next friend, properly filed M.A.'s action against Thomas. Next, Thomas argues that the trial court erred in denying his motions for a JML concerning the Heards' and Wells's wantonness claims against him because, Thomas argues, the 24 1150118, 1150119 Heards and Wells failed to present substantial evidence that Thomas acted wantonly.5 In Joyner v. B & P Pest Control, Inc., 853 So. 2d 991, 999 (Ala. Civ. App. 2002), the Court of Civil Appeals stated: "A JML is appropriate on a wantonness claim if the plaintiff has failed to offer substantial evidence showing that the defendant knew that its act or omission would likely or probably result in injury. See Anderson v. Moore Coal Co., 567 So. 2d 1314, 1317 (Ala. 1990)." "Substantial evidence" is defined as "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989). This Court defined wantonness in Ex parte Essary, 992 So. 2d 5, 9-10 (Ala. 2007), as follows: "'Wantonness has been defined by this Court as the conscious doing of some act or the omission of some duty while knowing of the existing conditions and being conscious that, from doing or omitting to do an act, injury will likely or probably result. Bozeman v. Central Bank of the South, 646 So. 2d 601 (Ala. 1994). To constitute wantonness, it is not necessary that the actor know that a person is 5Thomas does not challenge on appeal the trial court's denial of his motions for a JML concerning the Heards' and Wells's negligence claims against him. 25 1150118, 1150119 within the zone made dangerous by his conduct; it is enough that he knows that a strong possibility exists that others may rightfully come within that zone. Joseph v. Staggs, 519 So. 2d 952, 954 (Ala. 1988). Also, it is not essential that the actor should have entertained a specific design or intent to injure the plaintiff, only that the actor is 'conscious' that injury will likely or probably result from his actions. Id. 'Conscious' has been defined as '"perceiving, apprehending, or noticing with a degree of controlled thought or observation: capable of or marked by thought, will, design, or perception"'; '"having an awareness of one's own existence, sensations, and thoughts, and of one's environment; capable of complex response to environment; deliberate."' Berry v. Fife, 590 So. 2d 884, 885 (Ala. 1991) (quoting Webster's New Collegiate Dictionary 239 (1981) and The American Heritage Dictionary of the English Language 283 (1969), respectively). "Additionally, when determining if a defendant's actions constitute wanton conduct, it is important for the court to distinguish between wantonness and negligence. "'"'Wantonness is not merely a higher degree of culpability than negligence. Negligence and wantonness, plainly and simply, are qualitatively different tort concepts of actionable culpability. Implicit in wanton, willful, or reckless misconduct is an acting, with knowledge of danger, or with consciousness, that the doing or not doing of some act will likely result in injury .... "'"'Negligence is usually characterized as an inattention, thoughtlessness, or heedlessness, a lack of due care; whereas wantonness is characterized as ... a conscious ... act. 26 1150118, 1150119 "Simple negligence is the inadvertent omission of duty; and wanton or willful misconduct is characterized as such by the state of mind with which the act or omission is done or omitted." McNeil v. Munson S.S. Lines, 184 Ala. 420, [423], 63 So. 992 (1913)....'"' "Tolbert v. Tolbert, 903 So. 2d 103, 114–15 (Ala. 2004) (quoting Ex parte Anderson, 682 So. 2d 467, 470 (Ala. 1996), quoting in turn Lynn Strickland Sales & Serv., Inc. v. Aero–Lane Fabricators, Inc., 510 So. 2d 142, 145–46 (Ala. 1987)) (emphasis added)." This Court further stated in Ex parte Essary that "[t]he determination whether a defendant's acts constitute wanton conduct depends on the facts in each particular case. Ex parte Anderson, 682 So. 2d [467,] 470 [(Ala. 1996)]." 992 So. 2d at 10. In the present case, it is undisputed that Thomas drove his vehicle into the intersection without coming to a complete stop at the stop sign regulating traffic traveling south on County Road 41. The evidence indicates that Thomas slowed his vehicle as he approached the intersection but that he did not bring his vehicle to a complete stop before he drove into the intersection, where the collision occurred. There is no evidence indicating that Thomas was driving his vehicle at an unsafe speed. There is evidence indicating that Thomas drank at least one "tallboy" beer and that he took a Seroquel pill 27 1150118, 1150119 before leaving Foster's house. There was testimony presented that Seroquel causes drowsiness and that that effect would be exacerbated by alcohol. There was also evidence presented indicating that Thomas drank more than one beer. In fact, the evidence indicates that Thomas's blood-alcohol concentration "would have been somewhere between a .05 grams percent and a .06 grams percent." The evidence also indicates that witnesses smelled alcohol in the area of Thomas's vehicle immediately after the accident. Dr. Kalin testified as to the effects a person with a blood-alcohol concentration of .05% to .06% may experience. Dr. Kalin testified that a person with a blood-alcohol concentration of .05% to .06% may be "more prone to risky activity"; may have "some fine motor skill problems, how many things can you juggle at one time"; and "may experience some visual acuity problems," including potential loss of peripheral vision. However, Dr. Kalin testified that there was no evidence indicating that Thomas was actually experiencing these effects. Further, Thomas explicitly testified that he was not impaired when he left Foster's house. 28 1150118, 1150119 Viewing these facts in a light most favorable to the Heards and Wells, as we must, there is substantial evidence that Thomas drove his vehicle into the intersection without stopping at the stop sign regulating traffic on County Road 41, and that his driving so caused the accident. There is substantial evidence that Thomas drove his vehicle while he had a blood-alcohol concentration of .05% to .06%. There is also substantial evidence from which the jury could infer that, while Thomas was driving his vehicle with a blood- alcohol concentration of .05% to .06%, Thomas was experiencing the above-mentioned effects testified to by Dr. Kalin. Thomas argues that, based on this Court's decision in Ex parte Essary, these facts are not substantial evidence of wantonness. In Ex parte Essary, Essary failed to completely stop at a stop sign before he drove his vehicle into an intersection, thereby causing an accident. Essary's vehicle collided with another vehicle, causing serious injuries to the occupants of the other vehicle. The facts indicated that Essary had come to a "rolling stop" and had tried to "shoot the gap" between two vehicles. The occupants of the vehicle Essary's vehicle collided with sued Essary, alleging 29 1150118, 1150119 negligence and wantonness. Essary filed a motion for a JML as to the wantonness claim. The trial court granted Essary's JML motion, but the Court of Civil Appeals reversed the trial court's judgment. On appeal, this Court reversed the Court of Civil Appeals' decision, stating: "Although the evidence indicates that Essary knowingly entered the intersection, there is nothing from which the trier of fact could infer that, in moving his vehicle through the intersection, Essary's state of mind contained the requisite consciousness, awareness, or perception that injury was likely to, or would probably, result. Indeed, the risk of injury to Essary himself was as real as any risk of injury to the plaintiffs. Absent some evidence of impaired judgment, such as from the consumption of alcohol, we do not expect an individual to engage in self-destructive behavior. See Griffin Lumber Co. v. Harper, 252 Ala. 93, 95, 39 So. 2d 399, 401 (1949) ('There is a rebuttable presumption recognized by the law that every person in possession of his normal faculties in a situation known to be dangerous to himself, will give heed to instincts of safety and self-preservation to exercise ordinary care for his own personal protection. It is founded on a law of nature and has [as] its motive the fear of pain or death. Atlantic Coast Line R. Co. v. Wetherington, 245 Ala. 313(9), 16 So. 2d 720 [(1944)].'). "The facts here presented do not establish any basis from which to conclude that Essary was not possessed of his normal faculties, such as from voluntary intoxication, rendering him indifferent to the risk of injury to himself when crossing the intersection if he collided with another vehicle. Nor is the act as described by [the plaintiff] so inherently reckless that we might otherwise impute 30 1150118, 1150119 to Essary a depravity consistent with disregard of instincts of safety and self-preservation. We therefore conclude that, as a matter of law, the plaintiffs failed to offer substantial evidence indicating that Essary was conscious that injury would likely or probably result from his actions." Ex parte Essary, 992 So. 2d at 12. This Court concluded in Ex parte Essary that, based on the facts of that case, a motorist who failed to come to a complete stop at a stop sign and who drove his vehicle into an intersection with knowledge that a car was approaching, which resulted in an accident, was not guilty of wantonness. This conclusion was based on the rebuttable presumption that, unless their judgment is impaired, humans will act in their own self-interest. In other words, the Court in Ex parte Essary assumed that the motorist who caused the accident had no consciousness that an injury would likely occur from his actions because presumably he would not engage in activity that would knowingly result in harm to himself. However, this Court did indicate that that presumption could be rebutted if there were substantial evidence that the motorist was not in possession of his "normal faculties" as a result of "voluntary intoxication" such that he was indifferent to the risk of injury to himself. 31 1150118, 1150119 The present case raises the same issue. Unlike the motorist in Ex parte Essary, however, Thomas voluntarily consumed alcohol and at least one prescription drug before causing the accident. Dr. Kalin testified to the following effect, among others, that Thomas was potentially experiencing as a result of his voluntary consumption of alcohol: "Your judgment is going to be a problem in what you see, what you perceive, what you think, what you know. That's all impaired even by low levels of ethanol. That's what the buzz is, the buzz is something that makes you care less about your circumstances than you probably otherwise should." This constitutes substantial evidence from which a jury could infer that Thomas was not in possession of his "normal faculties" as a result of voluntary intoxication such that he was indifferent to the risk of injury to himself. Or, as alternatively stated by this Court in Roberts v. Brown, 384 So. 2d 1047, 1051 (Ala. 1980), Thomas "voluntarily created the conditions which led to the accident" by his consumption of alcohol. Accordingly, we do not find convincing Thomas's argument that the Heards and Wells failed to present substantial evidence of wantonness; there was substantial evidence from which the jury could have reasonably inferred that Thomas was not in possession of his normal faculties at 32 1150118, 1150119 the time of the accident as the result of his voluntary consumption of alcohol and at least one prescription drug. Thomas argues that, based on the evidence presented, a judgment in favor of the Heards and Wells on their wantonness claims requires "the impermissible stacking of multiple inferences to imply that Thomas was impaired." Thomas's brief, at p. 33. We disagree. There was direct evidence that Thomas's blood-alcohol concentration was .05% to .06% shortly following the accident.6 There was direct evidence that a person with .05% to .06% blood-alcohol concentration may experience the effects Dr. Kalin testified to. The only inference the jury needed to make was that Thomas was actually experiencing those effects at the time of the accident. The jury's inference that Thomas was experiencing those effects is 6Thomas argues that it required inferences to conclude that his blood-alcohol concentration was between .05% and .06%. However, both Dr. Kalin and Dr. Valentine, Thomas's own expert witness, testified to this fact. The jury was not required to infer that Thomas's blood-alcohol concentration was between .05% and .06%; that was an undisputed fact below. We note that Thomas raises some concern as to the weight to be accorded certain evidence; however, the right to accord evidence is solely within the province of the jury. See Bell v. Greer, 853 So. 2d 1015, 1018 (Ala. Civ. App. 2003)("It is the jury's responsibility, not this court's, 'to determine the credibility of the evidence, to resolve conflicts therein, to find the facts, and to express its findings in its verdict.' Jones v. Baltazar, 658 So. 2d 420, 422 (Ala. 1995)."). 33 1150118, 1150119 reasonable, given the substantial evidence presented by the Heards and Wells. Thomas's argument is not persuasive. Next, Thomas argues that the Heards and Wells "failed to present clear and convincing evidence of wantonness so as to support submission of punitive damages to the jury." Thomas's brief, at p. 40. In Cessna Aircraft Co. v. Trzcinski, 682 So. 2d 17, 19-20 (Ala. 1996), this Court discussed the following pertinent principles: "The [renewed] motion for a [JML] is a procedural device used to challenge the sufficiency of the evidence to support the jury's verdict. See, Rule 50(b), [Ala.] R. Civ. P.; Luker v. City of Brantley, 520 So. 2d 517 (Ala. 1987). Ordinarily, the denial of a [motion for a JML] or a [renewed motion for a JML] is proper where the nonmoving party has produced substantial evidence to support each element of his claim. However, if punitive damages are at issue in a motion for a [JML] or a [renewed motion for a JML], then the 'clear and convincing' standard applies. Senn v. Alabama Gas Corp., 619 So. 2d 1320 (Ala. 1993). "Section 6–11–20(a), Ala. Code 1975, provides that punitive damages may be awarded in tort actions 'where it is proven by clear and convincing evidence that the defendant consciously or deliberately engaged in ... wantonness' that caused injury to the plaintiff. 'Clear and convincing evidence' is defined in the Code: "'Evidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim 34 1150118, 1150119 and a high probability as to the correctness of the conclusion. Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt.' "Ala. Code 1975, § 6–11–20(b)(4). "Thus, the 'clear and convincing' standard requires the trial judge to do more than merely determine whether the nonmoving party has presented substantial evidence to support the claim for punitive damages. It is not the trial judge's function when ruling on a [motion for a JML] or [renewed motion for a JML] to weigh the evidence; rather, he must view the evidence in a light most favorable to the nonmoving party. If in viewing the evidence in that light the judge reasonably can conclude that a jury could find the facts in favor of the nonmovant and that the jury could be firmly convinced of that decision after considering the evidence in opposition, then the judge should deny the motion." (Footnote omitted.) As made clear by the facts presented in Ex parte Essary, Thomas's failure to bring his vehicle to a complete stop at the stop sign regulating traffic on County Road 41 before driving his vehicle into the intersection and causing the accident is not, in and of itself, substantial evidence of wantonness. This is so, the Court in Ex parte Essary made clear, because there is a presumption that a person will not 35 1150118, 1150119 consciously do something that will cause himself harm. However, the self-preservation presumption may be rebutted by, among other things, evidence indicating that the actor did not have possession of his or her normal faculties such that he or she did not appreciate the danger the actor's actions posed to himself or herself. We have determined that the Heards and Wells presented substantial evidence sufficient to rebut the self-preservation presumption. We must now determine if the Heards and Wells have presented clear and convincing evidence rebutting the self-preservation presumption. As set forth above, the Heards and Wells had to present: "Evidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim and a high probability as to the correctness of the conclusion. Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt." § 6-11-20(b)(4), Ala. Code 1975. The Heards and Wells presented clear and convincing evidence of Thomas's voluntary intoxication sufficient to rebut the self-preservation presumption. The evidence indicates that Thomas consumed alcohol and at least one 36 1150118, 1150119 prescription drug before driving his vehicle away from Foster's house. As Thomas approached the stop sign, he slowed the vehicle he was driving and then, without coming to a complete stop, drove his vehicle into the intersection; this is clear and convincing evidence that Thomas was aware of the presence of the stop sign and that he consciously chose to disregard it. From Thomas's equivocal testimony as to how much he drank, the jury could have concluded that he drank more than one beer. There is clear and convincing evidence to support such a conclusion given that Thomas's blood-alcohol concentration was between .05% and .06% at the time of the accident. Testimony was unequivocal that several of the drugs Thomas could have possibly taken, including Seroquel, which he did take, cause drowsiness and that alcohol would exacerbate that effect. Dr. Kalin testified that it is possible for people with Thomas's blood-alcohol concentration to be impaired; that one "would expect" their "inhibitions to be inhibited"; that they would be "more prone to risky activity"; that they would have "some fine motor skill problems"; that their "judgment is going to be a problem in what [they] see, what [they] 37 1150118, 1150119 perceive, what [they] think, [and] what [they] know. That's all impaired even by low levels of ethanol." Additionally, a person with Thomas's blood-alcohol concentration "may experience some visual acuity problems," may "have difficulty focusing," "may not see ... as well as [he] would otherwise," and will lose peripheral vision. Dr. Kalin did testify that not everyone experiences the same effects at the same blood-alcohol concentration. Further, he did discuss the impact of the alcohol on Thomas in terms of what "may" occur. However, if there is any lingering doubt as to whether there was clear and convincing evidence to rebut the self-preservation presumption, Thomas's own testimony indicated that he was impaired: "[Wells's trial counsel:] Why didn't you see the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you stop at the stop sign? "[Thomas:] I can't tell you that. "[Wells's trial counsel:] Why didn't you see the Heards traveling in their silver car to your right? "[Thomas:] I can't tell you that." 38 1150118, 1150119 The above-summarized evidence in conjunction with Thomas's own testimony constitutes clear and convincing evidence from which a jury could derive a firm conviction that Thomas was not in possession of his "normal faculties" as a result of voluntary intoxication so that he was indifferent to the risk of injury to himself. Accordingly, Thomas's argument that the Heards and Wells failed to present clear and convincing evidence of wantonness is not convincing. Next, Thomas argues that, even if this Court determines that the Heards and Wells presented clear and convincing evidence sufficient to support an award of punitive damages on their wantonness claims, the jury's punitive-damages awards were excessive. Thomas first notes that, in denying his motion for a remittitur, the trial court simply stated: "Defendant’s Motion for Remittitur is denied." Thomas argues that the trial court's cursory denial of his motion for a remittitur is in violation of Alabama law because the trial court did not include a written statement of the reasons for that denial. In making this argument, Thomas relies on the following portion of Williford v. Emerton, 935 So. 2d 1150, 1156 (Ala. 2004): 39 1150118, 1150119 "As we explained in Love v. Johnson, 775 So. 2d 127, 127–28 (Ala. 2000), such a written statement is necessary before this Court can conduct a proper review on appeal: "'In Hammond [v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986)], this Court required that a trial court "reflect in the record the reasons for interfering with a jury verdict, or refusing to do so, on the grounds of excessiveness of the damages." 493 So. 2d at 1379; see also ALFA Mut. Ins. Co. v. Brewton, 554 So. 2d 953 (Ala. 1989). In Hammond, this Court stated the reason for the requirement: "'"[T]he trial judge is better positioned to decide whether the verdict is ... flawed [as excessive]. He has the advantage of observing all of the parties to the trial -- plaintiff and defendant and their respective attorneys, as well as the jury and its reaction to all of the others. There are many facets of a trial that can never be captured in a record, so that the appellate courts are at a special disadvantage when they are called upon to review [a] trial [court's] action in this sensitive area...." "'493 So. 2d at 1378–79.' "When a trial court fails to put in writing its reasons for denying a motion to review a punitive-damages award for excessiveness, this Court's practice has been to remand the cause for the trial court to enter an order in compliance with Hammond. See, e.g., Love, 775 So. 2d at 128; Spencer 40 1150118, 1150119 v. Lawson, 815 So. 2d 502 (Ala. 2001); Southern Pine Elec. Coop. v. Burch, 878 So. 2d 1120 (Ala. 2003)." Thomas is correct. The trial court failed to put into writing its reasons for denying Thomas's motion for a remittitur of the punitive-damages awards. Therefore, we remand this case to the trial court for the entry of an order that complies with the requirements of Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala. 1986). Lastly, Thomas argues that the trial court "erred by awarding all of the costs claimed by" the Heards and Wells. Thomas's brief, at p. 56. Thomas does not argue that the Heards and Wells failed to present evidence supporting their motions for costs. Rather, Thomas's argument is limited to arguing that the trial court had no authority to award certain kinds of costs it awarded to the Heards and Wells. The awarding of costs by a trial court is governed by Rule 54(d), Ala. R. Civ. P., which states, in pertinent part: "Except when express provision therefor is made in a statute, costs shall be allowed as of course to the prevailing party unless the court otherwise directs ...." In Bundrick v. McAllister, 882 So. 2d 864, 866 (Ala. 2003), this Court stated: "[O]ur review of a trial court's order taxing costs 41 1150118, 1150119 pursuant to Rule 54(d) is limited to determining whether 'a clear abuse of discretion' is present. Garrett[ v. Whatley], 694 So. 2d [1390,] 1391 [(Ala. Civ. App. 1997)]." Thomas first argues that the trial court erred in awarding the Heards and Wells "medical expert witness fees." Thomas's brief, at p. 58. Thomas correctly notes that Bundrick stands for the proposition "'that compensation of experts cannot be allowed and taxed against the parties as costs in litigation unless so provided by statute.'" 882 So. 2d at 867 (quoting Hartley v. Alabama Nat'l Bank of Montgomery, 247 Ala. 651, 656, 25 So. 2d 680, 683 (1946)). However, Thomas has not set forth any facts in his brief before this Court indicating that the Heards or Wells were reimbursed for compensation they paid to experts. Thomas asserts that the Heards "recovered $4,200.00 in costs for medical depositions." Thomas's brief, at p. 58. Thomas does not allege that the Heards sought reimbursement for compensation they had paid to experts, only that they recovered costs for "medical depositions." It is well established that, 42 1150118, 1150119 "under Ala. Code 1975, § 12-21-144,[7] as interpreted by our Supreme Court in Ex parte Strickland, 401 So. 2d 33 (Ala. 1981), a trial court may, in its discretion, tax all of the costs of any deposition taken in a case, regardless of whether the deposition was used at trial, if the deposition was reasonably necessary." Bundrick, 882 So. 2d at 866. Therefore, Thomas's argument concerning the Heards' recovery of costs for "medical depositions" is not convincing. Based on the above-quoted language from Bundrick, Thomas's arguments concerning the "deposition fees" recovered by the Heards and Wells are likewise unconvincing. See Thomas's brief, at pp. 61-62. Concerning Wells, Thomas asserts that "Wells recovered $1,950.00 associated with payments for deposition testimony of medical experts." Thomas's brief, at p. 58. However, Thomas has not directed this Court's attention to any portion of the voluminous record in this case so indicating. Rule 28(a)(10), Ala. R. App. P., requires a party to provide "citations to the 7Section 12-21-144, Ala. Code 1975, states: "The costs of any deposition introduced, in whole or in part, into evidence at the trial by the party taking it shall be taxed as costs in the case upon the certificate of the person before whom the deposition was taken; the costs of depositions in other cases shall be taxed as costs in the case only if the court so directs." 43 1150118, 1150119 ... parts of the record relied on," which Thomas has failed to do. Accordingly, we decline to consider Thomas's argument. Thomas also raises other arguments concerning costs awarded to the Heards and Wells pertaining to travel, investigation, "audio/visual during trial," and "trial exhibits and copying costs." However, Thomas's arguments concerning those costs are either not supported with binding precedent or not supported with any authority whatsoever. "Rule 28(a)(10), Ala. R. App. P., requires that arguments in an appellant's brief contain 'citations to the cases, statutes, other authorities, and parts of the record relied on.' Further, 'it is well settled that a failure to comply with the requirements of Rule 28(a)(10) requiring citation of authority in support of the arguments presented provides this Court with a basis for disregarding those arguments.' State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 822 (Ala. 2005)(citing Ex parte Showers, 812 So. 2d 277, 281 (Ala. 2001)). This is so, because '"it is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."' Butler v. Town of Argo, 871 So. 2d 1, 20 (Ala. 2003)(quoting Dykes v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala. 1994))." Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9 (Ala. 2007). Accordingly, we will not consider Thomas's unsupported arguments. 44 1150118, 1150119 Conclusion Based on the foregoing, we conclude that the trial court correctly denied Thomas's renewed motion for a JML, and we affirm the trial court's judgments on the Heards' and Wells's wantonness claims. We also affirm the trial court's award of costs to the Heards and Wells. However, we remand the cause for the trial court to take such steps as are necessary to enter an order in compliance with Hammond on the punitive- damages awards. The trial court shall make a return to this Court within 90 days from the date this opinion is released. On return to remand, Thomas can renew his argument to this Court, if he so desires, that the punitive damages awards are excessive. 1150118 -- APPLICATION GRANTED; NO-OPINION ORDER OF AFFIRMANCE OF NOVEMBER 4, 2016, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; AND REMANDED WITH INSTRUCTIONS. Parker, Main, and Wise, JJ., concur. Bryan, J., concurs in part and concurs in the result. Shaw, J., concurs in the result. Stuart, Bolin, and Murdock, JJ., dissent. 1150119 -- APPLICATION GRANTED; NO-OPINION ORDER OF AFFIRMANCE OF NOVEMBER 4, 2016, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; AND REMANDED WITH INSTRUCTIONS. 45 1150118, 1150119 Parker, Main, and Wise, JJ., concur. Bryan, J., concurs in part and concurs in the result. Shaw, J., concurs in the result. Murdock, J., concurs in the result in part and dissents in part. Stuart and Bolin, JJ., dissent. 46 1150118, 1150119 BRYAN, Justice (concurring in part and concurring in the result). Regarding the discussion in the main opinion affirming the trial court's judgment on the Heards' and Wells's wantonness claims, I concur only in the result. As to the remaining issues, I concur. 47 1150118, 1150119 MURDOCK, Justice (concurring in the result in part and dissenting in part in case no. 1150119 and dissenting in case no. 1150118). I concur in the result reached by the main opinion as it relates to the meaning of § 6-5-390, Ala. Code 1975, in case no. 1150119. I respectfully dissent as to the merits of the other issues presented in both cases. Finally, I do not think a remand of the case to the trial court is necessary. "'Wantonness'•has been defined by this Court as the conscious doing of some act or the omission of some duty while knowing of the existing conditions and being conscious that, from doing or omitting to do an act, injury will likely or probably result." Ex parte Essary, 992 So. 2d 5, 9 (Ala. 2007). I see no evidence of wantonness on the part of Timothy Joel Thomas in connection with his pulling into the intersection in which the accident occurred. For example, there is no evidence indicating that Thomas saw one or more approaching vehicles and decided to try and "shoot the gap," as did the defendant in Essary, a case in which this Court nevertheless found there to be insufficient evidence of wantonness. 48 1150118, 1150119 Although there is much discussion in the main opinion of the fact that Thomas had a blood-alcohol content of .05% or .06%, I find little in that fact to support a wantonness claim, especially when the "legal limit" is .08% (and formerly was .10%). Of course, there is the added factor in this case of the prescription drug also taken by Thomas, along with testimony that the alcohol consumed by Thomas might enhance the tendency of the prescription drug to cause drowsiness. But by how much? Was Thomas aware that this might occur? What degree of impairment did Thomas experience above and beyond the normal impairing effect of a .05% or .06% blood- alcohol measurement? I do not believe the records before us contain answers to these questions, leaving us to speculate as to the answers. To my mind, then, the evidence before us is not evidence of wanton conduct on the part of Thomas. Negligence, yes. But not wantonness. And in any event, not evidence from which a jury could find wantonness to be "clearly and convincingly" established. The main opinion appears to deal with this deficiency, at least in part, by comparing and contrasting this case with Essary. It is true that this Court in Essary, in finding 49 1150118, 1150119 insufficient evidence of wantonness, took note of the lack of any evidence that the defendant was impaired. But the negative inference drawn by the main opinion from this notation in Essary is not warranted and was not intended by Essary. In particular, the fact that Thomas may not have been "'in possession of his normal faculties'" does not readily correspond, but in fact would seem to be at odds with, the requisite "'"'consciousness ... that the doing or not doing of some act will likely result in injury.'"'" Essary, 992 So. 2d at 12, 9 (emphasis omitted) (quoting, respectively, Griffin Lumber Co. v. Harper, 252 Ala. 93, 95, 39 So. 2d 399, 401 (1949), and Tolbert v. Tolbert, 903 So. 2d 103, 114–15 (Ala. 2004), quoting, in turn, Ex parte Anderson, 682 So. 2d 467, 470 (Ala. 1996), quoting in turn Lynn Strickland Sales & Serv., Inc. v. Aero–Lane Fabricators, Inc., 510 So. 2d 142, 145–46 (Ala. 1987)). And again, my struggle with this issue only increases when one turns to the question whether there was sufficient evidence from which the jury could find 50 1150118, 1150119 wantonness under a "clear and convincing" evidence standard as required for the awards of punitive damages.8 Finally as to the merits, I cannot agree with the analysis offered by the main opinion with respect to the issue of the costs awarded to the Heards and to Wells in relation to certain medical-deposition testimony. Aside from my position as to the merits of various issues as discussed above, I do not believe it is necessary for the Court today to remand this cause to the trial court. Although we have said, as the main opinion notes, that a trial court is to express the reasons for its denial of a motion for a remittitur in a written order to give this Court the benefit of the trial court's evaluation of the verdict, that is not an ironclad rule. See Phillips Colleges of Alabama, Inc. v. Lester, 622 So. 2d 308, 314 (Ala. 1993)(addressing the issue of whether a verdict that included a punitive-damages award was excessive and noting that "since Hammond [v. City of 8It should be noted that the appellate-review standard is not whether this Court can find wantonness to have been clearly and convincingly established, but rather whether the record is such that a jury could have done so. See, e.g., Ex parte Norwood Hodges Motor Co., 680 So. 2d 245, 249 (Ala. 1996). 51 1150118, 1150119 Gadsden, 493 So.2d 1374 (Ala. 1986)], we have pointed out that it was never our intention to automatically remand every case in which excessiveness was at issue. Where the record on appeal is sufficient for this Court to review the excessiveness issue, as it is in the present case, a Hammond remand is not necessary." (citation omitted)). In this regard, it is also worth noting that we employ a de novo standard on appellate review of a punitive-damages award. See, e.g., Schaeffer v. Poellnitz, 154 So. 3d 979, 986 (Ala. 2014). 52

March 24, 2017

17b1d1c3-93c4-4c3c-87f6-600363f72755

Campbell v. Davis

150 So. 2d 187

N/A

Alabama

Alabama Supreme Court

150 So. 2d 187 (1962) H. L. CAMPBELL, Administrator, v. Leon DAVIS. 4 Div. 111. Supreme Court of Alabama. December 20, 1962. Rehearing Denied February 28, 1963. *188 Robt. B. Albritton, Albrittons & Rankin, Andalusia, for appellant. Tipler & Fuller, Andalusia, for appellee. SIMPSON, Justice. This appeal is by the defendant from a jury's verdict and a judgment thereon in favor of the plaintiff below, assessing damages for wrongful death in the amount of $10,000. The action was commenced by father, Leon Davis, for the death of his minor son pursuant to § 119, Title 7, Code of Ala. 1940, against the estate of the deceased, Charles M. Locke, driver of the automobile in which plaintiff's intestate was killed. The evidence tended to show the following: Three boys, Virgil Davis (appellee's intestate), Ray Junior Henderson, and Bobby Barlow, were riding in an automobile being driven by Charles Melvin Locke. The car belonged to Henderson's mother. Ray had allowed Locke to drive. The boys were traveling toward Florala on County Highway No. 4, the so-called "Wing-Lockhart" road, in Covington County. There was evidence that it was dark enough to use the car lights, but that Locke was *189 driving with them off at the time of the collision, having been turning them off and on intermittently. Coming in the opposite direction was an automobile driven by one Jackie Lewis. Both cars being over the center line approximately one foot, they hit head-on, the left front of both meeting, described by a witness as "locking horns". There was evidence that Lewis had several cans of beer in his car, and that he had been drinking that day. One of the many conflicts in the evidence was as to the speed of the cars, Ray Henderson testifying that the Locke car was traveling at 40 to 50 miles per hour, the Lewis car at 80 to 100 miles per hour; while Bobby Barlow testified that the Locke car was traveling at 75 to 80 miles per hour. Both were in the Locke car in which the speedometer was broken. The highway patrolman investigating the collision estimated the speed of both cars at 75 to 80 miles per hour, which was introduced in evidence without objection. Virgil Davis and Charles Locke sustained injuries resulting in their death, and Bobby Barlow was severely injured as a result of the collision. Appellant under the misapprehension that this action was brought pursuant to § 121, Title 7, Code of Ala. 1940, first strenuously argued that there is no authority for one estate to sue another in tort actions, but on discovering that the action was commenced under § 119, Title 7, supra, by a father for the death of his minor son, this argument seems to have been abandoned. Appellant contends that the issue of indemnity insurance was improperly commented upon and argued to the jury by counsel for appellee, thereby necessitating a reversal. This issue bears some close scrutiny and explanation, because both sides in closing arguments to the jury argued at great length the fact of appellant's indemnity insurance. It appeared that insurance was first introduced into evidence by appellant's witness, Ray Junior Henderson, who on cross-examination volunteered that he had given a statement to an insurance agent. Appellant did not object to this testimony or move to exclude it. Appellee's counsel, pursuing the matter further, established the agent's name. Appellant offered the statement in evidence but the trial court refused it, the witness being in court. Appellant assigns only the following statement as error, which was made by appellee's counsel in closing argument: Appellant objected to the statement and then moved for a mistrial urging that the argument was improper, unfair, and prejudicial to his case. The lower court overruled the objection and denied the motion. It is manifest that the bulk of the matters argued by appellant in brief are not embraced within his Assignments of Error; therefore, on the authority of numerous cases, we only consider the ruling clearly assigned as error. (See Ala.Dig., Appeal & Error.) It should be emphasized that no objection was interposed when Henderson (witness for appellant) testified that he had given a statement to an insurance agent. The evidence was before the jury without objection, and was subject to comment by opposing counsel. Therefore, the trial court will not be put in error for overruling the objection and denying the motion for a mistrial. Appellee's counsel made the following statement in his opening argument to the jury: Appellant did not interpose an objection to the argument, but makes it a ground for motion for a new trial. While the argument is subject to the interpretation that appellant seeks us to indulge, i. e., that the statement was a reference to insurance coverage, we think it is subject also to the interpretation that the suit was merely against the estate of Locke and not against the administrator as an individual. Appellant by not raising an objection thereto must have thought so also. If the statement was a reference to insurance, to invite our review, it should have been duly objected to by appellant, otherwise we will not review matter alleged to be prejudicial unless it clearly appears so. Nelson v. Shelby Manufacturing & Implement Co., 96 Ala. 515(8), 11 So. 695; Southern Railway Co. v. Dickson, 211 Ala. 481(31), 100 So. 665; Ala.Dig., Trial. (2). This, aside from other reasons, makes it patent that there was no error to reverse in the stated argument. Appellant urges appellee's mention of a highway patrol report is sufficient to work a reversal of the case, in that the report had been excluded from evidence. Nowhere in the record do we find this assigned as error, nor do we find that it is made ground for motion for a new trial. Of consequence, there is nothing to invite our review. Appellant urges in support of his motion for a new trial that the closing argument of appellee's counsel to the jury is so incendiary, inflammatory and grossly improper in its premises by mention of insurance coverage, and that the insurer should be made to pay, that the same should have been excluded by the court on its own motion. The record discloses that appellant's counsel also strenuously argued insurance to the jury, although the full substance of the argument is not set out. We entertain the view that since both arguments of counsel were heard in full by the trial court in connection with appellant's motion, as amended, for a new trial, and the record before us being incomplete, we must of necessity sustain the finding of the trial court, and hold that no error is made to appear in the ruling of the trial court in denying the new trial on this ground. What constitutes proper argument by counsel is largely discretionary with the trial court, having the opportunity to hear the arguments in full, and the query is to be decided upon a consideration of the peculiar facts involved and of the atmosphere created at the trial. Pacific Mutual Life Insurance Co. of California v. Green, 232 Ala. 50(1), 166 So. 696; Adams v. Queen Insurance Co. of America, 264 Ala. 572(15), 88 So. 2d 331; Southern Railway Co. v. Jarvis, 266 Ala. 440(10), (11), 97 So. 2d 549. No case could present a clearer need for application of the rule than the case at bar. Appellant assigns as error the refusal of the trial court to allow him to interrogate his own witness, Ray Henderson, concerning previous alleged inconsistent statements for the purpose of refreshing his recollection. The following occurred on redirect examination by appellee: "Q You don't know who Mr. Carl Murray was do you? "A No, sir. "A I don't remember. "Q You don't remember Mr. Earl King taking down your statement? "A No sir. "MR. TIPLER: We object to him impeaching his own witness. "THE COURT: Yes, I think * * * "MR. ALBRITTON: He examined him about the statement Judge. "A I was upset at the time I gave that statement. "THE COURT: Yes." It appears that appellee is correct in that appellant was attempting to impeach his own witness, and had surpassed the realm of "refreshing recollection" of the witness. There must be an avowed surprise before one's own witness may be so examined. White v. State, 87 Ala. 24, 5 So. 829; Alabama Power Co. v. Hall, 212 Ala. 638, 103 So. 867; see also McElroy, Ala. Evid., Vol. 1, § 165.01(7) and cases therein cited. After a close examination of the record we find there is no substantial inconsistency between the testimony of Henderson on cross-examination and that given in the statement referred to in the above testimony. And the testimony in both instances was very favorable to appellant. At the date of the trial of this case the witness Henderson was a boy of about 15 years of age and could have easily forgotten to whom the statement had been given, and we feel that this would not be enough of an "avowed surprise" on the part of appellant to allow such examination. The recollection of the witness had sufficiently been probed, and any attempt to go beyond this would be an impeachment of his own witness. Appellant next contends that questions propounded to witness Roy Hysmith as to convictions of crimes for the purpose of impeachment were improper and prejudicial and appellant's objections thereto should have been sustained or a mistrial granted. On examination in chief the substance of Hysmith's testimony was that he had seen Jackie Lewis (the driver of the other car) the day of the accident and had served him one can of beer, and could tell that he had been drinking. Counsel for appellee asked on cross-examination how many times Mr. Hysmith had been in jail, the court overruling an objection thereto, and allowed the witness to answer. Appellee's counsel then asked the witness if he had ever served time in the penitentiary. Appellant did not object to this question, but in his brief states that he did and argues strenuously that there was error in overruling objection thereto. Since the record fails to disclose that any ruling of the trial court was invoked, this question is not up for review. Appellee's counsel then asked the witness whether he had been sentenced to 12 months hard labor for vagrancy; it was later elicited that the witness had refused to support his children. It would appear that the cross-examination to impeach Hysmith was improper, but his testimony on direct hardly amounted to more than stating that Jackie Lewis had been served one can of beer in his establishment, and that Lewis appeared to have been drinking, which was also brought out by examination of other witnesses. We fail to see how appellee was *192 prejudiced by this improper line of examination, and we therefore invoke the rule of "harmless error" in holding that this was not adequate ground for a reversal of the case. Rule 45, Rules of Supreme Court, Appen., Title 7, Code of Ala. 1940. Had the witness been material to appellee's defense a different question might have been presented. Appellant next contends the trial court erred in refusing to give requested charge No. 4, which in effect stated that the purpose of the wrongful death statute was to discourage homicides, and the only damages recoverable are by way of punishment, and that the plaintiff should recover only if the jury should find that the deceased tortfeasor should be punished for the wrongful act. The charge as it appears in the record apparently omits a word necessary to its understanding and was properly refused as elliptical. Washam v. Beaty, 210 Ala. 635(2), 99 So. 163; Marbury Lumber Co. v. Heinege, 204 Ala. 241(9), 85 So. 453; Southern Ry. Co. v. Jones, 21 Ala.App. 547(6), 109 So. 894. The charge is also an incorrect statement of the law in that it predicates recovery upon a determination of punishment upon Charles M. Locke, deceased, personally, when the suit is brought against his estate. Shirley v. Shirley, 261 Ala. 100, 73 So. 2d 77. It further appears that the charge was adequately covered in the general oral charge of the court to the jury [Ala.Dig., Trial. (d)] and thus its refusal was not error. Appellant seeks reversal for the trial court's refusal to give requested charge No. 5, which in substance stated that the plaintiff cannot recover merely because the defendant is insured. Appellant cites no authority for this proposition but it is elementary that the trial court will not be placed in error for refusing to give a requested charge not covered by the pleadings. Gilliland & Echols Farm Supply & Hatchery v. Credit Equipment Corp., 269 `Ala. 190(2), 112 So. 2d 331; Central of Ga. Ry. Co. v. McNab, 150 Ala. 332, 43 So. 222, and cases cited in Ala.Dig., Trial. The remainder of the Assignments of Error not having been argued in brief will be deemed waived. Rule 9, Supreme Court Rules of Practice, Appendix, Title 7, Code of Ala.1940, and cases cited. We are at the conclusion that appellant has failed to show error to reverse. Affirmed. LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.

December 20, 1962

3652f9da-3425-4e93-8f3d-686ecbc1f541

Davis v. Davis

147 So. 2d 828

N/A

Alabama

Alabama Supreme Court

147 So. 2d 828 (1962) John Foy DAVIS v. Marie B. DAVIS. 4 Div. 129. Supreme Court of Alabama. December 20, 1962. *829 J. Hubert Farmer, Dothan, for appellant. Halstead & Whiddon, Abbeville, for appellee. SIMPSON, Justice. Appeal from a decree of absolute divorce rendered in the Henry County Circuit Court, in Equity. It appeared that prior to granting appellant the absolute divorce, a decree of divorce, a mensa et thoro, was rendered in favor of the wife, appellee here, awarding separate maintenance and support. This decree was modified and affirmed by this Court. Davis v. Davis, 255 Ala. 215, 50 So. 2d 723. The Register of the lower court held a reference and determined $100.00 per month was a reasonable amount to be paid appellee as permanent alimony. The decree of absolute divorce in favor of appellee affirmed the Register's report and the amount awarded was ordered to be paid to appellee. From this decree this appeal ensued. The facts material to a determination of the appeal are: Appellee is 63 years of age, in exceedingly poor health and unable to maintain a regular job. She receives constant medical attention having a regular expense of drugs and medications. Her annual expenses are listed at $1,339.30, which, it is claimed, do not include certain dental care and the expense of an impending operation. It appeared that the parties were married for some 20 years before the divorce. Appellee receives some $34.34 monthly as Social Security payments, and some $47.00 yearly from realty. She also has a bank account of some $425.00. Appellant is 64 years old, having a heart condition, and being unable to perform strenuous labor. His income for 1957 was $2,930.00; for 1959 was $4,000.00; for 1960, $2,500.00; and for 1961, $4,100.00. Appellant believes that he will not be able to earn a livelihood for the rest of his life; his income will be only $1,500.00 to $2,000.00 yearly which will be from the sale of timber cut from land which was the estate of his father. Appellant's real and personal property was found by the Register to be worth $21,600.00. We may review the judicial discretion of the lower court in allowing permanent alimony and may revise it if found to be arbitrary. Pope v. Pope, 268 Ala. 513; 109 So. 2d 521; Rich v. Rich, 256 Ala. 339, 54 So. 2d 554; Sills v. Sills, 246 Ala. 165 (4, 6), 19 So. 2d 521. However, the parties were before the lower court and testimony was taken orally; in such circumstances we will not set aside the decree of the lower court unless palpably wrong. Crittenden v. Crittenden, 256 Ala. 219, 54 So. 2d 489; Cairnes v. Cairnes, 211 Ala. 342, 100 So. 317. The presumption remains even where a part of the evidence is taken by deposition and a part orally before the court. *830 Meares v. Meares, 256 Ala. 596, 56 So. 2d 661. The finding of the Register on questions of fact must be accorded the same presumption (State ex rel. Sellers v. Locke, 208 Ala. 169, 93 So. 876; Mahone v. Williams, 39 Ala. 202 [11], 221) and it is generally stated to be subject to the same presumption as a jury's verdict when based on oral evidence. Adair v. Adair, 258 Ala. 293, 62 So. 2d 437; State ex rel. Sellers v. Locke, supra; Garrett v. Snowden, 226 Ala. 30 (11), 145 So. 493, 87 A.L.R. 216. Such presumption, therefore, is indulged in favor of the report of the Register when reviewed by the lower court and this Court. There is no fixed rule for the determination of an alimony award. It must depend upon all relevant factors, considered in the light of what is just and reasonable. The allowance ordinarily varies from half the husband's estate to a third or less (Phillips v. Phillips, 221 Ala. 455, 129 So. 3), but where the husband is guilty of wanton or wicked conduct toward his wife, the allowance must be as liberal as the estate of the husband will permit under all the circumstances of the case. Steiner v. Steiner, 254 Ala. 260, 48 So. 2d 184. The court may and should inquire into the earning ability of the parties and their probable future prospects, their age, sex, health and station in life; the duration of the marriage, the conduct of the parties with particular reference to the cause of divorce. Garlington v. Garlington, 246 Ala. 665, 22 So. 2d 89; Ortman v. Ortman, 203 Ala. 167, 82 So. 417. The foregoing having been considered by the lower court in arriving at the permanent alimony award, there appears no error in this particular. We are not prepared to say that the decree of the lower court was palpably wrong, which we must do before we would be warranted in disturbing the decree. The rate of permanent alimony was reported to be reasonable by the Register and was so found by the lower court, so it must stand, the contrary not appearing. We might add that when permanent alimony is allowed in monthly installments and if the circumstances of the parties change substantially, the court can make revisions in the monthly allowance to appellee as the substantially changed circumstances may warrant. Wells v. Wells, 230 Ala. 430, 161 So. 794; Epps v. Epps, 220 Ala. 592, 126 So. 862; Garlington v. Garlington, supra; Smith v. Rogers, supra. The fourth Assignment of Error made by appellant was with reference to the final decree of the lower court placing a lien on all of the real estate and interest in real estate, situated in Henry County, Alabama, owned by appellant to secure payment of the permanent alimony. This was not error. The cases are numerous on the point that the court may secure payment of alimony by declaring a lien on the husband's property. Phillips v. Phillips, 221 Ala. 455, 129 So. 3; Smith v. Rogers, 215 Ala. 581, 112 So. 190. Appellee was awarded $200.00 solicitor's fee in the trial court. A motion to allow compensation for her attorney on this appeal is made here. This Court exercising wide discretion has authority to compel appellant to pay a reasonable fee for legal services on this appeal. Davis v. Davis, 255 Ala. 488(13, 14), 51 So. 2d 876; Walling v. Walling, 253 Ala. 337, 45 So. 2d 6; Taylor v. Taylor, 251 Ala. 374; 37 So. 2d 645; Steiner v. Steiner, supra; Phillips v. Phillips, supra. Due to the outcome of the case and other factors we think the $200.00 awarded appellee's solicitors for services in the trial court was reasonable and $100.00 for services on this appeal to be reasonable, and it is so ordered. Considering all the facts and circumstances in the case at bar, we are not prepared to say that the permanent alimony *831 award is excessive. But viewed in any aspect, we are not persuaded the decree rendered should here be disturbed. Affirmed. LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.

December 20, 1962

880591f8-2d1b-4f9e-b517-b391faf40a95

Aliant Bank, A Division of USAmeribank v. Wrathell, Hunt & Associates, LLC, and Pfil Hunt

N/A

1150823

Alabama

Alabama Supreme Court

REL: 05/05/2017 REL: 08/25/2017 As modified on grant of rehearing [by substitution of pages 72-90]. Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA SPECIAL TERM, 2017 ____________________ 1150822 ____________________ Aliant Bank, a Division of USAmeribank v. Four Star Investments, Inc., et al. ____________________ 1150823 ____________________ Aliant Bank, a Division of USAmeribank v. Wrathell, Hunt & Associates, LLC, and Pfil Hunt ____________________ 1150824 ____________________ Aliant Bank, a Division of USAmeribank v. Engineers of the South, LLC, and Tim Harbison Appeals from St. Clair Circuit Court (CV-12-900044) STUART, Chief Justice. Aliant Bank, a division of USAmeribank ("Aliant"), sued various individuals and business entities involved in a failed effort to develop the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The St. Clair Circuit Court ultimately entered a number of orders either dismissing Aliant's claims or entering a summary judgment in favor of the various defendants. Aliant has filed three appeals; we affirm in part and reverse in part in appeals no. 1150822 and no. 1150823 and affirm in appeal no. 1150824. 2 1150822, 1150823, 1150824 I. On August 15, 2007, Aliant closed a $2.3 million loan ("the Aliant loan") with Four Star Investments, Inc., a corporation that owned 197 acres of land in Odenville that Four Star Investments' president, Bobby R. Smith, Jr. ("Smith"), planned to develop into a subdivision to be known as Twelve Oaks. The proceeds of the Aliant loan were used both to pay off a previous loan on the Twelve Oaks property and to finance construction of the infrastructure for the subdivision. The Aliant loan was secured by a first-priority mortgage on the Twelve Oaks property and was also personally guaranteed by Smith, a contractor who had experience developing several other subdivisions in the St. Clair County area. Another company owned and operated by Smith, Twelve Oaks Properties, Inc., thereafter operated as the entity developing Twelve Oaks. During this same time frame, Smith was also seeking additional financing from other sources for the development of Twelve Oaks. He eventually came into contact with Pfil Hunt, a Mobile-based investment banker with experience setting up public-private partnerships between municipalities and developers. Hunt advised Smith that one option was to create, 3 1150822, 1150823, 1150824 pursuant to the Alabama Improvement District Act, § 11-99A-1 et seq., Ala. Code 1975, a type of public corporation known as an "improvement district" for which bonds could be issued and sold, thus providing immediate revenue for the construction of improvements benefiting the Twelve Oaks property. Those bonds would later be repaid by the end purchasers of the developed lots, who would be responsible for paying an annual assessment that ran with the property until the bonds were repaid. Smith ultimately elected to pursue that route, and throughout the fall of 2007 he worked with Hunt and Hunt's management company Wrathell, Hunt & Associates, LLC ("WHA"), to complete the planning of Twelve Oaks and to prepare a petition requesting that the Odenville town council formally create an improvement district that encompassed the Twelve Oaks property. As part of that process, Hunt directed Smith to Tim Harbison, an engineer with the engineering firm Engineers of the South, LLC ("EOS"), who, in November 2007, created an engineer's report detailing the feasibility of the planned Twelve Oaks subdivision. That report, based on figures provided by Smith, stated that it would cost $5,618,000 to complete the Twelve Oaks infrastructure, including roads, sidewalks, signage, street lighting, landscaping and irrigation, earthwork and a 4 1150822, 1150823, 1150824 series of lakes, water and sewage systems, a clubhouse and a swimming pool, park areas, and walking trails. Smith thereafter petitioned the Odenville town council to create the planned improvement district, and, on January 14, 2008, the Odenville town council adopted a resolution granting the petition and creating the Twelve Oaks Improvement District ("the District"). The District's board of directors consisted of Smith; Smith's brother Billy Smith, who was the partner with Smith in B&B Construction, Inc., a construction company that had worked on the Twelve Oaks property; and Fran Mize, a real-estate broker and another business partner of Smith's responsible for marketing Twelve Oaks (hereinafter referred to collectively as "the Board members"). The District subsequently hired WHA to manage the District and EOS as the official engineer for the District, and they thereafter worked toward preparing a bond issue and finding a buyer for the to- be-issued bonds. Ultimately, Allstate Insurance Company ("Allstate") agreed to purchase $4,395,000 worth of bonds issued by the District. In April 2008, the District petitioned the Odenville town council to adopt a resolution approving the assessments that would be used to secure and pay the bonds to be issued by the 5 1150822, 1150823, 1150824 District. In support of that petition, the District submitted the engineer's report prepared by Harbison and a methodology report prepared by WHA, which concluded that the $4,395,000 face value of the bonds would require a special assessment of $12,557.14 to be levied upon each of the 350 lots planned for Twelve Oaks, which assessment WHA recommended be payable at the rate of $1,318.67 per year for a 10-year period. The methodology report noted that the $4,395,000 bond issue would raise only $2,959,821 that would be available for the development of Twelve Oaks, because $993,870 of the bond proceeds would be set aside for capitalized interest and a debt-service reserve fund and the remainder of the bond proceeds would be paid out as costs and fees associated with the issuance of the bonds, which would be underwritten by another firm affiliated with Hunt –– Gardnyr Michael Capital. The methodology report also noted that an additional $2,658,179 would still be needed to finish the estimated $5,618,000 of infrastructure improvements needed to complete Twelve Oaks; however, the methodology report did not indicate where those funds would come from. The Odenville town council thereafter adopted a resolution setting the assessments at the 6 1150822, 1150823, 1150824 requested level, and the District then adopted its own resolution authorizing the issuance of the bonds. On June 6, 2008, the District filed a bond-validation petition in the St. Clair Circuit Court pursuant to § 11-81- 221, Ala. Code, which "allows a public corporation to 'determine its authority to issue ... obligations and the legality of all proceedings had or taken in connection therewith,' and 'the validity of the tax or other revenues or means provided for the payment thereof.'" Houston Cty. Econ. Dev. Auth. v. State, 168 So. 3d 4, 21 (Ala. 2014) (quoting § 11-81-221). On July 2, 2008, the trial court entered a final judgment confirming the validity and enforceability of the bonds and the assessments securing them. No appeal was filed, and it was thus established that the bonds and the assessments providing for their payment could "never be called in question in any court in this state." § 11-81-224, Ala. Code 1975. On July 14, 2008, Smith met with Doug Williamson, the Aliant officer responsible for the Aliant loan, and informed him that the bonds were ready to be issued but that the District could not proceed until Aliant executed a "mortgagee special assessment acknowledgment" that would subordinate Aliant's interest in the Twelve Oaks property to the interests 7 1150822, 1150823, 1150824 of the bondholders; Aliant alleges that this was the first time it was informed that it would be asked to subordinate its interest in the Twelve Oaks property. Williamson alleges that Smith and the District's attorney made various representations to him during that meeting and over the course of the next several days regarding the viability of Twelve Oaks and the controls that would be placed upon the use of the bond proceeds and that, based upon those and other representations made by Smith, as well as upon written representations made in the engineer's report prepared by Harbison and other materials prepared by WHA, he agreed to execute the mortgagee-special- assessment acknowledgment on behalf of Aliant, doing so on July 24, 2008. On July 31, 2008, the bonds were issued, and the bond proceeds were split into a series of trust accounts maintained by U.S. Bank, N.A., which, pursuant to the District's agreement with Allstate, had been selected to serve as trustee of those accounts. Pursuant to the terms of the trust indenture, the District could access the $2,959,821 available for the construction of improvements only upon filing a request for reimbursement and providing appropriate documentation describing the work that had been completed and 8 1150822, 1150823, 1150824 the costs that had been incurred; such requests then had to be signed and approved by both a District board member and Harbison or another EOS engineer. Unbeknownst to Aliant, however, Odenville had, on November 26, 2007 –– before the District had even been officially created –– adopted a resolution authorizing Twelve Oaks Properties, Inc., to be reimbursed from the future bond proceeds for improvements made to the Twelve Oaks property before the bonds were issued. In accordance with that resolution, Smith filed a request for reimbursement on behalf of Twelve Oaks Properties on August 8, 2008 –– eight days after the bonds were issued –– seeking $1,181,962 from the bond proceeds for work completed before the bonds were issued. Smith approved the request on behalf of the District, and, after Harbison approved the request as District engineer, the requested payment was made. On September 10, 2008, Smith submitted another request for reimbursement seeking $541,866, of which $306,951 was for work performed before the bonds were issued. That request was also approved by Harbison, and the bond proceeds were disbursed as requested. In the following months, virtually all the remaining bond proceeds were paid out, and by March 2010 only $9,500 9 1150822, 1150823, 1150824 remained. Aliant alleges that little progress was made at Twelve Oaks during this time. The trust accounts holding reserves were exhausted by late 2010 as well, and eventually neither the District nor Smith and his affiliated companies were able to make future payments on the bonds when they became due. In early 2011, Four Star Investments defaulted on the Aliant loan, and, on May 2, 2011, Aliant sued Four Star Investments and Smith alleging that they had breached the terms of their loan and guarantee agreements. On September 26, 2011, the trial court entered a $2,241,288 judgment in favor of Aliant in that action (hereinafter referred to as "the default action"). Aliant thereafter began conducting postjudgment discovery seeking to learn more about the assets of Four Star Investments and Smith. During that process, Aliant learned more details regarding the creation of the District, the development of Twelve Oaks, and how the bond proceeds had been used. On March 30, 2012, Aliant, based on the information it had discovered, filed another lawsuit asserting various claims related to the development of Twelve Oaks. As eventually amended, Aliant's final complaint asserted nine counts against various individuals and entities. Those defendants can be 10 1150822, 1150823, 1150824 categorized as follows: (1) "The Twelve Oaks defendants," including Four Star Investments, Twelve Oaks Properties, the District, Smith, Billy Smith, Mize, and B&B Construction; (2) Hunt and his management company WHA; (3) "the EOS defendants," including Harbison and his engineering firm EOS; and (4) Allstate and U.S. Bank.1 The gravamen of Aliant's claims is that those defendants combined to commit a number of wrongful acts that siphoned all equity from the Twelve Oaks development and that, while the defendants had individually profited from those acts, Aliant had been injured inasmuch as its security interest in the Twelve Oaks property had been rendered worthless because the property was now encumbered by assessments that had a total value in excess of the market value of the Twelve Oaks property. The defendants eventually all moved the trial court either to dismiss the claims asserted against them or to enter summary judgments in their favor. Through a number of orders entered between April 2015 and April 2016, the trial court dismissed some of the claims asserted by Aliant against Smith, 1Some individuals who had purchased lots in Twelve Oaks were also added as parties to the lawsuit at various times; however, the claims involving those parties are not relevant to these appeals. 11 1150822, 1150823, 1150824 Four Star Investments, Allstate, and U.S. Bank and entered summary judgments in favor of the defendants on all the remaining claims. Aliant subsequently filed four appeals with this Court: appeal no. 1150637 (challenging the judgments entered in favor of Allstate and U.S. Bank); appeal no. 1150822 (challenging the judgments entered in favor of the Twelve Oaks defendants); appeal no. 1150823 (challenging the judgments entered in favor of Hunt and WHA); and appeal no. 1150824 (challenging the judgment entered in favor of the EOS defendants). We consolidated the four appeals for the purpose of writing one opinion; however, the parties to appeal no. 1150637 subsequently settled their dispute, and that appeal has since been dismissed. II. The trial court disposed of each claim asserted by Aliant in this case either by dismissing the claim or by entering a summary judgment in favor of the defendant against which the claim was asserted; Aliant argues that the trial court erred in both respects. With regard to those claims that were dismissed, this Court has stated: "The appropriate standard of review of a trial court's [ruling on] a motion to dismiss is whether 'when the allegations of the complaint are viewed 12 1150822, 1150823, 1150824 most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief.' Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993); Raley v. Citibanc of Alabama/Andalusia, 474 So. 2d 640, 641 (Ala. 1985). This Court does not consider whether the plaintiff will ultimately prevail, but only whether the plaintiff may possibly prevail. Nance, 622 So. 2d at 299. A 'dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.' Nance, 622 So. 2d at 299; Garrett v. Hadden, 495 So. 2d 616, 617 (Ala. 1986); Hill v. Kraft, Inc., 496 So. 2d 768, 769 (Ala. 1986)." Lyons v. River Road Constr., Inc., 858 So. 2d 257, 260 (Ala. 2003). We review the summary judgments entered by the trial court under the following standard: "This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12." 13 1150822, 1150823, 1150824 Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004). III. Aliant's final amended complaint asserted nine counts, with each count including claims against multiple defendants. However, we note that Aliant has not, in its briefs to this Court, addressed the trial court's disposition of the first three asserted counts –– labeled "judicial foreclosure," "declaratory judgment and bill to quiet title," and "unjust enrichment" –– and Aliant has accordingly waived any argument that the trial court acted in error in its disposition of those counts. See Bogle v. Scheer, 512 So. 2d 1336, 1337 (Ala. 1987) ("The plaintiff filed a five-count complaint .... [O]n appeal he has argued only that a summary judgment was not proper on the conspiracy count (count four). Because issues not argued in brief are waived, ... our review is limited to whether the summary judgment was proper on the conspiracy 14 1150822, 1150823, 1150824 count.").2 We consider the rest of the counts asserted by Aliant in the order in which they were presented. Count four of Aliant's final amended complaint asserts negligence and breach-of-fiduciary-duty claims against WHA and the individual Board members –– Smith, Mize and Billy Smith. "The elements of a negligence claim are a duty, a breach of that duty, causation, and damage." Armstrong Bus. Servs., Inc. v. AmSouth Bank, 817 So. 2d 665, 679 (Ala. 2001) (citing AALAR, Ltd. v. Francis, 716 So. 2d 1141, 1144 (Ala. 1998)). Similarly, the elements of a breach-of-fiduciary-duty claim are the existence of a fiduciary duty, a breach of that duty, and damage suffered as a result of that breach. Regions Bank v. Lowrey, 101 So. 3d 210, 219 (Ala. 2012). Aliant alleges in its complaint that WHA and the Board members had a duty to 2It appears that counts one, two, and three of Aliant's final amended complaint were primarily directed to Allstate and determining the validity of the assessments securing the bonds issued by the District and Aliant's interest in the Twelve Oaks property in relation to any interest that Allstate might have. As explained supra, Aliant has settled its claims with Allstate, but, to the extent counts one, two, and three might assert claims against other defendants that are parties to these consolidated appeals, Aliant has waived those claims by failing to argue that the trial court erred in its disposition of them. 15 1150822, 1150823, 1150824 responsibly manage and oversee the District and that Aliant was damaged after they "breached their duties by, among other things, failing to exercise their independent professional judgment and analysis related to the feasibility of the [bond] issue, by failing to properly supervise and monitor the spending of the [bonds] on the premises, by failing to assure that the requisitions were proper and for work actually performed, by failing to properly monitor and supervise the construction of the promised improvements, by mismanaging the funds [so] that only a small portion of the promised improvements were completed, and by otherwise failing to carry out the responsibilities of their job." The determination whether a duty exists is generally a question of law for the court to decide. Ex parte BASF Constr. Chems., LLC, 153 So. 3d 793, 801-02 (Ala. 2013). With regard to Aliant's claims against the Board members, like the board of directors governing any corporate body the Board members had the duty to act with care and the duty to act with loyalty. See Massey v. Disc Mfg., Inc., 601 So. 2d 449, 456 (Ala. 1992) ("The corporate fiduciary duty is divided into two parts: (1) a duty of care; and (2) a duty of loyalty."). Although the board of directors of a typical for-profit corporation owe those duties to the corporation and its shareholders, see, e.g., Jones v. Ellis, 551 So. 2d 396, 401 (Ala. 1989), the District is a public corporation with no 16 1150822, 1150823, 1150824 shareholders. However, just as a for-profit corporation exists primarily to maximize profit for the benefit of its shareholders, the District exists primarily to benefit those owning property within its boundaries; accordingly, the Board members owe their duties to owners of property within the District. Inasmuch as Alabama is a "title theory" state, Aliant, which at all relevant times held a mortgage on the Twelve Oaks property, must be included among those to whom the Board members owed a duty of care and a duty of loyalty. See Maiden v. Federal Nat'l Mortg. Ass'n, 69 So. 3d 860, 865 (Ala. Civ. App. 2011) ("Alabama is a 'title theory' state; thus, when a person mortgages real property, the mortgagee obtains legal title to the real property ...."). Having held that the Board members did owe certain duties to Aliant, we also hold that Aliant met its burden of putting forth substantial evidence establishing that a genuine issue of material fact exists with regard to the other elements of its negligence and breach-of-fiduciary-duty claims against the Board members. The affidavit of Aliant's expert Marcus A. Watson in particular described the problematic nature of the actions taken by the Board members, especially in light of the fact that they were all related parties inasmuch as they 17 1150822, 1150823, 1150824 shared business interests in various entities involved in the development of Twelve Oaks. In their combined brief to this Court, the Twelve Oaks defendants do not argue that Aliant failed to submit substantial evidence establishing its negligence and breach- of-fiduciary-duty claims against the Board members. Rather, they argue that all the Twelve Oaks defendants were entitled to a summary judgment on all the claims asserted against them by Aliant on the basis of several affirmative defenses, specifically, immunity, res judicata and collateral estoppel, and the statute of limitations. In its order entering a summary judgment in favor of the Twelve Oaks defendants, the trial court in fact agreed that all the claims asserted by Aliant were barred by the doctrines of res judicata or collateral estoppel and by the statute of limitations. The trial court also cited those affirmative defenses when entering summary judgments in favor of the other defendants on the claims asserted in Aliant's final amended complaint. For the reasons that follow, we disagree that all of Aliant's claims are barred by the doctrines of res judicata and collateral estoppel and by the statute of limitations; the defendants' general arguments in this regard are without 18 1150822, 1150823, 1150824 merit. Nevertheless, there are specific facts relevant to some of the claims asserted against individual defendants such that those claims are barred by principles of immunity or the appropriate statute of limitations. Those exceptions are discussed in subsequent sections of this opinion; no affirmative defenses bar the negligence and breach-of- fiduciary duty claims asserted against the Board members, however, and our analysis of the general immunity, res judicata/collateral-estoppel, and statute-of-limitations arguments they make is equally applicable to the similar arguments made by the other defendants. The Board members first argue that they are entitled to immunity based on the Alabama Improvement District Act, which provides, in part: "Districts, the members of the board, its officers, and agents shall have the same immunity from liability as a municipality and its officers. No civil action shall be brought or maintained against the district or any director thereof for or on account of the negligence of a district or director or its or his or her agents, servants, or employees in or about the construction, acquisition, installation, maintenance, operation, superintendence, or management of any facility or other improvement owned, controlled, maintained, or managed by the district." 19 1150822, 1150823, 1150824 § 11-99A-7, Ala. Code 1975. Emphasizing the second sentence in this section, the Board members argue that no action in negligence can be brought against them based on their actions related to managing and operating the District. They further argue that § 11-47-190, Ala. Code 1975, which sets forth the immunity that applies to municipalities and their officers, operates to bar any action against them based on intentional torts as well; § 11-47-190 provides, in pertinent part: "No city or town shall be liable for damages for injury done to or wrong suffered by any person or corporation, unless such injury or wrong was done or suffered through the neglect, carelessness, or unskillfulness of some agent, officer, or employee of the municipality engaged in work therefor and while acting in the line of his or her duty ... and whenever the city or town shall be made liable for damages by reason of the unauthorized or wrongful acts or negligence, carelessness, or unskillfulness of any person or corporation, then such person or corporation shall be liable to an action on the same account by the party so injured." We disagree that these two statutes apply in this case to bar the claims asserted by Aliant in count four of its final amended complaint. Section 11-99A-7 is clear that the legislature intended an improvement district and its board members to have "the same immunity from liability as a municipality and its officers," and § 11-47-190 provides that a municipality can be sued for the negligent acts of its 20 1150822, 1150823, 1150824 agents and that, if a municipality is the subject of a lawsuit as a result of the negligence of an agent, "then such person ... shall be liable to an action on the same account by the party so injured." See, e.g., Morrow v. Caldwell, 153 So. 3d 764 (Ala. 2014) (recognizing that under § 11-47-190 a municipality can be sued based upon the negligence of its agent, while the agent can be sued in his or her individual capacity for both negligent and intentional acts). Reading these two statutes together, the sentence in § 11-99A-7 indicating that no claim can be pursued against a director of an improvement district "for or on account of the negligence of a district or director or its or his or her agents, servants, or employees" must operate only to bar a negligence claim from being asserted against a director based upon the negligence of some other party –– not the director's own negligence. This is consistent with how immunity is applied to cases involving municipal employees. See, e.g., Newton v. Town of Columbia, 695 So. 2d 1213, 1218 (Ala. Civ. App. 1997) ("[A] municipality's chief executive is not vicariously liable for the misconduct of his or her subordinates."). In this case, the Board members are being sued based on their own alleged wrongdoing, not the actions of each other or some 21 1150822, 1150823, 1150824 other agents. Accordingly, § 11-99A-7 does not bar the negligence and breach-of-fiduciary duty claims asserted by Aliant against the Board members. We next consider the Board members' argument that they are entitled to a summary judgment based on the doctrines of collateral estoppel and res judicata. The trial court agreed, stating in its order granting their motion for a summary judgment: "On May 2, 2011, Aliant filed suit previously in this court against codefendants [Smith] and Four Star [Investments] about the same loan they now complain about. On October 13, 2011, the court entered a judgment against Four Star [Investments] and [Smith] in the amount of $2,241,287.75 as a consequence of their default under the loan transactions. This order represents a final, binding adjudication of Aliant's claims concerning the loan on the Twelve Oaks property. Indeed, this court has previously held Aliant was estopped from bringing tort claims against [Smith]. "Collateral estoppel applies when '(1) an issue in a prior action was identical to the issue litigated in the present action; (2) the issue was actually litigated in the prior action; (3) resolution of the issue was necessary to the prior judgment; and (4) the same parties are involved in the two actions.' Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So. 2d 507, 520 (Ala. 2002). Here, (1) Aliant is suing over the very same issue –- [the Aliant loan]; (2) the loan was previously litigated to a final judgment; (3) resolution of the loan was necessary for the prior judgment; and (4) Aliant, Four Star [Investments], and [Smith] were all parties to both cases. Aliant is the same party 22 1150822, 1150823, 1150824 seeking to relitigate the same loan. See Whisman v. Alabama Power Co., 512 So. 2d 78, 82 (Ala. 1987) ('The party identity criterion does not require complete identity, but only that the party against whom res judicata is asserted was either a party or in privity with a party to the prior action ....'). Because the elements of collateral estoppel have been met, Aliant is estopped from prosecuting this suit over the very same loan. "Aliant's claims are precluded in this case. Aliant has already brought suit on this very same loan and obtained a judgment. Because Aliant seeks to relitigate the same issues as those in [the prior action], its claims are barred. "'If a claim, which arises out of a single wrongful act or dispute, is brought to a final conclusion on the merits, then all other claims arising out of that same wrongful act or dispute are barred, even if those claims are based on different legal theories or seek a different form of damages, unless the evidence necessary to establish the elements of the alternative theories varies materially from the evidence necessary for a recovery in the first action.' "Equity Resources Mgmt., Inc. v. Vinson, 723 So. 2d 634, 638 (Ala. 1998). "The prior judgment is res judicata. See Martin v. Cash Express, Inc., 60 So. 3d 236, 241 (Ala. 2010) ('[A] judgment or decree by consent is as conclusive between them and their privies as if the suit had been an adversary one and rendered after a trial on the facts.'); see Whisman v. Alabama Power Co., 512 So. 2d 78, 82 (Ala. 1987) ('The issue has been litigated and, if the defense is asserted, the prior litigation will preclude this issue from being relitigated.'). Since Aliant has already litigated its claim on the loan at issue and obtained a 23 1150822, 1150823, 1150824 judgment, it cannot now relitigate the issue under a different theory." This Court has explained that "[r]es judicata and collateral estoppel are two closely related, judicially created doctrines that preclude the relitigation of matters that have been previously adjudicated or, in the case of res judicata, that could have been adjudicated in a prior action." Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So. 2d 507, 516 (Ala. 2002). Essentially, the doctrine of collateral estoppel operates to bar the relitigation of issues actually litigated in a previous action, while the doctrine of res judicata bars the litigation of claims that were or could have been litigated in a previous action. Lee L. Saad, 851 So. 2d at 516-17. Aliant argues that neither doctrine has application here because, it says, the default action was limited to determining whether Four Star Investments had breached an agreement to repay a promissory note secured by a mortgage on the Twelve Oaks property and whether Smith had breached an accompanying agreement personally guaranteeing Four Star Investments' debt. Thus, Aliant argues, collateral estoppel does not apply because, it says, the issues surrounding the claims raised in the instant action –– such as 24 1150822, 1150823, 1150824 whether the Board members breached any duties they owed Aliant and whether any of the defendants made misrepresentations to Aliant –- were not litigated in the previous action, and, Aliant argues, res judicata does not apply because, it says, the claims asserted in the instant action were not and could not have been asserted in the previous action. We agree. With regard to collateral estoppel, the trial court and the Board members broadly identify the issue litigated in a prior action and the issue Aliant allegedly now seeks to relitigate as being the Aliant loan. However, although the Aliant loan is certainly a relevant part of both actions, it is not itself an "issue" that may be the subject of collateral estoppel. As explained in Lee L. Saad, collateral estoppel operates to prevent the relitigation of factual issues that have already been decided in a prior action. 851 So. 2d at 519. Thus, factual issues relating to the Aliant loan that were decided in the default action –– such as whether Four Star Investments had executed a valid promissory note with Aliant, whether Smith had personally guaranteed Four Star Investments' debt, and whether those agreements were breached –– cannot be relitigated in the instant or any other action; collateral estoppel precludes it. However, the factual issues 25 1150822, 1150823, 1150824 that must be resolved to decide the negligence, fraud, and other claims now asserted by Aliant against the Board members and other defendants in the instant action –- such as whether any duties were breached and whether any misrepresentations were made –– were undisputedly not considered in the default action; those issues simply were not relevant to whether Four Star Investments and Smith breached their loan and guarantee agreements. Inasmuch as the doctrine of collateral estoppel bars the relitigation only of "issues actually decided in a former action," it is without effect in this case. Leverette v. Leverette, 479 So. 2d 1229, 1237 (Ala. 1985) (emphasis added). We next turn to the Board members' argument that Aliant's claims against them are barred by the doctrine of res judicata. In essence, even though we have concluded that the factual issues relevant to Aliant's present claims were not actually decided in the default action, we must still determine whether Aliant could have asserted its present claims in the default action, thus putting those factual issues before the court at that time. See Dairyland Ins. Co. v. Jackson, 566 So. 2d 723, 725 (Ala. 1990) (explaining that res judicata will bar further litigation of "any claim that 26 1150822, 1150823, 1150824 was or could have been adjudicated in the prior action"). The Board members argue that the doctrine of res judicata bars Aliant's present claims "because the matters in the [instant] action involve the same wrongful act and dispute (i.e., non- payment of the [Aliant] loan) as was at issue in the first action. This is true regardless of what name or title that Aliant may use to describe its claims." The Twelve Oaks defendants' brief, pp. 30-31. Aliant, however, argues that the default action was essentially just a simple breach-of- contract case involving one wrongful act –– the failure to pay moneys owed by contract –– while the instant action encompasses entirely different claims based on other wrongs, such as the breaching of duties and the making of misrepresentations. Moreover, Aliant argues, it could not have asserted its present claims in the default action because, it alleges, it did not discover the facts supporting the present claims until after the default action was resolved. The elements of res judicata are (1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with substantial identity of the parties, and (4) with the same cause of action presented in both suits. Equity Res. 27 1150822, 1150823, 1150824 Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala. 1998) The only element now disputed by the parties is the fourth –– whether the cause of action in the instant case is the same as the cause of action in the default action. This Court has explained the factors relevant to making that determination: "The determination of whether the cause of action is the same in two separate suits depends on whether the issues in the two actions are the same and whether the same evidence would support a recovery for the plaintiff in both suits. Dominex, Inc. v. Key, 456 So. 2d 1047, 1054 (Ala. 1984). Stated differently, the fourth element is met when the issues involved in the earlier suit comprehended all that is involved in the issues of the later suit. Adams v. Powell, 225 Ala. 300, 142 So. 537 (1932)." Dairyland Ins., 566 So. 2d at 726. See also Chapman Nursing Home, Inc. v. McDonald, 985 So. 2d 914, 921 (Ala. 2007) (explaining that res judicata applies to all legal theories and claims arising out of the same nucleus of operative facts and that two causes of action are the same for res judicata purposes when the same evidence is applicable in both actions). In considering those factors, we cannot agree with the trial court that the claims now asserted by Aliant are essentially the same as the claim asserted by Aliant in the default action. The evidence that Aliant presented in the 28 1150822, 1150823, 1150824 default action indicated that Four Star Investments and Smith executed and subsequently breached agreements with Aliant and supported a recovery for Aliant on the breach-of-contract claims asserted in the default action. However, that evidence would not support and is not needed to prove Aliant's present claims of negligence, breach of fiduciary duties, fraud, conspiracy, and wantonness. Those claims are based on separate and distinct actions, not directly related to the Aliant loan, that were allegedly taken by the Board members and other defendants, and separate evidence is needed to establish those claims. For example, with regard to the negligence and breach-of-fiduciary-duty claims asserted against the Board members, that evidence would include evidence of the actions the Board members took in their official capacities and whether those actions were sufficient to fulfill the duties they owed Aliant. Accordingly, the doctrine of res judicata does not bar Aliant from asserting its present claims. Our conclusion that the doctrines of res judicata and collateral estoppel do not apply in this case is supported by this Court's decision in Benetton S.p.A. v. Benedot, Inc., 642 So. 2d 394 (Ala. 1994), a similar case in which it was alleged 29 1150822, 1150823, 1150824 that a previous action between parties in which a judgment was entered on a debt operated as res judicata to bar a subsequent action between the same parties. Benetton involved a dispute between the Italian clothing manufacturer Benetton and its United States subsidiary and sales representatives (hereinafter referred to collectively as "Benetton"), on the one hand, and Al-Ben, Inc., an Alabama company that had contracted with Benetton to operate certain Benetton stores in Alabama, on the other hand. 642 So. 2d at 396. Al-Ben had had a tumultuous relationship with Benetton from the beginning, alleging that Benetton failed to complete its obligations so that the stores could open when originally planned and that Benetton constantly sent it unordered and unwanted merchandise that had to be sold for a loss. Ultimately Al-Ben sued Benetton asserting claims of fraud, conspiracy, and breach of contract. Benetton separately sued the owners of Al-Ben in federal district court, alleging that the owners had personally guaranteed debt Al-Ben had incurred for merchandise received from Benetton, and Benetton ultimately obtained a judgment in its favor on this claim. 642 So. 2d at 397. Al-Ben thereafter was awarded $1,500,000 in the state-court action, and Benetton 30 1150822, 1150823, 1150824 appealed that judgment to this Court, arguing that Al-Ben's fraud, conspiracy, and breach-of-contract claims should have been barred by the doctrines of res judicata and/or collateral estoppel based on the earlier judgment entered by the federal district court. 642 So. 2d at 398-99. In rejecting Benetton's res judicata argument, this Court applied the "same-evidence" test discussed supra, stating: "We cannot say that the same cause of action is present in both actions. [Al-Ben's owners'] liability, through personal guarantees, for Al–Ben's debt based on unpaid invoices does not involve the issues of fraud, conspiracy, and breach of contract. The first action does not involve the issues raised in the second action, and the same evidence would not support a recovery for the plaintiffs in both actions. Therefore, the doctrine of res judicata does not bar Al–Ben's action against Benetton based on fraud, conspiracy, and breach of contract." Benetton, 642 So. 2d at 400. The Benetton Court also declined to apply the doctrine of collateral estoppel, noting that the federal district court had not decided any factual issues relevant to the state-court action because the federal district court had entered a judgment representing only the amount Al-Ben's owners conceded they owed; the federal district court had made no judgment on debt attributable to merchandise Al-Ben's owners claimed they had not wanted or ordered. Id. 31 1150822, 1150823, 1150824 Applying Benetton to the facts of this case, we note that Four Star Investments' and Smith's liability for the Aliant loan did not involve issues of negligence, breach of fiduciary duties, fraud, conspiracy, and wantonness. The default action did not involve the issues raised in the instant action, and the same evidence would not support a recovery for Aliant in both actions. Accordingly, the doctrine of res judicata does not bar the instant action. Moreover, because the Board members and other defendants have not identified any issue that was actually litigated in the default action that Aliant is seeking to relitigate in this action, the doctrine of collateral estoppel is inapplicable as well. Finally, the Board members also argue that Aliant's negligence and breach-of-fiduciary-duty claims against them are barred by the applicable statute of limitations. The trial court held, and the Board members argue, that Aliant suffered injury (1) when it closed the Aliant loan in August 2007; (2) when it agreed to subordinate its security interest in the Twelve Oaks property in July 2008; and (3) when the bond proceeds were disbursed to Smith, his companies, and others beginning in 2008. Accordingly, they argue, Aliant's tort claims accrued, at the latest, in 2008, and the 32 1150822, 1150823, 1150824 applicable two-year statute of limitations, see § 6-2-38(l), Ala. Code 1975, bars the claims now asserted inasmuch as Aliant did not initiate this action until March 2012. They further argue that Aliant was aware, at the time the bonds were issued, of the general process by which the bond proceeds would be disbursed and that Aliant knew that it could inspect the Twelve Oaks property to view construction progress at any time but apparently failed to do so; accordingly, they argue, Aliant should have been aware of its potential claims within that two-year period and it cannot rely on the discovery rule of § 6-2-3, Ala. Code 1975. See generally DGB, LLC v. Hinds, 55 So. 3d 218, 224 (Ala. 2010) (explaining that, pursuant to § 6-2-3, if a potential tort claim has been fraudulently concealed, the two-year statute of limitations generally applicable to such a claim will be tolled until the plaintiff discovers the fraud). Aliant disputes the trial court's conclusion and the Board members' argument that it suffered injury in 2008 and that the statute of limitations began to run at that time. Aliant argues that, although much of the malfeasance allegedly committed by the various defendants occurred during that time, Aliant remained unaware of that fact for several years, and it 33 1150822, 1150823, 1150824 suffered no legal injury until early 2011, when Four Star Investments defaulted on the Aliant loan. Aliant accordingly argues that § 6-2-3 applies and that its March 2012 complaint was timely. In support of its argument, Aliant relies heavily upon Bryant Bank v. Talmage Kirkland & Co., 155 So. 3d 231 (Ala. 2014), which it alleges mirrors this case. In that case, a bank relied upon an appraisal conducted in December 2007 valuing a property at $1,700,000 to issue a commercial mortgage loan that same month. 155 So. 3d at 233. After the borrower defaulted in October 2008, the bank ordered a new appraisal of the property from a different company, which concluded that the property was worth only $205,000. In July 2010, the bank sued the appraisers, alleging negligent misrepresentation and breach of contract. The appraisers thereafter successfully moved the trial court to enter a summary judgment in their favor on the negligent- misrepresentation claim, and the bank appealed that judgment to this Court. On appeal, the appraisers argued that the bank's claim accrued in December 2007 when the loan was made and that the bank's July 2010 complaint was accordingly filed outside the two-year limitations period. 155 So. 3d at 238. 34 1150822, 1150823, 1150824 The bank, however, argued that the claim did not accrue until "it incurred damage as a result of [the borrower's] default on the loan." 155 So. 3d at 237. This Court ultimately declined to affirm the summary judgment on the basis of the appraisers' statute-of-limitations argument, explaining: "No evidence was presented indicating that [the bank] had actual knowledge –– for more than two years before commencing this action –– that the appraisal was conducted in a negligent manner. Accordingly, [the bank's] negligent- misrepresentation claim accrued when a reasonable person would have discovered the fraud –– a question within the purview of the jury. Because a genuine issue of material fact exists as to when [the bank] discovered facts that would have caused a reasonable person to inquire and led to the discovery of the fraud giving rise to [the bank's] negligent-misrepresentation claim, the defendants were not entitled to a summary judgment on the basis that the statute of limitations had run on its negligent-misrepresentation claim. ..." Bryant Bank, 155 So. 3d at 238. There is likewise no evidence in this case establishing that Aliant had actual knowledge of the facts that form the basis of its claims at the time they were occurring. The Board members and other defendants argue that Aliant should have taken steps to discover those facts based on the lack of progress Aliant alleges it saw at Twelve Oaks during the time the bond proceeds were being depleted; however, Williamson 35 1150822, 1150823, 1150824 gave sworn testimony indicating that he concluded, based on the lack of construction activity he witnessed, that development had been temporarily put on hold during this time and that the bond proceeds were accordingly not being disbursed. Williamson further explained that Aliant had no role in the disbursement of the bond proceeds, which were held by U.S. Bank, as trustee, and were disbursed after requests for reimbursement were approved by EOS and the District, and that Aliant received no invoices and had no right to access the relevant bank records. Under these facts, the question of when Aliant's tort claims accrued is a question for the jury; a court cannot properly decide as a matter of law when a reasonable person should have discovered that claims had been fraudulently concealed unless the evidence is undisputed. See Bryant, 155 So. 3d at 237 (explaining that the issue of when a reasonable person would have discovered fraud is generally a question of fact for the jury that can be decided as a matter of law only when the facts are undisputed and the evidence supports but one conclusion). The summary judgment entered by the trial court in favor of the Board members on Aliant's negligence and breach-of-fiduciary-duty claims cannot 36 1150822, 1150823, 1150824 be affirmed on statute-of-limitations grounds and is due to be reversed. Count four of Aliant's complaint also asserts negligence and breach-of-fiduciary-duty claims against WHA. Aliant maintains that, like the Board members, WHA had a duty to responsibly manage and oversee the District and that it breached that duty in several respects noted above in the discussion of the similar claim made against the Board members. WHA argues that it had no fiduciary relationship with Aliant and that it owed no duty to Aliant –– fiduciary or otherwise. For the reasons that follow, we agree. With regard to Aliant's breach-of-fiduciary-duty claim against WHA, the trial court stated: "Aliant has also failed to establish that WHA owed it a fiduciary duty, as the facts indicate Aliant had no relationship, conversations, or communications with WHA. Without a relationship between WHA and Aliant a duty cannot be established much less a fiduciary duty. Aliant's own representative specifically testified that he was not aware of any relationship between [Aliant and] WHA much less a fiduciary relationship between the two entities. "In Alabama, a fiduciary or confidential relationship [has been] defined [as follows]: "'"'A confidential relationship is one in which one person occupies toward another such a position of adviser or counselor as 37 1150822, 1150823, 1150824 reasonably to inspire confidence that he will act in good faith for the other's interests, or when one person has gained the confidence of another and purports to act or advise with the other's interest in mind; where trust and confidence are reposed by one person in another who, as a result, gains an influence or superiority over the other; and it appears when the circumstances make it certain the parties do not deal on equal terms, but, on the one side, there is an overmastering influence, or, on the other, weakness, dependence, or trust, justifiably reposed; in both an unfair advantage is possible. It arises in cases in which confidence is reposed and accepted, or influence acquired, and in all the variety of relations in which dominion may be exercised by one person over another.'"' "DGB, LLC v. Hinds, 55 So. 3d 218, 233 (Ala. 2010) (quoting Bank of Red Bay v. King, 482 So. 2d 274, 284 (Ala. 1985), quoting in turn 15A C.J.S. Confidential (1967)). "Further, a fiduciary relationship is defined as: "'[a] relationship in which one person is under a duty to act for the benefit of another on matters within the scope of the relationship .... Fiduciary relationships usually arise in one of four situations: (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a 38 1150822, 1150823, 1150824 specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer.' "Swann v. Regions Bank, 17 So. 3d 1180, 1193 (Ala. Civ. App. 2008) (quoting Black's Law Dictionary, 1315 (8th. 2004)). "Aliant's corporate representatives testified that there was never any relationship between WHA and Aliant. Mr. [Craig] Wrathell[, the president] of WHA[,] also testified that he did not have any communications with Aliant. Since Aliant has not provided substantial evidence that WHA owed it a fiduciary duty, summary judgment is granted in WHA's favor on the breach-of-fiduciary-duty count." Aliant has identified no evidence that would refute the trial court's conclusion that Aliant had no relationship with WHA, much less a confidential or fiduciary relationship. Notably, this is not a case where we must determine whether the parties engaged in arm's length dealing or whether there was a fiduciary relationship; rather, it is undisputed that Aliant and WHA did not deal with each other at all –– there was no relationship between them. In light of this undisputed evidence, we agree with the trial court that WHA owed Aliant no fiduciary duties, and the summary judgment entered in favor of WHA on Aliant's breach-of-fiduciary-duties claim is accordingly due to be affirmed. We further note that, although Aliant in its brief cites several cases to support 39 1150822, 1150823, 1150824 its argument that WHA owed it a general duty of care, the alleged breach of which forms the basis of Aliant's negligence claim, it has cited no caselaw to support its argument that WHA owed it specific fiduciary duties. The final remaining claim asserted by Aliant in count four is its negligence claim against WHA. Aliant argues that it was injured as a result of WHA's alleged failure to act with care and skill in its role as manager of the District. WHA's duties as manager of the District were outlined in a management agreement between it and the District; however, it is undisputed that Aliant was not a party to that contract. Aliant accordingly acknowledges the general rule in Alabama that "where the charge of negligence is based upon breach of duty arising out a contractual relationship, no cause of action arises in favor of one not in privity to the contract." Federal Mogul Corp. v. Universal Constr. Co., 376 So. 2d 716, 724 (Ala. Civ. App. 1979). However, citing Berkel & Co. Contractors, Inc. v. Providence Hospital, 454 So. 2d 496 (Ala. 1984), and Cincinnati Insurance Cos. v. Barber Insulation, Inc., 946 So. 2d 441 (Ala. 2006), Aliant argues that it is entitled to rely on an exception to that general rule that applies when the defendant negligently performed its contract 40 1150822, 1150823, 1150824 with knowledge that others were relying on its proper performance. See also Williams v. Jackson Co., 359 So. 2d 798, 801 (Ala. Civ. App. 1978) ("Thus one who undertakes to perform a contract may be determined to owe a duty to others not privy to the contract to perform his obligations under the contract without negligent injury to such others. Such duty may arise from the foreseeability that such others may be injured by negligent performance, or duty may arise from the knowledge that others are relying upon a proper performance."). Inasmuch as Aliant's arguments are based primarily upon Providence Hospital and Barber, we begin with an analysis of those cases. Providence Hospital involved negligence claims against a hospital and its architect asserted by a subcontractor hired to install piling supports for an addition to the hospital.3 454 So. 2d at 499. The hospital's architect directed the subcontractor's construction of the piling supports, and, after the piling supports failed, the subcontractor sued, alleging that the hospital and its architect breached their duties of care in directing the construction. 454 So. 2d at 3The general contractor who had contracts with both the subcontractor and the hospital was not a party to the action. 41 1150822, 1150823, 1150824 500. After a summary judgment was entered in favor of the hospital, the subcontractor appealed to this Court, which reversed the summary judgment, explaining that the hospital did owe a duty of care to the subcontractor: "[The hospital] argues further that even if privity is not a defense, the facts disclosed that no duty was owed to [the subcontractor]. In deciding whether to impose a duty in a construction context, the trial court should analyze six factors: "'"(1)[T]he extent to which the transaction was intended to affect the other person; (2) the foreseeability of harm to him; (3) the degree of certainty that he suffered injury; (4) the closeness of the connection between the defendant's conduct and the injury; (5) the moral blame attached to such conduct; and (6) the policy of preventing future harm."' "Howe v. Bishop, 446 So. 2d 11 (Ala. 1984) (Torbert, C.J., concurring in the result), quoting from United Leasing Corp. v. Miller, 45 N.C. App. 400, 406–07, 263 S.E.2d 313, 318 (1980). Under this standard, [the hospital] clearly owes [the subcontractor] a duty to act reasonably in directing and approving pile construction work. The transaction was intended to affect [the subcontractor], and it was foreseeable that it would. The alleged harm is certain and directly connected to [the hospital's] conduct. Given the business relationship and lack of personal injury, the question of moral blame is not relevant in this case. The final factor, the policy of preventing future harm, also supports the finding of duty. [The hospital] could have averted the alleged loss either by not acting or by acting reasonably. This Court will impose liability on [the hospital] to require it to act responsibly. 42 1150822, 1150823, 1150824 "This argument for a legal duty is especially compelling because [the hospital] and its architect had the power through liquidated damages and other means to force [the subcontractor] to do as [the hospital] wished. The court in United States v. Rogers & Rogers, 161 F. Supp. 132, 136 (S.D. Cal. 1958), explained the responsibilities arising from unequal positions in the context of contractor and architect: "'Altogether too much control over the contractor necessarily rests in the hands of the supervising architect for him not to be placed under a duty imposed by law to perform without negligence his functions as they affect the contractor. The power of the architect to stop the work alone is tantamount to a power of economic life or death over the contractor. It is only just that such authority, exercised in such a relationship, carry commensurate legal responsibility.' "Under the circumstances, [the hospital] and its architect owed [the subcontractor] a duty to act reasonably in directing the pile work." Providence Hospital, 454 So. 2d at 502-03. Thus, in Providence Hospital, the Court determined that it was appropriate to find that a duty existed even in the absence of a contract. In contrast, in Barber this Court determined that no duty was owed where there was no privity between the parties. In Barber, a general contractor was hired to construct a lake house and, during the construction process, that general 43 1150822, 1150823, 1150824 contractor hired a subcontractor to install insulation in the walls. 946 So. 2d 442. Some time after the completed house was delivered to the homeowners, a pipe in the walls burst, causing extensive water damage, and the homeowners' insurance company subsequently sued the subcontractor responsible for installing the insulation, alleging negligence. After a summary judgment was entered in favor of the subcontractor, the insurance company appealed to this Court, which affirmed the summary judgment after concluding that the subcontractor owed no duty to the homeowners. 946 So. 2d at 449. The Barber Court reviewed Providence Hospital at length, distinguishing it as follows: "Prominent in the Court's analysis [in Providence Hospital] was the control the architect exercised over the subcontractor's work. [The subcontractor's] own contractual performance depended on the care exercised by the architect; that is, [the subcontractor] was relying on the architect, as the hospital's agent, to exercise due care in 'directing the pile work.' 454 So.2d at 503. "The element of reliance and the nature of the defendant are the features that most clearly distinguish Providence Hospital from this case. Providence Hospital simply represents the widely recognized rule that architects and similar design professionals may be liable in tort to persons with whom they are not in privity, when it is foreseeable that such persons would detrimentally rely on the professional's representations or performance. ... 44 1150822, 1150823, 1150824 ".... "[The insurance company's] contention that the [homeowners] relied on the contract between [the general contractor] and [the subcontractor] falls far short of the particularized reliance of the plaintiffs upon the architect ... in Providence Hospital .... Indeed, [one of the homeowners] testified by deposition that he had 'never heard' of [the subcontractor] prior to this litigation. In fact, it was [the general contractor] –– not [the homeowners] –– that relied on [the subcontractor]. The [homeowners] relied on [the general contractor], not [the subcontractor]. The absence of reliance and consideration of the six factors set forth in Providence Hospital militate against imposing liability on [the subcontractor]. ".... "In short, [the insurance company] has cited no persuasive authority for imposing on [the subcontractor] a duty to the [homeowners] arising out of its insulation subcontract with [the general contractor. Thus, the trial court did not err in entering a summary judgment for [the subcontractor]." Id. at 447-49. The instant case is more akin to Barber than it is to Providence Hospital. First, in Providence Hospital, the fact that the hospital's architect exercised authority over and directed the subcontractor's work was crucial to the Court's holding that the hospital owed the subcontractor a duty. In this case, Aliant seeks to impose a duty upon WHA; however, WHA was never in a position of control over Aliant. Rather, the entity that was in a position of control in this 45 1150822, 1150823, 1150824 case was the District. The District hired and paid WHA to provide management services, and, under the terms of the management agreement, the District could terminate its relationship with WHA for good cause at any time or for any reason whatsoever upon giving 60 days' written notice. Aliant played no part in that relationship. To paraphrase the Barber Court, the "particularized reliance" that was present in Providence Hospital simply does not exist in this case. 946 So. 2d at 448. When comparing the facts of the instant case to those in Barber, however, it is evident that a similar conclusion that no duty was owed is warranted. Just as the homeowners in Barber had no relationship with the subcontractor, it is undisputed that Aliant had no relationship with WHA. The District, not Aliant, relied upon WHA to provide management and administrative services. For these reasons, the trial court correctly concluded that WHA owed no duty to Aliant, and the summary judgment entered on the negligence claim asserted by Aliant against WHA in count four of its complaint is accordingly due to be affirmed. 46 1150822, 1150823, 1150824 IV. Count five of Aliant's final amended complaint asserts negligence and breach-of-fiduciary-duty claims against the EOS defendants. Aliant argues generally that the EOS defendants failed to perform the engineering services they were hired by the District to perform with the skill and care required by the recognized standards of the engineering profession. In its final amended complaint, Aliant specifically identifies the following ways in which the EOS defendants were alleged to have failed in their duties: "1) by failing to properly monitor and supervise the construction of the planned improvements; 2) by failing to monitor the use of the [bond] funds; 3) by failing to independently confirm that requisition requests submitted for reimbursement from bond funds contained invoices that had not been altered, were proper and/or were for work actually performed; 4) by relying upon representations of [Smith] about the progress of the development without independent knowledge or verification; 5) by failing to understand the development, including verification of which phases they were reviewing; 6) by submitting false and misleading progress reports about the actual progress of the development and implementation of the promised improvements; and 7) by otherwise failing to carry out their professional responsibilities." As the Board members and WHA argued with regard to the negligence and breach-of-fiduciary-duty claims asserted against them in count four of Aliant's final amended 47 1150822, 1150823, 1150824 complaint, the EOS defendants first argue that the summary judgment entered in their favor on the similar claims asserted against them should be affirmed on grounds of immunity, res judicata/collateral estoppel, and statute of limitations. In many respects, their arguments on these points are effectively the same arguments advanced by the Board members and rejected by this Court in Part III of this opinion; however, the facts underlying the EOS defendants' statute-of-limitations argument differ in one crucial respect that ultimately dictates a different result. This action was initiated by Aliant in March 2012. In that initial complaint, Aliant asserted claims against Four Star Investments, Twelve Oaks Properties, WHA, and the Board members. However, no claims were asserted against the EOS defendants at that time; notably, the complaint named no fictitious defendants either. Aliant did not assert any claims against the EOS defendants until October 29, 2014. Aliant argues that it did not discover the facts surrounding the EOS defendants' role in the alleged conspiracy surrounding the Twelve Oaks development until after it began discovery in this case and, more specifically, when it deposed Harbison in August 2014; however, the EOS defendants argue that Aliant, 48 1150822, 1150823, 1150824 had it been exercising reasonable diligence, should have known of the relevant facts at least when it initiated this lawsuit in March 2012 –– more than two years before it asserted its claims against the EOS defendants in October 2014 and, the EOS defendants argue, outside the period set forth in § 6-5- 221(a), Ala. Code 1975, which provides, in relevant part: "All civil actions in tort, contract, or otherwise against any ... engineer performing or furnishing the design, planning, specifications, testing, supervision, administration, or observation of any construction of any improvement on or to real property ... for the recovery of damages for: "(i) Any defect or deficiency in the design, planning, specifications, testing, supervision, administration, or observation of the construction of any such improvement ...; or "(ii) Damage to real or personal property caused by any such defect or deficiency; ... ".... "shall be commenced within two years next after a cause of action accrues or arises, and not thereafter. ..." Section 6-5-220(e), Ala. Code 1975, further provides that the two-year period described in § 6-5-221(a) begins to run "at the time the damage or injury is or in the exercise of reasonable diligence should have been first discovered, 49 1150822, 1150823, 1150824 whichever is earlier." In § 6-5-225(c), Ala. Code 1975, the legislature specifically stated that its intent in § 6-5- 221(a) was to apply the discovery rule of § 6-2-3, Ala. Code 1975, to actions against architects, engineers, and builders. As discussed in Part III, this Court explained in Bryant Bank that the question of when a reasonable person should have discovered a claim is generally a question of fact within the purview of the jury. 155 So. 3d at 238. Indeed, that question will be decided only as a matter of law when the facts are undisputed and the evidence warrants but one conclusion or, stated another way, when the evidence indicates that the plaintiff actually knew of facts that would have put a reasonable person on notice of the existence of a claim. 155 So. 3d at 237. The EOS defendants argue that this is precisely such a case inasmuch as, they argue, the evidence establishes that Aliant possessed information putting it on notice of the EOS defendants' alleged wrongful acts at least by October 29, 2012, two years before it actually asserted claims against them. In support of this argument, the EOS defendants emphasize that Four Star Investments defaulted on the Aliant loan in early 2011 and Aliant sued it and Smith alleging breach of his personal guaranty agreement in May 50 1150822, 1150823, 1150824 2011. In a deposition, Williamson testified that he had been monitoring the construction progress at Twelve Oaks and that, "[w]hen the note was not renewed and went into default, and then through the process of discovering additional information, I was shocked to discover that the entire proceeds of the bonds had been disbursed." Aliant thereafter obtained a judgment against Four Star Investments and Smith in August 2011. In December 2011, Aliant had the Twelve Oaks property appraised; in its March 2012 original complaint, Aliant asserts that it learned at that time that the promised improvements had not been made even though Smith and his companies were out of money with which to continue development and that the Twelve Oaks property now had a negative net value as a result of the assessments that encumbered it. During this same time, Aliant was conducting post- judgment discovery to assist it in collecting its August 2011 judgment, and it notified EOS pursuant to Rule 45(a)(3)(A), Ala. R. Civ. P., that it intended to issue EOS a subpoena requesting the production of all documents EOS had pertaining to the District, including "[a] complete accounting of every dollar spent and/or disbursed on Twelve Oaks by the [District] or [EOS] from the funds received from the bond issue 51 1150822, 1150823, 1150824 (including documents showing when, how much, for what, and to whom said disbursements were issued)." After Four Star Investments objected to the subpoena, Aliant filed a response, explaining: "11. While Aliant's suit claims against [Four Star Investments and Smith] involved a breach of promissory note, there was much more involved. Aliant was induced by [Four Star Investments and Smith] and other parties to subordinate its first mortgage position in favor of [the District bonds]. The funds from these bonds were to be used to fund the development of the infrastructure for the Twelve Oaks subdivision. ".... "13. It is unclear whether the funds advanced to [Four Star Investments and Smith] through the bonds were ever used in the subdivision. If there is any information in possession of any of the proposed subpoenaed parties which could be used to enhance Aliant's position or interest in the District property or lead to the discovery of additional information (including the location of any depository accounts and/or any alter egos of [Four Star Investments and Smith]) about [Four Star Investments' and Smith's] assets or the possible improper or fraudulent transfer thereof then Aliant is entitled to discover the same." The EOS defendants allege that no subpoena was ultimately issued to them but that they voluntarily delivered the requested materials to Aliant in March 2012 and that Aliant returned them that same month after making copies for its files. Included in those materials were all the reimbursement 52 1150822, 1150823, 1150824 requests and documents submitted by Smith and approved by Harbison. In March 2012, Aliant filed its initial complaint asserting claims against the Board members, WHA, and others and alleging that a substantial amount of the bond proceeds had been improperly disbursed to Twelve Oaks Properties without proper documentation. In the course of the discovery process relating to those claims, WHA, on October 4, 2012, responded to an Aliant interrogatory regarding its oversight of the progress of the Twelve Oaks development by stating that "[t]he progress of the development would be under the purview of the district engineer, who would coordinate with the developer. [WHA] does not deal with the daily activities or progress of the construction of the improvements."4 We also note that when U.S. Bank moved to intervene in this action in June 2012, it placed in the court record a copy of the engineer's report completed by Harbison in November 2007 and 4At some point, Aliant produced a copy of WHA's interrogatory responses for the EOS defendants. Notes, presumably made by the person who reviewed the responses on behalf of Aliant, were handwritten next to the responses, and the note next to WHA's response explaining that the progress of the development was "the purview of the district engineer" reads "Add Engineer?" 53 1150822, 1150823, 1150824 a copy of the reimbursement form that had to be completed before bond proceeds could be disbursed. This form was the same style as the completed reimbursement forms produced by the EOS defendants for Aliant in March 2012 and the form clearly indicates that no disbursement could be paid until an EOS engineer certified that the disbursement was for the Twelve Oaks project and was consistent with "(i) the applicable acquisition or construction contract; (ii) the plans and specifications for the portion of the project with respect to which such disbursement is being made; and (iii) the [November 2007] report of the consulting engineer." We agree with the EOS defendants that this evidence establishes beyond dispute that Aliant knew of the EOS defendants' alleged wrongful acts and role in the alleged conspiracy before October 29, 2012, and that its October 29, 2014, amended complaint asserting claims against them for the first time was accordingly untimely. Even though Aliant may not have known that the proceeds of the bonds had been improperly disbursed and misused when it initiated the default action and obtained a judgment against Four Star Investments and Smith in 2011, it certainly was aware of facts indicating as much when it filed its second lawsuit in March 2012, 54 1150822, 1150823, 1150824 because that initial complaint alleged that the various defendants "should have known that the requisition requests made for the bond funds were not for goods or services provided to the [Twelve Oaks development]." Aliant also had documents in its possession from at least March 2012 indicating that no bond proceeds could be disbursed unless EOS certified that the disbursal was proper and that Harbison had, in fact, approved the requests for reimbursement filed by Smith. Furthermore, it is undisputed that by March 2012 Aliant had knowledge of facts that had led it to conclude that Smith's reimbursement requests had improperly been approved and paid and that Aliant was aware that EOS's approval was required before any reimbursement could be paid and that Harbison had in fact provided that approval. Nevertheless, Aliant did not assert claims against the EOS defendants until October 29, 2014. This was more than two years after those claims had accrued, i.e., when, in the exercise of reasonable diligence, they should have been discovered, and we can accordingly conclude as a matter of law that all claims asserted by Aliant against the EOS defendants are barred by the statute of limitations set forth in § 6-5-221(a). See § 6-5-221(a) (explaining that the two-year statute of 55 1150822, 1150823, 1150824 limitations set forth therein applies to all civil actions "in tort, contract, or otherwise"); and Dickinson v. Land Developers Constr. Co., 882 So. 2d 291, 299 (Ala. 2003) (holding that the plaintiffs discovered a number of problems with their house more than two years before they filed their action against the builder and their claims arising from those problems were accordingly barred by § 6-5-221).5 5Aliant has argued that it did not discover the facts that form the basis of its claims against the EOS defendants until it deposed Harbison in August 2014 and when, in conjunction with that deposition, the EOS defendants produced an internal memorandum written by Harbison in June 2012 indicating that, in May 2012, Harbison had discovered that Smith had copied his signature to certain reimbursement forms that had been submitted and paid. Aliant argues that the EOS defendants suppressed this memorandum; the EOS defendants dispute that characterization, arguing that it did not exist when they voluntarily produced their Twelve Oaks records for Aliant in March 2012 and that they had received no further communications or request for information from Aliant until Aliant sought Harbison's deposition in the summer of 2014, at which time the memorandum was produced. We note only that, although this memorandum and Harbison's deposition may have revealed additional facts pertinent to Aliant's case, it is still undisputed that Aliant had knowledge of the facts that form the basis of its claims against the EOS defendants for more than two years before it formally asserted those claims. Aliant's claim accrued when it became privy to facts that would provoke inquiry in a person of reasonable prudence and that, if further investigated, would have led to the discovery of the EOS defendants' alleged deficient performance of their duties, not when Aliant became privy to all the facts surrounding the EOS defendants' alleged wrongdoing. Dickinson, 882 So. 2d at 299. 56 1150822, 1150823, 1150824 V. Count six of Aliant's final amended complaint asserts fraud claims against Four Star Investments, Twelve Oaks Properties, and B&B Construction based on invoices submitted for reimbursement by those companies for goods and services supposedly provided to the District. Aliant asserts that many of the claimed goods were never actually provided and claimed services were never actually rendered and that those companies' receipt of bond proceeds based on those invoices accordingly constitutes fraud. In its brief to this Court, Aliant quotes Harmon v. Motors Insurance Corp., 493 So. 2d 1370, 1373 (Ala. 1986), in which this Court recited the elements of a fraud claim: "(1) a false representation; "(2) concerning a material fact; "(3) reliance upon the false representation, and; "(4) damage as a proximate result." Aliant then proceeds to detail the evidence it submitted to the trial court indicating that the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction contain false representations concerning material facts before concluding that Aliant was damaged inasmuch as the paying of 57 1150822, 1150823, 1150824 the allegedly fraudulent invoices substantially exhausted the bond proceeds without providing any benefit to the Twelve Oaks development. However, although we agree that the evidence cited by Aliant constitutes substantial evidence that a false representation of a material fact was made, it is apparent, considering the whole of the evidence and Aliant's theory of the case, that Aliant never relied upon the misrepresentations in the allegedly fraudulent invoices. In Hunt Petroleum Corp. v. State, 901 So. 2d 1, 4-5 (Ala. 2004), this Court explained that reliance is an essential part of any fraud claim and detailed what kind of evidence is needed to establish the element of reliance: "The law of fraud is well-settled. 'An essential element of any fraud claim is that the plaintiff must have reasonably relied on the alleged misrepresentation.' Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143, 1160 (Ala. 2003). Section 6–5–101, Ala. Code 1975, provides that '[m]isrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party ... constitute legal fraud.' Thus, reliance in the form that the misrepresentation is 'acted on by the opposite party' is an essential element of fraud in Alabama. Liberty Nat'l Life Ins. Co. v. Allen, 699 So. 2d 138, 141 (Ala. 1997). ".... "Reliance requires that the misrepresentation actually induced the injured party to change its 58 1150822, 1150823, 1150824 course of action. See Restatement (Second) of Torts § 537 (1977) ('The recipient of a fraudulent misrepresentation can recover against its maker for pecuniary loss resulting from it if, but only if ... he relies on the misrepresentation in acting or refraining from action, and ... his reliance is justifiable.'); 9 Stuart M. Speiser et al., The American Law of Torts § 32:49 (Clark Boardman Callaghan 1992) ('It is a fundamental principle of the law of fraud throughout the United States, regardless of the form of relief sought, that in order to secure redress, the representee (person to whom or which the misrepresentation was made) must have relied upon the statement or representation as an inducement to his action or injurious change of position.'). "This Court has explained what constitutes legal reliance in Alabama: "'"To determine whether or not a misrepresentation was actually relied upon, whether it was a cause in fact of the damage, the sine qua non rule is often applied. If the plaintiff would not have acted on the transaction in question but for the misrepresentation, such misrepresentation was an actual cause of his loss. If he would have adopted the same course irrespective of the misrepresentation and would have sustained the same degree of damages anyway, it can not be said that the misrepresentation caused any damage, and the defendant will not be liable therefor."' "Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortgage Co., 390 So. 2d 601, 611 (Ala. 1980) (quoting Fowler V. Harper and Fleming James, Jr., The Law of Torts § 7.13 (1956)). See also Fisher v. Comer Plantation, Inc., 772 So. 2d 455, 466 (Ala. 2000) ('When deciding whether the plaintiff relied on a misrepresentation, the fact-finder must 59 1150822, 1150823, 1150824 consider whether the plaintiff would have chosen a different course but for the suppression of a material fact.'). Other states have adopted similar tests. ".... "Although the terminology varies from state to state, the underlying principle is the same –– for a plaintiff to state a fraud claim, he must show that a misrepresentation induced him to act in a way that he would not otherwise have acted, that is, that he took a different course of action because of the misrepresentation." It is undisputed in this case that Aliant never relied on or changed its course of action based on the false representations allegedly made in the identified invoices. Indeed, when asked in his deposition about Aliant's involvement in the process by which the bond proceeds were disbursed, Williamson stated that "[Aliant] had no knowledge of ... any of the disbursements in how those proceeds were used." In response to a subsequent question, Williamson further stated that "[Aliant] didn't have any access to what transpired with the disbursement of the proceeds of the bond issue. We didn't know when they were disbursed, who they were disbursed to, what was supposed to happen." This testimony is consistent with Aliant's position that it did not learn that the bond proceeds had been exhausted until Four Star 60 1150822, 1150823, 1150824 Investments defaulted on the Aliant loan in early 2011. In light of the undisputed fact that Aliant had no knowledge of the false representations allegedly made in the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction, it cannot have relied on those false representations. See Fisher v. Ciba Specialty Chems. Corp., Civil Action No. 03-0566-WS-B (S.D. Ala. Oct. 11, 2007) (not selected for publication in F. Supp. 2d) ("It is axiomatic that a plaintiff cannot show reliance (reasonable or otherwise) on a statement of which he or she is unaware."). In conclusion, if the false representations allegedly made in the invoices submitted by Four Star Investments, Twelve Oaks Properties, and B&B Construction support a cause of action for fraud, that cause of action must belong to some party other than Aliant. Aliant had no knowledge of the false representations and accordingly could not have taken, or refrained from taking, any action in reliance upon those representations. Inasmuch as reliance is a required element of any fraud claim, this lack of evidence is a sufficient basis upon which to affirm the summary judgment entered by the trial court in favor of Four Star Investments, Twelve Oaks 61 1150822, 1150823, 1150824 Properties, and B&B Construction on the fraud claims asserted by Aliant in count six of its amended complaint. We also note, however, that B&B Construction has claimed that Aliant's claims against it are barred by the statute of limitations. Had Aliant asserted no other claims against B&B Construction it would be unnecessary for us to address this issue; however, inasmuch as Aliant asserts conspiracy and additional fraud claims against B&B Construction in count seven of its final amended complaint, we address B&B Construction's statute-of-limitations argument. Aliant filed its initial complaint in March 2012; however, it did not designate any fictitious defendants in that complaint, and it did not designate B&B Construction as a defendant until it filed an amended complaint on October 29, 2014. Aliant's fraud and conspiracy claims against B&B Construction are all subject to a two-year statute of limitations. See § 6-2-3, Ala. Code 1975 ("In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his action."), and Garris v. A&M Forest Consultants, 62 1150822, 1150823, 1150824 Inc., 623 So. 2d 1035, 1039 (Ala. 1993) (noting that the plaintiff's claim was "barred by the statute of limitations for a conspiracy action, which is two years; § 6-2-38(l), Ala. Code 1975, as amended"). The question of when a reasonable person should have discovered a claim is generally a question of fact within the purview of the jury; however, that question may be decided as a matter of law when the facts are undisputed and the evidence warrants but one conclusion or, stated another way, when the evidence indicates that the plaintiff actually knew of facts that would have put a reasonable person on notice of the existence of the claim. Bryant Bank, 155 So. 3d at 237-38. In this case, the relevant facts are undisputed and require the conclusion that Aliant knew or reasonably should have known of its claims against B&B Construction at least when it filed its initial complaint in March 2012. Accordingly, the claims asserted against B&B Construction for the first time in October 2014 are untimely and are barred by the statute of limitations. In its March 2012 complaint, Aliant made the following allegations: "47. Upon information and belief, large sums of the funds received pursuant to the bonds were diverted and not used for their intended purposes. 63 1150822, 1150823, 1150824 Many were paid and/or transferred to entities wholly owned and controlled by Bobby Smith with little or no description of the actual goods or services purportedly rendered. ".... "54. [WHA], [Twelve Oaks Properties], and the District knew or should have known that the requisition requests made for the bond funds were not for goods or services provided to the premises. Said requests were either on their face not for the premises or were so vague that a reasonably prudent person in the defendants' position would have made further inquiry and/or sought additional details." Thus, Aliant acknowledges that it knew by March 2012 that a large amount of the bond proceeds had been paid out in reimbursements to entities "owned and controlled" by Smith. Aliant knew at that time that Smith had an ownership interest in B&B Construction, and it was in possession of the reimbursement requests indicating that bond proceeds had been claimed by B&B Construction. This information was sufficient to put Aliant on notice of its potential claims against B&B Construction, but Aliant nevertheless waited over two and a half years before filing an amended complaint asserting those claims. Because the statute of limitations for those claims was two years, however, they were untimely, and the summary judgment entered by the trial court in favor of B&B 64 1150822, 1150823, 1150824 Construction is accordingly due to be affirmed in all respects. VI. Count seven of Aliant's final amended complaint also asserts two species of fraud claims –– misrepresentation and suppression –– as well as conspiracy claims against Twelve Oaks Properties, the District, Four Star Investments, Smith, Mize, and Billy Smith, and Hunt and WHA.6 The gravamen of those claims is that the defendants conspired together and concocted a plan whereby the District was created and the bonds were issued for the purpose of enriching the defendants without regard to the fact that the plan virtually ensured the ultimate failure of the Twelve Oaks development. Aliant argues that a crucial part of this plan involved the defendants' convincing Aliant to execute the mortgagee- special-assessment acknowledgment that subordinated its interest in the Twelve Oaks property –– a requirement for the bonds to be issued –– and, Aliant argues, the defendants 6Count seven also asserts those claims against the EOS defendants and B&B Construction; however, for reasons already discussed, those claims are barred by the relevant statutes of limitations, and we accordingly need not address the specific allegations made against the EOS defendants and B&B Construction in the context of those claims. 65 1150822, 1150823, 1150824 accomplished that goal by making fraudulent misrepresentations and concealing and suppressing material facts. However, before we consider whether substantial evidence exists to support the fraud and conspiracy claims asserted by Aliant, we first address affirmative defenses claimed by two of the defendants named in this count. We first note that Aliant has identified the District itself as a defendant with regard to these claims. In Part III of this opinion we addressed the Twelve Oaks defendants' § 11-99A-7 immunity argument as it related to the negligence and breach-of-fiduciary-duty claims asserted against the Board members. Although we ultimately concluded that § 11-99A-7 did not shield the Board members from liability as to those claims, under the plain language of § 11-99A-7 and § 11-47- 190, we must nevertheless conclude that the District itself is entitled to immunity on the claims asserted against it by Aliant. Section 11-99A-7 expressly provides that an improvement district has "the same immunity ... as a municipality," and this Court has stated that § 11-47-190 "absolves a municipality from liability for the intentional torts of its agents." Altmayer v. City of Daphne, 613 So. 2d 366, 369 (Ala. 1993). The Altmayer Court specifically noted 66 1150822, 1150823, 1150824 that fraud claims were among those claims barred by § 11-47- 190, id.; conspiracy likewise is an intentional tort, and conspiracy claims are barred by § 11-47-190. See Grider v. Carver, 767 F. Supp. 2d 1246, 1251 (M.D. Ala. 2011) (noting that the plaintiffs' state conspiracy claim was an intentional tort). Inasmuch as § 11-99A-7 grants the District the same immunity to which a municipality would be entitled, the summary judgment entered by the trial court is due to be affirmed with regard to the claims asserted by Aliant against the District.7 Aliant has also named Hunt, a partner in WHA, as a defendant to the fraud and conspiracy claims asserted in count seven of its final amended complaint; Hunt argues that the claims asserted against him personally are barred by the statute of limitations because, although WHA was named as a defendant in Aliant's initial March 2012 complaint, Aliant did not amend its complaint to add him as a defendant until October 2014 –– more than two years later –– and thus, Hunt 7Aliant has also asserted a wantonness claim against the District in count eight of its amended complaint; that claim is also barred by § 11-99A-7. See Town of Loxley v. Coleman, 720 So. 2d 907, 909 (Ala. 1998) ("This Court has construed § 11–47–190 to exclude liability for wanton misconduct."). 67 1150822, 1150823, 1150824 argues, outside the two-year period allowed by § 6-2-38. The trial court agreed with Hunt, stating in its order entering a summary judgment in his favor: "[T]he undisputed evidence shows Aliant knew of Mr. Hunt and his role in the project in 2008, yet failed to name him in the 2012 suit. Aliant was aware that Mr. Hunt was working for Gardnyr Michael [Capital], the underwriter for the bonds, no later than July 10, 2008, the date of the validation order. ... Aliant knew of Mr. Hunt and Gardnyr Michael [Capital] at the outset of the bond deal in 2008." This Court will decide as a matter of law when a fraud claim accrued, that is, when "a person of reasonable prudence would have discovered the alleged fraud," only when the evidence is undisputed and allows but one conclusion. Bryant Bank, 155 So. 3d at 237. In this case, Hunt argues only that Aliant should have been aware of its fraud and conspiracy claims against him in 2008 because it undisputedly knew at that time that he was involved in the bond issue through his work for Gardnyr Michael Capital, the underwriter for the bonds. We disagree that this is a sufficient basis upon which to conclude as a matter of law that Aliant must have known of its claims against Hunt at that time. Hunt has cited this Court to no evidence establishing when Aliant knew of Hunt's involvement in any wrongdoing; it points only to evidence 68 1150822, 1150823, 1150824 establishing that Aliant knew Hunt was involved in the bond issue through his work at Gardnyr Michael Capital, the underwriter for the bonds. However, Aliant has not asserted any claims against or alleged any wrongdoing by Gardnyr Michael Capital; its claims against Hunt are based on wrongdoing he committed in his individual capacity or through his work at WHA. Hunt has not attempted to establish when Aliant should have been aware of that wrongdoing, and Aliant argues that this is an issue of fact for the jury. We cannot resolve this issue as a matter of law at this time, and we accordingly decline to affirm the summary judgment entered in favor of Hunt on that basis. We thus turn to the merits of Aliant's fraudulent- misrepresentation claims. "To establish a prima facie case of fraudulent misrepresentation, a plaintiff must show: (1) that the representation was false, (2) that it concerned a material fact, (3) that the plaintiff relied on the false representation, and (4) that actual injury resulted from that reliance." Boswell v. Liberty Nat'l Life Ins. Co., 643 So. 2d 580, 581 (Ala. 1994). As the basis for these claims, Aliant has identified alleged misrepresentations 1) orally made by Smith in his communications with Williamson and 2) contained 69 1150822, 1150823, 1150824 in written materials prepared by WHA. In an affidavit, Williamson described those misrepresentations and their impact on Aliant's decision to agree to subordinate its interest in the Twelve Oaks property as follows: "16. Over [a period of several months beginning in February 2008] Bobby Smith provided me with various documents related to the proposed bond deal, including, but not limited to, a term sheet and a financial analysis prepared by [Gardnyr Michael Capital], the engineer's report, a proposed budget analysis for the phase by phase development of the subdivision, as well as a draft of the methodology. "17. It was not until a meeting I had with Bobby Smith in mid-July 2008 that I was presented with the mortgagee special assessment acknowledgment for [Aliant] to sign. A true and correct copy of my July 14, 2008, memo is attached hereto. "18. I was assured by representations made by Bobby Smith and the various [District] and bond transaction documents referenced above that the bond proceeds would be used strictly for the development of the infrastructure for the remaining 270 undeveloped lots and a clubhouse and pool, that the funds' disbursement would be carefully controlled and monitored, and that there would be independent inspections to verify the expenditures purportedly made on the project. "19. A few days later I had a follow-up discussion with Bobby Smith and Heyward Hosch, District counsel, regarding additional requirements related to the bonds and whether there were any restrictions preventing [Aliant] and Bobby Smith from having agreements related to lot releases. "20. [Aliant] was satisfied based on my discussion with Mr. Hosch and Bobby Smith that in such 70 1150822, 1150823, 1150824 situation the bond fund spending could be halted or slowed. A true and correct copy of my July 21, 2008, memo is attached hereto. "21. At no time was it revealed to me that the parties intended to use any of the bond proceeds to pay any Bobby Smith-controlled entity (owner, developer, or otherwise) for work done or expense incurred before the bond issue. "22. Based on all of the above, Aliant executed the mortgagee special assessment acknowledgment on or about July 24, 2008. "23. If I had known that all of the equity built up in the development was going to be given back to the development with the first two draws, that there were not going to be controls over the disbursements of the bond funds, and that the progress of the development was not going to be carefully monitored by professionals, I would not have signed the mortgagee special assessment acknowledgment. "24. As of July 24, 2008, the infrastructure of phase I of the development was complete and eighty (80) lots of that phase [were] available for development. "25. I was told that the bond proceeds would be used to expand the subdivision so that an additional 270 lots (a total of 350) would be made available. "26. I had [no] idea that over one half of the total bond proceeds was going to be used to reimburse Bobby Smith and [Twelve Oaks Properties] for virtually all of the pre-bond issuance work, work which had been funded with money largely advanced by Aliant through [the Aliant loan]. "27. As of [January 27, 2016], with the exception of the club house and pool, the infrastructure is not measurably further along and there are no more completed and saleable lots available than existed 71 1150822, 1150823, 1150824 on the day I signed the [mortgagee special assessment] acknowledgment." In paragraph 18 of his affidavit, Williamson identified three representations allegedly made to him that Aliant now claims were false: (1) that the bond proceeds would be used only to develop the infrastructure for the remaining 270 undeveloped lots and a clubhouse and a pool; (2) that the disbursement of the bond proceeds would be carefully controlled and monitored; and (3) that there would be independent inspections to verify the expenditures claimed by Smith. This is sufficient to establish a prima facie case of fraudulent misrepresentation against Smith and Twelve Oaks Properties, the entity Smith is alleged to have been representing when making the oral misrepresentations. Accordingly, the summary judgment was improper as to those claims. However, Aliant has failed to support its claim that Hunt and WHA made those representations. In fact, a review of the documents identified in paragraph 16 of Williamson's affidavit that were prepared by Hunt and WHA reveals that they do not contain those representations. The party asserting a fraudulent-misrepresentation claim must support that claim with specific evidence of the alleged misrepresentations. [substituted p. 72] 1150822, 1150823, 1150824 See, e.g., Drummond Co. v. Walter Indus., 962 So. 2d 753, 787- 88 (Ala. 2006) (affirming a summary judgment entered on a fraud claim on the basis that the claimant "failed to identify the specific representations on which it based its fraud claim, to whom and by whom those communications were purportedly made, when they were purportedly made, and in what manner [the claimant] relied on the purported communications"). In the absence of any specific evidence indicating that Hunt or WHA made false representations upon which Aliant relied, the summary judgments entered by the trial court in favor of Hunt and WHA are due to be affirmed with respect to the fraudulent-misrepresentation claims asserted by Aliant. Aliant also argues that the misrepresentations allegedly made by Smith should support fraudulent-misrepresentation claims against Hunt, WHA, Four Star Investments, Mize, and Billy Smith because, it argues, they were all allegedly part of an overarching conspiracy. However, this argument evinces a misunderstanding of the conspiracy cause of action. If the finder of fact is ultimately convinced that Smith made fraudulent misrepresentations and that there was a conspiracy in which Hunt, WHA, Four Star Investments, Mize, and Billy [substituted p. 73] 1150822, 1150823, 1150824 Smith were participants, then Hunt, WHA, Four Star Investments, Mize, and Billy Smith may be held liable for Smith's fraudulent misrepresentations by being held liable for conspiracy, not fraudulent misrepresentation. This Court's decision in DGB is instructive. We noted in that case that the fraudulent-misrepresentation and fraudulent-suppression claims asserted against defendant Ray Jacobsen were properly dismissed, but a conspiracy claim asserted against Jacobsen based on allegations that other defendants worked together and with him "to knowingly misrepresent information and to conceal material facts" was nevertheless viable. DGB, 55 So. 3d at 231-34. We next consider the fraudulent-suppression claims asserted by Aliant. The gravamen of those claims is that the defendants knew that Smith was going to use the bulk of the bond proceeds to reimburse himself and his companies for work done before the bonds were issued and that the defendants concealed this fact from Aliant in order to induce it to sign the mortgagee-special-assessment acknowledgment. "The elements of a suppression claim are '(1) a duty on the part of the defendant to disclose facts; (2) concealment or nondisclosure of material facts by the defendant; (3) [substituted p. 74] 1150822, 1150823, 1150824 inducement of the plaintiff to act; (4) action by the plaintiff to his or her injury.'" Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So. 2d 883, 891 (Ala. 2005) (quoting Lambert v. Mail Handlers Benefit Plan, 682 So. 2d 61, 63 (Ala. 1996)). Aliant does not cite these elements anywhere in the briefs it filed in its appeals of the judgments entered in favor of the Twelve Oaks defendants and Hunt and WHA, but it cites Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortgage Co., 390 So. 2d 601, 616 (Ala. 1980), for the proposition that fraudulent suppression exists "where the defendant has special knowledge or means of knowledge not open to the plaintiff and is aware that the plaintiff is acting under a misapprehension as to facts which would be of importance to him and would probably affect his decision" and Bank of Red Bay v. King, 482 So. 2d 274, 284-85 (Ala. 1985), to suggest that fraudulent suppression might be found when a party knows that the plaintiff is relying on something that is not true. See Aliant's briefs in appeal no. 1150822, pp. 31- 33, and in appeal no. 1150823, pp. 29-31. The first element of a fraudulent-suppression claim that must be established is whether the defendant alleged to have concealed a material fact had a duty to disclose that fact to [substituted p. 75] 1150822, 1150823, 1150824 the plaintiff; this inquiry presents an issue of law to be determined by the court. Freightliner, 932 So. 2d at 891. To the extent Aliant addresses this element, it essentially argues that the various defendants owed it such a duty based solely on the fact that they knew that Aliant was unaware that the vast majority of the bond proceeds would be disbursed to reimburse Smith and his companies for work completed before the bonds were issued. See, e.g., Aliant's brief in appeal no. 1150823, p. 33 (arguing that the trial court erred in entering a summary judgment in favor of Hunt and WHA on the fraudulent-suppression claims asserted against them because the trial court failed to give effect to the law set forth in Shades Ridge Holding Co. and Bank of Red Bay, which, Aliant argues, "creat[ed] a duty for WHA to disclose the detail of the plan for the [District] by reason of their knowledge of Aliant's misapprehension"). We disagree that the defendants' knowledge that Aliant was unaware that the bond proceeds could be distributed for work performed before the bonds were issued was sufficient in itself to create a duty to disclose. This Court has explained the duty to disclose as follows: "A duty to communicate can arise from a confidential relationship between the plaintiff and the defendant, from the particular circumstances of the [substituted p. 76] 1150822, 1150823, 1150824 case, or from a request for information, but mere silence in the absence of a duty to disclose is not fraudulent. Dodd v. Nelda Stephenson Chevrolet, Inc., 626 So. 2d 1288 (Ala. 1993); Hardy v. Blue Cross & Blue Shield of Alabama, 585 So. 2d 29 (Ala.1991); King v. National Foundation Life Ins. Co., 541 So. 2d 502 (Ala. 1989); see, McGowan v. Chrysler Corp., 631 So. 2d 842 (Ala. 1993); § 6–5–102, Ala. Code 1975. ".... "This Court has stated that whether one has a duty to speak depends upon a fiduciary, or other, relationship of the parties, the value of the particular fact, the relative knowledge of the parties, and other circumstances of the case. Bama Budweiser of Montgomery, Inc. v. Anheuser–Busch Inc., 611 So. 2d 238 (Ala. 1992); Norman v. Amoco Oil Co., 558 So. 2d 903 (Ala. 1990); see § 6–5–102, Ala. Code 1975. When the parties to a transaction deal with each other at arm's length, with no confidential relationship, no obligation to disclose information arises when the information is not requested." Mason v. Chrysler Corp., 653 So. 2d 951, 954-55 (Ala. 1995) (emphasis added). Essentially, the primary factor to be considered when determining whether a duty to disclose exists is the nature of the relationship between the parties. See, e.g., Armstrong Bus. Servs., 817 So. 2d at 677 (noting that the Court begins its inquiry by considering whether the facts establish "a relationship sufficient to give rise to a duty to disclose"). A duty to disclose is more likely to be found where there is a special or confidential relationship between [substituted p. 77] 1150822, 1150823, 1150824 the parties, but a duty to disclose may still be found when the parties engage in an arm's length business transaction and there are special circumstances or when specific information is requested. Mason, 653 So. 2d at 954-55. However, it will be the rare situation and only under the most extreme special circumstances that a duty to disclose is imposed upon parties that have no relationship with each other. In this case, it is undisputed that Aliant had no relationship with Hunt and WHA. At most, the evidence in the record indicates that Hunt was a participant in one telephone call with an Aliant employee and the substance of that call is unknown. Based on this lack of a relationship –– much less a confidential relationship or even an arm's length business relationship –– we cannot conclude that Hunt and/or WHA owed Aliant a duty to disclose. Aliant has identified no special circumstances that warrant the imposition of such a duty; instead, it effectively assumes that such a duty existed solely because Hunt and WHA had greater knowledge than it and said nothing. However, "mere silence in the absence of a duty to disclose is not fraudulent." Mason, 653 So. 2d at 954. The summary judgment entered in favor of Hunt and WHA on the [substituted p. 78] 1150822, 1150823, 1150824 fraudulent-suppression claims asserted against them is due to be affirmed. With regard to the claims asserted against the various Twelve Oaks defendants, however, Aliant did have a business relationship with Smith. Aliant has alleged that Smith represented to it that the bond proceeds would be used to develop 270 additional lots in Twelve Oaks while allegedly knowing that he and/or his companies would actually receive the majority of the bond proceeds for work that had already been performed in association with the development of the first 80 lots. In CNH America, LLC v. Ligon Capital, LLC, 160 So. 3d 1195, 1202-03 (Ala. 2013), we explained that "'once a party elects to speak, he or she assumes a duty not to suppress or conceal those facts that materially qualify the facts already stated'" (quoting Freightliner, 932 So. 2d at 895). See also First Alabama Bank of Montgomery, N.A. v. First State Ins. Co., 899 F.2d 1045, 1056 (11th Cir. 1990) ("Finally, even if one is not under a duty to speak, if he decides to do so, 'he must make a full and fair disclosure,' without concealing any facts within his knowledge." (quoting Ellis v. Zuck, 409 F. Supp. 1151, 1158 (N.D. Ala. 1976), and citing Jackson Co. v. Faulkner, 55 Ala. App. 354, 315 So. 2d [substituted p. 79] 1150822, 1150823, 1150824 591 (1975))). Thus, once Smith represented how the bond proceeds would be used, he had a duty to make a full disclosure as to how those proceeds would be used. Aliant has submitted evidence indicating that Smith failed to fulfill that duty and instead concealed the truth about how the bond proceeds would be used, thus inducing Aliant to execute the mortgagee-special-assessment acknowledgment and resulting in subsequent injury to Aliant. Accordingly, the summary judgment entered on the fraudulent-suppression claims asserted against Smith and Twelve Oaks Properties is due to be reversed. Aliant has failed to establish that Mize or Billy Smith owed it a duty to disclose, however, and the summary judgments entered in favor of them on the fraudulent- suppression claims asserted by Aliant are due to be affirmed. Finally, inasmuch as we have held that Aliant has put forth substantial evidence supporting at least some of the fraudulent-misrepresentation and fraudulent-suppression claims asserted in count seven of its final amended complaint and that the trial court accordingly erred in entering a summary judgment against Aliant on those claims, we also hold that the trial court erred in entering a summary judgment against Aliant on the conspiracy claims it asserted against Smith, [substituted p. 80] 1150822, 1150823, 1150824 Twelve Oaks Properties, Four Star Investments, Mize, Billy Smith, Hunt, and WHA. Some of the defendants have argued that they cannot be found liable for conspiracy if they are not liable for the underlying wrong upon which the conspiracy claim is based; however, our holding in DGB refutes this argument. Although it is true that "[a] plaintiff alleging conspiracy must have a valid underlying cause of action," Callens v. Jefferson County Nursing Home, 769 So. 2d 273, 280 (Ala. 2000), it is not necessary that each alleged conspirator be the subject of an underlying cause of action, only that there be a valid cause of action against at least one of the alleged conspirators. See DGB, 55 So. 3d at 234 ("Because the [plaintiffs] have alleged valid underlying causes of action and because acts of coconspirators are attributable to each other, see [Ex parte] Reindel, [963 So. 2d 614, 621 (Ala. 2007),] the [plaintiffs] have stated a claim of civil conspiracy upon which relief may be granted against each of these defendants."). Thus, the defendants in this case may be liable for conspiracy even if they are not liable for the underlying fraud. VII. [substituted p. 81] 1150822, 1150823, 1150824 In count eight of its final amended complaint, Aliant asserts wantonness claims against Smith, Mize, Billy Smith, Twelve Oaks Properties, and WHA.8 Specifically, Aliant asserts that these defendants "undertook a duty to carefully and prudently spend and/or assure that the [bond proceeds] were spent in accordance with the bond documents to make the promised improvements" and that they "consciously and/or intentionally acted with reckless disregard to the consequences of their wrongful acts." We first note, however, that, although Aliant adequately explained the basis of its wantonness claim in its complaint, in its brief to this Court in appeal no. 1150822 challenging the judgment entered in favor of the Twelve Oaks defendants, Aliant has wholly failed to explain its wantonness claim or to cite any authority regarding wantonness. In J.K. v. UMS- Wright Corp., 7 So. 3d 300, 305-06 (Ala. 2008), we considered an argument that a trial court had erred in entering judgment 8Aliant also asserts wantonness claims against the EOS defendants and the District in count eight; however, as discussed supra, all claims against the EOS defendants are barred by the statute of limitations, and the District is protected by § 11-99A-7 immunity. [substituted p. 82] 1150822, 1150823, 1150824 on a wantonness claim where the appellants had similarly failed to support their argument: "Not only do [the appellants] not describe with any specificity conduct of the trustees that they consider to have been wanton, but they also fail to cite any statute or caselaw that defines wantonness, and they do not illustrate how the actions by the members of the board of trustees could satisfy any such definition. '"'Where an appellant fails to cite any authority, we may affirm, for it is neither our duty nor function to perform all the legal research for an appellant.'"' McCutchen Co. v. Media General, Inc., 988 So. 2d 998, 1004 (Ala. 2008) (quoting Henderson v. Alabama A & M Univ., 483 So. 2d 392, 392 (Ala. 1986), quoting in turn Gibson v. Nix, 460 So. 2d 1346, 1347 (Ala. Civ. App. 1984)). Because [the appellants] have not provided us with a standard against which to evaluate the trustees' allegedly wanton behavior ... the trial court's judgment on this issue is affirmed." Thus, by failing to adequately argue the issue, Aliant has effectively waived its argument that the trial court erred in entering summary judgment against it on the wantonness claims asserted against Smith, Mize, Billy Smith, and Twelve Oaks Properties. Bogle, 512 So. 2d at 1337. With regard to the wantonness claim asserted against WHA, we stated in Lemley v. Wilson, 178 So. 3d 834, 841-42 (Ala. 2015), that, "'[t]o establish wantonness, the plaintiff must prove that the defendant, with reckless indifference to the consequences, consciously and intentionally did some wrongful [substituted p. 83] 1150822, 1150823, 1150824 act or omitted some known duty.'" (Quoting Martin v. Arnold, 643 So. 2d 564, 567 (Ala. 1994).) Aliant has based its wantonness claims on the omission or breach of a known duty; however, we have already determined, supra in Part III, that WHA owed Aliant no duties. Moreover, Aliant's wantonness claims are premised on the allegation that the named defendants failed to make sure that the bond proceeds were properly spent; however, the documentary evidence in the record establishes that WHA had no role in approving the disbursement of bond proceeds. Disbursements had to be approved by EOS and the District's board of directors; WHA provided only administrative assistance in that process. Accordingly, the summary judgment entered in favor of WHA on the wantonness claim asserted against it in count eight of Aliant's final amended complaint is also due to be affirmed. VIII. In the last count of its final amended complaint, Aliant argues that Twelve Oaks Properties and WHA are liable for breach of contract. Aliant acknowledges that there is no contract between it and either Twelve Oaks Properties or WHA; however, it nevertheless argues that it was an intended third- party beneficiary of 1) a completion agreement between Twelve [substituted p. 84] 1150822, 1150823, 1150824 Oaks Properties and the District executed in conjunction with the bond issuance in which Twelve Oaks Properties took responsibility for completing the planned improvements at Twelve Oaks that were not funded by the bond proceeds; and 2) the management agreement between WHA and the District. In Swann v. Hunter, 630 So. 2d 374, 376 (Ala. 1993), this Court stated: "To recover in a breach-of-contract action, as a third-party beneficiary, the plaintiff must prove the following: (1) that the contracting parties intended, when they entered the contract, to bestow a direct, as opposed to an incidental, benefit upon a third party, (2) that the plaintiff was the intended third-party beneficiary of the contract, and (3) that the contract was breached. ..." Aliant argues that the completion agreement executed by Twelve Oaks Properties and the management contract executed by WHA were intended to benefit the owners of property in the District –– including Aliant inasmuch as it held a mortgage on the Twelve Oaks property –– and that Twelve Oaks Properties and WHA failed to fulfill their obligations under those contracts to the detriment of Aliant. Both the completion agreement and the management agreement were intended to bestow some benefit upon the District. Aliant argues, essentially, that, inasmuch as the [substituted p. 85] 1150822, 1150823, 1150824 District's raison d'etre is to provide improvements to the property within its borders, as the holder of an interest in such property it was an intended beneficiary of any contract that benefited the District. Twelve Oaks Properties and WHA rightfully do not dispute that Aliant had an interest in property within the District when those contracts were executed because it is undisputed that Aliant held a mortgage on the Twelve Oaks property at that time and "Alabama is a 'title theory' state; thus, when a person mortgages real property, the mortgagee obtains legal title to the real property and the mortgagor retains an equity of redemption." Maiden, 69 So. 3d at 865. However, Twelve Oaks Properties and WHA argue that Aliant's interest in the Twelve Oaks property at most made Aliant an incidental beneficiary to the cited contracts, not a direct beneficiary such that Aliant can sue for the breach of a contract. See Holley v. St. Paul Fire & Marine Ins. Co., 396 So. 2d 75, 80 (Ala. 1981) ("One who seeks recovery in contract as a third-party beneficiary must establish that the contract was intended for his direct, as opposed to incidental, benefit."). In its orders entering a summary judgment against Aliant on these claims, the trial [substituted p. 86] 1150822, 1150823, 1150824 court agreed, holding that Aliant was not an intended third- party beneficiary to either of the cited contracts. "[T]he determination of third-party-beneficiary status is a conclusion of law that we review de novo." Harris Moran Seed Co. v. Phillips, 949 So. 2d 916, 920 (Ala. Civ. App. 2006). For the reasons that follow, we agree with the holding of the trial court that Aliant was not an intended beneficiary to the cited contracts. Although those contracts were intended to benefit the District, even if we were to conclude that the parties to those contracts intended to bestow benefits upon the "owners" of property within the District as well, those benefits would run directly only to the party in possession of the property –– any benefit to the mortgagee would necessarily be incidental.9 Benefits and improvements 9In First Union National Bank of Florida v. Lee County Commission, 75 So. 3d 105, 113 (Ala. 2011), this Court explained how a mortgagee and a mortgagor are both in some sense "owners" of mortgaged property: "[The mortgagee's] argument presumes that legal title is the equivalent of absolute ownership of property, but that presumption is incorrect. See Alabama Home Mortgage Co. v. Harris, 582 So. 2d 1080, 1083–84 (Ala. 1991) (recognizing that there is no 'absolute owner' of property until there is a merger of equitable title and legal title). [The mortgagee's] interpretation of the term 'owner' in § 40–10–28[, Ala. Code 1975,] fails to consider the [substituted p. 87] 1150822, 1150823, 1150824 made to mortgaged property would not directly benefit the mortgagee until there is a merger of equitable title and legal title. At best, Aliant in this case would receive an incidental benefit from the cited contracts inasmuch as the property securing the Aliant loan would increase in value and Aliant's risk of loss in the event of default would decrease; however, this is far from a direct intended benefit that will support a third-party-beneficiary breach-of-contract claim. Accordingly, the trial court's judgments in favor of Twelve Oaks Property and WHA on the claims asserted against them in count nine of Aliant's amended complaint are due to be affirmed. IX. Aliant sued various individuals and business entities involved in developing the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' fact that when real property is mortgaged, only legal title passes to the mortgagee, and the mortgagor retains his or her other status as 'owner and holder of equitable title.' Sims v. Riggins, 201 Ala. 99, 103, 77 So. 393, 397 (1917) (the mortgagor is 'the owner and holder of the equitable title'). Until there has been a foreclosure, the mortgagor continues to 'own' the property. Alabama Home Mortgage, 582 So. 2d at 1083–84." [substituted p. 88] 1150822, 1150823, 1150824 conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The trial court ultimately entered judgments against Aliant and in favor of the defendants on all counts. We now affirm those judgments in part and reverse them in part. In appeal no. 1150822, we reverse the summary judgment entered by the trial court against Aliant (1) on the negligence and breach-of-fiduciary- duty claims asserted against the Board members in count four of Aliant's complaint; (2) on the fraudulent-misrepresentation and fraudulent-suppression claims asserted against Smith and Twelve Oaks Properties in count seven of Aliant's complaint; and (3) on the conspiracy claims asserted against Smith, Twelve Oaks Properties, Four Star Investments, Mize, and Billy Smith in count seven of Aliant's complaint. We affirm the summary judgment entered by the trial court against Aliant and in favor of the various Twelve Oaks defendants in all other respects. In appeal no. 1150823, we reverse the summary judgments entered against Aliant on the conspiracy claims asserted against Hunt and WHA in count seven of Aliant's complaint; however, we affirm those summary judgments with regard to all other claims asserted by Aliant against Hunt and [substituted p. 89] 1150822, 1150823, 1150824 WHA. Finally, in appeal no. 1150824, we affirm the summary judgment entered by the trial court against Aliant and in favor of the EOS defendants on all counts. 1150822 –– AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. 1150823 –– AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. 1150824 –– AFFIRMED. Bolin, Parker, Main, and Wise, JJ., concur. Shaw, J., concurs in the result. [substituted p. 90]

May 5, 2017

ef8c9384-2ef4-4de9-bbd5-157a50cc4d28

Fallaw v. Flowers

146 So. 2d 306

N/A

Alabama

Alabama Supreme Court

146 So. 2d 306 (1962) James R. FALLAW v. Roy Eugene FLOWERS et al. 6 Div. 849. Supreme Court of Alabama. October 25, 1962. *307 Wyman C. Lowe, Atlanta, for appellant. No attorney marked for appellees. SIMPSON, Justice. This is an appeal in an action for personal injuries by the plaintiff from a judgment in his favor rendered by the Circuit Court of Blount County. There was no jury and a judgment by default was taken and the trial judge assessed damages at $20,000. The plaintiff below, appellant here, claims the damages as assessed by the trial judge were inadequate, and urges that we increase the amount of recovery awarded. No motion for a new trial was made. The appeal clearly has no merit. It is well recognized that where no motion for a new trial is made, any question concerning the weight of the evidence is not before our court for review. Harris v. Martin, 271 Ala. 52, 122 So. 2d 116, and cases cited. Further, it is clearly enunciated by the cases that an excessive verdict cannot be reviewed by this court unless a motion for a new trial has been made and acted upon by the trial court. Central of Ga. Ry. Co. v. Chicago Varnish Co., 169 Ala. 287, 53 So. 832; Central of Ga. Ry. Co. v. Chambers, 197 Ala. 93, 72 So. 351; Lacey v. Deaton, 228 Ala. 368, 153 So. 650; Prestwood v. Bohannon, 27 Ala.App. 340, 172 So. 349; W. T. Rawleigh Co. v. Hannon, 32 Ala.App. 147, 22 So. 2d 603; Shelley v. Clark, 267 Ala. 621, 103 So. 2d 743; State v. Ferguson, 269 Ala. 44, 110 So. 2d 280. An apt corollary to these rules must be that this court cannot review the inadequacy of a judgment in such cases where no motion for a new trial is made on this ground. See Kraas v. American Bakeries Co., 231 Ala. 278, 164 So. 565 and cases cited therein; also Oates v. Glover, 228 Ala. 656, 154 So. 786. Appellant here had no adverse ruling on which to invite our review. We of course may not review any action of the lower court where the judge has made no ruling adverse to appellant on the question. Clancy Lumber Co. v. Howell, 260 Ala. 243, 70 So. 2d 239; Life & Casualty Ins. Co. of Tennessee v. Womack, 228 Ala. 70, 151 So. 880. The remittitur provision found in § 811, Tit. 7, Code of Ala. 1940 exists in certain circumstances as an exception to this rule. But nowhere in the code is any provision found giving our appellate courts the power to add to an alleged inadequate verdict, sometimes termed an additur, or incresitur. Thus we are without power to increase an inadequate award of damages in such cases not having the statutory authority. Kraas v. American Bakeries Co., supra. It results from these considerations that the appeal is without merit. Affirmed. LIVINGSTON, C. J., and GOODWYN and COLEMAN, JJ., concur.

October 25, 1962

c751e3b6-97b2-48dc-8515-ce21f6ed2050

Hurst v. Sneed

N/A

1151067

Alabama

Alabama Supreme Court

Rel:02/03/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151067 ____________________ Sherri Hurst v. Rankin Sneed, as administrator ad litem for the Estate of Brenda M. Ray Appeal from Madison Circuit Court (CV-15-901544) BOLIN, Justice. 1151067 Sherri Hurst appeals from a summary judgment in favor of the estate of Brenda M. Ray on Hurst's negligence claim. We 1 reverse and remand. Facts and Procedural History Hurst and Ray had been friends and neighbors for approximately 20 years before the incident that is the basis of the underlying action. Hurst and Ray would shop together once or twice a month, sharing rides over the years in order to reduce the expenses of gasoline and wear and tear on their respective vehicles. They would alternate as to whose vehicle they would take on each shopping trip. On August 22, 2013, Ray telephoned Hurst and asked her to accompany her to a Wal-Mart discount store. Ray was taking Nona Williams, her elderly aunt, to purchase Williams's medication and other merchandise that day, in preparation for Williams's move to Ohio. Hurst stated that Ray told her: "I really need you if you can go with me to Wal-Mart and go run some errands." Hurst testified that Williams was "very old" and that she walked "slowly." According to Hurst, although Williams walked "slowly," she was able to walk without Ray died following the events giving rise to the 1 underlying action and before the complaint was filed. 2 1151067 assistance. Hurst additionally stated that Ray suffered from congestive heart failure and a variety of other illnesses but that Ray also was able to walk without assistance. Hurst testified that her purpose in accompanying Ray to the Wal-Mart store was to "help her with her aunt [by] assisting her in the store [and] ... by standing with [Williams] [and] making sure [Williams] got to her correct destination." When asked specifically what assistance Ray had requested when she asked Hurst to go to the store with her, Hurst replied: "[S]he just wanted me to stay with [Williams] while she would go park the car or come into the store, whatever she needed." Williams testified that Ray asked Hurst to accompany them to the Wal-Mart store because "both [Ray] and I had limited mobility, and [Ray] wanted [Hurst] to come along in case either of us needed help moving around." Ray drove her vehicle to the Wal-Mart store, and Williams and Hurst rode as passengers. When they arrived at the Wal- Mart store, Ray pulled her vehicle along the curb in front of the store to allow Williams to get out of the vehicle at the entrance. After Williams got out of the vehicle, Ray asked Hurst to stand with Williams on the curb while she parked the 3 1151067 car. Hurst then began to get out of the vehicle, but, before she had completely exited the vehicle, Ray pulled the vehicle forward, causing Hurst to fall to the ground. Hurst sustained injuries when the back tire of the vehicle ran over her leg. On August 21, 2015, Hurst sued Ray's estate ("the estate"), alleging negligence and seeking to recover damages for her injuries. The estate answered the complaint, raising as a defense, among other things, the Alabama Guest Statute, § 32-1-2, Ala. Code 1975. On May 25, 2016, the estate moved for a summary judgment, arguing that Hurst's negligence claim was barred by the Guest Statute. On June 7, 2016, Hurst filed a cross-motion for a summary judgment or, in the alternative, to deny the estate’s motion for a summary judgment. Following a hearing, the trial court, on June 20, 2016, entered an order granting the estate’s motion for a summary judgment and denying Hurst’s cross-motion for a summary judgment. Hurst appeals. Standard of Review The standard by which this Court reviews a summary judgment is well settled: "This Court reviews a summary judgment de novo. Turner v. Westhampton Court, L.L.C., 903 So. 2d 82, 4 1151067 87 (Ala. 2004). We seek to determine whether the movant has made a prima facie showing that there exists no genuine issue of material fact and has demonstrated that the movant is entitled to a judgment as a matter of law. Turner, supra. In reviewing a summary judgment, this Court reviews the evidence in the light most favorable to the nonmovant. Turner, supra. Once the movant makes a prima facie showing that he is entitled to a summary judgment, the burden shifts to the nonmovant to produce 'substantial evidence' creating a genuine issue of material fact. Ala. Code 1975, § 12-21- 12; Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989). 'Substantial evidence' is 'evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co. of Fla., 547 So. 2d 870, 871 (Ala. 1989)." Muller v. Seeds, 919 So. 2d 1174, 1176-77 (Ala. 2005). Discussion Section 32-1-2, Ala. Code 1975, provides: "The owner, operator, or person responsible for the operation of a motor vehicle shall not be liable for loss or damage arising from injuries to or death of a guest while being transported without payment therefor in or upon said motor vehicle, resulting from the operation thereof, unless such injuries or death are caused by the willful or wanton misconduct of such operator, owner, or person responsible for the operation of the motor vehicle." The term "guest" is not defined in the statute; however, this Court has stated: 5 1151067 "'"The general rule is that if the transportation of a rider confers a benefit only on the person to whom the ride is given, and no benefits other than such as are incidental to hospitality, good will or the like, on the person furnishing the transportation, the rider is a guest; but if his carriage tends to promote the mutual interest of both [the rider] and driver for their common benefit, thus creating a joint business relationship between the motorist and his rider, or if the rider accompanies the driver at the instance of the driver for the purpose of having the rider render a benefit or service to the driver on a trip that is primarily for the attainment of some objective of the driver, the rider is a 'passenger for hire' and not a guest."'" Sullivan v. Davis, 263 Ala. 685, 688, 83 So. 2d 434, 436-37 (1955)(quoting Wagnon v. Patterson, 260 Ala. 297, 303, 70 So. 2d 244, 249 (1954), quoting in turn Hasbrook v. Wingate, 152 Ohio St. 50, 56-57, 87 N.E.2d 87, 91 (1949)). See also Dorman v. Jackson, 623 So. 2d 1056, 1057 (Ala. 1993), and Sellers v. Sexton, 576 So. 2d 172, 174 (Ala. 1991). Further, this Court has stated: "'If the excursion is not purely social, any benefit to the driver of the automobile conferred or anticipated or mutual benefit present or anticipated to the driver and the person carried is sufficient to take the case out of the automobile guest statute.'" Harrison v. McCleary, 281 Ala. 87, 90, 199 So. 2d 165, 167 (1967)(quoting Blair v. 6 1151067 Greene, 247 Ala. 104, 110, 22 So. 2d 834, 837 (1945)). This Court has also stated: "'... In order to keep the person transported from being a gratuitous guest, it is not necessary that he should have paid or agreed to pay directly for his transportation or be a "passenger for hire" in the legal sense of the term; and the payment or compensation which the carrier derives from the undertaking need not consist of cash or its equivalent, but may consist of some other substantial benefit, recompense, or return making it worth while for him to furnish the ride.' 60 C.J.S., Motor Vehicles, § 399(5)b, p. 1011. ".... "... [T]he general rule [is] that a mere incidental benefit to the driver is not sufficient to take the rider out of the guest statute. The benefit conferred must in some degree have induced the driver to extend the offer to the rider. Further, courts have generally held that the benefit must be material and tangible and must flow from the transportation provided. ..." Sullivan, 263 Ala. at 688-89, 83 So. 2d at 437. Relative to the court's task in determining whether a rider in a vehicle was a "guest" or a "passenger for hire," this Court has stated: "The commercial and social relationships that can exist between the driver of an automobile and his passenger are almost as numerous and varied as human activity itself. At one extreme we have the 'hitchhiker' guest who clearly falls within the purview of the statute. At the other extreme we have the passenger who pays the driver to be transported 7 1151067 to a particular place and who is unquestionably beyond the scope of the statute. Between these two extremes the dividing line may at times become illusory and shadowy. It is sometimes necessary to enter into a detailed examination of the present and former relations between driver and passenger; implied and expressed arrangements made between them as to the conduct of the particular trip; the purpose of the mission; the benefits accruing to the driver and passenger from the expedition; and any other factors that bring into proper focus the true status of the parties at the time of the accident which give rise to the legal action." Sullivan, 263 Ala. at 687, 83 So. 2d at 436. Hurst argues that the trial court erred in entering a summary judgment in favor of the estate because, she says, based upon the facts of this case she was a passenger and not a guest under the Alabama Guest Statute at the time she sustained her injuries. The general rule set forth in Sullivan above, regarding whether a rider in a vehicle is considered a "guest" or a "passenger for hire" for purposes of the Alabama Guest Statute, has three components: (1) if the transportation of a rider confers a benefit only on the rider, and no benefits, other than such as are incidental to hospitality, good will, or the like, on the driver, the rider is a guest; (2) if the transportation tends to promote the mutual interest of both the rider and the driver for their common benefit, 8 1151067 thus creating a joint business relationship between the motorist and his or her rider, the rider is a "passenger for hire" and not a "guest"; and (3) if the rider accompanies the driver at the instance of the driver for the purpose of having the rider confer a benefit or service to the driver on a trip the primary objective of which is to benefit the driver, the rider is a "passenger for hire" and not a "guest." As to the first component of the test espoused in Sullivan, supra, the estate argues that any benefit bestowed upon Ray by Hurst's accompanying Ray to the Wal-Mart store to assist Ray with Williams was incidental to the goodwill shared between Hurst and Ray that arose from their long- standing friendship. Therefore, the estate contends, Hurst was a "guest" and not a "passenger for hire" under the Guest Statute. It is undisputed that Ray and Hurst had enjoyed a friendship of over 20 years and that they had routinely shared rides with each other. However, nothing in the record indicates, nor has the estate demonstrated, that any benefit was conferred on Hurst by her agreeing to accompany Ray to the Wal-Mart store to assist Ray with her elderly aunt. It does not appear from the record that Hurst was to be compensated 9 1151067 for her assistance or that the trip was in any way for Hurst's benefit. Based on the facts presented here, Hurst did not qualify as a "guest" under the first component of the test set forth in Sullivan. As to the second component of the test set forth in Sullivan, we again note that the longtime friends had a history of shopping together, and, in the course of those shopping excursions, they would share rides and alternate on each trip whose vehicle they would take, for the mutually beneficial purpose of reducing the expenses of gasoline and wear and tear on their respective vehicles. However, the facts presented here indicate that this particular trip was not taken in the context of their standing arrangement of sharing rides for each other's mutual benefit. Rather, Ray asked Hurst to accompany her to the Wal-Mart store to assist Ray with Williams, her elderly aunt. Nothing in the facts presented indicate that Hurst's accompanying Ray to the Wal- Mart store to assist her with Williams tended to create a joint business relationship between Hurst and Ray because no benefit was being conferred upon Hurst. Accordingly, the 10 1151067 second component of the test set forth in Sullivan is not determinative of Hurst's status under the Guest Statute. As for component three of the test in Sullivan, Hurst argues that she conferred a material benefit upon Ray by agreeing to Ray's request to accompany Ray to the Wal-Mart store to assist Ray with her elderly aunt. Therefore, Hurst contends, she was a passenger and not a "guest" for purposes of the Guest Statute. We agree. The evidence, viewed in a light most favorable to Hurst, indicates the following. Ray suffered from congestive heart failure and a number of other illnesses. Williams, Ray's aunt, was described as "very old," and testimony indicated that she moved "slowly." When Ray had to take Williams shopping in preparation for Williams's move to Ohio, she told Hurst that she "really needed" Hurst to go to the Wal-Mart store with her. The purpose of Hurst's accompanying Ray to the Wal-Mart store was to assist Ray with Williams while they were in the store shopping, by standing with Williams while Ray parked her automobile, and by providing whatever other assistance Ray might have needed with Williams. In fact, Hurst was injured as she got out of the vehicle at Ray's direction that Hurst stand with Williams in 11 1151067 the front of the Wal-Mart store while Ray parked the automobile. Hurst's accompaniment of Ray to the Wal-Mart store to assist Ray with Williams conferred more than an incidental benefit to Ray -- it conferred a material and tangible benefit because it relieved Ray, who herself was ill and suffering from congestive heart failure, of some of the burden of having to be the sole caretaker of her elderly aunt on the shopping excursion. It was this benefit to Ray that induced her to ask Hurst to accompany her to the Wal-Mart store. Sullivan, supra. Accordingly, we conclude that Hurst's accompanying Ray to the Wal-Mart store to assist Ray with her elderly aunt conferred on Ray a material benefit so as to remove Hurst from "guest" status under the Guest Statute. Conclusion We reverse the summary judgment entered in favor of the estate and remand the case for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Parker, Shaw, Main, Wise, and Bryan, JJ., concur. Murdock, J., concurs in the result. 12

February 3, 2017

7fceb349-a1db-4c48-a8c3-c0987e7741f0

Collins v. Herring Chiropractic Center, LLC

N/A

1151173

Alabama

Alabama Supreme Court

Rel:02/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151173 ____________________ Betty Collins v. Herring Chiropractic Center, LLC, and Ricardo Herring, D.C. Appeal from Jefferson Circuit Court (CV-14-902835) BOLIN, Justice. Betty Collins appeals from a summary judgment in favor of Ricardo Herring, D.C., and Herring Chiropractic Center, LLC, the defendants in her action seeking damages for alleged medical malpractice. 1151173 Facts and Procedural History The evidence, viewed, as we are required to do, in a light most favorable to Collins as the nonmovant shows the following. Beginning in June 2012, Collins was being treated by Dr. Herring for injuries to her knee, shoulder, and lower back. The treatment for her knee injury included applying a "cold pack" to her knee. Collins received treatment from Dr. 1 Herring on several occasions during June 2012. On July 9, 2012, Collins sought treatment from Dr. Herring for her knee injury. During that appointment, Dr. Herring's assistant retrieved a cold pack from the refrigerator and placed it directly on Collins's knee. On Collins's previous appointments, the cold pack had been sitting out on a table when she arrived and was later placed on her knee. Collins noticed that the cold pack applied on July 9 was harder than the cold packs that had been applied to her knee during previous appointments. Collins's appointment that day was in the morning, and the chiropractic center had been closed the previous seven days. Collins felt heat when the cold pack was removed from her knee; during her Apparently, the cold packs were filled with gel or some 1 similar material. 2 1151173 previous treatments her knee felt cold when the cold pack was removed. A few hours later, Collins developed blisters on her knee where the cold pack had been. Subsequently, scars developed on Collins's knee where the cold pack had been. On July 7, 2014, Collins sued the defendants alleging medical malpractice arising out of the application of the cold pack to her knee. The defendants timely filed an answer. Subsequently, the defendants filed a motion for a summary judgment. They supported their summary-judgment motion with an affidavit from Dr. Herring. In the affidavit, Dr. Herring stated in pertinent part: "At all time when I provided care and treatment to Ms. Collins I did so in keeping with the standard of care that applied to me and to other similarly situated chiropractors. ".... "As a part of the care and treatment of Ms. Collins a cold pack was used. There were two types that are used in my practice. ... The manner and method that these types of packs are used in my office did not cause any injury and the area claimed to have been affected by Ms. Collins exceeds the area over which the cold pack would have been place[d]. The use of a cold pack in the care and treatment of Ms. Collins's condition is a recognized and standard treatment by chiropractors. It was not a deviation from the appropriate standard of care to use a cold pack. 3 1151173 "I provided appropriate chiropractic care and treatment when treating Ms. Collins. I did not fall below the standard of care in providing care or treatment to Ms. Collins in any respect. I did not cause any injury to Ms. Collins." In their summary-judgment motion, the defendants argued that Collins had not produced any evidence demonstrating that Dr. Herring's treatment fell below the applicable standard of care. The defendants argued that Collins failed to present testimony from a similarly situated expert witness because Collins had not designated an expert witness as required under the Alabama Medical Liability Act ("the AMLA"), § 6-5-480 et seq. and § 6-5-540 et seq., Ala. Code 1975, to testify that Dr. Herring breached his duty of care in treating Collins. They also argued that Dr. Herring's affidavit affirmed that he did not breach the required standard of care in treating Collins and that his treatment was not the cause of Collins's injuries. In response to their motion, Collins argued that it was not necessary for her to present expert testimony in opposition to the summary-judgment motion because Collins's claims fell within an exception to the AMLA, i.e., Collins's claims could be readily understood by a layperson. 4 1151173 Collins further argued that her deposition testimony provided substantial evidence of her claims and that it was up to a jury to determine whether the application of the cold pack on July 9, 2012, was the cause of her injuries. On June 24, 2016, the trial court entered a summary judgment in favor of the defendants. Collins timely filed an appeal. We reverse and remand. Standard of Review "We review a summary judgment de novo. Potter v. First Real Estate Co., 844 So. 2d 540, 545 (Ala. 2002)(citing American Liberty Ins. Co. v. AmSouth Bank, 825 So. 2d 786 (Ala. 2002)). "'We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once a party moving for a summary judgment establishes that no genuine issue of material fact exists, the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. "Substantial evidence" is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." 844 So. 2d at 545 (quoting Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So. 2d 369, 372 (Ala. 2000)) (citations omitted).' "Summary judgment is appropriate only when there is no genuine issue of any material fact and the 5 1151173 moving party is entitled to judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P." Hooper v. Columbus Reg'l Healthcare Sys., Inc., 956 So. 2d 1135, 1139 (Ala. 2006). Discussion Collins argues that the trial court erred in entering a summary judgment for the defendants on the basis that she had not designated an expert witness. Specifically, she contends that expert testimony is not required in this case to establish either the standard of care or the causal connection between the defendants' acts and her injuries. "To maintain a medical-malpractice action, the plaintiff ordinarily must present expert testimony from a 'similarly situated health-care provider' as to (1) 'the appropriate standard of care,' (2) a 'deviation from that standard [of care],' and (3) 'a proximate causal connection between the [defendant's] act or omission constituting the breach and the injury sustained by the plaintiff.' Pruitt v. Zeiger, 590 So. 2d 236, 238 (Ala. 1991)(quoting Bradford v. McGee, 534 So. 2d 1076, 1079 (Ala. 1988)). The reason for the rule that proximate causation must be established through expert testimony is that the issue of causation in a medical-malpractice case is ordinarily 'beyond "the ken of the average layman."' Golden v. Stein, 670 So. 2d 904, 907 (Ala. 1995), quoting Charles W. Gamble, McElroy's Alabama Evidence, § 127.01(5)(c), p. 333 (4th ed. 1991). The plaintiff must prove through expert testimony 'that the alleged negligence "probably caused the injury."' McAfee v. Baptist Med. Ctr., 641 So. 2d 265, 267 (Ala. 1994)." 6 1151173 Lyons v. Walker Reg'l Med. Ctr., 791 So. 2d 937, 942 (Ala. 2000). It is well settled that there is an exception to the rule requiring expert testimony "'in a case where want of skill or lack of care is so apparent ... as to be understood by a layman, and requires only common knowledge and experience to understand it.'" Tuscaloosa Orthopedic Appliance Co. v. Wyatt, 460 So. 2d 156, 161 (Ala. 1984)(quoting Dimoff v. Maitre, 432 So. 2d 1225, 1226–27 (Ala. 1983)); see also Anderson v. Alabama Reference Labs., 778 So. 2d 806 (Ala. 2000). The following situations have been recognized as exceptions to the general rule that the plaintiff in a medical-malpractice action must proffer independent expert medical testimony: 2 We note that it is not necessary for a plaintiff to 2 produce an independent expert to establish a requisite element of a medical-malpractice claim where the testimony of the defendant establishes that element. Timmerman v. Fitts, 514 So. 2d 907 (Ala. 1987); see also Ford v. Stringfellow Mem'l Hosp., 39 So. 3d 184, 191 (Ala. Civ. App. 2009)("Even when expert testimony is required to establish certain elements of a plaintiff's medical-malpractice claim, the plaintiff need not produce an independent expert witness to provide that testimony; instead, the plaintiff may rely on the testimony of the defendant to establish the elements of the claim for which expert testimony is required. See Timmerman, 514 So. 2d at 913; Wilson v. Manning, 880 So. 2d 1101, 1110-11 (Ala. 2003); and Dansby v. Hagood, 719 So. 2d 839, 842 (Ala. Civ. App. 7 1151173 "'(1) where a foreign instrumentality is found in the plaintiff's body following surgery; 2) where the injury complained of is in no way connected to the condition for which the plaintiff sought treatment; 3) where the plaintiff employs a recognized standard or authoritative medical text or treatise to prove what is or is not proper practice; and 4) where the plaintiff is himself or herself a medical expert qualified to evaluate the doctor's allegedly negligent conduct.'" Allred v. Shirley, 598 So. 2d 1347, 1350 (Ala. 1992)(quoting Holt v. Godsil, 447 So. 2d 191, 192–93 (Ala. 1984)(citations omitted in Allred)); see also Anderson v. Alabama Reference Labs., supra. In Ex parte HealthSouth Corp., 851 So. 2d 33 (Ala. 2002), this Court explained that the list of exceptions in Allred to the general rule requiring expert testimony was illustrative and not exclusive. The Court went on to explain that the first two examples were related to those categories of cases in which the lack of skill is so apparent as to be understood by a layperson and required only common knowledge and experience to understand it. The Court noted that the third and fourth examples set out in the list of exceptions had nothing to do with evidence within the common knowledge of the jury, because those exceptions to the rule requiring the 1998)."). 8 1151173 proffer of expert testimony are where an authoritative treatise is offered or the plaintiff is a medical expert qualified to evaluate the health-care provider's allegedly negligent conduct. The HealthSouth Court went on to "reformulate" the exceptions to the general rule requiring expert testimony in medical-malpractice actions as follows: "[T]o recognize first, a class of cases '"where want of skill or lack of care is so apparent ... as to be understood by a layman, and requires only common knowledge and experience to understand it,"' [Tuscaloosa Orthopedic Appliance Co. v.] Wyatt, 460 So. 2d [156] at 161 [(Ala. 1984)](quoting Dimoff v. Maitre, 432 So. 2d 1225, 1226–27 (Ala. 1983)), such as when a sponge is left in, where, for example, the wrong leg is operated on, or, as here, where a call for assistance is completely ignored for an unreasonable period of time. A second exception to the rule requiring expert testimony applies when a plaintiff relies on '"'a recognized standard or authoritative medical text or treatise,'"' Anderson [v. Alabama Reference Labs., 778 So. 2d [806] at 811 [(Ala. 2000)], or is himself or herself a qualified medical expert." 851 So. 2d at 39. The Court's reformulation of categories in HealthSouth essentially clarifies the exceptions to the general rule requiring expert testimony in medical-malpractice actions by emphasizing in the first exception as reformulated that there are situations where the lack of skill is so 9 1151173 apparent as to be understood by a layperson, thereby requiring only common knowledge and experience to understand it, and that further the list of examples of such situations was not exhaustive but merely set out examples of possible situations. In the second exception as reformulated, the Court simply combines the use of an authoritative treatise and the plaintiff's own testimony as a medical expert as the second exception to the general rule. As stated earlier, we view the evidence at the summary- judgment stage in a light most favorable to Collins as the nonmovant for summary judgment. Harris v. Health Care Auth. of Huntsville, 6 So. 3d 468 (Ala. 2008). In the instant case, Collins's knee was treated with a cold pack. The evidence, when viewed in a light most favorable to Collins, indicates that the cold pack had been in the refrigerator for seven days, that it had not been thawed when Collins arrived for her appointment, and that it was hard on the day of her treatment in contrast to her treatment on other visits. Collins felt heat when the cold pack was removed from her knee. Collins developed blisters on her knee following the treatment and later scarring. It was not necessary for Collins to present 10 1151173 independent expert testimony where her medical-malpractice case requires only common knowledge and experience to understand what is akin to frostbite. See, e.g., McGathey v. Brookwood Health Servs., Inc., 143 So. 3d 95 (Ala. 2013)(expert testimony was not required in medical-malpractice action to establish a breach of the standard of care by a hospital employee in failing to ensure that a metal bar used to keep the plaintiff's arm in place was sufficiently cool following a 270-degree sterilization process before it was attached to the plaintiff's arm); Walker v. Southeast Alabama Med. Ctr., 545 So. 2d 769 (Ala. 1989)(holding that expert testimony not necessary in medical-malpractice action where plaintiff was injured when bed rail was left in the down position contrary to doctor's orders); Therrell v. Fonde, 495 So. 2d 1046 (Ala. 1986)(holding that expert testimony was not necessary to withstand summary judgment in medical-malpractice action where the company refused to allow speedier transport of the injured worker to the hospital and company doctor did nothing to prevent the delay in transporting the worker and did not look at the worker's hand, which had been crushed); Lloyd Noland Found., Inc. v. Harris, 295 Ala. 63, 322 So. 2d 11 1151173 709 (1975)(holding that expert testimony was not necessary in medical-malpractice action where plaintiff's leg was burned after the application of hot plaster cast that had not been properly cooled); and Ford v. Stringfellow Mem'l Hosp., 39 So. 3d 184, 192-93 (Ala. Civ. App. 2009)(holding that patient was not required to provide expert testimony on claims against hospital because "[w]hether a hospital's employees are under a duty to properly and sufficiently cool surgical equipment and instruments before their use in surgery, whether the wrist traction tower was not sufficiently cooled after it was sterilized, and whether the heat from the wrist traction tower caused a third-degree burn to Ford's upper arm are all matters that can be easily understood and determined by the average person without the aid of a medical expert. Simply put, the present case fits within the 'class of cases "'where want of skill or lack of care is so apparent ... as to be understood by a layman, and requires only common knowledge and experience to understand it....'"' Ex parte HealthSouth Corp., 851 So. 2d at 39. See also Lloyd Noland Found., Inc. v. Harris, 295 Ala. 63, 66, 322 So. 2d 709, 711-12 (1975)(expert medical testimony 12 1151173 not necessary in case involving burn to leg of patient caused by application of cast that had not been properly cooled)."). Collins further argues that it was also not necessary for her to present expert testimony establishing the additional issue of causation. In Sorrell v. King, 946 So. 2d 854, 862–63 (Ala. 2006), this Court stated: "A plaintiff in a medical-malpractice action must also present expert testimony establishing a causal connection between the defendant's act or omission constituting the alleged breach and the injury suffered by the plaintiff. Pruitt v. Zeiger, 590 So. 2d 236, 238 (Ala. 1991). See also Bradley v. Miller, 878 So. 2d 262, 266 (Ala. 2003); University of Alabama Health Servs. Found., P.C. v. Bush, 638 So. 2d 794, 802 (Ala. 1994); and Bradford v. McGee, 534 So. 2d 1076, 1079 (Ala. 1988). To prove causation in a medical-malpractice case, the plaintiff must demonstrate '"that the alleged negligence probably caused, rather than only possibly caused, the plaintiff's injury."' Bradley, 878 So. 2d at 266 (quoting University of Alabama Health Servs., 638 So. 2d at 802). See also DCH Healthcare Auth. v. Duckworth, 883 So. 2d 1214, 1217 (Ala. 2003)('"There must be more than the mere possibility that the negligence complained of caused the injury; rather, there must be evidence that the negligence complained of probably caused the injury."' (quoting Parker v. Collins, 605 So. 2d 824, 826 (Ala. 1992))); and Pendarvis v. Pennington, 521 So. 2d 969, 970 (Ala. 1988)('"The rule in medical malpractice cases is that to find liability, there must be more than a mere possibility or one possibility among others that the negligence complained of caused the injury; there must be evidence that the negligence probably caused the injury."' (quoting Williams v. Bhoopathi, 474 So. 2d 13 1151173 690, 691 (Ala. 1985), and citing Baker v. Chastain, 389 So. 2d 932 (Ala. 1980))). In Cain v. Howorth, 877 So. 2d 566 (Ala. 2003), this Court stated: "'"'To present a jury question, the plaintiff [in a medical-malpractice action] must adduce some evidence indicating that the alleged negligence (the breach of the appropriate standard of care) probably caused the injury. A mere possibility is insufficient. The evidence produced by the plaintiff must have "selective application" to one theory of causation.'"' "877 So. 2d at 576 (quoting Rivard v. University of Alabama Health Servs. Found., P.C., 835 So. 2d 987, 988 (Ala. 2002)). However, the plaintiff in a medical-malpractice case is not required to present expert testimony to establish the element of proximate causation in cases where 'the issue of proximate cause is not ... "beyond the ken of the average layman."' Golden v. Stein, 670 So. 2d 904, 908 (Ala. 1995). Therefore, '[u]nless "the cause and effect relationship between the breach of the standard of care and the subsequent complication or injury is so readily understood that a layperson can reliably determine the issue of causation," causation in a medical-malpractice case must be established through expert testimony.' DCH Healthcare Auth., 883 So. 2d at 1217–18 (quoting Cain, 877 So. 2d at 576)." In the instant case, the procuring and application of the cold pack was within the exclusive control of the defendants, and no evidence was presented indicating that Collins contributed to her injuries. Blistering and subsequent scarring does not ordinarily occur following the application 14 1151173 of a cold pack, absent negligence. The causative relationship between Collins's injury and the defendants' acts are such that it can be readily understood, to the extent that a layperson can reliably determine the issue of causation without independent expert testimony to assist in that determination. Based on the foregoing, we reverse the summary judgment in favor of the defendants, and we remand the case for further proceedings consistent with this opinion. REVERSED AND REMANDED. Stuart, Parker, Murdock, Shaw, Main, and Wise, JJ., concur. Bryan, J., concurs in the result. 15

February 17, 2017

d148e743-c9d4-4bb2-b10e-c0bb7c57c8dd

Linda Etheridge, as executrix of the Estate of James L. Etheridge, deceased v. DVA Healthcare Renal Care d/b/a Demopolis Dialysis, et al.

N/A

1151339

Alabama

Alabama Supreme Court

REL: 02/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1151339 ____________________ Linda Etheridge, as executrix of the Estate of James L. Etheridge, deceased v. DVA Healthcare Renal Care d/b/a Demopolis Dialysis, et al. Appeal from Marengo Circuit Court (CV-15-900036) STUART, Justice. AFFIRMED. NO OPINION. See Rule 53(a)(1) and (a)(2)(E), Ala. R. App. P. Bolin, Parker, Shaw, and Main, JJ., concur. 1151339 Murdock, Wise, and Bryan, JJ., dissent. 2 1151339 WISE, JUSTICE (dissenting). I respectfully dissent for the same reasons I dissented in Marvin v. Health Care Authority for Baptist Health, 204 So. 3d 863, 863 (Ala. 2016). 3 1151339 BRYAN, Justice (dissenting). For the reasons explained in my dissent in Northstar Anesthesia of Alabama, LLC v. Noble, [Ms. 1141158, July 8, 2016] ___ So. 3d ___, ___ (Ala. 2016) (Bryan, J., dissenting), I respectfully dissent. 4

February 17, 2017

f33ae934-d5b6-42a7-b19b-89e637d20e56

Central of Georgia Railway Company v. Ramsey

151 So. 2d 725

N/A

Alabama

Alabama Supreme Court

151 So. 2d 725 (1962) CENTRAL OF GEORGIA RAILWAY COMPANY v. Greer L. RAMSEY. 6 Div. 751. Supreme Court of Alabama. December 20, 1962. Rehearing Denied April 11, 1963. *726 Sadler, Sadler, Sullivan & Herring, Birmingham, for appellant. Rives, Peterson, Pettus & Conway, Birmingham, for appellee. HARWOOD, Justice. The appellee, who was the plaintiff below, was employed by the appellant, defendant below, as a trainman. For convenience the parties will hereinafter be referred to as the plaintiff and defendant, the positions they occupied below. The plaintiff sought damages because of alleged injuries to his left ankle caused by the sudden stopping of a train on which he was a crew member. His complaint contained two counts. Count number 1 alleged a violation by the defendant of Title 45, Section 2 of U.S.C.A., commonly known as "the Automatic Coupler Act," and Count number 2 alleged a violation of Title 45, Section 1, U.S.C.A., commonly known as the "Federal Safety Appliance Act." The jury returned a general verdict in favor of the plaintiff and assessed his damages at $20,000.00. The court entered a judgment pursuant to the verdict. No motion for a new trial was filed in the court below. In briefs counsel for the appellant-defendant have argued two assignments of error, Nos. 14 and 15, which assignments relate to the refusal of affirmative charges with hypothesis going respectively to Count 1 and Count 2 of the complaint. The evidence presented by the plaintiff in the trial below tends to show that on 1 October 1953, the plaintiff was riding as a crew member in the caboose of defendant's train when the same came to a sudden stop at a point in Alabama. The plaintiff was thrown about by the stop, and his right ankle was painful. However, he left the caboose and walked along the train several cars and found that the cars had become uncoupled. The air hose which controls the brakes had become disconnected. The plaintiff reconnected the air hose and the train continued its run. Upon arrival at Columbus, Georgia, the plaintiff consulted the defendant's doctor, Dr. Sykes, who, after taking x-rays, informed the plaintiff that he had a sprained ankle and would be all right in a few days. On 12 October 1953, the plaintiff was paid $69.00 by the defendant, and signed a release. The plaintiff was unable to return to work because of the condition of his ankle and on 20 October 1953, he was admitted to the hospital operated by the defendant in Savannah, Georgia. After x-ray examination he was informed by Dr. C. F. Holton, chief surgeon in defendant's hospital, that his ankle was fractured. He was assigned to Dr. Edwards, an orthopedic specialist, who placed a cast on defendant's left leg. On 28 October 1953, the plaintiff left the hospital and returned to his home to convalesce. While at the hospital the plaintiff told the Assistant General Manager of the defendant's hospital that he had signed a release based on information that he had a sprain, and since his injury had turned out to be a fracture, he felt something further should be done for him. The plaintiff was again in defendant's hospital from 4 December 1953 to 10 December 1953, and again on 5 January 1954, when the cast was removed from his leg. At this time Dr. Holton issued a certificate discharging the plaintiff from further *727 treatment, and stated he would be ready for full duty on 12 January 1954. On 15 January 1954, the plaintiff made one passenger run, and upon his return found his ankle badly swollen. He thereupon took a two weeks' vacation. On 30 January 1954, the plaintiff's ankle gave way as he was walking in his kitchen, he fell, and a bone in his right ankle was broken. He went to Drs. Flinchum and Houghston in Columbus, Georgia, private practitioners, and a plaster cast was put on his right ankle. The plaintiff testified that on 8 February 1954, he was called by Mr. Stewart, a claim agent for defendant, and was told that authority had been given to pay the plaintiff from the date of the last settlement to 8 February 1954, and that he, Stewart, had talked to Dr. Holton who had stated that plaintiff had "been turned loose for full duty to go back to work, and that I was going to be all right." Plaintiff told Mr. Stewart he would sign the release but if he had more trouble he would come back. The plaintiff thereupon executed a release for $1217.00, and also signed a separate paper referred to as a certificate to accompany employee release, which paper recited that the money paid in settlement was to factors other than loss of time. The plaintiff was again in defendant's hospital from 5 May 1954 to 12 June 1954, during which time Dr. Brown of the hospital staff operated on plaintiff's ankle, wiring parts of the bone together. On 16 August 1954, the plaintiff was again admitted to the hospital, and on 23 August 1954, Dr. Brown again operated on the ankle and removed a piece of bone. During this stay in the hospital plaintiff was paid another benefit check. A cast put on the ankle was removed on 8 October 1954. On 27 October 1954, Dr. Holton again discharged the plaintiff telling him he was going to be all right and ready for full duty on 1 November 1954. The plaintiff thereafter did light work, but said his ankle was painful, and had a check-up on 2 December 1954. On 3 December 1954, the plaintiff consulted Dr. Flinchum, and this doctor testified that at this time a minimal degree traumatic arthritis was present in the ankle, and Dr. Flinchum wrote Dr. Holton a letter in which he stated: "As for disability in this ankle (left ankle) I would be hesitant to estimate, but around 5 to 10 percent might be considered if that agrees with Dr. Brown's opinion." The plaintiff continued work but claimed he had pain. On 15 April 1955, Dr. Flinchum gave him an injection and on 21 April 1955, he returned to the hospital at which time a wedge was put in his shoe. On 19 October 1955, Drs. Holton and Brown fitted him with a brace for his left leg, and he was again "turned loose for full duty." On 17 January 1956, Dr. Sharpley of the defendant's hospital performed an operation on plaintiff's left ankle. He was again in the hospital from 14 October 1956 to 16 October 1956, and from 13 March 1957 to 27 March 1957, and had another operation then, performed by Dr. Brown. The plaintiff was again in the hospital from November 7, 1957 to December 20, 1957; from July 21, 1958 to August 2, 1958. In November 1958, a private practitioner, Dr. Elkins, saw him. This doctor testified that plaintiff's pain was justified and advised him to have certain fragments in his ankle removed. Plaintiff was again in the hospital from 19 January 1959 to 27 January 1959, and on 10 June 1959, his left ankle was operated on again. Certain tissue, bone, and cartilage was removed. Dr. Holton told plaintiff after each of his operations that he could return to full duty, and so reported to the defendant. The plaintiff testified that while he was in the hospital on 9 October 1954, he was visited by Mr. Sease, defendant's Assistant General Manager, and Mr. Ozburn, Assistant *728 Chief Claim Agent for the defendant. They told him that the defendant company would pay him every dime they owed him, and Dr. Holton had informed them both that the plaintiff was going to be all right to go back to full duty. Again, on 8 February 1955, according to plaintiff's testimony, Mr. Stewart, defendant's claim agent called the plaintiff and told him to bring his wife to the Claim Office at Columbus, Georgia, as Mr. Ozburn had authorized a payment to plaintiff from the second settlement up to the time of Stewart's call; that Mr. Stewart told him he had talked to Dr. Dukes, Mr. Ozburn, and Dr. Holton, and Dr. Holton had said that the plaintiff had been turned loose for full duty and would be all right. The plaintiff replied he had not been working much but that Dr. Holton had told him his foot was going to be all right, and "okeh to turn loose for full duty," but if it wasn't he would come back to Stewart. On his visit to the Claims Office, the plaintiff was paid $3260.00, less $1170.00 refunded to the Railroad Retirement Board. The plaintiff again signed a release, and a "Certificate to Accompany Employee's Release," but testified that Dr. Holton's assurances to him were the reasons he signed the release. In this connection the plaintiff testified that on each occasion that he signed releases he was informed that the defendant was simply paying him for lost time. The plaintiff further testified that while he was in the hospital in March 1957, Mr. Ozburn came to his room and plaintiff asked him about helping him out, stating that Mr. Sease and Mr. Ozburn had promised to do so. The plaintiff further stated to Mr. Ozburn that since the settlement in 1955, he had had two operations, and wore a steel brace, but was yet unable to work. Then according to plaintiff: Following this conversation the plaintiff did nothing until 1 May 1957, when he discussed his situation with the General Chairman of his Railroad Brotherhood. This official stated he did not know what to tell the plaintiff, but suggested he consult a lawyer. Thereafter on 3 May 1958, the plaintiff came to Birmingham and consulted an attorney, and was given advice. This suit was brought on 20 April 1959. By argument in support of appellant's assignment of errors, each of which as before stated are directed to the court's refusal to give appellant's written hypothesized affirmative charges to each count of the complaint respectively counsel for appellant have urged three points as constituting error in the refusal of said charge. 1. The appellee could not avoid the releases given appellant, and was bound by them since the existence and extent of his injuries were known to appellee at the time he gave the releases, and the burden was upon the appellee to prove that the releases were obtained by fraud practiced upon him or by a mutual mistake of fact under which both parties acted. *729 2. That the action was barred by the statute of limitations, and 3. That the appellee did not restore the consideration paid for the releases prior to his attempted recission of the releases. We will discuss the above points in the order in which they are listed. 1. Avoidance of the releases. It is the contention of the appellant that no mistake permeates the releases signed by the appellee in that the appellee was fully cognizant of his physical condition at the time he signed the releases, and any representation by defendant's doctors and agents was as to the prognosis, or future developments in appellee's physical condition, and not as to diagnosis, or appellee's present condition. In this connection appellant cites Yocum v. Chicago, R. I. & P. R. Co., 189 Minn. 397, 249 N.W. 672; La Rosa v. Union Pacific R. Co., 142 Neb. 290, 5 N.W.2d 891; Chicago & N. W. R. Co. v. Wilcox, 116 F. 913 (CCA8); Chicago & N. W. R. Co. v. Curl, 8 Cir., 178 F.2d 497. In the Wilcox case, supra, the plaintiff had suffered a broken hip in a fall caused by a sudden stopping of defendant's train. She had been a trained nurse and had worked for the doctor who was her physician, and also physician for the defendant railroad. She testified that she signed a release for her claim against the defendant on the basis of the doctor's statement that she would be well in a year. Her injury proved to be permanent. The doctor testified he had told the plaintiff that her injury was serious and the better plan would be to wait until the extent of her injuries were known before making a settlement. The majority opinion stated that the acts and testimony of the doctor "impress one with his candor, faithfulness, and truth," and that the plaintiff had not established her charge of mistake by clear, convincing, and unequivocal testimony essential to sustain a suit for the recission of a written agreement of compromise. The majority opinion further stated that conceding the doctor had told the plaintiff she would be well in a year, she was fully informed as to her condition, and any mistake in the opinion of the doctor was as to a future event, and were not matters of fact but speculation as to future event. It is to be noted that Thayer, J., concurred in the above opinion only to the extent that the plaintiff's evidence that she was unduly influenced by the doctor in signing the release was too uncertain and conflicting to warrant a court setting aside the release, but stated further that if the plaintiff was deceived by the doctor's advice as to her condition then "the company should be held accountable for his wrongful conduct, and the release which was executed in reliance upon his advice, if it was so executed, should be vacated." It should be remembered that in the present case, there being no motion for a new trial, we are not concerned with the weight of plaintiff's evidence to sustain his allegation that the releases were signed through mutual mistake, but only if a scintilla of evidence tends to show such mistake. In Yocum v. Chicago, R. I. & P. R. Co., 189 Minn. 397, 249 N.W. 672, the plaintiff had been informed by his own physician prior to signing the release that his full recovery from his injury, of which the plaintiff had full knowledge, was problematical. These facts are so different from those in the present case as to make the conclusions in the Yokum case inapplicable. In La Rosa v. Union Pacific R. Co., 142 Neb. 290, 5 N.W.2d 891, the Nebraska court expressly found that the plaintiff knew the nature and extent of his injuries at the time he signed the release. *730 In Chicago & N. W. R. Co. v. Curl, 178 F.2d 497 (CAA8 1950), cited by appellant, we find the following statement: On the other hand, many respectable authorities have held that assurances given a party that he will soon be all right are more than a mere expression or conjecture as to the future course of the party's injuries. In Scheer v. Rockne Motors Corporation, 68 F.2d 942 (CCA2 1934) the court stated: And if the patient acts upon such assurances, if they are believed by the patient, and by the physician, the case is one of mutual mistake. If the statement is not believed by the physician, it is a case of fraud, and in either case the injured party is entitled to rescind the release. See Graham v. Atchison, T. & S. F. R. Co., 176 F.2d 819 (CCA9 1949). In accord with the above doctrines are Atchison, T. & S. F. R. Co. v. Peterson, 34 Ariz. 292, 271 P. 406; Matthews v. Atchison, T. & S. F. R. Co., 54 Cal. App. 2d 549, 129 P.2d 435; Ciletti v. Union Pac. R. Co., 196 F.2d 50 (CAA2 1952). In Fort Worth & R. G. R. Co. v. Pickens (Tex.Civ.App.), 153 S.W.2d 252 (reversed on other grounds in 139 Tex. 181, 162 S.W.2d 691), it was held that a physician's statement to the plaintiff that he would be all right and able to work in two or three weeks, and should accept defendant's offer of settlement, and the execution of certificate discharging plaintiff as being well and able to resume work, was sufficient to at least raise a jury question as to the validity of a release signed by the plaintiff. In the present case the trial court in its instructions clearly and amply covered the question of any misrepresentation and its effect upon the validity of the releases, if the plaintiff bona fide relied upon such representations. The jury found this issue adverse to the defendant. We find no basis for disturbing the judgment in this aspect. 2. Statute of Limitations. Despite some expressions of dissatisfaction with the results reached by a rigid application of the rule, it has generally been held that where a statute creates a new cause of action, and provides that such causes of action must be brought within the time specified in the statute, the time limitation was considered as a part of the newly created right, and could not be tolled or suspended for any reason not expressly excepted in the statute. See 15 A.L.R.2d pp. 501 through 527. We are here concerned with a federal statute. Decisions of appellate federal courts, construing federal statutes, in the absence of a contrary holding by the Supreme Court of the United States, are binding on us. Dickey v. West Boylston Mfg. Co., 251 Ala. 19, 36 So. 2d 106. And of course we are controlled by decisions of the United States Supreme Court in respect to its interpretation of federal statutes. Atlantic Coast Line Ry. Co. v. Mangum, 250 Ala. 431, 34 So. 2d 848. *731 The more recent federal appellate court decisions are to the effect that legal fraud can toll the time in which suit must be brought under the F.E.L.A. In Scarborough v. Atlantic Coast Line Ry. Co., 4 Cir., 178 F.2d 253, 15 A.L.R.2d 491, the plaintiff, an infant had sustained his injuries on 24 September 1944. Suit was filed on 17 March 1949. The complaint alleged that the plaintiff had been assured by the defendant's claim agent that he had a reasonable length of time after reaching 21 years of age in which to bring suit. The district court dismissed the cause of action on the theory that limitation on time in which to bring suit was of a substantive type and conduct by the defendant would not work an estoppel and toll the time limitation in which suit would have to be brought. In reversing the judgment of the district court, the Fourth Circuit Court of Appeals, through Dobie, J., wrote: In Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S. Ct. 760, 3 L. Ed. 2d 770, suit had been brought under the F.E.L.A. some seven years after the date of injury. The plaintiff had claimed that the defendant was estopped from raising the statute of limitations because it had represented to the plaintiff that he had seven years in which to sue. The defendant claimed that in F.E.L.A. cases the time limitation was an integral part of the cause of action and such cause was irretrievably lost at the end of the statutory period. The Circuit Court of Appeals for the Second Circuit, 253 F.2d 957 affirmed the action of the district court dismissing the suit stating, "For the reasons well stated (by the district court) we should not attempt to retrace our footsteps now, but may well await resolution of the conflict by the Supreme Court." In reversing the Circuit Court of Appeals the Supreme Court wrote: In addition to the continued assurances by the defendant's physicians that his foot or ankle would be all right and he would be fit for full duty, the plaintiff's evidence tends to show that on 9 October 1954 he was told by the defendant's Assistant General Manager, Mr. Sease, and by Mr. Ozburn, defendant's Assistant Chief Claim Agent, that the defendant would pay him every dime the defendant owed him, and these two officials of the defendant stated that each had been told by Dr. Holton that plaintiff's foot would be all right and he could return to full duty. It was not until March 1957 that the plaintiff was informed by Mr. Ozburn that the defendant was relying on the releases signed by the plaintiff and further that the statute of limitations had run on plaintiff's claim and there was nothing he could do in connection with it. In May 1958, the plaintiff consulted an attorney and then learned that the releases he had signed were of questionable binding effect, and that the time limitation for bringing suit may have been tolled. In Louisville & Nashville R. R. Co. v. Disspain, 275 F.2d 25 (C.C.A. 6), it was held that where the accident occurred on 19 July 1951, and the plaintiff was told his injury was not serious, but it later developed that plaintiff did have a serious spine injury which required an operation in 1957, more than six years later, it was held that the trial court properly submitted to the jury the issue of whether the time limitation for bringing suit under F.E.L.A., had been tolled by the misrepresentation of the defendant's physician, where the plaintiff did not learn of his true condition until 10 November 1954. While not definitely stated, the effect of this opinion was that the plaintiff had three years after the discovery of the misrepresentation in which to bring suit since the suit was brought three years and one day after the discovery of the misrepresentation. The court observed, "* * * it would seem perfectly clear that the railroad ought not be permitted to take advantage of an erroneous statement made by its doctor to prevent its employee from having his day in court." We are bound by the doctrine of this case. Dickey v. West Boylston Mfg. Co., 251 Ala. 19, 36 So. 2d 106, supra. Insofar as concerns the existence of legal fraud, "It is as much a fraud to affirm as true that which is untrue, though not known to be so, as to assert what is untrue and known to be so." Southern Loan & Trust Co. v. Gissendaner, 4 Ala.App. 523, 58 So. 737. Under the plaintiff's evidence not only was he repeatedly informed by the defendant's doctors and claim agents that his foot would be all right and he could return to full duty, that the railroad would pay him every cent it owed him, but further that the statute of limitations, and the releases barred recovery by him, and there was nothing he could do. This latter statement was made in March 1957. This latter statement was incorrect. Its overreaching tendency and possibilities of lulling the defendant into inaction are apparent. Counsel for appellant argue that plaintiff was fitted with a brace for his leg in October 1955, and that knowledge of his true condition must be attributable to him as of that date, and the statute of limitations would run from such time. However, at the time the plaintiff was fitted with braces, according to his testimony, he was again *733 assured by defendant's doctors that his ankle would be all right, and he would be fit for full duty. The trial court submitted to the jury the question of the time that the plaintiff learned his cause of action was yet preserved, in light of the alleged conduct of the defendant's agents. According to plaintiff's testimony, this was upon consultation with his attorney in May 1958. Suit was brought within a year of that time. This testimony at least created a question of fact within the province of the jury to resolve. Certainly under the scintilla rule there was evidence to support the verdict and judgment in this regard. We note that the trial court further charged the jury that another issue in the case was whether "the plaintiff did know about his rights and brought his suit within a year from knowing or discovering of those facts." This in view of the provisions of Title 7, Section 42, Code of Alabama 1940, to the effect that in an action seeking relief on grounds of fraud the cause of action must not be considered as having accrued until after the discovery of the fraud by the aggrieved party, after which he must have one year in which to bring suit. In view of doctrines announced in Dickey v. West Boylston Mfg. Co., 251 Ala. 19, 36 So. 2d 106, and the Disspain and Glus cases, supra, it is our conclusion that the time limitation could be determined only under the federal statute, and the decisions construing the same, and that Section 42, supra, could have no application. The instructions as to Section 42, supra, were, however, in the defendant's favor, and none of its substantial rights were probably injured thereby. Sup.Ct.Rule 45. Further, if the jury under the evidence determined that the plaintiff first learned of his rights upon consultation with his attorney in March 1957, the suit was brought within a year from this date, that is on April 1958 3. Failure of plaintiff to restore consideration paid for releases prior to his attempted recission thereof. The plaintiff testified that when he was informed by Mr. Ozburn, defendant's claim agent, that the defendant was relying on the releases executed by the defendant, and upon the statute of limitations, he inquired what could he do, and was informed by Mr. Ozburn that there was nothing he could do. The court fully instructed the jury as to the legal principles governing recission of contracts, the necessity of restitution of benefits prior to recission, and the possibility of waiver of the requirement of restitution by conduct of the opposite party. Under the evidence adduced we think the doctrines enunciated under the two appeals in Tuscaloosa Motor Co. v. Cockrell, 272 Ala. 1, 132 So. 2d 742, and Tuscaloosa Motor Co. v. Cockrell, 272 Ala. 387, 132 So. 2d 745, are decisive of the instant question. In the first appeal this court observed: Again in the second appeal, 272 Ala. 387, 132 So. 2d 745 at 749, the court states: It is our conclusion that this judgment is due to be affirmed and it is so ordered. Affirmed. LIVINGSTON, C. J., and SIMPSON and MERRILL, JJ., concur.

December 20, 1962

51af61e4-0afc-4f14-a147-6d781c28b820

General Motors Acceptance Corp. v. Kendrick

150 So. 2d 185

N/A

Alabama

Alabama Supreme Court

150 So. 2d 185 (1963) GENERAL MOTORS ACCEPTANCE CORP. et al. v. Claude KENDRICK, as Administrator. 4 Div. 139. Supreme Court of Alabama. December 20, 1962. Rehearing Denied February 28, 1963. Wm. Oldacre, Hill, Hill, Stovall & Carter, Montgomery, for appellants. Robt. C. Reid and F. B. McGill and Tipler & Fuller, Andalusia, for appellee. SIMPSON, Justice. This is the second appeal of this case. The first, General Motors Acceptance Corp. *186 v. Kendrick, 270 Ala. 25, 115 So. 2d 487, was from an interlocutory decree overruling demurrer to the bill of complaint. The facts of this case were sufficiently set forth in the former appeal, and only those necessary to our decision will be mentioned here. The decedent, Henry Grissett, purchased a car on a conditional sales contract; the contract was assigned to General Motors Acceptance Corporation (G.M.A.C.). The decedent was killed and the automobile was totally destroyed as a result of an accident in which the automobile was overturned. A condition of the purchase of the automobile was that the decedent pay premiums on life insurance to cover the unpaid purchase price in event of his death. G.M. A.C. was the named beneficiary. At the time of the purchase, a so-called "dual-interest" collision and upset policy was issued by Motors Insurance Corp. (a subsidiary of General Motors) which policy was cancelled for reasons not appearing from the record, and a "single interest" policy substituted, which covered only the seller or his assignee's interest. Decedent was given credit for the overpayment on the premium and was warned that his interest in the automobile was not insured, and that he should procure the insurance he deemed advisable. The final decree of the chancellor below ordered the proceeds of the policy issued by Motors Insurance Corp. paid to G.M. A.C., and that the proceeds of the life policy issued by Prudential Life Ins. Co., which had already been paid over to G.M. A.C., be paid by G.M.A.C. to complainant as administrator of decedent's estate. A credit of $200.00 was allowed for the salvage value of the car, and a further credit of $217.66 was allowed G.M.A.C. representing unearned financing charges. Appellants contend that no amount was due under the Motors Insurance contract because the conditions precedent to liability had not occurred, i. e.: (1) Purchaser or borrower has defaulted in payment, and (2) The named insured (G.M.A.C.) has made all reasonable efforts to collect overdue payments and failing to do so has repossessed the automobile, and, (3) That the interest of the insured has become impaired. We find ourselves in agreement with appellants, because it was not shown that any of the conditions precedent had occurred. Moreover, it was stipulated that Grissett had not defaulted but was current in his payments. Thus, G.M.A.C. had no cause to make efforts to collect overdue payments, and no legal right to repossess the automobile. The interest of G.M.A.C. had not been impaired because upon the death of Grissett the balance owing on the conditional sale contract was fully paid by Prudential Ins. Co. The law applicable to this case was not settled by the first appeal, because no defensive matter was before the court, it being an appeal from the overruling of demurrers. General Motors Acceptance Corp. v. Kendrick, supra. Further, it was stated in that opinion that "any amount due under the contract by Motors Acceptance [sic] Corporation should be paid to the estate of Henry C. Grissett, deceased". It is manifest from what we have said above that no amount was due under that policy of insurance. It is settled law that where the conditions precedent to liability on a policy of insurance have not occurred or been otherwise met that no liability exists with respect to the insurer. McGifford v. Protective Life Ins. Co., 227 Ala. 588, 151 So. 349; McCutchen v. All States Life Ins. Co., 229 Ala. 616, 158 So. 729. We cannot defeat the express terms of a policy of insurance by judicial interpretation, McDowell v. United States Fidelity & Guaranty Co., 260 Ala. 412, 71 So. 2d 64; and we must enforce the contract as it is *187 written, Loveman, Joseph & Loeb v. New Amsterdam Casualty Co., 233 Ala. 518, 173 So. 7; and not attempt to make a new contract for the parties, Montgomery Enterprises v. Empire Theatre Co., 204 Ala. 566, 86 So. 880, 19 A.L.R. 987; Continental Casualty Co. v. Ogburn, 175 Ala. 357, 57 So. 852. Our holding does not infringe upon the rule that a creditor made beneficiary of a policy of insurance can recover only to the extent of the indebtedness, General Motors Acceptance Corp. v. Kendrick, supra, because G.M.A.C. has recovered only once the balance owing at the time of Grissett's death, having no right to any proceeds on the Motors Insurance Policy, the conditions precedent not having been met. For the reasons hereinbefore announced the action of the trial court must be deemed erroneous. Reversed and remanded. LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.

December 20, 1962

cef467d2-c4e7-4467-b713-6a8cc1ca2460

Alabama Farm Bureau Mutual Cas. Ins. Co. v. Cofield

148 So. 2d 226

N/A

Alabama

Alabama Supreme Court

148 So. 2d 226 (1962) ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE CO., Inc. v. Imogene COFIELD et al. 7 Div. 588. Supreme Court of Alabama. December 20, 1962. *227 Beck & Beck, Fort Payne, for appellant. Scott & Scott, Fort Payne, for appellee Cofield. J. A. Johnson, Fort Payne, for appellees Johnson. SIMPSON, Justice. Appeal by complainant from a decree of the DeKalb County Circuit Court, in Equity, denying relief on a bill for a declaratory judgment. The chancellor determined that appellant would be required to defend a pending lawsuit filed June 5, 1961, growing out of an automobile accident; that respondents, Leroy Johnson and Carey (alias Gary) Johnson were entitled to the protection of the policy of insurance for any and all claims arising out of the action which had been prosecuted by respondent Imogene Cofield, as administratrix of David Cofield, deceased. The bill as filed by appellant consisted of two aspects, which if proved, would release appellant as insurer of the Johnsons, from defending the pending suit at law. The first aspect alleged a violation of an exclusion clause of the policy, as follows: "This insurance does not apply under any of the coverages while the automobile is operated in a pre-arranged race or competitive speed test." The second aspect alleges a violation of the so-called "co-operation clause", i. e., "The insured shall cooperate with the Company, and upon the Company's request, shall attend hearings and trials, and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses in the conduct of the suits", in that Carey gave a false statement to appellant's agent on September 20, 1960, in effect that prior to the accident the automobiles were not being "drag-raced" by a pre-arranged agreement. Carey later admitted on May 12, 1961 that the automobile was being raced just prior to the accident, but explained that at the time of the accident the "drag-race" was over. The evidence was undisputed that two cars, one driven by Donald Cofield in which David Cofield, deceased, was riding, and the other driven by Carey Johnson, had three "drag-races" on the day David was killed. Appellee's evidence shows that at the time of the accident all racing was over and that the boys were going their separate ways, when the car driven by Donald Cofield began to slide on some gravel on the side of the road, crossed the road, hitting an embankment, throwing David from the car and injuring him, as a result of which he died. A witness for appellant testified that she saw the two cars stop in front of her house, *228 and take off down the road together going side by side pretty fast, finally one car getting ahead of the other. Another witness stated that he saw the cars come up and stop, and start suddenly, attaining a rapid rate of speed until out of sight. This was shortly before David Cofield was killed, which occurred about one-half mile from where the witness observed the cars. It will be decisive of the case at bar to determine from the evidence whether there was any racing at the time of the accident, because if the boys were not racing at that time, although they may have been some time during that day, the statement by Carey Johnson that there had been no racing would be immaterial and not a breach of the "co-operation" clause; and of course, the accident would not have occurred "while the automobile is operated in a pre-arranged race or competitive speed test". The principle is clearly enunciated in the cases that to constitute a breach of a "co-operation clause" of a liability insurance contract the lack of co-operation must be in some substantial and material respect. See George v. Employers' Liability Assur. Corp., 219 Ala. 307, 122 So. 175, 72 A.L.R. 1438, wherein it was held that the insured's failure to come to trial from another state at his own expense was not a breach of the "co-operation clause"; and in Alabama Farm Bureau Mut. Casualty Ins. Co. v. Teague, 269 Ala. 53, 110 So. 2d 290, it was held that the insured's admitted sympathy for the opposing party did not amount to a breach of the "co-operation clause". In the case at bar if the boys were not racing their automobiles at the time of the accident, it must necessarily follow, that any statement by Carey Johnson that they had not been racing that day would be immaterial and entirely inconsequential to appellant's investigation of the accident, and would therefore not constitute a breach of the "co-operation clause" in the contract of insurance. After a close reading of the entire record, it is manifest that the overwhelming proof is that there was no racing between the automobiles at the time of the accident. Indeed, there is no evidence to the contrary. All the witnesses observing stated there was no racing at the time of the accident. Therefore, the withholding of the fact of racing that day would not permit the insurer to avoid liability, this being immaterial. Appellant, in brief, cites the case of Alabama Farm Bureau Mut. Cas. Ins. Co. v. Mills, 271 Ala. 192, 123 So. 2d 138, as controlling on the question before the court. We do not so regard it. There the misstatement was to the effect that a blow-out had caused the wreck, whereas in reality excessive speed on a muddy road had been the cause. The false statement consisting of a highly material fact was of or concerning matter leading to or directly causing the accident. Here, the false statement as to the racing was not of or concerning matters leading to or directly causing the accident, because the great weight of the evidence showed that the racing was over at a time before the automobile was wrecked. Thus the Mills case would, while being a correct statement of law, not be applicable here, the false statement of instant concern not being of a material or substantial nature. It therefore appearing that appellant has failed to establish either aspect of the bill, the cause must fail for want of proof, the burden being upon the complainant to prove the allegations of the bill. Employers' Ins. Co. of Ala. v. Brock, 233 Ala. 551, 172 So. 671; U. S. Fidelity & Guaranty Co. v. Remond, 221 Ala. 349, 129 So. 15. The judgment of the lower court denying appellant relief was without error. Affirmed. LIVINGSTON, C. J., and MERRILL, and HARWOOD, JJ., concur.

December 20, 1962

04dbc6e4-4a04-43b9-a743-03eeffeb517e

Ex parte A.M.

N/A

1150955

Alabama

Alabama Supreme Court

REL: 04/28/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150955 ____________________ Ex parte A.M. PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS (In re: A.M. v. Colbert County Department of Human Resources) (Colbert Juvenile Court, JU-11-64.04 and JU-11-66.04; Court of Civil Appeals, 2140519) MURDOCK, Justice. The petition for the writ of certiorari is quashed. 1150955 In quashing the petition for the writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals’ opinion. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973). WRIT QUASHED. Stuart, C.J., and Bolin, Parker, Shaw, Main, and Wise, JJ., concur. 2

April 28, 2017

098bde97-ad8e-4c40-9c11-be12863a7279

Blackmon v. Renasant Bank

N/A

1150692

Alabama

Alabama Supreme Court

Rel: 03/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150692 ____________________ Deborah Michelle Blackmon and the Estate of Brian Alan Blackmon v. Renasant Bank Appeal from Madison Circuit Court (CV-14-901198) PARKER, Justice. Deborah Michelle Blackmon ("Deborah") and the estate of Brian Alan Blackmon ("the estate") appeal from a partial summary judgment entered in favor of Renasant Bank and against 1150692 them by the Madison Circuit Court. We dismiss the appeal as being from a nonfinal judgment. Facts and Procedural History On November 8, 2004, Deborah and her husband Brian Alan Blackmon (hereinafter collectively referred to as "the Blackmons") executed an agreement establishing a home-equity line of credit with Renasant Bank secured by a mortgage on the Blackmons' house.1 The affidavit testimony of Jerry Harris, first vice president of Renasant Bank, indicates that, also on November 8, 2004, the Blackmons made an initial draw on their home-equity line of credit in the amount of $110,000. Harris's affidavit states that, from July 21, 2006, to June 6, 2013, the Blackmons made a total of 125 withdrawals on the home-equity line of credit totaling "approximately $387,929.00." In addition to making withdrawals on the home- equity line of credit, the Blackmons also made payments on the home-equity line of credit during that time. On June 14, 2013, Brian Alan Blackmon died. Harris's affidavit states that, following Brian Alan Blackmon's death, 1We note that Deborah contests the fact that she executed the documents establishing the home-equity line of credit and the mortgage document. 2 1150692 Deborah "made five separate payments" on the home-equity line of credit. However, the payments made by Deborah did not satisfy the entirety of the money the Blackmons owed Renasant Bank under the terms of the home-equity line of credit, and Deborah failed to make any additional payments. Deborah denied that she had executed the home-equity line of credit or the mortgage and, thus, denied liability for any outstanding balance due under the home-equity line of credit. Harris's affidavit states that the home-equity line of credit "is currently in default." Harris's affidavit states: "The balance on [the home-equity line of credit] as of June 23, 2015, is $129,545.86, inclusive of principal, interest and late fees." Harris's affidavit further states that "[t]he total amount due to Renasant Bank at this time, inclusive of principal, interest and attorney fees is $146,545.86." On June 5, 2014, Renasant Bank sued Deborah and the estate seeking a judgment declaring that the Blackmons had executed the agreement establishing a home-equity line of credit with Renasant Bank and a mortgage on the Blackmons' house securing the home-equity line of credit and asserting a claim of breach of contract seeking to recover the amount of 3 1150692 money owed under the terms of the home-equity line of credit. On July 7, 2014, Deborah and the estate filed an answer to Renasant Bank's complaint and asserted a counterclaim, requesting a judgment declaring that the mortgage on the Blackmons' house was not enforceable. On May 4, 2015, by leave of the circuit court, Renasant Bank filed an amended complaint against Deborah and the estate. Renasant Bank reasserted its breach-of-contract claim and asserted additional claims for "equitable mortgage," "open account," and "account stated." Through these various theories of recovery, Renasant Bank's sole request for damages was the outstanding balance owed on the home-equity line of credit. On August 21, 2015, Renasant Bank filed a second amended complaint against Deborah and the estate. In addition to the claims detailed above, Renasant Bank asserted the following claims: unjust enrichment, money had and received, "quasi-contract," and "constructive trust." Through these various theories of recovery, Renasant Bank's sole request for damages was the outstanding balance owed on the home-equity line of credit. 4 1150692 On November 12, 2015, Renasant Bank filed a motion for a summary judgment. On December 31, 2015, the circuit court entered a partial summary judgment in favor of Renasant Bank on its claims alleging unjust enrichment and money had and received in the amount of $142,612.85. The circuit court specifically stated that "[a]ll other counts asserted by the parties remain pending." On January 28, 2016, Deborah and the estate filed a motion to alter, amend, or vacate the circuit court's partial summary judgment in favor of Renasant Bank. On February 23, 2016, the circuit court denied Deborah and the estate's postjudgment motion. On March 28, 2016, Deborah and the estate purported to appeal the circuit court's December 31, 2015, partial summary judgment in favor of Renasant Bank. On November 28, 2016, the clerk of the Supreme Court entered an order remanding the case to the circuit court because all the claims pending before the circuit court had not been adjudicated in the circuit court's December 31, 2015, partial summary judgment. On remand, upon motion of Deborah and the estate, the circuit court certified its December 31, 2015, partial summary judgment in favor of 5 1150692 Renasant Bank as final pursuant to Rule 54(b), Ala. R. Civ. P.2 Standard of Review "Whether the action involves separate claims and whether there is a final decision as to at least one of the claims are questions of law to which we will apply a de novo standard of review." Scrushy v. Tucker, 955 So. 2d 988, 996 (Ala. 2006)(emphasis added). Discussion Although neither party challenges the appropriateness of the circuit court's Rule 54(b) certification of its December 31, 2015, partial-summary-judgment order in favor of Renasant Bank, "it is well settled that this Court may consider, ex mero motu, whether a judgment or order is sufficiently final to support an appeal." Natures Way Marine, LLC v. Dunhill Entities, LP, 63 So. 3d 615, 618 (Ala. 2010). In the present 2We note that Deborah and the estate filed a third-party complaint against Brenda G. Day, the notary public who notarized the home-equity line of credit agreement and the mortgage, asserting various claims. On March 24, 2016, the circuit court entered a partial summary judgment in favor of Day as to some of the third-party claims against her; the circuit court did not certify that judgment as final pursuant to Rule 54(b). Day is not a party to the appeal before this Court. 6 1150692 case, as noted above, the circuit court certified as final pursuant to Rule 54(b) its December 31, 2015, partial summary judgment as to Renasant Bank's unjust-enrichment and money- had-and-received claims against Deborah and the estate. This Court has stated that "'[n]ot every order has the requisite element of finality that can trigger the operation of Rule 54(b).'" Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 361 (Ala. 2004) (quoting Goldome Credit Corp. v. Player, 869 So. 2d 1146, 1147 (Ala. Civ. App. 2003) (emphasis omitted)). We will first consider whether the circuit court's Rule 54(b) certification of its December 31, 2015, partial summary judgment is appropriate. Rule 54(b) states, in relevant part: "When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." Clearly, Renasant Bank's complaint involves multiple claims against multiple parties. "'[F]or a Rule 54(b) certification of finality to be effective, it must fully adjudicate at least 7 1150692 one claim or fully dispose of the claims as they relate to at least one party.' Haynes v. Alfa Fin. Corp., 730 So. 2d 178, 181 (Ala. 1999)." Scrushy, 955 So. 2d at 996. We must consider whether Renasant Bank's unjust- enrichment and money-had-and-received claims were separate and distinct claims that were fully adjudicated by the circuit court's December 31, 2015, partial summary judgment. This Court considered a very similar issue in Scrushy. In North Alabama Electric Cooperative v. New Hope Telephone Cooperative, 7 So. 3d 342, 345 (Ala. 2008), this Court summarized the applicable law from Scrushy: "The Scrushy Court quoted with approval the United States Court of Appeals for the Seventh Circuit for '"certain rules of thumb to identify those types of claims that can never be considered separate"' for purposes of Rule 54(b). 955 So. 2d at 998 (quoting Stearns v. Consolidated Mgmt., Inc., 747 F.2d 1105, 1108 (7th Cir. 1984)). One such rule is that '"'claims cannot be separate unless separate recovery is possible on each.... Hence, mere variations of legal theory do not constitute separate claims.'"' Id. (quoting Stearns, 747 F.2d at 1108-09, quoting in turn Amalgamated Meat Cutters v. Thompson Farms Co., 642 F.2d 1065, 1071 (7th Cir. 1981)). The Scrushy Court also noted the similar rule of the United States Court of Appeals for the Second Circuit, see Rieser v. Baltimore & Ohio R.R., 224 F.2d 198, 199 (2d Cir. 1955), which was summarized by the commentators of Federal Practice and Procedure: 8 1150692 "'"A single claimant presents multiple claims for relief under the Second Circuit's formulation when the possible recoveries are more than one in number and not mutually exclusive or, stated another way, when the facts give rise to more than one legal right or cause of action .... However, when a claimant presents a number of legal theories, but will be permitted to recover only on one of them, the bases for recovery are mutually exclusive, or simply presented in the alternative, and plaintiff has only a single claim for relief for purposes of Rule 54(b)."' "955 So. 2d at 998 (quoting 10 Charles Alan Wright et al., Federal Practice & Procedure § 2657 (3d ed. 1998)(footnotes omitted))." In Scrushy, this Court adopted the principles discussed above and concluded that "the various claims in the complaint [at issue in that case were] not all variations on a single theme." 955 So. 2d at 998. This Court so concluded because some of the claims asserted by the plaintiff in that case sought damages that other of the claims did not. See id. (stating that "[the plaintiff's] alleged breach of duty in accepting bonuses that HealthSouth was not legally obligated to pay is a sufficiently separate breach that is not alleged elsewhere in the complaint"). In the present case, Renasant Bank alleges the following claims against Deborah and the estate: a claim seeking a 9 1150692 judgment declaring that Deborah executed the agreement establishing a home-equity line of credit with Renasant Bank and a mortgage on the Blackmons' house securing that line of credit; breach of contract; "equitable mortgage"; "open account"; "account stated"; unjust enrichment; money had and received; "quasi-contract"; and "constructive trust." Unlike in Scrushy, the only damages requested by Renasant Bank for each of the above-asserted claims is the outstanding balance Renasant Bank alleges Deborah and the estate owe under the home-equity line of credit. Although Renasant Bank has asserted several different legal theories, it has requested the same damages as to each claim. In fact, we note that Renasant Bank states that all of its claims, including its equitable claims, "originated" from "the written contract." Renasant Bank's brief, at p. 28. According to Renasant Bank, there is only one recovery possible for each claim: the outstanding balance under the home-equity line of credit.3 3In its partial summary judgment in favor of Renasant Bank, the circuit court awarded Renasant Bank $142,612.85 of the $146,545.86 it requested in damages. Based on the fact that the circuit court awarded the majority of the damages requested by Renasant Bank, it would appear that the circuit court adjudicated all the claims against Deborah and the estate. However, the circuit court specifically stated in its partial summary judgment that "[a]ll other counts [besides 10 1150692 Therefore, under the principles set forth in Scrushy, Renasant Bank's several claims are actually just one claim, which the circuit court's December 31, 2015, partial summary judgment did not fully adjudicate. Consequently, the adjudication of Renasant Bank's unjust-enrichment and money-had-and-received claims are not appropriate for Rule 54(b) certification; the circuit court's partial summary judgment did not fully adjudicate a single claim.4 See James v. Alabama Coalition unjust enrichment and money had and received] asserted by the parties remain pending." Accordingly, we must conclude that the circuit court did not fully adjudicate the claims asserted by Renasant Bank against Deborah and the estate. 4We also note that Renasant Bank's unjust-enrichment claim (which was adjudicated by the circuit court's partial summary judgment) and its breach-of-contract claim (which remains pending in the circuit court), which are based on the same facts and contract, are mutually exclusive. See, e.g., Lass v. Bank of America, N.A., 695 F.3d 129, 140 (1st Cir. 2012) ("[D]amages for breach of contract and unjust enrichment are mutually exclusive ...."); Univalor Trust, SA v. Columbia Petroleum, LLC, 315 F.R.D. 374, 382 (S.D. Ala. 2016) ("[T]he existence of an express contract extinguishes an unjust enrichment claim altogether because unjust enrichment is an equitable remedy which issues only where there is no adequate remedy at law."); Shedd v. Wells Fargo Home Mortg., Inc., Civil Action No. 14-00275-CB-M (S.D. Ala. Nov. 17, 2014) (not reported in F. Supp. 3d) ("[B]reach of contract and unjust enrichment are mutually exclusive when both claims are based on the same set of facts."); Clark v. Green Tree Servicing LLC, 69 F. Supp. 3d 1203, 1222 (D. Colo. 2014) (noting that plaintiff may plead contract claim and estoppel claim in the alternative but may not ultimately prevail on both); Superior Edge, Inc. v. Monsanto Co., 44 F. Supp. 3d 890, 900 (D. Minn. 11 1150692 for Equity, Inc., 713 So. 2d 937, 942 (Ala. 1997) ("'Only a fully adjudicated whole claim against a party may be certified under Rule 54(b). See Liberty Mutual Ins. Co. v. Wetzel, 424 U.S. 737, 742–44, 96 S. Ct. 1202, 1206, 47 L. Ed. 2d 435 2014) (noting that party cannot recover under both a quasi-contract and express-contract theory); Naiser v. Unilever U.S., Inc., 975 F. Supp. 2d 727, 748 (W.D. Ky. 2013) ("[U]njust enrichment 'has no application in a situation where there is an explicit contract which has been performed.'"); Harrell v. Colonial Holdings, Inc., 923 F. Supp. 2d 813, 826–27 (E.D. Va. 2013) (noting that breach of contract and unjust enrichment are alternative theories of recovery); Miami Valley Mobile Health Servs., Inc. v. ExamOne Worldwide, Inc., 852 F. Supp. 2d 925, 939 (S.D. Ohio 2012) (noting that breach of express contract, breach of implied contract, and unjust enrichment are alternative claims); Vives v. Rodriguez, 849 F. Supp. 2d 507, 515 n.6 (E.D. Pa. 2012) (same); CoMentis, Inc. v. Purdue Research Found., 765 F. Supp. 2d 1092, 1098 (N.D. Ind. 2011) (same); CLN Props., Inc. v. Republic Servs., Inc., 688 F. Supp. 2d 892, 902 (D. Ariz. 2010) (same); Scowcroft Grp., Inc. v. Toreador Res. Corp., 666 F. Supp. 2d 39, 44 (D.D.C. 2009) ("'[T]here can be no claim for unjust enrichment when an express contract exists between the parties.'" (quoting Schiff v. American Ass'n of Retired Persons, 697 A.2d 1193, 1194 (D.C. 1997))); Ryffel Family P'ship, Ltd. v. Alpine Country Constr., Inc., 386 Mont. 165, 171, 386 P.3d 971, 977 (2016) ("[B]reach of contract and unjust enrichment are mutually exclusive theories of recovery."); Lee v. Shim, 310 Ga. App. 725, 733, 713 S.E.2d 906, 913 (2011) (noting that breach of contract and unjust enrichment are mutually exclusive claims); and Russell v. Russell, 91 Conn. App. 619, 638, 882 A.2d 98, 111 (2005) ("[U]njust enrichment and breach of contract are mutually exclusive theories of recovery."). It would not be prudent to try these mutually exclusive claims in piecemeal fashion. 12 1150692 (1976).'" (quoting Aktiengesellschaft v. Smoked Foods Prods. Co., 813 F.2d 81, 84 (5th Cir. 1987))). Conclusion We dismiss the appeal as being from a nonfinal judgment. APPEAL DISMISSED. Stuart, Bolin, and Wise, JJ., concur. Shaw, J., concurs specially. 13 1150692 SHAW, Justice (concurring specially). I agree that the partial summary judgment on two counts of the complaint in this case cannot be made a final judgment by virtue of a certification pursuant to Rule 54(b), Ala. R. Civ. P. There are several reasons that lead me to this conclusion. Renasant Bank's second amended complaint contained nine counts alleging (1) the need for a judgment declaring, essentially, whether the line of credit was valid and enforceable and the amount due the bank under it; (2) equitable mortgage; (3) breach of contract; (4) open account; (5) account stated; (6) unjust enrichment; (7) money had and received; (8) quasi-contract; and (9) constructive trust. As the main opinion notes, these all appear to be separate legal theories advanced as part of one claim--different avenues to recover payment of the balance outstanding on the home-equity line of credit.5 The circuit court expressly disposed of two of those counts in the bank's favor. This would appear to 5The declaratory-judgment count, to the extent it seeks a judgment as to the respective rights of the parties under the line of credit, might be deemed to encompass some additional claims different from the recovery of money under the line of credit. 14 1150692 implicitly dispose of the entire claim; Renasant Bank could not later recover a second time on its other counts. Thus, by ruling in favor of the bank on the two equitable counts, the circuit court also appeared to dispose of the remaining counts. See, e.g., Baldwin v. Panetta, 4 So. 3d 555, 557 n.1 (Ala. Civ. App. 2008) (concluding, when the trial court ruled in favor of the appellees on two of their five counts, that the judgment was nonetheless final because the remaining counts "arose out of the same acts, were proved by the same evidence, and constituted, in effect, the same claim for relief, for which the [appellees] were entitled to recover only once"). However, the circuit court, in its order, explicitly stated that the other counts remained pending. This would tend to negate any inference that the circuit court also disposed of the remaining counts. If the remaining counts, which appear to be part of the same claim, are still pending, then the single claim is not fully adjudicated for purposes of Rule 54(b). A Rule 54(b) certification "should not be entered if the issues in the claim being certified and a claim that will remain pending in the trial court '"are so closely intertwined 15 1150692 that separate adjudication would pose an unreasonable risk of inconsistent results."'" Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006) (quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987)). By the circuit court’s entry of a judgment on two of the equitable counts, it would appear that the bank would not also be entitled to a judgment on a theory that an express contract existed. Cf. note 4, supra. The partial summary judgment calls into question whether the circuit court could later rule in favor of the bank on its declaratory-judgment count or breach-of-contract count (or against Deborah Blackmon and the estate of Brian Alan Blackmon on their own declaratory-judgment counterclaim challenging the existence of a valid contract). Yet, according to the circuit court, those counts based on express contract remain pending, thus raising the possibility of a later inconsistent judgment.6 6It is possible that the circuit court merely intended to express that the other claims in the case remained pending, and not the remaining "counts." However, the remaining claims--Deborah Blackmon and the estate’s counterclaim and what is left of Renasant Bank's declaratory-judgment claim-- 16 1150692 This illustrates why the judgment should not be certified as final. A nonfinal, interlocutory judgment "is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." Rule 54(b); see also Hallman v. Marion Corp., 411 So. 2d 130, 132 (Ala. 1982). If in later proceedings on the remaining counts the circuit court determines that a contract did in fact exist and that the bank was entitled to a judgment on its express-contract theories, it would be free to revise its interlocutory judgment in favor of the bank on the two equitable counts. Additionally, if this Court were to conclude in the instant appeal that the judgment before us is final and go on to consider the merits and affirm the partial summary judgment, our decision might be read as determining the similar issues remaining in the circuit court; further, this Court in a subsequent appeal might be required to review the very same facts again on the remaining issues. However, "'[i]t is uneconomical for an appellate court to review facts on an appeal might still be subject to a later judgment inconsistent with the judgment currently before this Court. 17 1150692 following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties. "'An appellate court also should not hear appeals that will require it to determine questions that remain before the trial court with regard to other claims.'" Centennial Assocs., Ltd. v. Guthrie, 20 So. 3d 1277, 1281 (Ala. 2009) (quoting 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998) (footnotes omitted in Centennial)). This case illustrates why Rule 54(b) certifications should be entered only in exceptional cases and why appellate review in a piecemeal fashion is disfavored. Id. 18

March 17, 2017

f10d58e7-91d5-4720-89f2-81317ac35646

Jefferson County v. Taxpayers & Citizens of Jefferson County

N/A

1150326

Alabama

Alabama Supreme Court

rel: 03/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1150326 _________________________ Jefferson County and Jefferson County Commission v. Taxpayers and Citizens of Jefferson County _________________________ 1150327 _________________________ Andrew Bennett, Mary Moore, John Rogers, and William Muhammad v. Jefferson County and Jefferson County Commission Appeals from Jefferson Circuit Court (CV-15-903133) PER CURIAM. 1150326; 1150327 Jefferson County and the Jefferson County Commission (hereinafter referred to collectively as "the County parties") appeal from the judgment of the Jefferson Circuit Court ("the trial court") denying a petition for validation of the warrants filed by the County parties, pursuant to § 6-6-750 et seq., Ala. Code 1975, and opposed by the taxpayers and citizens of Jefferson County.1 Andrew Bennett, Mary Moore, John Rogers, and William Muhammad cross-appeal from the portion of the trial court's judgment declining to address alternative arguments they raised. As to the County parties' appeal (no. 1150326), we reverse. We dismiss the cross-appeal (no. 1150327). I. Factual Background and Procedural History Section 40-12-4(a), Ala. Code 1975, provides, in pertinent part: "In order to provide funds for public school purposes, the governing body of each of the several counties in this state is hereby authorized by ordinance to levy and provide for the assessment and collection of franchise, excise and privilege license taxes with respect to privileges or receipts from privileges exercised in such county, which shall be in addition to any and all other county taxes heretofore or hereafter authorized by law in 1Andrew Bennett, Mary Moore, John Rogers, William Muhammad, and Keith A. Shannon each responded in his or her capacity as an individual taxpayer and citizen of Jefferson County. 2 1150326; 1150327 such county. ... All the proceeds from any tax levied pursuant to this section less the cost of collection thereof shall be used exclusively for public school purposes, including specifically and without limitation capital improvements and the payment of debt service on obligations issued therefor." In 2004 and 2005, Jefferson County issued warrants to raise funds to make certain grants to local boards of education to construct school buildings and to retire other debt.2 Those warrants are currently outstanding. All the revenue from Jefferson County's existing 1% education sales and use taxes levied under § 40-12-4, Ala. Code 1975, is pledged and required to pay the debt service on the outstanding warrants and certain related costs. Jefferson County has experienced severe financial difficulties in recent years that eventually resulted in the County's filing a petition in bankruptcy. In 2009, this Court held that Jefferson County's occupational tax, imposed since 1987, was unconstitutional. Jefferson Cty. Comm'n v. Edwards, 32 So. 3d 572 (Ala. 2009). Even though the legislature 2Those previously issued warrants are the Limited Obligation School Warrants, Series 2004-A, in the original principal amount of $650,000,000; the Limited Obligation School Warrants, Series 2005-A, in the original principal amount of $200,000,000; and the Limited Obligation School Warrants, Series 2005-B, in the original principal amount of $200,000,000. 3 1150326; 1150327 attempted to pass a new occupational tax, that effort did not survive judicial scrutiny. Jefferson Cty. v. Weissman, 69 So. 3d 827 (Ala. 2011). In 2015, Jefferson County and its legislative delegation proposed local legislation in an effort to bolster the County's finances without an occupational tax. Jefferson County proposed a new 1% sales tax and a 1% use tax to replace its existing 1% education sales and use taxes, the purpose of which was to fund new warrants at lower interest rate and a lower required debt service that would allow the County to retire its existing warrants. Jefferson County intended to use the replacement taxes to pay the reduced debt service on the new warrants and to use any excess for other purposes stated in the legislation, including additional school funding and its general fund. The replacement sales and use taxes for Jefferson County were proposed as House Bill 573 ("H.B. 573"). Section 71.01(C), Ala. Const. of 1901, prevents a house of the legislature from voting on a non-appropriations bill in a session until that house passes the basic annual appropriations bills. Section 71.01(C) also provides, however, that a house of the legislature may vote on a non- appropriations bill before the basic annual appropriations bills if that house takes an extra procedural step of passing 4 1150326; 1150327 a budget isolation resolution ("BIR") by "three-fifths of a quorum present." Section 71.01(C) does not specify whether "present" means present and voting or only present –- whether voting or not. House Rule 36 interprets this constitutional provision to require three-fifths of the members "present and voting" to pass a BIR. Before voting on H.B. 573, the House of Representatives passed a BIR on May 21, 2015, with 13 yes votes and 3 no votes from the Jefferson County delegation. The remaining members of the House either abstained or did not vote. The House passed H.B. 573 on May 21. The Senate then passed the bill, the Governor signed it, and on May 27, 2015, H.B. 573 became Act No. 2015-226, levying the local sales and use taxes at issue in this case. Act No. 2015-226 provides: "ENROLLED, An Act, "Relating to Jefferson County; to authorize the Jefferson County Commission to levy and assess, subject to the limitations set forth herein, a privilege or license tax against retail sales of tangible personal property and amusements (a 'sales tax') and an excise tax on the storage, use, or consumption of tangible personal property (a 'use tax'); to make legislative findings; to provide for definitions; to provide that the rate of sales and use taxes authorized by this act shall not exceed one percent; to require the simultaneous cancellation of a certain existing sales and use tax levy in the county if the taxes authorized by this act are levied by the county; to provide additional restrictions; to provide that the provisions of the state sales and use tax laws and regulations which are not inconsistent with this act shall be 5 1150326; 1150327 applicable with respect to the taxes authorized by this act; to provide for the continued levy of the taxes authorized herein following the repeal of either or both of the state sales tax or the state use tax; to provide for the collection and enforcement of the taxes authorized by this act; to require the sales taxes authorized by this act to be collected at the point of sale; to provide for the promulgation of rules and procedures; to provide for distribution of the proceeds of the taxes authorized herein first to debt service and other amounts due with respect to certain warrants issued for certain designated public school purposes, second to the general fund of the county, third to the Jefferson County 2015 Sales Tax Fund, fourth to the Jefferson County Community Service Fund, fifth to the Birmingham-Jefferson County Transit Authority, sixth to the Birmingham Zoo, Inc., and seventh to the general fund of the county; to create and provide for the Jefferson County 2015 Sales Tax Fund; to provide for distributions from the Jefferson County 2015 Sales Tax Fund to schools serving county residents; to create and provide for the Jefferson County Community Service Committee; to create and provide for the Jefferson County Community Service Fund; to provide for the expenditure of amounts deposited in the Jefferson County Community Service Fund by the Jefferson County Community Service Committee upon recommendations from members of the Jefferson County Legislative Delegation; to provide for the termination of the taxes authorized by this act upon the defeasance or other full payment of refunding school warrants provided for herein; to provide that the provisions of this act are severable; and to provide for an effective date. "BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: "Section 1. This act shall only apply to Jefferson County. "Section 2. (a) It is the intention of the Legislature by the passage of this act to authorize the county to levy and provide for the collection of, in addition to all other taxes authorized by 6 1150326; 1150327 law, except as provided in Section 4, a sales tax and a use tax conforming with and parallel to the state sales tax and the state use tax at a rate not exceeding the maximum rates set forth herein. "(b) The Legislature hereby finds and declares that each tax authorized by this act is a sales or use tax and is not a gross receipts tax in the nature of a sales tax, as such term is defined in Section 40-2A-3(8) of the Code of Alabama 1975, as amended, and used in Section 11-51-209 of the Code of Alabama 1975, as amended. "(c) In view of the county’s recent financial difficulties, the invalidation of certain taxes that previously provided significant revenues to the county, and the conclusion of the county's Chapter 9 bankruptcy proceedings, the Legislature hereby finds and declares that it is necessary, desirable, and in the best interests of residents of the county that the Jefferson County Commission be provided additional flexibility with respect to its revenue sources and budget. "(d) The Legislature hereby finds and declares that providing additional funding for public schools in the county will benefit the public welfare and education of residents of the county. "(e) This act shall be liberally construed in conformity with the intentions and findings expressed in this section. "Section 3. (a) As used in this act, the following words, terms, and phrases shall have the following respective meanings except where the context clearly indicates a different meaning: "(1) ACT 405. Act 405 of the 1967 Regular Session of the Legislature (Acts 1967, p. 1021), as amended. "(2) AVERAGE DAILY MEMBERSHIP. The meaning ascribed in Section 16-13-232, Code of Alabama 1975. 7 1150326; 1150327 "(3) COMMITTEE. The Jefferson County Community Service Committee authorized in Section 11. "(4) COUNTY. Jefferson County, Alabama. "(5) COUNTY COMMISSION. The Jefferson County Commission. "(6) EXISTING SCHOOL WARRANTS. Collectively, the following limited obligation warrants issued by the county for the benefit of public schools in the county: a. Limited Obligation School Warrants, Series 2004-A, b. Limited Obligation School Warrants, Series 2005-A and c. Limited Obligation School Warrants, Series 2005-B. "(7) JEFFERSON COUNTY LEGISLATIVE DELEGATION. The elected members of the House of Representatives and the Senate from districts wholly or partially within the county. "(8) REFUNDING SCHOOL WARRANTS. Any warrants or other obligations of the county issued after the effective date of this act to refinance, on such terms as the county commission shall determine in its discretion, either a. the existing school warrants, or b. any warrants subsequently issued for the purpose of refinancing such warrants. Refunding school warrants shall be issued under the statutes codified as Chapter 28 of Title 11, Code of Alabama 1975, as heretofore or hereafter amended, or any other law of the state available for such purpose. Refunding school warrants shall be limited obligations of the county secured by, and payable solely from, the portion of the taxes authorized by this act and described in Section 9(a). Refunding school warrants shall not be payable from any other revenues of the county and shall not constitute a general debt or obligation of the county within the meaning of any provision of the Constitution of Alabama of 1901, as heretofore or hereafter amended. "(9) STATE SALES TAX. The tax or taxes imposed by the state sales tax statutes. 8 1150326; 1150327 "(10) STATE SALES TAX STATUTES. Division 1 of Article 1 of Chapter 23 of Title 40, Code of Alabama 1975, as heretofore or hereafter amended, including all other statutes of the State which expressly set forth any exemptions from the computation of the tax levied in the state sales tax statutes and all other statutes of the state which expressly apply to or purport to affect the administration of the state sales tax statutes, and the incidence and collection of the taxes imposed therein. "(11) STATE USE TAX. The tax or taxes imposed by the state use tax statutes. "(12) STATE USE TAX STATUTES. Article 2 of Chapter 23 of Title 40, Code of Alabama 1975, as heretofore or hereafter amended, including all other statutes of the state which expressly set forth any exemptions from the computation of the tax levied in the state use tax statutes and all other statutes of the state which expressly apply to or purport to affect the administration of the state use tax statutes, and the incidence and collection of the taxes imposed therein. "(13) 2015 SALES TAX FUND. A governmental fund of the county which is created hereunder and shall be entitled 'Jefferson County 2015 Sales Tax Fund.' "(b) Except where another meaning is clearly indicated by the context, all definitions set forth in the state sales tax statutes and the state use tax statutes shall be effective as definitions of the words, terms, and phrases used in this act. All words, terms, and phrases used herein, other than those hereinabove specifically defined, shall have the respective meanings ascribed to them in the state sales tax statutes or the state use tax statutes and shall have the same scope and effect that the same words, terms, and phrases have where used in the state sales tax statutes or the state use tax statutes. "Section 4. (a) Subject to subsection (d) of this section, the county commission is authorized, 9 1150326; 1150327 by resolution duly adopted, to levy, in addition to all other taxes now imposed or authorized by law, and to collect as herein provided, a privilege or license tax, herein called a sales tax, against each person making retail sales of tangible personal property or amusements in the county at a rate not to exceed one percent of gross proceeds of sales or gross receipts, as the case may be, and an excise tax, herein called a use tax, on the storage, use, or other consumption of tangible personal property in the county purchased at retail at a rate not to exceed one percent of the sales price of such property. "(b) Any sales tax or use tax levied by the county commission pursuant to this section shall apply to and be levied upon every person or other entity required to pay, or upon whom shall have been levied, the state sales tax or state use tax. "(c) Notwithstanding the foregoing, the taxes authorized to be levied pursuant to this act shall not apply to the sale or use of property or services which are exempt under the state sales tax statutes or the state use tax statutes and corresponding regulations promulgated thereunder. "(d) Upon initial levy by the county of the taxes authorized by this act, the county commission shall simultaneously cancel the county's existing sales and use taxes currently being levied by the county under Ordinance 1769 of the county commission, as amended, that are pledged to the existing school warrants, provided that the county has previously or will simultaneously retire or defease the existing school warrants. The sales and use taxes authorized by this act and the sales and use taxes authorized to be levied by the county pursuant to Ordinance 1769 of the county commission shall not both apply to any taxable sale or storage, use, or consumption so as to result in a cumulative tax rate from both such taxes that is greater than one percent. 10 1150326; 1150327 "(e) In the event of the repeal of either or both of the state sales tax statutes or state use tax statutes, the county is authorized to continue to levy, administer, collect, and enforce the sales and use taxes authorized by this act. "Section 5. Pursuant to and in conformity with Article I of Chapter 3 of Title 11, Code of Alabama 1975, the county may, by ordinance or resolution, administer and collect, or contract for the collection of, the sales and use taxes authorized by this act. "Section 6. Each person engaging or continuing in a business subject to the sales taxes authorized to be levied by this act shall add to the sales price or admission fee and collect from the purchaser or the person paying the admission fee the amount due by the taxpayer on account of the sale or admission. It shall be unlawful for any person subject to the sales taxes authorized to be levied by this act to fail or refuse to add to the sales price or admission fee and not collect from the purchaser or person paying the admission fee the amount required to be added to the sale or admission price. It shall be unlawful for any person subject to the sales taxes authorized to be levied by this act to refund or offer to refund all or any part of the amount collected or to absorb or advertise directly or indirectly the absorption or refund of any portion of such tax or taxes. The sales taxes authorized by this act shall conclusively be presumed to be a direct tax on the retail consumer, pre-collected for the purpose of convenience only. "Section 7. The taxes authorized to be levied by this act shall constitute a debt due the county. Such taxes, together with any interest and penalties permitted by law, shall constitute and be secured by a lien upon the property of any person from whom the tax or taxes are due or that is required to collect the tax or taxes. "Section 8. All provisions of the state sales tax statutes and state use tax statutes with respect 11 1150326; 1150327 to the payment, assessment, and collection of the state sales tax and state use tax, making of reports, keeping and preserving records, interest or penalties, or both, for failure to pay such taxes or late payment of such taxes, promulgating rules and regulations with respect to the state sales tax and state use tax, and the administration and enforcement of the state sales tax statutes and state use tax statutes shall apply to the taxes authorized to be levied by this act, except for the rate of tax and except where otherwise inapplicable or otherwise expressly provided for by this act. The county and any designee or agent shall have and exercise the same powers, duties, and obligations with respect to the taxes authorized to be levied under this act that are provided the Department of Revenue and the Revenue Commissioner by the state sales tax statutes or state use tax statutes or provided the county under Act 405. All provisions of the state sales tax statutes and state use tax statutes or of Act 405 that are made applicable by this act to the taxes authorized to be levied under this act, and the administration and enforcement of this act, are incorporated by reference and made a part of this act as if fully set forth herein. "Section 9. (a) The proceeds of the taxes authorized herein collected each month by the county, after any deductions for cost of collection, shall be distributed at such times as shall be directed by the county commission in the priority and respective amounts set forth below: "(1) First, for so long as any refunding school warrants are outstanding and are not defeased or otherwise fully paid, so much of the proceeds received during a fiscal year of the county as may be necessary to satisfy the county's obligations with respect to the refunding school warrants, including payment of the principal of, premium, if any, and interest on the refunding school warrants, due during such fiscal year of the county, any ongoing expenses of administration of the refunding school warrants, amounts required to be deposited in any debt service reserve fund for the refunding 12 1150326; 1150327 school warrants, and amounts necessary to provide for payment of rebate, if any, or other amounts due to the United States, shall be paid over to the trustee or paying agent for the refunding school warrants to be held in a fund or funds solely for payment of such amounts due with respect to the refunding school warrants. The portion of the taxes authorized herein and required to be paid over to the trustee or paying agent for the refunding school warrants shall be segregated from all other receipts from the taxes authorized herein, shall be devoted solely to the payment of amounts due with respect to the refunding school warrants, and shall not be available to pay general governmental expenses of the county. "(2) Second, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivision (1), such remaining additional proceeds, up to thirty-six million three hundred thousand dollars ($36,300,000) per fiscal year of the county, shall be deposited into the general fund of the county for use and appropriation as the county commission shall determine in its discretion. "(3) Third, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivisions (1) and (2), such remaining additional proceeds, up to eighteen million dollars ($18,000,000) per fiscal year of the county, shall be deposited into the 2015 Sales Tax Fund. Funds on deposit in the 2015 Sales Tax Fund shall be distributed in accordance with the provisions of Section 10. "(4) Fourth, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivisions (1), (2), and (3), such remaining additional proceeds, up to three million six hundred thousand dollars ($3,600,000) per fiscal year of the county, shall be deposited in the Jefferson County 13 1150326; 1150327 Community Service Fund to be expended as provided in Section 11. "(5) Fifth, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivisions (1), (2), (3), and (4), such remaining additional proceeds, up to two million dollars ($2,000,000) per fiscal year of the county, shall be paid over to the Birmingham-Jefferson County Transit Authority for each of the first 10 fiscal years of the county following the adoption of this act, and thereafter up to one million dollars ($1,000,000) per fiscal year of the county. "(6) Sixth, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivisions (1), (2), (3), (4), and (5), such remaining additional proceeds, up to five hundred thousand dollars ($500,000) per fiscal year of the county, shall be paid over to Birmingham Zoo, Inc. "(7) Seventh, to the extent that there remain additional proceeds of the taxes authorized to be levied herein following the applications authorized in subdivisions (1), (2), (3), (4), (5), and (6), such remaining additional proceeds, shall be deposited into the general fund of the county for use and appropriation as the county commission shall determine in its discretion. "(b) The amounts specified in subdivisions (1) through (6) shall be paid and distributed in full so long as the proceeds of the taxes authorized to be levied herein are sufficient for such purposes. "Section 10. (a) There is hereby created a governmental fund of the county to be designated the Jefferson County 2015 Sales Tax Fund. The county commission shall maintain the 2015 Sales Tax Fund and shall administer it according to its normal fund administration procedures. 14 1150326; 1150327 "(b) As promptly as practicable after the end of each fiscal year of the county, funds on deposit in the 2015 Sales Tax Fund as of September 30 of each year shall be distributed to the city or county boards of education then serving students resident in the county according to the following procedure: "(1) Each county or city board of education serving any portion of the county shall certify in writing to the county commission its average daily membership of students resident in the county, its certified enrollment, calculated in accordance with Article 11 of Chapter 13 of Title 16, Code of Alabama 1975, or any successor thereto. County or city boards of education may use their certification to the state Department of Education under the state Foundation Program for this purpose to the extent such certification includes only students resident in the county. "(2) Upon receipt of the certified enrollment from each board of education described in this section, the county commission shall determine the total number of students resident in the county and enrolled in public schools serving the county. "(3) As promptly as practicable thereafter, the county commission shall distribute from the 2015 Sales Tax Fund to each board of education described in this section an amount equal to its pro rata share of the amount on deposit in the 2015 Sales Tax Fund as of September 30 of the prior fiscal year of the county, taking into account each board of education's certified enrollment and the total number of students resident in the county and enrolled in public schools serving the county. "(c) Absent manifest error, the determination by the county commission of the distribution of funds from the 2015 Sales Tax Fund shall be conclusive. "Section 11. (a) There is hereby created the Jefferson County Community Service Committee. The committee shall consist of four members, one of whom shall be elected by each of the Jefferson County 15 1150326; 1150327 Democratic House Delegation, the Jefferson County Republican House Delegation, the Jefferson County Democratic Senate Delegation, and the Jefferson County Republican Senate Delegation. Members of the Jefferson County Legislative Delegation shall not be eligible for election to the committee. Members of the committee shall be elected at a meeting of the Jefferson County Legislative Delegation held in the first year of each quadrennium of the Legislature and shall be residents and qualified electors of the county. The committee shall establish rules and procedures for its proceedings and activities. "(b) There is hereby created a public fund to be designated the Jefferson County Community Service Fund. The committee shall be the custodian of, and shall be responsible for the proper expenditure of, the Jefferson County Community Service Fund. "(c) Funds on deposit in the Jefferson County Community Service Fund shall be used solely for one or more of the following purposes in the county, provided that any use of such funds must serve a public purpose: "(1) To support public schools, public roads, public museums, public libraries, public zoos, public parks, neighborhood associations, public athletic facilities, public youth sports associations, public sidewalks, public trails, or public greenways; "(2) To support the performing arts; "(3) To support nonprofit entities that, at the time a recommendation for expenditure is filed with the committee, have received funding from the United Way of Central Alabama within the last 12 months and are not excluded from receiving additional United Way funding; "(4) To support police departments, the county's sheriff's office, or fire departments or districts in the county; or 16 1150326; 1150327 "(5) To support publicly available assistance programs established for the benefit of low income residential customers of the county's public sanitary sewer system. "(d) Subject to the provisions of this act, the amount deposited in the Jefferson County Community Service Fund shall be allocated equally between the Jefferson County House Delegation and the Jefferson County Senate Delegation. The amounts so allocated shall be further allocated equally among the members of the House Delegation and the Senate Delegation. From the amounts so allocated to them, the members of the House and Senate Delegations may recommend one or more expenditures from the Jefferson County Community Service Fund for purposes described in subsection (c). Such expenditures shall be made from revenues derived from the taxes authorized herein for the prior fiscal year of the county and deposited in the Jefferson County Community Service Fund. "(e) The committee shall consider and approve or deny each recommended expenditure pursuant to its rules for review and approval of disbursements from the Jefferson County Community Service Fund. "(f) Any amounts derived from the taxes authorized herein during the prior fiscal year of the county remaining on deposit in the Jefferson County Community Service Fund on September 30 of any year shall be paid over to the county for deposit into the general fund. "Section 12. The taxes authorized to be levied by this act shall be levied only for so long as any refunding school warrants are outstanding and are not defeased or otherwise fully paid, and when all refunding school warrants have been fully paid in accordance with the terms thereof, the levy of the taxes authorized by this act shall terminate unless extended by law. "Section 13. The provisions of this act are severable. If a court of competent jurisdiction 17 1150326; 1150327 adjudges invalid or unconstitutional any clause, sentence, paragraph, section, or part of this act, the judgment or decree shall not affect, impair, invalidate, or nullify the remainder of this act, but the effect of the decision shall be confined to the clause, sentence, paragraph, section, or part of this act adjudged to be invalid or unconstitutional. "Section 14. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law." On July 20, 2015, Bennett, Moore, Rogers, and Muhammad (hereinafter "the class plaintiffs") filed in the Jefferson Circuit Court a class action against Jefferson County on behalf of a purported class composed of "persons or entities who pay or are otherwise subject to franchise, excise, and privilege license taxes ('sales and use taxes') on receipts from sales made within Jefferson County," challenging the constitutionality of Act No. 2015-226. On August 13, the County adopted a resolution levying sales and use taxes pursuant to Act No. 2015-226 authorizing the County to implement the taxes, to issue approximately $595 million in warrants, and to pledge a portion of the taxes to pay the cost of servicing the debt created by the issuance of the warrants. On the same day, pursuant to § 6-6-751, Ala. Code 1975, the County parties filed in the trial court a petition, seeking to validate the proposed issuance and sale by the County of its limited-obligation refunding warrants, the sales and use taxes 18 1150326; 1150327 levied by the County pursuant to the resolution adopted by the Commission on August 13 and Act No. 2015-226, and the pledge of the proceeds of the sales and use taxes for the payment of the warrants.3 On September 10, the class plaintiffs appeared at the hearing in the validation action held pursuant to § 6-6-753, Ala. Code 1975, and filed a motion requesting the trial court "to deny [the] Validation Petition" and "to transfer the case" to the judge hearing their class action. On September 11, Keith Shannon, a taxpayer and citizen of Jefferson County, filed a separate response to the validation action. On September 12, the class plaintiffs joined the responses filed by the district attorney (see supra note 3) and Shannon. On September 14, the trial court denied the class plaintiffs' motion to have the validation action consolidated with the class action. The class plaintiffs then dismissed their action. Shannon and the class plaintiffs will hereinafter sometimes be referred to jointly as "the taxpayers." 3The trial court ordered the publication of a notice of the hearing to be held on the validation proceeding "to the taxpayers and citizens of Jefferson County, Alabama." In accordance with § 6-6-752(d), Ala. Code 1975, the notice was published once a week for three consecutive weeks in a newspaper of general circulation in Birmingham. Pursuant to § 6–6–752(c), Ala. Code 1975, the Jefferson County District Attorney was served with the petition and filed an answer. 19 1150326; 1150327 At the bench trial held by the trial court in the validation proceeding, the taxpayers raised four arguments against the validity of Act No. 2015-226 and Jefferson County's resolutions approving the taxes and issuance of the new warrants: (1) that the vote on the BIR for H.B. 573, which became Act No. 2015-226, did not comply with § 71.01(C), Ala. Const. of 1901 (quorum provisions); (2) that Act No. 2015-226 violates § 105, Ala. Const. of 1901 (local law subsumed by general law); (3) that Act No. 2015-226 violates § 104, Ala. Const. of 1901 (bar on certain types of local laws); and (4) that the County's resolutions violate § 45-37-162.03, Ala. Code 1975 (Local Laws, Jefferson County)(requiring the County to hold a public hearing before issuing debt). On December 14, 2015, the trial court entered a judgment denying the County parties' validation petition on the basis that the BIR adopted by the House to enable H.B. 573 to be considered before the annual appropriations bills was not passed in compliance with § 71.01(C). The trial court held that H.B. 573 was passed out of order in violation of § 71.01(C) and, therefore, that Act No. 2015-226 was unconstitutional. The trial court declined to reach the other arguments raised by the taxpayers. The County parties appealed, and the class plaintiffs cross-appealed. 20 1150326; 1150327 On August 26, 2016, while these appeals were pending, the legislature, at a Special Session, passed a proposed constitutional amendment to add a subsection (G) to § 71.01, Ala. Const. of 1901 (proposed amendment no. 14), as follows: "(G) Notwithstanding any provision of this amendment, any resolution authorizing the consideration of a bill proposing a local law adopted before November 8, 2016, that conformed to the rules of either body of the Legislature at the time it was adopted, is ratified, approved, validated, and confirmed and the application of any such resolution is effective from the date of original adoption." Act No. 2016-430, codified as § 71.01(G), Ala. Const. 1901. The purpose of proposed amendment no. 14 was to retroactively validate BIRs underlying local laws that were adopted before November 8, 2016, and that conformed to the rules of either house at the time they were adopted. Proposed amendment no. 14 was placed on the ballot for the November 8, 2016, general election, and the people of Alabama ratified proposed amendment no. 14 by a vote of 69%-31%. II. Standard of Review "In Monroe v. Harco, Inc., 762 So. 2d 828, 831 (Ala. 2000), this Court restated the long-standing rules governing review of acts of the Legislature under constitutional attack: "'"In reviewing [a question regarding] the constitutionality of a statute, we 'approach the question with every presumption and intendment in favor of its 21 1150326; 1150327 validity, and seek to sustain rather than strike down the enactment of a coordinate branch of the government.'" Moore v. Mobile Infirmary Ass'n, 592 So. 2d 156, 159 (Ala. 1991) (quoting Alabama State Fed'n of Labor v. McAdory, 246 Ala. 1, 9, 18 So. 2d 810, 815 (1944)). Moreover, "[w]here the validity of a statute is assailed and there are two possible interpretations, by one of which the statute would be unconstitutional and by the other would be valid, the courts should adopt the construction [that] would uphold it." McAdory, 246 Ala. at 10, 18 So. 2d at 815. In McAdory, this Court further stated: "'"[I]n passing upon the constitutionality of a legislative act, the courts uniformly approach the question with every presumption and intendment in favor of its validity, and seek to sustain rather than strike down the enactment of a coordinate branch of the government. All these principles are embraced in the simple statement that it is the recognized duty of the court to sustain the act unless it is clear beyond reasonable doubt that it is violative of the fundamental law." "'246 Ala. at 9, 18 So. 2d at 815 (citation omitted). We must afford the Legislature the highest degree of deference, and construe its acts as constitutional if their language so permits. Id.'" Rice v. English, 835 So. 2d 157, 163-64 (Ala. 2002). III. Retroactive Application of § 71.01(G) 22 1150326; 1150327 In their initial brief on appeal, the County parties first argued that this Court should reverse the trial court's judgment either because the issue presented a nonjusticiable political question or, alternatively, because Act No. 2015-226 was not unconstitutional in that the BIR that enabled the House to consider H.B. 573 was passed in accordance with a long-standing internal rule of the House. The taxpayers urged this Court to decide the issue, i.e., it did not present a nonjusticiable political question, and argued that we should affirm the trial court's judgment because, they argued, Act No. 2015-226 was unconstitutional in that the BIR that allowed the House to consider H.B. 573 out of order was not passed in accordance with the quorum requirements of § 71.01(C). After amendment no. 14 passed in the November 8 general election, this Court requested briefs from the parties on the issue whether the passage of amendment no. 14 retroactively validated Act No. 2015-226 and therefore rendered the BIR issue moot. The County parties argue that § 71.01(G) expressly applies retroactively and validates the BIR underlying Act No. 2015-226 because that BIR was passed in accordance with House Rule 36. Therefore, the County parties argue, the basis for 23 1150326; 1150327 the trial court's judgment in this case is no longer valid and the judgment should be reversed. The County parties first contend that § 71.01(G) is retroactive by its terms and by its remedial nature. "When a new law makes clear that it is retroactive, an appellate court must apply that law in reviewing judgments still on appeal that were rendered before the law was enacted, and must alter the outcome accordingly." Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 226 (1995). The County parties note that Section 71.01(G) expressly applies retroactively to "any resolution authorizing the consideration of a bill proposing a local law adopted before November 8, 2016," including the BIR underlying Act No. 2015-226. Citing United States v. Schooner Peggy, 5 U.S. (1 Cranch) 103 (1801), the County parties contend that the application of a new law intended to be retroactive to cases pending on appeal has been a sound principle of appellate review for centuries. In Schooner Peggy, discussing the applicability of a treaty signed during the pendency of an appeal, Chief Justice Marshall explained: "It is in the general true that the province of an appellate court is only to enquire whether a judgment when rendered was erroneous or not. But if subsequent to the judgment and before the decision of the appellate court, a law intervenes and positively changes the rule which governs, the law must be obeyed, or its obligation denied. If the 24 1150326; 1150327 law be constitutional, and of that no doubt in the present case has been expressed, I know of no court which can contest its obligation. ... In such a case the court must decide according to existing laws, and if it be necessary to set aside a judgment, rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set aside." 5 U.S. (1 Cranch) at 110. In Ex parte Luker, 25 So. 3d 1152, 1155 (Ala. 2007), this Court stated the principle as follows: "'[T]his Court has often noted that "retrospective application of a statute is generally not favored, absent an express statutory provision or clear legislative intent that the enactment apply retroactively as well as prospectively." This general rule is, however, subject to an equally well-established exception, namely, that "[r]emedial statutes ... are not within the legal [concept] of 'retrospective laws,' ... and do operate retroactively, in the absence of language clearly showing a contrary intention." In other words, "[r]emedial statutes--those which do not create, enlarge, diminish, or destroy vested rights –- are favored by the courts, and their retrospective operation is not obnoxious to the spirit and policy of the law." Remedial statutes are exemplified by those that "'impair no contract or vested right, ... but preserve and enforce the right and heal defects in existing laws prescribing remedies.'" Such a statute "may be applied on appeal, even if the effective date of that statute occurred while the appeal was pending, and even if the effective date of the statute was after the judgment in the trial court."'" (Quoting Ex parte Bonner, 676 So. 2d 925, 927 (Ala. 1995) (citations omitted).) The County parties contend that § 71.01(G) is remedial in that it "heals defects in existing laws," if any, by providing 25 1150326; 1150327 that BIRs authorizing the consideration of local laws passed before November 8, 2016, such as the one at issue here, are "ratified, approved, validated, and confirmed." Therefore, the County parties argue, Act No. 2015-226 was properly passed and "the newly ratified amendment, on its face, definitively disposes of the issues raised by the trial court's opinion in this case." County parties' supplemental brief, at 6. The County parties next argue that retroactive application of § 71.01(G) to this case is appropriate because the trial court's judgment is not the Judicial Department's final word on the issue here--this Court has not spoken. Although future changes in the law cannot alter the outcome of a truly final judgment, the County parties argue, there is a difference between a final judgment for the purpose of applying a retroactive law and a final judgment for the purpose of being appealable. Retroactive laws, they contend, may be applied to judgments that are pending on appeal, but such laws cannot be applied to judgments that are final in the sense that all appellate rights have been exhausted. In Ex parte Jenkins, 723 So. 2d 649, 656 (Ala. 1998), this Court explained that "'"a judicial Power" is one to render dispositive judgments.'" (Quoting Plaut, 514 U.S. at 219 (quoting, in turn, Easterbrook, Presidential Review, 40 Case 26 1150326; 1150327 W. Res. L. Rev. 905, 926 (1990)) (emphasis omitted).) This Court further stated in Jenkins that there are types of legislation that infringe upon judicial power: "Under the federal constitution, the Supreme Court of the United States has held that three types of legislation violate the separation-of-powers principle by encroaching on the judicial power. Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 218-19 (1995). First, legislation that prescribes rules of decision for the Judiciary is, under certain circumstances, unconstitutional. Id. at 218 (citing [United States v.] Klein, 80 U.S. (13 Wall.) 128, 20 L.Ed. 519 [(1871)]. Second, legislation that requires the review of judicial decisions by the other branches of government is impermissible. Plaut, 514 U.S. at 218 (citing Hayburn's Case, 2 U.S. (2 Dall.) 408 (1792)). Third, legislation that would change the law incorporated into a final judgment rendered by the Judiciary violates the separation-of-powers principle. Plaut, 514 U.S. at 218-19." 723 So. 2d at 655. The Jenkins Court then discussed the United States Supreme Court's explanation in Plaut as to when retroactive application of law infringes on the judicial power: "'It is the obligation of the last court in the [Article III] hierarchy that rules on the case to give effect to Congress's latest enactment, even when that has the effect of overturning the judgment of an inferior court, since each court, at every level, must "decide according to existing laws." ... Having achieved finality, however, a judicial decision becomes the last word of the judicial department with regard to a particular case or controversy, and Congress may not declare by retroactive 27 1150326; 1150327 legislation that the law applicable to that very case was something other than what the courts said it was.' "Plaut, 514 U.S. at 227 (emphasis in original) (citations omitted). Thus, the core judicial power is the power to declare finally the rights of the parties, in a particular case or controversy, based on the law at the time the judgment becomes final." Ex parte Jenkins, 723 So. 2d at 656. Here, the County parties argue, because this case remains on appeal from the trial court's judgment, a new law such as § 71.01(G) that is intended to be retroactive must apply to that judgment and have retroactive effect on this appeal. The taxpayers argue that § 71.01(G), passed after the trial court declared Act No. 2015-226 unconstitutional for lack of a proper BIR, cannot be used to revive a statute already determined to be unconstitutional. "At this point we note that Amendment No. 375 to the Constitution amended § 110 upon its ratification in 1978 and changed the definition of a local law to 'a law which is not a general law or a special or private law.' This amendment was not in effect, however, at the time Act 689 was passed. Therefore, the classification of the Act is to be determined under the definitions in the quoted portion of the original 110." Jefferson Cty. v. Braswell, 407 So. 2d 115, 117 (Ala. 1981). The taxpayers also argue that §§ 13 and 95, Ala. Const. of 1901, prohibit retroactive application of § 71.01(G) to their vested rights and the trial court's final judgment, 28 1150326; 1150327 which, they argue, are afforded protection under the Alabama Constitution. McCullar v. Universal Underwriters Life Ins. Co., 687 So. 2d 156, 165 (Ala. 1996) ("A cause of action has vested if it has accrued at the time of the legislation or the judgment. It accrues 'when a person sustains a legal injury upon which an action can be maintained.'"); Mayo v. Rouselle Corp., 375 So. 2d 449, 451 (Ala. 1979) (holding that the right to bring an action can be modified, limited, or repealed as the legislature sees fit, except where such action has already accrued). Section 13, Ala. Const. of 1901, guarantees "[t]hat all courts shall be open; and that every person, for any injury done him, in his lands, goods, person, or reputation, shall have a remedy by due process of law; and right and justice shall be administered without sale, denial, or delay." The taxpayers argue that § 13 prohibits the retroactive application of § 71.01(G) because, they say, § 13 preserves a remedy for their cause of action, which they say as accrued and their right vested. Alabama courts must follow the mandate of § 13, they argue, regardless of the intent or motives of the legislature. Lankford v. Sullivan, Long & Hagerty, 416 So. 2d 996, 1000 (Ala. 1982) ("'Where legislation infringes upon a right protected by § 13, however, we are 29 1150326; 1150327 dealing with a limitation on the power of the legislature. By determining the validity of such legislation, we do not pass judgment on its wisdom, but follow our own supreme mandate to uphold the constitution of this state.'"(quoting Fireman's Fund American Ins. Co. v. Coleman, 394 So. 2d 334, 353 (Ala. 1980)(Shores, J., concurring in the result))). The taxpayers rely on United Companies Lending Corp. v. Autrey, 723 So. 2d 617, 624 (Ala. 1998), in which this Court stated: "'[Section 13] of the Constitution provides "that every person, for an injury done him, in his lands, goods, person, or reputation, shall have a remedy by due process of law." It will be noticed that this provision preserves the right to a remedy for an injury. That means that when a duty has been breached producing a legal claim for damages, such claimant cannot be denied the benefit of his claim for the absence of a remedy. But this provision does not undertake to preserve existing duties against legislative change made before the breach occurs.'" (Quoting Pickett v. Matthews, 238 Ala. 542, 545, 192 So. 261, 263 (1939)(emphasis added in Autrey).) The taxpayers then argue that § 13 prohibits taking away rights that vested before a lawsuit is filed. In this case, they say, the County parties sued seeking to validate Act No. 2015-226 and the new taxes levied therein. In defense of that action, the taxpayers state, the taxpayers argued that Act No. 2015-226 30 1150326; 1150327 was unconstitutional because of the legislature's failure to pass a proper BIR. For purposes of § 13, the taxpayers argue, their defense accrued and right to a remedy vested as of the date of the enactment of Act No. 2015-226 and before the legislature exercised its power to propose amendment no. 14; therefore, they contend, applying § 71.01(G) retroactively would violate their rights under § 13. The taxpayers also argue that § 95, Ala. Const. of 1901, preserves their existing defenses. Section 95 provides: "There can be no law of this state impairing the obligation of contracts by destroying or impairing the remedy for their enforcement; and the legislature shall have no power to revive any right or remedy which may have become barred by lapse of time, or by any statute of this state. After suit has been commenced on any cause of action, the legislature shall have no power to take away such cause of action, or destroy any existing defense to such suit." The taxpayers, citing Jefferson County Commission v. Edwards, 49 So. 3d 685, 691 (Ala. 2010), maintain that this Court has held that § 95 prohibits "the legislature from acting on matters that are within the breast of the judicial system by taking away a cause of action" after a lawsuit has been filed. Section 95, the taxpayers argue, prohibits any legislative encroachment upon a right asserted in a pending case. Ex parte Alfa Fin. Corp., 762 So. 2d 850, 852 (Ala. 1999)(holding 31 1150326; 1150327 that § 95 prevented the legislature from taking away existing claim where suit had been filed before enactment of statutory amendment); United Cos. Lending Corp. v. Autrey, 723 So. 2d at 622 (concluding, in considering whether amended Code section should be afforded retroactive effect to bar plaintiffs' claims and damages, that right to recovery had vested within the meaning of § 13 of the Constitution, and any attempt to reduce the damages recoverable in the action would violate the last sentence of § 95). The County parties argue that no other constitutional provision can bar retroactive application of § 71.01(G) to this case. Section 71.01(G), they argue, is now itself a provision of the Alabama Constitution; therefore, they argue, it is entitled to the deference afforded all other constitutional provisions, which is that it should not be read to violate other provisions of the Alabama Constitution or read in ways that would make the Alabama Constitution self-contradictory. Any such reading, the County parties contend, violates two well settled canons of construction: (1) Laws "'"must be construed in pari materia in light of their application to the same general subject matter. ... Our obligation is to construe [the] provisions 'in favor of each other to form one harmonious plan,' if it is possible to do 32 1150326; 1150327 so."'" Brandy v. City of Birmingham, 73 So. 3d 1233, 1242 (Ala. 2011) (internal citations omitted), and (2) "[w]hen there is a conflict, or apparent conflict, between sections of the Constitution, the more specific will prevail as against a more general statement pertaining to the same subject matter." Jefferson Cty. v. Braswell, 407 So. 2d 115, 119 (Ala. 1981). The County parties insist that § 71.01(G) is the more specific provision when compared to the other constitutional sections argued by the taxpayers. By its very terms, they say, § 71.01(G) applies only to BIRs underlying local laws passed under the procedure stated in § 71.01(C) before November 8, 2016. Baldwin Cty. v. Jenkins, 494 So. 2d 584, 588 (Ala. 1986)("[I]n cases of conflicting statutes on the same subject, the latest expression of the legislature is the law."). The County parties argue that retroactive application of § 71.01(G) does not violate § 13 because no one has a vested right in the House's voting procedure on BIRs. Section 71.01(G), they argue, applies retroactively to this case because, they say, no person has a "vested right" to sue based on the voting procedure used in the House to pass BIRs. "[N]o person has a vested right in a particular remedy ... or in particular modes of procedure." Perdue v. Green, 127 So. 3d 343, 390 (Ala. 2012) (internal quotation marks omitted). 33 1150326; 1150327 Section 71.01(G) expressly applies retroactively to "any resolution authorizing the consideration of a bill proposing a local law adopted before November 8, 2016." The County parties maintain that the reach of § 71.01(G) includes BIRs underlying local acts involved in cases still pending before the State's trial courts and on appeal, as well as BIRs that have not been the subject of litigation. Those parties with actual vested rights, the County parties say, would be local governments like Jefferson County, hospital boards, and schools that constructed courthouses, hospitals, and school buildings in reliance on the local acts that were retroactively validated by § 71.01(G). The County parties also argue that retroactive application of § 71.01(G) does not violate § 95 because, they argue, the constitutional amendment is an act of the people of Alabama, not an act of the legislature purporting to take away a cause of action; § 95, they argue, bars legislation, not constitutional amendments. The County parties note that this Court held in Jefferson County Commission v. Edwards, supra, that § 95 barred the retroactive application of a new statute that attempted to cure an old tax statute because the new statute took away a cause of action. "But a proposal to amend the Constitution is not an act of legislation." Bonds v. 34 1150326; 1150327 State Dep't of Revenue, 254 Ala. 553, 554, 49 So. 2d 280, 281 (1950). Because § 95 does not apply to constitutional amendments, the County parties argue, § 71.01(G) applies retroactively to cure any defect in Act No. 2015-226. The taxpayers maintain that the County parties' § 13 argument is wrong for two reasons. First, they argue, they did not sue the County parties; the County parties sued taxpayers and citizens of Jefferson County in a validation proceeding, and the taxpayers defended the case based in part on the legislature's failure to pass a constitutionally adequate BIR before passing H.B. 573, which became Act No. 2015-226. Second, they argue, insisting that the legislature comply with the voting requirements of § 71.01(C) of the Alabama Constitution is not a matter of "remedy" or even a "mode of procedure." The taxpayers maintain that the voting requirements in § 71.01(C) were a constitutionally imposed gate the legislature needed to unlock before it could consider a bill without passing the basic appropriations bills. The taxpayers contend that a constitutional guarantee cannot be retroactively disregarded after the issue has been raised in a lawsuit and proceeded to a final judgment in the trial court. 35 1150326; 1150327 The taxpayers also argue that the County parties' § 95 argument is wrong for two reasons. The County parties, the taxpayers say, contend that § 71.01(G) does not violate § 95 because (1) it is an "act of the people, not an act of the Legislature taking away a cause of action," and, therefore, (2) § 95 applies only to actions of the legislature resulting in "statutes," not constitutional amendments. The taxpayers insist that § 95 places a constitutional check upon all "power" of the legislature, not solely upon the legislative power to enact statutes. The taxpayers further argue that their defenses and judgment are property rights warranting due-process protection. An accrued cause of action or defense to a claim, they say, is "constitutional" property, a vested property right, because "the holder has a legitimate expectation that state law will recognize the claim or defense." Shannon's supplemental brief, at 17. Once a lawsuit is filed, the taxpayers argue, subsequent action by the state does not interfere with rights that might accrue in the future, but with existing expectations and rights that have already accrued. To the extent that § 71.01(G) could apply to this case, the taxpayers conclude, it was enacted to eviscerate 36 1150326; 1150327 their vested rights and defenses and violates their constitutional right to due-process protection. Finally, the taxpayers argue that the constitutional right to have the annual budgets passed before other bills is a substantive, not a remedial, vested right of which citizens can be deprived only prospectively, citing Ex parte Bonner, 676 So. 2d 925, 926 (Ala. 1995), in which this Court stated: "'[R]emedial statutes ... are not within the legal [concept] of "retrospective laws," ... and do operate retroactively, in the absence of language clearly showing a contrary intention.' Street v. City of Anniston, 381 So. 2d 26, 29 (Ala. 1980). ... In other words, 'remedial statutes--those which do not create, enlarge, diminish, or destroy vested rights –- are favored by the courts, and their retrospective operation is not obnoxious to the spirit and policy of the law.'" The extension of the sales and use taxes in Act No. 2015-226, the taxpayers argue, will produce over $100 million a year for approximately 23 years. Therefore, they argue, they have a vested interest in the trial court's judgment declaring Act No. 2015-226 unconstitutional. This Court has previously held that "there is no reason why a constitutional amendment cannot by the use of express and clear terms validate and confirm an act of the legislature previously enacted but invalid on account of a failure to observe provisions of the State Constitution." Bonds, 254 37 1150326; 1150327 Ala. at 555, 49 So. 2d at 282. See also Ex parte Southern Ry., 556 So. 2d 1082, 1090 (Ala. 1989) ("We have been cited to Alabama cases recognizing two exceptions to the general rule that subsequent amendments to a constitution cannot revive a statute that is ineffective because of constitutional deficiencies that existed when the statute was passed. The first exception is applicable where the subsequent constitutional amendment by clear and express terms validates and confirms the statute that had been invalid on account of its failure to comply with constitutional provisions that existed at the time of its passage. Bonds v. State Dep't of Revenue, 254 Ala. 553, 49 So. 2d 280 (1950)."). Because amendment no. 14, now § 71.01(G), Ala. Const. of 1901, used "clear and express terms" to validate and confirm the procedure used to pass BIRs underlying local bills before November 8, 2016, we agree with the County parties, and we hold that § 71.01(G) can properly be applied retroactively to cure the argued constitutional deficiency affecting Act No. 2015-226. Our holding that § 71.01(G) applies retroactively to Act No. 2015-226 does not, however, dispose of this case. We now must address the alternative arguments made by the taxpayers challenging the constitutionality of Act No. 2015- 226. 38 1150326; 1150327 IV. The Taxpayers' Alternative Constitutional Challenges The taxpayers argue that the trial court had before it alternative grounds –- other than the non-retroactivity of § 71.01(G) –- for declaring Act No. 2015-226 invalid and that those alternative grounds provide separate and independent reasons aside from the BIR issue on which this Court can affirm the trial court's judgment. We now address these alternative grounds. A. Section 105, Ala. Const. of 1901 Section 105 prohibits local laws that create variances from general laws: "No special, private, or local law, except a law fixing the time of holding courts, shall be enacted in any case which is provided for by a general law, or when the relief sought can be given by any court of this state; and the courts, and not the legislature, shall judge as to whether the matter of said law is provided for by a general law, and as to whether the relief sought can be given by any court; nor shall the legislature indirectly enact any such special, private, or local law by the partial repeal of a general law." The taxpayers contend that Act No. 2015-226 is void under § 105 because, they argue, it is a local law that conflicts with general laws. The taxpayers first argue that § 105 voids Act No. 2015- 226 because the matter of Act No. 2015-226 is subsumed by § 40-12-4, Ala. Code 1975. "A matter is 'provided for by a 39 1150326; 1150327 general law' within the meaning of § 105 if the 'subject [of the local act] is already subsumed by [a] general statute." City of Homewood v. Bharat, LLC, 931 So. 2d 697, 701 (Ala. 2005)(quoting Peddycoart v. City of Birmingham, 354 So. 2d 808, 813 (Ala. 1978)). "'The subject of a local act is deemed to be "subsumed" in a general law if the effect of the local law is to create a variance from the provisions of the general law.'" Bharat, 931 So. 2d at 702 (quoting Opinion of the Justices No. 342, 630 So. 2d 444, 446 (Ala. 1994)(emphasis added in Bharat)). The taxpayers argue that § 40-12-4 is the only general law that provides counties with the authority to impose sales and use taxes for educational-funding purposes. They state that counties have no general authority to levy, impose, or collect privilege taxes in the nature of sales taxes without express authority from the legislature. Jefferson Cty. v. Johnson, 333 So. 2d 143, 145 (Ala. 1976). However, they say, § 40-12-4 authorizes the levy of such privilege taxes in the nature of sales taxes but contains significant restrictions on the counties' use of educational-funding taxes, specifically, all the proceeds of such taxes must be used solely for educational purposes. Under § 40-12-4(a), for example, "[a]ll the proceeds from any tax levied pursuant to this section less 40 1150326; 1150327 the cost of collection thereof shall be used exclusively for public school purposes, including specifically and without limitation capital improvements and the payment of debt service on obligations issued therefor." Similarly, the last sentence of § 40-12-4(b) dictates that moneys distributable to school systems operating within a county must be distributed according to the "Foundation Program" protocol for local boards of education within the county. The taxpayers state that this Court has held that local laws that attempt to fund local school systems in counties outside the restrictions of § 40-12-4 violate § 105. In Opinion of the Justices No. 311, 469 So. 2d 105, 107-08 (Ala. 1985), a proposed local law authorized Madison County to levy and collect sales and use taxes in areas served by the Madison County School System, the proceeds of which were to be distributed solely to that school system. This Court unanimously held that the proposed local law violated § 105: "Both § 40-12-4 and H.B. 704 authorize the governing body of Madison County to levy sales or use taxes in order to generate revenue for the Madison County School System. They differ only in that § 40-12-4 authorizes a county-wide tax to generate revenue for all school systems within the county (including the Madison County School System), while H.B. 704 authorizes a tax only in those areas of the county served by the Madison County School System, with the revenues generated to be given only to the Madison County School System. The subject 41 1150326; 1150327 matter of H.B. 704 is already subsumed by § 40-12-4 and therefore § 105 prohibits its enactment." The taxpayers argue that Act No. 2015-226 is a more overt violation of § 105 than the proposed local law in Opinion of the Justices No. 311, in which all the money was at least being used for educational purposes consistent with the requirements of § 40-12-4. However, the taxpayers argue, because the restrictions in § 40-12-4 were not being followed, the proposed law was invalid because the local act created a variance from § 40-12-4. In this case, they contend, the sales and use taxes authorized by Act No. 2015-226 contravene § 40-12-4 in at least two distinct ways. First, the taxpayers say, $42.4 million of the annual distributions of the sales and use taxes authorized by Act No. 2015-226 are to be paid to noneducational recipients, in direct contravention of the educational-exclusivity requirements of § 40-12-4. Second, they say, even the money earmarked for educational purposes is not to be distributed according to the "Foundation Program" as required by § 40-12-4(b) but, rather, according to a freestanding methodology contained in § 10 of Act No. 2015-226. The taxpayers maintain that a direct conflict is not required for a local law to violate § 105. If the local law 42 1150326; 1150327 addresses a "subject matter" already addressed in the general law, the taxpayers argue, that local law is "subsumed" by the general law and is void under § 105. Opinion of the Justices No. 311, 469 So. 2d at 107-08. Here, the taxpayers say, the § 105 problem is all the more obvious because there is direct conflict between the local law and the general law, conflict that is even more striking in this case, they argue, because the new warrants are to replace the existing school warrants. In fact, the taxpayers state, Act No. 2015-226 provides that the tax authorized therein cannot be imposed unless the existing tax imposed under § 40-12-4 is canceled. The very purpose of Act No. 2015-226 then, the taxpayers argue, is to create an exception to the exclusivity provisions of § 40-12-4 with respect to the education-sales tax currently in place. The taxpayers next argue that the County parties have not demonstrated any local need. The County parties, citing Miller v. Marshall County Board of Education, 652 So. 2d 759, 761-62 (Ala. 1995), argued that Act No. 2015-226 could be sustained based on the "demonstrated local need" exception to § 105. In Miller, this Court sustained a local act that authorized Marshall County to impose a sales tax in portions of the county not served by the municipal systems, with the proceeds to be provided solely to the county system. The 43 1150326; 1150327 defenders of the local act developed an extensive evidentiary record demonstrating that over time, the three municipal school systems in Marshall County had siphoned off large numbers of students, leaving the Marshall County school system "having to operate a primarily rural school system with a greatly diminished tax base." Miller, 652 So. 2d at 761. In addition, a Public Affairs Research Council of Alabama report noted that, in the relevant time frame, the Marshall County School System was last in Alabama in local per child expenditures. Under those circumstances, the Court held that Marshall County "had a demonstrated local need that was not provided for by the general law." 652 So. 2d at 762. Miller does not apply to this case, the taxpayers argue, because the County parties did not demonstrate in the record a local need. The taxpayers argue that Miller is distinguishable on its facts. Here, they say, the County parties offered no evidence of a local need that was not provided for by general law. The County parties' current educational-funding needs are, in fact, being met, the taxpayers say, because the existing school warrants are being paid through the proceeds of the education-sales tax currently in place. Moreover, the taxpayers argue, the County parties have pointed to no record evidence concerning any alleged need to refinance the existing 44 1150326; 1150327 school warrants or that such refinancing is economically desirable. Finally, the taxpayers argue that, even if the County parties had demonstrated a local need, § 105 has been violated. The taxpayers contend that the "demonstrated-local- need" line of cases is unmoored from § 105 and, they argue, should be overruled. The taxpayers say that this Court's last decision addressing the "demonstrated-local-need" exception was 16 years ago in Walker County v. Allen, 775 So. 2d 808, 812 (Ala. 2000), in which this Court made it clear that a local-need argument would not prevail where the use of such an argument is at total variance from the intent of the general law. The Court stated: "Walker County contends[] Act No. 97-903 was enacted in order to finance the construction and operation of a mandated county jail and to fund recurring general operations. We note however, that Act No. 97-903 provides that the proceeds from the tax or fee levied shall be deposited into the Walker County general fund. Unlike the local act in Miller, which provided that the tax was levied for a specific purpose (the support of Marshall County schools in areas not served by city school systems), Act No. 97-903 does not specify what the tax is to be used for. In addition, both the general law and the local law involved in Miller levied taxes to support school systems. In the present case, the local law permitting the levy of license taxes 'on engaging in or carrying on any business' has no relation to the construction of a new county jail. If local need were the sole criterion for determining the constitutionality of a local law, then probably no 45 1150326; 1150327 local act imposing a tax could ever be successfully challenged, because every county in the State could probably show it has a need for more funds." 775 So. 2d at 812-13. The taxpayers maintain that there is a fundamental problem of constitutional misinterpretation with Miller's "demonstrated local need" exception to § 105: They allege that it is grounded in no constitutional language whatsoever. Decisions on constitutional law must be grounded in the constitutional text itself, and, the taxpayers argue, there is no textual basis within § 105 or any other provision of the Alabama Constitution that recognizes a "demonstrated-local- need" exception to a variance from the general law created by a local law. The taxpayers insist that § 105 establishes a bright-line rule: Local laws cannot create exceptions from general laws. They argue that Miller and the "demonstrated- local-need" exception are unsound and lack any basis in the context of § 105, and they ask this Court to overrule Miller and the demonstrated-local-need line of cases. In response, the County parties first argue that Act No. 2015-226 is not subsumed by § 40-12-4 and does not violate § 105 because it is a nonexclusive act that meets specific local needs. The County parties state that the taxpayers argued in the trial court that Act No. 2015-226 violated § 105 on two 46 1150326; 1150327 grounds. First, the County parties say, the taxpayers argued that § 40-12-4, a general law, is the exclusive authority under which a county may levy sales and use taxes. Second, the County parties say, the taxpayers argued that Act No. 2015-226 is subsumed by § 40-12-4. The County parties argue that § 40-12-4 is a general law authorizing counties to levy sales and use taxes for the support of all county public-school systems but that it is not the exclusive authority for such taxes. The County parties contend that § 40-12-4(a) states that the taxes authorized therein "shall be in addition to any and all other county taxes heretofore or hereafter authorized by law in such county." The County parties argue that that language does not reflect an exclusive authorization, but requires the County to terminate the levy of the 2004 education-sales tax upon initial levy of the new sales and use taxes, and does not prohibit the County from levying taxes under § 40-12-4 in the future. Second, the County parties argue, this Court has held that "local legislation reflecting responses to local needs may be enacted. It is only when those local needs already have been responded to by general legislation that § 105 of our state Constitution prohibits special treatment by local 47 1150326; 1150327 law." Peddycoart, 354 So. 2d at 815. Moreover, the County parties state, a court looks to the goal of a local law, and not its generic subject matter, when determining whether § 105 has been violated. Thus, where a local act "represents the Legislature's response to demonstrated local needs of Jefferson County which had not previously been addressed by the general law, [the Court will] find no constitutional infirmity in the Act." State Bd. of Health v. Greater Birmingham Ass'n of Home Builders, Inc., 384 So. 2d 1058, 1062 (Ala. 1980). In this case, the County parties argue, Act No. 2015-226 provides for the levy of sales and use taxes to support educational and noneducational purposes. Section 40-12-4 does not authorize a county to levy sales and use taxes for general-fund purposes or any of the other noneducational purposes provided for in Act No. 2015-226. Therefore, they argue, Act No. 2015-226 is not subsumed by § 40-12-4. Furthermore, the County parties state, the legislature made findings in §§ 2(c) and (d) of Act No. 2015-226 describing the demonstrated local needs of Jefferson County, which clearly cannot be addressed by a tax levied under § 40-12-4 because, they argue, § 40-12-4 provides no authority for the County to levy taxes for noneducational purposes. If the taxpayers believed those findings were 48 1150326; 1150327 erroneous, the County parties argue, they could have presented evidence to the contrary in the trial court, but they did not. The County parties argue that Act No. 2015-226 does not violate § 105 because it represents the legislature's response to demonstrated local needs of Jefferson County that are not provided for by general law. We agree with the County parties that Act No. 2015-226 is not subsumed by § 40-12-4 and that it does not violate § 105. Although the taxpayers argue that the County parties did not demonstrate local need, the County parties pointed out that Act No. 2015-226 was supported by legislative findings of special local needs, both educational and noneducational, which cannot be addressed by § 40-12-4, findings that were made before Act No. 2015-226 was enacted. We further decline to overrule either Miller or the demonstrated-local-needs line of cases. B. Section 104, Ala. Const. of 1901 Section 104 states, in pertinent part: "The legislature shall not pass a special, private, or local law in any of the following cases: ".... "(15) Regulating either the assessment or collection of taxes, except in connection with the readjustment, renewal, or extension of existing municipal indebtedness created prior to the 49 1150326; 1150327 ratification of the Constitution of eighteen hundred and seventy-five; ".... "(17) Authorizing any county, city, town, village, district, or other political subdivision of a county, to issue bonds or other securities unless the issuance of said bonds or other securities shall have been authorized before the enactment of such local or special law, by a vote of the duly qualified electors of such county, township, city, town, village, district, or other political subdivision of a county, at an election held for such purpose, in the manner that may be prescribed by law; provided, the legislature may, without such election, pass special laws to refund bonds issued before the date of the ratification of this Constitution; ".... "(19) Creating, extending, or impairing any lien ...." The taxpayers contend that Act No. 2015-226 is void under §§ 104(15), (17), and (19) because, they argue, it is a local act touching upon subjects forbidden by those provisions. The taxpayers first argue that Act No. 2015-266 violates § 104(15). They state that § 4(e) of Act No. 2015-226 provides that if either or both of the State sales-tax statutes or State use-tax statutes are repealed, Jefferson County is nonetheless authorized to continue to levy, administer, collect, and enforce the sales and use taxes authorized by Act No. 2015-226. The taxpayers argue the 50 1150326; 1150327 sections of Act No. 2015-226 regulating "collection" violate the prohibition in § 104(15) against a local law "regulating either the assessment or collection of taxes." The taxpayers contend that this Court has recognized that the purpose of § 104(15) is to provide uniform laws for the assessment and collection of taxes. The taxpayers contend that the sales tax authorized to be levied under Act No. 2015-226 is like the type of privilege taxes in § 40-12-4 that are both assessed and collected. The taxpayers argue that the County parties' argument that § 104(15) does not apply to the levy, assessment, and collection of the sales tax involved in this case completely disregards the language of § 40-12-4 stating that sales taxes are both assessed and collected just like property taxes. In this case, the taxpayers contend, the "manifest injustice" of not assessing property taxes in a single property-tax bill is equally applicable to "point of sale" retail sales taxes where a different set of local-law collection regulations for sales taxes would be unworkable. The taxpayers maintain that local laws creating a non-uniform assessment and collection system for a portion of the sales tax are the type of taxes that violate the requirement in § 104(15) for uniform general law. 51 1150326; 1150327 The taxpayers next argue that Act No. 2015-266 violates § 104(17). They argue that Act No. 2015-226 is a local law that purports to empower Jefferson County to issue new refunding warrants, which were subsequently authorized in the principal amount of $595 million, even though there has been no County election regarding the matter. Warrants, the taxpayers say, are a form of indebtedness covered by § 104(17). As this Court stated in Newton v. City of Tuscaloosa, 251 Ala. 209, 216, 36 So. 2d 487, 492 (1948): "The term 'bonds or other securities' [in § 104(17)] of course comprehends warrants, too, and the intention is plain that the purpose of this constitutional proscription was to inhibit such local legislation as is intended by the act now under consideration without the matter first being authorized by a majority vote of the duly qualified electors of the county." Because there was no election regarding the issuance of new warrants before the enactment of Act No. 2015-226, the taxpayers argue, it violates § 104(17). The taxpayers also argue that the purpose of § 104(17) is to prohibit local-law statutes authorizing refunding warrants because, they say, the general law in § 11-28-4, Ala. Code 1975, subsumes the field. The taxpayers contend that Act No. 2015-226 provides that there can be no tax levy without a prior or simultaneous issuance of refunding warrants to 52 1150326; 1150327 refinance the existing warrants, but, they say, a local-law authorization to issue debt is prohibited by § 104(17). If Jefferson County were relying on general law as its sole authority to issue the refunding warrants, the taxpayers say, no detailed language would be necessary defining, discussing the terms and conditions of, and mandating how proceeds of refunding warrants would be used to defease the existing warrants. Finally, the taxpayers argue that Act No. 2015-266 violates § 104(19). They argue that Act No. 2015-226 imposes a lien in connection with the authorized taxes. Section 7 of Act No. 2015-226 states that all taxes, interest, and penalties "shall constitute and be secured by a lien upon the property of any person from whom the tax or taxes are due or that is required to collect the tax or taxes." The taxpayers argue that Act No. 2015-226 is a "plain English violation" of § 104(19), which prohibits a local law "creating, extending or impairing any lien." Under § 104(19), the creation of a lien must be a general law, and, the taxpayers argue, it is impossible to say the language "creating a lien" is not violated by the clear language of Act No. 2015-226. The County parties argue that Act No. 2015-226 does not violate any provisions of § 104. They first contend that § 53 1150326; 1150327 104(15) bars local laws that impose property taxes, but that Act No. 2015-226 authorizes sales and use/privilege taxes. The County parties maintain that, although on its face § 104(15) might appear to broadly cover all local taxation, this Court has long held that § 104(15) relates only to property taxes, not to privilege taxes like the sales and use taxes authorized in Act No. 2015-226. See Bedingfield v. Jefferson Cty., 527 So. 2d 1270, 1274 (Ala. 1988). The County parties next contend that, although § 104(17) prohibits local laws "[a]uthorizing any county, city, town, village, district, or other political subdivision of a county, to issue bonds or other securities," Act No. 2015-226 does not authorize the County to issue any debt. Instead, the County parties argue, Act No. 2015-226 authorizes the County, upon compliance with certain conditions, to levy the sales and use taxes and to pledge the proceeds thereof as security for obligations issued under other provisions of Alabama law to refinance the outstanding school warrants. Finally, the County parties argue that § 104(19) bars local laws that establish non-tax liens. The County parties state that Act No. 2015-226 authorizes only a tax lien. The County parties argue, however, that numerous local acts have authorized counties to levy sales and use taxes that expressly 54 1150326; 1150327 provide for a lien to secure the collection of such taxes because this Court has held that § 104 does not prohibit the legislature from making local sales and use tax laws complete by providing for the collection of such taxes in the local law, and because a lien to secure the collection of county sales and use taxes is either authorized by or created under general law by §§ 11-3-11.2 and -11.3, Ala. Code 1975. The County parties argue that § 104 does not prohibit the levy or authorization to levy sales and use taxes by local act, nor does it prohibit the legislature from including provisions for the collection of such taxes. If a local act is to levy a tax, the County parties argue, the governmental entity must be able to collect the tax, or the purpose of the act is frustrated. The County parties contend that this Court has long held that "[e]ach section of the Constitution must necessarily be considered in pari materia with all other sections." Jefferson Cty. v. Braswell, 407 So. 2d 115, 119 (Ala. 1981). The County parties maintain that this Court's holding in Standard Oil Co. v. Limestone County, 220 Ala. 231, 124 So. 523 (1929), that the legislature has essentially unabridged power to provide for local levy of privilege taxes, clearly indicates that § 104 was not intended to hinder the 55 1150326; 1150327 legislature's authority to provide for the levy and collection of privilege taxes by local law. Moreover, the County parties argue, the legislature has provided by general law broad powers to counties with regard to the administration and collection of sales and use taxes, powers that clearly include the authority to impose tax liens to enforce the collection of taxes levied. Ignoring those provisions of general law, the County parties argue, would retroactively invalidate numerous local acts. Section 11-3-11.2(b) provides: "Any county commission which elects to administer and collect, or contract for the collection of, any local sales and use taxes or other local taxes, shall have the same rights, remedies, power and authority, including the right to adopt and implement the same procedures, as would be available to the Department of Revenue if the tax or taxes were being administered, enforced, and collected by the Department of Revenue." In describing these powers and limitations, the County parties argue, § 11-3-11.3(a) provides: "Any county ... tax levy administered and collected by the Department of Revenue ... shall parallel the corresponding state tax levy, except for the rate of tax, and shall be subject to all ... regulations ... as applicable to the corresponding state tax, except where otherwise provided in this section, including provisions for the enforcement and collection of taxes." 56 1150326; 1150327 By the express terms of § 11-3-11.3(a), the County parties argue, the provisions for the enforcement and collection of the State sales and use taxes must be incorporated into the county tax levy in order for the Department of Revenue to be authorized to administer and collect the taxes. Because, they say, § 11-3-11.2(b) provides that the County "shall" have the same authority with regard to enforcement and collection as would the Department of Revenue, the provisions for the enforcement and collection of the State sales and use taxes must be incorporated into Act No. 2015-226. Those requirements, the County parties argue, are part of the general laws of the State. Sections 40-1-2 and 40-29-20, Ala. Code 1975, provide that there shall be a lien to secure the payment of certain State taxes on all property of a person liable for such taxes. Under § 11-3-11.3(a), given that such a lien provision is applicable to the enforcement and collection of State sales and use taxes, such a provision must also apply to the levy of a local tax if the tax is to be eligible for collection by the Department of Revenue. For a county commission or any other administrator of the local tax to have the same powers as the Department of Revenue, it follows that a parallel provision establishing a lien must be incorporated into the levy of the 57 1150326; 1150327 tax, regardless of who administers it. Therefore, the County parties conclude, the provision in Act No. 2015-226 providing for the establishment of a lien is either declarative of general law applicable to the County or is required by general law to be expressly incorporated into the Act. In either case, the County parties conclude, Act No. 2015-226 does not violate § 104(19). After reviewing the various detailed provisions of Act No. 2015-226, we see no merit to the taxpayers' arguments that any of the provisions of § 104 render Act No. 2015-226 unconstitutional. C. §§ 45-37-162.02 and .03, Ala. Code 1975 (Local Laws, Jefferson County) The taxpayers argue that Act No. 2015-226 and the County's implementing resolutions violate §§ 45-37-162.02 and .03, Ala. Code 1975 (Local Laws, Jefferson County), which require that before the County issues new debt, it must provide notice concerning the terms of the debt and hold a public hearing. The taxpayers state that the County parties' answer to this argument is that, because the County has not yet entered into any "binding agreement" to issue debt, the time for notice or a hearing has not yet come. The problem with the County parties' position, the taxpayers argue, is 58 1150326; 1150327 that a judgment in a validation proceeding under § 6-6-750 et seq., Ala. Code 1975, forecloses any right of a taxpayer to contest any aspect of the proposed indebtedness. The County parties indeed contend that they have not failed to hold the hearing provided for in § 45-37-162.03 because, they argue, no such hearing is required to be held at this time. The County parties state that the taxpayers fail to note that the hearing is required to be held 3 to 10 days before entering into a "binding agreement to issue debt." The term "binding agreement," the County parties state, clearly contemplates an agreement or contract with a purchaser to whom the debt will be issued. This concept, they state, includes contracts or agreements such as a warrant purchase agreement between the County and an underwriter, a loan agreement with a commercial bank buying the debt, or an implicit contract arising from a notice of sale distributed by the County to potential purchasers of debt at a public bid. The County parties state that Jefferson County has not entered into any such agreement; thus, they argue, this requirement has not been violated. The notice requirement in § 45-37-162.03 ties to the public hearing; therefore, the County parties argue, that statute has not been violated either. The County parties 59 1150326; 1150327 state that they are well aware of these requirements and will satisfy them at the appropriate time. We see no merit to the taxpayers' argument that the notice and hearing requirements in §§ 45-37-162.02 and .03 have any effect upon the constitutionality of Act No. 2015- 226. V. The Cross-Appeal The County parties filed a motion to dismiss the cross-appeal because, they argued, the class plaintiffs were not aggrieved by the judgment on which the taxpayers prevailed –- the trial court's denial of validation. Alcazar Shrine Temple v. Montgomery Cty. Sheriff's Dep't, 868 So. 2d 1093, 1094 (Ala. 2003) ("Only a party prejudiced or aggrieved by a judgment can appeal."). The County parties pointed out that, as appellees, the class plaintiffs could, in their appellate brief, argue that this Court should affirm the trial court's judgment for any reason without the necessity of filing a cross-appeal. In Municipal Workers Compensation Fund, Inc. v. Morgan Keegan & Co., 190 So. 3d 895, 908 (Ala. 2015), this Court stated: "'"[A]n appellee, though he files no cross-appeal or cross-petition, may offer in support of his judgment any argument that is supported by the record, whether it 60 1150326; 1150327 was ignored by the court below or flatly rejected. ..." "'....' "... Here, MAM and Morgan Keegan prevailed in the trial court and do not seek to have an 'alteration of the judgment to enlarge [their] rights.' [McMillan, Ltd. v. Warrior Drilling & Eng'g Co., 512 So. 2d 14, 25 (Ala. 1986)]. They simply argue for affirmance of the trial court's order on an alternative ground that was presented to the trial court but that was not relied upon by the trial court. Accordingly, MAM and Morgan Keegan were not required to file a cross-appeal in this case in order to challenge the denial of their motion to strike the Fund's evidentiary materials." (Quoting 9 J. Moore and B. Ward, Moore's Federal Practice ¶ 204.11[2] (2d ed. 1985).) We agree with the County parties that the cross-appeal is due to be dismissed. VI. Conclusion We conclude that by its express terms § 71.01(G) applies retroactively to this action. We further find no merit in the alternative grounds on which the taxpayers argue that Act No. 2015-226 is unconstitutional. We therefore reverse the trial court's judgment declaring Act No. 2015-226 unconstitutional on the basis that the proper quorum was not present pursuant to § 71.01(C) when the BIR underlying H.B. 573 was enacted. 1150326 -- REVERSED. 1150327 -- APPEAL DISMISSED. Stuart, Bolin, Main, and Wise, JJ., concur. Shaw, J., concurs in the result. 61

March 17, 2017

2254f722-37ed-464e-aeeb-db9e930f1556

State v. Southern Bell Telephone and Telegraph Co.

148 So. 2d 229

N/A

Alabama

Alabama Supreme Court

148 So. 2d 229 (1962) STATE of Alabama et al. v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY. 3 Div. 940. Supreme Court of Alabama. December 20, 1962. *230 MacDonald Gallion, Atty. Gen., J. Taylor Hardin, Asst. Atty. Gen., Maurice F. Bishop, Sp. Asst. Atty. Gen., J. Douglas Harris, Atty., Public Service Comm., J. M. Breckenridge, Birmingham, J. Howard McEniry, Bessemer, and Frank B. Parsons, Fairfield, for appellants. R. E. Steiner, III, Steiner, Crum & Baker, Montgomery, Jas. A. Simpson, Lange, Simpson, Robinson & Somerville, Birmingham, and Walter R. Byars, Gen. Atty., Birmingham, Jefferson Davis, Gen. Counsel of Southern Tel. Co. and Drury B. Thompson, Atlanta, Ga., for appellee. HARWOOD, Justice. We are here confronted with litigation that has dragged its way through the processes of the Alabama Public Service Commission, the Circuit Court of Montgomery County, and the Supreme Court of Alabama for over eight years. The interests of the rate payers, of the Southern Bell Telephone Company, and of the State of Alabama demand that this litigation be concluded. As observed by the trial court in its decree: "Thus for over six years since the Company filed its application for increased rates, this matter is still unsettled and in litigation. The public does not know what rates it has paid for telephone service over the past six years, nor indeed the price it is now paying. The utility does not know what earnings can be depended upon for the past six years on its operations in Alabama, during which time substantial expansion of its plant and facilities has been undertaken, nor does it yet know what return on its investment in Alabama might be expected from its present business or for its future plans." Section 52, Title 48, Code of Alabama 1940, pertaining to the fixing of rates of public utilities by the Public Service Commission provides: Adding some substance in a highly general way to the above provision, Section 319 of Title 48, Code of Alabama 1940, in determining the valuation of the property of a utility, the Commission "shall give due consideration to the history and development of the utility and its property, original cost, cost of reproduction, as a going concern, and other elements of value recognized by the laws of the land for rate-making purposes." As we interpret the above statutes, their effect is to have our Public Service Commission determine utility rates under the *231 theory of a fair rate of return based upon a fair and adequate rate base, as distinguished from the so-called "cost of capital" theory for determining the rate of return. The "cost of capital" theory treats capital charges as a cost of furnishing the public utility service and includes an allowance on debt capital plus any additional return considered necessary to attract investment to the enterprise. The fair rate of return is therefor the composite of an interest rate for debt capital, a figure arrived at without difficulty, and an earning rate for equity capital sufficient to create a fair rate of return when considered together with the cost of debt capital. See The Bell Telephone System Rate Cases, 37 V.L.R. 699. Under the rate base theory of determining a fair rate of return, the rate base is the valuation placed on the utility property. Prior to World War II most of the cases dealing with utility rates were concerned with methods of valuation. The "cost of capital" theory tended to shove this question into the background, though inherent in both theories was the problem of a proper debt-equity ratio in the capital structure of the company. As before stated, the cost of debt capital usually presents little difficulty, being historical, or at least within probable range of calculation if for the future. The cost of equity capital is the amount of earnings that should reasonably result from the funds represented by common stock. Unlike bonds, common stock does not contractually provide for the payment of a specific rate of return, and dividends may or may not be paid. This risk element naturally calls for a higher contemplated rate of return by the investor on the equity capital (common stock). The less the amount of debt in the debt-capital structure, the larger the amount that must be allowed to insure a fair rate of return. The ideal capital structure would allow a debt-equity ratio in amounts that the company would get its full benefit in the amount of debt capital, and yet not have the debt component so high as to discourage prudent investors. This ideal capital structure is not static. However, many commissions and courts for rate making purposes, have concluded that a debt-equity ratio of 45% debt-55% equity most nearly approximates a proper debt-equity ratio. In Southern Bell Telephone and Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So. 2d 372, that court observed: In the order of the Commission now before us, the rate base has been determined, and the Commission has used a debt-equity ratio of 35-65, as contended for by the Company. In doing so the Commission departed from its findings and order of 1954 considered on the first appeal of this case (Alabama Public Service Commission v. Southern Bell Telephone & Telegraph Co., 253 Ala. 1, 42 So.2d 655). The Commission in its first order in 1954, adopted, among other factors, a debt-equity ratio of 45-55, and a "net investment rate base." In its orders now under review, the Commission in addition to changing the debt-equity ratio component from 45-55 to 35-65, adopted a "reasonable value rate base," the latter base concededly being more favorable to the Company than the former "net investment rate base." As before stated, the rate base as determined by the Commission was confirmed by the lower court, and is not an issue in this appeal except in the aspect as to return on equity capital. We adverted to this matter in order to dispel any conclusion that this court has by its opinion in the first appeal in this case (253 Ala. 1, 42 So.2d 655), laid down as a mathematical requirement that the debt-ratio of 35-65 must under all circumstances be adhered to. While the question of debt-equity ratio is one for management, its impact substantially affects the manner and cost of obtaining capital, and is therefore an important factor in the rate of return. The fixing of a fair rate of return is exclusively within the jurisdiction of the legislature, or its agency, the Public Service Commission. This court's province is only to determine whether the rate of return fixed by the Commission is within the statutory requirement of being fair to the Company. As aptly stated by the Supreme Court of Massachusetts in New England Telephone & Telegraph Co. v. Dept. of Public Utilities, 331 Mass. 604, 121 N.E.2d 896, 6 P.U.R.3d 65 (1954): We have examined the 80 odd citations of cases and commission order set forth in an appendix to the Company's brief showing rates of return on equity capital. In all but two instances where the debt-equity ratio was commented upon, the courts and commissions used a debt-ratio in excess of the "historical debt-equity ratio" of 1/3-2/3 which the Company contends is now its right. We have written to this element of capitalization in determining the base rate since it will of necessity be influential in our considerations as to whether the order of the Alabama Public Service Commission now under review affords a fair rate of return, or its corollary whether the rate of return is confiscatory. The base rate fixed by the Public Service Commission in its order of December 8, 1959, which is now being reviewed, the Commission fixed the reasonable value base rate as follows: In the order of the Commission of 21 April 1954, the rate base was determined, among other factors on "net investment," and a debt-equity ratio of 45-55%. In its decision of 24 July 1958 (Alabama Public Service Commission and State of Alabama v. Southern Bell Telephone and Telegraph Company, 268 Ala. 312, 106 So. 2d 163) this court had before it an order of the Public Service Commission dated 21 April 1954, wherein the Commission denied the Company's petition for an increase in rates. The Company had taken an appeal to the Circuit Court of Montgomery County, and that court had entered an order substantially agreeing with the Company's position. In that appeal this court concluded that both the Commission and the Circuit Court of Montgomery County had erred in fixing the rate of return, in that the Commission had erred in excluding the cost of reproduction as one of the essential factors in arriving at the rate base, and the Circuit Court had erred in holding, in effect, that the cost of reproduction less depreciation was the controlling element in fixing the reasonable value of the Company's property. It was the view of this court that under the provisions of Sec. 52, supra, both the "net investment less depreciation" and the "cost of reproduction less depreciation" are factors that must be accorded consideration in determining the reasonable valuation of the Company's property. The court further observed that on remandment probably additional testimony would be taken concerning a fair rate of return on the "reasonable value" of the Company's property ascertained in accordance with the opinion of the court. The court further stated: This court also, as a guide to the Commission on remandment to it, excerpted the following from Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S. Ct. 281, 287, 88 L.Ed. 333: Upon remandment further hearings were held by the Commission, and upon such hearings the Commission entered its order of 8 December 1959. In this order the Commission revised several of the components of the formula by which it had determined the rate base in its order of 21 April 1954, all of such revisions being substantially in accord with the contentions of the Company. This was within the province of the Commission. Under the formula adopted in its order of 8 December 1959, the component of return on equity capital was arrived at by the Commission by giving consideration to the earnings price ratio of Moody's 24 public utilities as reflected in the testimony of Dr. Dorau, a witness for the Company, and by adding thereto 5% to cover cost of financing and market pressure. By this method the Commission allowed a return on equity capital as follows: The net result of such allowance for cost of equity capital, when considered with the other components of the rate base, was to provide for a rate of return. The Commission further determined that the fair rate of return on future operations would be 5.57%, the increase of .05% as to future return resulting from increased cost of debt capital. On appeal to the Circuit Court by the Company the findings and order of the Commission was affirmed in every respect except as to the item of "cost of equity *235 capital." As to this item, the order of the Circuit Court is as follows: It should be remembered that the decree of the Montgomery Circuit Court reaches us with no presumption of correctness in view of the fact that the appeal to that court was on the record established before the Alabama Public Service Commission and no additional evidence was adduced in the trial court. Code of Alabama 1940, Tit. 48, Sec. 82. Smith Transfer Co. v. Alabama Public Service Commission, 271 Ala. 177, 123 So. 2d 28. The lower court in its decree observed that the Commission found in its April 21, 1954 order that the "weight of the evidence" required 8.5% for equity capital and that the witnesses, including the Commission's witnesses, were unanimous that 8.5% for equity "is the lowest figure that the facts will support." With reference to the mere mathematical figure of 8.5%, the lower court was correct in its view, but from witnesses appearing before the Commission in 1954, and the factors which most certainly the Commission in its 1959 order took into consideration leads us to the conclusion that this mere *236 mathematical figure demands a closer scrutiny than was given it in the lower court's order. In the Commission's 1954 order the rate base was "net investment" and the debt-equity capitalization was based on a 45-55%. Then, too, at the 1954 hearing one of the expert witnesses (Hawkes) in using the figure 8.5% for equity capital, based his opinion upon the "net investment" and an assumption that the proper equity-debt ratio was to be 45-55%. The Alabama Public Service Commission in its 1959 order departed from the "net investment rate base" in deference to and in conformity with our decision in Alabama Public Service Commission v. Southern Bell Telephone and Telegraph Co., 268 Ala. 312, 106 So. 2d 163, and gave consideration to all of the factors and elements specified in Tit. 48, Sec. 319, Code of Alabama 1940, and adopted the "reasonable value rate base" which was concededly well above the "net investment rate base." Of necessity, and because of the many factors which vary with time, the cost of equity capital cannot properly be reduced to a valid mathematical certainty, nor should the fixing of the cost of equity capital be reduced to an exact mathematical certainty if such figure is to be combined with an established rate base, when such combination would bring about an unrealistic end result. The realistic end result sought is a fair rate of return. In the words of Dr. Herbert Dorau, a leading witness for the Company: It should be noted that despite this profession of difficulty this witness did give as his expert opinion that the Commission should have allowed a cost of equity capital of 8.5%. In arriving at this figure this witness accompanied his testimony by a prepared statement of some seventy-seven pages, mostly charts and computations. The elements going into formulation of his conclusion were: "Earnings-price ratio and dividend yields." "Record bull market." "Proportion of earnings paid out as dividends." "Difference between explicit and implicit dividend rates." "2½% for cost of financing and 7½% for market pressure." "Our political economy has `built in' pressures * * *." Under the lower court's decree the return on equity capital was treated as constant during the 1954-58 test periods here involved. If projected in the future such figure would result in a rate of return of 6.89%, a figure in excess of the rate of return now existing under the supersedeas bond. As to the relation of the cost of equity capital to a fair rate of return, Dr. Dorau testified that the cost of equity capital was not synonymous with a fair rate of return. He further testified that factors determining a fair rate of return, other than the cost of capital, could be given effect "by the application of informed economic judgment. Most of these factors are not susceptible of precise statistical measurement or reduction to mathematical formulae and some of them overlap." Dr. Dorau further testified that "the evaluation of the elements of fair rate of return is a function in which good judgment as well as arithmetic should be applied *237 to bring about an equitable economic result." From his charts, calculations and interpretations thereof, this witness stated that in his opinion a fair rate of return to the Company would be not less than 7.40% as of December 31, 1958, a 7.15% for the five year period. In his book "A Telephone Rate Case" we find E. D. Smith making the following observations: The above, we think, demonstrates the difficulties confronting the court in the determination of a rate case. The record in such a case is abundant with the testimony of experts who demonstrate their conclusions by varied formulae and computations. The ultimate question of a fair rate of return should not be a composite of the results mechanically reached by these formulae, with little regard given to the question sought to be determined, that is, the fair rate of return. After a study of the evidence, exhibits, and the briefs submitted in this appeal, it is our conclusion that the rate of return allowed by the Public Service Commission test periods 1954-58, which averages 5.52% is too low, and would not meet the statutory requirement of a fair rate of return, and it is further our conclusion that the rate of return resulting from the court's allowance of 8.5% for the equity component when used in conjunction with the capital structure adopted by the Commission and the lower court, and resulting in an average rate of return of 6.65% for the test period above mentioned, is too high. In the briefs filed in this cause our attention is called to the case of Southern Bell Telephone & Telegraph Co. v. Louisiana Public Service Commission, 239 La. 175, 118 So. 2d 372, wherein we find the following set forth: *238 "Since the testimony of Mr. Nolan was adduced, the Supreme Court of Mississippi, in the case of Southern Bell Telephone & Telegraph Co. v. Mississippi Public Service Commission, 113 So. 2d 622, has reduced the rate of return in Mississippi to the range of 4.96% to 5.08%. Accepting the former figure and reducing 6.19% to 4.96%, would reduce the foregoing mesne average from 6.36% to 6.21%." The Company contends that the figure of 6.87% is not a correct reflection of the rate of return in Alabama, as this figure represents the rate of return in effect under the supersedeas bond. We are in accord with this contention. We realize, of course, the rates of return in these other southern states have been arrived at by formulae which differ in components from those used by the Company in determining the rate base in Alabama. So far as we can tell, however, none of these different components would result unfavorably to the Company under the formulae used by the Alabama Public Service Commission. For instance the rate basis in several of the above mentioned states was determined with a debt equity ratio of 45-55, whereas the Alabama Commission allowed a debt equity ratio of 35-65. The most analogous case factually that we have found to the situation in Alabama is Re Diamond State Telephone Co., 21 P.U.R.3d 417. In the above case the rate base was determined by the fair value of the company's property, the components used being: The net value of the telephones in service (less depreciation), plus telephone plants under construction, plus property held for future telephone use, plus materials and supplies, plus the cash working capital allowance, at a debt equity ratio of 35.65%. The Delaware statute provided that the fair value of the utility was to be arrived at by determining the fair value of the property by every fact, matter, or thing which had any bearing on such value; that the Commission was to look to, among other things, the original cost of construction, particularly with reference to the amount expended in permanent improvements; the market value of bonds and stocks; the probable earning capacity under rates proposed by the Commission; the expenditures for obsolete equipment; historical development; reproduction costs; developmental and going concern value; and any other elements of value. The Delaware Commission determined cost of debt to be 4.3% and the cost of equity capital 7.2%, and the fair rate of return to be 6.19%. Furthermore, since the fair rate of return in Alabama is the answer we are seeking, it is logical that the above shown Alabama rate should be considered in any event. It is also to be noted that the Supreme Court in the case of Southern Bell Telephone & Telegraph Co. v. Mississippi Public Service Commission, 237 Miss. 157, 113 So. 2d 622, found that a return in the range of 4.96% to 5.08% on the reasonable value of the Company's intrastate property was not confiscatory, though such rate of return might appear to be low, as compared with the rates allowed in other states in which the Company operates. It is to be noted the range represented by the rate of return allowed in Mississippi is substantially below the average rate of return of 5.52% allowed for the test periods under the 1958 order of the Commission. Our statute, Section 52, supra, provides that the rates and charges for services rendered and required shall be reasonable and just to both the utility and the public, and that the uitlity shall be entitled to such just and reasonable rates as will enable it at all times to fully perform its duties to the public and will under efficient management earn a fair net return on the reasonable value of its property devoted to the public service. *239 Certainly as to the rate of return for the test periods, the Commission and the courts have had the advantage of historical figures and experience, whereas the rates which were allowed for the future of necessity had to be based on estimates of criteria furnished by the past. As stated in West Ohio Gas Co. v. Public Utilities Commission of Ohio, 294 U.S. 79, 55 S. Ct. 324, 79 L.Ed. 773: Obviously for the period between the date of the decree of the lower court and the time when this proceeding again reaches the Public Service Commission, the rates for the future set by the Public Service Commission will have a basis of factual experience rather than estimation. Upon consideration of all the evidence presented in the proceedings below, and the arguments contained in the respective briefs, it is our conclusion that a rate of return of not less than 6.20% would be a fair rate of return for the test period 1954-58, and that the cost of equity capital should be so adjusted that the end result would be a return of 6.20% on the property rate base as found in the proceedings below, and which is not now and here in controversy. Although the question of a fair rate of return to the Company from the date of the decree of the lower court to the date of this opinion is not before this court, the rates collected during this period have been collected under supersedeas. In an effort to bring to a close this protracted litigation, we will assume that during the period hereinabove mentioned that there has been no such change of conditions as to make the rate of return of 6.20% inappropriate for this period. However, we are fully aware that the matter of earnings from the date of the decree of the lower court is a matter which addresses itself to the Public Service Commission, and it is for that body to determine the rate of return beyond the date of the decree of the lower court. This opinion is not intended to prevent the Public Service Commission, at its own instance, or the utility to request a hearing under the applicable statutes regarding the rate of return for any period subsequent to the date of the test periods. Our only conclusion, with reference to this period of time, is that unless substantial changes have occurred that would affect either the rate payer or the utility, this litigation might be brought to a conclusion and that all matters affecting both the utility and the public be put at rest up to and including the date of this opinion. The decree below is due to be affirmed in part, reversed in part and remanded to the Alabama Public Service Commission for further proceedings in accordance with this opinion. In the meantime, the supersedeas order and the bonds made pursuant thereto, as required by law, shall continue in full force and effect until final disposition of this cause. Affirmed in part, reversed in part, and remanded to the Alabama Public Service Commission for proceeding in compliance with this opinion. LIVINGSTON, C. J., and SIMPSON and MERRILL, JJ., concur. [1] New England Telephone & Telegraph Co. v. Massachusetts Department of Public Utilities, 331 Mass. 604, 121 N.E.2d 896, 6 P.U.R.3d 65. [2] New England Telephone & Telegraph Co. v. State, 98 N.H. 211, 97 A.2d 213, 99 P.U.R.,N.S., 111. [3] Re New England Telephone & Telegraph Co., 116 Vt. 480, 80 A.2d 671, 90 P.U.R., N.S., 414. [4] Chesapeake & Potomac Telephone Co. of Baltimore City v. Public Service Commission, 201 Md. 170, 93 A.2d 249, 97 P.U.R.,N.S., 50. [5] Southern Bell Telephone & Telegraph Co. v. Mississippi Public Service Commission, supra. [6] State Corporation Commission v. Mountain States Telephone & Telegraph Co., 58 N.M. 260, 270 P.2d 685, 4 P.U.R.3d 33. [7] Petition of Mountain States Telephone & Telegraph Co., 76 Idaho 474, 284 P.2d 681, 8 P.U.R.3d 265. [8] Riverton Consolidated Water Co. v. Pennsylvania Public Utility Commission, 186 Pa.Super. 1, 140 A.2d 114, 24 P.U.R. 3d 9. [9] Re Southern Bell Tel. & Teleg. Co., 100 P.U.R.,N.S., 33. [10] Re Southern New England Telephone Company, 20 P.U.R.3d 34. [11] Northwestern Bell Telephone Company, 20 P.U.R.3d 385. [12] Re Mountain States Telephone & Telegraph Company, 2 P.U.R.3d 75. [13] Re Southwestern Bell Telephone Company, 2 P.U.R.3d 265. [14] Re Northwestern Bell Telephone Company, 97 P.U.R.,N.S., 394. [15] Re Illinois Bell Telephone Company, 7 P.U.R.3d 493. [16] Re Southern Bell Telephone & Telegraph Co., 4 P.U.R.3d 195. [17] Chesapeake & Potomac Telephone Co., 6 P.U.R.3d 222.

December 20, 1962

41a831e6-5bd7-431a-8b22-080c9d9b6add

Ex parte Allstate Property and Casualty Insurance Company.

N/A

1150269

Alabama

Alabama Supreme Court

REL:05/05/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 _________________________ 1150269 _________________________ Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Elizabeth Rebecca Zajic v. Kimberly D. Payne and Allstate Property and Casualty Insurance Company) (Madison Circuit Court, CV-12-901575) ________________________ 1150511 Ex parte Allstate Property and Casualty Insurance Company PETITION FOR WRIT OF MANDAMUS (In re: Danielle Carter v. Alvin Lee Walker and Allstate Property and Casualty Insurance Company) (Macon Circuit Court, CV-13-900170) 1151266 Ex parte GEICO Indemnity Company PETITION FOR WRIT OF MANDAMUS (In re: Rasheena Harris-Williams v. Frederick Chamberlin IV and GEICO Indemnity Company) (Jefferson Circuit Court, CV-15-900013) SHAW, Justice. In these three matters, Allstate Property and Casualty Insurance Company ("Allstate") and GEICO Indemnity Company ("GEICO") separately petition this Court for a writ of mandamus. The petitions seek writs directing the Madison, Macon, and Jefferson Circuit Courts to vacate their respective orders purporting to allow separate parties who have 2 1150269, 1150511, 1151266 underinsured-motorist ("UIM") insurance with Allstate or GEICO to enter into, without the applicable insurer's consent, settlement agreements with an alleged underinsured tortfeasor. In case no. 1150269, we dismiss the petition as untimely filed. In case no. 1150511 and case no. 1151266, we grant the petitions and issue the writs. Facts and Procedural History Each of these matters resulted from separate automobile accidents between either an Allstate or a GEICO insured with UIM coverage and allegedly underinsured tortfeasors. In each case, it appears undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. Case No. 1150269 On November 1, 2012, Elizabeth Rebecca Zajic filed in the Madison Circuit Court a complaint against Kimberly D. Payne, alleging that the two had been involved in an automobile accident on November 1, 2010, in which Payne had acted 3 1150269, 1150511, 1151266 negligently and wantonly. Zajic also included a claim against her insurer, Allstate, seeking to recover UIM benefits. Thereafter, Payne's liability insurer offered to tender the entire $50,000 available under Payne's policy limits in exchange for a full release of Payne's liability. Pursuant to the procedure outlined by this Court in Lambert v. State Farm Mutual Automobile Insurance Co., 576 So. 2d 160, 167 (Ala. 1991), Zajic notified Allstate of the settlement offer and sought its consent to settle. Allstate, however, declined to consent; instead, as also permitted by Lambert, Allstate opted to advance the $50,000 to Zajic. Allstate then opted out of participation in further proceedings determining Payne's liability and Zajic's damages. Approximately 10 months after Allstate opted out, Payne filed a "Motion to Enforce Settlement and for Pro Tanto Dismissal of Defendant, Kimberly D. Payne." In her motion, Payne, citing Lambert, among other authorities, argued that "the only permissible reason for a UIM carrier to advance or front the tortfeasor's liability limits is to preserve subrogation." Payne, citing Pennsylvania National Mutual Casualty Insurance Co. v. Bradford, 164 So. 3d 537 (Ala. 4 1150269, 1150511, 1151266 2014), and Hardin v. Metlife Auto & Home Insurance Co., 982 So. 2d 522 (Ala. Civ. App. 2007), further argued that Allstate had, after advancing the money in Zajic's case, failed to file either a subrogation cross-claim or a separate action against Payne, and that the applicable statute of limitations had, by that time, expired on any such action. Thus, Payne contended: "As [Zajic] originally reached a settlement agreement with ... Payne, to accept her policy limits of $50,000.00 and to release and dismiss ... Payne from [the] case, and because the only delay was an alleged subrogation claim by ... [Allstate] which no longer exists as a matter of law, the original settlement agreement ... should not be prevented from proceeding forward." In response, Allstate argued, among other things, that, despite the expiration of the statute of limitations on direct actions it might have against Payne, under Bradford and pursuant to the terms of the policy, it retained certain reimbursement rights to any funds Zajic might obtain from Payne in excess of the liability policy. After a hearing and over Allstate's objection, the trial court, on October 20, 2015, granted Payne's motion. More specifically, the trial court directed that the parties "effectuate the settlement" and submit appropriate pleadings seeking to dismiss the claims against Payne. In response, 5 1150269, 1150511, 1151266 Allstate filed, on November 4, 2015, a motion requesting that the trial court "alter, amend, or vacate" its order. The trial court denied that motion by order entered the following day. Following the denial of its motion seeking relief from that order, Allstate filed the instant petition for a writ of mandamus on December 16, 2015. Case No. 1150511 As the result of an automobile accident that occurred in Tuskegee on August 5, 2013, Danielle Carter sued, in the Macon Circuit Court, the alleged tortfeasor, Alvin Lee Walker. Carter's complaint also included a count against Allstate, her UIM insurer, pursuant to which Carter, who alleged that Walker was underinsured, sought to recover UIM benefits under her own policy. Walker's liability insurer subsequently made a $25,000 policy-limits offer to settle Carter's claims against Walker. Carter notified Allstate of the settlement offer; Allstate refused to consent to the settlement and, pursuant to the Lambert guidelines, instead elected to advance Carter $25,000. In addition, on May 12, 2014, Allstate obtained leave from the trial court to opt out of further participation in the litigation. 6 1150269, 1150511, 1151266 Over one year later, in September 2015, Walker filed a motion seeking "enforcement" of the original settlement offer and his dismissal from the action. In his motion, Walker noted that, despite the fact that "the only permissible reason for a UIM carrier to 'front' liability limits is to preserve subrogation," Allstate had not filed either a cross-claim or a separate subrogation action against him; thus, according to Walker, because the statute of limitations applicable to any such claim against him had expired with no action by Allstate, the settlement offer was due to be "enforced." Citing Bradford, Allstate responded that, although the statute of limitations might foreclose the right of a UIM insurer to maintain a direct action against the tortfeasor for recovery of amounts paid to its insured, the insurer had other means to seek reimbursement if the UIM insured obtained amounts from the tortfeasor in excess of the liability policy. On January 7, 2016, the trial court ordered the parties to effectuate settlement of Carter's claims against Walker and dismissed Walker with prejudice. The trial court further noted: "The case will remain pending only against the underinsured motorist carrier, Allstate ...." Allstate 7 1150269, 1150511, 1151266 responded with the instant petition for a writ of mandamus, which was filed on February 17, 2016. Case No. 1151266 On October 22, 2013, Rasheena Harris-Williams was, while driving a vehicle insured under a policy issued by GEICO, injured as the result of an automobile accident in Birmingham. Harris-Williams filed, in the Jefferson Circuit Court, a complaint against the alleged tortfeasor, Frederick Chamberlin IV. The complaint did not name GEICO as a party. Thereafter, Harris-Williams placed GEICO on notice, in light of the amount of Chamberlin's policy limits, of her intent to also seek UIM benefits under the GEICO policy. Harris-Williams also notified GEICO that Chamberlin's insurer had extended a $25,000 policy-limits offer to settle her claims against Chamberlin in exchange for Chamberlin's dismissal and that bills related to her medical treatment already exceeded $20,000. Harris-Williams requested that GEICO consent to the settlement or advance funds in the amount of the settlement offer. GEICO declined to consent and, instead, remitted the requested amount, stating that it reserved its right of 8 1150269, 1150511, 1151266 subrogation and to pursue reimbursement of the advanced settlement. In May 2016, Harris-Williams amended her complaint to add GEICO as a named defendant and to formally assert a claim for UIM benefits. In June 2016, Chamberlin filed a motion seeking "enforcement" of the settlement offer to Harris-Williams and the dismissal of all claims against him. More specifically, Chamberlin argued, as in the above cases, that preservation of its subrogation rights was the only "permissible" reason for GEICO's decision and that, pursuant to Bradford and Hardin, supra, the two-year statute of limitations applicable to any subrogation claim against him had expired without action by GEICO. Thus, according to Chamberlin, "[t]he settlement agreement is due to be enforced in its entirety and upon payment of $25,000.00 by [his insurer], [he was] due to be released and dismissed from this case, with prejudice." The trial court, over GEICO's claim that Bradford and Hardin concerned only the filing of "new actions" and were, thus, inapposite, granted, on August 2, 2016, Chamberlin's motion in all respects and dismissed Chamberlin as a defendant. Following the denial of its motion requesting that the trial 9 1150269, 1150511, 1151266 court "reconsider" that decision, GEICO filed the instant petition for a writ of mandamus on September 13, 2016. This Court subsequently ordered answers and briefs in all three cases and, considering that the issues presented are identical, has consolidated them for the purpose of writing a single opinion. Standard of Review As discussed in more detail below, in Lowe v. Nationwide Insurance Co., 521 So. 2d 1309, 1310 (Ala. 1988), this Court "set out the rights of a UIM carrier when its insured is involved in litigation" as including the right to "'elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court).'" Ex parte Geico Cas. Co., 58 So. 3d 741, 743 (Ala. 2010) (quoting Lowe, 521 So. 2d at 1310). In the instant cases, by attempting to enforce settlement agreements between the insureds and the alleged underinsured tortfeasors and dismissing the tortfeasors from these actions, the trial courts have left the UIM carriers as the sole defendants, regardless of their desire to opt out of participation at 10 1150269, 1150511, 1151266 trial. It is well settled that "[a] petition for a writ of mandamus is the appropriate means for challenging a trial court's refusal to grant a UIM carrier the right to opt out of litigation pursuant to Lowe." 58 So. 3d at 743. See also Ex parte Aetna Cas. & Sur. Co., 708 So. 2d 156 (Ala. 1998) (issuing a writ of mandamus directing the trial court to set aside an order compelling a UIM insurer to participate at trial). The standard for the issuance of the requested writs is also well settled: "'"Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala. 1995). The question of subject-matter jurisdiction is reviewable by a petition for a writ of mandamus. Ex parte Flint Constr. Co., 775 So. 2d 805 (Ala. 2000).' "Ex parte Liberty Nat'l Life Ins. Co., 888 So. 2d 478, 480 (Ala. 2003)." Ex parte Progressive Specialty Ins. Co., 31 So. 3d 661, 663 (Ala. 2009). 11 1150269, 1150511, 1151266 Discussion I. Timeliness Although not raised by any of the parties to these proceedings, this Court must first consider whether these petitions were timely filed. The Court of Civil Appeals in Ex parte Hoyt, 984 So. 2d 424, 425-26 (Ala. Civ. App. 2007), explained: "'The presumptively reasonable time within which to file a petition for a writ of mandamus is the time in which an appeal may be taken.'• Norman v. Norman, 984 So. 2d 427, 429 (Ala. Civ. App. 2007). In the present case, the petition was filed 68 days after the trial court had entered its order [challenged by the mandamus petition]. Accordingly, the petition was filed outside of the presumptively reasonable 42-day period. '[A] motion to [alter, amend, or vacate] [does] not work to extend that presumptively reasonable time within which the [petitioner] could have filed a petition for a writ of mandamus.' Norman, 984 So. 2d at 429; see also Ex parte Onyx Waste Servs., 979 So. 2d [833,] 834 [(Ala. Civ. App. 2007)]. '"[U]nlike a postjudgment motion following a final judgment, a motion to reconsider an interlocutory order does not toll the presumptively reasonable time period that a party has to petition an appellate court for a writ of mandamus."'• Norman, 984 So. 2d at 429 (quoting Ex parte Onyx Waste Servs., 979 So. 2d at 834). "'When a petition for a writ of mandamus has not been filed within a presumptively reasonable time, the petition "shall include a statement of circumstances constituting good cause for the appellate court to consider the petition, 12 1150269, 1150511, 1151266 notwithstanding that it was filed beyond the presumptively reasonable time." Rule 21(a)(3), Ala. R. App. P. "The filing of such a statement in support of an untimely petition for a writ of mandamus is mandatory." Ex parte Fiber Transp., L.L.C., 902 So. 2d 98, 100 (Ala. Civ. App. 2004) (citing Ex parte Pelham Tank Lines, Inc., 898 So. 2d 733, 736 (Ala. 2004), and Ex parte Troutman Sanders[, LLP], 866 So. 2d [547,] at 550 [(Ala. 2003)]).' "Ex parte Onyx Waste Servs., 979 So. 2d at 835. "The petitioner in this case did not include a 'statement of circumstances constituting good cause for the appellate court to consider the petition, notwithstanding that it was filed beyond the presumptively reasonable time.'• Rule 21(a)(3), Ala. R. App. P. 'Therefore, because the petition was not filed within a presumptively reasonable time and no statement constituting good cause for this court to consider the petition was filed, we must dismiss the petition.'• Ex parte Onyx Waste Servs., 979 So. 2d at 835." 984 So. 2d 424-25. See Ex parte Troutman Sanders, LLP, 866 So. 2d 547, 549-50 (Ala. 2003) (noting that the effect of a Rule 59(e), Ala. R. Civ. P., motion in tolling the time to file an appeal is applicable to final judgments and holding that a motion to reconsider a nonfinal, interlocutory order does not toll the time for filing a petition for a writ of mandamus seeking review of such order). 13 1150269, 1150511, 1151266 In case no. 1150269, as in Hoyt, Allstate filed its petition more than 42 days after the trial court had entered the order purporting to grant Payne's motion seeking to "enforce" the settlement agreement. In fact, Allstate's petition was filed on the 57th day following entry of that order. As was true in Hoyt, Allstate's motion to alter, amend, or vacate that interlocutory order did not toll the time for filing a petition for writ of mandamus in this Court. In addition, the petition does not include, as contemplated by Rule 21(a)(3), Ala. R. App. P., a statement explaining Allstate's failure to file the petition within the 42-day period contemplated by that rule. In consideration of those circumstances, the petition was not filed within the presumptively reasonable time; therefore, it is due to be dismissed. See Hoyt, supra; Troutman Sanders, 866 So. 2d at 549. In case no. 1150511 and case no. 1151266, both petitions were timely filed within 42 days of the trial court's orders 14 1150269, 1150511, 1151266 purporting to enforce the settlement agreements.1 Those matters are, thus, properly before this Court. II. Case No. 1150511 and Case No. 1151266 In Lowe, the Court considered the following question of first impression: "Whether an insured may file a claim for underinsured motorist coverage against his or her own insurer in the same lawsuit with the insured's claim against the alleged underinsured motorist ...." 521 So. 2d at 1309. We noted: "Three separate, underlying considerations are essential to our disposition of this first-impression case: 1) that of protecting the right of the insurer to know of, and participate in, the suit; 2) that of protecting the right of the insured to litigate all aspects of his claim in a single suit ...; and 3) that of protecting the liability phase of the trial from the introduction of extraneous and corrupting influences, namely, evidence of insurance ...." Id. This Court ultimately held that all the foregoing concerns were accommodated by the following procedure: "A plaintiff is allowed either to join as a party defendant his own liability insurer in a suit against the underinsured motorist or merely to give it notice of the filing of the action against the 1As noted above, GEICO filed a motion to reconsider, but nevertheless filed its petition within 42 days of the trial court's order purporting to grant the motion to enforce the settlement. 15 1150269, 1150511, 1151266 motorist and of the possibility of a claim under the underinsured motorist coverage at the conclusion of the trial. If the insurer is named as a party, it would have the right, within a reasonable time after service of process, to elect either to participate in the trial (in which case its identity and the reason for its being involved are proper information for the jury), or not to participate in the trial (in which case no mention of it or its potential involvement is permitted by the trial court). Under either election, the insurer would be bound by the factfinder's decisions on the issues of liability and damages. If the insurer is not joined but merely is given notice of the filing of the action, it can decide either to intervene or to stay out of the case." 521 So. 2d at 1310. Subsequently, in Lambert, the Court considered "the right of an insured to settle with a tort-feasor, and to give the tort-feasor a complete release without getting the consent of the insured's carrier of underinsured motorist coverage to the settlement." 576 So. 2d at 161. Noting "the 'twilight zone' that [an insured] is placed in when the underinsured motorist insurance carrier does not want to give its consent to settle, or wants to protect its subrogation rights," Lambert "attempt[ed] to provide a road map for everyone concerned to follow." 576 So. 2d at 165. That "road map" included the following "general rules": 16 1150269, 1150511, 1151266 "(1) The insured, or the insured's counsel, should give notice to the underinsured motorist insurance carrier of the claim under the policy for underinsurance benefits as soon as it appears that the insured's damages may exceed the tortfeasor's limits of liability coverage. "(2) If the tort-feasor's liability insurance carrier and the insured enter into negotiations that ultimately lead to a proposed compromise or settlement of the insured's claim against the tort-feasor, and if the settlement would release the tort-feasor from all liability, then the insured, before agreeing to the settlement, should immediately notify the underinsured motorist insurance carrier of the proposed settlement and the terms of any proposed release. "(3) At the time the insured informs the underinsured motorist insurance carrier of the tort-feasor's intent to settle, the insured should also inform the carrier as to whether the insured will seek underinsured motorist benefits in addition to the benefits payable under the settlement proposal, so that the carrier can determine whether it will refuse to consent to the settlement, will waive its right of subrogation against the tort-feasor, or will deny any obligation to pay underinsured motorist benefits. If the insured gives the underinsured motorist insurance carrier notice of the claim for underinsured motorist benefits, as may be provided for in the policy, the carrier should immediately begin investigating the claim, should conclude such investigation within a reasonable time, and should notify its insured of the action it proposes with regard to the claim for underinsured motorist benefits. "(4) The insured should not settle with the tort-feasor without first allowing the underinsured motorist insurance carrier a reasonable time within 17 1150269, 1150511, 1151266 which to investigate the insured's claim and to notify its insured of its proposed action. "(5) If the uninsured motorist insurance carrier refuses to consent to a settlement by its insured with the tort-feasor, or if the carrier denies the claim of its insured without a good faith investigation into its merits, or if the carrier does not conduct its investigation in a reasonable time, the carrier would, by any of those actions, waive any right to subrogation against the tort-feasor or the tort-feasor's insurer. "(6) If the underinsured motorist insurance carrier wants to protect its subrogation rights, it must, within a reasonable time, and, in any event before the tort-feasor is released by the carrier's insured, advance to its insured an amount equal to the tort-feasor's settlement offer." 576 So. 2d at 167. Finally, Lambert explained that the foregoing "guidelines should be applied with the understanding that the purpose of consent-to-settle clauses in the uninsured/underinsured motorist insurance context is to protect the underinsured motorist insurance carrier's subrogation rights against the tort-feasor, as well as to protect the carrier against the possibility of collusion between its insured and the tortfeasor's liability insurer at the carrier's expense." Id. In these two remaining petitions, Allstate and GEICO (hereinafter collectively referred to as "the insurers") contend that they are entitled to mandamus relief on the 18 1150269, 1150511, 1151266 ground that they, in all respects, complied with the procedural requirements established by this Court in Lowe and in Lambert, supra, and that they, therefore, possessed a clear legal right to have their liability to pay UIM benefits, if any, determined by a jury whose verdict would not be influenced by evidence of insurance coverage. According to the insurers, the trial courts' actions in ordering the subject settlements to be enforced over their objections, and the tortfeasors to be dismissed, thus leaving the insurers as the only remaining defendants, deprived them of that right. The respondents counter that, contrary to the insurers' claims, the trial courts' actions did not deprive the insurers of any legal right because, at the time the settlements were enforced, the insurers' subrogation claims against the tortfeasors had been extinguished by the expiration of the applicable limitations period –- a claim that, at least according to Walker, is "the practical and logical result of this Court's decision in Bradford." (Case no. 1150511, Walker's answer, at p. 8.) We disagree. It is undisputed that, at all times pertinent hereto, the insurers complied, to the very "letter of the law," with the 19 1150269, 1150511, 1151266 Court's dictates in Lowe and Lambert, as set out above. Specifically, Allstate and GEICO, after receiving notice of a settlement offer but declining to consent, which right was secured by the respective contracts between the insurers and their insureds, properly advanced an amount equal to the tortfeasor's respective settlement offer. Further, Allstate ultimately exercised the available option of opting out of further participation in the litigation2 in order to prevent mention of "its potential involvement." Despite that compliance, the actions of the trial courts in attempting to order that the settlements be effected and the tortfeasors dismissed have essentially nullified the insurers' legal right both to withhold consent to settlement and to opt out of further proceedings. In essence, despite the insurers' payment of the funds necessary to enjoin the insureds' consummation of the tortfeasors' offered settlements, the insurers were, nonetheless, ultimately forced to accept the exact settlement to which they had previously declined to consent. Further, as a result of the trial courts' attempted 2There appears to be no suggestion that, in any of the three cases, the consent of the respective insurer was unreasonably withheld or that Allstate did not "opt out" within a reasonable time. 20 1150269, 1150511, 1151266 dismissal of the tortfeasors, the insurers –- each of which would be the sole remaining defendant in each case –- are being denied the right to opt out of further proceedings and to avoid mention of their involvement in the case. 3 The respondents argue that this circumstance resulted from the insurers' own inaction, namely, the failure of the insurers to timely file either cross-claims or separate subrogation actions against the tortfeasors. More specifically, citing Bradford and Hardin, it is contended that once the statute of limitations on a direct subrogation action by the insurers against the tortfeasors has expired, "[t]here would be no viable legal means by which the [insurers] could collect against the [tortfeasors]." (Case no. 1151266, 3GEICO was added as a defendant in May 2016, and Chamberlin's motion seeking "enforcement" of the settlement offer was made the next month. Thus, it does not appear that GEICO had yet had the opportunity to "opt out" of the proceedings within a reasonable time. See Ex parte Electric Ins. Co., 164 So. 3d 529, 531 (Ala. 2014) (holding that an insurer's decision to opt out, which was nearly two years after the complaint was filed and after participation in discovery, was made within a reasonable time), and Ex parte Edgar, 543 So. 2d 682, 685 (Ala. 1989) ("Logically, the insurer would not want to withdraw from the case too early, before it could determine, through the discovery process, whether it would be in its best interest to do so."). The trial court's order essentially denies GEICO the ability to do so, despite the fact that GEICO has complied with the procedures in Lowe and Lambert. 21 1150269, 1150511, 1151266 Chamberlin's answer, at p. 10.) As this Court recently explained in Bradford, however, "insurers need not file a direct action against the tortfeasor to protect their rights of reimbursement ... [but] may obtain reimbursement from the insured's recovery against the tortfeasor." 164 So. 3d at 540.4 Indeed, as Justice Murdock noted in his special concurrence in Bradford, having advanced the tortfeasor's policy limits to its insured, "[the insurer] is now the beneficial owner of 'the case' against [the tortfeasor]," and, as such, "has the right to control the prosecution of that case." 164 So. 3d at 541 (Murdock, J., concurring specially). Thus, it is of no consequence that the timing for filing a direct action by the insurers against the tortfeasors has expired. The respondents correctly point to Bradford, 164 So. 3d at 539, Hardin, 982 So. 2d at 526, and related authorities as establishing that the statute of limitations begins to run against a subrogated insurer at the same time it begins to run 4GEICO was not made a party in the action until after the applicable limitations period had expired. Additionally, in case no. 1150269, which we are dismissing as untimely filed, Zajic's complaint against Payne and Allstate was filed the day the statute of limitations expired, making it virtually impossible for Allstate to file a timely direct subrogation action against Payne. 22 1150269, 1150511, 1151266 against the insured. See also Home Ins. Co. v. Stuart-McCorkle, Inc., 291 Ala. 601, 607-08, 285 So. 2d 468, 472-73 (1973). However, that well settled principle is clearly applicable only insofar as it prevents an insurer from "fil[ing] some new claim in its own name against [the tortfeasor] after the statute of limitations has expired." Bradford, 164 So. 3d at 541 (Murdock, J., concurring specially) (emphasis added).5 As noted in Lambert: "This Court has held that the insurer's duty to defend is more extensive than its duty to pay. See Universal Underwriters Ins. Co. v. Youngblood, 549 So. 2d 76 (Ala. 1989); United States Fidelity & Guar. Co. v. Armstrong, 479 So. 2d 1164 (Ala. 1985); and Samply v. Integrity Ins. Co., 476 So. 2d 79 (Ala. 1985). Therefore, the liability insurer's duty to defend the tort-feasor could extend beyond that moment when the underinsured motorist insurance carrier elected to pay to its insured the amount offered by the tort-feasor's liability insurer." 576 So. 2d at 167-68. 5We are likewise unpersuaded by Chamberlin's claim that mere "'fronting' of the settlement money did not create a vehicle for actual subrogation recovery" but, instead, that "the additional step of a timely Crossclaim or a timely separate lawsuit is necessary." (Case no. 1151266, Chamberlin's answer, at p. 9.) Notably, Chamberlin includes no citation to authority in support of that contention, which appears to be directly contradicted by Bradford and the authority cited therein. 23 1150269, 1150511, 1151266 Because the insurers, in following the express directives of this Court, have been deprived of their contractual rights as well as the benefit of the procedures set forth in Lowe and Lambert, we conclude that they have demonstrated a clear legal right to the requested relief. We, therefore, in case no. 1150511 and case no. 1151266, direct the applicable circuit court to vacate its respective order purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. 1150269 -- PETITION DISMISSED. Stuart, C.J., and Bolin, Parker, Main, Wise, and Bryan, JJ., concur. Murdock, J., dissents. 1150511 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 1151266 -- PETITION GRANTED; WRIT ISSUED. Stuart, C.J., and Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. 24

May 5, 2017

f95af4a3-ea60-4e5f-b944-5df9e414bb43

Charles K. Breland et al. v. Equity Trust Company, as custodian f/b/o David E. Hudgens IRA #41458, et al.

N/A

1150876

Alabama

Alabama Supreme Court

Rel: 02/17/2017 Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229- 0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter. SUPREME COURT OF ALABAMA OCTOBER TERM, 2016-2017 ____________________ 1150302 ____________________ Equity Trust Company, as custodian f/b/o David E. Hudgens IRA #41458, et al. v. Charles K. Breland et al. ____________________ 1150876 ____________________ Charles K. Breland et al. v. Equity Trust Company, as custodian f/b/o David E. Hudgens IRA #41458, et al. Appeals from Mobile Circuit Court (CV-14-900631) 1150302, 1150876 BRYAN, Justice. Facts and Procedural History Charles K. Breland is a developer of real property who, through his ownership of multiple companies, has owned and developed real property in Alabama and Florida. In 2002, Breland hired David E. Hudgens to provide legal services for him and his companies. According to Hudgens, Breland informed him early during their professional relationship that he "was suffering significant cash flow problems." As a result, Hudgens says, the various law firms with which Hudgens worked while providing Breland and his companies with legal services delayed billing "a significant portion of the attorneys' fees and costs" for those services. Breland disputes that contention and claims that he and/or his companies paid Hudgens more than $2.7 million for Hudgens's legal services between 2004 and 2010. According to Hudgens, Hudgens & Associates, LLC ("H&A"), is "the holder of the rights to the attorney's fees" allegedly incurred by Breland and his companies over the course of Hudgens's representation of Breland. 2 1150302, 1150876 Hudgens also contends that in 2004 Breland informed him that Shores of Panama, Inc. ("Panama"), one of Breland's companies, had insufficient funds to begin a condominium project in Florida. As a result, Hudgens caused Equity Trust Company ("ETC"), as custodian for the benefit of Hudgens's individual retirement account #41457 ("IRA #41457") and individual retirement account #41458 ("IRA #41458"), to loan Panama $390,000 and $80,000 from those IRAs, respectively, so that Panama could begin the project. Breland guaranteed payment of those loans in separate promissory notes. On March 11, 2009, Breland filed a Chapter 11 bankruptcy petition ("the Breland bankruptcy") in the United States Bankruptcy Court for the Southern District of Alabama ("the bankruptcy court"). Breland subsequently filed the required schedules, required disclosure statement, and a proposed plan 1 2 of reorganization that identified H&A as an unsecured 3 creditor holding a $1 million claim and identified ETC as an unsecured creditor holding a $390,000 claim. On May 3, 2010, See 11 U.S.C. § 521. 1 See 11 U.S.C. § 1125. 2 See 11 U.S.C. § 1121. 3 3 1150302, 1150876 Hudgens filed a proof of claim in the Breland bankruptcy on behalf of H&A for "legal fees" in the amount of $2,334,987.08 and filed proofs of claim on behalf of ETC for "guaranty of note" in the amounts of $879,929.55 (as to IRA #41457) and $180,498.37 (as to IRA #41458). According to Hudgens, Breland telephoned him on May 4, 2010, and "berated [him] and complained vociferously about the H&A proof of claim, including claiming that it was fraudulent." Later that day, Breland informed Hudgens in writing that he was "shocked" that Hudgens had filed claims in the Breland bankruptcy alleging that Breland had "outstanding legal bills ... amounting to several million dollars" and asked Hudgens to provide him with itemized billing of those fees. On October 1, 2010, Breland amended his disclosure statement and proposed plan of reorganization to reflect that the H&A and ETC claims were disputed but that settlement negotiations were then ongoing. On December 6, 2010, Breland and Ohana Cabo, LLC ("Ohana Cabo"), a creditor in the Breland bankruptcy, filed with the bankruptcy court a proposed plan of reorganization ("the Plan"). The Plan provided that "each holder of an allowed unsecured claim" would be paid in full and identified ETC as 4 1150302, 1150876 custodian of IRA #41457 and of IRA #41458 as a "holder[] with agreed allowed amounts" of $879,929 and $180,498, respectively. The Plan also provided that "holders of unsecured claims" that were not identified as "holders with agreed allowed amounts," a group that included H&A, held claims that were disputed and that Breland was preserving his objection to those claims. However, it appears that, later that day, Breland and Hudgens reached a settlement of the H&A and ETC claims, the terms of which are set forth in a December 6, 2010, e-mail from Robert Galloway, Breland's attorney, to Hudgens: "David, this letter will confirm our settlement of your claims. We will allow your claims for your retirement plans in the full amount of $1,080,000. With regard to your fees, we have agreed to a claim of $1,500,000 to be evidenced by a note and mortgage on the Grand Bay property due [in] one year with 6% interest." (Emphasis added.) It is undisputed that the Grand Bay property, located entirely in Mobile County, consists of 6 distinct parcels of property comprising approximately 508 acres that, at that time, were owned by Breland. On December 8, 2010, the bankruptcy court held a hearing regarding confirmation of the Plan. At that hearing, the 5 1150302, 1150876 following colloquy occurred between Galloway and the bankruptcy court. "MR. GALLOWAY: Judge, I'm proud to announce that we have settled everything. ".... "MR. GALLOWAY: I might announce some of the things that were said today with Mr. Hudgens. "THE COURT: All right. "MR. GALLOWAY: We have reached a settlement of his attorney's fee claim. ".... "MR. GALLOWAY: We are going to give him a mortgage on the Grand Bay property. We'll put this in the order. ".... "MR. GALLOWAY: Of $1,500,000 which is the additional amount he has agreed to accept. "THE COURT: All right. "MR. GALLOWAY: Now when we -- he has his retirement plan claims too. "THE COURT: Yes, right. "MR. GALLOWAY: And we're going to work with him as to how we apportion the cash, but he will have a mortgage left for $1,500,000 -- he's going to get $1,080,000 cash. There's going to be a mortgage for a million-five; but some of that might be retirement plan and some of it attorney's fee, depending on how he wants that paid this year versus next year." 6 1150302, 1150876 In light of those agreements, on December 10, 2010, Breland and Ohana Cabo filed a proposed amended version of the Plan that added a new provision (hereinafter referred to as "Section 3.2.3"), which provided: "3.2.3 Hudgens & Associates LLC and Equity Trust Company fbo David E. Hudgens IRA Claims. [The ETC claim on behalf of IRA #41457] shall be paid $0.00. [The H&A claim and the ETC claim on behalf of IRA #41458] shall be Allowed in the cumulative amount of $2,580,000, of which $1,080,000 shall be paid on the Distribution Date .... The $1,500,000 balance, together with interest from the Confirmation Date at the rate of 6% per annum, shall be paid on or before December 31, 2011[,] in accordance with the terms ... of a promissory note and mortgage to be agreed upon by the parties. The Debtor shall execute and deliver said promissory note and mortgage to his attorney Robert M. Galloway immediately upon confirmation of the Plan. On the Distribution Date, Mr. Galloway shall record said mortgage in the real property records maintained in the Office of the Judge of Probate of Mobile County, Alabama, and shall deliver said promissory note to David E. Hudgens as agent for [H&A] and [ETC] as Custodian for the benefit of David E. Hudgens IRA [#]41458." (Emphasis added.) On December 10, 2010, the bankruptcy court entered an order confirming the Plan, as amended, and Breland subsequently made the initial $1.08 million payment as required by Section 3.2.3. However, on December 23, 2011, approximately one week before Breland was required to make the 7 1150302, 1150876 $1.5 million payment required by Section 3.2.3, John H. Adams, an attorney then representing Breland, sent Hudgens a letter indicating that Breland had potential claims against Hudgens "stemming from events that transpired while [Hudgens was acting as Breland's] counsel" and that the value of those claims would equal or exceed the $1.5 million due under Section 3.2.3. Included with that letter was a copy of a complaint asserting claims against Hudgens alleging breach of a fiduciary duty and fraudulent suppression that, Adams said, Breland was prepared to file if he and Hudgens could not reach a resolution of Breland's claims. Breland never made the $1.5 million payment required by Section 3.2.3, and, although Hudgens made, he says, "numerous requests" for Galloway to deliver the promissory note and to record the mortgage as required by Section 3.2.3, Galloway neither delivered a promissory note to Hudgens nor recorded a mortgage securing the H&A and ETC claims. As a result, and given his concern that Breland was "selling off a lot of property," Hudgens recorded the Plan, as amended, in the Mobile Probate Court on March 5, 2012. 8 1150302, 1150876 On November 20, 2012, Breland conveyed the Grand Bay property by quitclaim deed to Gulf Beach Investment Company of Perdido, LLC ("Gulf Beach"), a company owned by Breland. Hudgens says that he discovered that conveyance in April 2013, and, upon that discovery, Hudgens executed and filed in the Mobile Probate Court an affidavit ("the Hudgens affidavit") in which he stated that the Grand Bay property was the property Breland had agreed under Section 3.2.3 of the Plan, as amended, to mortgage but that, instead of performing his obligations, Breland had transferred the Grand Bay property to Gulf Beach. On March 6, 2014, H&A and ETC (hereinafter collectively referred to as "the plaintiffs") filed in the Mobile Circuit Court ("the trial court") a complaint against Breland and Gulf Beach in which they brought the following claims: (1) a claim seeking enforcement of the Plan, as amended, through a judgment ordering Breland to deliver the promissory note to Hudgens and to record a mortgage on the Grand Bay property for the plaintiffs' benefit; (2) a claim seeking enforcement of the Plan, as amended, through a judgment awarding the plaintiffs $1.5 million, plus interest; (3) a fraudulent- 9 1150302, 1150876 transfer claim seeking a judgment voiding the conveyance of the Grand Bay property to Gulf Beach; enjoining Breland from further conveyances of the Grand Bay property; awarding damages for the allegedly fraudulent transfer of the Grand Bay property; and imposing a constructive trust on the Grand Bay property for the plaintiffs' benefit; and (4) a claim seeking a judicial foreclosure of the Grand Bay property for the plaintiffs' benefit. On April 21, 2014, Hudgens filed in the Mobile Probate Court a notice of lis pendens as to the Grand Bay property as required by § 35-4-131(a), Ala. Code 1975.4 Section 35-4-131(a) provides, in pertinent part: 4 "When any civil action or proceeding shall be brought in any court to enforce any lien upon, right to or interest in, or to recover any land, or where an application has been made to the probate judge of any county for an order of condemnation of land, or any interest therein, the person, corporation, or governmental body commencing such action or proceeding or making such application shall file with the judge of probate of each county where the land or any part thereof is situated a notice containing the names of all of the parties to the action or proceeding, or the persons named as those having an interest in the land in the application for an order of condemnation, a description of the real estate and a brief statement of the nature of the lien, writ, application, or action sought to be enforced. ..." 10 1150302, 1150876 On April 28, 2014, Adams sent Hudgens a letter that stated, in pertinent part: "As you will note, the [Plan] expressly stated that ... Breland would provide you with a mortgage the terms of which were to be agreed upon by the parties. In [the Hudgens] affidavit you expressly state that the property in the Gulf Beach deed was the property to be mortgaged. The [P]lan does not describe any property to be mortgaged and there was no agreement whereby ... Breland agreed to pledge any specific property to secure this obligation. As such, by filing [the Hudgens] affidavit you have unilaterally encumbered ... all of the property owned by Gulf Beach ... and likely slandered title to the property. ".... "While this litigation is pending, you cannot continue to encumber [500] plus acres of property which was never intended to be encumbered and which has a value well in excess of your alleged claim of $1,500,000." On May 21, 2014, Breland and Gulf Beach filed an answer and a counterclaim against the plaintiffs and a third-party complaint against Hudgens in which they claimed that Breland had refused to make the $1.5 million payment required by Section 3.2.3 because, they said, the plaintiffs and Hudgens "knew that the ... proofs of claim [filed in the Breland bankruptcy] were false" and because, they said, Breland "had become aware of certain fraudulent activities conducted by 11 1150302, 1150876 Hudgens, H&A, and [ETC] and raised these events as set offs to any amounts remaining to be paid." Given those allegations and the filings of the Hudgens affidavit and the notice of lis pendens, Breland and Gulf Beach brought the following claims against the plaintiffs and Hudgens: (1) a fraud claim and a breach-of-contract claim seeking a judgment "cancelling all obligations of Breland that are set forth in the Plan" and awarding Breland $1.08 million in damages -- the amount Breland had previously paid in accordance with Section 3.2.3; (2) a slander-of-title claim; and (3) a quiet-title claim seeking a judgment quieting title to the Grand Bay property in favor of Gulf Beach. On September 8, 2014, the plaintiffs and Hudgens filed a motion for a partial summary judgment as to the plaintiffs' "enforcement" claims and as to Breland and Gulf Beach's fraud, breach-of-contract, and slander-of-title claims. That same day, Breland and Gulf Beach filed a "motion to cancel and modify notice of lis pendens and motion for partial summary judgment" in which they argued that, although Breland had agreed to give Hudgens a mortgage to secure the plaintiffs' claims in the Breland bankruptcy, he had never specified which 12 1150302, 1150876 property he would mortgage. As a result, Breland and Gulf Beach sought a judgment "quashing, cancelling and removing" the Hudgens affidavit; modifying the notice of lis pendens so that it encumbered only parcel 4 of the Grand Bay property, which, Breland and Gulf Beach contended, provided sufficient security for the plaintiffs' claims; and authorizing Gulf Beach to transfer the Grand Bay property, excluding parcel 4, to Grand Oaks Plantation, LLC ("Grand Oaks"), a company owned by Breland. Before the trial court issued any order, Gulf Beach on October 24, 2014, deeded parcels 1, 2, 3, and 6 of the Grand Bay property to Grand Oaks. The plaintiffs subsequently amended their complaint to add Grand Oaks as a defendant. (Breland, Gulf Beach, and Grand Oaks are hereinafter collectively referred to as "the defendants.") On December 17, 2014, before the plaintiffs filed their amended complaint, Breland and Gulf Beach filed a "motion for a determination of collateral under contract" in which they reiterated that Breland was challenging the $1.5 million obligation imposed on him by Section 3.2.3 of the Plan, as amended, but indicated that Breland was "willing to post sufficient security during the pendency of the litigation as 13 1150302, 1150876 contemplated under the Plan." Breland and Gulf Beach requested a hearing so they could present evidence of the value of the Grand Bay property, which, they said, would allow the trial court to modify the notice of lis pendens so that it encumbered only as much of the Grand Bay property as necessary to secure the plaintiffs' $1.5 million claim. The trial court held an evidentiary hearing regarding the value of the Grand Bay property and, on September 17, 2015, entered an order ("the September 2015 order") in which it found that Hudgens was not entitled to encumber the entirety of the Grand Bay property because the Plan, as amended, did not specify the property Breland was required to mortgage. The trial court also found that the Plan, as amended, reserved Breland's right to challenge the validity of the $1.5 million obligation imposed on him by Section 3.2.3 but that the defendants "agree that ... [the] Plan ... contemplated that Breland would provide some collateral until a determination was reached as to the validity of the [p]laintiffs' claim." Thus, the trial court, after hearing conflicting evidence of the value of the Grand Bay property, found that parcel 4 of the Grand Bay property "would alone provide sufficient 14 1150302, 1150876 collateral to secure the [p]laintiffs' claim." However, "in an abundance of caution," the trial court ordered that the notice of lis pendens "is hereby modified such that it encumbers only Parcel 1, Parcel 4, Parcel 5, and [part] of Parcel 6." The trial court authorized the defendants to "convey, transfer, sale, encumber, and pledge" that part of the Grand Bay property unencumbered by the September 2015 order and directed the plaintiffs not to further encumber the Grand Bay property. On October 23, 2015, the defendants filed a motion requesting that the trial court certify the September 2015 order as final pursuant to Rule 54(b), Ala. R. Civ. P. The trial court granted that motion, and on December 18, 2015, the plaintiffs and Hudgens appealed. That case was assigned case no. 1150302.5 On March 24, 2016, the trial court entered a judgment ("the March 2016 judgment") on the parties' motions for a partial summary judgment. In that judgment, the trial court On March 1, 2016, the plaintiffs, the defendants, and 5 Hudgens filed a "joint motion for consent order authorizing sale of real property free and clear of liens and encumbrances" in which they indicated that the plaintiffs and Hudgens agreed to the sale of that part of the Grand Bay property unencumbered by the September 2015 order, provided that the proceeds from the sale would be placed in escrow pending the outcome of this appeal. 15 1150302, 1150876 noted that it was not addressing the plaintiffs' "mortgage claim" because it had denied that claim in the September 2015 order. After setting forth extensive findings of fact and conclusions of law, the trial court awarded the plaintiffs $2,189,342.96 (consisting of $1.5 million in principal, plus interest); "denied and dismissed" the defendants' fraud, breach-of-contract, and slander-of-title claims; and certified the judgment as final pursuant to Rule 54(b). The trial 6 court denied the defendants' postjudgment motion, and the defendants appealed. That case was assigned case no. 1150876, and this Court consolidated case nos. 1150302 and 1150876 for the purpose of writing one opinion. We now dismiss both appeals. Discussion The trial court did not expressly reference Rule 54(b) 6 in the March 2016 judgment but did state "that there is no just reason for delay in entry of judgment in accordance with the terms hereof and judgment is expressly so entered as to all matters decided herein." Because the trial court quoted Rule 54(b), it is "'clear and obvious from the language used by the trial court ... that the court intended to enter a final order pursuant to Rule 54(b).'" Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007) (quoting Schneider Nat'l Carriers, Inc. v. Tinney, 776 So. 2d 753, 755 (Ala. 2000)). 16 1150302, 1150876 Before addressing the arguments raised by the parties' appeals, we must determine whether we have jurisdiction to do so because the plaintiffs' fraudulent-transfer and judicial- foreclosure claims and the defendants' quiet-title claim remain pending. "An appeal will ordinarily lie only from a 7 final judgment; that is, a judgment that conclusively determines the issues before the court and ascertains and declares the rights of the parties." Palughi v. Dow, 659 So. 2d 112, 113 (Ala. 1995). However, "'[w]ith respect to the finality of judgments adjudicating fewer than all claims in a case, Rule 54(b), Ala. R. Civ. P., provides: "'"When more than one claim for relief is presented in an action, ... or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment .... [I]n the absence Even if we assume that the judicial-foreclosure and 7 quiet-title claims have been implicitly adjudicated and/or abandoned as to that part of the Grand Bay property that was declared unencumbered in the September 2015 order, those claims might still be viable as to that part of the Grand Bay property that remained encumbered. 17 1150302, 1150876 of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." "'"If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment." Baugus v. City of Florence, 968 So. 2d 529, 531 (Ala. 2007) (emphasis added). However, this Court will not consider an appeal from a judgment certified as final under Rule 54(b) if it determines that the trial court exceeded its discretion in concluding that there is "no just reason for delay." Rule 54(b); see also Scrushy v. Tucker, 955 So. 2d 988, 996 (Ala. 2006) ("Whether there was 'no just reason for delay' is an inquiry committed to the sound discretion of the trial court, and, as to that issue, we must determine whether the trial court exceeded its discretion."). "'A trial court exceeds its discretion in determining that there is "no just reason for delay" when "the issues in the claim being certified and a claim that will remain pending in the trial court '"are so closely intertwined that separate adjudication would pose an unreasonable 18 1150302, 1150876 risk of inconsistent results."'" Schlarb v. Lee, 955 So. 2d 418, 419–20 (Ala. 2006) (quoting Clarke–Mobile Counties Gas Dist. v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002), quoting in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala. 1987)). See also Centennial Assocs., Ltd. v. Guthrie, 20 So. 3d 1277, 1281 (Ala. 2009) ("'It is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties.'" (quoting 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998))).' "Loachapoka Water Auth., Inc. v. Water Works Bd. of Auburn, 74 So. 3d 419, 422–23 (Ala. 2011)." Grant v. Breland Homes, LLC, 156 So. 3d 391, 395-96 (Ala. 2014) (second and third emphasis added). "This Court looks with some disfavor upon certifications under Rule 54(b). "'It bears repeating, here, that "'[c]ertifications under Rule 54(b) should be entered only in exceptional cases and should not be entered routinely.'" State v. Lawhorn, 830 So. 2d 720, 725 (Ala. 2002) (quoting Baker v. Bennett, 644 So. 2d 901, 903 (Ala. 1994), citing in turn Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373 (Ala. 1987)). "'"Appellate review in a piecemeal fashion is not favored."'" Goldome Credit Corp. [v. Player, 869 So. 2d 1146, 1148 (Ala. Civ. App. 2003)] (quoting 19 1150302, 1150876 Harper Sales Co. v. Brown, Stagner, Richardson, Inc., 742 So. 2d 190, 192 (Ala. Civ. App. 1999), quoting in turn Brown v. Whitaker Contracting Corp., 681 So. 2d 226, 229 (Ala. Civ. App. 1996)) (emphasis added).' "Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363 (Ala. 2004)." Schlarb v. Lee, 955 So. 2d 418, 419-20 (Ala. 2006). In this case, the plaintiffs' mortgage, fraudulent- transfer, and judicial-foreclosure claims were all based on the plaintiffs' contention that Breland was obligated to give Hudgens a mortgage on the Grand Bay property but refused to do so. Conversely, the defendants' slander-of-title and quiet- title claims were based on their contentions that the Plan, as amended, does not specify which property was to be mortgaged and that Breland had never agreed to mortgage the Grand Bay property specifically. Thus, it is clear that the central issue with respect to resolution of certain of the adjudicated claims and the pending claims is the parties' rights and interests in the Grand Bay property. In Schlarb v. Lee, supra, Lisa Schlarb, claiming that she had an ownership interest in Job Source, L.L.C. ("Job Source"), a limited liability company owned by Davis Lee and 20 1150302, 1150876 Danny Yancey, sued Lee and Yancey alleging fraud, breach of contract, and unlawful conversion of her claimed ownership interest in Job Source after they terminated her employment from Job Source. The circuit court entered a summary judgment against Schlarb on the fraud and conversion claims and certified that judgment as final pursuant to Rule 54(b), and Schlarb appealed. In dismissing Schlarb's appeal, this Court noted that "[t]he essence of both Schlarb's fraud claim and her breach- of-contract claim is that Lee and Yancey agreed to, but did not, give her an ownership interest in Job Source" and concluded that, "in the interest of justice, Schlarb's fraud and conversion claims should not be adjudicated separately from the breach-of-contract claim." 955 So. 2d at 420. Just like the essence of Schlarb's fraud and breach-of-contract claims was her contention that she had an ownership interest in Job Source, the essence of the plaintiffs' mortgage, fraudulent-transfer, and judicial-foreclosure claims and the defendants' slander-of-title and quiet-title claims against the plaintiffs and Hudgens is the parties' competing claims to rights in the Grand Bay property. Thus, in the interest of 21 1150302, 1150876 justice, those claims should be completely adjudicated together. See also Pavilion Dev., L.L.C. v. JBJ P'ship, 142 So. 3d 535, 542 (Ala. 2013) (concluding, in a redemption case, that a trial court exceeded its discretion in entering a Rule 54(b) certification "[i]n light of the fact that the trial court's order failed to address the claims of all the assorted parties claiming an interest in the subject property"). Furthermore, as noted above, this Court has held that a trial court exceeded its discretion in entering a Rule 54(b) certification where "[r]epeated appellate review of the same underlying facts would be a probability" because "'"[i]t is uneconomical for an appellate court to review facts on an appeal following a Rule 54(b) certification that it is likely to be required to consider again when another appeal is brought after the [trial] court renders its decision on the remaining claims or as to the remaining parties."'" Smith v. Slack Alost Dev. Servs. of Alabama, LLC, 32 So. 3d 556, 562 (Ala. 2009) (quoting Centennial Assocs., Ltd. v. Guthrie, 20 So. 3d 1277, 1281 (Ala. 2008), quoting in turn 10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 (1998)). See also Fuller v. Birmingham-Jefferson Cty. Transit Auth., 22 1150302, 1150876 147 So. 3d 907, 913 (Ala. 2013) (noting that a Rule 54(b) certification was not appropriate "where '[t]he factual underpinnings of the adjudicated and nonadjudicated counts are ... inextricably intertwined'" (quoting Spiegel v. Trustees of Tufts Coll., 843 F.2d 38, 45 (1st Cir. 1988))); and Bella Inv., Inc. v. Multi Family Serv., Inc., 80 So. 3d 921, 924 (Ala. Civ. App. 2011) (noting that a Rule 54(b) certification would not have been appropriate because the adjudicated claims "ar[o]se out of the same set of common facts" as the remaining pending claims). Here, there is more than a probability that accepting the trial court's Rule 54(b) certifications would require this Court to review the same facts again should it be presented with a future appeal (or appeals) after the pending claims are adjudicated; this Court would without question have to do so because the "factual underpinnings" of the adjudicated claims -- those facts giving rise to the Breland bankruptcy, the plaintiffs' claims in the Breland bankruptcy, and the parties' agreements settling those claims -- are "inextricably intertwined" with the pending claims. Fuller, supra. Thus, given the interrelated nature of the adjudicated claims and 23 1150302, 1150876 the pending claims, separate adjudications would lead to piecemeal appellate review of the same facts and issues if this Court were to review the parties' arguments in these appeals and then later be presented with an appeal from a judgment adjudicating the pending claims. See Pavilion, 142 So. 3d at 542 (noting "the general disfavor with which both piecemeal appellate review and Rule 54(b) certifications are viewed"); and Stephens v. Fines Recycling, Inc., 84 So. 3d 867, 879 (Ala. 2011) (dismissing an appeal because the "possibility of a future appeal and this Court's general disfavor of Rule 54(b) certifications, coupled with the interrelated nature of the still pending [claims]," would result "in appellate review in piecemeal fashion"). The particular circumstances of this case dictate that the pending claims should be adjudicated or otherwise disposed of with those claims that have already been adjudicated. Accordingly, we hold that the trial court exceeded its discretion in certifying as final the orders from which these 24 1150302, 1150876 appeals lie. In the absence of final judgments, the appeals must be dismissed. Stephens, supra. 1150302 -– DISMISSED. 1150876 –- DISMISSED. Bolin, Murdock, Shaw, and Main, JJ., concur. 25

February 17, 2017

117bbef6-accf-4cc2-b88f-e69b4f2c6a37

Bulova Watch Co. v. Zale Jewelry Co.

147 So. 2d 797

N/A

Alabama

Alabama Supreme Court

147 So. 2d 797 (1962) BULOVA WATCH CO. v. ZALE JEWELRY CO., of Montgomery et al. 3 Div. 17. Supreme Court of Alabama. December 20, 1962. Hill, Robison & Belser, Montgomery, for appellant. Hill, Hill, Stovall & Carter and Wm. A. Oldacre, Montgomery, for appellees. SIMPSON, Justice. Appeal from a final decree of the Montgomery County Circuit Court, in Equity, sustaining demurrer to the bill of complaint as filed by Bulova Watch Co. and dismissing the bill. The demurrer filed by Zale Jewelry Co. assailed the constitutionality of the Alabama Fair Trade Regulations. (Tit. 57, § 77 et seq., Code of Ala. 1940.) Appellant sought by the bill an injunction to restrain the sale and offering for sale of Bulova watches by appellee, alleging a violation of the Fair Trade Regulations. Appellee in attacking the constitutionality of the regulations by demurrer urges a contravention of §§ 1 and 35 of the Alabama Constitution of 1901 in that the subject of the legislation is not within the state's police power. Appellee further insists that the regulations authorize an unlawful delegation of legislative power to private interests; and also that the legislature cannot consistently with the State Constitution prohibit competitive price cutting in a business not affected with a public interest, merely in the interest of fairness in competition. The lower court in dismissing the bill of complaint held the selling of watches and *798 related items is not a business affected with a public interest; that the Fair Trade Regulations, especially the "non-signer" provision (Tit. 57, § 82, supra) is a class of legislation outside the scope of the police power and violates §§ 1 and 35 of the 1901 Constitution of Alabama and is therefore invalid; finally that the regulations purport to authorize an unlawful delegation of legislative power to purely private interests, who could by selfish actions make certain business activities unlawful, which were formerly lawful. Appellant urges the business of selling watches and related items is affected with the "public interest" because a large wholesale corporation is allowed to compete through a retail outlet with strictly retail stores, creating unfair competition. Appellant argues that Fair Trade legislation is within the scope of the state's police power because the small independent merchant is entitled to protection against wholesale-retail operations. Our cases make clear the rule that before the legislature may regulate competitive prices or prohibit bona fide price cutting merely in the interest of fairness in competition, the business regulated must be affected with a public interest, otherwise such legislation would be violative of §§ 1 and 35 of the 1901 Constitution of Alabama. City Council of Montgomery v. Kelly, 142 Ala. 552, 38 So. 67, 70 L.R.A. 209; City of Mobile v. Rouse, 233 Ala. 622, 173 So. 266, 111 A.L.R. 349; Lisenba v. Griffin, 242 Ala. 679, 8 So. 2d 175; Alabama Independent Service Station Assn. v. Hunter, 249 Ala. 403, 31 So. 2d 571; Alabama-Independent Service Station Assn. v. McDowell, 242 Ala. 424, 6 So. 2d 502. The doctrine was most aptly stated in the Kelly case, supra, and is the governing rule in this jurisdiction today: It will therefore be decisive of the case at bar to determine whether the business of selling watches and related items is one affected with the public interest. Even where the legislature has declared a business to be affected with the public interest, this does not pretermit an examination of the validity of the regulation. The matter is always open to judicial inquiry. Lisenba v. Griffin, supra. But here the legislature has made no such declaration. We are therefore left free to examine the cases and ascertain what businesses are affected with "public interest". The business of barbering is not affected with a public interest (City of Mobile v. Rouse, supra; Lisenba v. Griffin, supra); nor is the business of operating a gasoline filling station (Alabama Independent Service Station Assn. v. Hunter, supra; Alabama Independent Service Station Assn. v. McDowell, supra). However, the milk industry is affected with a "public interest" (Franklin v. State, ex rel. Ala. State Milk Control Board, 232 Ala. 637, 169 So. 295); and everyone is aware that all public utilities are subject to state regulation. From these cases we draw an analogy. Certainly the gasoline retail business comes nearer to being affected with the public interest than the sale of watches, yet the gasoline business is expressly held not to be affected with a public interest. There would be more adequate reason for the regulation of the price of a hair-cut or a shave than the price of a watch, because in our society gasoline, hair-cuts and shaves tend to be more purchased and of necessity than a watch, which is generally a "once in a lifetime commodity". So considered it must follow that the sale of jewelry, watches, and related items is not so affected with the public interest as to allow a curtailing of *799 free competition and the right to contract by price setting among retailers by the manufacturer. It has been held that for an occupation or business to be affected with the "public interest" the community at large must have some pecuniary or legal interest in the manner in which the business or occupation is conducted; or the person so engaged therein must have a virtual monopoly or an oligopoly in the business; or the business or occupation must have been conducted in such a manner as to cause the public to adapt their affairs to the methods utilized. (See Vol. 5, Words & Phrases, "Business Affected with Public Interest", p. 1018). Moreover, we find support in numerous decisions in other jurisdictions declaring state Fair Trade laws unconstitutional. (See 60 A.L.R.2d 423). Some twenty-two states have had Fair Trade Regulations invalidated by the highest courts of those states. It is interesting to note that all twenty-two have been invalidated and only five upheld since 1951. This indicates that the modern trend is toward the unconstitutionality of such statutes. The numerical weight of authority is now clearly against the constitutionality of this character of legislation. We believe these decisions are supported by the more sound reasoning and logic. These cases also seem to indidate that the economic need for Fair Trade laws is becoming unnecessary. This opinion is not concerned with the power of the legislature over a monopolistic business to one affected with a "public interest". Upon this we express no opinion as that question is not before the Court. To recapitulate, we hold that the Fair Trade Regulations, especially the "non-signer" provision (Tit. 57, § 82, supra) are unconstitutional, being in violation of §§ 1 and 35 of the 1901 Constitution of Alabama, because the business sought to be controlled is not one wherein the "public interest" is affected, and therefore the legislation is outside the scope of the state's police power. It is unnecessary to pass on the other constitutional objections raised as the defect aforementioned is fatal to the legislation, as applied to the case at bar. We are at the conclusion that the ruling below was correct. Affirmed. LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.

December 20, 1962

e3cd4d06-d88a-4aa0-9d22-a9071704263f

Marigold Coal, Incorporated v. Thames

149 So. 2d 276

N/A

Alabama

Alabama Supreme Court

149 So. 2d 276 (1962) MARIGOLD COAL, INCORPORATED, v. Ruby W. THAMES. 6 Div. 530. Supreme Court of Alabama. November 29, 1962. Rehearing Denied February 7, 1963. *278 Wiggins & Wiggins, Jasper, for appellant. Elliott & Jackson, Jasper, for appellee. PER CURIAM. Plaintiff's complaint, containing five amended counts, two based on wanton conduct and three on negligence of the defendant (appellant here), claims of the defendant $5,000.00 in damages alleged to have been the proximate result of concussions from the use of explosives by defendant in blasting operations preparatory to strip mining of coal. The complaint avers structural damages to plaintiff's dwelling house and garage; also marked decrease of water supply in her well to the point of inadequacy; and by amendment to the original counts it alleges that "plaintiff was frightened, caused to suffer mental anguish, and was annoyed, and discomforted in the use and enjoyment of her property as a home of rest and. quietude." Defendant addressed a demurrer, with numerous and diverse grounds, to each count. The trial judge overruled the demurrers. Appellant here assigns error on such rulings. We will review only those grounds of demurrer which are adequately argued by appellant in its brief. Ala. Digest, Appeal and Error, Perkins Oil Company of Delaware v. Davis, 228 Ala. 190, 153 So. 417(2). Appellant argues that the ground of demurrer which charges the complaint with vagueness, indefiniteness and incompleteness and fails to inform appellee with certainty as to what it is called on to defend, has merit. Our observation is that this ground is too general, as is the ground that the complaint does not state a cause of action. The trial court will not be put in error on these grounds for its action in overruling the demurrer. Title 7, Section 236, Code of Alabama, 1940, as Recompiled in 1958; Bright v. Wynn, 210 Ala. 194, 97 So. 689(2). Ground 3 of the demurrer, included in appellant's argument, asserts that "the complaint as amended and the counts therein constitute two separate causes of action under claim for damages to real property and a claim for damages to the person of the plaintiff." This ground in our opinion is without legal efficacy. Ritter v. Gibson, 217 Ala. 304, 116 So. 158(10). This case approved a complaint which alleged that plaintiff's mule was killed and he suffered personal injuries in a collision with an automobile. The allegations were in one count. Ground C of the demurrer asserts that the complaint and each count fail to set forth any facts and things constituting *279 wanton or willful conduct on the part of the defendant. This ground lacks certainty and specificity, and for this reason is vulnerably deficient. Bright v. Wynn, supra. Likewise, this authority condemns Grounds A, B, C and D. The latter ground challenges the complaint, "for that said count fails to show or aver any facts, showing the mode, manner, means or agency, by which the plaintiff suffered any injuries to property or person of plaintiff." Assuming this latter ground is certain and specific, we think that the complaint meets this challenge. It alleges that the damages proximately resulted following concussions from the explosions of dynamite and other explosives in alleged mining operations. Other grounds of demurrer were either inadequately argued in appellant's brief or were waived by no argument at all. Perkins Oil Company of Delaware v. Davis, supra. This court is under no duty to cast about in the brief in an effort, possibly futile, to ascertain the grounds of demurrer to which the argument is addressed. We are inclined to believe that appellant argued with seriousness and certainty all the grounds of demurrer which it concluded had merit. We find no error in the trial court permitting plaintiff's witness, Ray McLendon, after qualifying as an expert in coal mining with the use of explosives dynamite and ammonium nitrate, to testify over the objection of defendant, that in his judgment the blasting done by the defendant, as alleged in the complaint, was heavier than reasonably necessary to remove the rock and dirt "down there." No ground that this witness had not qualified as an expert in the use of dynamite and ammonium nitrate in strip mining appears in the objection. This court, in reviewing rulings on evidence, will consider only the grounds of objection which were assigned. Bates v. Bank of Moulton, 226 Ala. 679, 148 So. 150(2). This witness had previously testified that he was familiar with the place where defendant was blasting between February 24, 1958, and February 24, 1959; that he was at home when the blasts would go off and that they were heavy. It is our opinion that the objection on the grounds argued was properly overruled. Assignment of error 44 is addressed to the adverse ruling by the trial court to defendant's objection to plaintiff's question to the witness McLendon: "State whether or not the dirt and rock in this strip mining operation could have been removed with less heavy shots than the blasting done by the defendant corporation, judging by what you know about this operation and the jars and vibrations you experienced that took place?" This witness had previously testified, as shown in the preceding paragraph, to his familiarity with the blasting and the location and had qualified as an expert in the use of dynamite and ammonium nitrate in strip mining. The weight of his testimony in the light of his experience and his knowledge of the operations by the defendant at the time and place at issue was for the jury. In the case of Harbison-Walker Refractories Co. v. Scott, 185 Ala. 641, 64 So. 547, the following question was asked and held proper over the objection of defendant: "I will ask you to state whether or not, in your judgment, the blasting that was done by defendant * * * was reasonably necessary to remove solid rock?" Also the following question in the same case to the same witness was held proper: "I will ask you to state if solid rock can be successfully removed with less severe blast than the blasting of this defendant, judging from what you saw, and the jar and vibrations you experienced?" The objection of defendant here was properly overruled. We do not think that a second question, "Mr. McLendon, if the blasts that occurred during the year we have been talking about were set off in this strip pit jarred windows out of houses *280 around it, shook houses and cracked foundations and chimneys around it, whether or not that would be an indication in your opinion that the charge was excessive?" and, also, a third question to the same witness, "I will ask you further if what you have just testified about, if that was not an indication that the blasting was improperly done?", violated any of the grounds of objection which defendant assigned to the questions. A ground of objection to which we should address judicial observations was that the above questions called for unauthorized conclusions. This witness, in the opinion of the trial judge, had qualified as an expert in this particular field of operation by the defendant. This court has held that an expert witness, qualified to that end, may give his opinion as to the safety or danger of a place, or an appliance, when the issue is involved on the trial. Burnwell Coal Co. v. Setzer, 191 Ala. 398, 67 So. 604, 607(11). Admission of such evidence is limited by the rule that an expert witness may not testify to a matter of common knowledge. Alabama Great Southern Railroad Company v. Bishop, 265 Ala. 118, 89 So.2d 738(11), 64 A.L.R.2d 1190. We do not think the evidence of this witness in giving his opinion in response to these questions was subject to this limitation. Therefore, the answers did not invade the province of the jury. Appellant complains under Assignment of Error 39 that the trial court erred to reverse in permitting plaintiff's witness to testify, over his objection, that the reasonable cash market value of plaintiff's well immediately before it went dry on February 24, 1958, was $160.00. The objection was that the question called for an answer that was incompetent, irrelevant, immaterial and illegal, and was not the proper way to prove damages. Damages to the well was claimed in the complaint. The objection was properly overruled. Arrick v. Fanning, 35 Ala.App. 409, 47 So. 2d 708 (10). The report of the mine inspector for the State of Alabama, who had testified that he only checked defendant's method of handling, transporting and storing explosives, and that he didn't observe any explosion on the surface of the ground, was not material or relevant to the issues before the court and was properly excluded. Sorrell v. Scheuer, 209 Ala. 268, 96 So. 216, 217(1). We hold the exception taken by appellant to the trial court's oral charge to the jury that if they should find the defendant guilty of wanton conduct under counts 1 and 2 of the complaint, they could, in addition to actual or compensatory damages, assess a fine or penalty against the defendant, is without merit. The excerpt of the charge to which exception was taken correctly states the prerogative of the jury. The evidence adduced and admitted made an issue of fact for the jury to decide as to the existence vel non of wantonness as alleged in the complaint. We will delineate some of the evidence later in this opinion. Damages awarded for such conduct, in addition to compensatory or nominal damages, are punitive and imposed as a punishment. Clinton Mining Co. v. Bradford, 200 Ala. 308, 76 So. 74(11-15); Birmingham Ry., Light & Power Co. v. Murphy, 2 Ala.App. 588, 56 So. 817(2); Payne v. Smitherman, 206 Ala. 591, 91 So. 575(3); Davis v. Smitherman, 209 Ala. 244, 96 So. 208(18-19). Assignment of Error 63 charges the trial court with error in giving plaintiff's written charge 6 as follows: "The court charges the jury that if they are reasonably satisfied from the evidence that the defendant had knowledge that the plaintiff or her property was likely to be in a position of danger and with conscious disregard of such known danger, defendant recklessly proceeded on a dangerous course and caused disaster and resulted in injury to plaintiff or her property, then this is a wanton injury and you must find *281 a verdict for the plaintiff." (Emphasis supplied.) An identical charge was approved by this court in the case of Dean v. Adams, 249 Ala. 319, 30 So.2d 903(2). In this case, Dean v. Adams, supra, no judicial observations were addressed to the mandatory phrase that the jury "must find a verdict for the plaintiff." This mandate contains no instructions that punitive damages must be awarded. If so, it would have had direct impact with the decisions of this court that punitive damages are not recoverable as a matter of right. First Nat. Bank of Huntsville v. Stewart, 204 Ala. 199, 85 So. 529(1), 13 A.L.R. 302. This mandatory direction is predicated on the jury being reasonably satisfied that the plaintiff suffered injury to his person or property as a result of the conduct delineated in the charge. Actual and compensatory damages are recoverable under a wanton count. Payne v. Smitherman, 206 Ala. 591, 91 So. 575(3), supra. This charge 6 probably was misleading here in a manner that could have been corrected by an explanatory written charge given at the request of appellant. No such charge was asked and refused. Karpeles v. City Ice Delivery Co., 198 Ala. 449, 73 So. 642(6); Ray v. Richardson, 250 Ala. 705, 36 So.2d 89(14). Appellant asserts prejudicial error in giving to the jury plaintiff's written charge 7 as follows: This charge is elliptical in that it omits a word following the preposition "to" and before the adjective "an." The omission, judging from the context, seems to be the word "show." We think the jury with reasonable effort could have supplied the missing word. If the jury, after reasonable effort, could not supply the word, a just criticism is that the charge was misleading or confusing. The giving of such a charge does not constitute reversible error. Mahone v. Birmingham Electric Co., 261 Ala. 132, 73 So.2d 378(1); Supreme Court Rule 45, Code of Alabama, 1940. The trial court gave a clear and comprehensive oral charge on the law undertaken to be shown by this elliptical charge. This oral charge was reasonably calculated to dissipate any confusion arising in the minds of the jury that was referable to the omission. Under such circumstances error to reverse will not be charged to the trial court. Ray v. Richardson, 250 Ala. 705, 36 So.2d 89(15), supra. A written charge predicated on belief of the jury from the evidence is not error. Conway v. Robinson, 216 Ala. 495, 113 So. 531(13). Plaintiff adduced evidence that some of the injuries to the property were permanent so as to preclude prejudicial error on the part of the court in giving charge 11. An almost identical charge was approved by this court in the case of Lehigh Portland Cement Company v. Donaldson, 231 Ala. 242, 164 So. 97(5). A fair inference from the evidence in this cause is that the remark of plaintiff's counsel in his argument to the jury that "Mr. Lee could have come in here and told you that they didn't do this, but he is not here," referred to Mr. C. A. Lee, President of defendant. An exception to the remark of counsel was overruled by the trial court and this ruling is assigned as error. We concur in the trial court's ruling. Mr. Leon Thames, husband of plaintiff, testified for plaintiff that he went to see *282 Mr. C. A. Lee about the blasting operations; that he told Mr. Lee they were shaking his house and damaging his property; that he told "us" that it was going to get worse, because he was going to get closer. Witness further testified that it did get worse. This witness also testified that he talked with Mr. Winnie Drummond, a pit foreman at the time for defendant. Mr. Drummond, according to this witness, said that he had orders from Mr. C. A. Lee. This statement was in response to plaintiff's inquiry if it was necessary for him to shoot "that heavy over there." This argument, in our opinion, was not improper or alien to right of counsel to comment on the absence of Mr. Lee as a witness for defendant. Mr. Lee was, according to the testimony of another witness, President of defendant corporation. He was not, therefore, equally available and under the legal control of plaintiff. Refutation of the evidence concerning the conversation of Mr. Thames with Mr. Lee was peculiarly within the knowledge of Mr. Lee, and if it didn't take place, Mr. Lee was available to deny it. If the plaintiff had put Mr. Lee on the stand as her witness and elicited a denial of the alleged conversation, she would have been offering both affirmative and negative evidence of an asserted fact. This court speaking through Chief Justice Stone, in Carter v. Chambers, 79 Ala. 223(6), at page 231, observed as follows: For an extended discussion of comments before the jury on failure of an opposite party to produce a witness, see Waller v. State, 242 Ala. 90, 4 So.2d 917(5). While it would be informative to delineate in detail the evidence adduced by both parties which was calculated to enlighten the jury on the factual issues in this case, such prolongated parade of testimony would burden this opinion beyond reasonable proportions. We will briefly refer to the tendencies of the evidence. Plaintiff's evidence tended to show that the home and garage, during this period of one year, suffered structural damage in the form of cracked walls, falling mortar, sagging doors, loosening of the ceiling on the back porch, "wrinkling" of the wall paper in the living room, "busting" of the eave of the house, and sagging floors. Plaintiff testified that during a heavy blast she was seated near a window of the house and six panes fell from the window near her, and that the house jerked. Also, there was testimony that there was a crack in the middle of a block in the garage building. Pictorial evidence of the condition of the home and garage was introduced in evidence. This structural impairment developed, according to plaintiff's evidence, during the period of the blasting between February 24, 1958, and February 24, 1959. Plaintiff also offered witnesses whose testimony tended to show marked decrease *283 of water supply in her well during this period of blasting operations. There was also some testimony that the blasting continued to get heavier and closer to plaintiff's home which was located from one-quarter to one-half mile from the scene of the blasting. Testimony was offered as to the physical impact of the blasting on other houses in the neighboring area. Mrs. Thames testified that she was frequently awakened at night by the blasting. The defendant introduced witnesses, both non-expert and expert, as to the reasonableness of its blasting at the time and in disproof of plaintiff's evidence that the blasting was unreasonably excessive. Also, it offered testimony which tended to show that the blasting did not cause the structural impairment of plaintiff's property and diminishment of her supply of water in the well. While we are impressed by the defensive evidence that was offered, we can't say as a matter of fact or law that the jury went beyond its prerogative in awarding damages to the plaintiff. The jury saw the witnesses, heard the tone of their voices, observed their demeanor while testifying, and were in much better position than this court to evaluate the evidence, reconcile the conflicts, and select the false from the true. We are not permitted, under the law, to substitute our opinion, based as it is on transcription, for that of the jury. A verdict supported by competent evidence, as here, will not be set aside because the appellate court might have reached a different conclusion. Southern Ry. Co. v. Smith, 221 Ala. 273, 128 So. 228(12). Verdicts are presumed to be correct and no ground of a new trial is more carefully scrutinized and rigidly limited, than that the verdict is against the evidence. Smith v. Smith, 254 Ala. 404, 48 So.2d 546(6). Where the presiding judge refused to grant a new trial, presumption in favor of the verdict is strengthened. Smith v. Smith, supra, (7). Finding no prejudicial error in the record before us, the judgment of the trial court is affirmed. The foregoing opinion was prepared by B. W. SIMMONS, Supernumerary Circuit Judge, while serving on the Supreme Court at the request of the Chief Justice, and was adopted by the Court as its opinion. Affirmed. LIVINGSTON, C. J., and GOODWYN, MERRILL and COLEMAN, JJ., concur.

November 29, 1962