WJR&B -- Supreme Court of Alabama Decisions - January, February & March, 2003

Supreme Court of Alabama Decisions
January, February & March, 2003

This page contains opinions released by the Supreme Court of Alabama for January , February & March, 2003. For the page with links to the most recent opinions released by the Supreme Court of Alabama, click on the link below:
Recent Alabama Supreme Court Decisions

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Opinions Released March 28, 2003

DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY, MARCH 28, 2003

Ex parte Ocwen Federal Bank, FSB,

No. 1002225 (Ala. Mar. 28, 2003)

(discovery; pattern and practice discovery; trade secrets; mandamus/adequate remedy on appeal; Lee Dowdle and Kimberly Dowdle executed a promissory note, secured by a mortgage on their home, to Johnson & Associates Mortgage Company, Inc. ("Johnson"). The truth-in-lending disclosure statement they received in connection with the execution of the note provided that a penalty would not be assessed if they paid the loan off before its maturity date. Aurora Loan Services, Inc. ("Aurora"), began to service the Dowdles' loan. The Dowdles decided to refinance their loan with a different lender. In order to refinance, the Dowdles had to pay off their original note before its maturity date. When the Dowdles received the payoff balance from Aurora, it included a prepayment penalty. The Dowdles sent a check to Aurora for the payoff balance after deducting an amount for the prepayment penalty. Aurora returned the check to the Dowdles because, it stated, the amount of the check was insufficient to pay off their loan. The Dowdles sent the check to Aurora again. This time, Aurora accepted it but stated that it would continue to seek collection of the prepayment penalty. The Dowdles sued Aurora, Johnson, and others. As amended, the Dowdles' complaint alleges misrepresentation; suppression; breach of contract; breach of fiduciary duty; negligence; wantonness; intentional infliction of emotional distress; violations of Alabama's Mini-Code, Ala. Code §5-19-1 et seq.; conspiracy; money paid by mistake; conversion; and defamation. The Dowdles also sought to certify a class. After Ocwen Federal Bank, FSB ("Ocwen") replaced Aurora as the servicer of the Dowdles' loan, the Dowdles began receiving statements from Ocwen. The first statement the Dowdles received from Ocwen showed that they owed $3,948.63; that amount included interest in the amount of $933.49. After receiving the statement, the Dowdles contacted Ocwen to inform it that the debt was the subject of a legal action and that they were represented in that action by legal counsel. The Dowdles' attorney sent a letter to Ocwen, explaining that the debt it was attempting to collect from the Dowdles was disputed and was the subject of pending litigation. Nonetheless, Ocwen continued to send the Dowdles monthly statements, increasing the past-due amount by $1,091.49 each month and assessing the Dowdles a late charge. Ocwen also contacted certain credit agencies to inform them that the Dowdles were delinquent in paying the amounts they owed it. The Dowdles amended their complaint to add Ocwen as a defendant. The Dowdles submitted interrogatories and document requests to all the defendants. Ocwen moved for a protective order to stay discovery; the trial court conditionally granted the order on September 11, 2000, pending receipt of discovery from the remaining defendants. The trial court lifted the stay on February 6, 2001. On March 19, 2001, the trial court entered a discovery scheduling order, requiring the completion within 120 days of all discovery concerning the merits of the Dowdles' claims and the certification of the purported class. On May 14, 2001, Ocwen filed a response to the Dowdles' June 2, 2000, discovery request. That response contained a general objection to each of the Dowdles' requests. On May 21, 2001, Ocwen moved for a protective order to stay discovery until the trial court decided whether to certify the purported class. On May 31, 2001, the Dowdles moved to compel Ocwen to respond to the outstanding discovery request. On August 14, 2001, the trial court denied Ocwen's motion for a protective order and granted, with limitations, the Dowdles' motion to compel. On September 26, 2001, Ocwen petitioned the Supreme Court for the writ of mandamus. HOLDING: The Supreme Court denied the petition for writ of mandamus because Ocwen dod not demonstrate that an appeal would not afford it a full and adequate remedy. The Court also held that the trial court's order -- that restricted to five years the period as to which the Dowdles' were entitled to discovery and limited the scope of their discovery to Ocwen's customers who lived in Alabama or whose collateral was located in Alabama -- was not overly burdensome or oppressive. The Court noted that mere recitation that certain information is a trade secret does not automatically bestow immunity from disclosure and that the person or entity attempting to exercise the privilege must show that the information sought to be protected satisfies the definition of a trade secret. The Court held that Ocwen failed to demonstrate that it was entitled to trade-secret protection.)

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Tipler v. Alabama State Bar,

No. 1011865 (Ala. Mar. 28, 2003)

(professional conduct of attorneys; bar discipline; referral fee agreement; On December 10, 1993, Charles Bentley, a client of Francis "Sonny" James, who was a principal in James & James, a law firm in Andalusia ("the James firm"), entered into a contract with the firm to represent him in a medical-malpractice/wrongful-death case arising out of the death of his wife. On December 13, 1993, James referred Bentley's case to Frank Tipler, James Harvey Tipler's father, of the Andalusia law firm of Tipler & Tipler. Pursuant to the referral letter sent to Frank Tipler by James, Tipler & Tipler would be entitled to 60% of any legal fees but it would be obligated to pay all costs associated with the litigation. Subsequently, James Harvey Tipler became the lawyer responsible for Bentley's case. On April 13, 1994, Bentley signed a "retainer agreement" prepared by Tipler & Tipler, which established a 50% attorney fee in the event there was any recovery on Bentley's claims. James Harvey Tipler ("Tipler") filed a complaint on behalf of Bentley; James was designated in the complaint as being "of counsel." In 1997, Tipler tried the Bentley case before a jury in the Covington County Circuit Court, obtaining a verdict for the plaintiff of $2 million. The trial court's judgment entered on that verdict was appealed, and was affirmed by the Supreme Court in McKowan v. Bentley, 773 So.2d 990 (Ala. 1999). The total judgment amount ultimately due, calculating interest that had accrued during the appeal, was $2,438,574.06. At the conclusion of the appeal, with Tipler's knowledge and approval, $659,261.20 of that judgment was transmitted by counsel for the defendant directly to the Internal Revenue Service and the Alabama State Revenue Department to satisfy tax liens filed against Tipler's property. The remaining $1,779,312.36 was then remitted to Tipler. On September 22, 1999, he deposited that amount into his attorney trust account. The day before that deposit, the balance in the trust account was only $12,210.27. According to the bank records relating to the trust account, shortly after the $1,779,312.36 deposit, Tipler wrote a check out of the trust account for $50,000 payable to the Tipler Law Firm, which was deposited into the firm's operating account. Also soon after September 22, Tipler sent a check drawn on the trust account in the amount of $279,731.08 to the "Destin Bank," for payment on a line of credit he had with that bank. That check cleared the trust account October 4, 1999. At points between October 7 and 13, 1999, Tipler made disbursements to, or on behalf of, Charles Bentley and David Bentley, Charles's son who was entitled to share equally in the net recovery, totaling $1,194,380.29. That amount represented the balance remaining of their $1,219,287.03 (50% of the $2,438,574.06 total recovery), after Tipler deducted expenses of litigation aggregating $24,906.74. There is no dispute that the Bentleys received all of the proceeds to which they were entitled under their attorney fee agreement with the Tipler Law Firm. However, there is equally no dispute that the payments of the tax liens, the payment to the Tipler Law Firm's operating account, and the payment to the Destin Bank -- totaling $988,992.28 -- used up all but $230,294.75 of the proceeds allocable to attorney fees. On October 7, 1999, Tipler faxed a letter to James, essentially advising him that Tipler believed there was an ethical problem with the referral fee. He explained that he had met with Dana Matthews, an attorney who practiced law in Florida and who had handled a prior "bar matter" for Tipler, at a restaurant in Florida on either October 6 or 7, and that at that time Tipler made "the final decision" not to pay the referral fee; shortly thereafter he transmitted the October 7 letter to James. Tipler knew, and had acknowledged to James, before October 7, 1999, that the James firm was entitled to a portion of the proceeds from the Bentley case under a referral agreement between it and the Tipler Law Firm. Furthermore, both before and after a dispute had arisen as to James's entitlement to that referral fee, Tipler used the bulk of the moneys in dispute to satisfy personal obligations rather than holding the portion of that money in dispute until the referral-fee dispute was resolved. In the process, the funds were all but completely depleted. The general counsel of the Alabama State Bar ("the Bar") filed formal charges against Tipler . The Bar's complaint presented five charges, alleging violations of the following Alabama Rules of Professional Conduct: Rule 1.15(a), Rule 1.15(b), Rule 1.15(c), Rule 8.4(c), and Rule 8.4(g), based on allegations that Tipler failed to satisfy a $487,714.80 referral fee agreement entered into between his firm and James, the referring attorney. Tipler denied the allegations. The Disciplinary Board issued a "Report and Order," finding Tipler guilty of the charge that he had violated Rule 1.15(c), Ala.R.Prof.Conduct, and not guilty as to the other charges. Tipler was suspended from the practice of law for 91 days, upon the condition that the suspension would be reduced to 30 days if within 30 days of the date of the Report and Order Tipler deposited a certain sum of money into the trust account of either the attorney representing him in the disciplinary proceeding or the attorney representing him in a civil action filed by James. Tipler was also assessed for all costs incurred as a result of the proceedings. Thereafter, Tipler filed a motion to extend the time within which he would be required to deposit the required funds into the trust account of either of his attorneys; that motion was denied. Tipler filed a "notice of appeal" to the Board of Disciplinary Appeals ("the Board of Appeals") of the Alabama State Bar. The Board of Appeals issued a "final order" on June 19, 2002, affirming the decision of the Disciplinary Board. Tipler thereafter timely appealed to the Supreme Court. HOLDING: The Supreme Court held that when Tipler became aware of a dispute as to the referral fee, he was required by Rule 1.15(c), Ala.R.Prof.Conduct, to keep the $487,714.80 in dispute in a separate account until the dispute was resolved. Thus, the Court stated that it could not conclude with "definite and firm conviction," that the Disciplinary Board erred in its factual finding that Tipler violated Rule 1.15(c). The Court concluded that the Disciplinary Board's 91-day suspension of Tipler from the practice of law was not manifestly excessive. The Court affirmed the decision of the Disciplinary Board.)

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Ex parte Estate of Inez Harris,

No. 1011881 (Ala. Mar. 28, 2003)

(The Supreme court quashed the writ of certiorari without opinion, but stated that the action in quashing the writ should not be taken as an expression of approval regarding the reasoning in the Court of Civil Appeals' opinion.)

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Southern Pine Electric Cooperative v. Burch,

No. 1020066 (Ala. Mar. 28, 2003)

(wrongful termination of electricity service; remittitur; Christopher Burch sued Southern Pine Electric Cooperative alleging wrongful termination of his electric service. A jury awarded Burch $20,000 in compensatory damages and $75,000 in punitive damages. Southern Pine Electric Cooperative filed a motion for a remittitur, which the trial court orally denied, without stating its reasons for doing so. Southern Pine Electric Cooperative appealed. HOLDING: The Supreme Court held that the trial court erred in denying Southern Pine Electric Cooperative's motion for a remittitur without providing a written statement of the reasons for the denial. The Court remanded the case for the trial court to enter an order in compliance with Hammond v. City of Gadsden, 493 So.2d 1374 (Ala. 1986), stating its reasons supporting the denial of the motion.)

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Ex parte Harrington,

No. 1020679 (Ala. Mar. 28, 2003)

(criminal; The Supreme Court denied the petition for writ of certiorari without opinion, but the Court stated that in denying the petition for the writ of certiorari, it did not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion.)

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Opinions Released March 21, 2003

DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY, MARCH 21, 2003

Ex parte Deramus,

No. 1012372 (Ala. Mar. 21, 2003)

(criminal; habeas corpus; Christopher Deramus was convicted of murder in 1988 and was sentenced to 45 years' imprisonment. In 1994, Deramus was granted work-release status. In 1995, Deramus began participating in the "PDL" work-release program, and he continued in the program for approximately five years. On June 23, 2000, Deramus was removed from work-release status and returned to Kilby Correctional Facility. Following his removal from the program, the Alabama Department of Corrections ("DOC") notified Deramus that he had been reclassified as a "heinous offender" and that he was permanently ineligible to participate in the work-release program. On February 12, 2001, Deramus filed a "petition for writ of certiorari" in the Limestone Circuit Court. The petition alleged that DOC had improperly classified him as a "heinous offender." The circuit court restyled the petition as one for a writ of habeas corpus and, after conducting a hearing, denied the petition. Deramus appealed. The Court of Criminal Appeals did not address the merits of Deramus's argument; instead the court affirmed the judgment of the circuit court because Deramus had mislabeled his petition -- Deramus's petition was styled as a "petition for writ of certiorari," rather than a "petition for writ of habeas corpus." The Supreme Court concluded that the Court of Criminal Appeals had erred, holding that because it was clear on the face of Deramus's petition that he was requesting relief regarding the change in his custody classification, the Court of Criminal Appeals should have treated Deramus's petition as a petition for a writ of habeas corpus and considered the merits of his claims. On remand, the Court of Criminal Appeals again affirmed the trial court's dismissal of Deramus's petition on the ground that Deramus had not complied with the statutory pleading requirements set forth in Ala. Code §15-21-4. The Court of Criminal Appeals based this determination on the fact that Deramus did not attach documents to his petition showing that he had a liberty interest in remaining on work release, showing that he had been removed from work release without due process, and showing that DOC had inconsistently and arbitrarily applied the policy. In support of its holding, the Court of Criminal Appeals cited its decision in Conners v. State, No. CR-00-1074 (Ala. Crim. App. Nov. 30, 2001). HOLDING: The Supreme Court declined to follow Conners and overruled it to the extent it conflicts with this decision. The Court concluded that Deramus's petition complied with the requirements of Ala. Code §15-21-4. The Court reversed the judgment of the Court of Criminal Appeals and remand the case.)

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Ex parte F.P.,

No. 1002146 (Ala. Mar. 21, 2003) (on application for rehearing; withdrawing and substituting the opinion released on February 22, 2002)

(termination of parental rights; adoption; vested rights; retroactivity; F.P., the biological father ("the father"), and R.P., the paternal grandmother (sometimes hereinafter called "the grandmother"), appealed from a judgment entered by the trial court in favor of J.K.M. and S.L.M. ("the adoptive parents"). The child, a boy, was born on July 6, 1999. The adoptive parents took the child home from the hospital; the biological parents of the minor child were both 17 years old when the child was born. The father petitioned the juvenile court on July 1, 1999, for a determination of a "father and child relationship." The father said that he petitioned the court before the child was born because he thought the child was born on June 29, 1999. The mother testified that after she became pregnant, her mother told her she had to leave home and that she and the father "stopped having contact," but that she maintained contact with his mother (i.e., the grandmother). The father, who has never seen the child, testified that he was presently attending college and was working part-time, that he spends weekends at his mother's home, that if he obtains custody of the child his mother would keep the child during the week while he is at school, that he had never consented to the adoption, that the mother had told him she was pressured into consenting to the adoption because the child is biracial, and that he wants the child to be with his biological family. The father and the grandmother tried to see the baby shortly after it was born, but were told they could not see the child without the mother's permission. The father testified that he did not provide support for the mother during her pregnancy because, he says, she did not ask for it. The father testified that he has not provided any support to the adoptive parents because they have not requested it. The father made one attempt to contact the adoptive parents by telephone before the hearing in this case, but he reached a relative of the adoptive parents who was babysitting and was told he could not see the child. The father has another child by his current 16-year-old girlfriend, and he testified that he provides financial and emotional support for that mother and child. The trial court held that the father had abandoned the child and that, therefore, he had impliedly consented to the adoption of the child. The Court of Civil Appeals affirmed. HOLDING: The Supreme Court held that evidence does not support a finding that the father gave implied consent to the adoption or that his actions amounted to an abandonment of the child. The Court held that the evidence supports a finding that the father has vigilantly pursued his legal rights to establish a relationship with the child and has sought legal and physical custody of the child. On rehearing, the Court addressed the amendments to the Alabama Adoption Code, Ala. Code §26-10A-1 et seq., passed by the Legislature effective April 17, 2002. See Act No. 2002-417, Ala. Acts 2002. Section 2 of Act No. 2002-417 states: "This act shall have retroactive effect to January 1, 1997." On rehearing, the biological father challenged the constitutionality of those amendments to § 26-10A-9 in Section 1 of Act No. 2002-417 and the retroactivity provision in Section 2. The first amendment to § 26-10A-9(a)(1) that recognized the concept of prebirth abandonment became effective on June 11, 1999, approximately 25 days before the birth of the child. The Court concluded that the prebirth-abandonment provision cannot apply to this case unless that portion of Act No. 2002-417 giving retroactive effect to January 1, 1997, to the amended statutes requires otherwise. The Court then concluded that to hold that the father fulfilled the requirement for a 6-month prebirth abandonment pursuant to a statute that became effective only 25 days before the birth of the child would "create a new obligation, impose a new duty, or attach a new disability, in respect to [a] transaction[] ... already past." Ex parte Buckley, 53 Ala. 43, 55 (1875). The Court held that the Legislature was prohibited by Art. IV, § 95, Ala. Const., from taking away the father's rights by enacting Act No. 2002-417. The Court did not address the arguments concerning the constitutionality of the substantive provisions of the Act in proceedings where § 95 is not at issue. Finally, the Court held that the father did not abandon the child, either before or after its birth; therefore, the Court concluded that he did not impliedly consent to the child's adoption.)

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Ex parte Woodward,

No. 1010187 (Ala. Mar. 21, 2003)

(immunity; In 1998, Jim Woodward and Mike Hale were competing candidates for the office of sheriff of Jefferson County. After the election, Mike Hale was installed as the sheriff; after an election contest, the Supreme Court held that Woodward was the rightful winner in that election. After Woodward was sworn into office, he terminated Allen Farley and demoted Jim Roberson, both of whom were Jefferson County deputy sheriffs. Farley and Roberson sued Woodward and the Jefferson County Personnel Board ("the personnel board") for wrongful termination and sought reinstatement. The personnel board was realigned as a plaintiff, because the personnel board's position was the same as Farley's and Roberson's. Roberson and Farley sought to recover from Woodward back pay; costs of litigation, including reasonable attorney fees; and appropriate monetary damages, both compensatory and punitive. Woodward moved for a partial summary judgment, seeking a dismissal of the claims "to the extent they sought damage relief against him in his individual capacity." The trial court denied his motion. Woodward petitioned the Supreme Court for a writ of mandamus to direct the trial court to dismiss the claims asserted against him in his individual capacity. HOLDING: The Supreme Court granted the writ of mandamus to the extent that Roberson and Farley, and the personnel board, seek monetary damages against Woodward, individually. The Court directed the trial court to dismiss the claims against Woodward in his individual capacity.)

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(Note: The successful petitioner in this case was represented by Albert L. Jordan and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C.)

Ex parte Heflin,

No. 1011506 (Ala. Mar. 21, 2003)

(criminal; DUI; working condition of an "Intoxylizer 5000"; The Supreme Court quashed the writ of certiorari without opinion. Justices Johnstone and Stuart wrote concurring opinions.)

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Parker v. Bozian,

No. 1012252 (Ala. Mar. 21, 2003)

(estates; wills; Effie Roney Wilson died on April 20, 2001. Sara Parker, a niece, was appointed the executrix of Wilson's will, which was executed by Wilson on April 27, 1995. Wilson, in "Item Two" of her will, made specific devises of sums of money to several individuals and to a church, and in "Item Four" she gave "[a]ll the rest, residue and remainder of my estate ... to Sara Parker." The dispute between the parties revolves around the construction of "Item Three" of her will, which reads as follows: "I give, devise and bequeath to Marguerite W. Bazian [sic], my CD Account #005-0001274 with the First Bank of Dothan, Dothan, Alabama." Because a dispute arose between Parker, as executrix, and Bozian, the legatee, regarding the interpretation of Item Three, Bozian filed an action against Parker seeking a declaration that the funds in the two certificate-of-deposit accounts were given to her under Wilson's will. She asked the trial court to order Parker to transfer the funds in those certificate-of-deposit accounts to her. In her complaint she alleged that Wilson, on March 16, 1992, deposited $69,646.50 with First Bank, and received a six-month certificate of deposit, with automatic renewal provisions, and that First Bank designated the account as CD 1274. She further alleged that on the last maturity date of CD 1274, March 16, 2000, Wilson "transferred, swapped, or rolled the matured existing funds (identified as CD 1274) into another account or contract ... for the purpose of increasing the rate of interest from 4.5% to 7%." In her declaratory-judgment action, Bozian further alleged that "[a]t the time of the swap, roll over, or transfer, the funds on deposit with the Bank were divided into two accounts, one being designated as CD account number 2843 (CD 2843) in the amount of $49,594.98, and the other being designated as CD account number 2844 in the amount of $49,594.97," and that "[t]he new CD accounts were derived solely and fully from the existing CD 1274." On March 16, 2000, the maturity date for CD 1274, Wilson was taken to First Bank by Shelby Parker, Parker's husband. The evidence is uncontradicted that on that date the CD 1274 account was the only account Wilson had at First Bank; it is also undisputed that at that time First Bank was paying interest at the rate of 4.5% on CD 1274, but was paying an interest rate of 7% on a 24-month certificate of deposit. Lisa Merritt, the bank officer who assisted Wilson, testified at the trial. Although she testified that she could not recall the specific transaction, she did testify that Wilson did not add any money to, or subtract any money from, the CD 1274 account, which at that time amounted to $99,189.95. Wilson transferred the entire amount in CD 1274 into two separate 24-month certificates of deposit, CD 2843 and CD 2844, the interest on which was 7%. Merritt testified that the bank numbered the two certificates of deposit as 2843, in the amount of $49,594.98, and 2844, in the amount of $49,594.97. Merritt testified that even though the two new certificates of deposit had different numbers than did the original certificate of deposit, the moneys in the two accounts represented by the certificates of deposit remained under the same portfolio number with the bank, and were the "same money." At the time of Wilson's death, Parker refused to give Bozian the funds in the two certificates of deposit, because she was of the opinion that the certificate of deposit enumerated in the will had been closed out and the gift to Bozian had adeemed. The trial judge, in a bench trial, heard conflicting ore tenus evidence. The evidence was conflicting regarding the reason for the testatrix's dividing the proceeds of CD 1274 and opening two certificate-of-deposit accounts, of approximately equal value. Parker, who is the legatee of the sizable residuary estate, contends that the testatrix took this action because Bozian was talking about putting the testatrix in a nursing home. Bozian argues that the testatrix took the action she took with regard to CD 1274 because she wanted to deposit the money for a longer term and to get a higher rate of interest. Bozian also argues that the testatrix took similar action at other banks where she had certificate-of-deposit accounts, in order to get a higher rate of interest. The trial judge found in favor of Bozian, and Parker appealed. HOLDING: The Supreme Court affirmed. The Court held that the specific legacy of the certificate of deposit did not adeem simply because the account designated by a specific number in the will did not exist at the time of the testatrix's death because the testatrix had transferred the funds from that account into two certificate-of-deposit accounts.)

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Opinions Released March 14, 2003

DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY, MARCH 14, 2003

Ex parte Smith,

No. 1010267 (Ala. Mar. 14, 2003)

(criminal; capital murder; death penalty; mitigation evidence; mental retardation; HOLDING: The Supreme Court held that the defendant, who had been sentenced to death, was improperly restricted in presenting mitigation evidence of the impact of his allegedly dysfunctional family on his development. The Court held that the defendant was not mentally retarded even under the broadest definition of mental retardation.)

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Ex parte Hodges,
No. 1010619 (Ala. Mar. 14, 2003)
(criminal; capital murder; judicial override of jury recommendation for life sentence; evidence of mitigating circumstances; The defendant was convicted of murder made capital because it was committed during the course of a robbery in the first degree. By a vote of 8-4, the jury recommended a life sentence. The trial judge overrode the jury and sentenced the defendant to death. HOLDING: The Supreme Court held that the judicial override was not unconstitutional in this case in light of Apprendi v. New Jersey, 503 U.S. 466 (2000), and Ring v. Arizona, 536 U.S. 584 (2002), because the findings reflected in the jury's verdict of the aggravating circumstance of the murder during a first-degree robbery exposed the defendant to a range of punishment that included the death penalty. The Court rejected the defendant's argument that he was unfairly restricted in presenting mitigation evidence.)
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Ex parte Coleman,

No. 1010644 (Ala. Mar. 14, 2003)

(oral modification of agreement; conversion; Beginning in 1999, Jesse W. Coleman and Vera F. Coleman together and then Vera singly entered into a series of pawn transactions with The Money Tree. The Colemans initially borrowed $500 and pawned the title to their 1995 Cadillac. In June 1999, the Colemans borrowed an additional $500 (for a total borrowed principal of $1,000) and repawned the title to their Cadillac. Thereafter, the Colemans together and then Vera singly repawned their car each month, with the agreement of The Money Tree, by paying the interest accrued for the particular month and by signing a new pawn ticket containing the terms of the pawn transaction. Each pawn ticket provided that the "length of the pawn transaction is 30 days and it can only be repawned with the agreement of both parties and only for 30 day incremental periods," that "pawn transaction has a grace period of 30 calendar days following the maturity date of the transaction," and that "[v]erbal agreements for additional days are not binding." On November 4, 1999, with the agreement of The Money Tree, Vera again repawned the Colemans' car in writing. The maturity date of that pawn ticket, as expressly entered in writing on that pawn ticket, was December 5, 1999. The Colemans claimed that they entered into an oral agreement with the Money Tree to extend the maturity date by 30 days. They claimed that when they tried to get their car back on January 4, they were told that the car had already been repossesed and had already been sold. The Colemans sued The Money Tree, Moore, and Jerry Higginbotham (another employee of The Money Tree) for conversion, fraud, conspiracy, breach of contract, and the tort of outrage. The Colemans alleged that The Money Tree wrongfully took possession of their 1995 Cadillac automobile, which the Colemans had pawned to The Money Tree. The Colemans asserted that the defendants had, by oral agreement, extended for 30 more days the December 5, 1999 maturity date of the last pawn ticket entered between The Money Tree and Vera and that the defendants had prematurely and wrongfully taken possession of the car before the expiration of that extended maturity date, January 4, 2000. The defendants moved for summary judgment on the ground, among others, that the pawn ticket specifically prohibited oral agreements to extend the maturity date of the pawn. The defendants also argued, without submitting any proof, that they did not make any oral agreement to extend the maturity date of Vera's last pawn. The trial court entered summary judgment in favor of the defendants. The Court of Civil Appeals affirmed. HOLDING: The Supreme Court held that even if a written agreement provides that all changes to an agreement must be in writing, a subsequent oral modification may still be enforced. Thus, the Court held that the trial court erred in granting summary judgment on the breach of contract claim, and the Court of Civil Appeals erred in affirming that summary judgment. The Court held that the Colemans presented substantial evidence that the defendants wrongfully took the Colemans' car, or wrongfully interfered with the Colemans' car, during the 30-day extended term of their pawn transaction with The Money Tree. Therefore, the Court held that the trial court erred in entering summary judgment in favor of the defendants on the Colemans' conversion claim and that the Court of Civil Appeals erred in affirming the summary judgment on the Colemans' conversion claim. The Court held that the Court of Civil Appeals correctly affirmed the judgment on the Colemans' fraud and tort-of-outrage claims.)

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Lyles v. Pioneer Housing Sys., Inc.,

No. 1010908 (Ala. Mar. 14, 2003)

(arbitration; nonsignatory plaintiffs; Debra and Derrick Lyles bought a new mobile home from a dealer located in Clanton. The home was manufactured by Pioneer. After the mobile home was delivered to the Lyleses in Wetumpka, they began to experience various problems with the home. The Lyleses sued Pioneer, alleging breach of contract, breach of implied and express warranties, violation of the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, negligence, and fraud. After a hearing on Pioneer's motion to compel arbitration, the court granted that motion. Three days later, the Lyleses voluntarily dismissed their Magnuson-Moss Act claim against Pioneer. Pioneer filed a notice, purporting to consent to the voluntary dismissal of the express-warranty and Magnuson-Moss Act claims. The Lyleses filed a motion to vacate the order compelling arbitration, and the trial court scheduled a hearing. When the Lyleses and their counsel failed to appear at the hearing because of scheduling conflicts, the trial court denied the motion to vacate. HOLDING: A plurality of the Court held that even though the Lyleses never signed the arbitration agreement, by accepting benefits under Pioneer's written warranty, they agreed to arbitrate their claims against Pioneer. However, a majority of the Court held that the trial court erred in requiring the Lyleses to arbitrate all of their claims because the warranty only requires that "warranty disputes" be submitted to arbitration.)

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Ex parte Hudson,

No. 1011148 (Ala. Mar. 14, 2003)

(immunity; In 1994, Russell Hudson was the purchasing foreman in the Mobile County School System's renovations department. In March 1994, the Mobile County School System solicited bids for the delivery and installation of bleachers in the gym at C.F. Vigor High School. The bleachers were not to be stationary; they were to pull out when necessary for seating and to close against the wall when more floor space was needed in the gym. The school system ultimately contracted with Garner & Associates, Inc., to deliver and install bleachers manufactured by Interkal, Inc. Once the school system had received bids from vendors, Hudson checked to ensure that the bids complied with the bid specifications and then made a recommendation to the school board as to which bid should be accepted. The school board made its decision, and once Hudson, or someone in his office, issued the purchase orders relating to the bleacher project, Hudson's work on the project ended. Hudson did not supervise the actual installation or maintenance of the bleachers at Vigor High School. Garner & Associates claims that in October 1994, in connection with the Vigor bleacher project, it sent Hudson a bleacher maintenance manual. Hudson stated in his deposition that he did not recall having received the manual, but that if he had received it, he would have passed it on to the project site foreman, Clayton Haggett. Hudson stated that, though no one has ever told him that it was part of his job to forward maintenance manuals to job sites, if he received a manual or other similar documentation relating to a project, he usually would pass it along to the site foreman as part of his job. On December 12, 1997, at the request of their gym teacher, Duane Haston and two other Vigor High School students tried to close the bleachers by pushing them towards the wall. The bleachers slipped off track and fell onto Haston, breaking his back. Haston, by and through his father and next friend Duane Haston, Sr., sued Russell Hudson and others alleging, among other claims, that Hudson had negligently inspected and maintained the bleachers at Vigor High School. Hudson and the other individual-school-system-employee defendants moved for a summary judgment on the ground that they were protected by State-agent immunity. The trial court entered a summary judgment in favor of all of the individual-school-system-employee defendants except Hudson. HOLDING: The Supreme Court held that Hudson's activities are comparable to the activities referred to in Ex parte Cranman as a state agent's "exercising his or her judgment ... [in] ... allocating resources [or] negotiating contracts." The Court concluded that Hudson is entitled to State-agent immunity as to the claims that Hudson failed to properly evaluate the bids for the bleachers and failed to inspect the bleachers. The Court held that Hudson was not entitled to immunity on the claim that Hudson's job included passing along the maintenance manual he received from Garner & Associates for the bleachers to the project foreman, that doing so was a ministerial duty, and that Hudson's failure to carry out this duty is negligent or wanton behavior.

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Custer v. Homeside Lending, Inc.,

No. 1011409 (Ala. Mar. 14, 2003)

(force-place flood insurance; Raymond Custer and his wife, Elizabeth, own a residence in Birmingham, Alabama, which they purchased in 1970. The mortgage did not require the Custers to maintain flood insurance on the mortgaged property, but did provide that the Mortgagor "will keep the improvements now existing or hereafter erected on the mortgaged property, insured as may be required from time to time by the Mortgagee against loss by fire and other hazards, casualties and contingencies in such amounts and for such periods as may be required by the Mortgagee." The mortgage also provided that "If the Mortgagor fails to insure said property as hereinabove provided ... the Mortgagee may, at its option, insure said property ...." The Custer loan was transferred several times to various mortgage-loan-servicing companies over the course of its life; it was transferred to Homeside Lending, Inc. in 1989. WNC Insurance Services, Inc. ("WNC") had entered into a "Policy of Insurance Contract" with Homeside whereby WNC would "force-place" flood insurance for certain Homeside borrowers. Pursuant to this agreement, WNC agreed to bind coverage on properties encumbered by Homeside mortgages, and, if needed, to force-place flood insurance with certain underwriters. WNC had also entered into a "Servicing Agreement" with Homeside pursuant to which WNC agreed to provide flood audit services and Homeside agreed to purchase from WNC flood insurance Homeside forced-placed on the mortgages it serviced. Between 1993 and 2000, WNC issued approximately 6,000 force-placed flood-insurance policies on properties encumbered by mortgages serviced by Homeside. After receiving a series of letters concerning flood insurance and being notified that Homeside was force-placing flood insurance on their home, the Custers decided to pay off the outstanding balance of their mortgage loan. In July 1999, they calculated the remaining balance and submitted to Homeside a check in the amount of $1,700.32. The complaint filed by the Custers in this action states that after receiving the Custers' check, Homeside responded by letter, stating that in order to pay off the loan balance, the Custers would have to pay an additional $938.22 for hazard disbursement, which included $667 as the annual premium for flood insurance. The complaint also states that in "late July 1999," the Custers made a "regular" payment in the amount of $205.67 on the loan. Several weeks later, as also indicated by the complaint, the Custers received a letter from Homeside stating that the amount necessary to satisfy the loan would be $197.98, which included earned premiums to date on the force-placed flood-insurance policy. In an August 4, 1999, notice from WNC, the Custers were informed that the force-placed insurance had been in effect on their property from April 21, 1999, to July 20, 1999, and that premiums of $214.02 had accrued on the policy. Thereafter, the Custers mailed a cashier's check, on or about September 27, 1999, to Homeside in the amount of $213, which, the Custers assert in their complaint, paid the loan in full. Homeside filed a motion for a summary judgment as to all claims with supporting evidentiary materials. The Custers sued, and the Custers' complaint, as amended, sought compensatory and punitive damages on claims of breach of contract, unjust enrichment, breach of duty of good faith and fair dealing, negligence, fraud by suppression, breach of a duty to a third-party beneficiary, and breach of an implied contract. Homeside filed a motion for a summary judgment as to all claims with supporting evidentiary materials. The trial court entered a partial summary judgment in favor of Homeside on all claims except the Custers' breach-of-express-contract claim and third-party-beneficiary claim, without stating its reasons for denying the summary-judgment motion as to those claims. Subsequently, the trial court reconsidered Homeside's summary-judgment motion and, again without stating a rationale, entered a summary judgment on the case action summary sheet in favor of Homeside as to those claims as well. The trial court also denied class certification of the Custers' claims. The Custers then appealed. HOLDING: The Supreme Court held that because the outstanding principal on the Custers' loan at the time Homeside force-placed flood insurance on the mortgaged property was approximately $2000, the minimum amount of flood insurance that Homeside could have force-placed on the Custers' property was $2000. The Court held that in force-placing flood insurance in the amount of $79,000, Homeside satisfied the minimum force-placement requirements of the National Flood Insurance Act, 42 U.S.C. § 4001 et seq. ("the NFIA"). The Court held that contractually, Homeside was given the right to force-place a higher amount, under the provisions of the mortgage authorizing it to force-place insurance against loss "in such amounts" as it might choose to require. The Court concluded that Homeside did not breach the terms of the mortgage agreement between it and the Custers by force-placing flood insurance in an amount that exceeded the outstanding principal on the Custers' loan. The Court affirmed the summary judgment in favor of Homeside, and therefore held that it need not address the issue of class certification.)

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Jackson v. Alexander, Corder, Plunk & Baker, P.C.,

No. 1011604 (Ala. Mar. 14, 2003)

(attorneys' fees; breach of contract; The Court affirmed the judgment of the trial court without opinion. Chief Justice Moore wrote an opinion concurring in part and dissenting in part, stating that he would reduce the amount of the judgment.)

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(Note: The successful appellees were represented by Albert L. Jordan and Michael L. Jackson of the law firm of Wallace, Jordan, Ratliff & Brandt, L.L.C.)