Opinions Released December 20, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  DECEMBER 20, 2002

 
• State of Alabama v. Howington,

Nos. 1000610, 1000611 & 1000612  (Ala. Dec. 20, 2002)
(eminent domain; affirmed without opinion; dissenting opinion by Justice Houston)
*Download or view PDF version of opinion*
 
• Exxon Corp. v. Department of Conservation & Natural Resources,

No. 1001053 (Ala. Dec. 20, 2002)
(attorney-client privilege; harmless error; statute of limitations; claims of breach of contract and fraud based on the alleged underpayment of oil-and-gas-lease royalties;  The Alabama Department of Conservation and Natural Resources ("DCNR") awarded seven oil-and-gas leases in Mobile Bay to Exxon in 1981 and fifteen more leases in 1984.  In mid-1993, when Exxon was completing construction of its infrastructure at the drilling sites in Mobile Bay and preparing to shift responsibility of the Mobile Bay project to its operations division, R.J. Mertz, Exxon's accounting manager on the Mobile Bay project, asked Exxon's in-house counsel Charles Broome to perform a legal analysis of the royalty provisions of the lease agreement "to ensure that royalties were paid in accordance with the terms of the mineral lease" and to evaluate potential areas of cost recovery for Exxon in the production and treatment process.  Broome offered three different interpretations of the lease language concerning the payment of royalties, along with the likelihood of success of each interpretation in litigation.  Using his analysis, R.J. Kartzke, the Mobile Bay project manager and Broome's chief supervisor; Mertz; and other Exxon executives adopted an interpretation of the lease and began paying DCNR royalties based upon that interpretation after production began that year.  In 1996 DCNR hired outside auditors to audit Exxon's royalty payments.  When the audit was completed, DCNR made a demand for reimbursement, plus interest, of what it alleged were millions of dollars in royalties that, it said, according to the royalty provisions in the lease agreement should have been paid but were not.  Exxon refused to pay, and DCNR officials informed Exxon that the State was planning to sue to recover the royalty payments.  Soon after, on July 28, 1999, Exxon filed a declaratory-judgment action to determine the rights of the parties under the lease agreement.  The next day, the State filed a separate action against Exxon, alleging breach of contract and fraud; it later dismissed that complaint and brought the same claims as compulsory counterclaims in Exxon's declaratory-judgment action.  The trial court granted the State's motion to realign the parties, and the State became the plaintiff and Exxon the defendant.  The jury returned a verdict in favor of the State, finding Exxon liable for breach of contract and fraudulent underpayment of royalties, awarding $87.7 million in compensatory damages and $3.42 billion in punitive damages. HOLDING:  The Supreme Court reversed the judgment and remanded the case, holding that a letter written by Exxon's in-house counsel Charles Broome was erroneously admitted into evidence because it was privileged under the attorney-client privilege.  The Court held that admission of the letter was not harmless error.  The Court declined to overrule the holding in Romar Development Co. v. Gulf View Management Corp., 644 So. 2d 462 (Ala. 1994), that a compulsory counterclaim is not subject to the defense of limitations.)
*Download or view PDF version of opinion*
 
• General Motors Corp. v. Kilgore,

No. 1002149 (Ala. Dec. 20, 2002)
(wrongful death; AEMLD; asbestos; preemption; William Austin Kilgore (hereinafter referred to as "decedent") died on June 12, 1997.  The Kilgores alleged that the decedent died of mesothelioma as a result of exposure at his workplace to products containing asbestos manufactured by the General Motors Corp. ("GMC").  The Kilgores claim that GMC breached its duty under the Alabama Extended Manufacturer's Liability Doctrine (hereinafter "the AEMLD") to provide reasonably safe products and that it breached its duty to inform the decedent of the hazards of exposure to  asbestos.  The Kilgores' claims are based on the decedent's alleged exposure to asbestos products during his employment with Norfolk Southern Railroad Company from 1941 through 1983.  The Kilgores maintain that while he was employed with Norfolk Southern the decedent was exposed to asbestos-containing components of locomotives manufactured by GMC.  GMC moved for a summary judgment on the ground that the Kilgores' claims were preempted by the Federal Locomotive Inspection Act ("FLIA").  The trial court denied the motion for a summary judgment.  The Supreme Court granted GMC permission to appeal the trial court's denial of summary judgment.  HOLDING:  The Supreme Court reversed the trial court's denial of the motion for summary judgment and rendered a judgment for GMC.  The Court held that the FLIA governs the Kilgores' state-law causes of action and, thus, the Kilgores' claims are preempted.)
*Download or view PDF version of opinion*
 
• Brown v. Pool Depot, Inc.,

No. 1011032 (Ala. Dec. 20, 2002)
(arbitration; door-closing statute, Ala. Code §10-2B-15.02; interstate commerce; A representative of Pool Depot, Inc., a Georgia corporation, approached David Brown, an Alabama resident, to solicit Brown's purchase of an aboveground pool to be installed by Pool Depot at Brown's Alabama residence.  Brown executed a contract for the purchase and installation of the aboveground pool.  That contract contained an arbitration provision. The contract also provided that the purchaser can cancel the contract within three days of execution.  About 16 days later, Brown telephoned Pool Depot to cancel the contract.  Pool Depot sent Brown a notice stating that his cancellation was not in compliance with the contract, that he owed the full purchase price, and that perjury was a serious offense.  Pool Depot also sent another document purporting to be a lien by Pool Depot against Brown's home for $9,295, the purchase price for the pool minus the $200 deposit Brown had already paid.  Brown sued Pool Depot for fraudulent inducement and "tortious attempt to collect a debt by the threat of criminal prosecution.  Brown also alleged that "Defendant does not have a Certificate of Authority to do business in Alabama and is not license[d] to do business in this State ... [, and,] [t]herefore, the contract signed by the parties is void."  Pool Depot moved to compel Brown to arbitrate his claims pursuant to the arbitration provision in the pool contract.  Brown opposed the motion on the ground that the contract and its arbitration provision were void under Alabama's door-closing statute because Pool Depot had not qualified to do business in Alabama until some months after the execution of the Brown pool contract.  Pool Depot responded that, although it was not qualified to do business in Alabama when it entered the Brown pool contract, Pool Depot, as a business engaged in interstate commerce, was protected by the Commerce Clause of the United States Constitution from the operation of Alabama's door-closing statute to void the Brown pool contract.  Pool Depot submitted as evidentiary support for this argument an affidavit from Pool Depot vice president Frank Loureire stating that the components of the aboveground pools are manufactured in other states, are shipped to Georgia for assembly, and are shipped to their final destination for installation.  Loureire stated that Pool Depot "is a national company which does business nationwide."  Loureire stated further that all monies paid to Pool Depot were deposited in an account in Atlanta, Georgia.  While Loureire expressly denied that Pool Depot had ever had any offices in Alabama, he did not deny that it had agents in Alabama.  The trial court granted the motion to compel arbitration.  HOLDING:  The Supreme Court held that because Pool Depot, a foreign corporation, was not qualified to do business in Alabama at the time Pool Depot contracted to sell and to install an aboveground pool at Brown's Alabama residence, Alabama's door-closing statute, Ala. Code §10-2B-15.02, voids the pool contract and bars Pool Depot from enforcing the pool contract and its arbitration provision.  The Court noted that an isolated contract by an unqualified foreign corporation to do localized intrastate business within Alabama is subject to Alabama's door-closing statute even though that contract may require the use of materials and equipment shipped into Alabama from out of state.  The Court reversed the judgment of the trial court and remanded the cause for the trial court to vacate its order for arbitration.)
*Download or view PDF version of opinion*
 
• Ex parte Boykins,

No. 1011152 (Ala. Dec. 20, 2002)
(criminal; habeas corpus; request to receive incentive good time;  In 1973, Gregory Boykins was convicted of first-degree murder and was sentenced to 60 years' imprisonment. In September 1974, while working on a "road camp," Boykins escaped.  He remained a fugitive from 1974 until April 1995. While on escape, Boykins pleaded guilty to another murder in Illinois. Subsequent to his return to the custody of the Department of Corrections ("DOC"), Boykins requested eligibility to earn incentive good time ("IGT").  His requests were denied by the DOC because of its determination that Boykins failed to meet the criteria for receipt of IGT. In September 2001, Boykins filed a petition for a writ of certiorari with the Bullock County Circuit Court challenging the denial by the the DOC of his request to receive IGT.   The district attorney's office filed a motion to dismiss the petition, which Boykins opposed.  The trial court characterized Boykins's petition as a petition for a writ of habeas corpus and granted the motion to dismiss.  Boykins filed a notice of appeal to the Alabama Court of Criminal Appeals.  That Court of affirmed the trial court's order of dismissal in an unpublished memorandum.  The Supreme Court granted Boykins's petition to address the question whether the Court of Criminal Appeals properly affirmed the trial court's order of dismissal where the basis of the dismissal was the trial court's treatment of Boykins's petition for a writ of certiorari as a petition for a writ of habeas corpus.  HOLDING: The Supreme Court noted that Boykins is not challenging the duration of his sentence and is not asserting that he is unlawfully imprisoned because he has completed all of the time he was sentenced to serve  The Court noted that the courts of this state have long recognized that the only purpose of the writ of habeas corpus is to afford relief against actual restraints upon liberty.  The Court held that Boykins does not have liberty interest in the DOC's ruling on his request to qualify for IGT.   The Court held that because Boykins is only challenging the propriety of the DOC's ruling on his request for IGT, the ruling of the Court of Criminal Appeals and the trial court was correct.   The Court noted that Boykins is not asserting that the DOC deprived him of IGT he had previously earned, as to which he would have a liberty interest.)
*Download or view PDF version of opinion*
 
• The Hartford Fire Ins. Co. v. Epting,

No. 1011211 (Ala. Dec. 20, 2002)
(garnishment action; prior pending action; Ala. Code §6-5-440; affirmed without opinion; dissenting opinion by Justice See)
*Download or view PDF version of opinion*
 
• Ammons v. Tesker Manufacturing Corp.,

No. 1011213 & 1011313 (Ala. Dec. 20, 2002)
(assumption of the risk; wantonness; amendment of pleadings; workers' compensation; Ronald Ammons was injured during the course of his employment with Vulcan Threaded Products ("Vulcan"), Ammons's former employer.  At the time of the injury, Ammons was operating a "thread-rolling machine" (the "threader"), a component part of which was manufactured by  Tesker Manufacturing Corporation ("Tesker").   Wausau Insurance Company ("Wausau") , Vulcan's workers' compensation insurer, paid benefits on behalf of Vulcan.  Wausau (and formally, Ammons) sued Tesker seeking reimbursement, pursuant to Ala. Code 1975, § 25-5-11(d), of the benefits it paid.  The complaint alleged that the threader was defectively designed and manufactured and included claims of negligence, wantonness, failure to warn, breach of warranty, and breach of the Alabama Extended Manufacturer's Liability Doctrine.  Tesker answered the complaint, asserting various affirmative defenses, including contributory negligence.  It did not, however, assert the defense of assumption of the risk.  At trial at the close of the plaintiffs' case-in-chief, Tesker moved, over Wausau's objection, to amend its answer to assert the affirmative defense of assumption of the risk.  The trial court granted that motion, stating that it would allow Wausau to "reopen its case," if it "need[ed] to put on additional evidence."  Wausau did not exercise that option. Tesker also moved for a judgment as a matter of law ("JML") as to Wausau's wantonness-based claims.  The trial court also granted that motion.  Additionally, Tesker moved for a JML on all other claims, contending that they were barred by the statute of limitations.  That motion was denied.  Over Wausau's objections, the court charged the jury on the affirmative defense of assumption of the risk.  The jury returned a verdict for Tesker, and the trial court entered a judgment on that verdict.  Wausau moved for a new trial, and renewed its challenge to the jury charge on the assumption-of-the-risk defense.   The trial court denied Wausau's motion.  Wausau appealed.  HOLDING:  The Supreme Court affirmed.  The Court held that Wausau produced no substantial evidence of wantonness and that the trial court did not err in granting Tesker's motion for a JML on the wantonness-based claims.  The Court concluded that Wausau failed to demonstrate that it was prejudiced by the amendment to add the defense of assumption of the risk, and it held that the trial court did not abuse its discretion in allowing the amendment.)
*Download or view PDF version of opinion*
 
• Potts v. Baptist Health Sys., Inc.,

No. 1011234 (Ala. Dec. 20, 2002)
(arbitration; employment; interstate commerce; unconscionability; Caroline Edwards Potts, a registered nurse and a former employee of Walker Regional Medical Center, Inc., sued Baptist Health System, Inc. (hereinafter referred to as "BHS"), Walker Regional Medical Center, Inc., and other individual defendants, alleging breach of contract, defamation, intentional infliction of emotional distress, invasion of privacy, and wrongful termination.  Potts's claims arose from the termination of her employment with Walker Regional Medical Center, Inc., d/b/a Walker Baptist Medical Center (hereinafter referred to as "Walker Medical").  In response to Potts's complaint, BHS and Walker Medical (hereinafter jointly referred to as "the defendants") filed a motion to stay the proceedings and to compel arbitration pursuant to the arbitration provision contained in a document entitled "Dispute Resolution Program" provided by BHS to Potts.  The trial court granted the motion to compel arbitration and dismissed the case.  HOLDING: The Supreme Court concluded that the defendants showed that their employment relationship with Potts had a substantial effect upon interstate commerce.  The Court also concluded that the arbitration provision was not unconscionable.  Thus, the Court affirmed the trial court's order compelling arbitration.)
*Download or view PDF version of opinion*
 
• Wenger Tree Service v. Royal Truck & Equipment, Inc.,

No. 1011373 (Ala. Dec. 20, 2002)
(personal jurisdiction; Wenger Tree Service, an Alabama sole proprietorship engaged in the business of tree removal, sued the defendant Royal Truck & Equipment, Inc. ("Royal"), a Pennsylvania corporation engaged in the business of acquiring, refurbishing, and selling specialized trucks used by landscapers and arborists. Wenger sought specific performance of Royal's alleged contractual obligation "to deliver properly endorsed legal title to" a specialized truck bought and received by Wenger from Royal.  Royal moved to dismiss Wenger's action for lack of personal jurisdiction.  After a hearing, the trial court granted Royal's motion to dismiss.  HOLDING:  The Supreme Court reversed.  The Court held that Royal has sufficient contacts with the State of Alabama because Royal is or may be legally responsible as a consequence of Royal's transacting any business in this state or contracting to supply services or goods in this state in that (1) Royal, on two separate occasions, sold trucks directly to Wenger, (2) Royal customized the trucks to meet Wenger's  particular specifications, (3) Royal negotiated the details of the customization directly with Wenger, (4) Royal negotiated the price and terms of the sale directly with Wenger, (5) Royal negotiated the terms of Wenger's trade-in directly with Wenger, and (6) Royal shipped the trucks directly to Wenger.)
*Download or view PDF version of opinion*
 
• Ex parte Stewart,

No. 1011381 (Ala. Dec. 20, 2002)
(criminal; Sixth Amendment right to counsel at initial appearance under Ala.R.Crim.P. 4.4; In April 1999, four men robbed Harry Sansom and James Hartley at gunpoint.  Jerry Dwight Stewart was identified as a suspect in the robbery.  An arrest warrant, in which an appearance bond in the amount of $25,000 was set, was issued for Stewart.  Stewart was arrested in Portland, Oregon, and was extradited to Alabama. At the initial appearance, the court informed Stewart of the charges against him, of his right to representation by counsel, of his right to remain silent, and of his right to a preliminary hearing.  During the initial appearance, Stewart completed an affidavit of substantial hardship.  On the form, however, Stewart did not indicate that he was "financially unable to hire an attorney" and did not "request that the Court appoint one for [him]."  The district court entered an order appointing an attorney from the public defender's office to represent Stewart.  Stewart was unable to post bail, and he remained incarcerated in the Tuscaloosa County jail.  Before Stewart's preliminary hearing, two officers interviewed Stewart at the jail.  The officers, unaware that counsel had been appointed for Stewart on the day of the initial appearance, informed Stewart of his Miranda rights.  Stewart did not request an attorney; he signed a waiver of his rights and talked with the officers.  Stewart did not invoke his right to counsel at any time during the interview.  Stewart provided the officers with a written confession.  Stewart was indicted and was charged with first-degree robbery.  Before his trial, Stewart filed a motion to suppress his confession because, he said, his Sixth Amendment right to counsel was violated when the officers interviewed him without his counsel being present.  The trial court denied Stewart's motion to suppress and admitted his written confession into evidence.  The Court of Criminal Appeals affirmed the judgment of the trial court, holding that Stewart's Sixth Amendment right to counsel had not attached before his interview with the officers because adversarial proceedings had not begun.  HOLDING: The Supreme Court affirmed.  The Court held that an initial appearance conducted pursuant to Rule 4.4, Ala.R.Crim.P. is not a "critical stage" of the criminal process that triggers the Sixth Amendment right to counsel.  The Court reasoned that the Sixth Amendment right to counsel attaches only after the commencement of adverse judicial criminal proceedings against the defendant, and because an initial appearance is an informational proceeding designed to protect the rights of the accused and does not constitute a "critical" pretrial proceeding, the right to counsel does not attach at that time.)
*Download or view PDF version of opinion*
 
• Ex parte Vaughn,

No. 1011416 (Ala. Dec. 20, 2002)
(criminal; evidence regarding prior "bad acts"; Elvin Ray Vaughn was indicted by a Lauderdale County grand jury on three counts of attempted murder and three counts of assault in the second degree.  Vaughn pleaded not guilty and not guilty by reason of mental disease or defect on all counts.  At trial, the State's expert, Dr. Alwyn Whitehead, also a psychologist, stated in a colloquy with the judge outside the presence of the jury, that Vaughn's prior bad acts were important to his determination of Vaughn's mental state at the time of the incident.  Counsel for Vaughn objected to the proposed admission of testimony of Vaughn's prior bad acts, arguing that the prejudicial effect of informing the jury of the prior acts substantially outweighed the probative value.  The trial court allowed Whitehead to testify as to the importance of Vaughn's prior bad acts, after giving a limiting instruction to the jury.  Dr. Whitehead discussed an incident that occurred during the 1980s, while Vaughn was living in Illinois, when he shot an ex-girlfriend as she climbed into the window of his house at night, not knowing who she was.  Dr. Whitehead stated that while Vaughn was serving in the United States Army, he shot a man who allegedly had attempted to stab him during a card or dice game, for which he was convicted of manslaughter.  Dr. Whitehead concluded that Vaughn did suffer from a paranoid personality; however, Dr. Whitehead also expressed the opinion that at the time of the shooting at the plant Vaughn was not suffering from symptoms of a major mental illness that would have prevented him from understanding the wrongfulness of his criminal acts.  At the close of the trial, and before the jury began deliberations, the trial judge again explained to the jury the limited purpose for which Vaughn's prior acts could be considered.  The jury convicted Vaughn of one count of attempted murder and two counts of assault in the third degree.  The trial court sentenced him to 25 years' imprisonment for the attempted-murder conviction and 12 months' imprisonment for each assault conviction, the sentences to be served concurrently, and imposed monetary sanctions.  Vaughn appealed to the Alabama Court of Criminal Appeals challenging the trial court's admission of evidence regarding prior "bad acts" on the ground that the prejudicial effect of that evidence substantially outweighed its probative value.  That court affirmed the trial court's decision. HOLDING:  The Supreme Court reversed.  The Court held that allowing the jury to hear testimony that before the shooting in this case Vaughn had shot two other persons was error because the prior acts committed by Vaughn occurred many years before the act at issue, the State presented no evidence to indicate any correlation between those prior acts and Vaughn's state of mind at the time of the shooting at issue, and the choice made by Vaughn not to testify was jeopardized by the admission of his prior acts, which, in effect, testified against him.  The Court held that Vaughn did not "open the door" for the State to present evidence of prior acts to rebut his defense of not guilty by reason of insanity because the State presented nothing to indicate that the prior acts committed by Vaughn were relevant to his mental state during the shooting that occurred at his workplace many years later.  The Court concluded that the limiting instruction did not cure the error.  The Court held that the probative value of the evidence of the prior bad acts was substantially outweighed by its prejudicial effect.)
*Download or view PDF version of opinion*
 
• Wood v. Wade,

No. 1011473 (Ala. Dec. 20, 2002)
(Ala.R.Civ.P. 60(b)(6);  Claude Wood and Camille Witt were the victims of an attack that occurred at a Taco Mac Restaurant in Birmingham.  Wood and Witt sued C.F.J.J. Restaurant II, L.L.C., d/b/a Taco Mac Restaurant ("Taco Mac"), and two bartenders, James Wade and Douglas McGary. Taco Mac filed an answer through its attorneys, Larry W. Harper and Neal D. Moore III; Wade answered pro se.  Later, Harper and Moore became the attorneys of record for Wade, and they later withdrew as attorneys for Taco Mac.  Moore remained as attorney for Wade. However, after September 2000, the Jefferson Circuit clerk's office erroneously listed Wade as a pro se defendant; as a result, Moore received no further correspondence from the court regarding the case.  Trial was set for February 12, 2001, but neither Wade nor Taco Mac appeared for trial.  Default judgments were entered against both of them and damages of approximately $600,000 were awarded against them jointly and severally.  Moore (Wade's attorney) and J. Flint Liddon (Wood and Witt's attorney) jointly filed a Rule 60(b), Ala.R.Civ.P., postjudgment motion to set aside the default judgment against Wade.  the trial court granted the motion and dismissed Wade from the action with prejudice. Thus, after September 2001, the only judgment debtor was Taco Mac.  In December 2001, D. Benjamin Traylor became Wood and Witt's attorney of record.  Traylor filed a "Verified Motion For Relief Under Rule 60(b)" to have the order on the joint Rule 60(b) motion set aside, in effect seeking to have Wade reinstated as a defendant and the default judgment against him reentered. The court denied this second Rule 60(b) motion.  Wood and Witt appealed and raised two issues: (1) whether the trial court's September 26, 2001, order setting aside the default judgment against Wade and dismissing him from the case with prejudice was erroneous, and (2) whether the trial court abused its discretion in entering its March 4, 2002, order denying Wood and Witt's Rule 60(b) motion.  HOLDING: The Supreme Court held that Wood and Witt's appeal as to the September 2001 order setting aside the default judgment could not be considered by the Court because it was not from an adverse ruling.  The Court explained that only adverse rulings are appealable.  The Court held that the denial of the second Rule 60(b) motion was not an abuse of discretion because Wood and Witt showed no "exceptional circumstances" which entitle them to relief under Rule 60(b)(6).) 
*Download or view PDF version of opinion*
 
• Ex parte Wilson,

No. 1011505 (Ala. Dec. 20, 2002)
(venue; forum non conveniens; Julia Wilson, who at the time of her death was a resident of Wilcox County, received medical treatment at Selma Baptist Hospital in Dallas County.  At some point during a surgical procedure, her esophagus was perforated.  She remained hospitalized for three days in Selma and was then transferred to the University of Alabama Medical Center in Jefferson County, where she died 16 days later on August 1, 1999.  Curtis Wilson, as administrator of his wife's estate, filed a medical-malpractice action in the Wilcox Circuit Court against the doctors and nurse-anesthetists involved in the decedent's medical care in Dallas County and the doctors involved in the decedent's medical care in Jefferson County.  Several defendants filed a motion to transfer the case to the Dallas Circuit Court on the basis of forum non conveniens.  The trial court granted the motion for a change of venue.  Wilson filed a petition for a writ of mandamus ordering the trial court to vacate its order transferring this case from Wilcox County to Dallas County.  HOLDING:  The Supreme Court granted the writ of mandamus and ordered the trial court to vacate its order transferring venue to Dallas County.  The Court noted that the text of Ala. Code §6-5-546 clearly requires that in a wrongful-death action where the malpractice is alleged to have occurred in more than one county, "the action must be brought" in the county wherein the plaintiff's decedent resided at the time of the act or omission.  Thus, the Court held that venue for this action at the time it was filed was proper only in Wilcox County, where the decedent resided at the time of her death.)
*Download or view PDF version of opinion*
 
• Jim Walter Homes, Inc. v. Spraggins,

No. 1011659 (Ala. Dec. 20, 2002)
(arbitration; fraudulent inducement; Brian Spraggins and Jennifer Spraggins entered into a contract for the purchase of a house from Jim Walter Homes, Inc. ("JWH"), to be constructed on property the Spragginses owned.  A.L. Richardson, an agent and employee of JWH, conducted most of the transaction on behalf of JWH.  The contract of purchase includes a paragraph that incorporates an attached arbitration agreement.  The Spragginses alleged in their affidavits that A.L. Richardson told them that "arbitration was where if we had a dispute with Jim Walter Homes then we would discuss it with the Construction Manager.  If the Construction Manager cannot resolve the problem, then we would go to the district level and then to the regional level.  If the problem cannot be resolved by that time, then we would go to court."  After becoming dissatisfied with their home, the Spragginses sued JWH and others.  The defendants moved to compel arbitration, and the trial court denied that motion.  HOLDING: The Supreme Court reversed.  The Court held that the trial court erred in denying the motion to compel  arbitration.  The Court held that the Spragginses' claim of fraud in the inducement fails as a matter of law, based on the facts in this case, on the ground that the Spragginses could not have reasonably relied on the alleged misrepresentation of A.L. Richardson.)
*Download or view PDF version of opinion*
 
• Wal-Mart Stores, Inc. v. Anniston Development Co.,

No. 1012070 (Ala. Dec. 13, 2002)
(statute of limitations; money had and received; action for money due by open or unliquidated account; action on the written lease agreement; Wal-Mart Stores, Inc., appeals from a summary judgment entered in favor of Anniston Development Company ("ADC") in an action to recover overpayment of rent, pursuant to a lease between Wal-Mart, as lessee, and ADC, as lessor.  The overpayment was made more than three years before this action was filed.  The written lease agreement required Wal-Mart to pay a base rent plus a "percentage rent"; that percentage was calculated annually by multiplying Wal-Mart's "gross sales," a term that was specifically defined in the lease, by 1.5%.  The lease agreement provided that the amount of the base rent would then be deducted from that amount to determine the percentage rent and that if Wal-Mart replaced any mechanical equipment originally installed on the premises by ADC Wal-Mart would receive a credit against the percentage rent for the unamortized costs of the mechanical equipment.  On October 31, 1992, Wal-Mart paid ADC $176,502.11 as the percentage rent for the lease period ending on that date.  Wal-Mart failed to deduct from the percentage rent for the lease period ending October 31, 1992, all or a portion of the base rent it had paid that year.  ADC argued that the three-year statutory period of limitations for an action for money due by open or unliquidated account (Ala. Code §6-2-37(1)) had expired.  Wal-Mart contends that this is an action for money had and received, which is governed by the six-year statute of limitations or an action on the written lease agreement, which is also governed by the six-year statute of limitations.  HOLDING:  The Supreme Court reversed.  The Court held that this was not an action on an open and unliquidated account because an open and unliquidated account is one where a provision of the contract is left open for further negotiations, but lease contract between Wal-Mart and ADC was fixed and settled in all its terms in that Wal-Mart and ADC are fully bound by the price as set out in the terms of the contract, gross sales are fully defined in the lease, the percentage of gross sales to be paid as percentage rent is fully defined in the lease, the base rent is fully defined in the lease, the manner in which the base rent is deducted from the percentage rent is fully defined in the lease, and the method by which Wal-Mart could receive a credit against the percentage rent for the unamortized costs of replaced mechanical equipment was fully set out in the lease.  The Court held that Wal-Mart is seeking to recover money had and received by ADC because of Wal-Mart's mistake in allegedly overpaying ADC the rental it owed ADC for the fiscal year ending October 31, 1992, and therefore, this action is not barred by Ala. Code §6-2-37(1).)
*Download or view PDF version of opinion*

Back to top

Opinions Released December 13, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  DECEMBER 13, 2002

 
• Southern Bakeries, Inc. v. Knipp,

No. 1010743 (Ala. Dec. 13, 2002)
(asbestos exposure; recovery for fear of developing physical injuries or disease; Ray Knipp was assigned the job of removing an old oven and installing the new one.  Ray Downey, the president of Southern Bakeries, Inc. ("SBI") told Knipp that if Knipp could find someone to buy the old oven, he would pay Knipp a percentage of the sales price.  Knipp claims that he asked Downey at that time whether an environmental study had been performed on the oven.  Knipp also claims that he told Downey that in order for Knipp to be able to find a buyer, the study would have to show that the oven was toxin free.  Knipp was told that the test results indicated that the oven was free of asbestos.  Knipp claims that he asked Downey for the report, and that Downey provided Knipp with a five-page document that stated that no asbestos had been detected in the oven.  Knipp became skeptical about Downey's representations that the oven was free of asbestos.  In July 1996, Knipp had tests conducted on samples of the insulation around the oven that he took when he removed it.  The tests indicated that the oven's insulation contained asbestos.  Knipp claims that Downey admitted that the report he gave Knipp was inaccurate in its representation that the oven contained no asbestos.  On December 2, 1998, Knipp sued SBI.  In an amended complaint, David Branyon joined the action as a plaintiff. Branyon had helped Knipp remove the oven.  Knipp and Branyon alleged (1) negligent or wanton  failure to warn them that the oven contained asbestos;  (2) fraudulent suppression; (3) negligent, reckless, or intentional representation; and (4) negligent or wanton failure to train employees, namely, Ray Downey.  In each count, Knipp and Branyon sought compensation for "extreme emotional distress and mental anguish," on the ground that because of their exposure to asbestos in removing the oven they "are at a greater risk of developing lung cancer and other diseases of the lungs in the future."  SBI moved for a summary judgment. the trial court entered a summary judgment for SBI as to "any claims by [Knipp and Branyon] that they are more likely than not to develop lung cancer almost three decades later."  However, the trial court denied SBI's summary-judgment motion "to the extent that [Knipp and Branyon's] causes of action arise from the present damage."  The Supreme Court granted SBI permission to appeal.  HOLDING:  The Supreme Court noted that Alabama has long required a manifest, present injury before a plaintiff may recover in tort.  The Court noted that fear is a real phenomenon and can be debilitating, but based on the evidence presented in this case the Court concluded that Knipp and Branyon have not suffered any legally cognizable present injury.  The Court concluded that opening the courts generally for compensation for fear of future disease would be a dramatic change in the law and could engender significant unforeseen and unforeseeable consequences.  The Court held that Knipp and Branyon's cause of action has not accrued because they have not proven that they suffered from mental anguish or emotional distress as a result of SBI's conduct.  The Court reversed the trial court's order insofar as it denied SBI's summary-judgment motion.)
*Download or view PDF version of opinion*
 
• Cook's Pest Control, Inc. v. Rebar,

No. 1010897 (Ala. Dec. 13, 2002)
(arbitration; Cook's Pest Control entered into a one-year renewable "Termite Control Agreement" with Robert Rebar and Margo Rebar.  Under the agreement, Cook's Pest Control was obligated to continue treating and inspecting the Rebars' home for termites during the term of the agreement, which, with certain limited exceptions, continued so long as the Rebars continued to pay the annual renewal fee.  The agreement contained a mandatory, binding arbitration provision.  When the initial term of the agreement was about to expire, Cook's Pest Control notified the Rebars and requested that they renew the agreement for another year by paying the renewal fee.  On August 16, 2001, Mrs. Rebar submitted a payment to Cook's Pest Control; with the payment she included an insert entitled "Addendum to Customer Agreement" (hereinafter referred to as "the addendum").  That addendum provided, in part: "Notwithstanding prior amendments, nothing herein shall limit Customer's right to seek court enforcement (including injunctive or class relief in appropriate cases) nor shall anything herein abrogate Customer's right to trial by jury.  Arbitration shall not be required for any prior or future dealings between Cook's [Pest Control] and Customer."  The addendum also provided: "Cook's [Pest Control] agrees that any future amendments to the Customer Agreement shall be in writing and signed by Customer and [an] authorized representative of Cook's [Pest Control]."  The addendum further provided: "Continued honoring of this account by you acknowledges agreement to these terms.  If you do not agree with all of the terms of this contract, as amended, you must immediately notify me of that fact."  After it received the addendum, Cook's Pest Control negotiated the Rebars' check and continued to perform termite inspections and services at the Rebars' home.  On August 30, 2001, just two weeks after it sent the addendum, the Rebars filed this action against Cook's Pest Control for fraud, negligence, breach of contract, breach of warranty, breach of duty, unjust enrichment, breach of the duty to warn, negligent training, supervision and retention of employees, and bad-faith failure to pay and bad-faith failure to investigate a claim.  Those claims were based upon Cook's Pest Control's alleged failure to treat and control a termite infestation in the Rebars' home and to repair the damage to the home caused by the termites.  Cook's Pest Control moved to compel arbitration of the Rebars' claims.  The Rebars opposed the motion to compel arbitration, asserting, among other things, that a binding, mandatory arbitration agreement no longer existed.  The trial court denied Cook's Pest Control's motion to compel arbitration.  HOLDING: The Supreme Court rejected Cook's Pest Control's argument that the Rebars were attempting unilaterally to modify an existing contract.  The Court held that the Rebars did not accept the terms proposed by Cook's Pest Control for renewal of the agreement but instead proposed terms for the renewal of that contract that were materially different from the terms of the agreement.  The Court also rejected Cook's Pest Control's argument that the addendum had no effect upon the renewal of the agreement because none of the employees in the office where the Rebars' payment was processed had the authority to enter into a contract on behalf of Cook's Pest Control.  The Court noted that if Cook's Pest Control wished to limit the authority of its employees to enter into contracts on its behalf, Cook's Pest Control, as the drafter of the original agreement, could have included such limiting language in the agreement.  The Court concluded that Cook's Pest Control's external and objective actions evidenced assent to the Rebars' proposed modifications.  The Court affirmed the denial of the motion to compel arbitration.)
*Download or view PDF version of opinion*
 
• Mt. Carmel Estates, Inc. v. Regions Bank,

No. 1011357 (Ala. Dec. 13, 2002)
(foreclosure; duty of fairness and good faith; Regions Bank foreclosed on a mortgage given as security for a promissory note executed on May 12, 1999, in the amount of $2,000,000 by Mt. Carmel Estates, Inc. ("Mt. Carmel"), and guaranteed by Charles M. Sisco, David Wall, Mychiallyn Wall, and Myron Wilson (hereinafter referred to collectively as "the guarantors").  At the foreclosure sale, Regions Bank, the only bidder, bid $1,242,000, an amount less than the unpaid balance on the note, creating a deficiency.  A July 24, 2000, appraisal valued the property at $1,530,000.  Regions Bank sued Mt. Carmel and the guarantors to collect the deficiency and demanded a judgment against the defendants, jointly and severally, for the sum of $375,122.16, attorney fees in the amount of $30,000, and interest "at the Index rate plus .50% until paid [in] full and costs."  After the defendants answered, Regions Bank filed a motion for a summary judgment.  The trial court entered a summary judgment in favor of Regions Bank, and against Mt. Carmel and the guarantors, with the exception of Myron Wilson, who had entered into a pro tanto release before the judgment was entered. HOLDING:  The Supreme Court affirmed the summary judgment.  The Court held that Regions Bank's bid of $1,242,000 was not so low as to shock the conscience.)
*Download or view PDF version of opinion*

Back to top

Opinions Released December 6, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  DECEMBER  6, 2002

 
• Alabama Power Co. v. Aldridge,

No. 1010969 (Ala. Dec. 6, 2002)
(workers' compensation; retaliation; Kevin Aldridge worked for Alabama Power Company ("APCo") from 1978 until 1998.  Aldridge alleged that in May 1996 he injured his neck on the job; he underwent surgery to correct this injury.  As a result of that injury, Aldridge made a claim for workers' compensation benefits.  From May 1996 to January 1997, Aldridge did not work because of his injury and subsequent recovery from surgery.  When he returned to work in January 1997, APCo placed Aldridge in its customer-service center.  Aldridge left the position after three days, claiming that he experienced severe pain from sitting all day.  Aldridge then applied for and received long-term disability benefits.  During this period, Aldridge started his own "car-hauling business."  The business ultimately failed, a fact APCo claims caused Aldridge to cooperate with its efforts to find him physically suitable employment.  In November 1997, almost one and one-half years after his neck injury, Aldridge accepted APCo's offer of a meter-reader position in Fort Deposit.  On December 2, 1997, Aldridge began training for the job.  Three days later, Aldridge injured his knee.  Aldridge claims that the injury occurred while he was on his meter-reading walking route.  Aldridge sought medical attention for his injury, and APCo would not let him return to work without medical clearance.  His doctor cleared him to return to work on January 21, 1998.   Aldridge began working as a part-time driver for Material Delivery Service, Inc. ("MDS"), during the period that he was not medically cleared to return to work at APCo.  Aldridge's job at MDS required him to work long hours and sometimes required work that appeared to be outside the physical limitations placed on him by his doctor after his knee injury.  Aldridge never told APCo that he was working for MDS; when  the doctor cleared him to work and he began to work for APCo again in January, he continued to work at MDS.  On January 21, 1998, Aldridge returned to his work as a meter reader.  The next day, Aldridge did not appear for work.  He claims that his knee was hurting when he woke up and that he attempted to call in sick.  Aldridge told APCo of his knee injury, and Aldridge was instructed to report for a fitness-for-duty examination.  On January 28, 1998, Aldridge was cleared to return to his meter-reader position.  During his absence from APCo, Aldridge continued to work for MDS.  Aldridge returned to work at APCo on January 29.  On February 9, 1998, Aldridge telephoned his supervisor to ask for the day off, stating that his son had wrecked one of Aldridge's automobiles the day before and that he needed to take it to get an estimate for the repairs.  The supervisor agreed to allow Aldridge to take the day off, and Aldridge received the day off without pay. Aldridge worked for MDS that day from 12:30 to 9:30 p.m.  Aldridge missed another day of work and left a message stating that the roof of  his house had been damaged by a storm, but after an investigation APCo found that Aldridge had lied about some of the information he had given concerning why he missed work.  APCo then decided to investigate a previous absence when he had claimed he had to deal with getting a wrecked car repaired.  APCo then learned that Aldridge was working for MDS.  Thereafter, Aldridge was told that he was being discharged for making misrepresentations, for failing to properly report his absences, and for failing to maintain proper attendance.  Aldridge sued APCo, asserting claims of retaliatory discharge, invasion of privacy, intentional infliction of emotional distress, and tortious interference with a business relationship.  APCo filed a motion for a summary judgment as to all of Aldridge's claims.  The trial court entered a summary judgment in favor of APCo as to all but Aldridge's retaliatory-discharge claim.  After a trial, the jury returned a verdict in favor of Aldridge in the amount of $500,000--$250,000 in compensatory damages and $250,000 in punitive damages.  The trial court denied all of APCo's posttrial motions. HOLDING:  The Supreme Court held that Aldridge did not establish a prima facie case of retaliation.  The Court noted that because APCo discharged Aldridge approximately two years after he filed his workers' compensation claim, there was insufficient temporal proximity to establish a prima facie causal connection between the workers' compensation claim and the subsequent discharge.  The Court held that "where a conclusive determination can be made that retaliation is not the sole basis for the discharge a judgment as a matter of law is appropriate."  The Court held that a plaintiff, therefore, has the burden of presenting sufficient evidence indicating that  the plaintiff was discharged because he or she filed a claim for workers' compensation benefits, but if there is uncontradicted evidence of an independently sufficient basis for the discharge then the defendant is entitled to a judgment as a matter of law.  The Court held that APCo presented undisputed evidence supporting one of its legitimate reasons for discharge--that Aldridge made misrepresentations concerning his absence on February 17 in order to make repairs to his roof -- and, consequently, Aldridge failed to present substantial evidence that APCo discharged him solely because he instituted or maintained an action against the employer to recover workers' compensation benefits.  Thus, the Court found it is unnecessary to address whether other aspects of Aldridge's proof would constitute a prima facie case of causation. The Court reversed the trial court's order denying APCo's motion for a JML at the close of the evidence and remanded the case for the trial court to enter a judgment in favor of APCo as a matter of law.)
*Download or view PDF version of opinion*
 
• Stevens v. Phillips,

No. 1010976 (Ala. Dec. 6, 2002)
(arbitration; interstate commerce; standing to enforce the arbitration agreement by an employee of the party to the agreement when the employee is the only defendant; Susan A. Stevens purchased a manufactured home from Southern Investment Corporation d/b/a Southern Homes, Inc. ("Southern Homes").  At the time Stevens purchased the manufactured home, she executed at least two arbitration agreements.  Stevens was dissatisfied with the condition of the home, and she sued only the salesperson after Southen Homes filed a demand for arbitration with the American Arbitration Association.  Stevens, although not naming Phillips's employer, Southern Homes, as a party, nevertheless included allegations relating to Southern Homes in two counts of her complaint.  Phillips filed a motion to compel arbitration.  Stevens was a resident of Alabama at the time of the sale and that Southern Homes was an Alabama corporation, and that the defendant, Uta Phillips, was the general sales manager of Southern Homes and was also the salesperson of the manufactured home that Stevens bought.  Indies House Manufactured Homes, the manufacturer of the home, was an Alabama corporation, and the home was manufactured in Hackleburg, Alabama, although there was evidence indicating that many of the materials used in the construction of the manufactured home came from out-of-state.  In an affidavit submitted in support of her motion, Phillips stated that Stevens's purchase of the manufactured home "was financed through Green Point Credit Company, which is headquartered in Cincinnati, Ohio,"  and that "[t]he actual sales documents and credit approval came from Green Point Credit in Pensacola, Florida."  Phillips also filed an affidavit made by Tony Capasso, the controller for Indies House Manufactured Homes, who stated that, based upon the records of the company, "the home purchased by Ms. Stevens would be constructed with materials purchased and paid for through Interstate Commerce in excess of $14,000."  The trial court ultimately granted the motion to compel arbitration.  HOLDING:  The Supreme Court affirmed.  The Court found that Stevens's claims against Phillips arise out of representations allegedly made by Phillips, while she was acting as an agent within the line and scope of her employment with Southern Homes; therefore, the Court held that under the circumstances presented by this case, Phillips "stands in the shoes" of her principal.  The Court also held that the evidence was sufficient to show that the transaction substantially affected interstate commerce.)
*Download or view PDF version of opinion*
 
• Dickerson v. Alabama State Univ.,

No. 1011053 (Ala. Dec. 6, 2002)
(final judgment; appellate jurisdiction; After being fired from his position as head football coach at Alabama State University ("ASU"), Ronald Dickerson sued ASU, the president of ASU, and various members of the ASU Board of Trustees.  The defendants filed a motion to dismiss on grounds of sovereign and state-agent immunity.  The trial court granted the motion except to a portion of one count seeking equitable relief.  The trial court did not certify the dismissal as final under Ala.R.Civ.P. 54(b).  Dickerson appealed. HOLDING:  The Supreme Court dismissed the appeal.  The Court held that because there was no final judgment, it lacked jurisdiction.
*Download or view PDF version of opinion*
 
• Ex parte Thomas,

No. 1011421 (Ala. Dec. 6, 2002)
(criminal; search and seizure; petition for writ of certiorari quashed without opinion; dissenting opinion by Justice Houston, joined by Justice Johnstone)
*Download or view PDF version of opinion*
 
• Holman v. Childersburg Bancorporation,

No. 1011756 (Ala. Dec. 6, 2002)
(Statute of Frauds; real estate; Danita Kim Holman and her husband, D. Mark Holman borrowed $275,000 from the First Bank of Childersburg ("the Bank") in connection with the purchase of approximately 16 acres of real property.  The loan was secured by a mortgage on that property.  Subsequently, the original 16-acre tract was subdivided into three tracts --tract I, tract II, and tract III.  The Holmans allege in their complaint that in 1997 they and Henry reached an oral agreement regarding the disposition of some of the property.  Under the alleged agreement, the Holmans would sell tract I.  The parties agree that a portion of the sale proceeds were to be paid to the Bank to satisfy the mortgage on tract I.  The Holmans allege that the Bank also agreed -- in exchange for $175,000 of the purchase price of tract I -- to execute an instrument releasing tract II from the mortgage lien, to enable the Holmans to obtain a construction loan to build a residence on tract II.  tract I was sold, and the Holmans paid the Bank  $175,000.  On May 7, 1997, the Bank executed a "Partial Release," releasing tract I from the mortgage lien.  Subsequently, the Holmans began constructing a house on tract II.  However, title searches conducted revealed to the Holmans that no mortgage release had been recorded as to tract II.  In December 2000, the Holmans sued the Bank, Childersburg Bancorporation, Inc., and Byron Louie Henry, an officer of the Bank alleging (1) breach of a contract to release tract II from the mortgage lien, (2) negligence/wantonness, (3) fraudulent misrepresentation, (4)  fraudulent suppression, (5) slander of title, and (6) civil conspiracy.  The trial court entered summary judgment for the defendants on grounds of Statute of Frauds as to the contract claim and statute of limitations as to the tort claims.  HOLDING:  The Supreme Court affirmed the summary judgment.  The Court held that the contract claim was barred by the Statute of Frauds and rejected the plaintiffs' argument that the defendants were estopped from denying the oral agreement and that there had been partial performance.  The Court held that the tort claims were also barred by the Statute of Frauds, because all of the tort claims depended upon the existence of an oral contract.)
*Download or view PDF version of opinion*
 
• Ex parte Wood,

No. 1011916 (Ala. Dec. 6, 2002)
(sovereign immunity; state-agent immunity; E.L., a minor child, by and through his next friend, Sharon Love, on behalf of himself and all others similarly situated, sued J. Walter Wood, Jr., executive director of the Department of Youth Services ("the Department"), and other fictitiously named defendants, on theories of negligence and wantonness, seeking damages as a result of Wood's alleged failure to provide adequate educational programs for children  committed to the Department's facilities.  E.L. was adjudicated a delinquent and was placed at the Vacca campus operated by the Department.  E.L. alleges that he and other class members at the Vacca campus have not received the curriculum and course of study mandated by State law.  He states that he attends school for only two hours each school day, as opposed to the six hours required by Ala. Code §16-1-1 and Rule 290-3-1-.02 of the Alabama State Department of Education.  E.L. claims that during those two-hour classes he has received no educational instruction and that, instead, he and his classmates watch movies during class time at the Vacca campus.  E.L. sued Wood, "in his individual capacity as Director" of the Department, seeking to represent all individuals committed to the custody of the Department and placed at the Vacca campus from February 12, 2000, to the present.  E.L. is seeking compensatory and punitive damages, attorney fees, and costs.  E.L. contends that Wood is personally responsible for providing and implementing appropriate educational opportunities required by State law for those individuals committed to the custody of the Department.  E.L. argues that Wood acted in bad faith by willfully denying E.L. and his class members "equitable and adequate" educational programs.  Wood sought to stay discovery in the trial court, or, alternatively, to limit discovery to those issues relating to his immunity from liability and/or class-action certification.  E.L. filed a response along with a motion to compel production.  Wood filed a motion for a summary judgment; the motion was supported by his own affidavit.  Wood argued that he was entitled to State or State-agent immunity.  The trial court denied Wood's motion for a summary judgment and questioned how it could consider the motion based on the information before it without allowing further discovery.  Wood then filed his mandamus petition.  HOLDING: The Supreme Court denied the petition for writ of mandamus.  The Court noted that, although Wood's affidavit states the issues in terms that would lead to the conclusion that he falls under the immunity from liability set forth in Cranman, Wood fails to provide any significant facts relating to his personal involvement in the actions giving rise to the claims asserted against him.  The Court held that Wood failed to present facts sufficient to determine whether his conduct entitles him to the defense of State-agent immunity. Based upon the inadequacy of the materials before the Court, it found no abuse of discretion in the trial court's deferral of resolution of the issue of State or State-agent immunity until E.L. has completed further discovery limited to the issue of immunity.)
*Download or view PDF version of opinion*
 
• Ex parte Dallas,

No. 1961457 (Ala. Sept. 9, 2002)
(criminal; capital murder; note from the reporter of decisions;  On September 9, 2002, the Supreme Court of Alabama issued an order setting an execution date for Donald Dallas.  Justice Johnstone issued a special writing dissenting from the order setting the execution date while Dallas's petition for federal habeas corpus relief is pending in federal court.  Justice Johnstone noted that the timeliness of the federal habeas corpus petition was a matter for the federal courts and stated that the ineffective assistance of counsel claims in the federal habeas corpus petition seem worthy of consideration if the federal court can reach the merits.)
*Download or view PDF version of opinion*

Back to top




---

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  NOVEMBER 27, 2002

 
• Lee L. Saad Constr. Co. v. DPF Architects, P.C.,

No. 1010505 (Ala. Nov. 27, 2002)
(construction contract dispute; res judicata; collateral estoppel; arbitration; The Baldwin County Board of Education (the "Board") sued Lee L. Saad Construction Co. ("Saad Construction") and one of its suppliers, Jim Boothe Contracting & Supply Company ("Boothe Contracting"), seeking a declaratory judgment as to the rights and obligations of the parties under the construction contract and seeking to interplead certain funds it claimed were in dispute between the parties concerning the "Spanish Fort" project and the "Rosinton project."  DPF Architects and Lee Turberville intervened.  Saad Construction raised as an affirmative defense that the Board was contractually obligated to submit disputes related to the construction contract to the Alabama Building Commission, and it moved to compel arbitration.  The trial court granted Saad Construction's motion to compel arbitration with the Board.  The director of the Commission conducted an arbitration hearing between Saad Construction and the Board.  the director issued his decision, which consisted of a list of the claims made by Saad Construction and the Board with a note beside each claim, "Award" or "No Award."  The director did not explain his reasons behind the decision.  The director noted "no award" concerning both parties' claims related to the remedial work on the wall.  The director made an award for Saad Construction on its claims for the changes to the overhead electrical installations and also made awards to Saad Construction for weather-related delays and for the addition of fire dampers that were also the subject of a dispute between the parties.  The director made awards to the Board for remedial work performed by the remedial-work contractor unrelated to the wall, "future remedial work," and liquidated damages under the contract.  The director made no award concerning any of Saad Construction's other claims.  Both the Board and Saad Construction satisfied the awards.  In September 2000, Saad Construction filed a cross-claim against DPF and a third-party complaint against Mueller, Capes, Capes Engineering, Yonge & Associates, and Larry Kerr, a former employee of Saad Construction who worked on the Spanish Fort project.  The trial court dismissed the Board and realigned the parties to identify Saad Construction as the plaintiff and  the other remaining parties as defendants.  DPF, Turberville, Mueller, Capes, and Capes Engineering subsequently filed motions for a summary judgment.  The trial court entered summary judgments in favor of those parties, stating:  "The Court is of the opinion that all issues are or were covered by arbitration.  All motions for summary judgment are granted."  HOLDING:  The Supreme Court held that Saad Construction's tort claims were not within the scope of the submission to arbitration.  The Court held that because the director lacked subject-matter jurisdiction over Saad Construction's tort claims and could not award punitive damages, res judicata does not bar Saad Construction from asserting those claims in a subsequent action.  The Court also held that the appellees have not satisfied their burdens of proof as to their affirmative defense of collateral estoppel.  The Court did hold that one defendant that submitted its motion for summary judgment on the merits, Capes Engineering, was entitled to a summary judgment.  Thus, the Court reversed the summary judgments as to all defendants except Capes Engineering.)
*Download or view PDF version of opinion*
 
• Liberty Mut. Ins. Co. v. Wheelwright Trucking Co.,

Nos. 1010818, 1010819, 1010820 & 1010821 (Ala. Nov. 27, 2002)
(garnishment proceedings; insurance coverage; consent judgment; Liberty Mutual Insurance Company, GAN North America Insurance Company, Federal Insurance Company, and Gerling America Insurance Company, the insurers of Dorsey Trailers, Inc. ("Dorsey"), appeal from the respective summary judgments entered against them and in favor of Wheelwright Trucking Company, Inc. ("Wheelwright").  Wheelwright and Eufaula Equipment Associates, L.L.C. ("Eufaula"), purchased 44 trailers from Scruggs, Incorporated ("Scruggs"), a trailer dealer.  The trailers were manufactured by Dorsey.  During the next five years, Liberty Mutual Insurance Company ("Liberty"), GAN North America Insurance Company ("GAN"), Federal Insurance Company ("Federal"), and Gerling America Insurance Company ("Gerling") (hereinafter referred to jointly as "the insurers") successively and respectively issued excess commercial liability insurance policies and/or "umbrella" excess liability insurance policies to Dorsey.  Wheelwright and Eufaula sued Dorsey and Scruggs in the Circuit Court of Barbour County on theories of breach of contract, breach of warranty, fraud, and negligence, and asserting a claim under the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD").  The insurers denied Dorsey's request for coverage and refused to provide it with a defense.  Federal, Gerling, and Liberty filed complaints in the United States District Court for the Northern District of Georgia against Dorsey, Wheelwright, and Eufaula seeking judgments declaring that their respective policies did not require them to provide coverage to Dorsey.  GAN filed a similar action in the United States District Court for the Middle District of Alabama with respect to  coverage under its policies.  Those declaratory-judgment actions were subsequently consolidated in the Federal District Court for the Middle District of Alabama.  Thereafter, Dorsey filed a petition in the United States Bankruptcy Court of the Middle District of Alabama pursuant to Chapter 11 of the United States Bankruptcy Code.  The Barbour County action and the federal declaratory-judgment actions were all stayed pursuant to the "automatic stay" provision of 11 U.S.C. § 362.  Dorsey entered into a settlement agreement with Wheelwright and Eufaula.  Wheelwright and Eufaula filed a motion with the bankruptcy court seeking relief from the automatic stay of their action against Dorsey in the Barbour Circuit Court and the approval of a proposed order of the Barbour Circuit Court incorporating the settlement.  The insurers filed objections to the "form and contents" of the proposed order approving the settlement, on the ground that the proposed order contained language concerning the conduct of the insurers that was not substantiated by any evidence.  The objections all contained substantially the same language indicating that the insurers did not object "to the entry of a proper order at the proper time relieving or modifying the stay of 11 U.S.C. § 362 for the purpose of the entry of a consent judgment as announced by the litigating parties ...."  Dorsey presented the proposed settlement to the bankruptcy court in what it styled as a "Motion to Compromise and Settle Claim" ("the motion to compromise").  In pertinent part, the motion stated: "[T]he Plaintiffs have agreed to collect the Consent Judgment only to the extent that the Debtor's insurance provides coverage."   None of the insurers took any action to oppose the motion. The bankruptcy court granted the motion to compromise and lifted the stays as to all of the related lawsuits.  The Barbour Circuit Court entered a judgment against Dorsey ("the consent judgment").  In pertinent part, the consent judgment stated: "The Plaintiffs have agreed to collect the Judgment only to the extent that Dorsey's insurance provides coverage." Wheelwright filed petitions for writs of garnishment in the Barbour Circuit Court against the insurers seeking to collect on the consent judgment.  The federal district court also stayed the declaratory-judgment actions pending before it until after there had been adjudication by the Barbour Circuit Court of the petitions for writs of garnishment.  The circuit court denied the insurers' and National Union's motions for a dismissal of the garnishment proceedings or abstention by the circuit court from ruling on the petitions.  The circuit court also entered summary judgments for Wheelwright against the insurers.  The circuit court concluded first that the insurers, by refusing to exercise their right to defend the claims against Dorsey, were "precluded from challenging the validity or amount of the [consent] judgment absent evidence of bad faith or collusion."  Second, the circuit court determined that no evidence of bad faith or collusion existed.   Third, the circuit court  determined that the insurers did owe coverage under their respective policies.  Accordingly, the summary-judgment order required each insurer to pay a pro rata share of the $2,500,000 judgment, less   a single "self-insured retention" ("SIR") amount of $250,000. HOLDING:  The Supreme Court concluded that under the circumstances of this case, the insurers are bound by Dorsey's consent judgment settling Wheelwright's claims to the extent that the consent judgment was reasonable and entered into in good faith. The Court held that because the the insurers were informed of the consent settlement and had ample opportunity to contest its terms before the settlement was approved by the bankruptcy court and because the circuit court's finding that the settlement was not collusive or made in bad faith is supported by the record, there was no error in the circuit court's determination that the insurers are precluded from challenging the validity or the amount of the consent judgment.  The Court noted that the policies in this case all specify that they apply only to property damage that occurs within their respective policy periods.   The Court concluded that the occurrence in this case is properly viewed as Wheelwright's loss of the use of its tractors because the Dorsey trailers could not haul steel coils and that that loss of use took place no earlier than July 1998.  Thus, the Court held that the policies of Liberty, GAN, and Federal had all expired before the occurrence.  Accordingly, the Court held that the circuit court erred in entering the summary judgments for Wheelwright against those insurers and erred in denying their respective motions for a summary judgment.  The Court found that Gerling's argument that the circuit court erred in denying its motions to dismiss Wheelwright's garnishment proceeding against it because, it says, the writ of garnishment was a compulsory counterclaim to its declaratory-judgment action pursuant to Rule 13(a), Ala.R.Civ.P., and Rule 13(a), Fed.R.Civ.P., to be without merit.  The Court reversed that portion of the summary judgment setting off only a single SIR amount and instructed the circuit court upon remand to determine the extent to which Dorsey satisfied the SIR requirements for each Gerling policy and to set off against Wheelwright's recovery against Gerling under the consent judgment the amount of the SIR for each respective policy that was not satisfied by Dorsey.  The Court concluded that the circuit court was correct in determining that Gerling owed coverage for Wheelwright's loss of use of its tractors as a result of the failure of Dorsey's trailers.  Although the Court rejected the circuit court's determination that the cracking of the trailers was the occurrence in this case, the Court noted that its determination that the failure of the trailers to haul concentrated loads is properly characterized as the occurrence fits within the circuit court's rationale.  The summary judgments for Wheelwright against Liberty, GAN, and Federal were reversed and remanded for the circuit court to enter a summary judgment for each respective insurer against Wheelwright.  The Court affirmed the summary judgment for Wheelwright against Gerling, but held that that cause must also be remanded for the circuit court to determine the extent of Gerling's liability under its policies with respect to Dorsey's payment of the SIR amounts as to each Gerling policy.)
*Download or view PDF version of opinion*
 
• Tuck v. Healthcare Authority of the City of Huntsville,

No. 1011100 (Ala. Nov. 27, 2002)
(medical malpractice; expert testimony; similarly situated health-care provider; Virginia Tuck was admitted to the  Hospital for treatment of respiratory problems and "confusion."  Nurses Connie Cowan and Paul Mizelle cared for Virginia Tuck during her stay.  Mizelle determined that Virginia Tuck was at risk for a fall, and he initiated a fall-management protocol.  This protocol called for safety measures, such as explaining the call bell to Virginia Tuck, raising the rails on her bed, and placing the bed in its lowest position.  After Tuck got out of bed three times, Cowan initiated a restraint protocol that included a belt restraint.  Tuck did not leave her bed for the rest of Cowan's shift.  Mizelle continued the restraint protocol.  Mizelle testified that he checked Virginia Tuck every two hours, in accordance with hospital policy, and that during those checks he made sure the belt restraint was in the proper location.  Around 5:30 p.m. on December 18, 1999, Mizelle found Virginia Tuck sitting on the floor at the foot of her bed; her leg was folded underneath her.  Virginia Tuck told Mizelle that she thought the room was on fire, and she apparently had worked her way out of the restraint and had gotten out of the bed and fallen.  Mizelle then added wrist and ankle restraints to Virginia Tuck.  The on-call doctor examined Virginia Tuck and determined that she had broken her hip in the fall.  Tuck sued the Hospital for medical malpractice.  Subsequently, Virginia Tuck died from unrelated causes, and her son, Charles Tuck, was substituted as the plaintiff in his capacity as the personal representative of Virginia Tuck's estate.  the Hospital filed a motion for a summary judgment.  Charles Tuck opposed the motion; his evidence in opposition included an affidavit of his expert witness, Cecilia Cantrell, a former nurse and an administrator at a school of nursing.  The Hospital filed a motion to strike the affidavit, and the trial court denied both the Hospital's motion for a summary judgment and its motion to strike Cantrell's affidavit.  At trial, the Hospital filed a motion to exclude the testimony of Charles Tuck's expert witness, Cantrell, on the grounds that she did not qualify as a similarly situated health-care provider as required by Ala. Code §6-5-548, a part of the Alabama Medical Liability Act ("AMLA").  The trial court granted the motion.  After this ruling, Tuck's attorney sought to call Phillip Buchmann, a Hospital employee who provides training in the use of patient restraints, to testify as an expert on the standard of care in applying restraints.  Tuck had deposed Buchmann and had submitted his testimony at the summary-judgment stage and had introduced at trial, before the Hospital filed its motion to exclude Cantrell's testimony, a training video featuring Buchmann.  The trial court did not allow Tuck to use Buchmann as an expert because Tuck had not disclosed Buchmann as an expert witness in accordance with Rule 26(b)(4), Ala. R. Civ. P., in response to the Hospital's interrogatories.  Tuck moved for a mistrial, and the trial court denied the motion.  At the close of Tuck's case, the trial court granted the Hospital's preverdict motion for judgment as a matter of law ("JML") and entered a judgment in favor of the Hospital.  Tuck filed a motion for a new trial;  the trial court denied the motion, and Tuck appealed.  HOLDING: The Supreme Court affirmed the trial court's judgment.  The Court held that when Cantrell testified at trial, she testified that she was not similarly situated to Cowan and Mizelle and that she had not been a staff nurse at a hospital in the year preceding Virginia Tuck's accident in December 1999.  The Court held that the trial court properly determined that Cantrell was not a health-care provider similarly situated to Cowan and Mizelle and that she was not qualified to testify as to the standard of care in this case.  The Court held that the trial court did not abuse its discretion in refusing to allow Buchmann to testify as an expert witness and in denying Tuck's motion for a mistrial.)
*Download or view PDF version of opinion*
 
• Grubbs v. Life Ins. Co. of Georgia,

No. 1011233 (Ala. Nov. 27, 2002)
(affirmed without opinion; Justice Johnstone stated that he concurred in affirming the summary judgment against the plaintiffs on their contract and negligence theories, but dissented from affirming the summary judgment against the plaintiffs on their fraud theory.)
*Download or view PDF version of opinion*
 
• Ex parte HealthSouth Corp.,

No. 1011582 (Ala. Nov. 27, 2002)
(medical malpractice; expert testimony; Sharon Heath had been admitted to the HealthSouth facility for back surgery.  After her surgery, which was successfully performed, Heath was transferred to the rehabilitation section of the facility.  Immediately before her transfer and before she left the surgical ward on November 21, 1999, she was given 5 milligrams ('mg.') Valium, 10 mg. morphine, and a Percodan tablet.  Shortly after arriving at the rehabilitative floor of the facility, she received a second Percodan tablet.  The Percodan was supposed to be given at four-hour intervals, but Heath received the second Percodan tablet 2 hours and 45 minutes after she had taken the first one.  In addition, Heath, an insulin-dependent diabetic, did not receive a scheduled dose of her insulin.  Heath testified in her deposition that, shortly after she received the second Percodan tablet, she needed to use the bathroom, and she rang the buzzer to summon a nurse. Heath said that after she rang the buzzer, she waited "anywhere from 30 minutes to an hour" for a nurse to come and assist her to the bathroom.  Although she knew that her doctor had instructed her not to get up from her bed without the assistance of a nurse, she was unable to wait any longer and she began to climb out of bed by herself.  Health fell, breaking her left hip.  The Heaths sued HealthSouth alleging that the defendants had breached the standard of care in providing care and treatment for Heath while she was a patient in the facility.  Specifically, they alleged that the defendants (1) had failed to identify Heath as a patient 'at risk' for falling, (2) had failed to properly supervise and monitor Heath while she was being treated in the facility, (3) had failed to train its nursing staff on safety issues, and (4) had failed to respond to Heath's calls for assistance. HealthSouth moved for a summary judgment, stating as grounds that no genuine issue of material fact existed as to the defendants' breach of the standard of care.  HealthSouth supported its motion with the affidavit of Lola Patterson, R.N.  The Heaths responded to HealthSouth's summary-judgment motion with the affidavit testimony of Julie Akin, R.N.  HealthSouth moved to strike Ms. Akin's affidavit, contending that she was not a qualified expert pursuant to the Alabama Medical Liability Act, Ala. Code §6-5-548.  The trial court determined that Ms. Akin did not meet those requirements, struck her affidavit, and granted HealthSouth's summary-judgment motion.  HOLDING: The Supreme Court affirmed the trial court.  The Court recognized that there is an exception to the rule requiring expert testimony in 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, 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.  The Court also recognized an exception to the rule requiring expert testimony applies when a plaintiff relies on a recognized standard or authoritative medical text or treatise or is himself or herself a qualified medical expert.)
*Download or view PDF version of opinion*
 
• Ex parte A.K.,

Nos. 1011789 & 1011790  (Ala. Nov. 27, 2002)
(petitions for writs of certiorari denied without opinion; brief dissent by Justice Johnstone)
*Download or view PDF version of opinion*
 
• Ameriquest Mortgage Co.. v. Bentley,

No. 1011791 (Ala. Nov. 27, 2002)
(arbitration; employment; Kathryn Bentley owns and operates a real estate appraisal business, Kathryn Bentley & Associates, in Jefferson County, Alabama.  Bentley performed real estate appraisals for  Ameriquest Mortgage Company, Inc. ("Ameriquest"), from May 1998 to January 2000.  In January 2000, Bentley accepted an offer to work for Ameriquest at its Birmingham office as a retail account executive.  Her job duties with Ameriquest consisted of originating loans on behalf of the company.  The employment agreement Bentley signed upon acceptance of the Ameriquest job stated that her employment was on an "at-will basis" and that it was also conditioned upon her signing an arbitration agreement. The contract provided: "As a condition of employment, you will be required to sign the standard Mutual Agreement to Arbitrate Claims ..., which will apply during your employment with the Company and thereafter."  Bentley and a representative of Ameriquest both signed the employment contract and the arbitration agreement.  Bentley later became dissatisfied and terminated her employment with Ameriquest, but claims that she left only after Ameriquest allegedly represented to her that the company would use her as a preferred real estate appraiser if she terminated her employment. Bentley later learned that she had been removed from Ameriquest's "preferred appraiser's list."  Bentley sued Ameriquest and Diana Harmon, an Ameriquest representative in California, alleging claims of breach of contract, fraud, defamation, and tortious interference with business relations.  All of the claims are based on the alleged representations by Ameriquest to Bentley while she was employed at Ameriquest. Ameriquest and Harmon moved to stay the proceedings and to compel arbitration based on the arbitration agreement signed by Bentley.  The trial court denied Ameriquest and Harmon's motion to compel arbitration. HOLDING: The Supreme Court reversed, holding that Ameriquest and Harmon clearly satisfied their burden by showing a valid, controlling contract containing an arbitration agreement in a transaction that substantially affects interstate commerce.  The Court rejected Bentley's unconscionability argument because Bentley neither pleaded nor argued below unconscionability  as a basis for avoidance of the arbitration agreement at issue.)
*Download or view PDF version of opinion*
 
• Ex parte Hayles,

No. 1011811 (Ala. Nov. 27, 2002)
(state-agent immunity; The Alabama Department of Transportation ('ALDOT') entered a contract with the Alabama Department of Conservation and Natural Resources ('ADOC') to demolish a bridge over Lake Martin known as the Old Kowaliga Bridge ('the old bridge').  During the demolition of the old bridge, however, it collapsed prematurely.  Two ALDOT employees, Randall Phillips and Frank Williams, who were working on the old bridge when it collapsed, died when pieces of the old bridge pinned them at the bottom of Lake Martin.  The widows of Phillips and Williams, acting as administratrices of their husbands' estates, along with their minor children (hereinafter the widows and the minor children will be sometimes referred to collectively as 'the families'), sued ADOC; ALDOT; James D. Martin, the former director of ADOC; Jimmy Butts, the former director of ALDOT; Ray Bass, ALDOT's chief engineer; Douglas 'Mitch' Kilpatrick, ALDOT's chief maintenance engineer; Terry L. McDuffie, an assistant bridge-maintenance engineer for ALDOT; Bob Campbell, an assistant bridge-maintenance engineer for ALDOT; and John A. Hayles, the supervisor of the ALDOT work crew to which Phillips and Williams were assigned.  Each of the individual defendants was sued in both his official capacity and his individual capacity.   The employees moved for a summary judgment on the ground that they are entitled to state-agent immunity.  The trial court entered a summary judgment for all the employees except Hayles and McDuffie.  Hayles and McDuffie filed a petition for writ of mandamus.  HOLDING:  The Supreme Court granted the writs.  The Court found that nothing indicates that McDuffie or Hayles exceeded the scope of his authority.  The Court held that McDuffie and Hayles established that they are entitled to  state-agent immunity as to the state-law causes of action.  The Court directed the trial court to enter a summary judgment in favor of Hayles and McDuffie.)
*Download or view PDF version of opinion*
 
• Ex parte Wharton,

No. 1011935 (Ala. Nov. 27, 2002)
(state-agent immunity and statutory immunity under Ala. Code §6-5-338(a); the petition for writ of mandamus was denied without opinion; dissenting opinions by Justice Houston and Justice Stuart)
*Download or view PDF version of opinion*
 
Back to top




---

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  NOVEMBER 22, 2002

 
• Ex parte Waldrop,

No. 1001194 (Ala. Nov. 22, 2002)
(criminal; capital murder; judicial override of jury recommendation of life imprisonment to impose the death penalty; The petitioner, Bobby Wayne Waldrop, was convicted of three counts of capital murder: two counts of murder made capital because it was committed during a robbery in the first degree and one count of murder made capital because two or more persons were murdered by one act or pursuant to one scheme or course of conduct.  After the sentencing hearing, the jury, by a vote of 10-2, recommended that Waldrop be sentenced to life imprisonment without the possibility of parole.  The trial judge overrode the jury's recommendation and sentenced Waldrop to death.  Waldrop claimed that the United States Supreme Court's opinions in Ring v. Arizona,  122 S. Ct. 2428 (2002), and Apprendi v. New Jersey, 530 U.S. 466 (2000), mandate that any factual determination required for imposition of the death penalty must be made by the jury, not by the trial court.  Waldrop also claimed that Ring and Apprendi require that the jury, and not the trial court, determine whether the aggravating circumstances outweigh the mitigating circumstances.  HOLDING:  The Supreme Court noted that because the jury convicted Waldrop of two counts of murder during a robbery in the first degree, the statutory aggravating circumstance of committing a capital offense while engaged in the commission of a robbery was "proven beyond a reasonable doubt."  Thus, the Court noted, in Waldrop's case, the jury, and not the trial judge, determined the existence of the "aggravating circumstance necessary for imposition of the death penalty."  Therefore, the Court held that the findings reflected in the jury's verdict alone exposed Waldrop to a range of punishment that had as its maximum the death penalty, and that this is all Ring and Apprendi require.  The Court also held that the weighing process is not a factual determination because the relative "weight" of aggravating circumstances and mitigating circumstances is not susceptible to any quantum of proof.  The Court affirmed the sentence of death.)
*Download or view PDF version of opinion*
 
• Ex parte Seaman Timber Co.,

No. 1001658 (Ala. Nov. 22, 2002) (additional opinion on application for rehearing)
(While the action was pending, the plaintiffs divorced, and the divorce judgment awarded all right, title and interest in and to the claim against Seaman Timber Company regarding the Shelby County farm property to Melford O. Cleveland and divested Belle Cleveland of any interest in the claim.  Belle Cleveland asked to be removed as a party.  The Supreme Court stated that it was reluctant to remove a party, but it encouraged the trial court, when  it reconsiders Seaman's motion for dismissal and the imposition of sanctions, to consider this new information regarding Belle Cleveland and her participation in the proceedings below.)
(In the opinion on original consideration, the Court granted the petition for the writ of mandamus and directed the trial court to reconsider Seaman's motion for dismissal or for sanctions for failure to allow discovery, and it directed the trial court to impose an adequate sanction, proportionate to the discovery abuse in this case.)
*Download or view PDF version of opinion*

--(The original opinion released on September 13, 2002, in Seaman Timber Co. is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Chambers County Comm'n v. Chambers County Bd. of Educ., 

No. 1010273 (Ala. Nov. 22, 2002)
(on application for rehearing; withdrawing and substituting opinion of August 2, 2002) (Note: August 2 opinion was a plurality opinion, but this substituted opinion is a majority opinion)
(taxation; property tax referendum; At a meeting of the Chambers County Commission held on August 20, 2001, the Chambers County Board of Education ("the Board"), in conjunction with the Board of Education for the City of Lanett, presented a resolution requesting that the Commission call a special election to propose the imposition of a special school district tax in Chambers County.  The resolution specified that the election be held on November 13, 2001, and that the assessment be at the rate of 5 mills and that it be imposed for 20 years.  The Commission did not act on the resolution but instead tabled the issue; the Commission noted that it did not have the money to fund such a special election and that funds for such a special election had not been included in the budget for Chambers County.  The day after the Commission tabled the issue, the Board instituted this action, seeking a writ of mandamus compelling the Commission to hold the special election.  The Board asserted that, pursuant to Amendment No. 3 and Amendment No. 202 to the Alabama Constitution of 1901, the Commission was required to call the special election, under the terms requested by the Board, for the purpose of considering the special school district tax.  The Board asserted that, Amendment No. 3 and Amendment No. 202 authorized it to set the rate and term of any assessment considered for public school purposes and to specify the date for the special election.  The Board of Education for the City of Lanett was added as a petitioner.  The trial court entered an order issuing the writ of mandamus and holding that Amendment No. 3 and Amendment No. 202 of the Alabama Constitution required the Commission to call a referendum in accordance with the terms in the Boards' resolution.  The trial court held that the Commission could not ignore its constitutionally mandated duty, regardless of the financial ramifications of performing that duty.   HOLDING:  The Supreme Court concluded that the Boards have no authority to invoke Amendment No. 202 at all.  Therefore, the Court reversed the trial court's order of September 6, 2001, and issued the writ of mandamus.  The Court noted that the only provision in Amendment No. 202 substantively addressing the power to tax is the first sentence,  which grants five-mill taxing power only to the county governing body -- not to any school board.  The Court noted that the last sentence of Amendment No. 202 purports only to provide for an election procedure, not to provide for any extension or expansion of the substantive five-mill taxing power.  The Court also reasoned that the last sentence of Amendment No. 202  is a general provision, which, as a matter of construction, cannot countermand the express, specific provisions of the first sentence limiting the five-mill taxing power to the county governing body.  Additionally, the Court stated that the reference to Amendment No. 3 in the last sentence of Amendment No. 202, which grants only three-mill taxing power, can hardly serve as a vehicle to grant the Boards five-mill taxing power.  The Court held that the Boards were not entitled to a writ of mandamus to enforce the Boards' claim to taxing power under Amendment No. 202.  Therefore, the Court reversed the trial court and ordered it to vacate its writ.)
*Download or view PDF version of opinion*

--(The original withdrawn plurality opinion released on August 2, 2002, in Chambers County Commission is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Ex parte Pike Fabrication, Inc.,

No. 1010388 (Ala. Nov. 22, 2002)
(venue; Pike Fabrication, Inc. ("Pike"), the defendant in an action pending in the Coffee Circuit Court, petitioned the Court for a writ of mandamus directing the trial court to vacate its order denying Pike's motion to transfer the action to Pike County.  Pike made a prima facie showing that it did not do business by agent in Coffee County.  The plaintiff did not respond to Pike's motion.  HOLDING:  The Supreme Court held that the two inquiries made in Coffee County by Pike's president regarding possible leases were not conduct sufficiently regular as to constitute doing business for purposes of the venue statute, and, therefore, the plaintiff failed to demonstrate that venue in Coffee County is proper. The Court granted the writ and directed the trial court to vacate its order denying the motion and to transfer the action to Pike County.)
*Download or view PDF version of opinion*
 
• Porterfield v. Audubon Indemnity Co.,

No. 1010894 (Ala. Nov. 22, 2002)
(insurance coverage; pollution-exclusion clause; environmental law; certified question from the the United States District Court for the Middle District of Alabama: "Does the pollution exclusion clause contained in Audubon's comprehensive general liability insurance policy preclude coverage to its insured for liability for injuries allegedly caused from the ingestion of lead contained in paint, blinds, water, pipes and soil on premises operated by the insured?"  The Supreme Court rephrased the question as follows: "Does an 'absolute' pollution-exclusion clause contained in a commercial general liability insurance policy exclude coverage for injuries resulting from the ingestion of lead contained in the paint, blinds, water, pipes, and soil on premises under the control of the insured?"  HOLDING:  The Supreme Court held that lead paint qualifies as a pollutant under the terms of the absolute pollution-exclusion clause.  On the other hand, the Court concluded that a reasonably prudent insured might have concluded in 1991 that the presence of lead-paint flakes, chips, and/or dust in a residential apartment would not qualify as a discharge, dispersal, release, or escape of a pollutant.  Having concluded that the operative terms "discharge," "dispersal," "release," or "escape" are ambiguous in the context of flaking and peeling lead paint in a residential apartment, the Court construed them against Audubon and thereby determined that the absolute pollution-exclusion clause does not bar coverage in that specific and particular setting.  Thus, the Court held that Audubon's duty to defend was triggered as to the claims in the underlying lawsuit predicated on the children's personal injuries that allegedly were caused by their inhalation and ingestion of lead disseminated through the "peeling and flaking" of lead paint.  The Court answered the certified question by stating that, as to the peeling and flaking interior surface lead paint that resulted in the presence of lead-paint particles (including lead dust), which were then ingested and/or inhaled by the children, the absolute pollution-exclusion clause serves as no bar to Audubon's otherwise existing duty to defend the MHA in the underlying lawsuit.)
*Download or view PDF version of opinion*
 
• Ex parte State Health Planning & Dev. Agency,

Nos. 1011707 & 1011708 (Ala. Nov. 22, 2002)
(certificate of need; The central issue in these appeals is whether vendors that provide mobile lithotripsy equipment to hospitals are providing a "health service" requiring a "certificate of need" ("CON") under Ala. Code §22-21-263(a)(4).  The Court of Civil Appeals answered this question in the negative, holding that "the health-care facilities and HMOs that provide health services must seek CON review in connection with providing such a service[; however, the] sellers or vendors of equipment that health-care facilities and HMOs use in order to provide such services need not obtain a CON."  HOLDING:  The Supreme Court found the Court of Civil Appeals' reasoning interpreting §22-21-263 to be sound.  The Court held that SHPDA's interpretation was not due any deference.  The Court reasoned that because the sale or lease of mobile lithotripsy equipment falls outside the SHPDA's particular sphere of statutory authority, any SHPDA interpretation that would bring the acts of selling or leasing mobile lithotripsy equipment into that sphere is invalid and is not entitled to deference.  The Court adopted the reasoning of the Court of Civil Appeals and affirmed its judgment.)
*Download or view PDF version of opinion*
 
• Locke v. City of Mobile,

No. 1011741 (Ala. Nov. 22, 2002)
(negligence; summary judgment; Laura Locke , who owns a house in the Azalea and Cottage Hill area of Mobile, alleges that the City negligently maintained the drainage system in her neighborhood and that its negligent maintenance of the system resulted in the flooding of her property.  The trial court entered summary judgment in favor of the City of Mobile.  HOLDING:  The Supreme Court concluded that Locke failed to present substantial evidence showing that the City's negligent maintenance of the drainage system proximately caused the flooding of her property.  It therefore affirmed the summary judgment in favor of the City.)
*Download or view PDF version of opinion*
 
• Ex parte House,

No. 1012219 (Ala. Nov. 22, 2002)
(petition for writ of certiorari denied without opinion; dissenting opinion by Chief Justice Moore stating that he believes House has demonstrated a true conflict between the no-opinion affirmance by the Court of Civil Appeals in this case, which concerns modification of a divorce judgment by the parties' agreement, and the decisions in Holland v. Holland, 406 So.2d 877 (Ala. 1981), and Price v. Price, 705 So.2d 488 (Ala. Civ. App. 1997).)
*Download or view PDF version of opinion*
 
• Ex parte Perkins,

No. 1991016 (Ala. Nov. 22, 2002) (on remand from the U.S. Supreme Court)
(criminal; capital punishment; mental retardation; The United States Supreme Court vacated the Supreme Court of Alabama's March 30, 2001, judgment in this case and remanded the cause for our further consideration in accordance with Atkins v. Virginia, 122 S.Ct. 2242 (2002), which held that executing a mentally retarded individual violates the ban on cruel and unusual punishments found in the Eighth Amendment to the United States Constitution.  On remand, the Supreme Court of Alabama conducted a thorough review of the record to determine if there is any inference that Perkins is mentally retarded.  The Court concluded that Perkins does not suffer from mental retardation under the definitions considered by the United Supreme Court in reaching its holding in Atkins or as defined by any of the state statutes that prohibit the imposition of the death sentence on a mentally retarded defendant.  The Court held that it can determine, based on the facts presented at Perkins's trial, that Perkins, even under the broadest definition of mental retardation, is not mentally retarded.  Applying the plain-error standard of review, the Court held that because, applying the most common definitions of mental retardation, it found no indication in the record that Perkins is mentally retarded, no reversible error occurred and the imposition of the death sentence in this case is not unconstitutional.  Therefore, the Court affirmed the judgment of the trial court sentencing Perkins to death.)
*Download or view PDF version of opinion*

--(The original opinion released on March 30, 2001, in Perkins is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--

--(The additional opinion on rehearing by Justice Johnstone concurring in the result released on July 13, 2001, in Perkins is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 
 
 

Back to top

There Were No Opinions Released November 15, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  NOVEMBER 15, 2002

 

 
 
 
 
 
 
 
 
 
 
 
 

Back to top

Opinions Released November 8, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  NOVEMBER 8, 2002

 
• Wood v. Phillips,

No. 1002091 (Ala. Nov. 8, 2002)
(sufficiency of the evidence; merger clause; parol evidence; This case involves a dispute between Barry Wood and William H. Phillips over the ownership of FM radio broadcast stations WAVH in Daphne and WZEW in Fairhope.  One of the critical questions presented by this appeal is the effect of an "employment agreement" dated December 30, 1992 ("the employment agreement"), in which Phillips was identified as the manager and "Baldwin Broadcasting Company, a sole proprietorship," was identified as the employer.  The employment agreement, among other things, set forth the duties Phillips was to perform as manager of the stations and the salary he would receive.  The employment agreement also provided for an incentive salary to Phillips based on the station's net income and further provided that, in the event the stations were sold, Phillips would receive the greater of $30,000 or 30% of the net proceeds of the sale.  The employment agreement contained a so-called merger clause; that clause stated: "This Agreement contains the entire agreement and understanding between the parties and integrates all prior discussions between them with respect to the subject matter hereof.  This Agreement does not create a partnership between the parties."  The complaint filed by Phillips consisted of four counts.  Count one alleged a breach of contract in failing to pay Phillips the incentive payments provided for in the employment agreement.  Counts two and three alleged misrepresentation and breach of contract, respectively, based on Wood's alleged representations that Phillips would be given an ownership interest in the stations.  Count four alleged that Wood had breached his fiduciary duty by promising Phillips that he would be given an ownership interest in the stations and based on the attorney-client relationship between Phillips and Wood, as well as their relationship as "de facto (if not on paper) partners."  Wood answered the complaint, and counterclaimed, alleging eight causes of action against Phillips.  On September 12, 2000, Phillips amended his complaint to add count five, in which he alleged that Wood had breached a duty of due care that, he asserted, Wood owed "to the Partnership and Mr. Phillips, the partner."  Phillips also alleged in count five that Wood violated his obligation of good faith and fair dealing that partners owe each other.  At the close of Phillips's case at the trial, Phillips filed a motion to amend the pleadings to conform to the evidence; the trial court granted the motion.  Count three was then amended to include a claim that the parties' actions had created a partnership and that Phillips had been expelled from the partnership in September 1999, when his employment was terminated, creating a dissolution of the partnership.  At the conclusion of the trial, the trial court submitted three interrogatories and two verdict forms to the jury, and the jury returned a verdict finding that a partnership, in which Phillips was a partner, was formed in December 1992, and that as of September 13, 1999, Phillips's interest in the partnership was 40%.  The jury also found for Wood on Phillips's misrepresentation claim and found for Phillips on Wood's defamation and breach-of-contract claims.  Although Wood concedes that evidence of the existence of an alleged partnership agreement was properly admitted on the question of whether he had made certain misrepresentations to Phillips, he nevertheless says that once the jury found in his favor on Phillips's misrepresentation claim, the jury should not have considered such evidence in deciding whether a partnership was in fact created.  Phillips argues in his brief to this Court, that once he dismissed count one of his complaint, he asserted no claim whatsoever under the employment agreement and that the jury was free to consider all the evidence relating to the formation of a partnership under count three of his complaint, where he asserted that "Wood's promises to [him] that [he] would be made an owner of WAVH and that he would be made an owner of WZEW constituted a contract between defendants and [him]." HOLDING:  The Supreme Court held that it is clear that evidence which may be admissible to attempt to prove fraud in the inducement of a contract is not to be considered in interpreting a written contract.  The Court found that no evidence was presented that would support the jury's determination that a partnership between Wood and Phillips was formed in December 1992.  The Court held that the trial judge erred in entering a judgment in favor of Phillips based upon the jury's determination that a partnership was created in December 1992.)
*Download or view PDF version of opinion*
 
• Securities America, Inc. v. Rogers,

No. 1011189 (Ala. Nov. 8, 2002)
(arbitration; nonsignatories; securities; Securities America, Inc. ("SAI") is a securities broker-dealer registered with the United States Securities and Exchange Commission, is a member of the National Association of Securities Dealers, and is registered under the laws of Alabama to offer and sell securities.  The 10 plaintiffs -- Charles P. Rogers, Margaret Rogers, M. Khris McAlister, Robert F. McCullough, William S. Ringland, Adrian Ringland, Jr., Adrian Ringland III, Bertha Ringland, George Edwards, and John Taliaferro -- allege that "[t]his is a case about the criminal actions of a con artist ... who assumed his college roommate's identity and stole over $1 million from the ten individual plaintiffs."  The alleged "con artist" is Scott Wolas, who, using the name of Allen Lee Hengst, his college roommate, became a registered representative of SAI, opened a branch office in Orlando, Florida, and obtained an Alabama securities license under that assumed name.  The plaintiffs allege that acting "[o]n behalf of SAI and in violation of the Alabama Securities Act, Wolas (masquerading [as] Allen Hengst) enticed each of [them] into investing in securities approved and supported by SAI."  Five of the plaintiffs -- M. Khris McAlister, Robert F. McCullough, Charles P. Rogers, Margaret Rogers, and William S. Ringland (the "nonsignatory plaintiffs") -- never opened an account with SAI and, therefore, never signed any agreement with SAI.  On the other hand, the other five plaintiffs -- Adrian Ringland, Jr., Adrian Ringland III, Bertha Ringland, George Edwards, and John Taliaferro (the "signatory plaintiffs") -- opened brokerage accounts with SAI, signing and receiving documents concerning those accounts.  The documents were presented to the signatory plaintiffs by Wolas, who signed the documents as SAI's registered representative, using the name "Allen Hengst."  Each signatory plaintiff signed a new account application, which contains an arbitration agreement.  SAI moved to compel arbitration, and the trial court denied the motion.  HOLDING:  The Supreme Court noted that SAI provided no evidence of any contract by which any nonsignatory plaintiff agreed to submit any dispute to arbitration.  The Court rejected SAI's argument that the nonsignatory plaintiffs should be compelled to arbitrate their disputes on the ground that the non-signatory plaintiffs are attempting to avail themselves of the benefits of the SAI customer agreement, because the plaintiffs are not attempting to enforce selectively the provisions of SAI's customer agreement, as alleged by SAI.  Thus, the Court held that the trial court did not err in refusing to compel the arbitration of the claims of the nonsignatory plaintiffs.  As to the signatory plaintiffs, the Court noted that the Alabama Securities Act requires that every person engaged in the business of effecting transactions in securities in Alabama be registered with the Alabama Securities Commission and states that it is unlawful for any person to transact business in this state as a dealer or agent for securities unless he is registered under this article and unlawful for any dealer or issuer to employ an agent unless the agent is registered.  The Court concluded that that Wolas and SAI violated Ala. Code §8-6-3(a).  The Court read Ala. Code §8-6-19(g) as stating, in relevant part, that no person who has made or engaged in the performance of any contract in violation of any provision of the Act may base any action on the contract, and therefore, SAI is not entitled to enforce the arbitration provision in its customer agreements.  The Court held that the trial court did not err in denying SAI's motion to compel the signatory plaintiffs to arbitrate their claims.  The Court affirmed the trial court's denial of the motion to compel arbitration.)
*Download or view PDF version of opinion*

Back to top

Opinions Released November 1, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  NOVEMBER 1, 2002 

 
• McConnell Automotive Corp. v. Jackson, 

No. 1010006 (Ala. Nov. 1, 2002) (plurality opinion)
(arbitration; interstate commerce; claims of fraud, misrepresentation, suppression, and deceit arising out of the sale of a used automobile; Kisha Jackson purchased a 1999 Cadillac DeVille automobile from McConnell Automotive Corp.  In connection with that purchase, Kisha Jackson executed an arbitration agreement.  McConnell purchased the Cadillac from General Motors Auction Department, located in Warren, Michigan, at an auction conducted by ADESA Birmingham, located in Moody, Alabama.  When McConnell purchased the vehicle it had a Georgia certificate of title issued on October 27, 1998.  Additionally, McConnell, although its principal place of business is located in Mobile, in the course of that business has sold motor vehicles to customers who reside out-of-state.  While Kisha Jackson paid cash for the Cadillac she purchased, McConnell has financed motor vehicles with companies whose principal places of business are not within Alabama.  When the Jacksons filed this action, the defendants moved to compel arbitration, and the trial court denied it without stating any reasons.  HOLDING:  The plurality opinion held that the defendants did not present sufficient evidence to show that the subject transaction had a substantial effect on interstate commerce.  The plurality opinion noted that some of the critical facts necessary to show a pattern of economic activity that in the aggregate substantially affected interstate commerce are not present.  The Court affirmed the trial court's denial of the motion to compel arbitration.)
*Download or view PDF version of opinion*
 
• Ex parte Horne, 

No. 1010796 (Ala. Nov. 1, 2002)
(criminal; The Supreme Court quashed the writ of certiorari, citing Hale  v.  State, No. 1010196 (Ala. Oct. 11, 2002) (holding that "the absence of sentence enhancement allegations from the indictment does not deprive the trial court of jurisdiction to impose the enhancements" and that because the defendant "did not argue before the trial court at any time that the application of the sentence enhancements violated his rights to due process and to a trial by jury, he ... waived appellate review of [those] arguments").)
*Download or view PDF version of opinion*
 
• Celtic Life Ins. Co. v. Brown, 

Nos. 1011007 & 1011237 (Ala. Nov. 1, 2002)
(arbitration; The Court reversed the trial court's order denying the appellants' motions to compel arbitration based on Ex parte Celtic Life Insurance Co., No. 1010738 (Ala. May 3, 2002).)
*Download or view PDF version of opinion*
 
• Ex parte Porter, 

No. 1011147 (Ala. Nov. 1, 2002)
(criminal; The Supreme Court quashed the writ of certiorari, citing Hale  v.  State, No. 1010196 (Ala. Oct. 11, 2002) (holding that "the absence of sentence enhancement allegations from the indictment does not deprive the trial court of jurisdiction to impose the enhancements" and that because the defendant "did not argue before the trial court at any time that the application of the sentence enhancements violated his rights to due process and to a trial by jury, he ... waived appellate review of [those] arguments").)
*Download or view PDF version of opinion*
 
• Southern Foodservice Management, Inc. v. American Fidelity

Assurance Co.,
No. 1011570 (Ala. Nov. 1, 2002)
(arbitration; claims of fraud, suppression, bad-faith failure to pay a claim, and breach of contract; Southern Foodservice Management, Inc. ("Foodservice"), a dining management service, has provided a self-funded medical insurance plan for its employees. Foodservice, through its agent, Group Resources, Inc. ("GRI"), or its predecessor, purchased excess or stop-loss insurance to protect against catastrophic losses.  On April 26, 1999, GRI solicited a proposal from Insurance Mass Marketing Systems, Inc. ("IMMS") for stop-loss insurance coverage for Foodservice.  On June 9, 1999, GRI instructed IMMS to bind stop-loss coverage with American Fidelity Assurance Company ("American Fidelity") as the insurer.  Foodservice executed an application for coverage and paid an advance premium of $11,384.95.  The application and premium were sent to GRI.  According to the application, Foodservice appointed GRI "as its agent for purposes of the REINSURANCE AGREEMENT and the applied for reinsurance coverage."  The stop-loss policy, issued by American Fidelity, was mailed to GRI, as agent for Foodservice, on December 6, 1999. GRI forwarded the policy, which had an effective date of July 1, 1999, to Foodservice on January 25, 2000. The policy contained an arbitration provision.  On November 17, 2000, Foodservice, through GRI, made a claim against the policy for $336,443.43. American Fidelity tendered $120,378.57 as total payment for the claim. The balance of that claim is the subject of this action.  Foodservice filed this action, asserting claims against GRI and several other insurance companies relating to the payment of proceeds under insurance policies covering Foodservice's employee-benefit plan.  Foodservice later amended its complaint to add American Fidelity and IMMS as defendants and to assert claims alleging breach of contract, fraud, suppression, and bad-faith refusal to pay an insurance claim.  American Fidelity and IMMS moved to compel arbitration under the arbitration agreement of the claims against them.  The trial court granted the motion to compel arbitration.  HOLDING:  The Supreme Court held that the arbitration provision in the policy was not a material alteration.  The Court held that, even if the addition of an arbitration provision in a policy amounted to a material alteration, Foodservice accepted the alteration by not returning the policy and by paying premiums on it.  In response to Foodservice's argument that American Fidelity and IMMS did not deliver the policy to it in a reasonable time and did not comply with Ala. Code §27-14-19 and, thus, that they should be estopped from enforcing the arbitration provision, the Court held that this argument was misplaced and that American Fidelity and IMMS complied with all statutory requirements.  The Court held that the trial court did not err, and it affirmed the order compelling arbitration).
*Download or view PDF version of opinion*
 
• Ex parte Allen, 

No. 1012141 (Ala. Nov. 1, 2002)
(criminal; The Supreme Court denied the petition for writ of certiorari without opinion.  Justice Johnstone wrote a dissenting opinion.)
*Download or view PDF version of opinion*
 
• Ex parte K.L.H., 

No. 1012175 (Ala. Nov. 1, 2002)
(criminal; The Supreme Court denied the petition for writ of certiorari without opinion.  Justice Johnstone wrote a dissenting opinion.)
*Download or view PDF version of opinion*
 
• Ex parte Baird, 

No. 1012192 (Ala. Nov. 1, 2002)
(criminal; The Supreme Court denied the petition for writ of certiorari without opinion, but stated that the Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion.)
*Download or view PDF version of opinion*

Back to top
 
 

Opinions Released October 25, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  OCTOBER 25, 2002 

 
• Kershaw v. Kershaw, 

No. 1011253 (Ala. Oct. 25, 2002)
(in terrorem clauses; trusts and estates; standing; tortious interference with an inheritance; The trial court concluded that Knox Kershaw II ("Knox") did not violate that aspect of the in terrorem clauses prohibiting an attack on the validity of the will or the trusts.  The trial court concluded that Knox violated the in terrorem clauses in that he attacked the validity of "any disposition made under this Will or under any Trust."  Because Knox's claims, if successful, would have increased his share of the distribution under the trusts, the trial court concluded that Knox had violated that portion of the in terrorem clause.  The trial court also concluded that Knox had violated the in terrorem clauses by petitioning to have Royce Kershaw, Jr. ("Royce") and Rodger Davis, Royce's personal assistant and a longtime employee of Kershaw Manufacturing Company, Inc. (hereinafter "KMC"), joined as coplaintiffs or dismissing them as coexecutors and cotrustees; the trial court concluded that his doing so constituted action that "otherwise" violated the in terrorem clause.  The trial court concluded that Knox, who is a coexecutor and a cotrustee, lacked the authority to act singly in filing this action.  HOLDING: The Supreme Court agreed with the trial court that Knox did not violate that aspect of the in terrorem clauses prohibiting an attack on the validity of the will or the trusts.  The Court stated that the trial court erred in treating "disposition" as being synonymous with "distribution" because the term "disposition" applies to the acts of the testator and the term "distribution" applies to the duties of the executor or the administrator.  The Court found no basis in the record upon which to conclude that Knox has challenged any act of Mrs. Kershaw as settlor of the trusts or as testatrix with respect to the dispositions made in either the trusts or the will because Knox's challenges leave intact the formulas in the trusts and the will; they affect only the amount of the payout when those formulas are applied to the assets.  The Court held that the trial court erred in concluding that Knox  "otherwise" violated the in terrorem clause by petitioning to have Royce and Davis joined as coplaintiffs or dismissing them as coexecutors and cotrustees, because the phrase "or otherwise" in the in terrorem clause appears after the reference to the condemned conduct of contesting or attacking the validity of the will or the trusts or any disposition under the will or trusts.  The Court held that the holding in Donegan v. Wade, 70 Ala. 501, 505 (1881), imposing a penalty for a violation of the spirit and not the letter of the in terrorem clause is limited to the facts presented there – where another beneficiary was guilty of a clear violation of the letter of the in terrorem clause.  The Court held that the trial court erred in admitting parol evidence concerning the testator's intention because the in terrorem clause was unambiguous.  The Court held that, under the circumstances here presented, the trial court's rejection altogether of Knox's right to proceed singly as coexecutor and cotrustee, without an opportunity to be heard on the merits, constituted an abuse of discretion, but the Court held that a trial court could attach conditions to allowing a single coexecutor to proceed.  The Court instructed the trial court to grant the relief and allow Knox to proceed singly as coexecutor and cotrustee upon the condition that Knox post, in his individual capacity, a bond as security for the costs and attorney fees incurred by the estate or for which the estate might be liable to third parties to the extent that the litigation on the behalf of the estate or trusts is unsuccessful.  The Court  held that Knox has suffered no interference with an inheritance even if it were to recognize such a cause of action in this proceeding.  The Court affirmed the trial court's judgment insofar as it dismisses the claim alleging tortious interference with an inheritance.  The Court reversed the trial court's judgment insofar as it finds Knox guilty of violating the in terrorem clauses in the trusts and the will and insofar as it denies Knox's petition seeking to join Royce and Davis pursuant to Rule 19, Ala.R.Civ.P., or to dismiss the coexecutors and cotrustees from their duties through a judgment of severance.  The Court remanded the case with instructions that the trial court enter an order granting that relief conditioned upon the posting of a bond as previously described.  )
*Download or view PDF version of opinion*

Back to top
 
 

Opinions Released October 18, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  OCTOBER 18, 2002 

 
• Crowl v. Kayo Oil Co., 

No. 1002058 (Ala. Oct. 18, 2002)
(substitution of fictitiously named defendants; relation back; statute of limitation; premises liability; On September 11, 1997, Robert Crowl slipped and was injured at a gasoline service station located at 800 Oakwood Avenue in Huntsville.  On August 31, 1999, shortly before the two-year statute of limitations for his cause of action would have run, Crowl sued Conoco, Inc., and six fictitiously named defendants, alleging that they had negligently and wantonly failed to maintain the parking lot of the service station.  On April 10, 2000, the trial court entered a default judgment against Conoco, Inc., in the amount of $200,000 together with costs.  On April 6, 2001, Conoco, Inc., filed an answer to the complaint and a Rule 60(b), Ala. R. Civ. P., motion to set aside the default judgment, with supporting affidavits attached.  Conoco, Inc., identified Kayo Oil Company ("Kayo") as the owner of the service station at the time the plaintiff was injured.  The trial court vacated the judgment it had previously entered against Conoco, Inc.  On May 3, 2001, Crowl filed an amended complaint substituting Kayo as a defendant for the entities originally identified as fictitiously named parties in the original complaint.  Kayo filed a motion to dismiss and a brief in support of the motion with attached exhibits and affidavits.  Kayo argued that the substitution of Kayo for fictitiously named parties should not be allowed to relate back to the date of the filing of the original complaint because, it says, Crowl cannot show that he was ignorant of the true identity of the fictitiously named defendant and that he used due diligence in attempting to discover it.  The trial court granted Kayo's motion.  HOLDING: The Supreme Court treated Kayo's motion to dismiss as a motion for summary judgment.  The Court agreed with Kayo's argument that Crowl did not exercise "due diligence" to discover its identity as one of the fictitiously named defendants in Crowl's complaint, because Crowl could have made a telephone call to the office of the tax assessor for Madison County, could have examined the property tax records for the property in question and found that the property was assessed for tax purposes in Kayo's name, or could simply asked the manager at the service station who the owner was.  The Court noted that the record was devoid of any evidence that Crowl took any effort to learn the names of the fictitiously named defendants.  Thus, the Court affirmed the trial court's dismissal of Kayo.)
*Download or view PDF version of opinion*
 
• Leonard v. Terminix Int'l Co., 

No. 1010555 (Ala. Oct. 18, 2002)
(arbitration; unconscionability; class action; Walter Leonard, Jr., and Evalina Leonard, "on behalf of themselves and all others similarly situated," filed a six-count complaint against Terminix.  Count one was styled "Civil Tort for Criminal Conduct and Action for Statutory Penalties, Qui Tam."  The essence of the complaint, as contained in count one, is that Terminix owed a statutory duty to all its customers to conduct annual inspections, see Ala. Code §2-28-9, and that Terminix had systematically failed to do so.  The plaintiffs further alleged that the violation of § 2-28-9 is a crime, as defined in Ala. Code §2-28-11(a).  The complaint sought, among other things, rescission of the plaintiffs' contracts with Terminix and restitution of amounts paid Terminix under the contracts.  Terminix moved to compel arbitration.  The trial court granted that motion.  HOLDING: The Supreme Court held that the arbitration clause was unconscionable and therefore unenforceable.  The Court concluded that the Leonards have shown that the Terminix contract is a contract of adhesion that has never been modified for any Alabama customer, that they were not given any opportunity to accept or reject the arbitration provision, that they were not given any quid pro quo for agreeing to arbitration and forgoing their constitutional right to a trial by jury, that the Leonards are not sophisticated or wealthy consumers with equal bargaining power, and that Terminix's competitors in Alabama also used arbitration provisions in their contracts at the time the Leonards bought their home.  The Court concluded that the limitation upon recovery of "indirect, special, and consequential damages or loss of anticipated profits" in the arbitration clause and elsewhere in the agreement and the preclusion of eligibility for class-action treatment deprive the Leonards of a meaningful remedy.  The Court concluded that  Terminix has extracted unreasonably favorable and patently unfair terms in its contract of adhesion.  The Court held that the arbitration agreement is unconscionable because it is a contract of adhesion that restricts the Leonards to a forum where the expense of pursuing their claim far exceeds the amount in controversy.  The Court held that the arbitration agreement achieves this result by foreclosing the Leonards from an attempt to seek practical redress through a class action and restricting them to a disproportionately expensive individual arbitration.  Consequently, the Court held that the arbitration clause is unconscionable and unenforceable, and it reversed the trial court's order compelling arbitration.)
*Download or view PDF version of opinion*
 
• Johnson v Stewart, 

No. 1011114 (Ala. Oct. 18, 2002)
(invasion of privacy; Dr. Donald Stewart and Dr. Donald Johnson are radiologists, who became partners in 1991. In January 1995, Dr. Johnson hired Surveillance Technologies, Inc. ("STI"), to investigate Dr. Stewart and his wife, Janet, after Dr. Johnson became concerned about Dr. Stewart's behavior.  The investigation continued for approximately two and one-half years. The Stewarts did not learn of STI's investigation until August 1997, when an employee of STI sold Dr. Stewart what purported to be a copy of STI's investigative file in exchange for a $10,000 loan.  The Stewarts sued Dr. Johnson, stating invasion-of-privacy claims, as well as other claims, against him.  The case was tried before a jury.  Dr. Stewart's copy of what was purported to be STI's investigative file was not received into evidence.  However, Charles Frederick, the owner of STI and one of its investigators, did testify concerning the scope and manner of the investigation.  Dr. Johnson moved for a judgment as a matter of law ("JML") on the invasion-of-privacy claims, both at the close of the Stewarts' case and at the close of all the evidence, and the trial court denied the motions.  The jury returned verdicts on the Stewarts' invasion-of-privacy claims, awarding $1 in nominal damages to each and $1 million in punitive damages each, but it awarded no compensatory damages to either plaintiff.  Dr. Johnson filed a post-judgment motion seeking, alternatively, a judgment as a matter of law, a new trial, or a remittitur of the punitive-damages awards.  The trial court denied the motion insofar as it sought a judgment as a matter of law or a new trial.  However, the trial court ordered Dr. Stewart to accept a remittitur of the punitive damages from  $1 million to $500,000, and ordered Janet Stewart to accept a remittitur of the punitive damages from $1 million to $350,000, or else it would order a new trial.  The Stewarts accepted the remittiturs.  Dr. Johnson appeals, contending that he was entitled to a JML on the invasion-of-privacy claims.  HOLDING: The Supreme Court held that the trial court erred in not granting Dr. Johnson's motion for JML and reversed the judgment in favor of the Stewarts.  The Court concluded that there was no substantial evidence of any surveillance or other improper intrusion into the Stewarts' solitude or seclusion or into the private affairs and concerns of the Stewarts by Dr. Johnson or the investigators he hired.)
*Download or view PDF version of opinion*
 
• Ex parte Pankey, 

No. 1011274 (Ala. Oct. 18, 2002)
(child custody; adultery; The Court denied the petition for writ of certiorari without opinion, but stated that the Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals' opinion.  Justice Lyons and Justice Harwood each wrote concurring opinions.  Justice Brown wrote a dissenting opinion, and Chief Justice Moore wrote a substantial dissenting opinion.)
*Download or view PDF version of opinion*

Back to top
 
 

Opinions Released October 11, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  OCTOBER 11, 2002 

• Yates v. El Bethel Primitive Baptist Church, 

No. 1001913 (Ala. Oct. 11, 2002)
(church dispute; ore tenus; El Bethel Primitive Baptist Church, Inc., is an Alabama incorporated religious society.  It is undisputed that it operates under a set of rules entitled the "Discipline of the Primitive Baptist Church" (hereinafter the "Discipline").  On March 30, 2001, the El Bethel Primitive Baptist Church (hereinafter referred to as "the Church"), by and through its board of deacons and trustees (hereinafter referred to as "the Board"), petitioned the trial court for a temporary restraining order to prevent Reverend Jonathan Yates from interfering with the financial operation of the Church.  The petition sought an order restraining Yates "from interfering with the financial operation of the Church, interfering with all day to day operations of the Church, including supervising daycare employees and Church employees, and ordering him to direct all Church employees with financial records of the Church to turn over all financial records and documents of the Church to the Deacon and Trustee Boards."  the Board asserted that Yates was using the church's funds for his personal benefit, providing false financial statements to the Board at its monthly meetings, and failing to withhold income tax from several employees' paychecks.  There were also allegations that Yates had sexually harassed a female employee of the Church.  The Board alleged that Yates had admitted to the Board that he had misappropriated the Church's funds for his personal use and that income tax had not been withheld from several employees' paychecks.  The trial court conducted hearings on April 12 and April 17, 2001, receiving testimony ore tenus.  On May 18, 2001, the trial court issued an order that stated that "this Court notified both parties that the hearing would be considered [one for] a Permanent Injunction."  Thereafter, the court ordered that "The Board of Deacons and/or Trustees are vested by its membership with the authority to transact business on behalf of the Church."  Yates has not sought in any way to challenge the validity or binding effect of that final order.  On June 21, 2001, the Board filed a motion for contempt and to set aside an election that had been held at the Church at Yates's insistence on June 17 and that purportedly had resulted in the election of a new slate of deacons and trustees.  On June 28, 2001, a hearing was held on the Board's motion, and the trial court heard testimony regarding the events that had transpired at the Church on dates subsequent to its May 18 order.  On July 19, 2001, the court issued an order that denied the contempt portion of the motion, but that declared that "the election held on June 17, 2001, is due to be, and is, hereby set aside."  On appeal, Yates argues that the June 17, 2001, election was consistent with the Church's rules, with Alabama law, and with the considerations of notice and due process, and, thus, that it was a valid, legal election.  The core of Yates's argument is "that the opinion of the trial court is not fairly supported by credible evidence under any reasonable interpretation and that it is palpably wrong." HOLDING:  The Supreme Court found that at several stages of the proceedings, the Board attempted to use the appeal process provided by the Discipline.  The Court held that the evidence in the record was sufficient to allow the trial judge to conclude, without being plainly and palpably wrong, that Yates declined to engage in the appeal process that the Board sought to pursue.  The Court concluded that the trial court could have found, without being plainly and palpably wrong, (1) that it could properly exercise jurisdiction, given the financial and property rights of the Church that were involved; (2) that although it had issued an order on May 18, 2001, addressing certain of the financial and business issues (from which no appeal has been taken) and encouraging cooperative engagement between Yates and the Board, Yates had undertaken to circumvent that order by forcing the election of a new Board; (3) that the election meeting that took place on June 17, 2001, violated the Discipline in several material respects and also violated basic standards of due process; and (4) that the Board attempted in good faith to use the appeal procedure but was thwarted in that effort through no fault of its own and in large part due to Yates's refusal to participate in the process.  The Court concluded that, under the circumstances of this case, the trial court did not err in examining the circumstances surrounding the purported election.  The Court further concluded that because live testimony was presented to the trial court concerning disputed issues of fact, the ore tenus rule applies and, therefore, it must accord the trial court's findings a presumption of correctness.  The Court affirmed the order of the trial court setting aside the June 17, 2001, election, but noted that the affirmance does not preclude any further actions by any of the parties done in conformity with the Discipline.)
*Download or view PDF version of opinion*
 
• Northcom, Ltd. v. James, 

No. 1002072 (Ala. Oct. 11, 2002)
(arbitration; Northcom, Ltd. entered into a contract with the plaintiffs for the purchase of two radio stations.  The contract contained an arbitration clause.  Approximately eight years later, R.E. James, Roberta Gwenn James, and Kathy James Pittman (hereinafter collectively referred to as "the plaintiffs") brought a breach-of-contract action against Northcom, Ltd., Jerry Oakley, and William R. McDonald III (collectively "Northcom")  in the Coffee Circuit Court.  Northcom moved to compel arbitration, but the trial court denied the motion.  Northcom appealed the trial court's order denying arbitration to the Supreme Court of Alabama.  The Supreme Court reversed the order of the trial court, holding that the plaintiffs were required to arbitrate their claims against Northcom pursuant to the arbitration agreement in the contract.  See Northcom, Ltd. v. James, 694 So.2d 1329 (Ala. 1997).  On remand to the Coffee Circuit Court, the plaintiffs purported to continue the litigation of this case by serving discovery and filing motions to compel responses.  Northcom moved the trial court to comply with the Supreme Court's remand order and stay the action pending arbitration.  After a hearing on the motion, the trial court entered a stay in the case on September 8, 1998, pending arbitration.  The plaintiffs filed with the Coffee Circuit Court a motion to "require defendants to appoint an arbitrator."  The trial court granted the motion and ordered Northcom to appoint an arbitrator within 10 days.  Northcom then moved the trial court to set aside its order, arguing that the plaintiffs had not yet initiated arbitration proceedings.  The trial court denied Northcom's motion.  After the trial court denied a motion to reconsider its order, Northcom moved the trial court to dismiss the plaintiff's case against it.  The trial court entered an order holding that Northcom had failed and refused to appoint an arbitrator even though specifically ordered to do so and that Northcom's non-compliance constituted a waiver of arbitration.  Northcom appealed that order.  It is undisputed that although the plaintiffs purported to select an arbitrator, they never initiated arbitration proceedings after the Supreme Court's 1997 opinion.  HOLDING: The Supreme Court held that the trial court's order is due to be reversed because the order is based upon the erroneous assumption that Northcom bears the burden of initiating arbitration proceedings in this case and because the order holds that Northcom waived its right to arbitrate by failing to initiate such proceedings.  The Court reasoned that under the AAA's Commercial Arbitration Rules, the plaintiffs, as the party initiating this legal action, are the claimants, and Northcom, the defendant, is the respondent.  As the claimants, the plaintiffs must pursue their claims against Northcom by  giving Northcom, the respondent, a written notice, or demand, for arbitration.  The demand must meet all of the requirements specified by the Commercial Arbitration Rules.  Furthermore, the plaintiffs must file two copies of the demand with the AAA, along with a copy of the arbitration agreement and a filing fee.  In other words, the plaintiffs must initiate arbitration proceedings according to the AAA rules.  The Court noted that the record indicates that the plaintiffs have initiated arbitration proceedings.  The Court noted that,  instead, the plaintiffs have purported to "appoint" an arbitrator, and they allege that Northcom must do the same.  The Court noted that appointing an arbitrator does not initiate the arbitration process as provided in the Commercial Arbitration Rules.  Thus, the Court held that it is clear that Northcom could not have waived its right to arbitrate by failing to initiate arbitration proceedings when it never had the burden to do so under the terms of the arbitration agreement.  The Court reversed the order of the trial court and directed that the trial court shall order the plaintiffs to initiate arbitration in accordance with their agreement to arbitrate and shall stay the case pending arbitration or shall dismiss the case if the plaintiffs persist in failing to initiate arbitration.)
*Download or view PDF version of opinion*
 
• Hale v. State of Alabama, 

No. 1010196 (Ala. Oct. 11, 2002)
(criminal; unlawful distribution of marijuana; sentencing; Anthony Jermaine Hale was indicted for, tried for, and convicted of unlawful distribution of marijuana.  Before the sentencing hearing, the State gave Hale notice of intention to seek enhancement of Hale's sentence pursuant to the Habitual Felony Offender Act (Ala. Code §13A-5-9(a)(2)) for a prior conviction of a felony committed by Hale.  At the sentencing hearing, the State offered a case action summary of a 1996 conviction of Hale for unlawful distribution of a controlled substance as proof of the prior felony conviction.  The case action summary did not show that Hale was treated as a youthful offender when he received the prior conviction.  Hale did not object to the offer of the case action summary on any ground.  Also at the sentencing hearing, the trial court heard the proof that the sale by Hale occurred within three miles of a school and within three miles of a public housing project.  Hale did not object to this proof on any ground at the sentencing hearing.  After a sentencing hearing, the trial court sentenced Hale, as an habitual felony offender with one prior felony conviction, to the maximum of life imprisonment (Ala. Code §13A-5-9(a)(2)), plus an additional ten years' imprisonment pursuant to the schoolyard and public housing project enhancement statutes (Ala. Code §§13A-12-250 and 13A-12-270, respectively).  Hale filed a postjudgment motion for a reduction of his sentence on the sole ground that it was excessive, cruel, and unusual in violation of his federal and state constitutional rights.  The trial court denied the motion.  HOLDING: The Supreme Court noted, in response to Hale's argument that the State had failed to prove the requisite chain of custody, that testimony of Deputy Holsenback, Deputy Payne, and Lieutenant Jones, including their testimony to the sealing and the sealed condition of the evidence bag, identify all links in the chain of custody and prove the safeguarding and handling of the evidence by each link in the chain until the evidence bag was relinquished to Wallace at DFS, where Hutto analyzed the plant material and determined it to be marijuana.  The Court further noted that the certificate of analysis does not conform to the Ala. Code §12-21-300 requirement that "it shall be signed and sworn to as true and correct," that Hutto swore only that the certificate was "a true and correct copy," and that Hale did not challenge this defect or any other in the form or content of the certificate and did not challenge the §12-21-300 et seq. statute itself.  Therefore, the Court held that the trial court did not err in admitting the certificate and the plant material with it.  With regard to the application of the Habitual Felony Offender Act, the Court held that because Hale did not object to the case action summary on any ground before the trial court, he has not preserved his arguments for appellate review.  Furthermore, the Court held that Hale's contention that the case action summary of his prior conviction was  inadmissible on the ground that it did not indicate whether he was treated as a youthful offender is without merit.  With regard to the enhancement of Hale's sentence for selling in close proximity to a school and a public housing project under Ala. Code §§13A-12-250 and 13A-12-270, the Court noted that the only ground asserted for challenging the enhancement was that it was excessive, cruel, and unusual.  The Court approved and adopted the holding in Poole v. State, No. CR-99-1200 (Ala. Crim. App. Aug. 31, 2001), that the absence of sentence enhancement allegations from the indictment does not deprive the trial court of jurisdiction to impose the enhancements.  Therefore, the Court held that Hale cannot prevail on his argument that the failure of the State to charge the sentence enhancement factors in his indictment deprived the trial court of jurisdiction to enhance his sentence.  The Court held that Hale had waived other arguments challenging the sentence enhancement.  The Court therefore affirmed the conviction and the sentence.)
*Download or view PDF version of opinion*
 
• Smart Professional Photocopy Corp. v. Childers-Sims, 

No. 1010354 (Ala. Oct. 11, 2002)
(class action; class certification; Smart Professional Photocopy Corporation d/b/a Smart Corporation (hereinafter "Smart") is in the business of providing copying and related services to health-care businesses, including medical-care providers and businesses that provide nonmedical services to those providers.  A medical provider will typically forward to Smart a letter the provider has received from a patient or a patient's attorney requesting copies of medical records and/or billing records.  Smart retrieves the requested records and forwards the copies, along with its invoice, to the patient or the patient's attorney requesting the records.  On October 9, 2001, the trial court certified two classes of Alabama residents with claims against Smart.  The representatives of each respective class, Deborah Childers-Sims and Harriet Lowe (hereinafter referred to collectively as "the customers"), claim that Smart charged, and they mistakenly paid, amounts in excess of the "reasonable costs" of reproducing medical records pursuant to Ala. Code §12-21-6.1.  The customers allege unjust enrichment, money paid by mistake, and money had and received.  They seek refunds and other equitable relief.  Smart provides a procedural manual to its employees.  That manual directs its employees to charge a fee for shipping and handling equal to 18% of the copying charges, unless management instructs otherwise.  Smart contends that its employees have been instructed to charge, in addition to the search fees and copying charges, only actual postage for copies mailed to this State.  Smart says that whenever an employee mistakenly charges the 18% fee to someone requesting copies in Alabama, its policy is to adjust the invoice to charge only actual postage fees.  Although the transactions involve separate matters, the claims of Childers-Sims and Lowe are factually similar. The differences between the claims of the customers, and thus the need for two classes, involve the type of records requested and received by each customer and the amount Smart charged each customer for its services.  After extensive and contested discovery, including the production of over 60,000 invoices, the customers submitted evidence that the 18% fee was charged on over 100 invoices and that over 300 invoices reflected overcharges on a per-page basis and/or search-fee basis.  A class-certification hearing was held on October 1, 2001.  No witnesses testified at the certification hearing.  Based upon the parties' briefs and the arguments at the hearing, the trial court entered an order certifying the two classes on October 9, 2001.  Smart appealed.  HOLDING: The Supreme Court concluded that the proof essential to support the customers' claims of unjust enrichment, money had and received, and money paid by mistake defeats the predominance and superiority requirements of Rule 23(b)(3).)
*Download or view PDF version of opinion*
 
• Sumlin Construction Co., L.L.C. v. Taylor, 

No. 1010943 (Ala. Oct. 11, 2002)
(standing; derivative action; bankruptcy; limited liability companies; The record reflected that on April 23, 1998, Ray J. Sumlin (hereinafter "Sumlin") entered into an operating agreement with William Buck Taylor III and American Construction Corporation (of which Taylor was the sole shareholder) to form Sumlin Construction Co., L.L.C. (hereinafter "the LLC").  Subsequently, Taylor contributed the $150,000  start-up funds in the form of certificates of deposit issued by First Community Bank ("CDs").  On October 15, 1998, Taylor requested from Sumlin copies of all of the "bonding applications" and also the CDs. Although Sumlin questioned in a letter to Taylor the motives behind Taylor's requests, Sumlin released the CDs to Taylor.  In late November 1998, Taylor cashed the CDs, without notifying Sumlin, and placed the money in his personal account; he used the money to pay off some promissory notes evidencing loans American Construction Corporation owed him.  Sumlin and the LLC alleged in their complaint that "[t]he cashing and conversion of the Certificates of Deposit constituted a breach of the operating agreement," and "as a consequence of the agreement, the [LLC] remained under-funded and was unable to engage in business as had been agreed to in the operating agreement."  Ultimately, the LLC was unable to obtain financing and halted all business activities.  On May 28, 1999, Sumlin filed in the United States District Court for the Southern District of Alabama a voluntary petition in bankruptcy under Chapter 7.  The LLC was not listed as a debtor in the bankruptcy petition or otherwise a direct participant in the bankruptcy proceeding.  In the petition, Sumlin disclosed his 1/6 interest in the defunct LLC, valuing it at $1.00, and claimed wages due from the LLC, also valuing them at only $1.00.  Sumlin claimed in his petition that both his interest in the LLC and his wages were due to be recognized as exempt from bankruptcy administration pursuant to Ala. Code §6-10-6.  No party to the bankruptcy proceedings, including the trustee, filed a motion to limit the amount of the claimed exemptions or otherwise challenged the exemptions.  Sumlin did not list any potential action against the defendants on the "statement of affairs," constituting a section of the petition.  On September 1, 1999, Sumlin was granted a full discharge by the bankruptcy court, and on October 18, 1999, the bankruptcy proceeding was closed.  The L.L.C. , and Sumlin sued William Buck Taylor III and American Construction Corporation in the Mobile Circuit Court.  Sumlin brought his action derivatively on behalf of the LLC and also asserted individual claims, but the individual claims are not relevant to the appeal because they were disposed of separately, made final under Ala.R.Civ.P. 54(b), and not timely appealed.   The defendants filed an answer and counterclaim alleging that Sumlin had violated the operating agreement of the LLC and had breached his fiduciary duty.  Sumlin attempted to amend his original bankruptcy petition to include reference to the action, but was denied leave to do so by  the bankruptcy court.   The trial court entered summary judgment for the defendants on the LLC's derivative claims.  Sumlin and the LLC argued on appeal that the summary judgment for the defendants on Sumlin's derivative claims was erroneous because, it says, the trial judge could not properly have held that Sumlin lacked standing to bring the derivative action on behalf of the LLC.  HOLDING:  The Supreme Court noted that §10-12-25 of the Alabama Limited Liability Company Act (Ala. Code §10-12-1 et seq.) provides for derivative actions on behalf of limited liability companies and specifies that to have standing to institute such an action the plaintiff must be a member of the LLC at the time of the bringing of the action.  The Court found that  the operating agreement constitutes an executory contract involving in significant part the contribution of personal services by Sumlin for purposes of  11 U.S.C. § 365(e)(1) and, therefore, Alabama law would allow the defendants to refuse to accept any proposed performance of those services by the trustee in bankruptcy and would prohibit Sumlin from assigning the contract to the trustee.  The Court noted that the record shows that the trustee in Sumlin's Chapter 7 bankruptcy never attempted to perform under the operating agreement and  the defendants never consented to any such assumption by the bankruptcy trustee of Sumlin's contractual rights and duties as either a member, a manager, or an administrative manager of the LLC.  The Court held that it need not decide whether Sumlin's interest in the executory contract was abandoned or whether it was exempted, because, under either process, the trustee would conclusively have forgone any assumption of that interest in the contract by, at the latest, the closing of his bankruptcy case, some two months before the derivative action before us was filed.  Thus, through the operation of §365(e)(2), §365(e)(1) did not apply to preclude effectuation of the ipso facto provision in Ala. Code §10-12-36(b).  The Court concluded that in any event, §365(e) is intended to apply only during the pendency of a bankruptcy case, and is inapplicable once the "automatic stay" against ipso facto termination has been lifted by the closing of the bankruptcy case.  Thus, because the bankruptcy proceedings had been closed before the action was filed, the Court found that the automatic stay was no longer in effect.  Consequently, for this additional reason, the Court held that §10-12-36(b) would not have been subject to preemption by §365(e)(1) at the time the action was filed.  Therefore, the Court held that Sumlin would have been divested of his member status by that time by the operation of §10-12-36(b) and thus was without statutory standing to bring a derivative suit on behalf of the LLC.  The Court held that the trial court never acquired subject-matter jurisdiction over the action, and the Court dismissed the appeal as one taken from a void judgment.)
*Download or view PDF version of opinion*
 
• Brown Electro Mech. Sys., Inc. v. Thompson Engineering, Inc., 

No. 1011457 (Ala. Oct. 11, 2002)
(spoliation; Tony Sanspree was swimming near Dauphin Island.  He got out of the water and stood on a metal portion of a seawall that surrounded the ramp's boathouse.  For unknown reasons, Sanspree came into contact with the cables and straps of the boat lift.  When Sanspree touched the cable, he was electrocuted.  Patrick G. Carrigan owned the premises and the boat lift in question; he had homeowner's insurance through Cincinnati Insurance Company.  Within six days of Sanspree's death, Cincinnati contracted with Thompson Engineering, Inc. to inspect the boathouse and the electrical supply of the boat lift.  Thompson tested the steel cables on the boat lift and discovered that the cables carried around 110 volts of electricity.  After this test, Brown Electro Mechanical Systems, Inc. ("Brown"), which had installed the components of the boat lift's system, allegedly warned Cincinnati and Thompson not to move any of the electrical components or conductors.  Cincinnati and Thompson then conducted tests on the electrical junction box of the boat lift.  The configuration and condition of the boat lift's electrical wiring were materially damaged, and as a result, the components are unavailable to ascertain the condition of the system at the time of Sanspree's death.  Sanspree's mother and custodial parent, Karen Ann Ward, sued Carrigan, alleging that he was negligent in maintaining the safety of his premises; Brown, alleging it had negligently installed the boat lift's electrical supply; and Cincinnati and Thompson, alleging that they had negligently destroyed material evidence.  Ward later amended her complaint to add as a defendant William L. Patterson, a private consultant hired by Thompson to assist in its inspection of the boat lift.  Brown then filed a cross-claim against Cincinnati and Thompson, alleging negligent spoliation of material evidence. Cincinnati filed cross-claims against Thompson and Patterson, alleging negligence, breach of contract, and breach of workmanlike performance and seeking indemnification for any damages levied against it because of the spoliation claims.  Brown's cross-claim alleges that the tests performed by Cincinnati and Thompson destroyed evidence necessary to defend Ward's claim against Brown and to maintain any potential actions against the individual or individuals originally responsible for wiring the boat lift or against the manufacturers of the wiring components.  Brown seeks to hold Cincinnati and Thompson liable for any damages that would result if Ward's claim against Brown is successful.  The trial court dismissed Brown's cross-claim as premature, and made its order dismissing the cross-claim final pursuant to Rule 54(b), Ala.R.Civ.P.  Brown appealed.  HOLDING: The Supreme Court held that no showing can be made in this action at this stage of the proceedings that the lost or destroyed evidence was so important to Brown's defense in the underlying action that without that evidence Brown had no defense to liability.  The Court held that until Brown suffers a judgment at the hands of Ward and it can be established that without the lost evidence Brown had no defense to liability, a spoliation claim against a third party is premature.  Thus, the Court held that the trial court properly dismissed Brown's cross-claim against Cincinnati and Thompson.)
*Download or view PDF version of opinion*

Back to top
 
 

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  OCTOBER 4, 2002 

 
• Lewis v. Oakley, 

No. 1001847 (Ala. Oct. 4, 2002)
(arbitration; securities; E. Milton Lewis III began working with Merrill Lynch as a securities dealer/stockbroker in 1966.  During his 32 years of employment, he accumulated a "book of accounts" with an approximate value of $182,000,000. In 1998, contemplating retirement, Lewis entered into a "Purchase Agreement" with Oakley, who was also a stockbroker with Merrill Lynch.  Lewis agreed to sell his book of accounts to Oakley for $420,000, to be paid in monthly installments of $14,000 per month from April 1, 1998, through September 30, 2000.  The Purchase Agreement provided for a significant reduction in the monthly payments in the event the value of the book of accounts fell below $100,000,000.  The Purchase Agreement also stipulated that should Oakley "involuntarily separate from service with Merrill Lynch" while the Purchase Agreement was in effect, he would "have no obligation to continue to make payments" to Lewis.  Further, Lewis expressly represented in the Purchase Agreement that the Agreement had "been approved by Merrill Lynch."  Oakley paid Lewis $14,000 per month for 22 months;  however, by letter dated March 16, 2000, Oakley informed Lewis that the value of the book of accounts had dropped below $100,000,000, and that, pursuant to the Purchase Agreement, a reduced payment in the amount of $4,733.26 would be made for February 2000.  At the end of March, Oakley ceased working at Merrill Lynch and became a stockbroker for Morgan Stanley.  Oakley never made the payment promised for February 2000, and he did not make any further payments.  Lewis asserted that on March 29, 2000, Oakley had advised him that Oakley had "voluntarily" left Merrill Lynch, but that his departure had been "hastened" when Merrill Lynch learned of his agreement to accept employment with Morgan Stanley.  Lewis averred that Merrill Lynch retained "a significant number of the accounts developed by Plaintiff Lewis that are earning income daily" and that Morgan Stanley, having paid Oakley "a substantial bonus to join its firm," in reliance on the book of accounts, was "greatly benefiting from a great number of said accounts."  Lewis sought damages from Oakley, Merrill Lynch, and Morgan Stanley for breach of contract.  He alleged that the "contractual agreement" between him and Oakley had been "approved and ratified by Defendant Merrill Lynch" and that Morgan Stanley was "a 'successor' and 'assign' under [the] contract and is obligated by the terms thereof."  He also sought an accounting from Oakley for all accounts Oakley had purchased from Lewis as of "the first day of each month from January 1, 1998 to date," including "the monthly earnings and commissions paid on each"; a similar accounting from Merrill Lynch for the same period for all accounts "under its management sold by" Lewis to Oakley; and a similar accounting from Morgan Stanley for "all accounts brought under its management by virtue of hiring Defendant Oakley from January 1, 2000 to date."  Oakley filed an answer and a counterclaim.  As counterclaims, Oakley asserted that Lewis himself had breached the Purchase Agreement and that, as to the clause of the agreement stating that Lewis "represents and warrants [to] use his best efforts to assist [Oakley] in retaining the clients comprising the assets," Lewis was guilty of fraudulent misrepresentation.  Merrill Lynch filed its "Motion To Stay Pending Arbitration," based on a document Lewis had signed on December 10, 1990, during his employment with Merrill Lynch, a copy of which was attached to the motion.  The document was a "Form U-4, Uniform Application for Securities Industry Registration or Transfer" (hereinafter "Form U-4").  Morgan Stanley filed a motion to dismiss the complaint for failure to state a claim against it, stating that "In the Alternative, Morgan Stanley joins in Merrill Lynch's Motion To Stay Pending Arbitration."  After a series of various motions and other filings, the trial court entered an order referring the controversy to arbitration and dismissing the case with prejudice.  Lewis appealed. HOLDING: The Supreme Court concluded that the trial judge could not properly have based his ruling compelling arbitration on the purely permissive, but not mandatory, scope of arbitration of Rule 10101 of the NASD Code of Arbitration Procedure.  The Court held that the trial court acted within its discretion in considering an untimely affidavit and in concluding, based on it, that the Form U-4 had been executed by Lewis.  The Court held that the Form U-4 was a contract evidencing a transaction that is quintessentially interstate in nature.  The Court determined that Lewis agreed to arbitrate any dispute that might arise between him and Merrill Lynch, and/or him and "any other person" arising out of the business of Merrill Lynch and/or Morgan Stanley.  The Court concluded that the dispute, claim, or controversy in this case can fairly be said to exist between Lewis and Merrill Lynch ("my firm"), and also between him and Oakley and Morgan Stanley ("any other person" per the Form U-4), and represents a "controversy between a member organization" (Merrill Lynch and Morgan Stanley, respectively) and "any other person," i.e., in this instance, Lewis.  The Court held that the description in "the contract" of the parties entitled to arbitration is, as already shown, clearly broad enough to include Oakley.  The Court concluded that the trial court acted within its discretion in implicitly finding that Oakley had not substantially invoked the litigation process and/or that Lewis was not substantially prejudiced by the level of the litigation process that was invoked.  The Court concluded that the order of the trial court is due to be affirmed to the extent it ordered the dispute underlying this litigation to arbitration, but the Court reversed the trial court's order to the extent the trial court dismissed the case with prejudice.)
*Download or view PDF version of opinion*
 
• Parsons v. Aaron, 

Nos. 1002086,  1002087 & 1010105 (Ala. Oct. 4, 2002)
(remittitur; civil procedure; appellate procedure; timeliness of appeal; noncompetition agreement or covenant not to compete; claims of tortious interference with contractual or business relations, breach of contract, and conversion; The claim in this case arise out the sale by Patrick Aaron and Pat & Pat, Inc. (hereinafter sometimes collectively referred to as "Aaron") of World Gym Health and Fitness Center-Pelham (hereinafter "World Gym"), to James C. Parsons and James C. Parsons, Inc.   James C. Parsons ("Jimbo"), James C. Parsons, Inc. ("the corporation"), and James T. Parsons ("Jim Parsons" or "Parsons") (all three hereinafter sometimes collectively referred to as "the Parsonses") sued Aaron seeking to enjoin him from taking certain actions the Parsonses contended would violate a noncompetition agreement Aaron had entered into in conjunction with the sale of World Gym to the Parsonses.  Aaron responded by filing his own complaint in Shelby Circuit Court, suing Jimbo and the corporation alleging breach of contract and conversion.  Later, Aaron added Jim Parsons as a defendant, alleging a claim of tortious interference with contractual or business relations.  The Parsonses then filed a counterclaim alleging that Aaron had breached the noncompetition agreement and seeking monetary damages.  The cases were consolidated and all of the above-identified claims were tried before a jury.  The jury returned a verdict against the Parsonses on their claim alleging breach of the noncompetition agreement and seeking an injunction.  The jury returned a verdict in favor of Aaron on his claims of breach of contract, conversion, and tortious interference, awarding Aaron compensatory in the amount of $107,000 and punitive damages in the amount of $193,000.  The Parsonses filed postjudgment motions pursuant to Ala.R.Civ.P. 50 and 59,  seeking a judgment as a matter of law, a new trial, or alternatively, a remittitur of the punitive-damages award.  On June 6, 2001, the trial court entered on the case action summary the following notation:  "by express consent of all parties pursuant to the provisions of [Ala. R. Civ. P.], Rule 59.1, the post-judgment motion of the Plaintiffs -- i.e., 'James C. Parsons, Inc., James. C. Parsons, and James T. Parsons' Alternative Post-Trial Motions Under Rules 50 and 59' -- shall remain pending in this court until July 6, 2001, unless said motion is ruled upon by the court prior to said date."  On July 5, 2001, trial court conditionally granted the Parsonses' motion for a new trial unless Aaron accepted a remittitur of the $193,000 punitive- damages award to $60,000.  On July 19, 2001, Aaron filed a motion styled "Request for Correction/Amendment of Order."  In that motion, Aaron argued that the trial court should correct or amend its postjudgment order to reflect that, if Aaron accepted the remittitur, the Parsonses must agree to forgo any appeal of the judgment.  Aaron asserted that the trial court had no authority to order a remittitur without also ordering that the Parsonses forgo their right of appeal upon Aaron's acceptance of the remittitur.  On July 25, Aaron filed a notice styled "Involuntary Acceptance of Remittitur."  However, Aaron did not withdraw his motion to correct or amend.  On August 17, 2001, the Parsonses filed their notices of appeal.  On August 22, 2001, Aaron filed a motion to dismiss the Parsonses' appeal in case no. 1002086, claiming that the notice of appeal in that case was not timely filed.  Aaron also filed a conditional cross-appeal, seeking reinstatement of the full punitive-damages award in the event the Parsonses' appeals were not dismissed as untimely.  Aaron asserts that the time for filing a notice of appeal began to run the day the trial court entered its order on the Parsonses' postjudgment motions.  The trial court entered its order on those motions on July 5, 2001.  Forty-two days from that date was August 16; the Parsonses filed their notice of appeal on August 17.  HOLDING:  The Supreme Court denied the motion to dismiss the appeal and found the appeal to be timely because under Rule 59.1 the parties and trial court had extended the time for posttrial motions' remaining pending until July 6, 2001, and because the remittitur set forth in the trial court's July 5 order had not been accepted as of July 6, that aspect of the Parsonses' posttrial motions remained pending on July 6, 2001.  The Court held that because the Parsonses' notices of appeal were filed on August 17, 2001, 42 days after July 6, the notices of appeal were timely filed.  The Court concluded that the trial court improperly denied Jim Parsons's motion for a judgment as a matter of law on Aaron's tortious-interference claim.  The Court reversed the judgment entered on the jury's verdict in favor of Aaron on his tortious-interference claim and render a judgment in favor of Jim Parsons.  The Court held that because of its resolution of this issue, it need not address the challenge to the compensatory- and punitive-damages awards on that tortious-interference claim.  The Court reversed the judgment entered for Aaron on his breach-of-contract claim and remand the cause to the trial court for a new trial on that claim.  The Court also found no reversible error in the trial court's ruling regarding parol evidence.)
*Download or view PDF version of opinion*
 
• Sprinkle v. Edwards, 

No. 1010199 (Ala. Oct. 4, 2002)
(res judicata; personal injury; automobile accident; Timothy Joe Sprinkle, a minor, was injured in an automobile accident.  The automobile accident was caused by George Hardy Edwards, Jr., a deputy sheriff, who was responding to an emergency dispatch and driving at a high rate of speed.  Sprinkle was injured when Deputy Sheriff Edwards, responding to an emergency 911 dispatch call, allegedly drove through a dangerous curve at approximately 90 miles per hour without his emergency flashers or siren on, violating Ala. Code §32-5A-7(c).  Edwards lost control of his vehicle and collided with another vehicle traveling in the opposite direction that was operated by Peggy Davidson Cooley and in which the plaintiff, Timothy Joe Sprinkle, was a passenger.  As a result of the collision, Cooley and her unborn child were killed, and Sprinkle was injured.  Sprinkle sued Edwards and others in the Baldwin Circuit Court, alleging negligence, wantonness, and violations of his civil rights under 28 U.S.C. § 1983.  The defendants removed the case to federal court.  Once in federal court, the defendants filed a motion to dismiss the complaint for failure to state a claim under Rule 12(b)(6), Fed. R. Civ. P. (hereinafter referred to as "Federal Rule 12(b)(6)").  The federal district court granted that motion, but did not indicate in its order whether the dismissal was with prejudice, and it permitted Sprinkle to restate his § 1983 claims if he could do so in a viable manner.  Within 14 days of that dismissal, Sprinkle filed another complaint in the Baldwin Circuit Court realleging his state-law claims of negligence and wantonness against Edwards in his individual capacity; that complaint included no federal claims.  Edwards moved to dismiss the state-law claims, arguing that they were barred by the doctrines of res judicata and/or collateral estoppel.  The trial court denied Edwards's motion.  Edwards then filed a motion for a summary judgment, arguing that the action was barred by the doctrines of res judicata and/or collateral estoppel, or, in the alternative, that Edwards was immune from liability under the theory of State-agent immunity.  The trial court granted that motion and entered a summary judgment for Edwards, but it did not specify on what ground.  HOLDING:  The Supreme Court affirmed the judgment, finding that Sprinkle's claim is precluded by the doctrine of res judicata.  The Court noted that the United States Supreme Court has stated that "[t]he dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is a 'judgment on the merits'" for res judicata purposes.  The Court noted that as to the state law claims, because Federal Rule of Civil Procedure 41 explicitly states that unless the court has specified otherwise, a dismissal is an adjudication on the merits, and because the federal district court did not specify otherwise in this case, the federal court's decision was an adjudication on the merits by a court of competent jurisdiction involving the same parties and the same claims.  Therefore, the Court held that Sprinkle's action against Edwards is barred by the res judicata effect of the federal district court's dismissal of all Sprinkle's claims.  However, because the federal district court neglected to mention Sprinkle's state-law claims in its dismissal, the Court noted that if Sprinkle was to obtain a clarification from the federal district court under Rule 60, Fed.R.Civ.P., that the dismissal of his state-law claims was without prejudice, Sprinkle would be entitled to relief from our determination, according to Rule 60(b), Ala.R.Civ.P.)
*Download or view PDF version of opinion*
 
• Sessions v. Espy, 

No. 1010329 (Ala. Oct. 4, 2002)
(legal malpractice; summary judgment; bankruptcy; necessary party; From July 1992 until January 1994, J.R. Sessions and Emily Sessions negotiated with Manuel Patrick to purchase from Patrick the assets of an existing business known as Patrick's Feeds, Inc.  The purchase was consummated on January 12, 1994.  As a part of the agreement, J.R. Sessions and Emily Sessions were required to sign promissory notes in their individual capacities.  During the negotiations, the Sessionses were forming a corporation, known as Sessions Feeds, Inc.; this corporation was formally incorporated on February 11, 1994, after the Sessionses had already acquired the assets of Patrick's Feeds, Inc.  Sessions Feeds, Inc., did not perform as well as the Sessionses had expected.  The Sessionses claim that they discovered gross exaggerations in the sales figures provided to them by Manuel Patrick; the Sessionses claim that, relying upon those exaggerated figures, the accountants had erroneously concluded that the business would be a profitable one for the Sessionses at the agreed-upon purchase price.  The Sessionses claimed that they had been fraudulently induced to purchase the assets of Patrick's Feeds, Inc., as a result of Patrick's misrepresentations. The Sessionses assert that they retained Collier Espy in early April 1995 to represent them individually in a  fraudulent-inducement action against Manuel Patrick and Patrick's Feeds, Inc.  The Sessionses also claim that in late 1995, Sessions Feeds, Inc., retained Espy to file a petition in bankruptcy pursuant to Chapter 11.  The Sessionses allege that Espy committed malpractice against the Sessionses in their individual capacities as a result of his failure to assert a fraudulent-inducement claim against Manuel Patrick and Patrick's Feeds, Inc., before the expiration of the statute of limitations on that claim and his failure to advise the Sessionses as to the legal impact of certain acts and omissions by Espy.  The malpractice claims asserted by the corporation are based upon the claim that Espy acted both as attorney for the debtor (i.e., the corporation) and as attorney for the bankruptcy trustee without advising the corporation of this conflict of interest; that Espy failed to fully investigate the claims of the corporation against Manuel Patrick and Patrick's Feeds, Inc.; and that Espy failed to honor certain representations that he made to the debtor and to the debtor's subsequent legal counsel.  J.R. Sessions, Emily Sessions,  and Sessions Feeds, Inc., filed a five-count complaint against Espy and his law firm, Espy & Metcalf, P.C.  The complaint alleged (1) a breach of a legal duty (this count presumably brought under the common law); (2) a breach of a legal duty (this count brought under the Alabama Legal Services Liability Act ("ALSLA"), § 6-5-570 et seq., Ala. Code 1975); (3) misrepresentation; (4) suppression; and (5) negligence.  Each claim was alleged to have arisen out of an attorney-client relationship between the Sessionses and Sessions Feeds, Inc., on the one hand, and Espy and Espy & Metcalf, P.C., on the other.  The trial court entered summary judgment in favor of Espy and his firm.  HOLDING: The Supreme Court held that, based on the allegations of the complaint, the Sessionses and Sessions Feeds, Inc. are entitled to assert only a claim under the ALSLA.  The Court found that the evidence contained in the record is in conflict as to whether an attorney-client relationship existed between Espy and Espy & Metcalf, P.C., on the one hand, and J.R. Sessions and Emily Sessions, in their individual capacities, on the other.  Thus, the Court concluded that a material issue of fact was presented, and the trial court erred in entering summary judgment.  The Court also concluded that the corporation's malpractice claims are sufficiently rooted in its prebankruptcy relationship with Espy so that those claims should be considered to have been the property of the debtor's estate at the time it filed its bankruptcy petition and should be considered an asset or property of the bankruptcy estate as of the filing of the bankruptcy petitions.  Thus, the Court held that the bankruptcy trustee is a necessary party to the malpractice claims alleged by Sessions Feeds, Inc., against Espy and Espy & Metcalf, P.C., and because the trustee has not abandoned those claims and is a not a participant in this action, the trial court properly entered a summary judgment in favor of Espy and Espy & Metcalf, P.C., as to the claims of Sessions Feeds, Inc., against them.  The Court affirmed the judgment of the trial court as to the claims of Sessions Feeds, Inc. and reversed the judgment as to the Sessionses' individual claims.)
*Download or view PDF version of opinion*
 
• AmSouth Bank v. Dees, 

No. 1010361 (Ala. Oct. 4, 2002)
(arbitration; interstate commerce; scope of arbitration provision; nonsignatory plaintiff; unconscionability; claims of breach of contract, breach of fiduciary duty, unjust enrichment, fraud, suppression, deceit, negligence, wantonness, and conspiracy, allegedly arising from the wrongful handling of a mortgage loan; Leffie Terrell Dees III and Yvette Dees mortgaged their home to AmSouth Mortgage Company, Inc., to secure a 20-year loan in the amount of $55,090 (that mortgage is hereinafter referred to as "the first mortgage"). Neither the mortgage nor the underlying promissory note contained an arbitration clause.  On October 31, 1994, AmSouth Mortgage assigned the mortgage to Countrywide Home Loans, Inc.  Mr. Dees entered into an "AmSouth Equity Line of Credit Agreement" (hereinafter referred to as the "credit agreement") in connection with obtaining a $15,000 line of credit from AmSouth Bank ("AmSouth").  Although Mrs. Dees did not sign the credit agreement, she did sign a contemporaneously executed document captioned "Opening an AmSouth Equity Line of Credit Account"; that document identified her as an "account holder."  The document stated in its introduction that "[AmSouth has] agreed to establish an open-end account for you ...," and went on to explain her right to cancel the account upon taking certain steps.  The credit agreement contains an arbitration clause.  The line of credit was secured by a second mortgage of the same date on the Deeses' home, signed by both Mr. and Mrs. Dees.  The mortgage document did not contain an arbitration clause.  The annual interest rate of the line of credit was 1.5% above prime, which, at the time the agreement was executed, translated to an annual interest rate of 9.75%.  Mr. Dees subsequently requested an increase in the line-of-credit limit, and on June 10, 1997, he and Mrs. Dees signed an "Amendment to Adjustable-Rate Line of Credit Mortgage" (hereinafter referred to as the "amended second mortgage").  AmSouth increased the line of credit from $15,000 to $20,000.  By March 2001, the Deeses had fallen behind on the Equity Line.  On March 13, 2001, AmSouth purchased the Deeses' first mortgage from Countrywide and increased the amount owing under the Deeses' line of credit to $72,352.20.  This amount reflected the addition of $51,210.74 that AmSouth had paid Countrywide for the assignment of the first mortgage.  AmSouth proceeded to charge the Deeses interest based on the higher interest rate applicable to the line of credit, instead of the 7% interest rate of the first mortgage.  AmSouth did not seek the approval of the Deeses for that course of action.  The Deeses sued AmSouth Bank and Countrywide.  AmSouth filed a motion to compel arbitration of the Deeses' claims on the basis that two agreements between it and them – a "Customer Agreement for Depository Account," associated with a checking account the Dees opened on June 11, 1992, and the April 16, 1996, credit agreement – contained arbitration clauses applicable to the dispute.  The trial court denied the motion to compel arbitration. HOLDING: The Supreme Court reversed the order denying AmSouth's motion to compel arbitration.  The Court noted that AmSouth supported its motion with affidavits from four of its officers: a vice president serving as manager of its equity loan center; a senior vice president serving as wholesale funding manager; a senior vice president serving as manager of electronic banking; and a senior vice president serving as manager of deposit operations, and that, collectively, those affidavits showed that the aggregate effect of the credit-line transaction substantially involved interstate commerce.  The Court concluded that, given the broad language of the arbitration clause ("any controversy, claim, dispute, or disagreement arising out of, in connection with, or relating to this Agreement or your Loan") and the Deeses' expansive statement of their claims in their complaint, the Deeses' dispute with AmSouth does in substantial part arise out of, relate to, and/or has a connection with, the credit agreement and the loan it gave rise to.  The Court held that AmSouth could compel arbitration as to Mrs. Dees because she claims damages for the changes in the credit line established by the credit agreement.  The Court rejected the Deeses' unconscionability argument because they never raised it in the trial court and because it is based on actions AmSouth took outside the contract.)
*Download or view PDF version of opinion*
 
• Ex parte Toney, 

No. 1010696 (Ala. Oct. 4, 2002)
(criminal; probation violation; hearsay; Donald Toney was arrested for allegedly violating his probation.  At his probation-revocation hearing, the State elicited testimony from a probation officer to the effect that the officer was present in the probation office when agents from a Tennessee car dealership identified Toney from a photograph as the person who had purchased an automobile in Tennessee.  Based on this evidence, the trial court found that Toney had left the State of Alabama without permission, and, based on that violation, it revoked Toney's probation.  Toney appealed, arguing that the testimony was based on inadmissible hearsay; the Court of Criminal Appeals affirmed. HOLDING: The Supreme Court noted that the State's position is that the testimony at issue was "not offered to prove the truth of whether Toney had gone to Tennessee to purchase the vehicle"; rather, "[i]t was offered to prove that Toney was identified by agents of the car dealership as the person who purchased the vehicle in Tennessee and drove it to Alabama."  The Court concluded, however, that the out-of-court statements of the dealership agents were offered to prove the truth of the matter asserted, i.e., that Toney had been in Tennessee.  Therefore, the Court reversed the judgment of the Court of Criminal Appeals.)
*Download or view PDF version of opinion*
 
• General Motors Corp. v. Stokes, 

No. 1010773 (Ala. Oct. 4, 2002)
(arbitration; Stokes Chevrolet, Inc. ("the Stokes dealership"), operates a dealership in Clanton that, in addition to the Chevrolet line of the Chevrolet Motors Division of General Motors Corporation ("GM"), sold Chrysler, Plymouth, Dodge, and Jeep vehicles (Stokes's non-GM lines are hereinafter referred to as "the Chrysler assets").  Rick Bush Motors ("Bush") was a GM dealer that also operated in Clanton and that had the authority to sell Buick, Oldsmobile, and Pontiac vehicles, and the GMC line of GM.  The Stokes dealership was interested in acquiring from Bush assets to be used in the operation of an Oldsmobile, Pontiac, and Buick dealership.  Bush's dealership agreement with GM required GM's approval of the sale of its assets to the Stokes dealership.  The Stokes dealership obtained GM's approval and purchased Bush's assets; however, a condition of the approval was the Stokes dealership's agreement to relocate the Chrysler assets to another site in Clanton.  Bush and the Stokes dealership consummated their asset purchase agreement on April 6, 1999, and on April 8, 1999, the Stokes dealership and GM consummated a "Relocation Agreement and Business Plan" ("the relocation agreement").  This action arises out of the Stokes dealership's purchase of 63 new GM vehicles from Bush's inventory.  The Stokes dealership claims that GM promised that the 63 vehicles would be "reinvoiced" to it if it would agree to sell the vehicles.  The Stokes dealership further claims that GM promised that it would receive the three percent "dealer-holdback" credit, the advertising credit, and other interest credits on those vehicles.  GM denied making any such promises.  Kirk A. Stokes, James H. Stokes, and the Stokes dealership (hereinafter sometimes referred to collectively as "the Stokeses") sued GM and its area market manager, Robert T. Feeley, Jr., alleging fraud, suppression, conversion, negligence, wantonness, and the tort of outrage.  GM's dealership agreement with the Stokes dealership does not contain an arbitration clause.  The arbitration clause provides that claims arising under or relating to the negotiation, execution, administration, modification, extension, or enforcement of the relocation agreement fall within its sweep.  GM and Feeley filed motions to compel arbitration.  The trial court denied GM's motion to compel arbitration.  GM appealed. HOLDING: The Supreme Court held that the claims made the basis of this action are subject to arbitration pursuant to the arbitration clause in the relocation agreement.  The Court reasoned that  because additional payments from GM not covered by the written terms of the agreement were orally promised during the negotiations concerning the transaction, those promises were a discrete event related to the Stokes dealership's acquisition of the Oldsmobile, Buick, and Pontiac franchises and, therefore, a claim based on those promises constitutes a claim "arising under or relating to" the "negotiation" of the relocation agreement.  The Court also held that the transaction substantially affects interstate commerce.)
*Download or view PDF version of opinion*

Back to top
 
 

Opinions Released September 27, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  SEPTEMBER 27, 2002 

 
• Chesser v. AmSouth Bank, N.A., 

No. 1002021 (Ala. Sept. 27, 2002)
(on application for rehearing; withdrawing and substituting the opinion of June 28, 2002)
(arbitration; interstate commerce;  William T. Chesser purchased a used 1995 GMC truck from Premiere Chevrolet, Inc.  AmSouth Bank financed the purchase of the truck; when he finalized the necessary paperwork to complete the sale, Chesser executed a buyer's order, an installment sales contract and security agreement, and an application for credit-disability and credit-life insurance coverage from Protective Life Insurance Corporation of Alabama. The buyer's order, the retail installment contract, and the certificate of insurance Chesser received when he applied for the credit-life and credit-disability insurance coverage all contained separate arbitration provisions.  Seven months after he purchased the truck, Chesser underwent heart surgery and was unable to continue making the installment payments due on the AmSouth loan.  Chesser contacted Premiere Chevrolet and told them that he wished to make a claim for benefits under the credit-disability policy he had purchased from Protective Life when he purchased the truck.  Premiere Chevrolet forwarded Chesser's claim to Protective Life.  Protective Life subsequently denied Chesser's claim and refunded to AmSouth, as the lienholder on the vehicle, the $1,141.38 premium.  AmSouth subsequently repossessed the truck.  Chesser maintains that although AmSouth received the refunded premium before it repossessed the truck, AmSouth failed to apply the refunded premium to the arrearage he owed on the loan; Chesser sued AmSouth and Protective Life alleging breach of contract, fraud, negligent failure to obtain insurance, wrongful possession and conversion, and bad-faith refusal to pay.  AmSouth moved to stay the action pending arbitration or, alternatively, to dismiss the action.  The trial court granted AmSouth's motion to compel arbitration. HOLDING: The Supreme Court held AmSouth met its burden of proving that the transaction had a substantial effect on interstate commerce because the credit-life and credit-disability insurance was purchased by Premier Chevrolet's forwarding a check to Protective Life in California, because the extended service contract was purchased by Premier Chevrolet's forwarding a check to "MS Dealer Service Corporation," which is headquartered in Florida, and because, in compliance with the retail installment agreement, Chesser obtained comprehensive and collision insurance from State Farm Insurance, which is headquartered in Illinois.  The Court therefore affirmed the trial court's order compelling Chesser to arbitrate his claims against AmSouth.)
*Download or view PDF version of opinion*

--(The original withdrawn opinion released on June 28, 2002, in Chesser  is also available on the web site of Wallace, Jordan, Ratliff & Brandt, L.L.C.)--
 

• Providian Nat'l Bank v. Pritchett, 

No. 1010296 (Ala. Sept. 27, 2002)
(class action; class certification; res judicata; In 1999, Calvin Pritchett and James Joyner, both holders of Visa credit cards issued by Providian National Bank, sued Providian National Bank and Providian Financial Corporation (hereinafter collectively referred to as "Providian"), alleging that Providian had charged their credit-card accounts, without their knowledge or permission, for products or services Pritchett and Joyner had not ordered or requested.  In their complaint, Pritchett and Joyner alleged misrepresentation, suppression, deceit, fraudulent deceit, and unjust enrichment.  However, when Pritchett and Joyner filed this action, litigation involving similar claims was pending in California, Pennsylvania, and other states.  Many of those cases had been consolidated, and a nationwide class had been certified in the Superior Court of California, San Francisco County.  Pritchett and Joyner fell within the definition of the nationwide class.  Some of the class representatives involved in those actions were Alabama residents, and Alabama lawyers were listed as counsel of record in those actions.  Pritchett and Joyner received notice at least as early as February 22, 2000, that that claim was being alleged in the nationwide class action.  Pritchett and Joyner received notice of a proposed settlement of the nationwide class action; included in that notice were detailed instructions regarding the class members' rights under the proposed settlement, the date of a scheduled fairness hearing regarding the proposed settlement, how class members could object to the proposed settlement, and how class members could exclude themselves from the nationwide class.  Pritchett and Joyner elected to file an objection to the proposed settlement with the Superior Court of California rather than to opt out of the nationwide class.  The day before the California trial court concluded its fairness hearing on the proposed settlement, the Bullock County Circuit Court certified unidentified claims for class treatment, pursuant to Ala.R.Civ.P. 23(b)(2) and (b)(3).  Providian appealed.  HOLDING: The Supreme Court vacated the order of class certification.  The Court found that the claims asserted in Pritchett and Joyner's complaint are barred by the doctrine of res judicata and by the express language of the settlement agreement entered into by the parties to the nationwide class action, which included Pritchett and Joyner.)
*Download or view PDF version of opinion*
 
• Ex parte Hurricane Freddy's, Inc., 

No. 1010643 (Ala. Sept. 27, 2002)
(fraud; damages; In a previous appeal, the Court of Civil Appeals remanded the case for the trial court to enter an award of damages on the fraud claim by Darrell D. Smith and Hook's Catfish, Inc., d/b/a Hooks Catfish Restaurant ("Hooks Catfish") against  Hurricane Freddy's, Inc., Chris Ybarra, and Frank Martin.  The trial court heard testimony and other evidence and awarded Smith and Hooks Catfish $63,711.41.  The prior appeal established that Smith and Hooks Catfish were damaged when, as a proximate result of Smith's relying on the defendants' false representation, Smith and Hooks Catfish chose to close the restaurant.  HOLDING: The Supreme Court held that the plaintiffs were entitled to recover only those damages, including expenses, that naturally and proximately resulted from the closing of the restaurant, but that the trial court, in determining the damages to be awarded Smith and Hooks Catfish, considered the operating income of the restaurant, as well as its operating expenses, many of which Smith and Hooks Catfish had received the full benefit of before they decided to close the restaurant.  Therefore, the Court held that the trial court improperly applied the law to the facts.)
*Download or view PDF version of opinion*
 
• Mason v. Acceptance Loan Co., 

Nos. 1010563 & 1010564 (Ala. Sept. 27, 2002)
(arbitration; interstate commerce; insanity; mental retardation; capacity to contract; Charlie Mason, Charlie Thigpen, and others (hereinafter collectively referred to as "the plaintiffs") sued Acceptance Loan Company, Inc., Protective Life Insurance Company, and CNL Insurance America, Inc. (hereinafter collectively referred to as "the defendants"), in the Lowndes Circuit Court, asserting various claims stemming from the solicitation and sale of insurance to the plaintiffs in conjunction with consumer loans  they obtained from Acceptance.  Specifically, the plaintiffs purchased credit-life and disability insurance from Protective Life and automobile insurance from CNL.  The defendants each filed a motion to compel arbitration, seeking to enforce arbitration agreements signed by the plaintiffs in connection with each consumer loan and each application for insurance.  The trial court granted the defendants' motions.  The plaintiffs appealed and argued that the trial court erred in compelling arbitration because, they say, (1) the defendants did not offer sufficient evidence indicating that the transactions substantially affected interstate commerce, (2) the various contracts that contained the arbitration agreements are void under Ala. Code 1975, § 8-1-170, because, they argue, the plaintiffs suffer from mental retardation that renders them "insane," (3) the plaintiffs were fraudulently induced into signing the arbitration agreements, and (4) the arbitration agreements are unconscionable.  HOLDING:  The Supreme Court affirmed the trial court's order granting the motions to compel arbitration.  The Court held that two uncontroverted affidavits submitted by the defendants established that the plaintiffs' purchase of credit-life and disability insurance and automobile insurance in connection with obtaining loans through Acceptance clearly "involved" interstate commerce so as to enforce the arbitration agreements under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA").  The Court held that the plaintiffs are not properly characterized as "insane" for purposes of  Ala. Code §8-1-170 because conditions such as "mental weakness," illiteracy, and a lack of education do not make one "insane" or otherwise deprive one of the ability to contract.  The Court held that one claiming to be "insane" and thereby seeking to void a contract under Ala. Code §8-1-170 must present evidence of some condition substantially different in nature and degree than mere "mental weakness."  The Court noted that because there is no dispute that the arbitration provisions were clearly and repeatedly indicated in the various documents signed and received by the plaintiffs, the plaintiffs' claim of fraudulent inducement essentially rests on a combination of an alleged failure to disclose and the plaintiffs' alleged inability to read and to understand the documents at issue.  The Court held that, unlike their insanity claim, the plaintiffs' fraudulent-inducement claim should be resolved by an arbitrator, not a court, because their allegation addresses the contracts as a whole, rather than the arbitration provisions only.  The Court found either unsupported or unpersuasive the plaintiffs' arguments that the contracts were unconscionable because of (1) a lack of meaningful choice on their part, (2) a lack of mutuality of remedy, and (3) an inherent bias on the part of the American Arbitration Association.)
*Download or view PDF version of opinion*
 
• Conseco Fin. Corp.-Ala. v. Salter, 

No. 1010657 (Ala. Sept. 27, 2002)
(on application for rehearing; withdrawing and substituting the opinion of July 3, 2002)
(arbitration; waiver; John T. Salter purchased a mobile home from Southern Lifestyle Manufactured Housing, Inc.., located in Bay Minette, Alabama; in connection with this purchase, Salter executed a Manufactured Home Retail Installment Contract and Security Agreement ("the installment contract"), which reflected that the installment contract was to be assigned to Green Tree Financial Corp.-Alabama (now known as Conseco Finance Corp.-Alabama), located in Pensacola, Florida.  The installment contract contained an arbitration provision.  The arbitration provision contained a sentence stating: "The institution and maintenance of a lawsuit to foreclose upon any collateral, to obtain a monetary judgment or to enforce the security agreement shall not constitute a waiver of the right of any party to compel arbitration regarding any other dispute or remedy subject to arbitration in this contract, including the filing of a counterclaim in a suit brought by you pursuant to this provision."   Conseco instituted in the Baldwin County Circuit Court an action against Salter alleging that Salter was in default for failing to timely make the payments due under the installment contract.  Salter asserts that during the course of his discussions with Conseco, Conseco learned that Salter had made all of his payments in a timely manner and that his account had never been in default.  Salter filed an answer and counterclaims in response to Conseco's complaint.  Salter sought a judgment declaring that his account with Conseco was not in default and that all payments he lawfully owed Conseco had been paid.  Salter also asserted counterclaims alleging negligence and the tort of outrage arising out of Conseco's continued attempts to collect the purportedly delinquent payments.  Three days later, at a hearing on Conseco's request for repossession,  Conseco voluntarily withdrew its action.  Salter then filed a motion seeking to enjoin Conseco from further collection attempts and requesting an immediate hearing.  The trial court granted Salter's motion and entered a preliminary injunction.   On the day the trial court entered the preliminary injunction, Conseco filed its motion to compel arbitration of Salter's claims against Conseco and a supporting affidavit, seeking to enforce the arbitration provision contained in the installment contract.  The trial court denied Conseco's motion, finding that Conseco had substantially invoked the litigation process and had thereby waived its right to enforce the arbitration provision.  HOLDING:  The Supreme Court held that although Conseco initiated this replevin action, the mere filing of a pleading does not constitute a waiver of the right to compel arbitration.  The Court noted that, as evidenced by the express language of the arbitration provision in the installment contract, the parties specifically agreed that the filing of such an action would not constitute a waiver of Conseco's right to seek arbitration.  The Court held that Conseco had not substantially invoked the litigation process by appearing at hearings held in its replevin action and by participating in discussions with Salter regarding the status of his account.  The Court noted that once Salter asserted his counterclaims, Conseco's only filing in the trial court related to enforcement of the parties' agreement to arbitrate, and that was done within two months of the filing of the counterclaims.  The Court held that the trial court erred in denying Conseco's  motion to compel arbitration and reversed the order denying arbitration.)
*Download or view PDF version of opinion*

--(The original withdrawn opinion released on July 3, 2002, in Salter  is also available on the web site of Wallace, Jordan, Ratliff & Brandt, L.L.C.)--
 

• Comalander v. Spottswood, 

No. 1011020 (Ala. Sept. 27, 2002)
(construction; materialman's lien; negligence; fraud; slander of title; Robert Comalander, Jr. contracted with George and Amy Spottswood to build a house for the Spottswoods.  After the house was built, Comalander sued the Spottswoods, alleging breach of contract and seeking to enforce a materialman's lien in the amount of unpaid invoices for the construction of the house.  The Spottswoods counterclaimed, alleging negligence, fraud, and slander of title.  During the charge conference, the trial court stated that it would not charge the jury that the parties were entitled to a setoff.  Instead, the trial court stated that it, not the jury, would calculate the amount of any setoff, in the event  the jury awarded damages on both Comalander's and the Spottswoods' claims.  The trial court also stated during the charge conference that it would calculate and fix the interest of an award in favor of Comalander.  Comalander's invoices provided that a charge of 18% per year would be added to any balance remaining unpaid after 30 days.  While the jury was deliberating, Comalander entered into a settlement agreement with the Spottswoods.  Under that agreement, the Spottswoods were to pay Comalander a maximum amount of $400,000 and a minimum amount of $200,000.  The agreement stated that there was to be "[n]o appeal on counterclaim issues by either party."  It further stated: "This agreement is to settle all claims [the] Spottswoods have against Comalander."  Finally, it stated: "This agreement waives no defenses as to Comalander's claims against the Spottswoods."  The jury returned a verdict in favor of Comalander in the amount of $80,766.11.  The jury also returned a verdict in favor of the Spottswoods, on their counterclaims, in the amount of $41,300.  The trial court set off the two verdicts and then added interest to the final amount.  Thus, the trial court entered a judgment in favor of Comalander in the sum of $39,466 plus interest in the amount of $13,369.  The verdict in favor of the Spottswoods and against Comalander was substantially below the $200,000 floor set in the settlement agreement.  Zürich American Insurance Company, Comalander's insurance carrier, has tendered two checks to the Spottswoods, totaling $200,000.  Those checks have not been negotiated.  Comalander filed a postjudgment motion under Ala.R.Civ.P. 59 to alter or amend the trial court's judgment, and Ala.R.Civ.P. 60 for relief from the judgment, arguing that because the parties had already entered into a settlement agreement, pursuant to which the Spottswoods would be paid $200,000, the verdict in his favor should not have been set off.  In the alternative, Comalander argued that the trial court erred when it set off the amount of Comalander's verdict before adding interest, thereby reducing his entire verdict.  The trial court denied Comalander's postjudgment motion. HOLDING: The Supreme Court held that the trial court did not interpret the settlement agreement when it ruled on Comalander's Rule 59 and 60 motion.  Because the record indicates that the trial court did not consider the terms of the settlement agreement when it ruled on Comalander's postjudgment motion, the Court reversed the judgment of the trial court and remand the case for the trial court to construe the terms of the settlement agreement and to rule on Comalander's postjudgment motion in accordance with its construction of the settlement agreement.  In doing so, the Court declined to reach the merits of Comalander's substantive claims.)
*Download or view PDF version of opinion*
 
• Byrd v. Lamar, 

No. 1011068 (Ala. Sept. 27, 2002)
(promissory fraud; fraudulent suppression; sovereign immunity; state-agent immunity; Bernard Byrd transferred to Alabama State University ("ASU") in 1995 to pursue a degree in music media.  Byrd chose ASU based upon the information he had seen in ASU's "General Undergraduate Catalog, 1994-1996."  Dr. Horace Lamar, the dean of ASU's school of music, was Byrd's academic advisor at ASU.  Early in his academic career, Byrd asked Lamar for permission to enroll in some of the music media courses.  Lamar told Byrd that he had to complete ASU's core-requirement classes before he could take the music media courses.  Byrd was not allowed to take any music media courses during his first three years.  During his fourth year at ASU, Byrd had not taken any of the courses listed in ASU's undergraduate catalog for students majoring in music media.  In 1997, ASU revised the list of courses offered to students seeking a degree in music media.  Byrd had not taken any of these courses by his fourth year at ASU.  According to Byrd, in February 1999, Carol Porter, an instructor in the music department, told Byrd that she had talked with Lamar about the music media curriculum and that Lamar told her that "he was just bull****ting [Byrd] ... about the music media program."  Byrd met with Lamar and, according to Byrd, Lamar told him that he could still take the necessary music media courses to graduate in May 2000.  Lamar also told Byrd that he would arrange for Byrd to take the "basic recording" course during the 1999 spring semester but, according to Byrd, the instructor for the "basic recording" course, Ralph Chapman, did not appear in class until four weeks into the semester.  When Chapman did appear, he offered to give Byrd and the other music media students in the class a grade for the course, even though they had done nothing to earn it.  Byrd wrote letters to Lamar, the dean of the school of music; Dr. Roosevelt Steptoe, the vice president of academic affairs; Dr. Jacqueline Williams, the vice president of student affairs; and Dr. William Harris, the president of ASU, stating that he did not understand why the courses in his music media major were not being taught at ASU and that he had been misled about the status of his degree program.  Lamar mailed Byrd a memorandum listing the music media courses required for Byrd to graduate and indicating when those courses would be offered.  The memorandum stated that "basic recording" and "practicum in recording" would be offered in the 1999 fall semester, "advanced recording, audio production, and an internship" would be offered in the 2000 spring semester, and "digital signal processing" and "recital" would be offered in the 2000 summer semester.  In the fall semester of 1999, Byrd enrolled in the basic recording and practicum in recording courses.  According to Byrd, no instructor appeared on the first day of classes to teach the courses.  Byrd alleges that about five weeks into the semester, Ron Handy, an instructor in the music department, told Byrd that Lamar asked him to show Byrd "some things in the music recording area."  According to Byrd, Handy told him that ASU's music-recording equipment was outdated.  According to Byrd, most of the equipment in the studio did not work, and Handy told him that he did not have the credentials to teach either the basic recording course or the practicum in recording.  Byrd alleges that between the 1999 spring semester and the 1999 fall semester, three ASU music professors -- Ron Handy, Tony Van Free, and Doug Bristol -- told him that the music media program had been discontinued several years before Byrd enrolled at ASU and that ASU did not have a qualified music instructor to teach the music media courses.  Byrd decided to withdraw from ASU in the spring semester of 2000.  Byrd met with Williams, the vice president of student affairs, and Williams asked Byrd to talk with Dr. Steptoe, the vice president of academic affairs, once more before he withdrew from school.  Byrd testified that during his meeting with Steptoe, Steptoe admitted that there was no music media program at ASU.  According to Byrd, Steptoe told Byrd that if he "dropped" his lawyer he would be given "transportation, somewhere to stay, free schooling, and free room and board" and that Steptoe offered to provide the cost of tuition for Byrd to complete a music media program at another college.  Byrd withdrew from ASU during the spring semester of 2000.  Byrd sued ASU, and Lamar, Steptoe, Harris, Williams (hereinafter referred to collectively as "the ASU defendants"), and the Board of Trustees of ASU, all in their individual and official capacities, alleging breach of contract and fraud.  The trial court dismissed Byrd's claims against ASU, his breach-of-contract claim, and his claims against Lamar, Steptoe, Harris, Williams, and the members of the Board of Trustees in their official capacities, holding that those defendants were immune from suit pursuant to Ala. Const. of 1901, Art. I, § 14.  Byrd filed an amended complaint alleging what he described as fraud claims against Harris and Lamar, promissory-fraud claims against Lamar and Steptoe, and suppression claims against Williams and Harris.  The trial court subsequently entered a summary judgment in favor of each of the ASU defendants and the Board of Trustees in their individual capacities, holding, among other things, that Byrd had failed to produce substantial evidence indicating that Lamar or Steptoe had made untrue statements to Byrd or that Byrd had relied to his detriment on the alleged statements; that Byrd failed to produce substantial evidence of an intent to deceive and an intent not to do the acts allegedly promised in order to support his promissory-fraud claims against Steptoe and Lamar; and that Byrd failed to produce substantial evidence indicating that the music media program was fraudulent in order to support his suppression claims against Williams and Harris.  On appeal, Byrd did not challenge the dismissal of ASU and Harris, Lamar, Steptoe, Williams, and the Board of Trustees, in their official capacities, nor did Byrd challenge the summary judgment in favor of the Board of Trustees in their individual capacities.  Byrd conceded that the trial court properly dismissed or entered a summary judgment in favor of all members of the Board of Trustees.  HOLDING:  The Supreme Court agreed with the ASU defendants' contention that Byrd's fraud claim against Lamar is actually a suppression claim, noted that Byrd conceded in his reply brief to this Court that his fraud claim against Lamar is actually a suppression claim. and noted that Byrd did not argue in his initial appeal brief that the trial court erroneously entered the summary judgment for Lamar as to the suppression claim but instead argued in that brief that the trial court erroneously entered the summary judgment for Lamar as to the  misrepresentation claim.  The Court held that it cannot consider Byrd's suppression claim as to Lamar because of the settled rule that the Court does not address issues raised for the first time in a reply brief and because it cannot reverse the trial court's judgment based on a version of the complaint that was not before it.  Thus, because Byrd did not properly allege a fraudulent-misrepresentation claim in his complaint, the Court affirmed the summary judgment in favor of  Lamar as to Byrd's so-called "fraud" claim.  As to Byrd's claims against Harris, the Court noted that Byrd contends that Harris should be held liable for the allegedly fraudulent misrepresentations in ASU's undergraduate catalog.  The Court held that because the allegations of the complaint charge Dr. Harris, in his individual capacity, with fraud, Ex parte Cranman does not shield Dr. Harris from immunity.  The Court noted that while Byrd presented evidence indicating that the ASU undergraduate catalog 1994-1996 misrepresented the courses that would be available to music media students and the condition of its music recording studio, Byrd failed to present substantial evidence indicating that Harris prepared the course curriculum for the school of music, that Harris was specifically aware of what courses the catalog advertised for music media students, or that Harris had approved the ASU undergraduate catalog, 1994-1996, for publication.  The Court further found that the record is devoid of any evidence indicating that Harris made any direct misrepresentation to Byrd.  The Court held that without substantial evidence indicating that Harris himself made misrepresentations to Byrd or that he approved the alleged  misrepresentations in the ASU catalog, Byrd's fraud claim against Harris must fail.  As to Byrd's promissory-fraud claim against Lamar, the Court found that the record contains substantial circumstantial evidence supporting Byrd's contention that Lamar misrepresented the status of ASU's music media program and that Lamar knew in the spring semester of 1999 that ASU did not have the equipment or the instructors qualified to teach music media courses in the fall semester of 1999.  Therefore, the Court reversed the summary judgment for Lamar on the promissory-fraud claim.  As to Byrd's promissory-fraud claim against Steptoe, the Court found that Byrd presented substantial circumstantial evidence of Dr. Steptoe's involvement in ASU's curriculum by reason of his position as vice president of academic affairs, substantial evidence that Steptoe promised him that he could complete the music media program in a "timely manner" and that the music media courses listed in the ASU catalog would be taught in the "near future," and that  Steptoe knew that ASU did not offer a music media program.  Thus, the Court held that the trial court erred in entering a summary judgment in favor of Dr. Steptoe as to Byrd's promissory-fraud claim.  As to Byrd's fraudulent-suppression claims against Williams and Harris, the Court found that Byrd presented no evidence indicating that Williams or Harris had knowledge that music media courses were not being taught in the music department, that ASU did not have a qualified instructor to teach the music media courses, or that the music equipment in the recording studio was outdated and did not work.  The Court further found that even if Williams and Harris did have knowledge that ASU could not offer music media courses, Byrd presented no evidence indicating that Williams or Harris attempted to conceal that fact from him.  Thus, the Court affirmed  the summary judgments in favor of Williams and Harris on Byrd's suppression claims.)
*Download or view PDF version of opinion*
 
• Ex parte Spivey, 

No. 1011128 (Ala. Sept. 27, 2002)
(state-agent immunity; negligence; wantonness; Jerry Peacock is a vocational teacher and Donald Spivey is the career and technical director at the Houston County Career and Technical Center ("the vocational center").  During the week of August 20, 1999, Peacock's class, in which Heath Wright was a student, was making raised-panel doors.  As part of the project, the students were to use a model W-SS3 spindle wood shaper manufactured by Jet Equipment and Tools, Inc., to make straight cuts on three sides of a board and an arched cut on the fourth side.  The shaper has "infeed" and "outfeed" "fences" positioned lengthwise on the right and left sides of the blade, respectively, from the perspective of the operator.  The fences assist the operator in guiding the wood into the blade.  Before class began on the date of the accident, Peacock set up the shaper for the students' use.  Peacock removed the outfeed fence, left the infeed fence in place, and made sure that a "rub collar" was in place.  Peacock also had the students use a "starting pin."  Peacock testified that he believed this setup was "more or less in line with" a photograph in the textbook depicting the operation of the shaper when making irregularly shaped cuts -– with a collar and a starting pin and without fences.  Peacock testified that he believed that there was no way to make the machine safer than it was at the time of Heath's injury.  Peacock further testified that the specific cut Heath was making at the time of his injury -- a straight cut -- could have been made with both fences in place.  Before the students began to use the shaper on the day Heath was injured, Peacock demonstrated how to use the shaper to perform the assigned cuts.  Heath testified that Peacock also demonstrated how to safely operate the shaper and told them to avoid coming in contact with the cutter.  Peacock had also required the students to take written safety tests.  Peacock testified that the students were all wearing safety goggles or glasses on the day Heath was injured.  Heath had never used the large shaper before the day he was injured.  However, Heath had used the smaller shaper earlier in the week.  Peacock testified that Heath successfully completed the arched cut and two of the straight cuts during previous turns at the machine.  Peacock also testified that Heath successfully completed the final cut, a straight cut, before he was injured.  Peacock testified, "I watched him, after the board had passed the cutter.  And the last step that he had to do was turn the machine off.  And, at that point, when the cut was completed, I remember stating, 'Good job.'  And the last operation was just to turn the machine off."  Peacock testified that he did not witness Heath's hand coming in contact with the blade because some students were standing between Heath and Peacock.  Heath's version of how the injury occurred contradicts Peacock's testimony.  Heath testified that the injury occurred when he was approximately halfway finished with his cut.  Heath severed one finger and part of his thumb and severely cut another finger on his right hand.  Heath Wright and his parents, Betty Wright and Solomon Wright, sued Donald Spivey, Jerry Peacock, among others, alleging that Peacock and Spivey had been negligent and wanton (1) in failing to supervise and/or instruct Heath in the proper use of the shaper, (2) in allowing Heath to operate a defective or improperly designed machine, (3) in failing to inspect the shaper to assure that it was in proper working order and safe for use by the students, (4) in failing to implement or to follow guidelines or rules for the proper and safe use, and the proper safety inspection of, the shaper, (5) in failing to prevent an unsafe condition from developing, (6) in failing to provide the proper safety equipment for use with the shaper, and (7) in failing to properly maintain the shaper.  Peacock and Spivey filed motions for a summary judgment arguing, among other things, that they were entitled to state-agent immunity.  The trial court denied their motions for summary judgment, specifically finding that they were not entitled to state-agent immunity.  Peacock and Spivey filed a petition for writ of mandamus.  HOLDING: The Supreme Court held that the Wrights' actions against Peacock and Spivey arise from decisions they made in educating students and in Spivey's supervision of Peacock, categories specifically included within the Cranman restatement of the rule governing state-agent immunity.  The Court found that even assuming that the teacher was under a ministerial duty to follow to the letter the textbook and the owner's manual, an analysis of the textbook and the manual does not support the conclusion that the use of the shaper without fences renders the shaper unsafe.  The Court held that Peacock was immune from liability predicated upon the exercise of his judgment in educating students, and held that it may not second-guess his decision.  The Court held that Peacock and Spivey's  respective job descriptions and in the faculty handbook do not remove from Peacock his judgment in determining the safe operation of the tools or when a safety hazard exists and are not the type of "detailed rules or regulations" that would remove a state agent's judgment in the performance of required acts.  The Court also held that the general requirement imposed by Spivey's job description that he "[i]mplement safety instruction and practices" does not remove Spivey's judgment in determining whether Peacock was properly teaching and practicing safe operation of the shaper.  The Court found that Peacock, a shop teacher with over 20 years' experience, acted within his judgment in determining that retrofitting equipment for the shaper was not available and that it was reasonably safe to use the shaper under his close personal supervision without additional guards.  The Court found that there is no evidence indicating that Peacock had any "knowledge that injury ... would likely or probably result" from the use of the shaper without the guards and the outfeed fence.  Thus, the Court concluded that Peacock and Spivey have a "clear legal right" to summary judgments in their favor.  The Court ordered the trial court to vacate its order denying summary judgments for Peacock and Spivey and to enter summary judgments in their favor.)
*Download or view PDF version of opinion*
 
• Trapp v. Vess, 

No. 1011406 (Ala. Sept. 27, 2002)
("rescue doctrine" of tort law; negligence; wantonness; On January 28, 2000, the weather conditions in Franklin County included freezing temperatures and two to three inches of snow.  Jerry Vess and his daughter left their home that morning to take Vess's daughter to Russellville Hospital, where she was scheduled to undergo medical tests.  Along the way, Vess applied the brakes on an icy portion of a road, and his car skidded into a ditch.  Neither Vess nor his daughter were injured; however, Vess's car was stuck in the ditch.  A few minutes later Jerry Trapp drove by and stopped to help.  Vess says that he informed Trapp that he and his daughter were not injured and that they had been on their way to Russellville Hospital where his daughter was to undergo some tests.  Trapp offered to get a truck with a trailer hitch to pull Vess's car out of the ditch.  Trapp left and later returned with a truck and five or six men to aid in getting Vess's car out of the ditch.  The men attached a chain to the front of Vess's car and proceeded to pull the car from the ditch. During this process, Trapp and some of the men were standing in the ditch pulling on the car while the truck pulled from the road. As Trapp pulled on the car, he tore his right distal biceps tendon.  The men successfully removed the car from the ditch.  Trapp sought medical attention for his injury a few days later and eventually underwent surgery on his arm.  Trapp sued Vess and Cotton States Insurance Company, alleging that the injury to his arm resulted from Vess's negligence and/or wantonness in driving his car into the ditch.  Both Vess and Cotton States filed motions for a summary judgment. After Trapp responded to the motions, the trial court entered a summary judgment for Vess and Cotton States. Trapp appealed. HOLDING: The Supreme Court noted that the rescue doctrine allows a person who sustains an injury when he or she comes to the aid of another in peril to recover damages based upon the negligence of the tortfeasor, despite the absence of proximate cause.  The Court noted that in order to meet the standard under the rescue doctrine, the defendant must have been negligent as to the person being rescued.  If so, the defendant is deemed to have acted negligently towards the rescuer as well.  However, the Court held that Trapp's argument contains no factual support to show that Vess acted negligently in causing his car to enter the ditch, and it noted that the mere skidding of an automobile on an icy street does not necessarily prove negligence of the driver of the car.   Therefore, the Court held that the trial court correctly entered a summary judgment for Vess and Cotton States.  Additionally, the Court concluded that, as a matter of law, Trapp did not have a reasonable belief that some person was in imminent peril and that Trapp is not entitled to the application of the rescue doctrine.)
*Download or view PDF version of opinion*

Back to top

Opinions Released September 20, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  SEPTEMBER 20, 2002 

 
• Ex parte Pierce, 

No. 1981270 (Ala. Sept. 20, 2002)  (on return to remand)
(criminal; postconviction relief; ineffective assistance of counsel; Pierce was convicted of murder committed during the course of a robbery, and he was sentenced to death by electrocution. After his conviction was affirmed after various appeal proceedings, Pierce filed a petition for postconviction relief under Ala.R.Crim.P. 32.  The trial court dismissed several of Pierce's claims and denied the remaining claims for relief.  One of Pierce's claims for Rule 32 relief was based on his allegation that Sheriff Douglas Whittle had been a key witness for the prosecution and that he had improperly had close and continual contact with the jury throughout the trial.  The Court of Criminal Appeals held that this issue was procedurally barred by Rule 32.2(a)(3) and (5) because it was not raised at trial or on direct appeal, and it further held the claim to be without merit. The Supreme Court reversed in Ex parte Pierce, No. 1981270, Ala. Sept. 1, 2000).  The Court concluded that "Sheriff Whittle was in fact a key witness for the State," and found "undisputed evidence indicating [Sheriff Whittle] had close and continual contact with the jury" in violation of Turner v. Louisiana, 379 U.S. 466 (1965).  However, the Court held that this claim would be procedurally barred by Rules 32.2(a)(3) and (5) if "Pierce's attorney did know or should have known of the sheriff's contact with the jury during the trial," and the Court remanded the case for the Court of Criminal Appeals to remand to the trial court for an evidentiary hearing on that issue.  The trial court found that Pierce's attorney knew or should have known of the sheriff's contact with the jury during the trial.  HOLDING: The Supreme Court held that while the trial court's conclusion that Pierce's attorney knew or should have known of the sheriff's contact with the jury during the trial may result in the preclusion of Pierce's underlying Turner claim, it effectively breathes life into his ineffective-assistance-of-counsel claim, which requires proof (1) that Pierce's attorney did not provide reasonably effective assistance and (2) that Pierce's attorney's deficient performance prejudiced Pierce.  The Court noted that it answered the question of prejudice in Pierce when it held that a Turner violation occurred.  The Court also found that the failure to raise this constitutional violation constitutes a failure to provide reasonably effective assistance.  Therefore, the Court held that Pierce is entitled to a new trial based upon his ineffective-assistance-of-counsel claim.)
*Download or view PDF version of opinion*

--(The opinion released on application for rehearing on Sept. 1, 2000, in Ex parte Pierce is also available on the web site of Wallace, Jordan, Ratliff & Brandt, L.L.C.)--

--(The oritginal withdrawn opinion released on May 26, 2000, in Ex parte Pierce is also available on the web site of Wallace, Jordan, Ratliff & Brandt, L.L.C.)--
 

• Eastside Development, Inc. v. Medical Plaza East, POB, LLC, 

Nos. 1010342 & 1010525 (Ala. Sept. 20, 2002)
(partnership dissolution; affirmed without opinion; opinion by Justice Johnstone concurring in part and dissenting in part; opinion by Justice Lyons concurring in part and dissenting in part)
*Download or view PDF version of opinion*
 
• Ex parte Carroll, 

No. 1010546 (Ala. Sept. 20, 2002)
(opinion of July 26, 2002, modified on rehearing)
(criminal; capital murder; sentencing; Taurus Carroll and Mack Dailey robbed a dry-cleaning and coin-operated-laundry business in Birmingham on April 9, 1995. During the robbery, Betty Long, one of the owners of the business, was shot and later died as a result of the gunshot wound.  The jury, by a vote of 10-2, recommended that Carroll be sentenced to life imprisonment without the possibility of parole, but the trial court overrode the jury's recommendation and sentenced Carroll to death.  The case was appealed and remanded several times for resentencing, and the trial court again sentenced Carroll to death. HOLDING:  The Supreme Court held that the trial court improperly considered Carroll's incarceration for youthful-offender adjudications in negating the mitigating circumstance of no significant criminal history.  The Court found, in light of the wish of the victim's family that Carroll not be sentenced to death, but that he instead be sentenced to life imprisonment without parole, that it was difficult to reconcile the trial court's reliance upon the "pain of the victim's family" as one of its reasons for overriding the jury's recommendation.  The Court held that it appears that the trial court gave insufficient weight to the jury's recommendation that Carroll be sentenced to life imprisonment without parole, and in this case, the recommendation was entitled to considerable weight.  The Court further explained the effect of a jury's recommendation of life imprisonment without the possibility of parole.  The Court concluded that the trial court's override in this case of the jury's recommended sentence of life imprisonment without parole and that court's subsequent sentence of death were improper under the circumstances presented here.  The Court reversed the judgment of the Court of Criminal Appeals as to Carroll's sentence and remanded the case for that court to instruct the trial court to resentence Carroll following the jury's recommendation of life imprisonment without the possibility of parole.  The Court stated that issues as to the continuing validity of its stated conclusions regarding the effect of a jury's recommendation of life imprisonment without the possibility of parole and the authority of the trial court to override such a sentence and the scope of the appellate court's review in light of Ring v. Arizona, 122 S. Ct. 2428 (2002), must await another day.)
*Download or view PDF version of opinion*

--(The original withdrawn opinion released on July 26, 2002, in Ex parte Carroll is also available on the web site of Wallace, Jordan, Ratliff & Brandt, L.L.C.)--
 

• Gilbert v. Nicholson, 

No. 1010600 (Ala. Sept. 20, 2002)
(contempt; The Nicholsons filed a complaint on the 11th day of March, 1999, seeking to enjoin the Gilberts from blocking a roadway to their homeplace.  Thereafter, the parties agreed in open court that the Gilberts would convey to the Nicholsons another roadway or right of way over their property in order to allow the Gilberts to close the existing roadway, and furthermore, that the Gilberts would construct or have constructed the new roadway.  Thereafter, the parties could not agree upon the materials, etc., to be used to construct the roadway, and the parties agreed for the court to appoint Mr. David Edgil, the Walker County Engineer, as the court's Special Master to inspect the roadway and see that the road was constructed according to his specifications.  Edgil subsequently reported to the court that the proposed roadway has not been constructed to his specifications, and some of the materials used were insufficient to maintain this roadway.  The Nicholsons filed a Petition for Rule Nisi.  The trial court noted that Gerald Gilbert admitted in open court that he was in contempt of court for his failure to comply with the court's previous orders, which ordered him and his wife to construct a certain roadway in accordance with the specifications in the court's previous orders.  The trial court also found that the Gilberts blocked the old roadway on more than one occasion, although they were previously ordered specifically not to do so.  On November 2, 2001, the trial court found Gerald Gilbert in contempt and sentenced Gerald Gilbert to be incarcerated in the Walker County Jail, unless and until he fully and completely complied with the court's orders pertaining to the roadways.  The trial court ordered that Gerald Gilbert may purge himself of contempt by constructing or having constructed the roadway in accordance with the court's orders and according to the specifications of the court's Special Master, and further comply with all the Court's Orders, no later than November 19, 2001.  The court also ordered Joyce Gilbert, to appear on November 20, 2001, to show cause why she also should not be held in contempt for her failure to comply with the court's previous orders concerning the roadways, including the court's order requiring her to post a performance bond in the sum of $25,000.00 to insure her performance and compliance with the previous orders of the trial court.  After a hearing on November 20, the Gilberts filed the $25,000 performance bond required by the court and filed a motion to stay Gerald Gilbert's incarceration.  The court granted the motion to allow Gerald Gilbert to be released from jail with further instructions from the court to comply with its previous orders.  The Gilberts then appealed from the trial courts November 2 and November 20 orders.  HOLDING: The Supreme Court held that to the extent that the Gilberts attempt to appeal orders relating to the merits of the underlying case, their appeal is premature, because no final judgment has been entered in the case.  The Court considered the Gilberts' argument that the trial court was without jurisdiction to enter its contempt finding because of the failure to join an indispensable party and  concluded that the trial court did not abuse its discretion in denying the Gilberts' motion to add Leady Gilbert as an additional party and that her absence does not render the proceeding void.  The Court concluded that the trial court did not abuse its discretion in finding Gerald Gilbert in contempt of court after hearing testimony ore tenus on the issue of Gerald Gilbert's inability to comply.  The Court affirmed the contempt order of November 2.)
*Download or view PDF version of opinion*
 
• McRae v. Johnson, 

No. 1010952 (Ala. Sept. 20, 2002)
(deceased party; appellate jurisdiction or standing; Notice of this appeal was filed on January 23, 2002, by an attorney purporting to represent Charles McRae, who died in November 2000.  The "appeal" purports to be from the denial on January 10, 2002, of a postjudgment motion, challenging a judgment entered on December 11, 2001, which, among other things, set aside a judgment entered on November 4, 1999, "quieting title" in Charles McRae to certain real estate in Barbour County.  Throughout these proceedings, no suggestion of death has been filed and no substitution of parties has been made. HOLDING: The Supreme Court held that an attorney's authority to act on behalf of a client ceases on the death of that client.  The Court held that a notice of appeal filed on behalf of a deceased party fails to invoke the jurisdiction of the Court, except where the party dies shortly before the deadline for filing an appeal.  Because the notice of appeal purportedly filed by Charles McRae was a nullity, the Court dismissed the appeal.)
*Download or view PDF version of opinion*
 
• Russell Coal Co. v. Smith, 

No. 1011008 (Ala. Sept. 20, 2002)
(default judgment; Rule 60(b); service of process; Russell Coal Company ("Russell") suffered a default judgment in the amount of $300,000 after it failed to answer the complaint filed by Kenneth Smith and Deborah Smith.  In 1996, Russell filed a petition in the United States Bankruptcy Court for the Northern District of Alabama, seeking protection under Chapter 11 of the United States Bankruptcy Code.  The bankruptcy court appointed Terry Humphryes trustee of the bankruptcy estate of Russell, the debtor.  Humphryes retained David B. Anderson as his attorney, apparently with the approval of the bankruptcy court.  In 1997, the Smiths filed this action against Russell.  After their attempts to obtain service of process upon Russell failed, the Smiths had a copy of the summons and complaint sent by certified mail to Anderson, the attorney representing the bankruptcy trustee.  A secretary at the law firm where Anderson works signed the certified-mail receipt on January 6, 2000.  On September 18, 2000, the Smiths filed an application for the entry of a default against Russell, claiming that Russell "was served through the bankruptcy trustee ... on January 6, 2000."  Default was entered on that same date, with leave to prove damages.  On November 6, 2000, after a hearing on damages, the trial court entered judgment in favor of the Smiths and against Russell in the amount of $300,000.  On March 6, 2001, Russell filed a Rule 60(b), Ala.R.Civ.P., motion for relief from the default judgment, claiming that the judgment was void, because, it alleged, it had not been served with process in accordance with Ala.R.Civ.P. 4(c)(6).  The trial court entered an order denying Russell's Rule 60(b) motion, and Russell appealed. HOLDING: The Supreme Court reversed the trial court's denial of Russell's Rule 60(b) motion.   The Court held that there is no factual or legal support for the Smiths' contention that 11 U.S.C. §323 allows service of process upon the attorney for the trustee, in lieu of service upon the debtor-defendant.  The Court concluded that service upon Anderson, the attorney for the bankruptcy trustee, was not effective service of process upon Russell, the debtor-defendant, and, therefore, the default judgment entered against Russell was void.)
*Download or view PDF version of opinion*
 
• Seward v. Dickerson, 

No. 1011359 (Ala. Sept. 20, 2002)
(Sandra Deno, Angie Tisdale, Matthew Adams, and Jackie Fairley and Tonda Dickerson were all employees at the Waffle House restaurant in Grand Bay, Alabama. Edward Seward was a regular customer of the Waffle House. On several occasions Seward would travel to Florida and purchase lottery tickets and upon his return would give the tickets to various friends and family members, including the employees of the Waffle House. Seward did not expect to share any potential lottery winnings based on the tickets he gave away, but he claimed that he was promised a new truck by the employees of the Waffle House if one of the tickets he distributed there was a winning ticket. Several employees of the Waffle House received lottery tickets from Seward during the several weeks that he gave out the tickets.  A drawing for the Florida lottery was scheduled for Saturday night, March 6, 1999. During the week before that drawing, Seward traveled to Florida and purchased several lottery tickets. He placed each individual ticket in a separate envelope and wrote the name of the intended recipient on the outside of the envelope. On March 6, 1999, before the lottery drawing, Seward presented Deno, Tisdale, and Adams each with an envelope containing one lottery ticket. The drawing was held as scheduled. The numbers on the lottery tickets held by Deno, Tisdale, and Adams did not match the numbers drawn in the March 6 drawing.  On March 7, 1999, after the March 6 drawing had already been concluded and the winning numbers had been determined, Seward presented a ticket to Fairley, who had never previously received a ticket from Seward; he also on that date presented Dickerson with a ticket. Each of those tickets was for the March 6 drawing, and each was presented in a separate envelope. Upon opening her envelope, Fairley determined that the numbers on her ticket did not match the winning numbers. Subsequently, Dickerson opened her envelope and determined that the numbers on her ticket matched the winning numbers drawn in the lottery the night before. The ticket won Dickerson a prize of approximately $10 million.  Seward sued Dickerson and others (hereinafter referred to collectively as "the defendants"), alleging fraud and conversion and seeking equitable relief.  The basis for each of these claims is Seward's allegation that Dickerson acquired the ticket from Seward by fraudulently misrepresenting that, if she won, she would share any winnings with her co-employees.  The trial court entered a summary judgment in favor of the defendants as to each of Seward's claims.  HOLDING: The Supreme Court held that for Seward to recover, he must have "reasonably relied" on Dickerson's alleged representation that she would split with her co-employees any winnings she received from her lottery ticket, but the Court found that the evidence indicates that the only "representation" Dickerson made was not made to Seward.  Instead, the Court found that Seward was attempting to rely on Dickerson's mere assent to a question asked to her by one of her coworkers, Sandra Deno, which he overheard.  The Court held that Seward cannot reasonably rely on Dickerson's mere assent -- a fragment of a vague conversation that was not directed to him -- as the basis for the rather serious charge that Dickerson somehow "defrauded" him.  The Court also noted that the lack of the reasonableness of his reliance combines with the lack of evidence indicating that Dickerson intended to communicate with Seward in such a way as to induce him to purchase the ticket.  The Court held that the trial court did not err when it entered a summary judgment on Seward's fraud claim.  Additionally, because Seward's conversion claim and his claim for equitable relief rely upon the validity of his fraud claim, the Court held that the trial court did not err in entering summary judgment in favor of the defendants on those claims.)
*Download or view PDF version of opinion*

Back to top

Opinions Released September 13, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  SEPTEMBER 13, 2002 

 
• Ex parte Seaman Timber Co., 

No. 1001658 (Ala. Sept. 13, 2002)
(discovery; spoliation; sanctions; Melford O. Cleveland, his wife, Belle H. Cleveland (Melford and his wife are hereinafter referred to collectively as "the Clevelands"), and his aunt Sarah Head sued Jim Seaman, Janet Seaman, and Seaman Timber Company, Inc. (referred to collectively as "Seaman"), claiming that a Seaman's operation of a lumber mill and wood-preserving operation on property adjacent to theirs caused the contamination of their land.  The Clevelands and Head claimed that their land was damaged and that they suffered personal injuries.  Because of the advanced ages of the plaintiffs, Seaman attempted to schedule depositions soon after it was served with the complaint.  Head's deposition was scheduled four or more times (twice on dates selected by the Clevelands, once pursuant to a court order, and other times on dates selected by Seaman).  Seaman filed several motions for sanctions under Ala.R.Civ.P. 37.  On September 9, 1999, the trial court entered a discovery order requiring the plaintiffs to submit to depositions "in the near future" and to attend "barring an emergency."  There was also paper discovery to which the plaintiffs were ordered to respond.  The morning of September 27, 1999, Sarah Head did not appear for her deposition as scheduled.  After several attempts to reschedule, on April 5, 2000, Seaman filed another Rule 37 motion requesting dismissal and other sanctions.  On August 30, 2000, Seaman took the deposition of Dr. Karin Rock, Ms. Head's physician, and Seaman learned for the first time from Dr. Rock's deposition and the medical file that Ms. Head's condition on September 27 was not a medical emergency and that she could have given a deposition on that date.  Dr. Rock's deposition testimony also revealed that Sarah Head was mentally and physically capable of giving a deposition up until the end of 1999, but in Dr. Rock's opinion, by the end of 1999 or early 2000, Ms. Head's condition had deteriorated to the point that she could no longer give a deposition.  Ms. Head later died.  Seaman filed its fifth motion to dismiss on December 21, 2000.  The trial court granted Seaman's motion to dismiss as to the plaintiffs' personal-injury claims, but denied it as to the claims for damages to their land.  Seaman filed a petition for a writ of mandamus directing the trial court to dismiss this action with prejudice or to grant whatever other relief this Court deems appropriate, just, and proper as a sanction for the respondents' willful refusal to comply with the trial court's discovery orders.  HOLDING: The Supreme Court granted the writ of mandamus.  The Court noted that the appropriate sanction for spoliation of evidence is dismissal (or a default judgment) where the complained-of conduct is willful, especially where the party seeking the discovery is prejudiced by the refusal to comply with discovery orders.  The Court noted that dismissal of the personal-injury claims tends to indicate that the trial court found the Clevelands' conduct to be willful.  The Court found the discovery sanction imposed -- dismissal of the personal-injury claims – to be wholly inadequate.  The Court granted the petition for the writ of mandamus and directed the trial court to reconsider Seaman's motion for dismissal or for sanctions for failure to allow discovery, and it directed the trial court to impose an adequate sanction, proportionate to the discovery abuse in this case.)
*Download or view PDF version of opinion*

--(The additional opinion released on Nov. 22, 2002, in Seaman is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Gonzalez, LLC v. DiVincenti, 

Nos. 1010015 & 1011011 (Ala. Sept. 13, 2002)
(res judicata or claim preclusion; Alabama Litigation Accountability Act;  Gonzalez LLC, the owner of the former Scottish Rite Temple (the "Temple") in Mobile County, sued its insurance agent, Mark Rowley; its insurance agency, Oakleigh Insurance Agency; its insurance providers, TIG Insurance Company and K&K Insurance Group; and the agents or representatives of all the defendants, alleging claims of negligent failure to report a claim; wanton failure to report a claim; fraud in misrepresenting that the hurricane-damage claim would be paid; breach of contract for failure to investigate, handle, or pay the covered loss; negligent failure to supervise agents and representatives; and bad faith in failing to investigate and refusing to pay claims.  The claims by Gonzalez arose out of insurance claims for damage to the Temple caused by two hurricanes.  The defendants in that action hired Professional Forensic Services, Inc. and its president, Roy DiVincenti, to perform forensic testing on the roof of the Temple to determine what damage, if any, had been done by wind and rain.  The president of Gonzalez signed a release purporting to release PFS from liability for any damage done to the roof during testing.  PFS tested the roof of the Temple.  This testing included inserting numerous nails into the roof at regular intervals.  Gonzalez claims that inserting the nails into the roof pierced the water barrier in the roof, permitting additional water damage to the roof and the building.  After PFS completed its testing, Gonzalez filed an amended complaint, asserting claims against fictitious parties based on its allegations concerning damage to the roof during testing.  After filing this amended complaint, Gonzalez, LLC, agreed to settle the action.  After the settlement of the original action for a combined total payment of $1 million, Gonzalez, LLC, filed a new action against DiVincenti and PFS.  DiVincenti and PFS moved for the payment of attorney fees under the Alabama Litigation Accountability Act and for summary judgment.  The trial court granted the motion for a summary judgment, but did not address the issue of attorneys' fees.  About eleven days after the entry of the summary judgment, the trial court noted in the case-action log that it was aware that it had not ruled on the motion for attorney fees, and that it thought that reasonable attorney fees were warranted in this case.  Gonzalez then filed a notice of appeal from the summary judgment.  Thereafter, Gonzalez requested a hearing in the trial court on the issue of attorneys' fees.  No hearing took place, and several months later the trial court denied DiVincenti and PFS's motion for attorney fees.  DiVincenti and PFS then appealed from the order denying their motion for fees.  HOLDING: The Supreme Court held that the summary judgment was a final, appealable order, because the trial court did not specifically reserve jurisdiction for determination of attorneys' fees.  The Court held that all the elements of res judicata were met, including the substantial identity of the parties, even though PFS and DiVincenti were not named in the first action.  Therefore, the Court affirmed the summary judgment.)
*Download or view PDF version of opinion*
 
• Serra Chevrolet, Inc. v. Edwards Chevrolet, Inc., 

Nos. 1010340 & 1010341 (Ala. Sept. 13, 2002)
(statute of limitations; Motor Vehicle Franchise Act ("MVFA"); tortious interference with a contract; Serra Chevrolet sued Edwards Chevrolet, claiming that Edwards had tortiously interfered with its business relationship with General Motors ("GM").  Serra filed an amended complaint that set forth an additional claim that Edwards had acted in concert with other named defendants in violation of the MVFA.  Serra's amended complaint also sought to name two GM "representatives," within the meaning of the MVFA, as defendants.  GM filed a motion to intervene as a defendant and filed an answer to Serra's complaint that also contained a counterclaim for a declaratory judgment. The trial court granted GM's motion to intervene.  Serra amended its complaint to add GM as a defendant, claiming that GM had acted in concert with other named defendants in violation of the MVFA, and to state additional claims against GM alleging fraud, negligence, willfulness, and wantonness, and negligent and wanton supervision.  The trial court entered summary judgment in favor of Edwards and also entered summary judgment in favor of GM on all claims except the MVFA claim.  As to Serra's MVFA claim against GM, the trial court held that it could only assert a claim based on events occurring after December 1994.  After a trial on Serra's MVFA claim against GM, the jury found in favor of Serra and awarded damages against GM in the amount of $9,096,000.00.  The trial court also awarded Serra $2,500,000 in attorney fees and $330,000 in expenses. Serra appealed the judgment in favor of Edwards, and GM appealed the judgment in favor of Serra.  HOLDING: The Supreme Court affirmed the judgment in favor of Edwards and against Serra, and it reversed the judgment in favor of Serra against GM.  The Court found that Serra had not presented any evidence of damages nor had its contract with GM been terminated at the time the trial court ruled on Edwards's summary-judgment motion.  The Court held that any damage sustained by Serra as a result of any violation of the MVFA by GM before April 8, 1994, and any subsequent damage resulting from such a pre-April 8 violation, would be barred by the MVFA's statute of limitations.  The Court then concluded that there was no evidence presented to the jury indicating that GM failed to follow its distribution system after 1991, which the jury could have reasonably inferred to be a violation of the MVFA.  Based upon the evidence, limited to GM's conduct after April 8, 1994, the Court concluded there was no basis to support a verdict determining that GM's conduct was arbitrary, in bad faith, unconscionable, capricious, or unreasonably discriminatory, as is required for liability under the MVFA.  Accordingly, the Court held that GM was entitled to judgment as a matter of law.)
*Download or view PDF version of opinion*
 
• Community Care of Am. of Ala., Inc. v. Davis, 

No. 1010454 (Ala. Sept. 13, 2002)
(arbitration;  Leatha Davis, an Alabama resident, sued Community Care of America of Alabama, Inc., and some of its employees alleging that, while she resided in Community Care's nursing home, she developed "pressure ulcer sores on her feet," as the result of what she described as the "negligent and wanton conduct" of the defendants.  Davis averred that, as a consequence of this condition and of Community Care's failure to provide "the proper medical services, care, and treatment that a long-term care facility within the same medical community, and same general line of practice, possessing and exercising such ordinary, reasonable and necessary medical care, skill and diligence would have provided" in discovering and treating the condition, she suffered the amputation of both legs.  Community Care moved to compel arbitration of the dispute, based on a clause in the "Admission Contract" Davis's son, Willie Harris, executed when Davis was admitted to the facility.  Community Care supported its motion with the affidavit of Joan Tidwell, the administrator of the nursing-home facility.  The trial court refused to consider the affidavit.  The trial court also denied the motion to compel arbitration.  Community Care appealed.  HOLDING:  The Supreme Court affirmed the denial of the motion to compel arbitration.  The Court held that it need not determine whether the trial court erred in striking the Tidwell affidavit, because, even assuming that it was admissible, it failed to compel the conclusion that the FAA requires enforcement of the arbitration provision.  The Court noted that on November 6, 1999, the office of the Secretary of State revoked the certificate of authority of Community Care to transact business in Alabama.  Thus, when the Admission Contract was signed, Community Care was not qualified to do business in Alabama, as required by Ala. Code §10-2B-15.01(a).  The Court noted that this "door-closing" statute bars a foreign corporation not qualified to do business in Alabama from enforcing in an Alabama court a contract it made in Alabama.  The Court noted that the test of the enforceability of the arbitration clause in the Admission Contract in this case is not, as Community Care contends, whether the transaction substantially affects interstate commerce, but is whether the main or primary purpose of the transaction constitutes an interstate or intrastate activity.  The Court noted that establishing a continuing presence in the state over and above the mere shipping of commodities between the states is intrastate activity, and the Commerce Clause does not protect a foreign corporation from the consequences of noncompliance with a door-closing statute when the corporation has "localized its business" in the forum state.  The Court noted that the operation of the nursing home constitutes a "localized" business activity, especially considering that the essence of Community Care's transactions with its residents is labor.)
*Download or view PDF version of opinion*
 
• Ex parte Lamar Advertising Co., 

No. 1010479 (Ala. Sept. 13, 2002)
(zoning; Lamar Advertising Company, Inc. ("Lamar"), owns an outdoor advertising sign located on the southwest corner of Airport Boulevard and Azalea Road in Mobile.  The sign was erected before 1994, when the city of Mobile adopted Zoning Ordinance No. IV, which regulates outdoor advertising signs.  Lamar's sign was thus "grandfathered" in as a nonconforming sign.  The ordinance provided that if a nonconforming sign is expanded, the Land Use Department of the City of Mobile can require its removal.  After the ordinance was adopted, Lamar replaced the existing face on the sign with a "trivision sign face," which is a sign face allowing automatic changing of the sign face, thus making it possible to present up to three advertisements during a relatively short period by automatically changing the sign face, for example, every 20 seconds on a rotating basis. The size of the sign when displayed remained the same as the earlier sign.  The Land Use Department sent Lamar a notice stating that the trivision sign face constituted an improper "expansion" under the ordinance and directing Lamar either to remove the sign or to get a variance for it.  The Mobile Board of Zoning Adjustment affirmed the Department's position, and after an appeal to the circuit court, the circuit court also affirmed the Department's position.  HOLDING:  The Supreme Court reversed.  The Court held that the sign at issue here was not "enlarged" by adding a motor and the ability to display three advertisements instead of one.)
*Download or view PDF version of opinion*
 
• Denmark v. Mercantile Stores Co., 

No. 1010849 (Ala. Sept. 13, 2002)
(trip-and-fall; premises liability; Genevieve Denmark and her husband, Jed W. Denmark, Jr., sued Mercantile Stores Company, Inc., a/k/a Dillard's, or Dillard's, Inc., (hereinafter referred to as  "Mercantile"), seeking damages for injuries Genevieve Denmark allegedly suffered when she tripped and fell on Mercantile's premises.  The complaint alleged that Genevieve Denmark was injured while shopping at Mercantile's store in Springdale Mall, when she "tripped [over] a roll of plastic shopping bags that was left lying on the floor by [Mercantile]."    Mercantile subsequently moved for a summary judgment, which the trial court granted. HOLDING:  The Supreme Court reversed the summary judgment in favor of Mercantile.  The Court noted that the evidence presented tends to establish that the roll of garment bags over which Denmark tripped was under the custody and control of Mercantile and had been placed in the display area by a Mercantile employee.  The Court noted that Mercantile offered no evidence indicating that the roll of garment bags was ever used or handled by anyone, other than Mercantile employees.  The Court held that Mercantile did not present sufficient evidence to support its "open and obvious" affirmative defense.)
*Download or view PDF version of opinion*
 
• Ex parte Pikeville Country Club, 

No. 1011244 (Ala. Sept. 13, 2002)
(venue; Pikeville Country Club, Inc. ("the Club") is an Alabama corporation located in Marion County, and it has never done business in Covington County.  Harry Green, a resident of Marion County, is a licensed, practicing attorney whose office is located in Marion County. He has never practiced law in Covington County.  Hugghins Sod Farms, Inc. ("Hugghins"), the plaintiff in this action, is a corporation  whose principal place of business is in Covington County.  Hugghins supplied sod to Southern Golf Development, Inc. ("Southern Golf"), the general contractor for renovations at the Club.  Hugghins advised the Club that Southern Golf had not paid Hugghins for the sod used in the renovations at the Club and that, therefore, Hugghins was asserting a lien against any unpaid balance due Southern Golf by the Club.  Green, on behalf of the Club, responded by a letter dated August 26, 1998, stating that no moneys were due Southern Golf and that final payment to Southern Golf had been made before Hugghins's attorney contacted the Club.   Green drafted the letter in his office in Marion County, and it was mailed from Marion County to Covington County.  After learning of Green's letter, Hugghins decided that it should not proceed to perfect a lien upon the Club's property in Marion County.  Hugghins then proceeded to attempt to collect from Southern Golf the balance due it.  On September 28, 1999, a Southern Golf employee gave deposition testimony indicating to Hugghins that the Club made its final payment to Southern Golf after August 26, 1998, the date of Green's letter.  Hugghins sued the Club and Green in the Covington Circuit Court, alleging that Green's letter contained misrepresentations.  The Club and Green filed motions to transfer the case to the Marion Circuit Court, contending that venue was not proper in the Covington Circuit Court.  The trial court denied the motions to transfer.  The Club and Green filed a petition for a writ of mandamus. HOLDING:  The Supreme Court granted the petition and issued the writ.  Relying on Ex parte SouthTrust Bank of Tuscaloosa County, N.A., 619 So.2d 1356 (Ala. 1993), the Court concluded that venue in this case is not proper in Covington County under either Ala. Code §6-3-7(a)(1) or §6-3-2(a)(3), because the event giving rise to Hugghins's claims -- the mailing of the letter containing the alleged misrepresentations -- occurred in Marion County, where the letter was mailed, and not in Covington County, where Hugghins received the letter.)
*Download or view PDF version of opinion*
 
• Ex parte Cobb, 

No. 1011892 (Ala. Sept. 13, 2002)
(The Supreme Court denied the petition for the writ of certiorari without opinion, but stated that it does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals' opinion.)
*Download or view PDF version of opinion*

Back to top

Opinions Released September 6, 2002

• DECISIONS ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON FRIDAY,  SEPTEMBER 6, 2002 

 
• Ronnie Smith's Home Ctr., Inc. v. Luster, 

Nos. 1000856 & 1000978 (Ala. Sept. 6, 2002) (plurality opinion)
(arbitration; merger rule; the trial court denied the defendants' motions to compel arbitration; HOLDING: the Supreme Court affirmed the trial court's denial of the motions to compel arbitration on the authority of Belmont Homes, Inc. v. Law, No. 1010854 (Ala. June 28, 2002), stating that "[t]he merger rule applies as well as to prior or contemporaneous writings as to oral agreements")
*Download or view PDF version of opinion*
 
• Commercial Union Ins. Co. v. DeShazo, 

Nos. 1002083, 1002084 & 1002099  (Ala. Sept. 6, 2002)
(negligent inspection; asbestos exposure; the defendants were  Commercial Union Insurance Company, CNA Insurance Company, and Fireman's Fund Insurance Company, which were liability and workers' compensation insurance carriers for Sepco Corporation; from 1975 to 1984, the plaintiffs were employed by an independent contractor who provided janitorial services for Sepco; the plaintiffs claim that while working in Sepco's facilities they were exposed to fibrous asbestos dust, which, they say, subsequently caused asbestosis and other illnesses; all of the policies issued by the defendants contained "inspection and audit" clauses, which stated that any inspections conducted by the insurer would not be for the benefit of the insured or anyone else and would not constitute an undertaking to ensure that the inspected facilities were safe; the plaintiffs sued Commercial Union, CNA, and Fireman's Fund, alleging that the insurers failed to detect unsafe working conditions during their inspections of the Sepco facilities; the trial court denied the defendants' motions for summary judgment, and the Supreme Court granted permission for an interlocutory appeal; HOLDING: the Supreme Court held that Commercial Union, CNA, and Fireman's Fund, by undertaking inspections pursuant to their general liability policies, did not assume the duty to provide the plaintiffs with a reasonably safe workplace because the "inspection and audit" clauses in the policies all stated that they were not undertaking "to determine or warrant that such property or operations [or workplaces, operations, machinery or equipment] are safe or healthful"; the Court also noted that the "inspection and audit" clauses also indicate that any inspection was solely for the benefit of the defendants, and not, as described in the clauses, made "on behalf of or for the benefit of the named insured or others"; the Court noted that its decision is not based upon an "exception" to Restatement (Second) of Torts § 324A (1965), but, rather, it is based on the fact that, in this situation, § 324A, as a conduit of liability, is rendered wholly unavailable to the plaintiffs because there was no "undertaking ... to render services for another"; the Court reversed the trial court's order denying the defendants' motions for summary judgment and rendered a judgment for the defendants)
*Download or view PDF version of opinion*
 
• Hannah v. Gregg, Bland & Berry, Inc., 

Nos. 1002094 & 1002095  (Ala. Sept. 6, 2002) (on application for rehearing)
(on rehearing, Gregg, Bland & Berry, Inc. ("GB&B"), argues that the summary judgment in its favor was proper because, according to GB&B, it owed no duty to Hannah; GB&B contends that the contract it entered into with Reynolds Metals Company -- to convert the belt wrapper to its original overwind configuration -- did not obligate GB&B to include safeguarding around the belt wrapper; HOLDING: in an additional opinion issued on rehearing, the Supreme Court overruled the application for rehearing, noting that GB&B failed to include the contract on which it relies in the record on appeal; the Court)
(original opinion summary: wrongful-death action; summary judgment; expert testimony; contributory negligence; claims are based upon the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD") and theories of  negligence, wantonness, and breach of warranty; Jerry Hannah was crushed to death between two large industrial machines --  a "belt wrapper" and a "recoiler" -- at a plant operated by  Reynolds Metals Company ("Reynolds"); the belt wrapper and recoiler were manufactured in the mid-1960s by the McKay Machinery Company; the belt wrapper was modified to wind the aluminum in an under-wind direction, but in 1985 or 1986 Reynolds hired Greg, Bland & Berry, Inc. ("GB&B") to convert the belt wrapper to its original overwind configuration; GB&B reconfigured the belt wrapper in accordance with Reynolds's specifications, which did not include a barrier guard to protect persons working between the belt wrapper and the recoiler, and GB&B did not suggest to Reynolds that it include a barrier guard in the specifications; Westinghouse Electric Corporation ("Westinghouse") supplied the electrical controls for the continuous annealing line ("CAL"), including the belt wrapper, in the 1960s; on the day of the accident, Hannah was inspecting the recoiler, which he had previously done twice that day, and he signaled for Roy Gieske to stop the recoiler and then signaled for Gieske to turn the recoiler slowly; however, Gieske pressed the wrong button; when Gieske saw the belt wrapper moving toward Hannah he immediately pressed the retract button, but the belt wrapper did not retract; the belt wrapper lifted Jerry Hannah and pushed him into the recoiler; Hannah died from his injuries; neither Roy Gieske nor Hancock noticed whether the safety pin was in place at the time of the accident, and when Reynolds engineers inspected the accident site, they did not find the safety pin in place;  Judy Hannah, Jerry Hannah's widow, sued several defendants, including Danieli Corporation (formerly McKay Corporation), GB&B, and Westinghouse, alleging negligence and breach of warranty based upon the failure of those defendants to include a safety feature, such as a barrier guard, an interlocking device, or a presence-sensing device, in the area between the belt wrapper and the recoiler; the trial court entered a summary judgment in favor of GB&B and Westinghouse; it denied Danieli's motion for a summary judgment; the trial court certified the summary judgments for GB&B and Westinghouse as final under Rule 54({b); HOLDING: the Supreme Court reversed and remanded the summary judgment in favor of the defendants on the AEMLD and negligence claims; the Court held that the mere fact that GB&B followed the plans and specifications supplied by Reynolds does not, in and of itself, shield GB&B from liability if GB&B should have been aware that complying with those plans and specifications would create an unreasonably dangerous condition, and Hannah submitted expert testimony stating that GB&B should have been on notice of the hazard of failing to include a barrier guard between the belt wrapper and the recoiler;  the Court held that the trial court also erred in entering summary judgment against Westinghouse because Hannah submitted the deposition testimony of two experts who agreed that Westinghouse failed to include appropriate safety devices in the design and installation of the electrical controls for the CAL; the Court held that the electrical controls could be a product for purposes of the AEMLD where Westinghouse designed the control system, the regulating system, and the tension and speed control of the CAL and where Westinghouse supplied motors, the control for the motors, desks, operators stations, control cabinets, the equipment to control the speed and tension of the process line, the logic solenoid, and the logic relays, all in accordance with the design of the electrical circuitry; the Court held that a manufacturer such as Westinghouse could be liable under the AEMLD where there was an alteration of the product if the alteration or modification did not in fact cause the injury, or if the alteration or modification was reasonably foreseeable to the manufacturer or seller, and Although Reynolds modified the electrical control system,  Westinghouse's expert admitted in his deposition that most of those modifications played no role in causing and did not contribute to the accident that killed Jerry Hannah; the Court held that Hannah presented substantial evidence creating a jury question as to whether Westinghouse owed a duty of care to Hannah; the Court rejected Westinghouse's contention that even if the control logic and the control panels are products under the AEMLD, Hannah failed to demonstrate that a feasible alternative design was available that would have reduced or eliminated Jerry Hannah's injuries, because Hannah's experts described five feasible alternative designs Westinghouse could have used in the design and construction of the electrical controls for the CAL; the Court noted that to establish contributory negligence as a matter of law such that summary judgment would be appropriate (as opposed to proving it sufficiently for a jury to find contributory negligence), a defendant seeking a summary judgment must show that the plaintiff put himself in danger's way and that the plaintiff had a conscious appreciation of the danger at the moment the incident occurred, and the Court held that this standard was not met because Hannah submitted evidence that would permit jury could conclude that at the time of his accident, Jerry Hannah was standing in what he may have believed to be a safe position, on the outer edge of the recoiler and that he did not appreciate the danger posed by the belt wrapper, and also that would permit a jury to conclude that Hannah may have inserted the safety pin, believing that it was set, but that the bend in the pin did not allow it to properly lock)
*Download or view PDF version of opinion*

--(the original opinion released on Apr. 26, 2002, in Hannah is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Ex parte J.A.P., 

No. 1010263  (Ala. Sept. 6, 2002)
(juvenile; criminal; first-degree rape; J.A.P., a 14-year-old male, was charged with the attempted first-degree rape of his 9-year-old half-sister, L.P.; the trial court found the charge to be true and adjudicated J.A.P. delinquent; the Court of Criminal Appeals affirmed; HOLDING: the Supreme Court reversed, holding that there was insufficient evidence of the element of "forcible compulsion"; the Court overruled B.E. v. State, 778 So.2d 863 (Ala. Crim. App. 2000), because the the Court of Criminal Appeals failed to acknowledge that the Supreme Court's forcible-compulsion analysis in Powe v. State, 597 So. 2d 721 (Ala. 1991), is limited to cases concerning the sexual assault of children by adults with whom the children are in a relationship of trust)
*Download or view PDF version of opinion*
 
• Potter v. First Real Estate Co., 

No. 1010339  (Ala. Sept. 6, 2002) (on application for rehearing; withdrawing and substituting the opinion released May 24, 2002)
(claims of misrepresentation, suppression, fraud, and promissory fraud arising out of the sale of a house; statute of limitations; reasonable reliance;  Joseph Potter and his then fiancée, Jamie, were looking to purchase their first house; Joseph and Jamie saw a "First Real Estate" sign in the yard in front of Kimberly Boler's house; they telephoned the number on the sign and spoke with Dawn Borden, a real-estate agent employed by First Real Estate; Borden acted as a "dual agent" in the sale of the house, representing both the buyer and the seller; Joseph Potter testified that during the first visit he asked Borden if the house was located in a flood plain, and Borden responded that to her knowledge it was not, but that she would check on a survey she had in her office; Borden told Joseph and Jamie that they could obtain another survey if they wished, but that the one she had was a recent one and that they could save money if they used it; Joseph Potter testified that when Borden showed him the survey of the property that she purportedly had obtained from a prior owner, it was hard to read and "almost illegible," so he took her at her word; on July 7, 1998, Joseph executed an eight-page "Financed Sales/VA Contract" for the house, and the contract stated that the property was not located in a flood plain; at that July 7 meeting, Jamie asked if the property was in a flood plain, and Borden replied, "No"; the sales contract also included a disclaimer stating that "they have not relied upon the advice or representations of Broker ..."; at the closing, Joseph was given a copy of the survey of the property which contained the words "the property described herein (is) (is not) located in a special flood hazard area" and had a slightly diagonal handwritten line moving from the lower left to the right over the words "is not"; Joseph testified that the copy of the survey he was given at the closing was another copy of the same survey he described as "almost illegible"; the Potters testified that they first learned their property was in a flood plain on September 2, 1999, when they received a letter from their mortgage company stating that the property was in a flood plain and that they were required to purchase flood insurance; Joseph contacted an insurance agent and purchased flood coverage for the structure of the house; in March 2000, after heavy rains, the Potters' house flooded; the Potters filed this action; Borden and First Real Estate moved for summary judgment, and the Potters unsuccessfully attempted to postpone consideration of Borden's and First Real Estate's motions for a summary judgment to allow further discovery; the trial court entered a summary judgment for Borden and First Real Estate, stating that the plaintiffs were put on notice that the property in question was in a flood hazard zone; HOLDING:  the Supreme Court held, based upon the documents in the record that clearly show the words "is not" to have been struck through by a hand-drawn line, that the trial court did not err in reading the survey as giving the Potters notice that the property is situated in a flood plain; the Court held that under the reasonable-reliance standard, evidence showing that a single clear and unambiguous document was submitted to a literate person at the time of closing does not always trigger the running of the statute of limitations, regardless of circumstances and events preceding the closing or events occurring at the closing; the Court held that it is consistent with Foremost Ins. Co. v. Parham, 693 So.2d 409 (Ala. 1997), to recognize a jury question in a fraud case where the plaintiff's ignorance of the contents of a document is reasonable under the circumstances; the Court held that the evidence of a special relationship between the Potters and Borden, evidence indicating that Joseph was unable to read an earlier version of a document that was presented again at the closing in a legible condition, and evidence of renewed assurances that the document presented at the closing was consistent with the previous document described by Joseph as almost illegible is sufficient evidence to warrant a determination by the jury that there was a "misrepresentation of the content of the agreement or the employment of trick or artifice" at the time of the closing that lulled the Potters into a "false sense of security"; the Court held that "the documents at issue are not as easily understood" as those in Foremost and that a jury, taking the Potters as reasonable first-time home buyers, could conclude that they reasonably relied on Borden's oral representations and the statement in the sales agreement that the property was not in a flood plain; the Court held that the trial court erred in entering a summary judgment based on a finding "that the Plaintiff was put on notice that the property in question was in a flood hazard zone"; the Court reversed the summary judgment entered in favor of Borden and First Real Estate)
*Download or view PDF version of opinion*

--(the original opinion released on May 24, 2002, in Potter is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Scott & Scott, Inc. v. City of Mountain Brook, 

No. 1010524  (Ala. Sept. 6, 2002)
(business license taxes; the City of Mountain Brook sued several defendants, collectively referred to as the "Scotts" seeking to collect allegedly owed and unpaid business license taxes; the City alleged that the Scotts were in the business of leasing property within the City and that they had failed to pay the business license taxes required for the operation of such a business; the Scotts answered the City's complaint by asserting that their ownership of leased real property within the City was not a "business" within the ambit of the City's ordinances imposing the business license tax; after both sides filed motions for summary judgment, the trial court entered summary judgment for the City; after a series of discovery disputes concerning damages, the trial court entered an "Order and Judgment," awarding the City damages in the total amount of $85,595.30; HOLDING: the Supreme Court affirmed the judgment of the trial court; the Court held that the business license tax ordinances are not unconstitutionally vague; the Court rejected the Scotts' overbreadth argument because the Court found that the Scotts have not shown that the ordinances impose an unnecessary and unreasonable burden upon useful activity and because the Scotts have presented no evidence indicating that the City's actions were unreasonable, arbitrary, or capricious; the Court rejected the Scotts' argument that the ordinances, as written, do not apply to them because their ownership of the commercial real property was "passive"; the Court rejected the Scotts' argument that the ordinances effectively imposed double taxation because, they argued, the ordinances "required individuals engaged in leasing as well as leasing agents to pay a business license tax")
*Download or view PDF version of opinion*
 
• Ex parte Orkin Exterminating Co., 

No. 1010533 (Ala. Sept. 6, 2002)
(petition for writ of mandamus denied without opinion; special concurring opinions by Justices Lyons and Harwood; dissenting opinion by Justice Houston; Ala. Code §6-5-440; simultaneous actions; class actions)
*Download or view PDF version of opinion*
 
• Ex parte Hall, 

No. 1010573 (Ala. Sept. 6, 2002) (on application for rehearing; withdrawing and substituting the opinion of June 14, 2002)
(criminal; release on bail; necessity of a hearing; Tarus Hall filed this petition for a writ of mandamus or, in the alternative, a writ of habeas corpus after the Montgomery Circuit Court, without a hearing, denied his request to be released on bail; on September 5, 2001, Hall was arrested pursuant to a warrant charging him with murder, an offense made capital because the murder was committed during a robbery in the first degree; on October 5, 2001, Hall filed a motion to be released on bail; in his motion he requested a hearing; the State filed no response to the motion; without a hearing, the trial court denied the motion; Hall filed a petition for a writ of habeas corpus in the Court of Criminal Appeals; in response to that petition, the State submitted voluminous evidentiary materials, none of which had been submitted to the trial court; the Court of Criminal Appeals denied Hall's petition, without an opinion; Hall then filed his petition in the Supreme Court of Alabama; in response, the State admits that the trial court denied bail apparently without conducting a hearing, but relying upon the evidentiary materials first submitted to the Court of Criminal Appeals, the State argues that Hall is not entitled to bail, because "the proof is evident" that Hall is guilty of capital murder; HOLDING: the Supreme Court said it is well established that a person accused of a capital offense must overcome the presumption of his guilt by proof, in order to be entitled to bail; the Court held that by denying, without a hearing,  Hall's motion to be released on bail, the trial court denied him the opportunity to offer the proof necessary to overcome that presumption; the Court held that while the State has attempted to cure that procedural deficiency by submitting evidentiary materials, first to the Court of Criminal Appeals and then to the Supreme Court, a proper record must be developed in the trial court before such evidence can be considered by an appellate court; the Court granted the petition, directed the trial court to set aside its order denying bail, and directed the trial court to schedule a bail hearing)
*Download or view PDF version of opinion*

--(the original opinion released on June 14, 2002, in Hall is also available on the Wallace, Jordan, Ratliff & Brandt, L.L.C. web site)--
 

• Moore v. Prudential Residential Servs. Ltd. Partnership, 

No. 1010767 (Ala. Sept. 6, 2002)
(real estate; caveat emptor; fraud; claims of breach of contract, fraudulent misrepresentation, fraudulent suppression, conspiracy, breach of fiduciary duty, negligence, and wantonness in connection with the sale of a house;  Bobby L. Moore and Melba Jean Moore asked Lou Thorne, their real estate agent, to schedule an appointment for them to view the house that is the subject of this action; Thorne contacted Nancy Rogers, the listing agent for the house, at Prudential South O'Town Realty, Inc. ("South O'Town") and arranged for the Moores to view the house; David F. Lundy and Cherry Ann Lundy, the occupants of the house, were selling the house because David Lundy was being transferred  by his employer; David Lundy's employer had an agreement with Prudential Relocation, a division of Prudential Residential, pursuant to which Prudential Relocation assisted transferred employees in selling their homes; Rogers identified Prudential Relocation as the seller of the house, and she testified that she represented Prudential Relocation in the transaction; when the Moores walked through the house and inspected each room,  some portions of the walls were not visible because of furniture; neither the Moores nor Thorne asked Rogers or Cherry Lundy to move any of the furniture so they could view the portions of the walls hidden behind the furniture; Melba Moore testified that, while they were inspecting the basement den, she asked Rogers if there was "any type of water problem in this basement" and that Rogers said, "No"; Bobby Moore also testified that while he was in the basement, he asked Cherry Lundy, "Have you ever had any water come through the walls?  And [Cherry Lundy] said, 'No, sir, we have never had any water problems in the basement'"; Thorne testified that she asked both the Lundys and Rogers if there were any water problems with the house, that she heard the Moores ask the Lundys on at least three occasions if there were any water problems with the house, and that Cherry Lundy responded that they had never had any water problems; the Moores decided to make an offer for the house; the Moores' offer was to be subject to a "conventional appraisal," not "as is"; the Lundys counter-offered with an increased price and by writing "as is" on the contract; Thorne prepared another copy of the sales contract, which both parties accepted; the contract provided, among other things, that "Purchaser has the obligation to determine any and all conditions of the Property material to Purchaser's decision to buy the Property, including, ... the roof and the basement, including leaks therein ...," and that "Purchaser has inspected the Property, ... and, without relying on any representation or warranty from Seller or Broker ... accepts the Property in its present 'as is' condition,"; after the Moores took possession of the house, they discovered a number of defects in the house, including a number of defects related to water leakage; the Moores sued, and the trial court entered summary judgment in favor of all defendants who did not settle, even though the Lundys never filed a motion for summary judgment; HOLDING: the Supreme Court held that because the Moores have cited no authority in support of their arguments that Prudential Residential and Prudential Homes are liable for negligence and are vicariously liable for Rogers's actions, it will not consider those arguments; the Court also noted that because the Moores do not address in their brief on appeal their conspiracy, wantonness, suppression, or breach-of-contract claims, those issues are deemed waived; the only issues considered by the Court are whether the trial court properly entered a summary judgment in favor of Rogers on the Moores' fraudulent-misrepresentation claim against her and whether the trial court properly entered a summary judgment in favor of the Lundys despite their failure to move for a summary judgment; thus, the Court affirmed the trial court's summary judgments in favor of Prudential Residential, Prudential Homes, South O'Town, and Sanders; the Court affirmed the summary judgment in favor of Rogers because where a purchaser's direct inquiry would otherwise impose a duty of truthful disclosure, a purchaser's fraud claim is precluded by language in a sales contract stating that the purchase is "as is"; because the Moores did not ask the Court to overrule the cases establishing this rule of law, because of "the state of the briefs in this appeal," and because the Moores are a former real estate agent and an insurance adjuster with experience in evaluating water damage to houses, the Court declined on this occasion to revisit the rule holding that "as is" language in a contract for the purchase of used residential real estate precludes a fraud claim; the Court also held that Rogers was  entitled to a summary judgment because the Moores presented no evidence indicating that Rogers knew that the house had any water problems; the Court reversed the summary judgment as to the Lundys because Rule 56 requires, at the least, that the nonmoving party be provided with notice of a summary-judgment motion and be given an opportunity to present evidence in opposition to it, and the trial court violates the rights of the nonmoving party if it enters a summary judgment on its own, without any motion having been filed by a party)
*Download or view PDF version of opinion*
 
• Wetterhan v. Vesta Ins. Group, Inc., 

No. 1010780 (Ala. Sept. 6, 2002)
(breach of employment contract; termination without cause; race discrimination in jury selection; after the Supreme Court reversed a summary judgment in favor of the employer, Vesta Insurance Group, the case was tried to a jury; at the charge conference a special interrogatory, which the trial court announced it would give to the jury, was discussed; the plaintiff, Wetterhan, did not object to this special interrogatory at the charge conference, but he stated to the court that he thought the court had "correctly stated the issue in the special interrogatories referring to terminated without cause"; after the trial court thoroughly instructed the jury on the special interrogatory and after the jury retired to begin its deliberations, Wetterhan objected to the charge that the jury must find that Wetterhan was terminated in order for him to recover; the trial court held that Wetterhan had waived any objection he had to submitting the special interrogatory to the jury; HOLDING: the Supreme Court held that the trial court did not err in holding that Wetterhan had waived any objection he had to submitting the special interrogatory to the jury; the Court held that there was substantial evidence to support the jury's finding that Wetterhan was not terminated without cause by his employer; the Court held that the trial court did not err in holding that reason proffered by the defendant for the challenged strikes -- that they were the only veniremembers whose husbands were "on disability" -- was a race-neutral reason; the Court affirmed the judgment in favor of the employer)
*Download or view PDF version of opinion*
 
• Water and Wastewater Bd. v. Anderson, 

No. 1010896 (Ala. Sept. 6, 2002)
(the trial court issued a writ of mandamus directing the Water and Wastewater Board of the City of Madison to provide water service to property owned by G. Walton Anderson; the service area the Water Board purchased in 1990 from the Madison County Commission included Anderson's property; on January 8, 1996, the Water Board adopted a resolution that limited its service area; Anderson did not file a formal application for water service with the Water Board until July 1, 1999; HOLDING: the Supreme Court held that after the Water Board limited its service area in 1996, it no longer held itself out to serve potential customers outside the Madison city limits except under certain specified circumstances, and Anderson failed to show that the Water Board's policy of requiring annexation of property contiguous to Madison's city limits had been applied in an arbitrary or discriminatory manner with regard to him as compared with any other person or entity; accordingly, the Court concluded that Anderson did not have a clear legal right to have the Water Board provide water service to his property; the Court also held that mandamus relief is inappropriate because Anderson had at least one other remedy available to him -- a declaratory-judgment action; the Court reversed the trial court's writ of mandamus)
*Download or view PDF version of opinion*
 
• Stabler v. City of Mobile, 

No. 1010944 (Ala. Sept. 6, 2002)
(tort of outrage; timeliness of notice of claim; plaintiff James A. Stabler, Jr., was employed by the City of Mobile as a police officer; his supervisor was the defendant Curtis Robinson, a sergeant with the Mobile Police Department; Stabler applied to the Baldwin County Sheriff's Department for a job as a deputy sheriff; on April 28, 1999, Robinson wrote and signed a letter, written on "Mobile Police Department" letterhead, to Chief Larry Milstead, of the Baldwin County Sheriff's Department, stating that "Officer Stabler has problems following rules, procedures and regulations," that Stabler "has a record that reflects an abuse of sick time," that he "has a rash of citizen complaints filed against him on his demeanor and excessive force," that he "was the center of a racial incident with a black officer and disciplinary actions are pending," that he "has a problem with truthfulness," that he "is not dependable or trustworthy," that his performance was "inept," and that he "has displayed a bad attitude that reflects prejudicialness [sic] against minorities"; the Mobile Police Department investigated Robinson's actions in writing the letter, and Robinson was suspended without pay for a period of 10 consecutive workdays; Robinson appealed that ruling to the Mobile County Personnel Board, and the personnel board found that Robinson had violated police department rules and procedures, but determined that Robinson's discipline was too severe, and reduced his suspension to three workdays; Stabler filed a "charge of discrimination" with the Equal Employment Opportunity Commission ("EEOC") naming as respondents the City of Mobile, the Mobile Police Department, and Sgt. Curtis Robinson; Stabler sued his supervisor, Sgt. Robinson, the City of Mobile, and the City of Mobile Police Department, claiming that the letter contained false and defamatory statements, asserting the tort of outrage, alleging that the City failed to use reasonable care in adequately supervising and monitoring the actions of Curtis Robinson, and alleging that the sending of the letter was malicious, wanton, and/or negligent conduct; the City and the Police Department (collectively  the "City") moved to dismiss, alleging that Stabler had failed to comply with the provisions of Ala. Code §§ 11-47-23 and 11-47-192 because he did not file a sworn statement of claim with the City within six months of the injury alleged in the complaint; the City attached an affidavit of the City's clerk; Robinson filed a motion for a partial summary judgment alleging that plaintiff failed to comply with the required prerequisites to recovery of punitive damages as mandated by Alabama Code § 6-5-186 and that the allegations made by plaintiff are insufficient as a matter of law to support an outrage claim; the trial court granted the City's motion to dismiss and  made the order of dismissal final pursuant to Rule 54(b), Ala. R. Civ. P.; the trial court also dismissed "the claim for punitive damages" and entered partial summary judgment for Robinson on the tort-of-outrage claim; HOLDING: the Supreme Court held that Sgt. Robinson's behavior in writing the letter was not "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency" and affirmed the partial summary judgment on Stabler's tort-of-outrage claim; the Court noted that, although styled a motion to dismiss, the City attached an affidavit, and Stabler, in his response to the motion, attached a copy of the charge of discrimination he had filed with the EEOC; thus, the Court reviewed the dismissal of the claims against the City as a summary judgment; the Court held that the filing of the EEOC charge does not constitute compliance with a municipal notice-of-claim statute; thus, the Court also affirmed the dismissal/summary judgment in favor of the City) 
*Download or view PDF version of opinion*
 
• Jones v. Hooks, 

No. 1010948 (Ala. Sept. 6, 2002)
(Certified Questions from the United States District Court for the Northern District of Alabama: (1) Does Alabama law authorize the governor to grant a commutation of a sentence of life without parole to a sentence of life with the possibility of parole?; (2) If so, what guidelines, if any, apply to the decision-making process?; (3) Is a hearing before the governor required at which the prisoner can present his case?; (4) May the denial of a grant of commutation or the refusal to rule on a request for commutation be challenged and, if so, in what forum, controlled by what rules or procedures?; HOLDING: the Supreme Court answered the first question in the negative, stating that there is no constitutional or statutory provision "authoriz[ing] the governor to grant a commutation of a sentence of life without parole to a sentence of life with the possibility of parole"; the Court held that because it answered the first question in the negative, it need not answer the remaining questions) 
*Download or view PDF version of opinion*
 
• Harper v. Brown, Stagner, Richardson, Inc., 

Nos. 1011109 & 1011205 (Ala. Sept. 6, 2002)
(Rule 60(b); finality of judgments; Brown, Stagner, Richardson, Inc. ("Brown") initially sued Harper Sales Company, Inc. ("Harper Sales"), and the jury returned a verdict in favor of Brown and awarded damages of $113,115.34; the judgment against Harper Sales became final on July 17, 2000, when the trial court dismissed with prejudice the counterclaim filed by Harper Sales against Brown, and there was no appeal from that judgment; more than eight months after the entry of final judgment, Brown filed a motion, stating that "pursuant to Ala. R. Civ. P. 60(b)[, it] moves this court for an order amending the complaint ... to add Rolfe C. Harper, III as a party defendant"; Brown attached to its motion an amended complaint against Harper, which it described as an "action to pierce the corporate veil" in order to impose personal liability upon Harper; the trial court granted Brown's motion; Harper moved to dismiss arguing that Brown's use of Ala. R. Civ. P. 60(b) "to assert new claims against a new defendant" was improper; the trial court denied Harper's motion; later, the trial court entered a summary judgment in the amount of $113,115.34  for Brown and against Harper; HOLDING: the Supreme Court held that the trial court erred in granting Brown's Rule 60(b) motion, noting that Rule 60 contains no provision contemplating its use as a means to add new claims against a new defendant after a final judgment has been entered; the Court noted that Brown's motion did not attack the judgment in its favor against Harper Sales, and the motion sought no relief from that judgment; instead, the Court noted, Brown's motion sought only to amend its complaint to add Harper as a defendant, relief clearly not contemplated by Rule 60; the Court noted that, although there were differences in the facts of the cases, its decision in this case is consistent with its decision in the recent case of Pratt Capital, Inc. v. Boyett, No. 1001653 (Ala.  June 28, 2002); the Court reversed the summary judgment in favor of Brown against Harper)
*Download or view PDF version of opinion*
 
• Ex parte Bryant, 

No. 1011111 (Ala. Sept. 6, 2002)
(criminal; unlawful possession of a controlled substance (i.e., cocaine); Sedina Lashay Bryant and Kenneth Edward Moffitt were convicted of unlawful possession of a controlled substance (i.e., cocaine), a violation of Ala. Code §13A-12-212(a); an officer discovered and seized the cocaine pursuant to a warrantless entry into an apartment shared by Moffitt and Bryant; in Ex parte Moffitt, No. 1001739 (Ala.  Feb. 22, 2002), the Supreme Court held that the warrantless entry was unlawful because, "[a]fter reviewing the undisputed facts, we conclude[d] that the State did not carry its burden to show the existence of probable cause"; the Court also held in Moffitt that the trial court had erred in denying Moffitt's motion to suppress the evidence of the cocaine, and that the Court of Criminal Appeals had erred in affirming the trial court's judgment; HOLDING: the Supreme Court held that, for the same reasons expressed in Moffitt, it must conclude that the trial court erred in denying Bryant's motion to suppress the cocaine evidence, and that, therefore, the Court of Criminal Appeals erred in affirming the trial court's judgment)
*Download or view PDF version of opinion*
 
• Ex parte Employers Mut. Cas. Co., 

No. 1011202 (Ala. Sept. 6, 2002)
(affirmative defense; discovery; attack on consent judgment by nonparty insurer; fraud and collusion with respect to a consent judgment; Nadia, Inc. filed an action against the respondents, Computer Equipment and Service Company, Inc., and its employee Robert Todd Barwick (hereinafter referred to collectively as "CESCO") alleging damage to one of Nadia's computers by CESCO; CECSO referred the complaint to Employers Mutual Casualty Company, Inc. ("EMC"), CESCO's liability insurer, but EMC, asserting that CESCO was not entitled to coverage, refused to provide a defense; CESCO eventually consented to a judgment against it and in favor of Nadia for $1,100,000; before the entry of the consent judgment, CESCO filed a separate action against EMC and Nadia alleging, among other things, that EMC's failure to provide a defense amounted to a breach of contract, negligence, and the tort of outrage; After the entry of the consent judgment, Nadia filed a cross-claim against EMC, and EMC filed a counterclaim against CESCO and a cross-claim against Nadia, seeking a declaratory judgment on the issue whether there was collusion to defraud involved in the consent judgment; the trial court dismissed EMC's counterclaim and cross-claim; EMC then essentially restated its claim of collusion to defraud by amending its answer to add the claim as an affirmative defense against both CESCO and Nadia; the trial court struck the defense on the same basis it dismissed EMC's counterclaim and cross-claim, namely, because EMC failed to intervene as a party and challenge or appeal the consent judgment; the trial court also granted CESCO's and Nadia's motions for protective orders, barring EMC from deposing CESCO's and Nadia's lawyers regarding the circumstances surrounding the consent judgment; EMC argues that it is entitled to a writ of mandamus directing the trial court to allow EMC to maintain, and to seek discovery regarding, its asserted affirmative defense; HOLDING: the Supreme Court held that the trial court clearly erred in striking EMC's affirmative defense alleging collusion to defraud in obtaining the consent judgment; the Court held that EMC was not required to intervene in first case resolved by the consent judgment in order to challenge the consent judgment because judgments are binding only upon parties thereto and their privies; thus, the Court held that the trial court erred in striking EMC's affirmative defense of "fraud and collusion"; the Court held that  the scope of discovery in light of its ruling was a matter to be addressed by the trial court, so it did not issue a writ of mandamus as to the discovery issue)
*Download or view PDF version of opinion*
 
• Neal v. Neal, 

Nos. 1991439 & 1992202 (Ala. Sept. 6, 2002)
(trusts; relief from judgment; res judicata;  necessary or indispensable parties; in 1941, W.T. Neal executed a will creating a trust and which appointed three coexecutors, Ed Leigh McMillan, Violet H. Neal, and W.T. Neal, Jr. (hereinafter "W.T. Jr."), the son of the testator and trustor, and likewise appointed the same three as cotrustees of the trust; the terms of the trust required the trustees to pay $3,000 per year to each of W.T. Jr. and Violet H. Neal while both lived and, after Violet's death, $6,000 per year to W.T. Jr. while he lived, and then to his children or their descendants per stirpes; in 1950, W.T. Neal died; in 1955, W.T. Jr. married Sara Olivia Beall Weaver, who already had two sons, Leon Terrill Weaver II (hereinafter "Terrill"), and James Willett Weaver (hereinafter "James"); in 1956, appellant John Stewart Neal (hereinafter "John")  was born to W.T. Jr. and his wife Sara Olivia; on March 3, 1960, the Escambia County Circuit Court declared John to be the only living descendant of W.T. Jr.; sometime after March 3, 1960, a daughter, Lauren, was born to W.T. Jr. and his wife Sara Olivia; in 1963, a second daughter, Kate, was born to W.T. Jr. and his wife Sara Olivia; on September 13, 1973, the Adult Adoption Act, codified at Ala. Code §§ 43-4-1 through -4, became effective; on September 17, 1973, W.T. Jr. petitioned to adopt his two adult stepsons, his wife Sara Olivia's two adult sons from her former marriage, Terrill and James; on December 21, 1973, and on December 31, 1973, final orders of adoption were issued for Terrill (then 25 years old) and James (then 21 years old), respectively; on November 14, 1990, W.T. Jr., the last surviving original cotrustee of the trust, died; surviving him were, among others, his three natural children, John, Lauren, and Kate, all born to W.T. Jr. and his wife Sara Olivia, and his two adopted sons, Terrill and James, born to Sara Olivia during her prior marriage; the successor cotrustees began dividing among these five issue of Sara Olivia the $6,000 per year in trust benefits payable to the children or descendants of W.T. Jr.; W.T. Jr.'s death triggered the termination clause of the trust provisions of the will, and the trust will terminate on November 14, 2010, 20 years from the November 14, 1990 date of W.T. Jr.'s death; on January 1, 1991, the repeal of the Adult Adoption Act, Ala. Code §§43-4-1 through -4, became effective; in 1996, the successor cotrustees, N.Q. Adams, Kate Neal McNeel, and Lauren Neal Shepard, petitioned the Escambia County Circuit Court for a partial settlement of the trust from "January 1, 1956, through December 1, 1996" and for a declaration that Terrill and James were "children" and "descendants" of W.T. Jr. as contemplated by the will and trust and that they and their descendants as their interests would appear were beneficiaries and remaindermen of the trust; Terrill and James filed an answer, counterclaim, and cross-claim; in their counterclaim they sued the successor cotrustees, and in their cross-claim they sued John, for the very same declaration of their status and their descendants' status as the declaration sought by the successor cotrustees in their petition for partial settlement; John filed his own answer and counterclaim to the petition for partial settlement;  in his counterclaim he sought a declaration that Terrill and James were neither "children" of W.T. Jr., grandchildren of W.T. Neal, nor "descendants" of either W.T. Neal or W.T. Jr. entitled to distributions of assets or income from either the estate or the trust; John also sought an accounting of the assets of the trust, sought removal and replacement of the successor cotrustees, sought an injunction prohibiting the successor cotrustees from distributing trust assets and income to "recipients not entitled to receive the same,"  and sought damages for the successor cotrustees' alleged breaches of fiduciary duties, distribution of trust assets or income "to parties not entitled to the same," and suppression of facts about improper distribution of trust assets; John also sought attorneys' fees; in 1997, John, the successor cotrustees, and other parties entered into a settlement agreement; on the very same day John executed the settlement agreement, January 17, 1997, he also executed, but did not promptly file or otherwise disclose, an affidavit (hereinafter "'duress' affidavit"); on January 30, 1997, the Escambia County Circuit Court entered a Rule 54(b), Ala. R. Civ. P., final judgment pursuant to the settlement agreement, the settlement hearing, and the evidence introduced at the settlement hearing; the judgment granted all of the relief contemplated by the settlement agreement, including the constructions of W.T. Neal's will and its trust provisions, and including the dismissal of John's counterclaim, and including the approval of the successor cotrustees' accounting and the settlement of the trust through December 31, 1996; the judgment specifically held that W.T. Jr.'s adoptive sons Terrill and James, and their descendants, like W.T. Jr.'s three natural children and their descendants, were entitled to share in the income and the remainder of the trust; no appeal was taken from the judgment; on October 16, 1998, the successor cotrustees petitioned for a partial settlement of the trust from January 1, 1997 through December 31, 1997; in response to this petition, John filed an answer, counterclaim, and cross-claim and, later, an amended answer, counterclaim, and cross-claim contesting the findings and holdings of the January 30, 1997 judgment and the validity of that judgment itself; the successor cotrustees and Terrill and James filed their respective answers to John's counterclaim and cross-claim as amended and their respective motions for summary judgment on his claims; among John's evidentiary materials, not filed until August 20, 1999, was the "duress" affidavit he had sworn and executed two years and seven months earlier, on January 17, 1997; the trial court entered partial summary judgment on each of the two motions for summary judgment, first by interlocutory order, and then by final Rule 54(b) appealable order; John timely appealed each of the summary judgments; after the records on appeal were completed by the trial court and filed with the Supreme Court, and after all of the appellate briefs were filed with the Supreme Court, John then filed a "Motion to Supplement the Submission of these Consolidated Appeals"; John's motion states that, after the summary judgments were appealed to us, the Judicial Inquiry Commission, upon inquiries by the trial judge, issued two advisory opinions indicating that the trial judge should be disqualified; the trial judge also entered an order recusing himself; HOLDING:  the Supreme Court held that John's motion to supplement which seeks relief from the January 30, 1997 final judgment on the ground of the trial judge's disqualification is not properly before the Court; the Court held that John cannot receive any appellate relief on the merits of his claims to oust Terrill and James and their descendants as beneficiaries and remaindermen of the trust or his claims to recover damages from, or equitable relief against, the successor cotrustees for the various torts John alleges they committed before the date of the January 30, 1997 judgment, unless that judgment is either void for want of personal jurisdiction, subject-matter jurisdiction, or due process of law; the Court held that the judgment was not void for failure to join the Florida attorney general because neither the Florida attorney general nor any other person or entity in Florida seems to have been a necessary or indispensable party to the proceedings on the 1996 petition for partial settlement in the case; the Court held that the attorney general of Alabama, who did receive notice, was the only proper party, and the attorney general of Florida was neither an indispensable party, a necessary party, nor even a proper party, to enforce the charitable aspect of the trust; the Court held that the trial court had subject-matter jurisdiction of the issues framed by the successor cotrustees' 1996 petition for partial settlement and by the claims and other pleadings filed by Terrill, James, and John in that same litigation; the Court held that the the misinterpretations and misapplications of law that John ascribes to the aspects of the January 30, 1997 judgment about the distributions to and the status and rights of Terrill, James, or their descendants did not deprive John of due process of law; the Court held that because John received notice, employed counsel who advised and represented him, actively litigated his cause, entered the January 17, 1997 settlement agreement, attended (through counsel) the hearing on the 1996 petition for partial settlement, interposed no objections at the hearing, obtained the January 30, 1997 judgment conforming to the settlement agreement, and did not appeal that judgment, he can hardly contend that the judgment is void for a deprivation of due process of law; the Court held that the last sentence of Ala. Code §19-3-5 contemplates only mistakes of material fact, not mistakes of law, made by the trial judge and incorporated in the judgment, and John claims only mistakes of law, not mistakes of material fact, by the trial court; the Court held that John has not established fraud as a ground for revising or vacating the January 30, 1997 judgment, pursuant to Ala. Code §19-3-5; the Court held that in promoting the January 30, 1997 judgment and concealing his January 17, 1997 "duress" affidavit from the court during the proceedings culminating in that judgment, John himself participated in any fraud, if any, on the court; the Court held that John is not due relief from invited error; the Court rejected John's Rule 60(b)(6) claim based on duress because John describes his duress, in essence, as that he had already spent all of his own money and about $7,700,000 of other people's money, and the successor cotrustees would not lend or distribute still more money to him; the Court held that both summary judgments against John and in favor of the appellees must be affirmed, and John's "Motion to Supplement the Submission of these Consolidated Appeals" must be denied)
*Download or view PDF version of opinion*

Back to top

Opinions Released September 4, 2002

• DECISION ANNOUNCED BY THE SUPREME COURT OF ALABAMA ON WEDNESDAY,  SEPTEMBER 4, 2002 

Back to top

---

Disclaimer and note regarding opinion formats:   The Supreme Court of Alabama opinions are now being released by the Court electronically in HTML (.htm) format as well as in WordPerfect® 5.1 format (with a .rel extension).  Before February 8, 2001, both the HTML and WordPerfect® formats were made available on this web site.  After February 8, 2001, we are converting the WordPerfect® files into Portable Document Format (PDF) and posting the HTML and PDF files.  We believe that the PDF files will be more user friendly.  The PDF files can be viewed using Adobe® Acrobat® Reader™.  If you don't have Adobe® Acrobat® Reader™, you can download it free at www.adobe.com/products/acrobat/readstep2.html. The link to the PDF version of the opinion will be at the end of the summary as "*Download or view PDF version of opinion*."  While these files contain the text of the slip opinions released electronically by the Court, please note that these may differ from the hard copy slip opinions in several respects.  Some, but not necessarily all, of these differences are that in some of the electronic file formats the footnote numbers may be in brackets, the text of the footnotes may be at the end of each opinion, the pagination may not necessarily be the same, section and other symbols may not appear correctly, and these opinions may not reflect some italicized, bolded, underlined, or otherwise emphasized text that appears in the opinions issued on paper.  These opinions are released to the public by the Court and are provided here as a convenience to visitors of our web site.  These opinions do not constitute legal advice.  By making these opinions available over the Internet, we by no means imply, nor should anyone infer, that we have any connection with any governmental agency or court.  Please read the notice that appears at the top of each opinion.  We recommend obtaining from the Court a paper copy of any slip opinion before citing to it in any document submitted to any governmental entity for legal purposes.  If you have any questions or comments about our posting of these opinions, please contact the web administrator:  webadmin@wallacejordan.com

Back to top