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New Plan Realty Trust v. Morgan

792 So. 2d 351

1981944

Alabama

Alabama Supreme Court

792 So. 2d 351 (2000) NEW PLAN REALTY TRUST and New Plan Realty Trust of Alabama, Inc., d/b/a The Club Apartments v. Kimberly MORGAN. 1981944. Supreme Court of Alabama. December 29, 2000. Rehearing Denied February 23, 2001. *354 James S. Ward and Adam P. Morel of Corley, Moncus & Ward, P.C., Birmingham, for appellant. Kenneth Lee Cleveland of Cleveland & Cleveland, P.C., Birmingham, for appellee. JOHNSTONE, Justice. The opinion of May 12, 2000, is withdrawn, and the following opinion is substituted therefor. This case arises from the removal and disposition of personal belongings from an apartment before the termination of the lease. Kimberly Morgan sued New Plan Realty Trust and New Plan Realty Trust of Alabama, Inc., d/b/a The Club Apartments (collectively "New Plan") for trespass and conversion because New Plan removed and disposed of her belongings from her apartment before the end of her lease. After a trial, the jury returned a verdict in favor of Morgan and against New Plan. The jury awarded Morgan $100,000 in compensatory damages and $100,000 in punitive damages. New Plan appeals and asserts that (1) the trial court erred in denying its motion in limine and in overruling its objection to certain testimony by Joan Davis as hearsay; (2) the trial court erred in overruling the objection of New Plan to admission of a statement by a police officer to Morgan; (3) "the trial court erred in overruling New Plan's objection concerning testimony regarding the pecuniary status of New Plan because the evidence is irrelevant and substantially more prejudicial than probative"; (4) "the trial court erred in denying New Plan's motion for a new trial because the jury award of $100,000 in compensatory damages is excessive and not supported by the preponderance of the evidence"; and (5) the trial court erred in denying New Plan's motion for a new trial on the ground that the punitive damages award is excessive and is not supported by clear and convincing evidence. *355 "In reviewing a jury verdict, an appellate court must consider the evidence in the light most favorable to the prevailing party...." Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831 (Ala.1999). See also Cobb v. MacMillan Bloedel, Inc., 604 So. 2d 344 (Ala.1992), and Mason & Dixon Lines, Inc. v. Byrd, 601 So. 2d 68 (Ala.1992). A presumption of correctness attaches to a jury verdict, "if the verdict passes the `sufficiency test' presented by motions for a directed verdict and a JNOV." S & W Properties, Inc. v. American Motorists Ins. Co., 668 So. 2d 529, 534 (Ala.1995). (Rule 50(a), Ala. R. Civ. P., now designates a motion for a directed verdict as a motion for a judgment as a matter of law, and Rule 50(b) now designates a motion for JNOV as a renewed motion for a judgment as a matter of law.) This presumption is strengthened by a trial court's denial of a motion for a new trial. Christiansen v. Hall, 567 So. 2d 1338 (Ala.1990). "This Court will not, on a sufficiency of the evidence basis, reverse a judgment based on a jury verdict unless the evidence, when viewed in a light most favorable to the [verdict winner], shows that the verdict was `plainly and palpably wrong and unjust.'" S & W Props., 668 So. 2d at 534 (quoting Christiansen, 567 So.2d at 1341). "Whether to grant or deny a motion for new trial rests within the sound discretion of the trial court, and this Court will not reverse a ruling in that regard unless it finds that the trial court's ruling constituted an abuse of that discretion." Colbert County-Northwest Alabama Healthcare Auth. v. Nix, 678 So. 2d 719, 722 (Ala.1995). "Without a showing of such an abuse, the trial court's ruling must be affirmed." Id. Morgan leased an apartment at The Club Apartments. In March 1995, Morgan was raped and injured by an ex-fiancé, who was also a resident at The Club Apartments. Morgan's injuries, physical and mental, prevented her from working for a period of time. Morgan testified that she was afraid to stay alone in her apartment. Because her ex-fiancé lived at The Club Apartments, Morgan wanted to move. In April 1995, Morgan spoke to the assistant manager of The Club Apartments and requested that she be allowed to terminate her lease early. Morgan informed the assistant manager about the rape and her resulting financial problems. On the assistant manager's instruction, Morgan completed the necessary paperwork to terminate her lease early. The assistant manager told Morgan that the manager would have to approve her request and that the manager would notify Morgan. Morgan testified that the manager never notified her whether her request for early termination of her lease had been approved. In May 1995, New Plan purchased The Club Apartments and assumed control of the management of the property. New Plan hired a new manager, Marsha Babineaux, to oversee the management of the apartments. Morgan discussed her rent arrearage with Babineaux and made arrangements with her for the payment of the arrearage. Morgan testified that she asked Babineaux "if it was all right if [she] left [her] things in the apartment until June the 30th [the last day of her lease]." Babineaux told Morgan that "it was fine." Morgan told Babineaux that she planned to move out of her apartment by June 30, the date her lease ended. She testified that Babineaux told her that no one would go in her apartment and that no one would bother her belongings "until after that date." At this time, because her doctor advised her against staying alone, Morgan was living with her mother. Morgan testified that she needed to leave her belongings in her apartment because she was recovering from the rape and because her friends were helping her move her belongings *356 "a little bit at a time" to a storage unit. Around this time, Morgan also learned that she had a brain tumor, which made her very ill. She was working as much as she possibly could. Additionally, Morgan learned that doctors thought her sister was dying. In the middle of June 1995, Morgan's friend William Hammock moved 15 or 16 boxes of books to Morgan's storage unit. Hammock had previously been to Morgan's apartment to have dinner. Dinner had been served on good china with crystal and silverware. He described Morgan's apartment, in June 1995, as containing a sofa; a television; a VCR; a dining room table and chairs; cassettes; oriental wall hangings; a large painting of a woman with a halo; an old dulcimer; and a keyboard. While moving the boxes, Hammock noticed that Morgan's sofa, dining room table and chairs, wall hangings, and television were still in the living room. During the week before her lease expired, Morgan and a friend, Dwight Ballard, moved her sofa; her dining room table and chairs; a dresser; a bed; mattresses; and bookshelves from Morgan's apartment to her nearby storage unit. Ballard testified that many things were left in Morgan's apartment after he moved the furniture. Personal belongings remaining in Morgan's apartment were a stereo; speakers; stacks of paintings; stacks of pictures; stacks of portraits; "elaborately framed paintings"; glassware; china; and clothing. When Morgan returned to her apartment on Sunday, June 25, 1995, her belongings were still in her apartment. On June 26, 1995, Morgan telephoned Babineaux to reassure Babineaux that she would have all of her belongings out by midnight of June 30, 1995, the last day of her lease. She also reassured Babineaux that she would pay her rent arrearage. Morgan testified that Babineaux told her that there was no problem. She stated that Babineaux assured her that no one would go into her apartment and bother her belongings. About 4:00 p.m. on June 30, 1995, Morgan telephoned Babineaux and informed her that she was coming to get the remainder of her belongings, but that she was waiting to come until it stopped storming. Babineaux told Morgan that she was not sure if anything was left in her apartment, but she told Morgan that she would go check the apartment and would telephone Morgan later. Babineaux never telephoned Morgan. Morgan, however, testified that she telephoned Babineaux again, and that Babineaux told her that all of her belongings were gone. Morgan began crying and trying to talk to Babineaux. Babineaux told Morgan, "I don't have time for this shit," and slammed down the telephone. Shortly after her telephone conversation with Babineaux, Morgan, accompanied by her mother JoAnn Jones, returned to her apartment to see if any of her belongings were there. Morgan used her key to open the locked apartment door. After entering the apartment, Morgan and Jones searched every room and every closet for her belongings. However, the apartment was empty. Morgan and Jones went to the office of The Club Apartments. Morgan stated that she spoke to Babineaux, who ignored her. She testified that Loretta Moore, a New Plan employee, was present in the office. Morgan reminded Babineaux of the payment agreement. She stated that Moore confirmed the payment agreement, pulled out a note Moore had made confirming the payment agreement, and showed the note to Babineaux. Crying, Morgan asked for her belongings. Babineaux then grabbed Morgan by the arm and stated, "I don't have time for this *357 shit, get the fuck out of here." Pushing and pulling, Babineaux forced Morgan out of the office. At the same time, Moore gave Morgan the note confirming the payment agreement. Morgan stated that she went to the police to report her belongings as missing. She testified that a police officer recommended that she hire an attorney. Morgan testified that included in her belongings discarded by Babineaux were Irish linen tablecloths and napkins given to her by her grandmother and her great-grandmother; wedding gifts; tapestries from China; family heirlooms; a silver tea service; crystal glassware; glassware from China; a silk wall hanging from Korea; photographs of her grandparents, her great-grandparents, her dying sister, and her friends; art supplies and paints; and paintings, one with an appraised value of $5,000; and her clothing. Morgan testified that she compiled a list of her belongings that Babineaux or other New Plan employees had removed. The list was introduced into evidence. On the list, Morgan identified each item and specified a current appraised or replacement value for each item. The value of Morgan's lost belongings totaled $46,679. Morgan testified: Morgan's mother JoAnn Jones confirmed the events described by Morgan. She testified that Morgan's apartment was empty and freshly painted. After discovering the empty apartment, Jones stated that Morgan "was almost in a hysterical state." She stated also that Morgan asked, "[W]hat have they done?" Jones told Morgan not to get excited, that they might have moved her belongings and stored them somewhere else. Morgan told her mother that Babineaux had promised Morgan that she would not go into Morgan's apartment until Morgan had moved all of her belongings from the apartment. Jones testified that she and Morgan walked across the walkway to the apartment across from Morgan's apartment. Jones spoke to Joan Davis, who lived in the apartment. Jones then accompanied Morgan to the office of The Club Apartments. Jones stated that she asked Babineaux where Morgan's belongings were. Babineaux stated that they were in the dumpster. Jones asked Babineaux when she had placed Morgan's belongings in the dumpster, and Babineaux replied, "This morning." Morgan and her mother looked in the dumpster, but it was empty. Jones testified that, after Morgan learned her belongings were gone, she became depressed, cried "all the time," and refused to eat. She stated that she had to take Morgan to a doctor because Morgan was greatly upset about losing all of her belongings and about learning that her sister was dying. Jones stated that Morgan was very upset but she "mostly [was upset about] the things that [Morgan's] grandmother who had passed away a year before had given her and left her." She testified that Morgan said, "I felt like I have lost mypart of my life" because *358 Morgan's belongings "dated back to things that she had as a child, high school, cheerleader pictures, albums to appliances." Jones stated, "They even took her clothes. She didn't have anything to wear. Took her shoes and her clothes. She had what she had on. So, we had to even go and buy her some things to wear. She had nothing. Everything was gone." Morgan's neighbor Joan Davis testified by deposition that Morgan and her mother visited her on the Friday on which Morgan had planned to move her belongings. She stated that Morgan told her that everything was gone from her apartment, although Morgan had spoken with Babineaux and had made arrangements to move her belongings from her apartment by Friday. Davis testified that she had seen Babineaux and maintenance people enter Morgan's apartment before Morgan came to see her on Friday. She stated that Kathy, the maid who cleaned the apartments at The Club Apartments, and Ted, the maintenance man there, told her that Babineaux had sent them to clean out Morgan's apartment and that Kathy and Ted had told Babineaux that, usually when a tenant left belongings in an apartment, they held the items for at least 90 days to give the tenant time to collect his or her belongings. Davis testified that Ted and Kathy told her that Babineaux told them that she was not holding Morgan's belongings. She instructed them to take Morgan's clothes to Goodwill Industries and to throw the rest of her belongings in the dumpster. Davis stated that Ted and Kathy were very upset that Babineaux told them to dispose of Morgan's belongings. Later, Kathy told Davis that she had seen two of Morgan's lamps in Babineaux's office. Davis stated that Kathy asked Davis to get in touch with Morgan and to tell Morgan about the lamps so that Morgan could get her lamps. Joseph Bosco, vice president of the apartment divisions of New Plan, testified by deposition that he produced records kept in the local, district, or home offices of New Plan. Bosco produced a letter dated August 2, 1995, from Morgan's attorney to the manager of The Club Apartments: Bosco produced also a letter dated August 14, 1995, from Gina Poff, a district manager for New plan, to Bosco. The letter specified the reasons and circumstances of the termination of Babineaux. The reasons for Babineaux's termination included "[d]ishonesty when relating incidents pertaining to the operation of [The Club Apartments]," "[d]id not follow proper procedure regarding personal effects left in units after tenants vacate," and a "[l]ack of professionalism and respect demonstrated when addressing subordinates and [tenants]." Bosco produced another letter dated August 14, 1995, from Poff to Morgan's attorney: *359 Last, Bosco produced a letter dated August 18, 1995, from Poff to Morgan's attorney. This letter was identical to the letter of August 14, 1995, except that the former letter was carbon copied to the "N.Y. Office Operations," "N.Y. Office Legal," "Field Operations District Office," and "Site File." Testifying by deposition, Gina Poff stated that she terminated Babineaux for, among other things, not following "proper procedure regarding personal effects left in units after tenants vacate" and for lying to Poff about hiring her brother as a maintenance man. Poff stated also that her reference to Babineaux's failure to follow proper procedure regarding a tenant's personal belongings was specifically based upon Babineaux's disposal of Morgan's belongings. Poff testified that New Plan's procedure was to inventory any belongings of value left in an apartment, to photograph the belongings, and to store the belongings for 30 days. According to Poff, Morgan's belongings were not photographed, inventoried, or stored. In investigating the loss of Morgan's belongings, Poff questioned Babineaux. Babineaux told Poff that she inspected Morgan's apartment to see whether it was vacant. Babineaux told Poff that she found Morgan's apartment vacant but found "a couple of belongings such as older clothes, junk that people leave behind when they move that they don't want to take with them." Babineaux said she threw away the items she found in Morgan's vacant apartment. Poff stated further that Babineaux told her that Babineaux contacted the "emergency contact person on [Morgan's] application," Morgan's former boyfriend who lived at The Club Apartments and whom Morgan had reported to Babineaux as having raped Morgan. Babineaux told Poff that Morgan's former boyfriend told her to dispose of any items remaining in the apartment. Poff did not question anyone except Babineaux about Morgan's missing belongings. The trial judge instructed the jury on the elements of conversion, compensatory damages, mental anguish damages, and punitive damages. Counsel for New Plan did not object to any of the trial judge's instructions. The jury returned a verdict in favor of Morgan and against New Plan, and awarded Morgan $100,000 in compensatory damages and $100,000 in punitive damages. The trial court entered a judgment on the verdict accordingly. New Plan moved for a new trial. Following a hearing, the trial court entered a postjudgment order reviewing the punitive damages award according to the standards set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989), and Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986). The order reads, in pertinent part: New Plan argues that the trial court erred in denying its motion in limine and in admitting the testimony of Joan Davis about statements made by employees of New Plan. At trial, Morgan presented the deposition testimony from her former neighbor Joan Davis: This particular testimony was introduced without objection. It establishes that Kathy was the cleaning woman who worked for the apartment complex. There is no genuine dispute that the owner-operator of the apartment complex is the defendant. Noteworthily, New Plan did not, either before or after the above-quoted exchange, challenge Kathy's status as its employee-housekeeper. Indeed, the trial judge instructed the jury: New Plan did not object to the trial judge's instruction. New Plan's objection to Joan Davis's testimony, interposed only after her last answer quoted above, incorporated only the grounds included within New Plan's motion in limine. The motion in limine itself characterized Kathy as New Plan's housekeeper. The motion in limine did not object to an absence of proof that Kathy was New Plan's housekeeper. Rather, the motion in limine objected only that the housekeeper would not have authority to speak for New Plan. Thus New Plan's allowing Morgan to establish at trial before the jury that Kathy was New Plan's cleaning woman was no lapse or oversight. Warren Webster & Co. v. Zac Smith Stationery Co., 222 Ala. 41, 44, 130 So. 545, 547 (1930) (quoting Birmingham Mineral R.R. v. Tennessee Coal, Iron & R.R. Co., 127 Ala. 137, 145, 28 So. 679, 681 (1900) (emphasis added)). Thus Kathy's out-of-court declaration, as recounted by the witness Joan Davis after the trial court overruled New Plan's objection, was admissible to prove both the fact of Kathy's agency and the scope of her authority since Morgan had already established her status as New Plan's cleaning woman. The testimony which New Plan challenges as hearsay reads: The exchange follows the trial court's overruling New Plan's objection invoking its motion in limine. New Plan did not object to this testimony on the ground that the witness apparently recounted a sort of conglomerate out-of-court declaration by more than one declarant ("they") rather than just the declarant Kathy. Thus, considering the tendencies of the testimony *362 most favorable to the verdict winner, as we must in our review, we must deem Morgan to have established that, usually when a tenant left the apartments and did not get all of the tenant's things, Kathy would take them over to the office for at least 90 days to give the tenant time to come and get the things. This evidence, together with the unchallenged testimony that Kathy was New Plan's "cleaning woman," established both the fact of Kathy's agency and the scope of Kathy's agency. Warren Webster, supra. Rule 801(d)(2)(D), Ala. R. Evid., authorizes the admission of "a statement by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship." Kathy's declaration established that what she did with a tenant's belongings was within the scope of her agency or employment. Consequently, Rule 801(d)(2)(D) authorized the trial judge's admission of Joan Davis's testimony to Kathy's declaration regarding her performance of her duty of handling the belongings of Morgan. New Plan argues that the trial court erred in overruling the objection of New Plan to the admission of a statement made by a police officer to Morgan. New Plan argues that the testimony was irrelevant and prejudicial. At trial, the following occurred: "When the grounds for an objection are stated, this impliedly waives all other grounds for the objection to the evidence; and the objecting party cannot predicate error upon a ground not stated in the trial court, but raised for the first time on appeal." Nichols v. Southeast Prop. Mgmt., Inc., 576 So. 2d 660, 662 (Ala.1991) (citations omitted). Because New Plan specifically objected to the testimony on the ground of hearsay, we do not address whether the testimony was irrelevant or prejudicial. Id. New Plan argues that "the trial court erred in overruling New Plan's objection concerning testimony regarding the pecuniary status of New Plan because the evidence is irrelevant and substantially more prejudicial than probative." New Plan specifically argues that the trial court erred in allowing evidence of the pecuniary status of New Plan. At trial, Morgan's attorney read from Bosco's deposition: New Plan argues that, from the above question and answer read from Bosco's deposition, "the jury learned that New Plan, in addition to owning the apartment complex which was the subject of the lawsuit, also owns and operates other apartment complexes, copying centers and office space. This evidence could serve no other *363 purpose but to prejudice the jury in its attempt to assess liability and, most importantly damages in this matter." Brief, p. 18. This Court has stated: Atkins v. Lee, 603 So. 2d 937, 946 (Ala. 1992). Rule 32(b), Ala. R. Civ. P., reads: Rule 32(d)(3), Ala. R. Civ. P., reads, in pertinent part: Thus, the trial court erred in overruling the objection of New Plan on the ground that New Plan did not make the objection during Bosco's deposition. However, this case is different from the cases cited by New Plan in that Morgan's attorney did not during his closing argument inject the wealth of New Plan on the issues of liability or damages. New Plan has not shown that the single reference to New Plan's owning shopping centers substantially prejudiced its right to a fair trial. Thus, the error committed by the trial court is harmless error. Rule 45, Ala. R.App. P. New Plan contends that the trial court erred in denying New Plan's motion for a new trial on the ground that the compensatory damages award is excessive. Specifically, New Plan argues that the $100,000 compensatory damages award is excessive because the award is more than double Morgan's $46,679 property loss. This Court has held: Prudential Ballard Realty Co. v. Weatherly, 792 So. 2d 1045, 1049 (Ala.2000). Ordinarily, in Alabama, a plaintiff cannot recover damages for mental anguish when a tort results in injury to property only, except when the tort is committed under circumstances of insult or contumely. Wal-Mart Stores, Inc. v. Bowers, 752 So. 2d 1201 (Ala. 1999). Moreover, this Court gives "stricter scrutiny to an award of mental anguish [damages] where the victim has offered little or no direct evidence concerning the degree of suffering he or she has experienced." Kmart Corp. v. Kyles, 723 So. 2d 572, 578 (Ala.1998). As already mentioned in this opinion, the trial judge instructed the jury on damages for mental anguish. Specifically, he gave instruction 31.84 from Alabama Pattern Jury Instructions: Civil (2d ed.1993). New Plan did not object to this instruction. Thus, the jury was authorized to include damages for mental anguish as part of the compensatory damages award to Morgan. Again as already stated, Morgan placed a value of $46,679 on her belongings disposed of by Babineaux, a New Plan employee. Morgan and her mother, particularly her mother, testified to the mental anguish that Morgan suffered from Babineaux's disposal of Morgan's belongings. In fact, Morgan sought medical treatment because she was so distraught about the loss of her belongings. After reviewing the record and the aforementioned testimony, we conclude that the evidence of Morgan's special damages, together with the evidence of mental anguish suffered by Morgan as a result of actions of the employees of New Plan, support the jury's award of compensatory damages. In its reply brief, New Plan argues for the first time that, because Morgan did not prove that Babineaux acted under circumstances of insult or contumely, Morgan was not entitled to damages for mental anguish. Because New Plan did not raise this issue in its initial brief or at trial, we "will simply treat such [issue] as not before the Court." Kennesaw Life & Acc. Ins. Co. v. Old Nat'l Ins. Co., 291 Ala. 752, 754, 287 So. 2d 869, 871 (1973). See also Sanders v. Smitherman, 776 So. 2d 68 (Ala.2000); Goodyear Tire & Rubber Co. v. Washington, 719 So. 2d 774 (Ala.1998); C & S Family Credit of Alabama, Inc. v. McNairy, 613 So. 2d 1232 (Ala.1992); Lunney v. Southern Ry., 272 Ala. 611, 133 So. 2d 247 (1961). New Plan contends that the jury's award of $100,000 in punitive damages is not supported by clear and convincing evidence of intentional, reckless, wanton, or malicious conduct and is excessive. An award of punitive damages must be supported by clear and convincing evidence "that the defendant consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the plaintiff." § 6-11-20(a), Ala.Code 1975. Section 6-11-20(b) defines the terms "fraud," "malice," "wantonness," and "oppression": "`Gross' is defined as inexcusable, flagrant, or shameful." Talent Tree Pers. Servs., Inc. v. Fleenor, 703 So. 2d 917, 924 (Ala.1997). Additionally, § 6-11-27(a), Ala.Code 1975, provides: The record contains clear and convincing evidence that, although New Plan's manager Babineaux assured Morgan that no one would enter her apartment and that no one would remove her belongings from her apartment, Babineaux directed other employees of New Plan to remove Morgan's belongings from her apartment and to dispose of them before the termination date of her lease. Morgan's attorney demanded the return of Morgan's belongings. The investigation of the matter by New Plan's district manager Poff consisted of one conversation with Babineaux, who admitted she had disposed of Morgan's belongings after she, according to her, had spoken to Morgan's former boyfriend. Although Poff terminated Babineaux because of her disposal of Morgan's belongings, Poff wrote Morgan's attorney that New Plan "had no information regarding this matter" and that to New Plan's knowledge Morgan's apartment "was vacated and there were no personal items left." In the letter dated August 18, 1995, from Poff to Morgan's attorney, New Plan disavowed knowledge of the disposal of Morgan's belongings although Babineaux had already informed Poff of her actions. New Plan ratified Babineaux's wrongful conduct by joining in it by disavowing Babineaux's disposal of Morgan's belongings. See Holmes v. Sanders, 729 So. 2d 314 (Ala. 1999). Moreover, Babineaux's wrongful conduct benefited New Plan by readying Morgan's apartment for the next tenant before the end of Morgan's lease. Morgan presented clear and convincing evidence that Babineaux's disposal of her belongings was intentional, malicious, or oppressive. The ratification of and benefit from Babineaux's wrongful conduct by New Plan support an award of punitive damages. New Plan argues that the $100,000 award of punitive damages was excessive because "[t]his amount is more than twice the total replacement cost of all the items removed according to Morgan's evaluation." In the postjudgment order on punitive damages, the trial judge accurately *366 recognized the standards for determining whether a punitive damages award is excessive. The trial judge analyzed the $100,000 punitive damages award on the basis of the applicable standards. After carefully reviewing the record of wrongful conduct by Babineaux and New Plan, we agree with the trial judge that the $100,000 punitive damages award is not excessive. Thus, the judgment of the trial court is due to be affirmed. APPLICATION GRANTED; OPINION OF MAY 12, 2000, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED. HOUSTON, COOK, LYONS, BROWN, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX and SEE, JJ., dissent. MADDOX, Justice (dissenting). I believe Morgan laid an insufficient foundation for the admission of the hearsay statements made by persons alleged to be New Plan employees; therefore, I must dissent. "It is well established that Rule 801(d)(2)(D) requires the proffering party to lay a foundation to show that an otherwise excludible statement relates to a matter within the scope of the agent's employment.'" Wilkinson v. Carnival Cruise Lines, Inc., 920 F.2d 1560, 1566 (11th Cir. 1991) (quoting Breneman v. Kennecott Corp., 799 F.2d 470, 473 (9th Cir.1986) (citing Hoptowit v. Ray, 682 F.2d 1237 (9th Cir.1982))); see also Lowery v. Ward, 662 So. 2d 224, 227-28 (Ala.1995) (holding that the burden rests on the offering party to lay the proper foundation for the admission of evidence). A showing that an agency relationship exists is the cornerstone of this foundation. Vicarious admissions are admissible only after the offering party presents independent evidence tending to show that the out-of-court declarant is an agent of the principal. Charles W. Gamble, McElroy's Alabama Evidence, § 195.01(3) (5th ed.1996). New Plan argues in its brief that "[w]ithout a reversal, defendants will be subject to liability based upon statements made by almost unknown individuals who repeat to a witness what was supposedly told to them by others." Morgan asks this Court to consider two things that, I believe, do not advance her argument that she laid a proper foundation for the admission of the hearsay testimony. First, she contends that statements made by New Plan's trial counsel during voir dire examination of the jurors provided a proper foundation for the declarants' statements. Second, Morgan asserts that an exhibit to the deposition of Gina Poff, who was New Plan's district manager, established that the declarants were New Plan employees.[1] New Plan responds to Morgan's argument that its trial counsel asked the jurors on voir dire about the two declarants by contending that an unsworn statement given *367 by trial counsel is not evidence. This contention, of course, is correct. See, e.g., American Nat'l Bank & Trust Co. v. Long, 281 Ala. 654, 656, 207 So. 2d 129, 132 (1968) (where this Court held that statements of trial counsel regarding the execution of a note have no evidentiary value). Based on this principle of law stated in American National Bank, I would not consider the statements made by New Plan's trial counsel during voir dire in determining whether Morgan laid a proper foundation. The same principle of law applies to Morgan's second argument that the names of the two declarants appear on a list of employees that was attached to a deposition that was not introduced into evidence; without admission into the evidence at trial, that fact could not be considered as proof before the jury that the two declarants were agents of the defendant New Plan.[2] The remaining evidence would then include a neighbor's trial testimony describing the declarants as being 1) a woman who was "Kathy that cleaned the apartments" and 2) "a maintenance man." Without being directed to any trial testimony that identifies New Plan as the principal or employer of the two declarants or that explains the scope of the declarants' alleged authority, I believe that the neighbor's testimony, alone, falls short of satisfying the burden imposed by Rule 801(d)(2)(D). Therefore, I would conclude that the trial court erred when it admitted the declarants' out-of-court statements, because, absent a proper foundation, the statements were inadmissible hearsay. Insofar as I can tell from the briefs and arguments and from my examination of the record, these statements appear to have been the only evidence suggesting that New Plan was responsible for the disappearance of Morgan's property. Accordingly, I would reverse the judgment of the trial court. HOOPER, C.J., and SEE, J., concur. [1] Morgan's arguments in her brief in support of the admissibility of these hearsay statements were as follows: "Trial counsel for New Plan admitted in front of the jury that Kathy Haeni and Ted Fortner were employees of The Club Apartments. New Plan's witness, Gina Poff, admitted that Exhibit 1 to her deposition was New Plan's list of its employees. This document lists Ted Fortner as `Maint. Supv.' and Kathy Haeni as `Housekeeper.'". Morgan also argues in her brief that Joan Davis, in her testimony, "identified Kathy as a maintenance employee of the defendant, namely `Kathy that cleaned the apartments.'" She also argued that Davis "identified Ted `a maintenance man' as one of the speakers," and that Davis testified that she actually saw Ted and Kathy going into the apartment during the week before Morgan came by on Friday. [2] New Plan supplements its arguments on these points by emphasizing that the list was not before the jury and that even if it had been there was no evidence to show that either out-of-court declarant was an employee of New Plan.

December 29, 2000

25fb9d42-b200-43cf-a12b-758d677bb590

Breaux v. Bailey

789 So. 2d 204

1990436, 1990646, 1990804

Alabama

Alabama Supreme Court

789 So. 2d 204 (2000) Dr. Charles BREAUX v. Sheila BAILEY. Cooper Green Hospital et al. v. Sheila Bailey. Charles Breaux, M.D., and Jefferson Clinic, P.C., v. Sheila Bailey. 1990436, 1990646 and 1990804. Supreme Court of Alabama. December 22, 2000. *205 Randal H. Sellers and Joseph L. Reese, Jr., of Starnes & Atchison, L.L.P., Birmingham, for appellants Charles Breaux, M.D., and Jefferson Clinic, P.C. Robert E. Parsons and Dorothy A. Powell of Parsons, Lee & Juliano, P.C., Birmingham, for appellants Jefferson County d/b/a Cooper Green Hospital, Cynthia Venton, and Wiley King. John W. Haley, Shay Samples, and Bruce J. McKee of Hare, Wynn, Newell & Newton, Birmingham, for appellee. COOK, Justice. These three appeals arise from Sheila Bailey's lawsuit alleging that the defendantsDr. Charles Breaux; Jefferson Clinic P.C.; Cooper Green Hospital; Cynthia Venton; and Wylie Kingacted negligently or wantonly in providing her medical care. On December 24, 1994, Bailey underwent abdominal surgery, performed by Dr. Breaux at Cooper Green Hospital. Cynthia Venton and Wylie King, two surgical nurses, assisted Dr. Breaux with the procedure. Following the surgery, Bailey suffered from abdominal pain. In March 1996, Bailey learned that a foreign object had been left in her abdomen during the December 1994 surgery. Bailey sued. Bailey's claims went to trial on October 18, 1999. The jury returned a verdict for Bailey, awarding her $78,000 in damages. The circuit court entered a judgment on that verdict. On November 18, 1999, King and Venton moved to alter, amend, or vacate the judgment. On November 24, 1999, before the trial court had ruled on Venton and King's motions, Dr. Breaux filed a notice of appeal. On December 15, 1999, the trial court acknowledged that in charging the jury he had committed an error that was prejudicial to Venton and King. He ordered a new trial as to all defendants. All the defendants appealed the order granting a new trial. Cooper Green Hospital, Cynthia Venton, and Wylie King argue that the trial court was without jurisdiction to *206 grant a new trial as to all defendants because none of the defendants in their post-judgment motions had requested a new trial and because the trial court ordered the new trial more than 30 days after it had entered its judgment. In order to fully understand the issues presented by Cooper Green Hospital, Venton, and King, we include a portion of the trial court's order: We agree with the trial court that the only way to cure the effect of the erroneous jury instruction is to order a new trial as to all defendants. We also agree with the trial court's interpretation of Venton and King's motions to alter, amend, or vacate as asserting grounds for a new trial. This Court has repeatedly held that "[t]he substance of a motion and not its style determines what kind of motion it is." Evans v. Waddell, 689 So. 2d 23, 26 (Ala.1997) (citing Cannon v. State Farm Mut. Auto. Ins. Co., 590 So. 2d 191 (Ala.1991)). Therefore, because Venton's and King's Rule 59(e) motions were, in substance, motions seeking a new trial, the trial court was well within its bounds to order a new trial. Thus, the appellants' argument that the trial court entered its new-trial order more than 30 days after it had entered its judgment is without merit. On January 14, 2000, Dr. Breaux and Jefferson Clinic, P.C., filed a separate notice of appeal. They ask this Court to rule that the trial court's jury instructions were erroneous and prejudicial. They also ask this Court to remand this case for a new trial with guidance regarding the proper jury instructions applicable in this case. Dr. Breaux's appealsfiled on November 24, 1999, and January 14, *207 2000are moot and, therefore, due to be dismissed. In order for this Court to have jurisdiction over an appeal, it must involve an actual controversy. Spence v. Baldwin County Sav. & Loan Ass'n, 533 So. 2d 192, 193 (Ala.1988) (Maddox, J., concurring specially) (quoting Caldwell v. Loveless, 17 Ala.App. 381, 382, 85 So. 307 (1920)). In this case, the trial court's order of a new trial is such an "event" as was described in Spencean event making it impossible for this Court to grant relief. In both the November 24, 1999, appeal and the January 14, 2000, appeal, Dr. Breaux asks this Court to remand the case for a new trial and to provide instructions for the trial court specifying the proper instructions that should be given to the jury. However, the trial court has already ordered a new trial to all defendants, which is the maximum relief to which Dr. Breaux and Jefferson Clinic are entitled. This Court's jurisdiction is limited to review of actual cases and controversies; it does not extend to dealing with future errors predicted, or likely, to result in an actual controversy. Therefore, this Court may not presume that the trial court will incorrectly instruct the jury at the conclusion of the new trial. Should the trial court err in charging the jury, then Dr. Breaux, Jefferson Clinic, and the other codefendants would be entitled to seek appellate relief at that time. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.

December 22, 2000

238fd01c-da21-4646-9243-49a3ff9853fc

State Personnel Bd. v. Akers

797 So. 2d 422

1990954

Alabama

Alabama Supreme Court

797 So. 2d 422 (2000) STATE of Alabama PERSONNEL BOARD et al. v. Eugene J. AKERS et al. 1990954. Supreme Court of Alabama. December 29, 2000. Rehearing Denied May 11, 2001. *423 Bill Pryor, atty. gen., and Alice Ann Byrne, asst. atty. gen., for appellants. J. Knox Argo, Montgomery; Jeffery C. Duffey, Montgomery; and Alvin T. Prestwood of Volz, Prestwood & Hanan, P.C., Montgomery, for appellees. SEE, Justice. The Alabama Department of Revenue, the commissioner of revenue, and the State of Alabama Personnel Board (collectively, the "State") were defendants in an action filed by several past and present division chiefs of the Department of Revenue (collectively, the "Employees").[1] On October 30, 1997, the trial court, following the decision in State Personnel Board v. Brashears, 659 So. 2d 617 (Ala.Civ.App. 1994), cert. quashed, 659 So. 2d 617 (Ala. 1995), entered a final judgment in favor of the Employees and, in pertinent part, ordered the State to pay them "all backpay and back retirement benefits, with interest, to which they were entitled and which they ha[d] not received due to their not being placed" in a certain pay grade as required by Ala.Code 1975, § 40-2-24,[2] and to adjust the Employees' present pay and retirement benefits to those of the Brashears plaintiffs. (Emphasis added.) On appeal, this Court affirmed the trial court's judgment without an opinion. Alabama Dep't of Revenue v. Akers, (No. 1970478) 745 So. 2d 310 (Ala.1998). The State paid the Employees backpay and back retirement benefits, but did not pay prejudgment interest. On January 8, 1999, the Employees moved to have the defendants held in contempt and to enforce the trial court's October 30, 1997, judgment. The Employees asserted that the trial court's October 30, 1997, judgment required the State to pay them prejudgment interest on the award of backpay. The State argued that the trial court's judgment did not order the State to pay the Employees prejudgment interest, but, instead, ordered the State to adjust *424 the Employees' backpay to that ordered in Brashears, and that the State had fully complied with the trial court's October 30, 1997, judgment. On September 27, 1999, the trial court denied the Employees' January 8, 1999, motion and entered the following order purporting to clarify its October 30, 1997, judgment: The trial court further held (1) that the Employees were not entitled to prejudgment interest under Ala.Code 1975, § 8-8-8, because, it concluded, their action was not based on a contract theory, and (2) that the State had fully complied with the October 30, 1997, judgment. The Employees filed a motion asking the court to alter, amend, or vacate its September 27, 1999, order. On January 25, 2000, the court granted that motion, holding that under § 8-8-8 the Employees were entitled to prejudgment interest on the backpay award. The trial court ordered the State to pay prejudgment interest at the rate of 6% per year "on all ... backpay earned prior to" the trial court's October 30, 1997, judgment. The State appeals from that order. The State argues that the trial court erred in holding that under § 8-8-8 the Employees are entitled to prejudgment interest. The Employees, on the other hand, argue that the trial court's October 30, 1997, judgment clearly required the State to pay prejudgment interest on the award of backpay and that the State cannot now collaterally challenge that judgment, given that it has been affirmed by this Court and that in the prior appeal the State failed to raise the issue of prejudgment interest. A trial court has inherent authority to interpret, clarify, and enforce its own final judgments. See Helms v. Helms' Kennels, Inc., 646 So. 2d 1343, 1347 (Ala. 1994) ("a trial court does have residual jurisdiction or authority to take certain actions necessary to enforce or interpret a final judgment"); Gild v. Holmes, 680 So. 2d 326, 329 (Ala.Civ.App.1996) ("A trial court possesses an inherent power over its own judgments that authorizes it to interpret, clarify, implement, or enforce those judgments."). Thus, even after this Court, on the direct appeal, affirmed the trial court's October 30, 1997, judgment, that court retained jurisdiction to interpret and clarify that judgment. Courts are to construe judgments as they construe written contracts, applying the same rules of construction they apply to written contracts. See Hanson v. Hearn, 521 So. 2d 953, 954 (Ala. 1988). Whether a judgment is ambiguous is a question of law to be determined by the court. See Chapman v. Chapman, 634 So. 2d 1024, 1025 (Ala.Civ.App.1994); Grizzell v. Grizzell, 583 So. 2d 1349, 1350 (Ala. Civ.App.1991). If the terms of a judgment are not ambiguous, then they must be given their usual and ordinary meaning and their "legal effect must be declared in the light of the literal meaning of the language used" in the judgment. Wise v. Watson, 286 Ala. 22, 27, 236 So. 2d 681, 686 (1970); see Moore v. Graham, 590 So. 2d 293, 295 (Ala.Civ.App.1991). However, if a term in a trial court's judgment is ambiguous, then the trial court's interpretation of *425 that term "is accorded a heavy presumption of correctness and will not be disturbed unless it is palpably erroneous." Chapman, 634 So. 2d at 1025. We conclude that the phrase "with interest," as used in the trial court's judgment of October 30, 1997, is ambiguous because it is susceptible to more than one reasonable interpretation. See Homes of Legend, Inc. v. McCollough, 776 So. 2d 741 (Ala.2000). The phrase could mean only postjudgment interest, see Mixer v. Mixer, 2 Cal. App. 227, 231, 83 P. 273, 274 (1905) (holding that in a money judgment the phrase "with interest thereon" is "to be construed as legal interest from the date of [the judgment's] rendition"); it could mean only prejudgment interest; or it could mean both prejudgment and postjudgment interest, see McNickle v. Bankers Life & Cas. Co., 888 F.2d 678, 681 (10th Cir.1989) (stating that the term "interest," as used in a request in the plaintiffs complaint, "encompasses all interest, both preand post-judgment").[3] In its September 27, 1999, order, the trial court stated that the October 30, 1997, judgment did not include prejudgment interest. We conclude that the trial court's September 27, 1999, interpretation of its own October 30, 1997, judgment was not palpably erroneous, because that interpretation is the only interpretation consistent with Ala.Code 1975, § 8-8-8. See Womack v. Womack, 307 Ark. 269, 270, 818 S.W.2d 958, 959 (1991) (holding that in construing ambiguous terms in a judgment a court will presume them to conform with statutory law). Section 8-8-8 provides that "[a]ll contracts, express or implied, for the payment of money, or other thing, or for the performance of any act or duty bear interest from the day such money, or thing ... should have been paid, or such act ... performed." (Emphasis added.) The Employees did not allege any breach-of-contract theories in their complaint. Claims arising out of the employment relationship between a government entity and its employees are not contract claims. See City of Anniston v. Douglas, 250 Ala. 367, 371, 34 So. 2d 467, 470-71 (1948) (holding that claims arising out of the employment relationship between a municipality and its employee are not contract claims because a city employee's salary is "an amount due and owing by virtue of law, and not by contract"); see also Whitlow v. City of Birmingham, 689 So. 2d 107, 109 (Ala.Civ. App.1996) (holding that "§ 8-8-8 is limited strictly to contract actions and ... does not apply to awards of backpay for municipal employees"). Therefore, under the facts of this case, we conclude that the Employees were not entitled to an award of prejudgment interest under Ala.Code 1975, § 8-8-8. Because the Employees were not entitled to prejudgment interest, we will presume that the trial court meant only postjudgment interest when it used the term "with interest" in its October 30, 1997, judgment. *426 Accordingly, we conclude that the trial court erred in granting the Employees' motion to alter, amend, or vacate its September 27, 1999, order. The trial court erred because a trial court lacks the authority, after a judgment has been affirmed on appeal, to alter or amend that judgment by adding an award of prejudgment interest.[4] See McArthur v. Dane, 61 Ala. 539 (1878); Ryan v. Ryan, 268 Ala. 490, 492, 108 So. 2d 340, 342 (1959). Therefore, based on Ala.Code 1975, § 8-8-8, we reverse the trial court's order awarding the Employees prejudgment interest. We remand the case for the trial court to enter an order consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, and BROWN, JJ., concur. JOHNSTONE and ENGLAND, JJ., dissent. JOHNSTONE, Justice (dissenting). I respectfully dissent. After the affirmance by this Court of the October 30, 1997, trial court judgment became final, that judgment became the law of the case. That judgment unequivocally ordered the State to pay the employees interest on their backpay and back retirement benefits. The judgment did not in any way distinguish between prejudgment and postjudgment interest. No aspect of the order suggests that the parties or the trial court contemplated any such distinction. The order left nothing to interpret or to clarify on this issue under any guise or procedure. This final judgment could not be revisited, much less altered or amended, by the trial court or, derivatively, by this Court. Thus the doctrine of res judicata requires that we affirm the order presently before us enforcing the employees' already adjudicated right to the prejudgment interest. [1] Two of the Employees are now deceased and are represented by their personal representatives. [2] After the Employees brought their action, the Legislature repealed § 40-2-24, effective May 16, 1996. [3] In McNickle, the district court entered a judgment awarding the plaintiffs money damages "with interest thereon as provided by law." See 888 F.2d at 679-80. The United States Court of Appeals for the Tenth Circuit affirmed that judgment on direct appeal. After that, the plaintiffs filed a motion pursuant to Fed.R.Civ.P. 60(a) seeking an award of prejudgment interest. The district court denied the plaintiffs' Rule 60(a) motion. The Tenth Circuit reversed. It held that "[i]f a court's judgment states that interest is to be `according to law' but the rate is not specified, the court may specify, in response to a Rule 60(a) motion, the appropriate rate at any time." McNickle, 888 F.2d at 682. The Tenth Circuit reasoned that the district court had intended to award interest as provided by law and that under the applicable state interest statute, prejudgment interest was mandatory. See id. [4] A court does have authority under Rule 60(a), Ala. R. Civ. P., to correct an omission of prejudgment interest from a judgment where it had intended to award prejudgment interest but failed to do so when it entered its judgment, or where the judgment failed to include prejudgment interest that is mandated by law. See Paddington Partners v. Bouchard, 34 F.3d 1132, 1141, 1144 (2d Cir.1994) Klingman v. Levinson, 877 F.2d 1357, 1361 (7th Cir.1989); McNickle v. Bankers Life & Cas. Co., 888 F.2d 678, 682 (10th Cir.1989); Frigitemp Corp. v. Lefrak, 781 F.2d 324, 327 (2d Cir.1986); Frederick v. Mobil Oil Corp., 765 F.2d 442, 450 (5th Cir.1985); Lee v. Joseph E. Seagram & Sons, Inc., 592 F.2d 39, 40, 42-44 & n. 4 (2d cir.1979); Morgan Guar. Trust Co. v. Third Nat'l Bank, 545 F.2d 758, 759 (1st Cir.1976); Warner v. City of Bay St. Louis, 526 F.2d 1211, 1212-13 & n. 4 (5th Cir.1976); see also 11 Charles Alan Wright et al., Federal Practice and Procedure § 2817 (2d ed. 1995) ("It has been held that a motion for amendment of the judgment to include prejudgment interest is under Rule 60(a), and is not subject to the time limit of Rule 59(e), if the party is entitled to interest as a matter of right, but that if allowance of prejudgment interest is in the discretion of the court then the [time] limit of Rule 59(e) applies."); id. § 2854, at 245-46 ("The judgment may be corrected by including interest if this is a matter of right but not if allowing interest is discretionary."); 12 James Wm. Moore et al., Moore's Federal Practice § 60.11[2][b] (3d ed.1997). But see Ostermeck v. Ernst & Whinney, 489 U.S. 169, 176 n. 3 & 177, 109 S. Ct. 987, 103 L. Ed. 2d 146 (1989) (holding "that a postjudgment motion for discretionary prejudgment interest is a Rule 59(e) motion" and noting in dictum that "the result should [not] be different where prejudgment interest is available as a matter of right"); accord Capstick v. Allstate Ins. Co., 998 F.2d 810, 812-13 (10th Cir. 1993); Keith v. Truck Stops Corp. of America, 909 F.2d 743, 746 (3d Cir.1990).

December 29, 2000

d7ba598a-d5a0-4648-a99e-d1f1b820c038

Joiner v. Medical Center East, Inc.

709 So. 2d 1209

1961838

Alabama

Alabama Supreme Court

709 So. 2d 1209 (1998) Frank D. JOINER and Avis C. Joiner, v. MEDICAL CENTER EAST, INC. 1961838. Supreme Court of Alabama. January 30, 1998. M. Clay Ragsdale and E. Ansel Strickland of Law Offices of M. Clay Ragsdale, Birmingham, for appellants Sid J. Trant and Richard L. Sharff, Jr., of Bradley, Arant, Rose & White, L.L.P., Birmingham, for appellee. HOUSTON, Justice. The plaintiffs, Frank D. Joiner and his wife, Avis C. Joiner, appeal from a summary judgment for the defendant, Medical Center East, Inc., in this action seeking equitable relief and damages based on allegations of negligence, wantonness, breach of contract, fraudulent suppression, and slander of title, arising out of a hospital lien filed by Medical Center East against the proceeds of a liability insurance settlement. We hold that the lien filed by Medical Center East against the settlement proceeds was valid and enforceable because Medical Center East had the right under applicable federal law to obtain full payment of its charges from those proceeds; therefore, because each of the plaintiffs' claims presupposes the invalidity of the lien, we affirm the summary judgment. The pertinent facts are undisputed: The Joiners were injured in an automobile accident on May 31, 1994. The driver of the other automobile involved in the accident had liability insurance coverage. Frank Joiner was admitted to Medical Center East for treatment on the day of the accident; he was discharged on June 4, 1994. Medical Center East is an approved Medicare health services provider and Frank Joiner was, at the time of his admission and treatment, Medicare eligible. Although Frank Joiner was eligible *1210 to have his $14,778.76 hospital bill paid by Medicare, Medical Center East elected to forgo billing Medicare and, instead, filed a lien on June 29, 1994, pursuant to Ala.Code 1975, § 35-11-370 et seq., against the proceeds of any settlement that Joiner might enter into with the liability insurer of the driver of the other automobile. The amount that Medical Center East sought to recover by virtue of its lien ($14,778.76) was in excess of the amount it had agreed to accept as payment from Medicare under its provider agreement. On or about February 28, 1995, 269 days after he had been discharged from the hospital, Frank Joiner settled with the other driver's liability insurer for $50,000. Joiner requested that Medical Center East withdraw its lien and that it accept payment in full from Medicare. Medical Center East refused this request. The Joiners then filed this action and later paid into the court the liability insurance proceeds that were the subject of the lien. The trial court stated in its judgment that it considered the dispositive issue to be whether Medical Center East had a valid lien against $14,778.76 of the proceeds recovered by Frank Joiner pursuant to his settlement with the other driver's liability insurer. Without addressing any of the other arguments made by Medical Center East in support of the summary judgment motion, the trial court, concluding that Medical Center East had a legal right to receive payment in full from the proceeds of Frank Joiner's settlement, held the lien to be valid. Thus, the trial court entered a summary judgment for Medical Center East and ordered disbursement of the $14,778.76 that had been paid into the court. The Joiners appealed.[1] Our decision in this case hinges upon our resolution of a pure question of law whether Medical Center East had the right under federal law to obtain full payment for Frank Joiner's medical treatment from the proceeds of his settlement with the liability insurer. If Medical Center East had that right, then the lien that it filed against the proceeds of Joiner's liability insurance settlement was valid and the summary judgment was proper. See Rule 56, Ala.R.Civ.P. If, on the other hand, Medical Center East did not have the right to obtain full payment for Frank Joiner's medical treatment from the proceeds of his settlement, then the lien was not valid and the summary judgment is due to be reversed. In support of its judgment, Medical Center East contends, and the trial court held, that Congress has made Medicare a secondary payer when proceeds covering a beneficiary's medical bill are due from a thirdparty tortfeasor's liability insurer. Relying primarily on Oregon Ass'n of Hospitals v. Bowen, 708 F. Supp. 1135 (D.Or.1989), and American Hospital Ass'n v. Sullivan (D.D.C., May 24, 1990, No. Civ.88-2027) (not reported in F.Supp.), 1990 WL 274639, Medical Center East argues that a Medicareapproved health services provider has the right under federal law to elect to file a lien under state law against liability insurance proceeds owing to the beneficiary for medical services provided to the beneficiary. According to Medical Center East, Congress changed Medicare from a primary payer to a secondary payer when liability insurance is available, in an attempt to shift financial responsibility for a beneficiary's medical treatment from Medicare to the party responsible for the beneficiary's injuries. This change in the law, according to Medical Center East, was intended to reduce Medicare's costs. The Joiners concede that Congress changed the law so as to make Medicare a secondary payer. They argue, however, that that change provided only for Medicare to become a secondary payer under certain limited circumstances. Relying, in part, on what they characterize as the clear language of 42 U.S.C. § 1395y(b)(2)(A) and 42 C.F.R. § 411.50(b), as well as on Bowen and Sullivan, *1211 supra, the Joiners argue that Medical Center East lost its statutory authorization to obtain payment from Mr. Joiner's settlement because, the Joiners argue, that settlement was not made "promptly" (i.e., within 120 days of Frank Joiner's discharge from the hospital), as a matter of federal law. After carefully examining the record and after considering the arguments of the parties, we conclude that Medical Center East has correctly interpreted federal law. In Sullivan, supra, one of the two cases primarily relied on by both sides here, the United States District Court for the District of Columbia was concerned with the validity of a regulation promulgated by the Secretary of the United States Department of Health and Human Services, the federal agency charged with administering the Medicare program established by Congress, and the administrator of the Health Care Financing Administration, which administers aspects of the Medicare program relevant to this case. The question presented in Sullivan was whether that regulation, which prohibited health-care providers from accepting payment from a liability insurer for a beneficiary's medical treatment, conflicted with congressional intent. The Sullivan court struck down the regulation. Because we find that case to be both informative and instructive, we quote from it extensively: (Emphasis in original.) As Sullivan illustrates, Congress originally intended for Medicare to be the primary payer for hospital and medical services provided to a Medicare beneficiary. The statutory framework even today envisions that when a health services provider bills Medicare, it agrees to accept the amount that Medicare will pay, and that once Medicare is billed a Medicare beneficiary will not be charged, either directly or indirectly, for items or services that the beneficiary is entitled to have paid. Of course, when Medicare pays, it becomes subrogated to the rights of the beneficiary and it may seek reimbursement from a beneficiary's settlement with a liability insurer. 42 U.S.C. § 1395y(b)(2)(B). However, as the Sullivan court recognized, a statutory exception to Medicare's primary payer status is found in the "secondary payer" provision, set out in 42 U.S.C. § 1395y(b)(2)(A). That provision provides, in pertinent part, that payment for a beneficiary's medical treatment cannot be made by Medicare "with respect to any item or service to the extent that ... payment has been made or can reasonably be expected to be made promptly (as determined in accordance with regulations) ... under an automobile or liability insurance policy or plan (including a self insurance plan) or under no fault insurance." Thus, by virtue of the "secondary payer" exception, Congress has provided the statutory means by which a health services provider, which has provided medical treatment to a Medicare beneficiary, may obtain payment from a beneficiary's liability insurance proceeds, instead of from Medicare. The effect of the "secondary payer" provision is to force a health services provider to look to a liability insurer for payment, instead of to Medicare, when payment from a liability insurer "has been made or can reasonably be expected to be made promptly (as determined in accordance with regulations)." 42 C.F.R. § 411.50, defines "prompt or promptly" as follows: The Sullivan court made it very clear that the Department of Health and Human Services and the Health Care and Financing Administration could not, by regulation, effectively write the "secondary payer" exception out of the statute and thereby prohibit recovery from a beneficiary's liability insurance proceeds. The Joiners do not take issue with Sullivan on this point; they argue, instead, that if the definition set out in 42 C.F.R. § 411.50 is plugged into the statute (§ 1395y(b)(2)(A)), and applied under the facts of the present case, then the "secondary payer" exception is not available to Medical Center East because payment from the liability insurer was not made "promptly." In this respect, the Joiners argue, it makes no difference that Medical Center East promptly filed its lien on June 29, 1994, against any potential liability insurance payment. According to the Joiners, the statute required that the liability insurance payment either be made within 120 days from June 4, 1994 (the day of Joiner's discharge) or that the payment be reasonably expected to be made within 120 days from the day of discharge. Therefore, under the Joiners' interpretation of the statute, once the 120-day deadline for payment from the liability insurer had *1218 passed, any payment thereafter could not have been prompt, and could not reasonably have been expected to be prompt, as a matter of federal law. Therefore, the Joiners argue, after the 120-day period had passed, Frank Joiner was once again "covered" by Medicare and "entitled" to have Medicare pay his bill in accordance with its provider agreement with Medical Center East. As was noted in Sullivan, courts must give great deference to a federal agency's interpretation of its controlling statute. If the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute, that is, whether the agency's construction is natural and consistent with the statute. Although the "secondary payer" provision clearly prohibits a health services provider from billing Medicare when "payment has been made or can reasonably be expected to be made promptly" by a liability insurer, as "promptly" is defined in 42 C.F.R. § 411.50, the statute is not as clear as to whether a health services provider can continue to pursue full payment for its charges from a liability insurance settlement after the expiration of the 120-day period set out in § 411.50. We note that the Department of Health and Human Services at one point interpreted the statute as the Joiners contendto prohibit a health services provider from pursuing liability insurance proceeds after the expiration of the 120-day period. See 42 C.F.R. § 411.54, which, in pertinent part, provides: (Emphasis added.) See, also, 42 C.F.R. § 489.20, which provides in part: (Emphasis added.) The emphasized portions of these regulations were apparently promulgated in response to the Bowen decision in Oregon. Although these regulations presently appear in the Code of Federal Regulations, the Department of Health and Human Services changed its interpretation of the statute after Sullivan. On November 13, 1991, Medicare's Associate Regional Administrator, Richard L. Warren, sent a letter to all "Part A & B Medicare Contractors" that stated, in pertinent part, as follows: (Emphasis in original.) On March 12, 1996, the Health Care Financing Administration, through Thomas E. Hoyer, its director of the Office of Chronic Care and Insurance Policy, sent an interdepartmental memorandum to all of its associate regional Medicare administrators, explaining the proper procedure to be followed when liability insurance is available to pay for a beneficiary's medical treatment. That memorandum, which was distributed on April 23, 1996, to all "Region IV Medicare Contractors" by Medicare's associate regional administrator, George F. Jacobs, read in pertinent part as follows: (Emphasis in original.) The August 21, 1995, memorandum referred to in the March 12, 1996, memorandum stated: The interpretation that has now been placed on the statute by the Health Care Financing Administration, on behalf of the Department of Health and Human Services, is entirely permissible and is consistent with congressional intentto cut Medicare's costsand, we conclude, it is due to be followed in this instance. For this reason, we hold that Medical Center East had the right under federal law to obtain full payment of its charges from the proceeds of Frank Joiner's settlement, even though that settlement was reached more than 120 days after Joiner's discharge from the hospital. Therefore, the trial court did not err in holding that Medical Center East had a valid and enforceable lien. We further note the Joiners' argument that Medical Center East did not file a proper request to have the trial court disburse the $14,778.76, and that it did not prove that those charges were reasonable, as required under § 35-11-370. However, the record indicates that Medical Center East made a request for disbursement in its brief in support of its summary judgment motion and that it made a prima facie showing that its charges were reasonable by submitting its "Notice of Hospital Lien," wherein Paul Burchfield, the director of patient accounts for Medical Center East, stated under oath that the claimed charges were reasonable. Because the Joiners presented no evidence to rebut that prima facie showing, we see no *1222 error on the part of the trial court in disbursing the funds. For the foregoing reasons, the summary judgment is affirmed. AFFIRMED. HOOPER, C.J., and MADDOX, SHORES, KENNEDY, COOK, BUTTS, and SEE, JJ., concur. [1] Avis Joiner was apparently not treated by Medical Center East. Medical Center East argues that "[b]ecause there is no allegation that [it] treated Ms. Joiner, or had any express or implied agreement with her, she has no claim, direct or indirect, against [it], regardless of the validity of the Joiners' arguments about Medicare's rules." In light of our holding, we pretermit consideration of any other grounds upon which a summary judgment might be proper with respect to Avis Joiner.

January 30, 1998

f288ba6f-266e-495c-9d7e-f5cbd5a83730

Ex Parte Barksdale

788 So. 2d 915

1992230

Alabama

Alabama Supreme Court

788 So. 2d 915 (2000) Ex parte Tony BARKSDALE. (In re Tony Barksdale v. State of Alabama). 1992230. Supreme Court of Alabama. December 15, 2000. Mark Allen Treadwell III of Oliver & Sims, Dadeville, for petitioner. Bill Pryor, atty. gen., and A. Vernon Barnett IV, asst. atty. gen., for respondent. Prior report: Ala.Cr.App., 788 So. 2d 898. HOUSTON, Justice. The petition for the writ of certiorari is denied. Our denial of the petition should not be taken as an approval of all the statements in the Court of Criminal Appeals' opinion. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973). WRIT DENIED. HOOPER, C.J., and MADDOX, COOK, SEE, LYONS, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., dissents. JOHNSTONE, Justice (dissenting). I respectfully submit that we should grant certiorari review to determine whether the trial court erred and the Court of Criminal Appeals erred in finding and holding that the "cruel, heinous, or atrocious" aggravating circumstance, as defined by statute and caselaw, applied in this case. The evidence is that the defendant inflicted two nine-millimeter pistol shot wounds upon the victim within seconds of one another. While the Court of Criminal Appeals says that the victim suffered for four and a half hours, the evidence apparent from the opinion of the Court of Criminal Appeals, as well as from the defendant-petitioner's statement of facts, suggests that most of this time transpired after the defendant shot the victim, pushed her out of the car, and left the scene. Such a murder does not meet the criteria for the "cruel, heinous, or atrocious" aggravating circumstance. Even the Court of Criminal Appeals acknowledges that, *916 Barksdale v. State, 788 So. 2d 898, 908 (Ala.Crim.App.2000). Likewise, the Court of Criminal Appeals, 788 So. 2d at 907, cites Ex parte Kyzer, 399 So. 2d 330, 334 (Ala. 1981), for the proposition that this aggravating circumstance applies only to murders that are "unnecessarily torturous." Inexplicably, however, describing the murder in the instant case in a way that meets neither criterion, the Court of Criminal Appeals concludes that the aggravating circumstance applies. We also would do well to review the trial judge's charge on lesser included offenses. This case went to the jury on two charges in the indictment: robbery-murder and murder of a victim inside a vehicle. The trial judge addressed the lesser included offenses of the second charge in these words: Barksdale, 788 So. 2d at 906 (emphasis added). The Court of Criminal Appeals implies that this instruction tells the jurors to consider the same lesser included offenses for the second charge as they were instructed to consider for the first charge. Several of the statements in this instruction, however, say or imply the diametric opposite. The most notable such statement is, "I'm not asking you to do it twice." While I dissent from the denial of certiorari review, I agree with the statement that the "denial of the petition should not be taken as an approval of all the statements in the Court of Criminal Appeals' opinion." That opinion contains obvious errors. Discussing the trial judge's refusal of the defendant's requested jury charges on accidental killing, the Court of Criminal Appeals writes: Barksdale, 788 So. 2d at 906. The pertinent problem with both of the requested charges is that they "would [not] have allowed the jury to find the appellant guilty of lesser included offenses." (Emphasis added.) The Court of Criminal Appeals has apparently inadvertently omitted the word not from its rationale. While the evidence supported the consideration of lesser included offenses for both pertinent counts of the indictment and, indeed, the trial court duly submitted lesser included offenses to the jury for its consideration, the requested jury instructions, as written and quoted in the opinion of the Court of Criminal Appeals, state, in essence, that, if the jury found that the shots were accidentally fired, then the jury "must find the defendant not guilty," 788 So. 2d at 906, when correct instructions on this point would have concluded that the jury must proceed to consider the lesser included offenses, such as robbery.

December 15, 2000

a5d63996-1a0b-4079-8669-419615e317d3

Cooper & Co., Inc. v. Lester

832 So. 2d 628

1981368

Alabama

Alabama Supreme Court

832 So. 2d 628 (2000) COOPER & COMPANY, INC., d/b/a The Prudential Cooper & Company; et al. v. James LESTER et al. 1981368. Supreme Court of Alabama. December 22, 2000. Rehearing Denied December 7, 2001. *629 Edward G. Bowron, H. William Wasden, and J. Robert Turnipseed of Pierce, Ledyard, Latta & Wasden, P.C., Mobile, for appellants. Edward G. Hawkins and Ray M. Thompson of Hawkins & Thompson, L.L.C., Mobile, for appellees. JOHNSTONE, Justice. Four couples sued the defendants-appellants for frauds in the sales of four homes to the respective couples, who alleged that the defendants misrepresented or suppressed an existing flood hazard, that the couples consequently bought the homes, and that floods damaged the homes. From judgments on verdicts in favor of the plaintiff couples, the defendants-appellants appeal; and we affirm, conditioned on the plaintiffs' accepting certain remittiturs. The plaintiffs, Jeffrey Scott Willis and Sandra Willis; Stacy L. Sergeant and Laura E. Sergeant; Leslie Dwayne Woodham *630 and Nan A. Woodham; and James W. Lester and Sandra L. Lester, are the four couples who bought homes in the Sunchase subdivision. After experiencing major flooding of their homes, the plaintiffs sued Cooper & Company, Inc., d/b/a The Prudential Cooper & Company; Lloyd A. Botsford; Jordan R. Cooper; E.W. Brewer; E.W. Brewer Quality Homes; John E. Turberville; Turberville Construction, Inc.; Fred M. Smith; Fred Smith & Company, Inc.; Mikell D. Speaks; and Mikell D. Speaks & Associates Consulting Engineers, Inc. The plaintiffs alleged that the defendants either misrepresented or suppressed (or both) material facts about storm water flooding from Turkey Creek when the plaintiffs purchased their homes in the Sunchase subdivision. Before trial, the plaintiffs entered a pro tanto settlement with defendants Fred M. Smith, Fred Smith & Company, Inc., Mikell D. Speaks, and Mikell D. Speaks & Associates Consulting Engineers, Inc., and dismissed their claims against these defendants. The case against the remaining defendants was tried to a jury in December 1998. The jury found for the plaintiffs and variously against Botsford, Cooper, and Cooper & Company. The jury found no liability on the parts of defendants John E. Turberville, Turberville Construction, Inc., E.W. Brewer, or E.W. Brewer Quality Homes. The verdicts were as follows: Cooper, Botsford, and Cooper & Company moved for a new trial or, in the alternative, for a remittitur. After a hearing on the motions, the trial judge issued his order upholding the jury's verdicts. The trial judge made the following findings of fact in his Hammond[1] Order: "The plaintiffs alleged and proved that three separate incidents caused Cooper & Company, Lloyd Botsford, and Jordan Cooper (the Cooper defendants) to know about the storm water flooding problems in Sunchase prior to the relevant sales to the four sets of plaintiffs. First, on September 3, 1993, Lloyd Botsford witnessed a flood in the backyard of Lot 18 during the final walk-through inspection on a sale brokered by Cooper & Company to Chris Clements. Mr. Clements testified that a flood occurred at the *631 time of the inspection and that the water level was well above the base of several landscaped trees (see Plaintiffs' Exhibit 73). Though Mr. Botsford denied witnessing such a flood, the photograph introduced in evidence refuted the veracity of his testimony. (Emphasis added.) On appeal, the defendants claim that the trial court erred in granting the plaintiffs' motion in limine to exclude the preclosing inspection forms executed by "the Willis, Woodham, and Lester plaintiffs," that the trial court erred in excusing two jurors without sufficient cause, and that the trial court prejudiced the defendants in questioning defendant Eric Brewer. Next, they claim that the trial court erred in submitting to the jury: (1) the Lesters' fraudulent misrepresentation claim against Botsford and Cooper & Company; (2) the Lesters' fraudulent suppression claims against Lloyd Botsford and Cooper & Company; (3) the Willises' fraudulent suppression claim against Jordan Cooper and Cooper & Company; and (4) the Sergeants' fraudulent suppression claim against Cooper & Company. The defendants claim also that the trial court gave erroneous instructions on fraudulent suppression. They claim further that the verdicts are inconsistent as a matter of law. Last, the defendants argue that the trial court erred in refusing to the remit the punitive damages awarded to the plaintiffs and that the trial court erred in failing to offset the verdicts with the pro tanto settlements entered between the plaintiffs and codefendants Fred Smith & Company, Mikell Speaks & Associates, and Mr. Smith and Mr. Speaks themselves. The defendants do not challenge any of the compensatory damages awards for excessiveness. The defendants argue that the trial court erred in granting the plaintiffs' motion in limine and in excluding the pre-inspection indemnity agreements signed by the Willis, Woodham, and Lester couples. The defendants complain that the trial judge erred both in granting the plaintiffs' motion in limine and in sustaining the plaintiffs' objections at trial. The defendants-appellants, however, have failed to include the excluded exhibits in the record on appeal. Thus, we cannot determine whether the exhibits would have made any difference even if the rulings by the trial court were erroneous. The duty is on the appellants to include in the record on appeal those materials necessary for valid review. See Coleman v. Taber, 572 So. 2d 399 (Ala.1990), Trimble v. City of Prichard, 438 So. 2d 745 (Ala.1983), and *633 Elliott v. State ex rel. Outlin, 547 So. 2d 566 (Ala.Civ.App.1989). The defendants next argue that the trial judge erred in excusing two jurors challenged for cause by the plaintiffs. Because a trial judge has broad discretion in sustaining or denying a challenge of a juror for cause, his decision is given great weight and will not be disturbed on appeal unless it is clearly erroneous and equivalent to an abuse of discretion. Roberts v. Hutchins, 613 So. 2d 348 (Ala.1993). The record reflects that, on the plaintiffs' challenges for cause, the trial judge excused Juror 11, an insurance agent who represented the two insurance companies that insured the defendants in this case, and excused Juror 26, a former-real estate broker for Cooper & Company who had appraised homes in the Sunchase subdivision. The defendants have failed to show an abuse of discretion by the trial court. The defendants contend that the trial court erred in submitting the Lesters' fraudulent misrepresentation claim to the jury. They argue that the statements made by defendant Botsford to plaintiff James Lester constituted an opinion or a prediction of a future event, not a misrepresentation of fact. "Whether a given representation is an expression of opinion or a statement of fact depends upon all the circumstances of the particular case, such as the form and subject matter of the representation and the knowledge, intelligence and relation of the respective parties." Executive Dev., Inc. v. Smith, 557 So. 2d 1231, 1233 (Ala.1990) (quoting earlier cases). Classifying a defendant's statement as an opinion is not necessarily fatal to a plaintiff's claim for fraud: "... Whether a fraudulent intent has been proven is a matter peculiarly within the province of the jury, where there *634 is evidence of such an intent. State Farm Mut. Auto. Ins. Co. v. Borden, 371 So. 2d 28 (Ala.1979); Southeastern Properties, Inc. v. Lee, 368 So. 2d 288, on remand, 368 So. 2d 289 (Ala.Civ.App. 1979)." Reynolds v. Mitchell, 529 So. 2d 227, 231 (Ala.1988). The record reflects that a dry creek bed for a tributary of Turkey Creek runs along the back of the lots on which the plaintiffs' homes were built in the Sunchase subdivision. Each plaintiff couple suffered three or four floods between the time the couple bought their home and the time the couple filed suit. Plaintiff James Lester testified that in January 1994 he and his wife Sandy visited the Sunchase subdivision and noticed "open house signs." He stated that they then walked through one of the "open houses." James Lester noticed that the front and side yards of the open house had been sodded but that the backyard had not been sodded. Although James Lester did not walk in the backyard, he noticed that the backyard area was "kind of wooded and trees and brushy and those kudzu and weeds and stuff." As the Lesters walked through the open house, defendant Botsford, a one-sixth owner of Cooper & Company, approached them and visited with them for "twenty minutes." The Lesters told Botsford that the house suited them. As the Lesters and Botsford were discussing items in the house that needed to be completed, they walked out onto the back patio, where James Lester asked Botsford about the drainage of rainwater falling from the roof onto the patio and washing away dirt at the edge of the patio. In this discussion, James Lester asked Botsford "if there was a problem with water." Botsford responded, "[N]o, there shouldn't be a problem." James Lester then asked Botsford, "if there was ever a problem with water," to which Botsford replied, "there is a fifteen-foot easement back there that should handle the water." Relying on Botsford's statement that the easement should handle the drainage of rainwater, the Lesters purchased the house on lot 17. The following facts support the jury's conclusion that Botsford intentionally misrepresented the ability of the easement to handle the drainage of rainwater from the Sunchase subdivision. In September 1993, Botsford had been questioned about flooding by Chris Clements, a prospective purchaser of the house on lot 18, on the south side of the Lesters' house. Clements had noticed the "ponding" of water that extended to a tree by the driveway close to the house. He specifically asked Botsford about flooding. Botsford told Clements that the flooding would subside "as more houses were built and the land was more developed." Relying on Botsford's representation, Clements purchased the house on lot 18. In December 1993, Botsford tried to sell the house on lot 17, the lot that the Lesters subsequently purchased, to Keith Bryant. During a visit to lot 17, Bryant observed a "pond" in the backyard that extended approximately 40 feet toward the house. Bryant demanded a written assurance from the developer that the "swale" in the backyard would work. When he did not receive such an assurance, Bryant purchased a house and lot across the street from lot 17 and the plaintiffs' homes, on the high side of the Sunchase subdivision. Although Botsford's statements to the Lesters can be characterized as opinions, Botsford had knowledge of flooding of lot 17 and the other lots bordering the 15-foot easement, a material fact, not known to the Lesters or the builder of the Lesters' house. The Lesters presented substantial evidence from which the jury could have concluded that Botsford gave *635 his opinion with the intent to deceive and that the Lesters' reliance on his opinion was reasonable. See Reynolds, supra. Therefore, the trial court did not err in submitting the Lesters' fraudulent misrepresentation claim to the jury. Id. The defendants argue that the trial judge erred in questioning Eric Brewer, a defendant and a witness. The record reflects that the trial judge gave the jury the following curative instruction before questioning Brewer: The trial judge then asked Brewer a question. The next morning the trial judge gave the following additional curative instruction: The judge then asked: "Is there anyone who cannot disregard both the question and the answer?" No juror responded. The defendants neither requested a further curative instruction nor moved for a mistrial. A judge has a right to propound questions to witnesses as may be necessary to elicit certain facts, if he or she deems it necessary to elicit proper evidence bearing on the issues. Rice v. Hill, 278 Ala. 342, 178 So. 2d 168 (1965). Dean Gamble notes that the case of Affiliated FM Ins. Co. v. Stephens Enterprises, 641 So. 2d 780 (Ala.1994), suggests that any inappropriateness in a trial judge's questioning may be lessened by a curative instruction informing the jury that the judge has no feelings about the case. Charles W. Gamble, McElroy's Alabama Evidence § 121.04(2), n. 7. (5th ed.1996). This trial judge gave the proper curative instruction and did not abuse his discretion in this case. The defendants claim that the trial court erred in submitting to the jury: (1) the Lesters' fraudulent suppression claims against Lloyd Botsford and Cooper & Company, (2) the Willises' fraudulent suppression claim against Jordan Cooper and Cooper & Company, and (3) the Sergeants' fraudulent suppression claim against Cooper & Company. The defendants claim also that the trial court gave erroneous instructions on fraudulent suppression. *636 The issue of fraudulent suppression is governed by State Farm Fire & Casualty Co. v. Owen, 729 So. 2d 834 (Ala.1999): "`The plaintiff contends that the defendant was guilty of a legal fraud because the defendant (concealed) (withheld) material facts from the plaintiff and without knowledge of such material facts the plaintiff acted to his injury. The defendant denies those allegations and, therefore, the burden is upon the plaintiff to reasonably satisfy you from the evidence of the truthfulness of each of the following claims: "`1. That the defendant (concealed) (withheld) material facts from the plaintiff to induce the plaintiff to act; and "`2. That without knowledge of such material facts the plaintiff acted to his injury. "`In determining whether the plaintiff has sustained the foregoing burden, you may consider the value of the particular fact(s) involved, any inequality of the condition of the parties, and whether the defendant has some particular knowledge or expertise not shared by the plaintiff.'" 729 So. 2d at 841-42. With regard to a seller or a seller's agent's duty to disclose defects in residential real estate, this Court has held: Roberts v. C & S Sovran Credit Corp., 621 So. 2d 1294, 1297 (Ala.1993) (citations omitted). "Suppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case." § 6-5-102, Ala.Code 1975. See also § 6-5-103 and § 6-5-104, Ala.Code 1975. In this case the plaintiffs purchased new homes directly from the builder of the homes. See Cochran v. Keeton, 287 Ala. 439, 252 So. 2d 313 (1971) (this Court abrogated the caveat emptor rule in sales of new residential real estate by a "builder-vendor"). Therefore, because each of the homes being sold was new, the abrogation of the caveat emptor rule strengthens the duty of a seller or a seller's agent to disclose defects affecting health and safety. Jordan Cooper, a profit-sharing employee of Cooper & Company, testified that, when he drove by the Sunchase subdivision, he noticed that the developer had *637 put up a sign advertising lots for sale. After several conversations with the developer, Cooper obtained "a listing" of the subdivision for Cooper & Company. Cooper recommended to the developer that the developer and Cooper & Company obtain four or five good builders to work in the subdivision. Each builder started with three lots on which to build houses. Cooper visited the Sunchase subdivision on a regular basis. On several occasions, he noticed water running across the backyards of the properties along the easement. Cooper testified: Cooper admitted that, when he was marketing the lots to the builders and to the plaintiffs, he knew: He acknowledged that the flooding of the plaintiffs' properties could affect their health and safety. Cooper admitted that, when the plaintiffs purchased their houses and lots, the plaintiffs would not have been able to see any problems with water in the easement overflowing into the backyards. He admitted further that neither he nor Botsford told any of the agents of Cooper & Company about the "potential water problems or water problems at Sunchase [subdivision]." Cooper stated also that Botsford never told him about any water problems at the Sunchase subdivision. Botsford testified that Jordan Cooper had a listing agreement with defendant Turberville, one of the builders in the Sunchase subdivision. Botsford stated that he had the listing agreement with defendant Brewer, another of the builders in the Sunchase subdivision. Botsford admitted that, in September 1993, during a final walk-through of the house on lot 18, he and the prospective purchaser Chris Clements noticed the "ponding" of water in the backyard. Botsford denied that the easement had flooded the backyard of lot 18. Clements testified that, at the time of the final walk-through of the house on lot 18, there was, in the backyard, rapidly flowing water extending to a tree by the driveway, well beyond the confines of the easement. When Clements asked Botsford about the flooding, Botsford told him that the flooding would subside "as more houses were built and the land was more developed," and that the flooding would subside as soon as the rest of the subdivision was landscaped. Lot 18 adjoins lot 17 on the south side of the Lesters' house and lot. In December 1993, Botsford tried to sell the house on lot 17 to Keith Bryant. Botsford admitted that Keith Bryant refused to purchase lot 17, but denied that Bryant refused to purchase the lot because the easement flooded the backyard during Bryant's inspection of the house and lot. Bryant testified that, while visiting the house on lot 17, he noticed dampness in the backyard and told Botsford he wanted to return to the property after it rained. Bryant revisited the property in December 1993 after a rain. He stated that he observed in the backyard a "pond" of water extending approximately 40 feet toward the house. Bryant then asked Botsford for a written assurance from the developer that "the berm" at the back of lot 17 worked. He testified that he did not receive *638 a written assurance from the developer or Botsford, so he bought a house on the high side of the subdivision across from lot 17 and the plaintiffs' other properties. In the fall of 1994, after the plaintiffs-Sergeants complained to Brewer about a "flooding defect," Brewer discussed the "flooding problems" with Botsford, Cooper, the developer, and the engineer for the subdivision. Botsford admitted that, even after witnessing the flooding or the "ponding" on lot 18 during the preclosing walk-through with Clements, Cooper & Company did not disclose on the multi-listing information any flooding or "water" problems in the Sunchase subdivision. He stated that the multi-listing information is for the use of real estate agents "so that all the agents have the information about the property." The foregoing facts establish that the defendants knew that the 15-foot easement contained a dry creek bed intended by the developer to drain rainwater from the subdivision and that the easement could not handle the rainwater draining from the subdivision. Further, it is undisputed that the defendants did not disclose the drainage problem to the individual builders or the plaintiffs. The Woodhams, Leslie and Nan, purchased their house and property on lot 15 on January 10, 1994. Robin Blake of Cooper & Company represented both the seller and the Woodhams in the sale of the property. The Woodhams did not ask about flooding before purchasing their property. However, the defendants do not contend that the trial court erred in submitting the Woodhams' fraudulent suppression claims to the jury. As previously stated in this opinion, before making the purchase agreement for lot 17, James Lester specifically asked Botsford "if there was a problem with water," and if there was ever a problem with water. Botsford replied, "[N]o, there shouldn't be a problem." Botsford never told the Lesters about the "ponding" that he had seen on Lot 17 in December 1993. During one of the numerous floods of the Lesters' property, the Lesters' 12-foot-by-12-foot utility shed containing a 900 to 1,000 pound riding lawn mower, tools, and some of James Lester's work files floated down the street and into the holding pond. James Lester had to return home from a job in Louisiana to have his utility building and riding lawn mower pulled out of the holding pond. During another flood, water overflowing from the easement damaged the framing and vinyl siding of the Lesters' carport. Additionally, water seeped under the vinyl siding and damaged the drywall under the vinyl siding. James Lester testified that the estimated cost of repair of the carport was between $1,100 and $1,200. Sandy Lester testified that Botsford did not tell her about a flooding problem before she and her husband purchased their house. Sandy testified that water from the easement travels from the backyard around both sides of the house to the front yard. She stated that water from the easement has reached the front door of her house and has transported debris to her front yard. In February 1994, plaintiffs Laura Sergeant and Stacy Sergeant drove to the Sunchase subdivision to look for a house. They drove to a house with an "open house" sign. They stopped and went inside the house, where Botsford greeted them. Botsford was wearing a "Prudential Cooper" badge. Botsford showed the Sergeants several lots and the house on lot 14. The Sergeants were interested in the house on lot 14. Botsford arranged for *639 the Sergeants to meet with the builder for lot 14, Eric Brewer. The next day, the Sergeants, Botsford, and Brewer met at the house on lot 14. They discussed the house plans, the square footage of the house, and the sales price of the house. Laura testified that she and Stacy were shown "a piece of paper showing the lot itself and there were two easements present on the lot." One easement was a five-foot utility easement on the front of the property. The second easement was "a ten-foot easement in the back that said drainage easement across it." Laura testified that, when she asked Botsford and Brewer the purpose of the drainage easement, either Botsford or Brewer told her that the purpose of the drainage easement "was to collect water that drained down our lot from rain to the back of the property rather than keeping it in the yard. And then the same way for all the homes on that side of the street." Laura stated that neither Botsford nor Brewer told her or Stacy that the lot would flood. She stated further that she and Stacy would not have bought the house on lot 14 had they known about the flooding problem. Laura testified that, when their property first flooded in September 1994, she, from the back porch, could hear the water rushing. Laura described the water as extremely swift with white foam, white water, and a sewage smell. The water moved so swiftly that it washed away big stumps. Laura said that, at times, after a rain, she and passersby could smell sewage in front of her home. She said that water extended beyond the easement to within four feet of the corner of her house and that the water was about two feet deep on most occasions. Laura stated that she and her husband wanted to erect a fence around their property. After the September 1994 flood, Laura telephoned Brewer about the flooding and about erecting a fence around her lot. Brewer referred her to Cooper & Company. Laura telephoned Jordan Cooper and asked him about erecting a fence around her property. Cooper told Laura that he would not recommend erecting a fence at that time because "[t]hey still hadn't cleared out lot sixteen. There was some kudzu in the back of the lot and ... when they finished building on that property that the problem should be gone." After watching their neighbors' fences rot and wash away during floods, the Sergeants decided not to erect a fence around their property. Laura stated that, after the water from a rain recedes from her backyard, she has noticed dead, smelly fish in her backyard. She has noticed that the dead, smelly fish attract cats to her backyard. Laura has noticed that, after a rain, frogs, too, are attracted to her backyard, where they lay eggs. Because puddles remain in the backyard, it takes days or weeks to dry out, and during this time the frog eggs hatch and grow into tadpoles. The tadpoles live for some time, until the sun dries up the puddles. The tadpoles then die and smell. Laura described the smell of her backyard after a rain as "[i]f you have left shrimp or whatever in the garbage can too long it kind of has a real foul odor and it smells like that and the grass smells that way." She further described her backyard as "like mush," so that a person cannot walk in the backyard without sinking into the ground. To avoid erosion, the Sergeants spread a load of topsoil in their backyard. Stacy Sergeant staked three railroad crossties with three-foot metal rods along the easement in the Sergeants' backyard. However, water from the easement washed away the railroad crossties. Stacy Sergeant then staked landscaping timbers two-high along the easement. Again, water from the *640 easement washed away several of the landscaping timbers. Plaintiff Sandy Willis testified that Hope Downing, a real estate agent with Cooper & Company, showed her and her husband Scott a house in the Breckenridge subdivision, where they did not buy. In December 1994 or January 1995, Downing telephoned Sandy and told her that Cooper & Company had some houses within the Willises' price range in the Sunchase subdivision. Sandy arranged to meet Downing the next day at the Sunchase subdivision. Sandy then telephoned Scott and asked him to go by the Sunchase subdivision and look at the houses. Scott brought home fliers of the homes for sale in the Sunchase subdivision. Sandy and Scott met Downing at the Sunchase subdivision, where they walked through a house. Sandy and Scott both testified that they did not see any evidence of flooding when they visited the house they eventually purchased. They did notice debris and a hump or a "berm" in the backyard. Sandy and Scott contracted with the builder, Turberville, to purchase the house on lot 16, which is between the lots owned by the Lester and Woodham families. They conditioned their purchase of the house upon Turberville's leveling the backyard and clearing trash from the backyard. Sandy and Scott attended a preclosing walk-through of the house. Cooper and Turberville were present at the preclosing walk-through. At that time, Sandy and Scott asked Turberville if he could lower the berm more because they wanted to erect a fence around the backyard. Turberville, with Cooper standing next to him, stated that he could not further lower the berm because the berm controlled the water. Sandy and Scott asked if there was a "water problem." Turberville stated that there was not a water problem. He explained how rainwater from the houses above their property in the Sunchase subdivision would drain in the easement. Sandy testified that Cooper agreed with Turberville's statements and said there "was not a water problem." Cooper did not tell the Willises at the preclosing walk-through about the easement. Likewise, Cooper did not tell them about the water that had flowed through their backyard. On January 26, 1995, the Willises closed their purchase on the house on lot 17. Sandy testified that she did not know about the 15-foot easement across her backyard until after she and Scott bought their house. Sandy and Scott erected a wooden fence around their property. However, they had to move the back fence forward several feet because fast-flowing rainwater had lifted and loosened the fence bottom. Even after Sandy and Scott moved the fence forward further into their backyard, fast-flowing water overflowed the easement, lifted the fence, and pulled boards off the fence. Eventually fast-flowing rainwater washed away the concrete anchors of the fence posts and, on one side of the property, moved the fence into the neighbors' yard. During a March 1995 flood, the water overflowing from the easement flowed halfway up in the Willises' backyard. Sandy stated that the water sounded like "a creek running." Further, according to Sandy, water ran through her backyard every day from November 1997 until January 1998. Every day from November 1997 until January 1998 the Willises' backyard smelled like a sewer or dead fish. In January 1998 water overflowed the easement again. As the water crept closer to the Willises' house, Sandy and Scott moved their cars up on a hill. The water circled the house and seeped in under the front door and the back door of the house. The water flooded the patio and washed away chairs, "boilers," a barbecue grill, *641 and a garbage can. The water filled the empty swimming pool. Sandy testified that, when her daughters went outside to get the "boilers," her daughters could have been washed away by the water. The Willises had a major clean-up after the water subsided. The Willises' property flooded still again one night in March 1998. Sandy videotaped the flood. Water seeped in under the back door of Willises' house and seeped into the back foyer. Sandy and her family used towels and blankets to keep the water from seeping into any other room. The easement overflowed next on July 26, 1998. Sandy again videotaped the flood. Sandy testified that the July 1998 flood was not bad, but that the creek was "out" of the easement and into her backyard. The easement next flooded on September 28, 1998. The jury viewed videotapes of the March 1998 and July 1998 floods. The trial judge's findings of fact and the evidence of record itself establish that defendant Botsford knew there was a flooding problem. Botsford had personally witnessed the flooding of lot 17 and he had lost a sale of lot 17 as a result of flooding just one month before the Lesters inquired about any "water problems" with that lot. All of the witnesses unanimously testified that the flooding defect was not apparent to the plaintiff purchasers. Moreover, during Sandy Willis's testimony, defense counsel conceded that Sandy Willis's testimony "goes to suppression ... suppression that, yes the allegation is we knew there was substantial floods before this and we didn't tell her, I agree, she cannot, `As is,' accept to something she was not told of." The trial court concluded that the flooding of the plaintiffs' property constituted a defect affecting health and safety. We agree that the swiftness of the water flowing in and out of the easement; the washing of fish, which died, and of other debris into the plaintiffs' yards; the attraction of frogs into the plaintiffs' backyards and the breeding of tadpoles and frogs which died there; and the strong smell of sewage or dead fish, constitute a defect affecting the health and safety of the plaintiffs. Further, it is undisputed that the plaintiffs did not know of, and could not have known of, the flooding defect. The plaintiffs presented substantial evidence that the defendants knew of and concealed the flooding defect. Thus, the trial court properly submitted the plaintiffs' fraudulent suppression claims to the jury. C & S Credit Corp. of Alabama, supra. Next, the defendants contend that they are entitled to a new trial on the ground that the trial judge gave erroneous instructions on fraudulent suppression. In reviewing the trial court's instruction to the jury, this Court reads and considers the entire charge as a whole. Baptist Mem'l Hosp. v. Bowen, 591 So. 2d 74 (Ala. 1991). There were four couples as plaintiffs, each with different claims. The trial judge took care to avoid confusion among the different claims. The trial judge dealt with the fraudulent suppression claim by adapting Alabama Pattern Jury Instruction 18.05, entitled "Suppression of Truth." With regard to the fraudulent suppression claim of the Willises, the trial judge charged: "If you are reasonably satisfied from the evidence that the flooding was and is a material defect or condition affecting the health and safety of the residence of the Willis home and that any of the Defendants, Jordan R. Cooper and the Prudential Cooper and Company knew about the defect before Mr. and Mrs. The trial judge gave similar charges on fraudulent suppression for each of the claims of the other plaintiff-couples. The defendants contend also that the trial judge gave a confusing charge as to the general fraud count. Having carefully reviewed the entire jury charge, we hold that the trial judge did not err in its charge to the jury: when read in its entirety, the charge was neither confusing nor misleading. Baptist Mem'l Hosp., supra. The defendants argue that the verdicts returned by the jury are inconsistent as a matter of law because the jury returned a verdict in favor of all the plaintiffs and against defendants Cooper & Company, Jordan R. Cooper, and Lloyd Botsford but in favor of defendants John E. Turberville, Turberville Construction, Inc., E.W. Brewer, and E.W. Brewer Quality Homes. The defendants contend that the verdicts are inconsistent because witnesses testified that both defendant John E. Turberville and defendant Eric Brewer made misrepresentations. The findings of the jury are not inconsistent. Within its prerogative, the jury could have disbelieved evidence offered against some defendants and believed evidence offered against others and likewise could have found differing tendencies in the evidence. See Courtesy Ford Sales, Inc. v. Clark, 425 So. 2d 1075, 1077-78 (Ala. 1983). The record establishes that, although Botsford and Cooper, and through them Cooper & Company, knew of the inadequacy of the easement and the likelihood of flooding of the lots along the easement, these defendants did not tell Turberville or Brewer of the inadequacy of the easement when they brokered the sale between the developer and Turberville and the sale between the developer and Brewer. There was a great deal of difference in the evidence as to the fraudulent involvement of Botsford, Cooper, and Cooper & Company on the one hand and the evidence as to the fraudulent involvement of Turberville and Brewer on the other hand. There was substantial evidence that Botsford, Cooper, and Cooper & Company were involved at all stages of the subdivision marketing. Botsford, Cooper, and Cooper & Company marketed the Sunchase lots to builders and then again marketed the same lots to the plaintiffs. The jury's verdict against Botsford, Cooper, and Cooper & Company but in favor of Turberville and Brewer was not inconsistent. Clark, supra. The defendants argue that the trial court erred in refusing to order a remittitur of the verdict. The trial judge in his Hammond order reviewed the jury verdict, using not only the three guideposts set out by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), but also applying the factors set forth in Green Oil Co. v. Hornsby, 539 So. 2d 218, 223-24 (Ala.1989), and Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986): "In BMW I, the Court opined the most important indicium of the reasonableness *643 of punitive damage awards is the degree of reprehensibility of the defendant's conduct. See BMW, 517 U.S. at 575, 116 S. Ct. 1589. The [U.S.] Supreme Court did not provide any particular standard to measure reprehensibility; however, it recognized that trickery and deceit are more reprehensible than negligence, and that acts of affirmative misconduct such as making deliberate false statements, are more reprehensible than making an innocent misrepresentation. Life Insurance Company of Georgia v. Parker, [726 So. 2d 619 (Ala.1998)]. In this case, the Court finds from the evidence a clear pattern of deceit and deliberate misrepresentation by the defendants, Cooper & Company, Lloyd Botsford, and Jordan Cooper, which induced the plaintiffs to purchase the subject property. "The record before the Court does not indicate that the defendants have similar cases pending. A similar type case was tried before this Court in January of *645 1999 with the jury finding in favor of the defendants. Following Parker, this factor weighs in favor of finding the award of punitive damages excessive. After a thorough examination of the record in this case, including the evidence produced in the post-verdict Hammond hearing, we conclude that the respective punitive damage awards of $250,000 each to three of the four plaintiff-couples exceed what the tests of BMW of North America, Inc. v. Gore, supra, allow. To pass the tests, these three punitive damage awards must be remitted by the respective sums stated in the table below: The remainders of these three reduced punitive damage awards, together with the punitive damage award in favor of the Willises, which is not excessive, together with the respective compensatory awards in favor of the four sets of plaintiffs, adequately punish the defendants and should deter similar conduct. The defendants contend that the verdict is due to be remitted by the $17,500 total of the pro tanto settlement entered between the codefendants Fred M. Smith, Fred Smith & Company, Inc., Mikell D. Speaks, and Mikell D. Speaks & Associates Consulting Engineers, Inc., and all of the plaintiffs. The plaintiffs have admitted that the pro tanto settlement should be applied to the verdicts. The defendants are entitled to a $17,500 setoff for the pro tanto settlement between the plaintiffs and the settling defendants. We affirm the judgment of the trial court on the following conditions: (1) the *646 trial court must remit the plaintiffs' compensatory damages by the amount of the pro tanto settlement; (2) each affected plaintiff-couple must file with this Court an acceptance of the remittitur of that couple's punitive damage award specified in the table in Part IX above; (3) these actions must be accomplished within 21 days following the date of our certificate of judgment. In the absence of any affected couple's acceptance of the specified remittitur of punitive damages, the judgment on that couple's claims will be reversed and that couple's claims will be remanded for a new trial. AFFIRMED CONDITIONALLY.[*] MADDOX, HOUSTON, SEE, LYONS, and ENGLAND, JJ., concur. HOOPER, C.J., dissents. HOOPER, Chief Justice (dissenting). I have several concerns with the main opinion, chief of which is the manner in which the main opinion has ignored recent precedent of this Court dealing with the manner in which a trial judge should instruct a jury as to the "duty" element of a fraudulent-suppression claim. I will first address some aspects of the evidence that the main opinion ignores when discussing the facts. The defendants testified that even though they had seen water pooling in the backyards of the homes in question, they did not necessarily understand that to mean that the buyers would face flooding problems. They said none of the pooling water they had seen threatened the homes in question. Also, on one occasion when Botsford and Turberville witnessed "ponding" of water in the backyard of lot 17, the lot later purchased by the Lesters, the water was not flowing through the backyard and was only a couple of inches deep. The backyard was not complete at the time they viewed it because it had not been graded toward the back drainage easement. Therefore, the yard, consisting of clay, would have held water rather than allowing it to drain properly. The main opinion simply recites the facts as stated by the trial judge, and that statement does not take into account the entire record of the evidence from the trial. Section 6-5-102, Ala.Code 1975, states the requirements for a finding of a duty on the part of a defendant to disclose information: It is clear that the defendants had no duty based on confidential relations with the plaintiffs, because the defendant agents represented the sellers, not the buyers, in these transactions. The purchase agreements the plaintiffs signed, and which Botsford reviewed with them line by line, *647 stated that Cooper and Company represented the seller in the realty transaction. I also question the impression the trial judge may have given the jury by some of his comments and questions before the jury. For example, at one point he stated: The next day the trial judge admitted he had made an error regarding an alleged conversation between Botsford and Lester, but the trial judge's attempt to correct the error dealt only with that specific fact and not his entire demeanor and many statements and questions to the witnesses and attorneys for the defendants. The jury, not the trial judge, is responsible for determining the credibility of the witnesses for each party. The Committee Comments to Rule 614, Ala.R.Evid., state: From the trial judge's questioning and from other comments that appear in the record, I think the trial judge crossed the line and appeared to favor the plaintiffs quite strongly, even going so far as to accuse the defendants' witnesses of lying under oath, or at least of intending "to shuck and jive" on the witness stand. The last error I will refer to, and perhaps the most egregious, is the majority's failure to properly apply the holding and rationale of State Farm Fire & Casualty Co. v. Owen, 729 So. 2d 834 (Ala.1999), a case in which this Court stated in the clearest of terms the roles of the trial judge and the jury in determining the duty of a defendant in a fraudulent-suppression case. This Court went so far as to suggest a revised Instruction 18.08 of Alabama Pattern Jury Instruction: Civil (2d ed.1993) to assist the bench in the future. The key statement from State Farm that applies to the present case is this: 729 So. 2d at 842 (quoting the Court's proposed "Notes on Use" to accompany a revised Instruction 18.08). Yet the trial court gave both instructions in this case. The effect of the manner and order in which the trial judge gave these instructions was to remove from the jury's deliberations the question whether there had been a confidential relationship between the Cooper defendants and the plaintiffs, something that is the duty of the jury to decide, and to allow the jury to determine whether the Brewer and Turberville defendants had a duty to disclose, something that is the duty of the trial judge to determine. Such confusion created by the instructions clearly would have prejudiced the defendants in this case. Also, even if I agreed that the problems related above were insufficient to require a new trial of this case, I would still dissent *648 from the remittitur order because even as remitted the awards would still be excessive. The defendants' behavior was not reprehensible. The remittiturs ordered are inadequate. If this Court's purpose is to destroy the real-estate business with this case and others, then it is doing a good job. See Prudential Ballard Realty Co. v. Weatherly, 792 So. 2d 1045 (Ala. 2000). The purpose of punitive damages is to deter, not to destroy. Haynes v. Alfa Fin. Corp., 730 So. 2d 178, 185 (Ala.1999) (Houston, J., concurring specially); American Pioneer Life Ins. Co. v. Williamson, 704 So. 2d 1361, 1366 (Ala.1997); BMW of North America, Inc. v. Gore, 701 So. 2d 507, 513 (Ala.1997); Ayres v. Lakeshore Community Hosp., 689 So. 2d 39, 41 (Ala. 1997); Smith v. Schulte, 671 So. 2d 1334, 1346 (Ala.1995); Patel v. Patel, 708 So. 2d 159, 161 (Ala.1998); Ridout's-Brown Serv., Inc. v. Holloway, 397 So. 2d 125, 127 (Ala. 1981) (Jones, J., concurring specially). It appears that time can have a deleterious effect upon a court's resolve to comply with Supreme Court precedent. Since the United States Supreme Court issued its opinion in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), we have seen punitive damages decrease in cases where they should have decreased. Now we see them increasing, as if the courts have forgotten that excessive punitive-damages awards are not simply a mistake on the part of a jury or trial judge but are, according to the United States Supreme Court, a violation of the right to due process. As the United States Supreme Court stated in BMW: "Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct. As the Court stated nearly 150 years ago, exemplary damages imposed on a defendant should reflect `the enormity of his offense.'" 517 U.S. at 575, 116 S. Ct. 1589. As in BMW, the damage in this case was mainly economic in nature, and the defendants in this case did not have knowledge of actual flooding; if anything, they had knowledge of some pooling in the backyards. And even that knowledge was disputed. The weather certainly had something to do with the flooding in these yards. Water has never come into the Woodham, Lester, or Sergeant homes and has only touched the sides of the Woodham home during Hurricane Danny and a major flooding event on January 7, 1998. These facts and others stated above do not indicate reprehensible conduct in this case. Businesses in this State that act in accordance with business custom and that do not act reprehensibly should be safe from the imposition of punitive damages. For these reasons, I respectfully dissent. [1] Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986). [*] Note from the reporter of decisions: On January 4, 2002, the Supreme Court issued a "certificate of judgment of affirmance"; that certificate of judgment contains the following paragraphs: "WHEREAS, in keeping with the former order and judgment of this Court entered on December 22, 2000, the appellees, James Lester et al., did on January 5, 2001, file in this Court a remittitur in the amount of $150,419. "IT IS NOW CONSIDERED, ORDERED AND ADJUDGED that the judgment of the circuit court be reduced to $1,134,596 and as thus reduced, the judgment of the circuit court is hereby affirmed, with interest and costs. "IT IS FURTHER ORDERED AND ADJUDGED that the appellants, Cooper & Co., Inc., et al., pay the costs of appeal and the costs taxed against the defendants in the court below will stand as taxed."

December 22, 2000

b7938885-941b-4048-8232-10c61d757858

Ex Parte Anderson

789 So. 2d 190

1991564

Alabama

Alabama Supreme Court

789 So. 2d 190 (2000) Ex parte Robert E. ANDERSON, M.D., and Selma Doctors Clinic, P.C. (Re Diana Cabaniss, as personal representative of the estate of James Harold Trotter, Sr., deceased; and Annie Ruth Trotter v. Robert E. Anderson, M.D., et al.) 1991564. Supreme Court of Alabama. December 22, 2000. *191 Frank J. Stakely and William H. Webster of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for petitioners. Benjamin L. Locklar of Richard Jordan, Randy Myers & Ben Locklar, P.C., Montgomery, for respondents. HOOPER, Chief Justice. Robert E. Anderson, M.D., the defendant in a medical-malpractice action pending in the Dallas Circuit Court, petitions for a writ of mandamus directing the circuit court to vacate its order compelling Dr. Anderson to comply with certain discovery requests and directing it to issue a protective order. We stayed enforcement of the trial court's discovery order pending our review of this petition. We grant the petition in part and deny it in part. *192 After finding a questionable bump on his forehead in January 1998, James Harold Trotter, Sr., was referred to Dr. Anderson for further consultation. Dr. Anderson, who had previously removed a cancerous tumor from Trotter's forehead, determined that this bump, a squamous cell carcinoma tumor, also needed to be excised. On February 5, 1998, Dr. Anderson performed an outpatient procedure at Four Rivers Medical Center ("Four Rivers"), in which he removed all tissue from Trotter's forehead and scraped all the way down to the bone. Dr. Anderson then performed a skin graft by which he removed skin from under Trotter's forearm and transferred it to the surgical site. At a follow-up appointment a few days later, Dr. Anderson noticed that the skin graft on Trotter's forehead did not seem to be "taking" properly. Because of this failure of the skin graft to adhere properly to the bone, Dr. Anderson scheduled for Trotter a debridement and granulation procedure at Four Rivers in which he would drill holes in Trotter's forehead, which would allow the transferred skin from the graft to grow toward the bone marrow between the inner and outer tables of the skull. During the drilling process, which took place on March 13, 1998, Dr. Anderson drilled through the inner table of Trotter's skull and into the dura (the outermost lining of the brain), resulting in a "gush of serosanguinous fluid (a mixture of cerebrospinal fluid and blood)." A postsurgery CAT scan revealed the presence of air in the intracranial space. Fearing that Trotter would suffer from infection, Dr. Anderson scheduled to have Trotter transferred to another hospital for a neurological evaluation. However, approximately 50 minutes postsurgery, Trotter suffered a serious and debilitating stroke; he was not transferred to the other hospital until two hours later. Because of the stroke, Trotter spent several weeks in the hospital and at a rehabilitation facility. He never fully recovered from the stroke before he died in June 1998. Trotter and his wife, Annie Ruth Trotter, sued Dr. Anderson and Four Rivers, alleging that Dr. Anderson had breached the applicable standard of care in performing the skin-graft procedure.[1] Annie Ruth Trotter claimed damages for loss of consortium. On Trotter's death, Trotter's daughter Diana Cabaniss, as personal representative of his estate, was substituted as a plaintiff. Cabaniss and Mrs. Trotter (hereinafter referred to collectively as "Cabaniss") made discovery requests to Dr. Anderson, asking for the following: In addition, Cabaniss requested the following items from all defendants, including Dr. Anderson and Four Rivers: Dr. Anderson filed a response objecting to these requests, based on §§ 22-21-8, 34-24-58, 34-24-59, 6-5-333 and 6-5-551, Ala. Code 1975. Cabaniss eventually moved to compel Dr. Anderson to respond to her discovery requests. On April 4, 2000, the trial court entered an order giving Dr. Anderson 14 days to respond to these discovery requests. Three days later, Dr. Anderson moved to "reconsider" the order compelling discovery or, in the alternative, for a protective order. The trial court held a hearing on the motion to reconsider on April 19, and, on May 3, it entered an order revising its prior order compelling discovery from Dr. Anderson, to provide as follows: The trial court denied other discovery requests Cabaniss had made and denied Dr. Anderson's request for a protective order, except to preclude Cabaniss from sharing information and documents regarding discovery with third parties (except witnesses). Dr. Anderson was given 10 days to comply with the discovery order. He then filed this mandamus petition. We stayed enforcement of the order pending our resolution of the petition. In his petition for a writ of mandamus, Dr. Anderson presents two issues: (See Dr. Anderson's brief to this Court, p. 8.) This Court stated in Ex parte Pfizer, Inc., 746 So. 2d 960 (Ala.1999): 746 So. 2d at 962. Disputes regarding discovery matters are an appropriate basis for a petition for a writ of mandamus. See Ex parte Toyokuni & Co., Ltd., 715 So. 2d 786 (Ala.1998). Dr. Anderson contends that the trial court erred in compelling discovery of "other incidents," if any, of alleged malpractice committed by him. Specifically, he argues that discovery of such information is barred by § 6-5-551, Ala.Code 1975. Section 6-5-551, Ala.Code 1975, states: (Emphasis added.) By the terms of § 6-5-552, Ala.Code 1975, the Medical Liability Act applies to "all actions against health care providers based on acts or omissions accruing [sic] after June 11, 1987." The term "health care providers" is defined by § 6-5-542(1), Ala.Code 1975, to include medical practitioners and physicians. Because Dr. Anderson qualifies as a physician under the Medical Liability Act and because Cabaniss's action against Dr. Anderson alleging a breach of the standard of care qualifies as an action "accruing after June 11, 1987," § 6-5-551 governs matters of discovery in this particular case. This Court stated in Ex parte Krothapalli, 762 So. 2d 836 (Ala.2000): *195 762 So. 2d at 838. Although in Krothapalli we specifically examined the language of Alabama's peer-review statute, § 22-21-8, Ala.Code 1975, the same principles of statutory interpretation should govern our reasoning as to the statutes at issue here. We have reviewed the language of the statute, and we conclude that its meaning could not be clearer. If all conditions of the statute are met, then any other acts or omissions of the defendant health-care provider are exempt from discovery, and the discovering party is prohibited from introducing evidence of them at trial. See § 6-5-551. Such exemptions would include information regarding any other incidents regarding Dr. Anderson and his alleged breach of the standard of care. Our review of Cabaniss's complaint indicates that her complaint fits within the bounds of the statute. Cabaniss specifically detailed the facts and dates regarding Trotter's injury and death and Dr. Anderson's alleged negligence causing Trotter's injury. (Exhibit A to Cabaniss's complaint, included in Dr. Anderson's petition for the writ of mandamus.) Furthermore, the trial court's case action summary sheet indicates that she filed an amended complaint on April 23, 1999, and that the date set for trial was June 12, 2000well within the 90-day limit prescribed by § 6-5-551. (Exhibit G, pp. 2 and 3, as presented in Dr. Anderson's petition for the writ of mandamus.) Thus, Cabaniss appears to have filed a complaint that meets the requirements of § 6-5-551, Ala.Code 1975, and that statute precludes her from obtaining discovery regarding any other medical-malpractice claims that may have been made against Dr. Anderson. In spite of the trial court's attempt to narrowly frame the issue to include only debridements, drillings, or transfers with respect to patients other than Trotter, Dr. Anderson is entitled to the exemption provided by § 6-5-551. Cabaniss argues that under § 6-5-551 she should not be precluded from obtaining discovery regarding other similar incidents (i.e., other incidents of misperformed drilling procedures, skin grafts, or transfers of patients to other hospitals). Cabaniss argues that she is precluded only from obtaining information regarding any other incidents of malpractice completely unrelated to those alleged in her complaint. (Issue D, Cabaniss's brief to this Court, p. 12.) However, this is not what the statute says. It states that "[a]ny party shall be prohibited from conducting discovery with regard to any other act or omission or from introducing at trial evidence of any other act or omission." § 6-5-551, Ala.Code 1975. (Emphasis added.) See Ex parte Krothapalli, supra, quoting BP Exploration & Oil, Inc., supra. Cabaniss's argument contradicts the plain meaning of the statute. Cabaniss also argues that under our holding in Ex parte Horton Homes, Inc., 774 So. 2d 536 (Ala.2000), Dr. Anderson waived his right to petition this Court for the writ of mandamus because, she says, he waited too long to move for a protective order. The facts of Horton Homes are distinguishable from those in this present case. In Horton Homes, the defendants filed several requests for production along with their May 19, 1999, complaint; Horton Homes responded on July 15, 1999. On August 30, 1999, the defendants filed a motion to compel discovery, citing numerous theories, supported by caselaw, as to why the requested documents were not beyond the scope of discovery and were reasonably calculated to lead to admissible evidence. On September 2, 1999, Horton Homes stated in a one-page response that it stood behind its previous discovery responses and objections, and it requested a *196 full hearing on all issues presented in the motion to compel. On October 14, 1999, the court held a hearing on the motion to compel. After the hearing, but on the same day, the court ordered Horton Homes to produce the requested documents. On October 27, 1999, Horton Homes moved the court to "reconsider" the October 14 order; "in that motion, for the first time, it offered additional reasons why it considered the requests for production to be beyond the bounds of discovery" and "also asserted, for the first time, that [the plaintiffs'] requests were `overly broad, unduly burdensome, [and] not reasonably limited in time, scope and geographical area.'" 774 So. 2d at 538. On October 29, 1999, the trial court denied Horton Homes' motion to reconsider. By the order of October 14, 1999, Horton Homes' response to the plaintiffs' requests for production was due within 21 days from that date, i.e., no later than November 4, 1999. However, Horton Homes did not respond by that date. On November 19, 1999, Horton Homes moved for a protective order, pursuant to Rule 26(c), Ala.R.Civ.P. In its motion for a protective order, Horton Homes articulated the same two arguments it had presented in its motion for reconsideration. However, in further support of its motion, Horton Homes submitted for the first time an affidavit stating that production of some of the documents sought would be unduly burdensome because of the large number of files Horton Homes would have to search in order to comply, and the manner in which those records were kept. The trial court denied the motion for a protective order. Horton Homes then petitioned this Court for a writ of mandamus. We stated: 774 So. 2d at 539-40. Horton Homes can be distinguished from this present case. First, in Horton Homes, the trial court apparently held a hearing on the motion to compel and on that same day issued its ruling directing Horton Homes to produce the requested documents. Horton Homes thereafter had the opportunity to file for a protective order within 21 days, as required by the trial court. Second, from the outset, the trial court's order specified the number of days in which Horton Homes had to comply with discovery; it never altered the time or date of compliance. Third, the trial court never altered the scope of the discovery; despite Horton Homes' motion to reconsider and its motion for a protective order, the trial court did not change its decision as to what Horton Homes should be compelled to respond to or what materials it should be made to produce. This present case can first be distinguished from Horton Homes in that there was a questionable expanse of two months between the time the trial court first wrote its order compelling discovery, the date that order was officially issued, and when Dr. Anderson received it in the mail. On April 4, 2000, the trial court entered, without a hearing, an order dated March 14, 2000, directing Dr. Anderson to respond to discovery within 14 days. However, this order did not specify from what date the 14 days would run. On April 17, 2000, Dr. Anderson filed a motion to reconsider or, in the alternative, for a protective order, and the trial court held a hearing on April 19. On May 3, 2000, the trial court entered an order (dated April 28, 2000) revising its prior order by narrowing the scope of the discovery and directing Dr. Anderson to respond to the requests within 10 days. The order was mailed on May 4 and was received by Dr. Anderson's counsel on May 8. We note that if the 14-day period had begun to run from the date of the order, then the protective order would have had to be filed a week before the order was officially issued and mailed by the trial court. It would be impossible to expect Dr. Anderson to move for a protective order when he and his counsel had not yet received the order in the first place. Therefore, the only reasonable interpretation of the trial court's order is that it did not mean for the 14-day period to begin running until the date the order was received by Dr. Anderson's counsel. Second, this present case is distinguishable from Horton Homes in that the number of days in which Dr. Anderson had to comply with the trial court's order was altered from 14 days to 10 days. Third, unlike the order in Horton Homes, the order in this case changed the scope of the discovery from the broad discovery allowed by the first order to the narrow discovery allowed when that order was subsequently altered by the trial court. *198 After Dr. Anderson moved for a protective order, the trial court not only denied him the requested protection but also modified his responsibilities for responding to the original order on the motion to compel. Thus, the order from which Dr. Anderson seeks relief here is not the same order from which he sought protection. Furthermore, the trial court, itself, stated in its order on Dr. Anderson's motion to reconsider that the protective order was timely filed. (Exhibit J, Dr. Anderson's petition to this Court.) The record indicates that Dr. Anderson filed his motion to reconsider the trial court's order compelling discovery or, in the alternative, for a protective order, within 14 days of the date the trial court entered its order compelling discovery and the date his counsel received a copy of the order. Thus, it appears that Dr. Anderson complied with the mandates of Rule 26(c). See Horton Homes, citing Reynolds Metals, supra; see also Brittain, Wang, and International Business Machs. Corp., all cited above in the quotation from Horton Homes. Therefore, the trial court's order compelling Dr. Anderson to comply with Cabaniss's discovery requests regarding incidents of alleged malpractice other than those alleged in her complaint constituted an abuse of discretion. Dr. Anderson is entitled to a writ of mandamus directing the trial court to set aside that order. Dr. Anderson contends that the trial court erred in ordering discovery on the question whether his medical, surgical, or staff privileges have ever been reviewed, restricted, or canceled by any hospital or medical licensure commission. Specifically, he argues that such information "touches upon" the "other acts or omissions" exempted from discovery under § 6-5-551, Ala.Code 1975. He further contends that such information is protected from discovery under §§ 6-5-333, 22-21-8, 34-24-58, and 34-24-59, Ala.Code 1975. We discuss the amended discovery requests individually and discuss the statutes pertinent thereto. The trial court's order compelled Dr. Anderson to provide discovery as to any complaints related to any debridement surgeries, drilling procedures, or skin grafts performed by him within the five years previous to March 13, 1998. Discovery of any incidents of malpractice other than those specifically alleged in the complaint is precluded. As previously stated in Part I of this opinion, § 6-5-551 states in plain language that "discovery with regard to any other act or omission" or the introduction "at trial [of] evidence of any other act or omission" is prohibited. Despite her argument to the contrary, Cabaniss is not even entitled to learn whether any such "complaints" exist. The mere acknowledgment of whether a complaint was ever filed concerning alleged incidents of malpractice would indeed constitute evidence of prior claims of medical malpractice allegedly committed by Dr. Anderson; this is exactly the kind of information the statute protects from discovery. Therefore, even a simple "yes" or "no" answer to the question whether any complaints against Dr. Anderson had been filed regarding alleged incidents of malpractice other than those that involved Trotter would fall within the prohibition of the statute. The trial court's amended order compelling Dr. Anderson to respond to discovery included the direction that he provide information as to whether his medical, surgical, or staff privileges had ever *199 been reviewed, restricted, or canceled by any hospital or by any medical licensure commission. First, we note that discovery of information regarding Dr. Anderson's privileges is barred by § 6-5-333(d), Ala.Code 1975, which states: The clear import of this statute is that official committee documents, which would include information regarding whether Dr. Anderson's privileges have ever been reviewed, restricted, or canceled, that were prepared in furtherance of the committee's function, are privileged from discovery. However, records made in the regular course of business, exclusive of official committee functions, and otherwise available from their original sources, are discoverable and not privileged. Thus, Cabaniss is not entitled to discover records or documents prepared by a hospital or other health-care provider unless they were prepared in its regular course of business; however, she is not precluded from seeking the same from Dr. Anderson as the original source. Furthermore, according to § 6-5-551, if Cabaniss were to seek the same from Dr. Anderson as the original source, he would be required only to provide her with discovery regarding any review, restriction, or cancellation of privileges that may have occurred specifically in regard to the Trotter incident. Moreover, the trial court's statement that Cabaniss's request "does not seek disclosure of documents, but only a written response to the inquiry" does not automatically place this kind of discovery outside the scope of the applicable statutes. Section 6-5-551 states that "discovery with regard to any other act or omission" or the introduction "at trial [of] evidence of any other act or omission" is prohibited. The mere acknowledgment of whether complaints were ever filed concerning alleged incidents of malpractice would constitute evidence of "other act[s] or omission[s]," i.e., of other acts of medical malpractice. Thus, to declare "information" not "documents"discoverable to Cabaniss is contrary to the plain meaning of the statute. Cabaniss's claim to discovery of information and materials pursuant to §§ 22-21-8, 34-24-58, and 34-24-59, Ala. Code 1975, is absolutely barred, regardless of the fact that such information and materials might have been gathered as a consequence of the incident regarding Trotter. Section 22-21-8, Alabama's "peer-review statute," reads: This Court elaborated on the confidentiality of peer-review proceedings in Ex parte Qureshi, 768 So. 2d 374 (Ala.2000), in which we determined that the trial court erred in compelling discovery from a physician and hospitals when they were sued by a patient for medical malpractice. That opinion contains a sound statement of the applicable public-policy considerations: *202 768 So. 2d at 377-78. (some emphasis added in Qureshi, other emphasis added here.) Section 22-21-8, as explained in Qureshi and Krothapalli, provides that under our peer-review statute, information and documents produced by hospitals, their agencies, or bodies, in furtherance of their official duties and activities in regard to the peer-review process, are not discoverable. Section 34-24-58, Ala.Code 1975, reads: This provision mandates that information gathered or formulated within the scope of business conducted by such committees is privileged from external review. Section 34-24-59(c) builds upon the foundation laid by § 34-24-58, by requiring that "[a]ny report [of formal disciplinary action related to professional ethics, medical incompetence, moral turpitude, or drug or alcohol abuse, resulting in termination, reduction, or resignation of hospital privileges and reported to the proper authorities]... shall be privileged from discovery." See also § 34-24-59(a). Therefore, Cabaniss's attempt to obtain discovery of information or documents regarding Anderson's performance and privileges past or presentfrom any pertinent hospital or medical-review committee is barred. In reaching this holding, we remain mindful of the intent of the Legislature when it enacted these statutes: to encourage meaningful peer review, with the goal of providing a better, more efficient, medical system for the people of this State. See Qureshi, supra, quoting Krothapalli, supra. The trial court ordered Dr. Anderson to provide discovery regarding any instances where he drilled too far into a bone and penetrated the skull or dura during a drilling procedure and any instances between 1995 and 1998 when he suffered a delay in transporting or arranging the transfer of a patient to another facility. As previously stated, § 6-5-551 prohibits Dr. Anderson from responding to discovery requests regarding any instances other than the one specifically alleged in Cabaniss's complaintspecifically, the Trotter incidentdespite the trial court's attempt to narrowly frame the issue as compelling discovery regarding only incidents *203 of misperformed drill procedures and transfers of patients to other facilities, instead of any and every alleged incident of malpractice committed by Dr. Anderson. Dr. Anderson argues that the statutory framework created by §§ 6-5-551, 6-5-333, 22-21-8, 34-24-58, and 34-24-59, Ala. Code 1975, serves to absolutely insulate him, his documents, and other information concerning the Trotter case, whether obtained from him personally, from the hospital, or from other committees. We do not completely agree. His contention regarding the material gathered from the hospital or review committees is correct; documents from those sources generated pursuant to hospital or committee business is absolutely not discoverable. See §§ 6-5-333, 22-21-8, 34-24-58, and 34-24-59, Ala.Code 1975. However, information and documents that specifically concern the Trotter incident and that may be obtained from Dr. Anderson himself as an "original source" are discoverable. See §§ 6-5-551 and 6-5-333, Ala.Code 1975. In conclusion, we hold that the trial court erred in granting Cabaniss's motion to compel discovery. Cabaniss may not compel discovery as to incidents of alleged malpractice by Dr. Anderson except for discovery of evidence specifically relating to the Trotter incident. Although Cabaniss is not entitled to information or documents regarding any incidents of alleged malpractice committed by Dr. Anderson except as to those specifically alleged in their complaint and are likewise not entitled to any information or documents regarding the Trotter case resulting from the quality assurance inquiry of the hospital or any associated committee, she is entitled to any information and documents regarding her specific allegations that can be obtained from Dr. Anderson himself as an original source. Likewise Cabaniss is entitled to any material produced by the hospital or any associated committee in its regular course of business. Thus, the trial court abused its discretion in granting Cabaniss's motion to compel discovery. Therefore, we grant the petition in part and issue the writ, directing the trial court to modify its order so as to grant Dr. Anderson's request to protect from discovery 1) any information concerning medical-malpractice incidents other than the Trotter incident and 2) any materials resulting from the peer-review process, and so as to deny his request insofar as it regards information that can be obtained from him, as an original source, or from the hospital or any medical committee in its regular course of business. PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED. MADDOX, HOUSTON, and ENGLAND, JJ., concur. SEE, LYONS, and BROWN, JJ., concur in the result. LYONS, Justice (concurring in the result). The failure to move for a second protective order directed to the production required in the order entered in response to Dr. Anderson's previous motion to reconsider or, in the alternative, for a protective order does not require that the petition be denied for a failure to show the unavailability of another adequate remedy. Where the trial court has had the opportunity, in ruling on a previous motion for a protective order, to address the grounds asserted by the party opposed to production, it would exalt form over substance to require the filing of a second motion for a protective order reciting the same grounds merely because the trial court, in ruling on the *204 previous motion, created a new deadline. Compare Ex parte Horton Homes, Inc., 774 So. 2d 536 (Ala.2000) (petition for writ of mandamus denied for failure to demonstrate inadequacy of other remedy where a potential avenue of relief had been waived). The circumstances here presented are quite different from those presented in Horton Homes, where the trial court had never been asked to rule on a motion for a protective order before the deadline for discovery. [1] Before this mandamus petition was filed, Cabaniss settled the claim against Four Rivers. Cabaniss filed a "Joint Stipulation for Dismissal" with the trial court. The claim against Four Rivers was dismissed with prejudice. The trial court stated in the dismissal order that Cabaniss's claims against Dr. Anderson and Selma Doctors Clinic, P.C., were not affected by the settlement reached with Four Rivers. However, the trial court did not have jurisdiction to entertain that "stipulation" because before it was filed, this Court had stayed all proceedings in this case pending its ruling on this mandamus petition concerning discovery issues.

December 22, 2000

4cade0d9-efb7-4185-bfe5-d612ef690e9a

Wilson v. Teng

786 So. 2d 485

1982180

Alabama

Alabama Supreme Court

786 So. 2d 485 (2000) Stacia Lynn P. WILSON v. Bibi L. TENG, M.D. 1982180. Supreme Court of Alabama. December 8, 2000. *486 Charles C. Tatum, Jr., Jasper, for appellant. Michael A. Florie, Joseph S. Miller, and J. Wilson Axon, Jr., of Starnes & Atchison, L.L.P., Birmingham, for appellee. JOHNSTONE, Justice. The plaintiff, Stacia Wilson, brought a medical malpractice wrongful-death action against Athens Limestone Hospital and Dr. Bibi L. Teng, a pediatrician employed by Athens Limestone Hospital. The plaintiff complains that, after she brought her four-year-old daughter Starsha Wilson to the hospital for treatment for an infection, Dr. Teng, who regularly treated Starsha for sickle-cell anemia, wrongfully caused Starsha's death by causing or allowing her to be discharged without admission to the hospital and without proper care by Dr. Teng. The plaintiff claims that Starsha would not have died had Dr. Teng complied with the applicable standard of care and admitted Starsha to the hospital for treatment. Dr. Teng and Athens Limestone moved for summary judgment. Finding that no physician-patient relationship existed between Dr. Teng and Starsha, the trial court granted a summary judgment in favor of Dr. Teng, but denied a summary judgment in favor of Athens Limestone. The plaintiff appeals from the summary judgment in favor of Dr. Teng. We reverse that summary judgment. On July 2, 1999, the trial court entered the following order: (R. 375-77.) After determining that there was no just reason for delay, the trial court, pursuant to Rule 54(b), Ala.R.Civ.P., declared its summary judgment in favor of Dr. Teng final on August 2, 1999. Asserting that an issue of fact existed as to whether a physician-patient relationship existed between Dr. Teng and Starsha and that the trial court's August 2, 1999, order of summary judgment in favor of Dr. Teng did not comply with Rule 54(b), the plaintiff moved the trial court to alter, amend, or vacate the judgment in favor of Dr. Teng. The trial court denied the motion. Before ruling on Dr. Teng's motion for a summary judgment, the trial court heard oral arguments from the parties' counsel and considered evidentiary materials submitted by the parties. In her motion for summary judgment, Dr. Teng asserted that she had not rendered any treatment to Starsha on the day of her death and that "no doctor/patient relationship existed between Dr. Teng and Starsha Wilson on the morning of the emergency department visit in question." (Motion, p. 3.) In support of her motion, Dr. Teng submitted her own deposition testimony, the deposition testimony of the emergency room physician Dr. Dianna Osborn, and her own affidavit, in which she stated: (R. 171-72.) Likewise, in her deposition, Dr. Teng consistently testifies that her visit to the emergency room was merely a "social visit," during which she did not undertake to examine or treat Starsha. Opposing the motion for summary judgment of Dr. Teng, the plaintiff claimed that disputed facts exist as to whether a physician-patient relationship existed between Dr. Teng and Starsha. The plaintiff specifically claimed that the facts are disputed as to whether Dr. Teng's visit with the plaintiff in the emergency room was merely a "social visit," as Dr. Teng claims, or whether Dr. Teng's visit was in response to a telephone call she received from the plaintiff on the morning of Starsha's death, as the plaintiff claims. In opposition to the summary-judgment motion, the plaintiff submitted her own deposition testimony of May 16, 1997, and her own affidavit executed on August 27, 1998, in addition to the deposition testimony of Dr. Teng and Nurses Charlotte Inman and Bonnie Livingston, and the affidavits of Dr. Andrew Melnyk (board certified pediatrician), Dr. Alfred Frankel (board certified emergency physician), and Dr. William Maxfield (board certified radiologist). The plaintiff also submitted Starsha's hospital medical records. In her affidavit, the plaintiff states: (R. 228-29.) The trial court found that the plaintiff's affidavit was inconsistent with her deposition testimony, and, therefore, the trial court refused to consider the plaintiff's affidavit as creating an issue of material fact regarding the purpose of Dr. Teng's visit to the emergency room. The only depositions included in the record are those of Dr. Teng and Dr. Osborn. The affidavits of Dr. Melnyk, Dr. Frankel, and Dr. Maxfield are included in the record. The affidavit of Dr. Melnyk, a board certified pediatrician with over 20 years' experience, describes his review of the autopsy report of Starsha, the hospital medical records of Starsha, and the affidavits of the plaintiff, Dr. Teng, Nurse Inman, Nurse Dollar, and Nurse Livingston, and presents the following opinions and observations: (R. 217-21.) (Emphasis added.) On the basis of the same materials reviewed by Dr. Melnyk, Dr. Frankel, an emergency room physician with 30 years of experience in Florida, swears in an affidavit: (R. 234, 238.) (Emphasis added.) After reviewing the same materials as Drs. Melnyk and Frankel, Dr. Maxfield, an emergency room physician with nearly 40 years of experience, swears in an affidavit: (R. 208-09.) (Emphasis added.) In addition to the above-quoted affidavits, the plaintiff also submitted the deposition testimony of Dr. Osborn, the emergency room physician, and the deposition testimony of Dr. Teng. Likewise, Dr. Teng relied upon portions of these depositions in support of her motion for summary judgment. During her deposition, Dr. Osborn responded as follows to questions from the plaintiffs counsel: *493 (Dr. Osborn's deposition, pp. 30-31.) Dr. Osborn stated that she was aware that Starsha had sickle cell anemia and that she was trained in treating sickle cell patients. She stated also that she was aware that Dr. Teng was Starsha's pediatrician. (Depo., p. 62.) Dr. Osborn continued about her conversation with Dr. Teng on the morning of Starsha's death: (Depo., pp. 67-89.) (Emphasis added.) In her deposition, Dr. Osborn also acknowledged that, as the emergency room physician, she did not have the authority to admit patients to the hospital: (Depo., pp. 91-92.) (Emphasis added.) The exchange between the plaintiff's counsel and Dr. Osborn continued: (Depo., pp. 110-12.) (Emphasis added.) Dr. Teng testified by deposition about her visit to the emergency room and her conversations with the plaintiff and Dr. Osborn as follows: (Depo., pp. 128-29.) Dr. Teng and the plaintiff's attorney continued in the following exchange: (Depo., pp. 21-25.) (Emphasis added.) Although Dr. Teng could not recall specifically her conversation with the plaintiff-mother, Dr. Teng stated that she told the mother "the lab work looked good; [and] Dr. Osborn will take good care of you." (Depo., p. 122.) Dr. Teng denied that she told the mother that Starsha would soon be released to go home. (Depo., p. 123.) Dr. Teng testified further that she first treated Starsha in the emergency room of Athens-Limestone in 1991, but she continued thereafter to treat Starsha as her "private patient in her office." (Depo., pp. 35-37.) Dr. Teng acknowledged that she had admitted Starsha to the hospital on prior occasions. She acknowledged also that only she, not the emergency room physician, had the authority to admit Starsha on May 19, 1994. However, she stated that she did not admit Starsha on that day because Dr. Osborn did not consult her to do so. (Depo., pp. 146-47, 156.) In her appeal, the plaintiff claims that the foregoing evidentiary material created genuine issues of material fact as to whether a physician-patient relationship existed between Dr. Teng and Starsha and whether Dr. Teng breached the standard of care in refusing to admit Starsha to the hospital. The plaintiff also claims that: 1) because the trial court's August 2, 1999, order of summary judgment in favor of the defendant Dr. Teng did not contain a list of factors to support the trial court's finding that there was no just reason for delay, the order did not comply with Rule 54(b), Ala.R.Civ.P.; and 2) the trial court erred in striking her affidavit from the materials she submitted in opposition to Dr. Teng's motion for summary judgment. The plaintiff contends that, because the trial court did not explicitly list the factors to support its determination that there was "no just reason for delay" in this case, as required by Brown v. Whitaker Contracting Corp., 681 So. 2d 226 (Ala.Civ. App.1996), the trial court's summary judgment in favor of Dr. Teng was not final under Rule 54(b), Ala.R.Civ.P. Recently, on May 26, 2000, this court overruled that requirement of Brown v. Whitaker Contracting, supra, in Schneider National Carriers, Inc. v. Tinney, 776 So. 2d 753 (Ala.2000). Footnote 3 of Schneider stated, "Rule 54(b) does not require a trial court to list the factors it considered in finding that there is no just reason for delay." In the case before us the trial court entered a final judgment, specifying that "there is no just reason for delay." (R. 378.) Thus, the trial court fulfilled the requirements of Rule 54(b) and made the summary judgment in favor of Dr. Teng final. The plaintiff contends also that the trial court erred in striking her affidavit executed on August 27, 1998. She argues that, although she submitted her affidavit after she gave her deposition testimony on May 16, 1997, her affidavit contains more detailed facts about the events surrounding her daughter's death because she prepared her affidavit from notes she wrote shortly after her daughter's death. She maintains that her affidavit is not inconsistent with her deposition and that, therefore, the trial court should have considered her affidavit in opposition to Dr. Teng's motion for summary judgment. *497 Attempting to show that the plaintiffs affidavit is inconsistent with her deposition testimony about whether she called Dr. Teng on the morning of Starsha's death, Dr. Teng quotes from the plaintiffs deposition: (Dr. Teng's brief, pp. 18-19, citing Stacia Wilson's deposition, pp. 131-32.) In her affidavit, the plaintiff stated that she called Dr. Teng's office from the emergency room on the morning of Starsha's death and spoke with Dr. Teng personally. The trial found that the plaintiffs affidavit about Dr. Teng's involvement with Starsha on the morning of her discharge contradicted the plaintiffs deposition testimony. Opining that the plaintiff, in her deposition, "is not alleging that Dr. Teng undertook any treatment," the trial court noted that, in her deposition, the plaintiff testified, "I guess it really wasn't [Dr. Teng's] case," and that Dr. Teng's emergency-room visit lasted only "three to five minutes." (Trial Court's Order, C.R. 376.) This Court has held that "a party is not allowed to directly contradict prior sworn testimony to avoid the entry of a summary judgment." Continental Eagle Corp. v. Mokrzycki, 611 So. 2d 313, 317 (Ala.1992), citing Doe v. Swift, 570 So. 2d 1209, 1214 (Ala.1990). "`When a party has given clear answers to unambiguous questions which negate the existence of any genuine issue of material fact, that party cannot thereafter create such an issue with an affidavit that merely contradicts, without explanation, previously given clear testimony.'" Id., quoting Robinson v. Hank Roberts, Inc., 514 So. 2d 958, 961 (Ala. 1987). However, when a party submits a subsequent affidavit merely to clarify his or her answers to ambiguous questions asked by counsel during a deposition or other prior sworn proceeding or to supply information not necessarily sought by questions asked at the deposition or other prior sworn proceeding, the trial court should consider the subsequent affidavit. See, e.g. Richard v. Shoals Distrib., Inc., 645 So. 2d 1378, 1382-83 (Ala.1994); and Tittle v. Alabama Power Co., 570 So. 2d 601, 606-07 (Ala.1990). The plaintiffs deposition testimony, "I guess it really wasn't [Dr. Teng's] case," as quoted by the trial court in its order granting summary judgment in favor of Dr. Teng, is merely a layperson's guess at an opinion on a legal issue rather than a statement of fact. Thus this statement does not foreclose the facts stated in the plaintiffs subsequent affidavit and does not disprove the plaintiffs claim that issues of fact exist as to whether Dr. Teng had a physician-patient relationship and *498 whether Dr. Teng breached the applicable standard of care. In fact, the portions of the plaintiff's deposition testimony quoted in Dr. Teng's brief are consistent with the plaintiff's affidavit to the effect that the plaintiff did telephone Dr. Teng's office at or about seven o'clock on the fateful morning and that she spoke with someone, whether Dr. Teng herself or her operator, about Starsha's condition and asked that Dr. Teng see her in the emergency room. While the particular portions of the plaintiffs affidavit contradicting the plaintiff's deposition testimony on the topics of the place from which she telephoned Dr. Teng's office, to whom she spoke about Starsha's condition, and how long Dr. Teng's visit to the emergency room lasted, should have been stricken by the trial court, nevertheless the trial court should not have stricken, and should have considered, the remaining portions of the plaintiff's affidavit. The plaintiff contends that the trial court erred in granting a summary judgment in favor of Dr. Teng. The plaintiff claims that she presented substantial evidence to create issues of fact as to whether Dr. Teng's preexisting physician-patient relationship with Starsha and Dr. Teng's actions and interactions at the emergency room created a physician-patient relationship and a concomitant duty to Starsha at that time, and whether Dr. Teng breached the standard of medical care for the performance of that duty. Ex parte Usrey, 777 So. 2d 66, 68 (Ala. 2000). "Once the moving party has made a prima facie showing that no genuine issue of material fact exists, the burden of proof shifts to the nonmovant to provide `substantial evidence' in support of his position, so as to show that there is a question of fact." Allen v. Storie, 579 So. 2d 1316, 1318 (Ala.1991). To overcome a motion for summary judgment in a medical malpractice action, the nonmovant must present substantial evidence, "that character of admissible evidence which would convince an unprejudiced thinking mind of the truth of the fact to which the evidence is directed." § 6-5-542(5), Ala.Code 1975 (Medical Liability Act of 1987). This Court has held that "[g]enerally, in order to overcome a defendant/physician's motion for summary judgment in a medical malpractice case, the plaintiff must submit competent expert medical testimony to prove that the defendant violated the standard of care set out in [§ 6-5-484, Ala. Code 1975]." Morris v. Young, 585 So. 2d 1374, 1376 (Ala.1991), quoting Wozny v. Godsil, 474 So. 2d 1078, 1080 (Ala.1985). Section 6-5-484 provides: Liability for a breach of the standard of care depends, first, on the existence of a duty to the patient, which, in *499 turn, depends on the existence of a physician-patient relationship creating the duty. In Oliver v. Brock, 342 So. 2d 1, 3-4 (Ala. 1976), this Court recited the general rule governing physician-patient relationships as stated in 61 Am.Jur.2d, Physicians, Surgeons, and Other Healers § 96: Whether or not a physician-patient relationship exists depends upon the facts in each case. Oliver, 342 So. 2d at 4. Viewing the evidence in the light most favorable to the plaintiff and resolving all reasonable doubts against the defendant, as we must in reviewing a summary judgment for the defendant, this Court finds that the depositions and the affidavits submitted by the parties establish that genuine issues of fact exist as to whether Dr. Teng had a physician-patient relationship with Starsha in Dr. Teng's actions and interactions relating to Starsha in the emergency room on the morning of Starsha's discharge and, if so, whether Dr. Teng breached the applicable standard of care in performing the duty she owed Starsha. The plaintiffs experts supply substantial evidence that the preexisting physician-patient relationship between Dr. Teng and Starsha and Dr. Teng's actions and interactions in the emergency room on the fateful morning created a physician-patient relationship between Dr. Teng and Starsha for that occasion. The same experts supply substantial evidence that Dr. Teng breached the standard of care. The evidence of record supports the factual assumptions grounding the experts' opinions to this effect. Thus, the trial court erred in granting a summary judgment in favor of Dr. Teng. Consequently, we reverse this summary judgment and remand the case for further proceedings consistent with this opinion. REVERSED AND REMANDED. MADDOX, HOUSTON, LYONS, and BROWN, JJ., concur. COOK, J., concurs specially. SEE, J., concurs in the judgment and concurs in Parts I and III, but dissents from Part II. HOOPER, C.J., dissents. COOK, Justice (concurring specially). Dr. Bibi Teng moved for a summary judgment, arguing that, as a matter of law, no physician-patient relationship arose out of her visit with Stacia Wilson and her daughter, Starsha Wilson, on the morning of May 19, 1994, in the emergency room of Athens Limestone Hospital. The trial court agreed with Dr. Teng and entered a summary judgment on that ground. In so doing, the trial court erred. The affidavits and depositions create a question of fact on the specific issue whether Dr. Teng's emergency-room visit with Ms. Wilson and the emergency-room physician, *500 along with her concomitant examination of Starsha's medical charts, created an implied contract to provide professional services to Starsha Wilson. SEE, Justice (concurring in the judgment and concurring in Parts I and III, but dissenting from Part II). I concur in the judgment of reversal. I also concur in Part I, which holds that the trial court fulfilled the requirements of Rule 54(b), Ala.R.Civ.P., and made the summary judgment in favor of Dr. Teng final. I also concur in Part III, which holds that the evidence creates genuine issues of material fact as to whether Dr. Teng's actions relating to Starsha created a physician-patient relationship between Dr. Teng and Starsha in the emergency room and as to whether Dr. Teng breached the applicable standard of care by failing to admit Starsha into the hospital for further observation and treatment. However, I dissent from Part II, which holds that the trial court erred in striking Ms. Wilson's affidavit. This Court has held that "`[w]hen a party has given clear answers to unambiguous questions which negate the existence of any genuine issue of material fact, that party cannot thereafter create such an issue with an affidavit that merely contradicts, without explanation, previously given clear testimony.'" Scoggin v. Listerhill Employees Credit Union, 658 So. 2d 376, 380 (Ala.1995) (quoting Van T. Junkins & Assocs., Inc. v. U.S. Indus., Inc., 736 F.2d 656, 657 (11th Cir.1984)). In this case, Ms. Wilson's deposition testimony, as quoted in the trial court's order and in the parties' briefs to this Court, contained clear responses to unambiguous questions. During Ms. Wilson's deposition, counsel asked her several questions concerning the material question of Dr. Teng's involvement in Starsha's care on the morning on which Dr. Teng saw Starsha in the emergency room. Specifically, counsel asked her when she contacted Dr. Teng's office, whether she spoke with Dr. Teng's nurse or operator, and how long Dr. Teng was in the emergency room. Ms. Wilson, in turn, provided gave clear answers to these straightforward questions. However, in her affidavit, Ms. Wilson directly contradicted her prior sworn testimony, without providing any explanation for those inconsistencies. Those inconsistencies are the sort of "`simple, direct contradiction regarding a material question of fact that has been held to preclude a party from defeating [a summary-judgment motion] solely by his own affidavit.'" Richard v. Shoals Distrib., Inc., 645 So. 2d 1378, 1383 (Ala.1994) (quoting Tittle v. Alabama Power Co., 570 So. 2d 601, 606 (Ala.1990)). The main opinion states that the trial court should have struck only those portions of Ms. Wilson's affidavit that were inconsistent with her deposition testimony, while considering the remaining portions of the affidavit. However, this Court has upheld the striking of an entire affidavit even when only portions of that affidavit appeared to contradict prior sworn testimony. See Scoggin v. Listerhill Employees Credit Union, supra, 658 So. 2d at 379; Lady Corinne Trawlers v. Zurich Ins. Co., 507 So. 2d 915, 917 (Ala.1987). Given this precedent and given the fact that the main opinion does not cite any authority for its proposition that the trial court should have considered those portions of Ms. Wilson's affidavit that were apparently consistent with her deposition testimony, I would hold that the trial court correctly struck Ms. Wilson's affidavit in its entirety. However, even without that affidavit, the evidence created genuine issues of material fact; therefore, I concur in the judgment reversing the trial court's summary judgment. HOOPER, Chief Justice (dissenting). I respectfully dissent. The main opinion recites sufficient facts to show that the *501 trial court properly entered the summary judgment for Dr. Teng. The plaintiff did not present sufficient evidence to create a genuine issue of material fact. There are procedures in an emergency room for determining who will be the doctor to treat a patient. Without the application of those procedures, the patient does not know who should be responsible for his or her treatment, nor does a doctor know that she is responsible for a particular patient. The jury should not be the final arbiter of that question, because having the jury decide it would result in having shifting standards all over the state in different hospital emergency rooms as to who should be held responsible for treatment. Dr. Teng made a showing that she was not the emergency-room treating physician. Subjecting Dr. Teng to a jury trial risks holding liable a person who lacked responsibility for treating the patient. Therefore, I dissent.

December 8, 2000

04876e8d-47c3-4bf2-93a5-b85379c39360

Ex Parte Horn

718 So. 2d 694

1961159

Alabama

Alabama Supreme Court

718 So. 2d 694 (1998) Ex parte William Fred HORN, et al. (In re William Fred HORN, et al. v. CITY OF BIRMINGHAM; and CITY OF BIRMINGHAM v. William Fred HORN, et al.). 1961159. Supreme Court of Alabama. January 30, 1998. Rehearing Denied March 20, 1998. *695 W.L. Williams, Jr., Birmingham; and David A. Sullivan, Birmingham, for petitioners William Fred Horn, et al. Demetrius Newton, city atty., Birmingham; Donald V. Watkins, Birmingham; Joe R. Whatley, Jr., and Peter H. Burke of Cooper, Mitch, Crawford, Kuykendall & Whatley, Birmingham; and Kenneth L. Thomas of Thomas, Means & Gillis, Birmingham, for respondents City of Birmingham and Mayor Richard Arrington, Jr. PER CURIAM. We granted certiorari review in order to determine whether the Court of Civil Appeals erred in affirming the trial court's ruling that the plaintiffs are not due an award of attorney fees under the "common benefit" exception to the "American rule." Although summaries of the factual background and procedural history of this case have been presented in Horn v. City of Birmingham, 648 So. 2d 607 (Ala.Civ.App.1994) ("Horn I"), Horn v. City of Birmingham, 718 So. 2d 691 (Ala.Civ.App.1997) ("Horn II"), and Battle v. City of Birmingham, 656 So. 2d 344 (Ala. 1995), a detailed discussion is necessary here. Browning Ferris Industries of Alabama, Inc. ("BFI"), operates landfills for sanitary waste (hereinafter sometimes referred to as "garbage") in Blount and Walker Counties that are permitted to accept such waste from certain other Alabama counties, including Jefferson County. In 1991, BFI sought to construct a sanitary waste transfer station and recycling center in the City of Birmingham ("the City"). The sanitary waste transfer station was to be a facility where the many BFI trucks collecting garbage from areas of the City would come and dump their loads of garbage inside a large building; the garbage would then be processed by separating recyclable waste from nonrecyclable waste. The nonrecyclable waste would later be transferred to much larger trucks for *696 transport to distant landfills, and the recyclable waste would be stored on-site for eventual sale. In January 1991, an attorney representing BFI wrote a letter to Tom Magee, chief planner in the City's Department of Urban Planning, inquiring whether BFI's proposed sanitary waste transfer station and recycling center would require a "special use" zoning permit. The BFI letter stated, in relevant part: The City's use regulations for a district zoned M-2, heavy industrial, state: (Emphasis added.) The City's M-1 use regulation allows, among other things, "Manufacturing, fabricating, processing, or assembling uses which do not create an objectionable noise, vibration, smoke, dust, odor, heat or glare." (Emphasis added.) Later that same month, Magee wrote a response to BFI, stating that it was his opinion that BFI did not need to obtain a special use permit to construct a sanitary waste transfer and recycling facility in an M-2 district: (Emphasis added.) At the time Magee wrote this letter, the only knowledge or information he had regarding sanitary waste transfer stations was that presented in BFI's letter to him and in a videotape he had also received from BFI. Magee failed to conduct any further inquiry before providing BFI with his response approving construction of the facility in that M-2 district. Thereafter, BFI obtained an option from the Golden Flake Company to purchase 10 acres of a 30-acre tract owned by Golden Flake, and BFI submitted for Golden Flake an application with the City to subdivide the property. In March 1992, BFI gave property owners immediately adjacent to the Golden Flake property notice of the intended subdivision of the property for development by BFI as a sanitary waste transfer and recycling station and the City approved subdivision of the property. BFI purchased the subdivided property from Golden Flake in March 1993 and in April BFI announced in a press release that it had obtained all the permits and approvals required by the City for it to construct a garbage transfer station in the Titusville area of Birmingham. The residents of the primarily African-American Titusville neighborhood first learned of the BFI sanitary waste transfer station through the press release. They objected to the facility's being built adjacent to their neighborhood, and several residents obtained the assistance of attorneys W.L. Williams, Jr., and David A. Sullivan. These Titusville residents and their legal counsel attended the May 11, 1993, meeting of the Birmingham City Council and voiced to the council members their objections to the proposed BFI facility. Council members responded by saying that they had not previously been aware of the pending BFI facility and that they did not believe they could do anything to prevent the completion of its construction. A larger group of Titusville residents, along with residents of Walker County, attended the May 25, 1993, meeting of the city council. During that meeting, the Titusville residents and their counsel voiced continued opposition to the BFI sanitary waste transfer station. Attorney Williams stated that he believed that under the City's M-2 zoning classification a facility such as the one BFI planned to construct required approval by the city council, and he requested that the Department of Urban Planning review the zoning ordinance again. Michael Dobbins, who was director of the Department of Urban Planning and was Magee's supervisor, stated that he believed council approval was not necessary, because he believed the BFI sanitary waste transfer station conformed with the M-2 heavy industrial zoning classification. Dobbins admitted that he had not visited a BFI sanitary waste transfer facility, but stated that if the proposed BFI facility involved the creation of noxious odors, fumes, and/or noise then it would violate the City's nuisance ordinances. Mayor Richard Arrington made a report to the council and informed it that he believed he had no legal basis to deny any further permits to BFI. However, the city council passed a resolution asking the mayor to have the City do whatever was legally possible to prevent BFI from operating a sanitary waste transfer station at the site in question. The following day the City's attorney issued a memorandum to the city council stating that he believed the City could face a multi-million dollar lawsuit if it prevented BFI from *698 completing construction of the sanitary waste transfer station. Thereafter, Dobbins wrote a letter to Williams, one of the attorneys for the Titusville residents. Dobbins stated that it was his position that BFI's proposed facility was not a garbage dump and that BFI was not required to receive any further zoning approvals before construction of the facility. It is apparent from Dobbins's letter that he was taking as fact BFI's contention that the garbage transfer station would not create any noise, noxious odors, or fumes that would prevent it from conforming with the M-2 use regulations and thus would not require city council approval. Dobbins stated in his letter to Williams that garbage transfer stations were a new method for handling household wastes and that the nearest one was being operated by BFI in Marietta, Georgia, where it was adjacent to a residential neighborhood. However, there is no indication in the record that Dobbins or any of his staff had visited the Marietta garbage transfer station, or any other operated by BFI, in order to ascertain whether such facilities created noise, noxious odors, or fumes, or in any other way would constitute a nuisance. Also in May 1993, Mayor Arrington wrote to the city council, stating that after consulting with the City's Law Department and the Department of Urban Planning, he was of the opinion that construction permits could not be legally withheld from BFI. In early June 1993, the Titusville residents appealed Dobbins's decisionthat the proposed BFI garbage transfer station did not require approval by the city council in order to be constructed in an area zoned M-2to the City's Board of Zoning Adjustment ("the Board"). The construction of the BFI facility adjacent to a residential neighborhood, and the protest of the Titusville residents, had begun to attract substantial attention from the local news media, and at the June 8, 1993, meeting of the city council, one of the council members responded by sponsoring a proposed ordinance that would regulate sanitary waste transfer facilities and would require public notice and public hearings, as well as city council approval, before construction. The ordinance was adopted by the council at the same meeting and was approved by the mayor the following day; however, public notice requirements for approval of the ordinance had not been met and it had to be passed again at a later date, as mentioned below. The Titusville residents and their counsel, along with numerous supporters, appeared before the Board of Zoning Adjustment on June 10, 1993, to support their appeal; however, the Board upheld Dobbins's decision. Thereafter, on June 24, William Fred Horn and other citizens filed in the Jefferson Circuit Court a "Notice of Appeal of the Decision of the Zoning Board of Adjustment of the City of Birmingham and Complaint for Declaratory Judgment, Petition for Writ of Mandamus and Permanent Injunctive Relief" against the Board, the City, and the mayor ("the Horn lawsuit"). The Horn filing alleged that Dobbins, as the director of the Department of Urban Planning, was the only person lawfully authorized to administer the City's zoning ordinances and, therefore, that a lesser employee such as Magee was without lawful authority to render an interpretation of the M-2 zoning ordinance when he did so in his January 1991 letter to BFI. The filing further alleged that the construction permits the City had issued to BFI, based on Magee's decision and without city council approval, were unlawful. It requested that the court order the City not to issue any further permits to BFI regarding the facility under construction until its use was approved by the city council. In July 1993, 63 persons from different cities and counties in Alabama moved to intervene as plaintiffs in the Horn lawsuit. BFI also moved to intervene in the action as a defendant. In response to extensive and continuing public pressure and media coverage brought by the plaintiffs' litigation against the City, the city council, on August 3, 1993, passed a resolution authorizing the mayor to enter into negotiations with BFI to either purchase the subject property from BFI or to exchange it for other property owned by the City. The mayor and a council member met with representatives of BFI to discuss a purchase of the property by the City, but no *699 agreement was reached and BFI continued construction of the facility. On August 27, the plaintiffs filed a motion seeking to compel the City and the mayor to be realigned from defendants to plaintiffs. Negotiations between the City and BFI continued, but failed when the City could not meet BFI's requested price for the facility, $17 million. On September 3, the mayor filed a motion with the circuit court requesting that he be realigned from a party defendant to a party plaintiff, which was granted by the circuit court. That motion stated: (Emphasis added.) On September 7, the city council adopted a resolution authorizing the mayor to obtain an appraisal of the BFI property for the purpose of condemning the property. The council also authorized the creation of a committee to investigate the BFI project. BFI responded by suing the City, Mayor Arrington, the city council, and its members, for declaratory and injunctive relief, and for $17 million in damages ("the BFI lawsuit"). In its complaint, BFI alleged that City officials, unfairly exercising political expediency, had illegally conspired to formulate a plan to "kill" its previously approved project. On September 10, the City made an offer of judgment, per Rule 68, Ala.R.Civ.P., consenting to the entry of a judgment against it and in favor of the plaintiffs in the Horn lawsuit that would require that the matter of BFI's construction permits be returned to the city council for further consideration, requiring council approval before the facility *700 could begin operating.[2] The plaintiffs accepted the offer of judgment. On September 13, 1993, Judge William A. Jackson, of the Jefferson Circuit Court, entered a final order in the Horn lawsuit, pursuant to the offer of judgment, requiring that the City refuse to issue construction permits to BFI until the sanitary waste transfer facility obtained the approval of the city council, after public notice and a public hearing. The court ordered that each party bear its own costs. Two days later, the plaintiffs filed a Rule 59, Ala.R.Civ.P., motion with the circuit court, asking the court to alter or amend the judgment so as to award them an attorney fee from the City. The trial court denied the motion and the plaintiffs appealed to the Court of Civil Appeals; that court eventually affirmed the trial court's ruling (see discussion below). On September 14, the city council adopted an amended version of the solid waste facilities ordinance it had previously adopted in June. That extensive ordinance, governing the permitting and licensing of all commercial solid waste facilities in the City, now appears as § 4-3-31 et seq., General Code of the City of Birmingham. In § 4-3-31, the City made the following findings of fact: "Section 1. Findings of Fact: (Emphasis added.) On September 17, the City's attorney wrote BFI a letter in which he invited BFI to petition the City for a special use zoning permit from the Board of Zoning Adjustment, as required by the trial court's judgment in the Horn lawsuit. However, BFI never did so. Instead, BFI attempted to use its own lawsuit against the City to gain approval to operate its garbage transfer station. The City responded to BFI's complaint against it by asserting the Horn lawsuit consent judgment in support of a collateral estoppel and res judicata defense. On January 13, 1994, Whitlynn Battle, one of the Titusville plaintiffs, moved to intervene in the BFI lawsuit against the City, as a party defendant. Battle sought to protect the judgment she and the other plaintiffs had obtained in the Horn lawsuit. The City, BFI, and Battle entered into mediation, and the BFI lawsuit was eventually settled, with a consent judgment entered in February 1994; by that settlement BFI was to sell, and the City was to purchase, BFI's property for $6,750,000. Battle, seeking to prevent the City from having to purchase the property from BFI, challenged the judgment by way of a Rule 59, Ala.R.Civ.P., motion and also sought an award of attorney fees in relation to the BFI lawsuit. The trial court denied the motions, and its ruling was eventually upheld on appeal. Battle, supra.[3] The success of the Horn plaintiffs in preventing the operation of BFI's sanitary waste transfer station, and the City's purchase of the BFI property, was brought to statewide and even international attention. According to the plaintiffs, a Birmingham daily newspaper, the Birmingham News, published more than 90 articles concerning the plaintiffs' fight against the proposed BFI garbage transfer facility, and one Birmingham television station aired approximately 100 stories on that topic. The case was the focus of discussion on the Alabama Public Television Network's news program "For the Record" on November 28, 1995, and the international organization Greenpeace produced a video on the struggle of the Horn plaintiffs entitled, "Not in Anyone's Backyardthe Grassroots *701 Victory over Browning-Ferris Industries." On the episode of "For the record," Rick Losa, a BFI representative, stated that because of the Horn litigation involving its attempt to operate a garbage transfer station in Titusville, BFI had changed its procedures for locating and constructing such a facility so that in the future public concerns about a proposed location would be considered from the start. The Horn lawsuit was also the topic of one of the 11 chapters in the 1995 academic text "Faces of Environmental Racism" by Dr. Laura Westra and Dr. Peter Wenz, in which those authors concluded that BFI's attempt to locate its garbage transfer facility in the primarily African-American Titusville neighborhood was a clear case of environmental racism. With regard to the appeal by the Horn plaintiffs of the trial court's denial of their motion for an award of attorney fees, in Horn I the Court of Civil Appeals remanded the case to the trial court for further proceedings. The Court of Civil Appeals explained: 648 So. 2d at 610. On remand, the trial court held a hearing on the issue whether the Horn plaintiffs had produced a common benefit that would support an award of attorney fees. The court listened to arguments from the parties' attorneys, but took no oral testimony. The trial court ultimately denied the plaintiffs an award of attorney fees, and in its October 31, 1995, order the court made the following findings of fact, which were based on the affidavits of Mayor Richard Arrington; Emory Folmar, mayor of Montgomery, Alabama; and Jack Harrison, city attorney for Hoover, Alabama: Given those factual findings, and given also the fact that, so far as the trial court knew, attorney fees had never been awarded in a "zoning case" based on the common benefit theory, the trial court concluded that the actions of the plaintiffs had not conferred a common benefit upon all the citizens of Birmingham in the same manner as they had benefited themselves. The court concluded: Under the American rule, the parties to a lawsuit bear the responsibility of paying their own attorney fees. However, the law recognizes certain exceptions to this rule, and attorney fees are recoverable when authorized by statute, when provided by contract, or when justified by special equity. Blankenship v. City of Hoover, 590 So. 2d 245 (Ala.1991); Reynolds v. First Alabama Bank of Montgomery, N.A., 471 So. 2d 1238 (Ala. 1985). In the latter instance, attorney fees may be awarded where the plaintiff's efforts are successful in creating a fund out of which the fees may be paid, or when the efforts of the plaintiff's attorneys render a public service or result in a benefit to the general public in addition to serving the interests of the plaintiff. City of Ozark v. Trawick, 604 So. 2d 360 (Ala.1992); Brown v. State, 565 So. 2d 585 (Ala.1990); Bell v. Birmingham News Co., 576 So. 2d 669 (Ala.Civ.App.1991). These have been termed the "common fund" and "common benefit" exceptions to the American rule. The common benefit exception is at issue here; however, the trial court, concluding that the efforts of the plaintiffs' attorneys did not create a benefit common to all the citizens of Birmingham, denied the plaintiffs' request for an award of attorney fees. Whether to award attorney fees is within the sound discretion of the trial court, and the ruling on that question will not be reversed on appeal absent an abuse of discretion. Battle, supra; Tuscaloosa County Comm'n v. Deputy Sheriffs' Ass'n of Tuscaloosa County, 632 So. 2d 442 (Ala.1993). The plaintiffs contend that the trial court abused its discretion in denying them an award of attorney fees. They say the trial court based its ruling on the fact that attorney fees had never been awarded in a zoning case and they believe its ruling was in error because, they say, under Alabama law, as set out in Brown, supra, and Bell, supra, attorney fees may be awarded in any type of case, even a zoning case, if the efforts of the plaintiffs result in a common benefit to the public. The plaintiffs argue that their efforts resulted in a substantial common benefit to all the residents of Birmingham, thereby entitling them to an attorney fees award. The plaintiffs first contend that the trial court erred in concluding that there was no common benefit to the public; they say the court's findings on which that conclusion was based are not supported by evidence properly admitted into the record. They argue that the trial judge improperly relied on three affidavits that they claim are inadmissible hearsay; the plaintiffs claim that the affidavits make conclusions based on facts not present in the record. The plaintiffs further argue that the unrebutted evidence of this case, including admissions by the City defendants, proves that their actions conferred a substantial common benefit upon all the residents of Birmingham. They claimed to have benefited Birmingham residents in at least the following ways: The plaintiffs argue that the trial court erred in categorizing their efforts as a "run-of-the-mill zoning case." They say that the trial judge's finding contradicts his earlier statement that this was a case of first impression in Alabama. As noted in the plaintiffs' above-quoted listing of claimed benefits to the Birmingham general public, they argue that this case involved much more than whether a garbage transfer station would be built in the Titusville neighborhood. They contend that this is a case in which the City defendants sought to evade their legal responsibilities and that the plaintiffs forced the City to acknowledge that existing zoning regulations prohibited the construction of a garbage transfer station in an M-2 district, unless such a use was approved by the city council after public notice and hearings. They further contend that because of their opposition to the City's approval of the BFI facility without public notice and public hearings, and the ensuing public furor it spawned, the City passed an ordinance specifically establishing that no type of solid waste facility could be constructed in any area of Birmingham without first being permitted and licensed by the city council, after public notice and hearings. They contend that their actions provided a substantial benefit to all the residents of Birmingham and that they benefited all residents in the same manner that they benefited themselves. The plaintiffs argue that the record is replete with evidence supporting their position, including publicly made admissions and legal findings of fact made by the City defendants that directly contradict the City's present position and the trial court's finding that there was no common benefit to Birmingham residents. First, the plaintiffs refer this Court to the affidavits of several Birmingham residents, who were not parties in the action below, who stated that they believed the efforts of the plaintiffs conferred a common benefit upon the residents of Birmingham. Then, in addition to the statements contained in Mayor Arrington's motion to realign as a party plaintiff and in the findings of fact contained in the solid waste facility licensing ordinance now codified at § 4-4-31 of the Birmingham General Code, which are quoted above, the plaintiffs reference numerous statements made by City defendants that the plaintiffs say are admissions that the plaintiffs' efforts resulted in significant relief that conferred a substantial common benefit. Some of the statements by City defendants referenced by the plaintiffs were merely public comments, while others are found in legal documents. The latter group includes: (1) In the resolution passed by the city council authorizing the mayor to enter into negotiations with BFI to purchase the BFI property, the city council stated, in part: (2) In its answer to the complaint in the BFI case, the City asserted the defenses of res judicata and collateral estoppel, which was based on the Rule 68 judgment obtained by the plaintiffs' efforts. (3) In its answer to the BFI complaint, the City contended that BFI was barred from relief because, it said: The plaintiffs argue that the City is bound by these prior public statements and findings of fact as admissions of fact, and, citing Parr *704 v. Champion Int'l Corp., 667 So. 2d 36 (Ala. 1995), and Tittle v. Alabama Power Co., 570 So. 2d 601 (Ala.1990), they say that the affidavit submitted by Mayor Arrington contradicting the above statements, without offering an explanation of his earlier statements, cannot be used to create questions of fact. They contend that the trial court erred in not striking the affidavit and that the court's findings of fact based in part on that affidavit are, therefore, erroneous. Finally, citing Bullard v. Creative Leasing, Inc., 624 So. 2d 199 (Ala.Civ.App.1993), and Lepeska Leasing Corp. v. State Dep't of Revenue, 395 So. 2d 82 (Ala.Civ.App.1980), the plaintiffs argue that the ore tenus standard of review does not apply to the trial court's findings of fact because the court did not hold an evidentiary hearing, but took the case on submission based on the pleadings, motions, exhibits, and briefs. Thus, they say, there was no oral testimony for which the trial court could judge credibility. The plaintiffs contend that in such a situation the de novo standard of review applies to the trial court's factual findings, and that when such review is applied by this Court to the plaintiffs' evidence described above and to Alabama law regarding awards of attorney fees, it will be apparent that the trial court erred in denying their motion for such an award. In response, the City contends that the trial court did not abuse its discretion in denying the plaintiffs' motion for an award of attorney fees, and it argues that this Court should affirm that ruling. It says that there is sufficient evidence in the record to support the court's ruling, and it refers this Court to the affidavits of Mayor Arrington, Mayor Folmar, and attorney Jack Harrison, in which they stated that the plaintiffs' efforts did not confer a common benefit upon Birmingham residents.[4] Next, the City denies that the plaintiffs' efforts, i.e., their efforts through the Horn lawsuit, were responsible for preventing BFI from operating a garbage transfer facility on the property at issue. It notes that the result of the Horn litigation was that the matter of approval for BFI to operate the facility was to be returned to the city council for further consideration, but ultimately the matter was never brought up before that body. The City says that it made no other promises to the plaintiffs regarding what would happen upon further review by the City. It argues that preventing BFI from operating its garbage transfer facility was actually achieved by a consent judgment entered in other litigation, the BFI lawsuit. Next, the City argues that the evidence in the record of this case indicates that the plaintiffs did not confer a common benefit upon the residents of Birmingham. It says that under Brown, supra, and Bell, supra,[5] the kind of action that satisfies the "common benefit" requirement is one that stops the violation of a clearly defined state law, and it argues that no violation of a state law or other clearly defined right was ever at issue. It contends that the plaintiffs' lawsuit merely involved the interpretation of one of the City's zoning ordinances. In addition, the City says that even if the plaintiffs' efforts can be said to have prevented operation of the BFI garbage transfer station, the facility would have had no impact on residents of eastern Birmingham and, thus, that a benefit *705 was not conferred on all the residents of Birmingham in the same manner as it was conferred on themselves. The City also attacks the plaintiffs' Rule 39(k), Ala.R.App.P., statement of facts, arguing that much of the plaintiffs' evidence in the record is unreliable information.[6] The City contends that the affidavits it submitted to the trial court provided a proper basis for the trial court's denial of the plaintiffs' motion for attorney fees. Finally, the City argues that attorney fees should not be awarded in a case contesting a city's zoning decision without an indication from the legislature that the plaintiffs are entitled to such an award. It then says that Ala.Code 1975, § 11-52-81, the statute providing for an appeal of a decision of a zoning board, does not mention that any party is entitled to an award of attorney fees, and it argues that this Court should not read such an entitlement into the statute. We first note that the plaintiffs are correct in their argument that where a trial court does not receive evidence ore tenus, but instead makes its judgment based on the pleadings, exhibits, and briefs, the ore tenus standard's presumption of correctness does not apply to the trial court's factual findings and it is the duty of the appellate court to judge the evidence de novo. Tate v. Kennedy, 578 So. 2d 1079 (Ala.1991); Phillips v. Knight, 559 So. 2d 564 (Ala.1990); Sheehan v. Liberty Mut. Fire Ins. Co., 288 Ala. 137, 258 So. 2d 719 (1972). The trial court in this case did not receive oral testimony and, thus, that court's findings of fact carry no presumption of correctness. Given a de novo standard of review, and the body of evidence in the record of this case, we disagree with the trial court's factual findings. First, the trial judge found that this was a "run-of-the-mill zoning case." Although this case involved a decision by the City of Birmingham's Board of Zoning Adjustment, the circumstances and history of the case described above make it clear that this is not a run-of the-mill case. This is not a case where the city council granted a special use exception from the M-2 zoning ordinance for the construction a garbage transfer station after public notice and a public hearing, and the plaintiffs succeeded in reversing that decision on appeal to the circuit court, causing a benefit to the residents in that particular area of the City alone. Rather, after the BFI garbage transfer facility had been approved by the City in an M-2 district, without public hearings and city council approval, and the City defendants contended that they could do nothing to prevent operation of the facility, the plaintiffs succeeded in proving that the zoning ordinance required public hearings and city council approval of a special use permit before the BFI facility could operate. Thus, the plaintiffs forced the City to acknowledge and affirm that its residents have certain due process protections in the zoning regulations relating to construction of garbage-related facilities when the City had at first vigorously denied that. The noteworthiness of that fact is evident from the great publicity the case merited during litigation and afterward as the plaintiffs' success reached international audiences. Next, the trial court found that the plaintiffs' acceptance of the City's Rule 68 offer of judgment resulted in very limited relief to the plaintiffs. On its face, the Horn judgment required that the issue of operation of the garbage transfer facility be returned to the city council. However, a study of the record makes it apparent that because of the plaintiffs' efforts there was so little chance BFI would subsequently receive approval from the city council to operate its garbage transfer station that BFI never applied for a special use permit and never sought city council approval. Instead, BFI pursued a lawsuit against the City, seeking a multi-million-dollar damages award. The City responded by claiming the Horn judgment as a res judicata and collateral estoppel defense to the action. Thus, although it was the consent judgment between BFI and the City in the BFI lawsuit that formally ended the *706 possibility the BFI garbage transfer facility might one day begin operations, as a practical matter that judgment was the result of the earlier Horn judgment achieved by the plaintiffs. Thus, the Horn judgment did result in substantial relief to the plaintiffs. Relying on several affidavits submitted by the City, the trial court found that any benefit resulting from the plaintiffs' efforts inured only to their benefit and that of their neighbors and did not inure to the residents of Birmingham living outside the Titusville neighborhood, so that the plaintiffs did not bestow a common benefit upon the all residents of Birmingham. However, the record contains evidence indicating that the plaintiffs' efforts did result in a common benefit to the residents of Birmingham outside the Titusville neighborhood. First, we note that in response to the public interest caused by the plaintiffs' efforts in this case, the City passed a new ordinance specifically regulating and licensing solid waste facilities, such as the garbage transfer station at issue. Although it could be argued that the ordinance did not directly result from the Horn judgment, such an argument takes a narrow view not consistent with the history of this case discussed in detail above. The record reflects that the City's solid waste licensing ordinance is the result of the plaintiffs' efforts in this case. Thus, the plaintiffs' efforts clearly resulted in an increased level of due process protection to all residents of Birmingham. It is highly likely that additional solid waste facilities will be needed in Birmingham in the future, and all of its residents have received a common benefit from the existence of the ordinance. Moreover, the record contains many statements by City officials such as Mayor Arrington and members of the city council made during the course of this litigation that are consistent with the plaintiffs' claim that they bestowed a common benefit upon the residents of Birmingham and that are inconsistent with the City's present position. For example, as is quoted above, Mayor Arrington, in his official capacity, stated in his motion to realign himself as a party plaintiff that if it was allowed to operate the BFI garbage transfer station would be a public nuisance "prejudicial to the comfort and offensive to the senses of the ordinary citizens of the City of Birmingham." The city council made in its solid waste facilities ordinance a finding of fact that the collection and disposal of solid waste is a "matter of grave concern and is an activity thoroughly affected with the public interest." We take these and other public statements to be evidence that the plaintiffs' efforts bestowed a substantial common benefit upon all the residents of Birmingham. Although the City has attempted to rebut that evidence by submitting several affidavits, we find each to be flawed. First, Mayor Arrington's affidavit is clearly contradicted by the prior position set out in his motion to realign as a party plaintiff. In Tittle, 570 So. 2d at 604, this Court stated: "This Court has held that when a party to an action has given clear answers to unambiguous questions that negate the existence of any genuine issue of fact, that party cannot later create an issue of fact by submitting an affidavit that directly contradicts, without explanation, that earlier testimony." Mayor Folmar's affidavit is based solely on the limited facts of this case contained in the Horn I opinion, and it relates to his experiences in zoning disputes in Montgomery. It is not based on the body of facts contained in the record of this case. Although attorney Jack Harrison's affidavit is of greater weight, it is not controlling over the admissions made by the City defendants during the course of the litigation. In sum, given our finding that the record contains abundant evidence that the plaintiffs bestowed a common benefit upon the residents of Birmingham, we conclude that the trial court erred in denying the plaintiffs' motion for an award of attorney fees. In Brown, supra, this Court reversed the trial court's denial of an award of attorney fees where the litigants had challenged the validity of the State's practice of trying citizens on unsworn and unverified traffic ticket complaints. In Bell, supra, this Court affirmed the trial court's award of attorney fees to the Birmingham News Company, which had filed an action that enforced statutory requirements that the Birmingham City Council conduct its business in open and public meetings *707 and that election of city council officers be conducted in public. We conclude that the plaintiffs' efforts similarly "[brought] an end to an improper practice." 576 So. 2d at 670-71. The Court of Civil Appeals erred in affirming the judgment of the trial court. We remand this cause for that court to enter an order consistent with this opinion. REVERSED AND REMANDED. ALMON, SHORES, HOUSTON, KENNEDY, COOK, and BUTTS, JJ., concur. HOOPER, C.J., and MADDOX and SEE, JJ., dissent. [1] The record does not indicate why BFI's January 1991 letter to Tom Magee of the City's Department of Urban Planning referred to a 70-ton garbage truck while Magee's letter in response referred to a 22-ton garbage truck. [2] BFI, an intervenor in the case, was not a party to the offer of judgment. [3] This Court did not address the merits of Battle's request for attorney fees, affirming the judgment of the trial court because "all of Battle's arguments in support of her request for attorney fees apply solely to her efforts in the Horn case." Battle, 656 So. 2d at 347. [4] The plaintiffs moved the trial court to strike the affidavits, arguing that they were not based on facts in evidence and that they were merely opinions and conclusory perceptions. [5] The City also cites Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975), for the proposition that attorney fees should not be awarded to the plaintiffs. However, in Mims v. Teamsters Local No. 728, 821 F.2d 1568 (11th Cir.1987), the Court of Appeals stated: "In its order denying attorney's fees, the district court questioned the continued efficacy of the Hall [v. Cole, 412 U.S. 1, 93 S. Ct. 1943, 36 L. Ed. 2d 702 (1973),] Court's common benefit analysis in light of the Court's subsequent decision in Alyeska Pipeline Serv. Co. v. Wilderness Sc'y, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975), which denied attorney fees under the `private attorney general' approach, to environmental groups that sued to bar construction of the trans-Alaska oil pipeline. We respectfully disagree with the district court because the `common benefit' exception was not at issue in Alyeska." 821 F.2d at 1570, n. 6. [6] However, we note that the documents and videotapes the plaintiffs rely on were admitted into evidence by the trial court.

January 30, 1998

5f621fdc-22c9-49ba-9fbe-dba2261d5bf8

PRUDENTIAL BALLARD REALTY CO. INC. v. Weatherly

792 So. 2d 1045

1981671

Alabama

Alabama Supreme Court

792 So. 2d 1045 (2000) PRUDENTIAL BALLARD REALTY COMPANY, INC., and Hugh Weimorts v. James WEATHERLY and Carol Weatherly. 1981671. Supreme Court of Alabama. July 28, 2000. Opinion Overruling Rehearing December 1, 2000. Dissenting Opinion on Overruling of Rehearing December 22, 2000. *1046 E. Hamilton Wilson, Jr., Clyde C. Owen, Jr., and T. Cowin Knowles of Ball, Ball, Matthews & Novak, P.A., Montgomery, for appellants. Edward B. Parker II, Montgomery, for appellees. Les Hayes III of Melton, Espy, Williams & Hayes, Montgomery, for amicus curiae Alabama Association of Realtors. PER CURIAM. The opinion released April 14, 2000, is withdrawn and the following is substituted therefor. The defendants Prudential Ballard Realty Company, Inc., and its agent Hugh Weimorts appeal from a judgment entered on a jury verdict in favor of the plaintiffs James Weatherly and his wife Carol Weatherly. The Weatherlys had sued the defendants for damages based on fraudulent misrepresentations they allege the defendants made while the defendants had the Weatherlys' home listed for sale. We affirm. "In reviewing a jury verdict, an appellate court must consider the evidence in the light most favorable to the prevailing party...." Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831 (Ala.1999). Considered in that manner, the evidence suggests the following facts: In May 1995, the Weatherlys listed their Montgomery home for sale with Weimorts. Weimorts then assisted the Weatherlys in finding a home to purchase in Lowndes County. The Weatherlys signed a contract to purchase a home in Lowndes County, but the contract was contingent upon the Weatherlys' finding a purchaser for their Montgomery home before August 30, 1995. On August 28, 1995, Eddie Stallworth and his wife signed a contract to purchase the Weatherlys' Montgomery home. The Stallworths' contract was contingent on the Stallworths' being able to obtain financing for the purchase. Weimorts assured the *1047 Weatherlys that the Stallworths had the financing to purchase the Weatherlys' home, when in fact they did not. The Weatherlys told Weimorts that they could not afford to own both homes at the same time. Based upon Weimorts' misrepresentations, the Weatherlys closed on the purchase of the Lowndes County home and, anticipating closing on the sale of the Montgomery home, allowed the Stallworths to move into the Montgomery home. The Stallworths, however, were never able to get financing for the purchase of the Montgomery home; they began making rental payments to the Weatherlys. The Weatherlys did not sell the Montgomery home until October 1996. The Weatherlys allege that they suffered financial injury and mental anguish from October 1995 to October 1996, the 12-month period during which they owned both homes. The Weatherlys filed an action in Lowndes County to recover damages based upon the defendants' misrepresentations. The jury awarded the Weatherlys $250,000 in compensatory damages and $2.5 million in punitive damages. The trial court denied the defendants' motion for a new trial and their motion for a judgment as a matter of law, but conditioned its denial of a new trial on the Weatherlys' accepting a remittitur of punitive damages of $1,250,000. The Weatherlys accepted the remittitur. The following issues are presented for review: With respect to the first issue, we note that we have carefully considered the defendants' argument that the evidence was insufficient for the trial court to submit the Weatherlys' claims to the jury. We conclude that the trial court properly denied the defendants' motion for a judgment as a matter of law. The evidence created fact questions for the jury to resolve. As to the second issue, the record indicates that the jury was selected from a panel of 35 veniremembers. Of that panel, 26 members were black; 9 were white. The Weatherlys' attorney used nine of his peremptory challenges to remove white veniremembers and two of his peremptory challenges to remove black veniremembers. The Weatherlys and Weimorts are white. The defendants, relying on a number of cases, including Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986), and Powers v. Ohio, 499 U.S. 400, 111 S. Ct. 1364, 113 L. Ed. 2d 411 (1991), challenged the Weatherlys' use of their peremptory challenges and argued that the challenges were motivated by impermissible racial discrimination as evidenced by the removal from the panel of all nine white veniremembers. Following the procedure set out in Ex parte Branch, 526 So. 2d 609 (Ala.1987), the trial court asked the Weatherlys to explain the reasons for their challenges. The defendants *1048 argue that the reasons given were pretextual. The trial court found the reasons given to be race neutral. We have reviewed the reasons given by the Weatherlys for each challenge, and we do not find the trial court's findings on this issue to be clearly erroneous. Ex parte Branch, supra; Ex parte Thomas, 659 So. 2d 3 (Ala. 1994) (discussing the "clearly erroneous" standard for reviewing the trial court's findings of fact on a Batson challenge). In connection with their third issue, the defendants argue that the trial court erred to reversal in refusing three of their requested jury instructions. The record indicates, however, that requested instruction no. 53, which deals with one's duty to mitigate damages, was properly refused because the defendants did not affirmatively plead mitigation of damages as a defense, either in their answer or at any time during the trial. Any matter constituting an avoidance or affirmative defense, such as mitigation of damages, must be affirmatively pleaded. See Rule 8(c), Ala. R.Civ.P.; Harkins & Co. v. Lewis, 535 So. 2d 104 (Ala.1988). Although the defendants did raise the issue just before the case was submitted to the jury (by objecting to the trial court's refusal to give requested instruction no. 53), the evidence relied on by the defendants in support of their mitigation-of-damages argument was sufficiently within the proof of the issues that were properly before the court to preclude the operation of Rule 15(b), Ala. R.Civ.P. See Harkins & Co. v. Lewis, supra. The trial court did not err in denying the defendants' requested instruction no. 53. Furthermore, we find no error in the trial court's refusal of the defendants' requested instructions nos. 63 and 65. Section 6-11-20, Ala.Code 1975, provides, in part: The trial court instructed the jury in part as follows: "If you are reasonably satisfied that the Defendants or either of them has been shown by clear and convincing evidence to be guilty of an intentional misrepresentation, *1049 deceit, or a concealment of a material fact that the Defendant had a duty to disclose, which was gross, oppressive, or malicious and committed with the intention on the part of the Defendant of thereby depriving the Plaintiff of property or legal rights or otherwise causing injury and the Plaintiff did suffer such injury or damage as a proximate result of the fraud or deceit, then in your discretion you may award punitive damages in addition to the actual damages." Requested instruction no. 63 set out the definition of "malice," as stated in § 6-11-20(b)(2); requested instruction no. 65 set out the definition of "oppression," as stated in § 6-11-20(b)(5). Relying on § 6-11-20(b)(1), the plaintiffs based their fraud claims, with the exception of their reckless-fraud claim, on allegations of intentional misrepresentation, deceit, and suppression. Section 6-11-20(b)(1) defines "fraud" as "[a]n intentional misrepresentation, deceit, or concealment of a material fact the concealing party had a duty to disclose [that] was gross, oppressive, or malicious and committed with the intention on the part of the defendant of thereby depriving a person or entity of property or legal rights or otherwise causing injury." That section also states that in order to award punitive damages it must be shown by clear and convincing evidence that the misrepresentation, deceit, or suppression was "gross, oppressive, or malicious." The terms "malicious" and "oppressive," as defined above, and the term "gross," which is defined as inexcusable, flagrant, or shameful, see Talent Tree Personnel Services, Inc. v. Fleenor, 703 So. 2d 917 (Ala.1997), are subsumed within the definition of fraud in § 6-11-20(b)(1). In other words, it cannot seriously be argued that an intentional act of fraud committed for the purpose of "depriving a person or entity of property or legal rights or otherwise causing injury," is not a gross, malicious, or oppressive act, as those terms are defined in § 6-11-20. In short, for purposes of applying § 6-11-20(b)(1), the terms "gross," "malicious," and "oppressive" are redundant. The trial court adequately instructed the jury with respect to the plaintiffs' fraud claims. As to the fourth issue, the defendants contend that the compensatory-damages award is excessive because, they argue, the award consists primarily of damages awarded as compensation for mental anguish and, they argue, the evidence does not support a substantial compensatory-damages award for mental anguish. When a court is assessing whether compensatory damages are excessive, the focus is on the plaintiff. A court reviewing a verdict awarding compensatory damages must determine what amount a jury, in its discretion, may award, viewing the evidence from the plaintiff's perspective. There is no fixed standard for ascertaining what are adequate compensatory damages for mental anguish. A determination of how much to award is left to the sound discretion of the jury, subject only to correction by the court if the jury clearly abused its discretion or was improperly influenced by passion or bias. When there is no evidence before the court of any misconduct, bias, passion, prejudice, corruption, or improper motive on the part of the jury, or when there is no indication that the jury's verdict is not consistent with the truth and the facts, there is no statutory authority to invade the province of the jury in awarding compensatory damages. See Pitt v. Century II, Inc., 631 So. 2d 235 (Ala.1993). Here, the jury awarded the Weatherlys a total of $250,000 in compensatory damages, most of which, the record indicates, was compensation for mental anguish. *1050 After reviewing the record, we conclude that the evidence of the Weatherlys' out-of-pocket losses, together with the evidence of the mental anguish they suffered as a result of the defendants' actions, supported the jury's award of compensatory damages. The evidence indicates that the Weatherlys suffered financial hardship and that they were put under a great deal of stress as the result of the defendants' actions. The Weatherlys worried about not being able to pay their bills on time; they were forced to borrow money from family members and from Carol Weatherly's employer. There was additional evidence that the Weatherlys had "crying spells"; that James Weatherly was treated for depression and that he lost weight; that Carol Weatherly suffered from Tourette's syndrome (a neurological condition that causes involuntary muscle movements and uncontrollable verbalization) and that the stress caused by the defendants' actions had made that condition worse; and that the stress of the situation had interfered with the Weatherlys' marital relationship. Based on our review of the record, we can find no indication that the compensatory-damages award (which, we emphasize, was to compensate both of the Weatherlys for, among other things, the mental anguish they suffered) was the result of any misconduct, bias, passion, prejudice, corruption, or improper motive on the part of the jury, nor was there any indication that the verdict was not consistent with the truth and the facts. Therefore, we have no authority to invade the province of the jury and reduce the compensatory-damages award. With respect to the fifth issue, the jury, in addition to compensatory damages, awarded punitive damages in the amount of $2.5 million. The trial court reduced that award to $1.25 million. The defendants argue that $1.25 million is excessive. When reviewing a trial court's award of punitive damages, this Court looks to the three guideposts set out by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), as well as the factors listed in Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989). In reviewing the facts of the present case in light of those factors, we find that the facts of this case will not support the award of $1.25 million. In particular, we note that Weimorts's conduct, though reprehensible, was not so reprehensible as to support a $1.25 million punitive-damages award; nor did Weimorts or Ballard profit greatly from that conduct. Therefore, we conclude that a $750,000 punitive-damages award would be sufficient to punish the defendants and to deter them from further similar conduct, without compromising their due process rights. For the reasons stated above, we affirm the judgment of the trial court on the condition that the Weatherlys file with this Court within 21 days a remittitur of punitive damages to the sum of $750,000; otherwise, the judgment will be reversed and the cause remanded for a new trial. OPINION OF APRIL 14, 2000, WITHDRAWN; OPINION SUBSTITUTED; APPLICATION FOR REHEARING GRANTED; AFFIRMED CONDITIONALLY. MADDOX and ENGLAND, JJ., concur. HOUSTON, COOK, LYONS, and JOHNSTONE, JJ., concur specially. SEE and BROWN, JJ., concur in part and dissent in part. HOOPER, C.J., dissents. *1051 HOUSTON, Justice (concurring specially). I am aware of Acts of Alabama, Act No. 99-358, which was entitled as an act "[t]o regulate the award of punitive damages in civil actions and to provide an effective date for this act." Even though the Act was made effective immediately upon its passage and approval by the Governor (the Governor's approval was given on June 7, 1999, before the trial of this case), § 4 of the Act provided, "This act shall apply to all actions commenced more than 60 days after the effective date of this act." Therefore, this Act applies to actions commenced after Friday, August 6, 1999 (considerably after the date this action was filed), and it does not apply to this action. If this Act did apply to this action, then, based upon defendant's Exhibit H3, Prudential Ballard Realty Company, Inc., would be considered a "small business" under that Act, for it has a net worth of less than $2 million, and the punitive-damages award would have to be limited to $50,000, which apparently is greater than 10% of Prudential Ballard Realty Company's net worth. If the Legislature had made Act No. 99-358 apply to all cases tried after the "effective date" of June 7, 1999, then I would have voted to limit punitive damages to $50,000 in this case. However, for those cases involving the alleged excessiveness of a punitive-damages award in actions filed no later than August 6, 1999, I would apply the following rules. In reviewing punitive-damages awards in cases decided after BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), this Court has struggled with the question whether a specific punitive-damages award is reasonable. Although the United States Supreme Court provided guidance in BMW by setting out the three guideposts to use as factors(1) the degree of reprehensibility; (2) the ratio of actual or likely harm to punitive damages; and (3) the sanctions imposed for comparable misconduct, see BMW, 517 U.S. at 574-75, 116 S. Ct. 1589, there is no set analysis to help trial courts or appellate courts apply these guideposts. See Paul M. Sykes, Marking a Road to Nowhere? Supreme Court Sets Punitive Damages Guideposts in BMW v. Gore, 75 N.C.L.Rev. 1084 (March 1997). This lack of analysis has allowed the law in this area to become muddled, which, in turn, has led to unpredictability in the amounts of punitive damages this Court has approved. For example, we have held to be constitutionally acceptable ratios of punitive damages to compensatory damages ranging from 1:1 in Ford Motor Co. v. Sperau, 708 So. 2d 111 (Ala.1997), to 121:1 in Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala.1997). See Employees' Benefit Ass'n v. Grissett, 732 So. 2d 968, 979 (Ala. 1998). This unpredictability has caused confusion among the judiciary, the bar, and perhaps most importantly, the public; therefore, I feel the need to write specially and to set out the steps I believe this Court should take to alleviate the confusion that unpredictability has caused. As I see it, the unpredictability faced by both plaintiffs and defendants in an action seeking both compensatory damages and punitive damages can result in two major problems. The first is faced by potential plaintiffs who have incurred an injury for which, although the potential compensatory damages are small, a jury may consider assessing punitive damages against the defendant. Because there is no clear road map as to the amount of punitive damages that is constitutionally recoverable, such plaintiffs may understandably encounter difficulty in obtaining counsel. In other words, an attorney who undertakes to represent *1052 a plaintiff on a contingency-fee basis in a case where the compensatory damages are low anticipates the major portion of any fee will be derived from the punitive-damages award. Therefore, it is important that the law provide an accurate indication as to the amount of damages a plaintiff can reasonably expect in a given case. In addition, this unpredictability can pose a problem for defendants as well: E. Berton Spence, Punitive Damages in Alabama After BMW v. Gore: Are Out-comes Any More Predictable? 59 Ala. Law. 314 (Sept.1998). Without knowing a range within which their potential damages are likely to fall, it is impossible for a defendant to accurately evaluate a case for settlement purposes. Because of these problems, I believe that the following analysis should be used in determining whether a punitive-damages award is excessive. Once it has been established that punitive damages are appropriate in a particular case, I would establish a benchmark amount of the greater of $20,000 or 3 times the compensatory-damages award as the cornerstone for the analysis in that case.[1] This amount would be the standard punitive-damages award for that case. If a punitive-damages award does not exceed the benchmark amount, I would consider it to be presumptively reasonable. Any deviation greater than that amount would require special justification if it is challenged by the defendant. In assessing the justification, the Court would apply the factors set out in BMW, Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989), such as the reprehensibility of the defendant's conduct, whether that conduct resulted in physical injury to the plaintiff, the defendant's financial position, any criminal sanctions, and any other civil *1053 actions against the same defendant based on the same conduct. In such a situation, where the punitive-damages award is greater than the benchmark amount, the plaintiff would have the burden of establishing the justification to support that deviation. If the punitive-damages award is lower than the benchmark amount, the defendant could present evidence to rebut the presumption that the award is reasonable; however, the burden in this scenario would be on the defendant to prove that, under the factors set out in BMW, Hammond, and Green Oil, the award, while at or below the benchmark amount, is nonetheless excessive. Only in the most extraordinary situations would the award be deemed excessive when that amount is at or below the benchmark. See Wilson v. Dukona Corp., 547 So. 2d 70 (Ala.1989); Employees' Benefit Ass'n, 732 So. 2d 968; Ford Motor Co., 708 So. 2d 111. In setting this benchmark amount, I do not intend to establish a mathematical formula for determining punitive damages in every case. As the United States Supreme Court has stated: "Of course, we have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award." BMW, 517 U.S. at 582, 116 S. Ct. 1589. Punitive-damages awards would continue to be analyzed on a case-by-case basis, and the jury would maintain the discretion to set those damages in an amount it deems necessary. Green Oil, 539 So. 2d at 222. However, the reasonableness of the award of those damages would still be subject to judicial review, and, when the award of punitive damages is challenged, I would use the benchmark amount as a means of determining if any deviation from this amount is justified. See Id. I believe that with this analysis in place, the two problems noted above would be alleviated. A plaintiff would be able to secure counsel, because attorneys would know that if an award of punitive damages is appropriate, any judicial review of that award probably would not result in a reduction of the award of punitive damages below $20,000. This should ensure that a plaintiff can obtain counsel in a case even if the potential compensatory damages are particularly low. Furthermore, this analysis would allow a defendant to adequately evaluate his or her case, because a defendant would know the general range of punitive damages that can be expected to be approved in the ordinary case. In the present case, the Weatherlys were awarded compensatory damages of $250,000. Therefore, the benchmark amount of punitive damages for this case is $750,000 ($250,000 × 3 = $750,000). The jury awarded $2.5 million in punitive damages. After conducting a hearing in accordance with BMW, Hammond, and Green Oil, the trial court entered an order reducing the punitive damages award to $1.25 million. The punitive-damages award, as remitted, is still greater than the benchmark amount of $750,000; therefore, under my proposed test, the plaintiffs would have the burden of proving a special justification for the deviation from the 3:1 ratio, based on the factors discussed in BMW, Hammond, and Green Oil. After reviewing the facts of this case in light of the BMW, Hammond, and Green Oil factors, I find that there is no special justification here.[2] Therefore, I concur *1054 with the majority's reduction of the punitive-damages award to $750,000, but I do so because it would be the benchmark amount under the analysis I have set out in this special writing. COOK, Justice (concurring specially). I concur in the main opinion. I also join in the reasoning expressed in Justice Lyons's concurring opinion. LYONS, Justice (concurring specially). I concur in the per curiam opinion. I write specially to discuss the standards applicable to a recovery of punitive damages. In the more than two years that I have served on this Court, we have repeatedly faced the difficult issue of determining the appropriate proportion of compensatory damages to punitive damages that will afford a defendant the rights guaranteed under the Due Process Clause of the Fourteenth Amendment as articulated in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) ("BMW I"). Before the release of BMW I, arguments for using a low-digit multiplier of compensatory damages to arrive at the appropriate punitive-damages award were not well received. In Alabama, a punitive-damages award, to be upheld, did not need to bear any particular mathematical relationship to the compensatory-damages award in the case. See, e.g., U-Haul Co. of Alabama v. Long, 382 So. 2d 545 (Ala. 1980); accord, Associates Fin. Servs. Co. of Alabama, Inc. v. Barbour, 592 So. 2d 191 (Ala.1991). In earlier times, the practitioner could try a case for a plaintiff without laying a strong predicate for ample compensatory damages solely to protect a possibly substantial award of punitive damages from a remittitur. The customary practice began to change dramatically with the release of BMW I. On May 9, 1997, this Court released its opinion in BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala.1997), on remand from the United States Supreme Court ("BMW II"), in which it approved a punitive-damages-to-compensatory-damages ratio of approximately 12:1. Although I believe that a stated preference for applying, as a rule of thumb, a comparatively low multiplier is unfair to plaintiffs in those cases tried before the clarification of the law concerning the need for significant compensatory damages as a basis for determining the amount of punitive damages,[3] I do not see the necessity for similar concern in cases tried after the change in the law became clear. Most of those earlier cases appear to have worked their way through the system. On the other hand, I am not convinced that low-digit multipliers are mandated in every case. *1055 We must strike a delicate and difficult balance. Under the Criminal Code, a detailed schedule of punishments permits a would-be wrongdoer to analyze in advance the consequences of the contemplated conduct. Without standards, there is no predictability to the consequences of contemplated conduct, and the actor risks the arbitrary imposition of horrific punishments for the slightest wrong. The wisdom of degrees of punishment for criminal acts is within the province of the Legislature, subject to constitutional challenges for excessiveness. This Court does not sit as a legislative body and, moreover, the separation-of-powers doctrine, set out in § 43 of the Constitution of Alabama of 1901, demands that we refrain from legislative action. We must therefore confine our action to those rules laid down in the adjudication of cases as they come before us, because we are not the appropriate body to declare in advance elaborate standards suitable for gauging an appropriate civil penalty in the myriad of settings in which mankind might manifest its frailty. Yet, from both a constitutional perspective and as judges whose duty it is to administer fair and effective justice, we are required to set some standards. I applaud Justice Houston's special concurrence for its commendable effort to address a defendant's need for predictability while at the same time recognizing that a slavish adherence to a low multiplier would insulate certain wrongdoers simply by making it uneconomical to make them accountable. Justice Houston endorses a "benchmark" of the greater of a 3:1 ratio of punitive damages to compensatory damages or $20,000. The burden of upholding an award above the benchmark would be on the plaintiff. Justice Houston quite properly observes that the United States Supreme Court has consistently rejected a ratio or a mathematical formula for determining punitive damages. See BMW I, 517 U.S. at 582, 116 S. Ct. 1589. Justice Houston's formula is only a benchmark; it is not a rigid formula subject to criticism for going beyond the constitutional boundaries set in BMW I. My concern is not with the end but with the means. I fear that Justice Houston's benchmark may err too far on the side of predictability by drawing an excessively bright line, albeit only in the form of a guideline. But I do not believe that the solution is the complete rejection of any standards. The trial courts, the bar, and last, but certainly not least, the public are entitled to a compass to guide them in this exceedingly difficult area. I believe we should endorse, as a general rule, a presumptively reasonable benchmark that is pegged to a range rather than a specific number. I recognize that dulling the bright line may lead to an equally offensive vagueness, but at this stage of our walk down this path I prefer to err in that direction.[4] A general rule of preference for single-digit benchmarks serves society's dual needs for adequacy of standards while effectively meeting the goals of deterrence and punishment in civil cases. The use of a range of single-digit benchmarks has impeccable credentials.[5] *1056 We should not, however, embrace single-digit benchmarks without recognizing the need for an exception where necessary to prevent a range of wrongdoing from escaping accountability. Justice Houston's solution of allowing $20,000 in punitive damages to pass muster without regard to the ratio reflects commendable sensitivity to the problem of making wrongdoers accountable in those cases where a plaintiff has only a modest claim for compensatory damages. I suggest that we deal with the problem by recognizing in such cases the propriety of multipliers sufficiently high so that both the plaintiff and the plaintiff's attorney will have adequate incentive to secure accountability for reprehensible conduct. Without such an approach, a well-financed and litigious defendant could easily make the presumptive floor of $20,000 highly unattractive to both the plaintiff and the plaintiff's counsel. Litigation costs are a traditional factor to be applied in gauging the excessiveness of punitive damages. Life Ins. Co. of Georgia v. Parker, 726 So. 2d 619, 624 (Ala. 1998). We should announce that we are prepared to mute a defendant's shrill claims of "sticker shock" in instances of high ratios resulting from modest claims for compensatory damages by taking into account high litigation costs. Our end should be accountability for reprehensible conduct, even where compensatory damages are small, by creating a climate where the public knows that this Court will uphold a punitive-damages award in an amount sufficient to justify a plaintiff's risk, effort, and inconvenience in being a party to civil litigation and, at the same time, fairly compensate the plaintiffs attorney for the risk and effort necessary to obtain such a result. COOK, J., concurs. JOHNSTONE, Justice (concurring specially). I concur in the main opinion in the context of a very valuable aspect of Justice Houston's special writing. Specifically, I concur in Justice Houston's recommendation that we establish a punitive-damages benchmark of the greater of either $20,000 or three times the actual harm caused by the tort, with the burden on the plaintiff to justify any deviation above the benchmark and the burden on the defendant to justify a remittitur that would deviate below the benchmark. I recognize that the $20,000 alternative of the benchmark may require some reevaluation over time or in peculiar cases. SEE, Justice (concurring in part and dissenting in part). I agree with the majority's opinion conditioning its affirmance on the plaintiff's acceptance of a remittitur of the punitive-damages award; however, I believe the punitive-damages award, even as reduced to $750,000, is excessive. I agree that a punitive-to-compensatory ratio of 3:1 is a useful benchmark for analyzing whether a punitive-damages award is excessive, see Life Insurance Co. of Georgia v. Johnson, 701 So. 2d 524, 535 (Ala.1997) (See, J., concurring in part and dissenting in part), but an award based on that ratio is only presumptively reasonable. In this case, a punitive-damages award of three times the amount of the compensatory-damages award is excessive. First, the amount of compensatory damages in this case, of which approximately $200,000 is to compensate for mental anguish, is the outer limit of a permissible compensatory-damages award; I believe that fact mitigates against applying the benchmark multiplier. Second, although Weimorts's conduct was reprehensible, it was not so reprehensible as to justify punishment to the extent of *1057 $750,000. Accordingly, I dissent from the majority's conclusion that $750,000 is a permissible punitive-damages award in this case. BROWN, J., concurs. HOOPER, Chief Justice (dissenting). I must respectfully dissent. The punitive damages awarded by juries in some counties in this State can get out of hand. It is up to this Court to evaluate the excessiveness of such awards. Considering BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) ("BMW I"), and the newly enacted statutory cap, the punitive-damages award in this case was an unpredictable consequence of the defendant's actions and perhaps even a denial of due process. A seller of real estate is dependent on a buyer's obtaining financing. Some responsibility for knowing the difficulties of obtaining such financing must rest with the seller. A passage in the amicus curiae brief of the Alabama Association of Realtors explains my feelings regarding this case: The Weatherlys' entire case is premised upon an allegation that Mr. Weimorts falsely told them that potential buyers, the Stallworths, had been "approved" for a loan. Essentially, the conduct the trial court found so "reprehensible" was Weimorts's passing along to the sellers, the Weatherlys, information from a mortgage lender. Weimorts testified that at the time of the closing on the Steep Creek house, Heidi Ogleson of American Mortgage had told Weimorts that the Stallworths' loan should close by October 15, 1995. Weimorts testified that he was acting under the assumption that the Stallworths' loan approval was imminent. Section 6-11-20(a), Ala.Code 1975, provides that punitive damages may not be awarded unless "it is proven by clear and convincing evidence that the defendant consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the plaintiff." "Clear and convincing evidence" is "[e]vidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim and a high probability as to the correctness of the conclusion." § 6-11-20(b)(4). "Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt." § 6-11-20(b)(4). "Fraud" is defined as "[a]n intentional misrepresentation, deceit, or concealment of a material fact the concealing party had a duty to disclose, which was gross, oppressive, or malicious and committed with the intention on the part of the defendant of thereby depriving a person or entity of property or legal rights or otherwise causing injury." § 6-11-20(b)(1). No evidence was presented indicating that Weimorts's alleged misrepresentation or concealment was "gross, oppressive, or malicious" or that it was committed with the intention to injure the Weatherlys. The evidence presented by the Weatherlys indicating that Weimorts had deliberately *1058 engaged in fraud consisted of the testimony of the Weatherlys that Weimorts had told them that the Stallworths had been approved for a mortgage loan. The evidence in opposition indicates that Weimorts relied on the representation of the mortgage lender to the effect that the Stallworths would be approved for a loan and that the closing could occur on October 15. The Weatherlys' evidence does not produce a firm conviction that Weimorts "consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the [Weatherlys]." § 6-11-20(a). This Court needs to return to the punitive-damage analysis followed in BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala.1997) ("BMW II"), including an analysis of the BMW I guideposts and the Green Oil factors.[6] Such an analysis in this case indicates that the punitive-damages award is excessive. The per curiam opinion does not address each factor individually; therefore, I must point out some deficiencies in the trial court's order. In BMW of North America v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), the United States Supreme Court stated: "Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." 517 U.S. at 575, 116 S. Ct. 1589. It further stated: "That conduct is sufficiently reprehensible to give rise to tort liability, and even a modest award of exemplary damages does not establish the high degree of culpability that warrants a substantial punitive damages award." 517 U.S. at 580, 116 S. Ct. 1589. In evaluating the reprehensibility of the defendants' conduct in the Weatherlys' case, the trial court made the following assessments, which I consider to be legally insufficient to support the punitive-damages award. First, the trial court stated: "Defendants persist in denying any wrongdoing. They admit they have taken no remedial action to prevent such occurrences in the future." I can understand, under the particular facts in this case, the defendants' arguing that they had done nothing wrong. Therefore, the trial court should not have used this argument as support for a finding of reprehensibility. Second, the trial court stated: "This Court notes that additionally, the Defendants had an early opportunity to remedy this problem as reasonable settlement offers were made by representatives for the plaintiffs prior to the institution of litigation." In my opinion, the defendants have the right to defend their actions in a court of law. They cannot be punished for refusing to settle a claim they believe has no merit. The defendants certainly should not be punished to the extent of a $750,000 punitive-damages award for exercising their constitutional right to a trial by jury. Whether a defendant has refused a settlement offer has no place whatsoever in an analysis of whether the defendant's conduct was so reprehensible as to support an award of punitive damages. The trial court's statement suggests that resort to the judicial process comes at the price of judicial retribution. Suddenly, the reprehensibility of the defendants' conduct is enhanced. Additionally, "persistence in denying wrongdoing" is not a proper indicator of the degree of reprehensibility of the conduct under scrutiny. The evidence presented at trial indicated that the Weatherlys' suffered economic *1059 damage of no more than $25,000. The jury returned a verdict of $250,000, based primarily on the mental anguish suffered by the Weatherlys. I think it is important to note that the $750,000 punitive-damages award upheld by the per curiam opinion is 30 times the economic damage suffered by the plaintiffs. I would also note that there was no expert testimony to support the claims that the aggravation of Mrs. Weatherly's Tourette's syndrome or Mr. Weatherly's depression were caused by stress resulting from the real-estate transaction. The trial court did not address this issue in its order. The gross commission on the purchase of the Steep Creek house was $3,850. Of that amount, Weimorts received 70% and Ballard received 30%. The $750,000 punitive-damages award is almost 195 times greater than the total gross commission earned by the defendants. Even a substantial reduction in the punitive-damages amount would obliterate any profit the defendants derived from this transaction. The trial court did not consider the financial position of the defendant based on its net worth, as BMW II contemplates. Instead, the trial court stated that the defendants' insurance would cover up to $1,900,000 of the award, and perhaps a greater amount. The trial court also stated that the defendants "insist that the corporate Defendant has a negative net worth based on the unaudited financial reports" but also noted that "the corporate Defendant has income of over $3 million for each of the last three years." The trial court refused to consider Ballard's net worth in assessing the financial position of the defendants. In 1999, the Alabama Legislature amended § 6-11-21, Ala.Code 1975, by enacting Act No. 99-358, Ala.Acts 1999. That Code section places a statutory cap on punitive damages. Although the statute is not applicable to the present case, which was filed before August 6, 1999, the "effective date" of Act No. 99-358, it is a persuasive indicator that the punitive damages awarded in this case are excessive. The Legislature has spoken as to how courts should reach a fair punitive-damages award, and this Court should not ignore its guidance. If the statute were applicable to this case, based on § 6-11-21(b) and (c), Ballard would fit within the definition of "small business," and the punitive damages would be capped at $50,000. The vast difference between the $50,000 cap of § 6-11-21 and the $750,000 awarded in this case surely indicates excessiveness. Finally, after the closing of the Woodbridge home did not occur as planned, Weimorts continued to work to secure a lender for the Stallworths, so that the Weatherlys could sell the Woodbridge house. Ironically, the Stallworths were initially approved for a mortgage by the Marble Mortgage Company in November 1995, but that company decided to withdraw from doing business in Alabama because it believed the legal climate here was unfavorable. The result of this case will be that even more businesses will want to withdraw from doing business in Alabama. Any mistake by a realtor who hopes a buyer will obtain financing and who relies on a financing company for such a prediction will be fair game in Alabama for any plaintiff who wants to be a millionaire. PER CURIAM. The defendants' application for rehearing is overruled. *1060 On original submission, this Court, on April 14, 2000, reversed the judgment entered on the jury's verdict for the plaintiffs. Agreeing with the defendants, this Court held that the trial court had erred in refusing to instruct the jury on the law with respect to the plaintiffs' responsibility to take reasonable steps to mitigate their damages. The case was remanded for a new trial. The plaintiffs' attorney, Edward B. Parker II, filed an application for rehearing in which he made a principled argument that this Court's initial holding was in error because, he said, the defendants had not timely raised the affirmative defense of mitigation of damages. Mr. Parker argued that the defendants had waived this affirmative defense and, therefore, that the trial court had properly refused to instruct the jury on it. See Harkins & Co. v. Lewis, 535 So. 2d 104 (Ala. 1988); Frederick v. Kirby Tankships, Inc., 205 F.3d 1277 (11th Cir.2000). This Court, on July 28, 2000, withdrew its original opinion and issued a new opinion affirming the judgment, conditioned on the plaintiffs' accepting a reduction of the punitive-damages award. The defendants have applied for a second rehearing. The application for rehearing serves the laudable purpose of allowing this Court to rectify any errors in its opinions, so that the ends of justice may be ultimately achieved. In this respect, this Court's decision on the first application for rehearing was not unlike its decisions in other cases this Court has reconsidered. See, e.g., Ex parte Ward, 447 So. 2d 142 (Ala. 1983); Norton v. Mobile County, 562 So. 2d 503 (Ala.1990); Bailey Mortgage Co. v. Gobble-Fite Lumber Co., 565 So. 2d 138 (Ala.1990); Garner v. Barnett, 576 So. 2d 234 (Ala.1991); Ex parte State Dep't of Revenue, 667 So. 2d 1372 (Ala.1995). Distinguishing this case from the others, however, are the unprofessional comments contained in the brief filed by the plaintiffs' attorney in support of the first application for rehearing. Mr. Parker, unfortunately, did not stop with his argument on the merits of the jury-instruction issue. He accused members of this Court of selling favorable decisions to the highest bidder. Mr. Parker's remarks in this regard, as unfounded and completely unprofessional as they are, sadly are indicative of a growing trend among some attorneys who feel that an application for rehearing provides them with a bully pulpit for venting their frustrations after receiving an adverse decision. Whether some attorneys believe it to be necessary to spew this venom for the benefit of their unhappy clients or to take the spotlight off their own inadequacies as legal practitioners, such childish behavior is uncivil and beneath the members of a professional bar association and it is a dangerous method of appellate advocacy. By couching a rehearing argument in the form of a written temper tantrum, an attorney can detract from the merits of the argument and do his or her client irreparable harm by failing to maintain the required level of professionalism. The members of this Court may not always agree on the outcome of a particular case; however, this Court as an institution strives to decide each case correctly, based on the law and the particular facts. In this respect, this case was decided in the same way any other case brought before this Court would be decided. APPLICATION OVERRULED. HOUSTON, COOK, LYONS, and JOHNSTONE, JJ., concur. MADDOX, J., concurs in the result. HOOPER, C.J., and SEE, BROWN, and ENGLAND, JJ., dissent. *1061 HOOPER, Chief Justice (dissenting). The per curiam opinion does not adequately address the pertinent issues in this case; therefore, I must dissent. First, this Court must take a more responsible position as to the propriety of one party's striking each and every minority member of a venire. Second, it is the function of this Court to honor caselaw and statutory precedent to the utmost; any alteration, especially an alteration to the prejudice of a party innocently doing business, should be highly suspect. Third, this Court must take responsibility for monitoring and, where appropriate, adjusting punitive-damages verdicts to conform to the standards set forth in our caselaw. Fourth, we must heed our duty to act as a fair and neutral body, yet convey the message that our decisions are influenced by nothing other than the law and the facts of each individual case. Last, we must discipline with particular strength those attorneys who would descend to unprofessional attacks on the integrity of this Court, lest we become complicit in destroying the public's confidence in this Court. First, the per curiam opinion issued on the initial application for rehearing gives only passing reference to the Batson issue. Although the three-step Batson analysis is well-settled law, there are no definite standards by which to determine whether the party striking a minority veniremember is using a pretext for a racially discriminatory strike. The only clear standard in this Court's precedent is that the trial court's determination shall not be reversed unless it is "clearly erroneous." See Ex parte Branch, 526 So. 2d 609 (Ala.1987). I believe Prudential Ballard presents in its application for rehearing a solid argument that is comparable to that presented in Smith v. Jackson, 770 So. 2d 1068 (Ala. 2000). The facts in this particular case are almost identical to those in Smith and they call for a reversal, as this Court ordered in that case. In Smith, a husband and wife sued a building-contractor corporation and its owner, alleging breach of express warranty and breach of contract in regard to the construction of their home. The husband and wife, the Jacksons, used their peremptory strikes to remove all white veniremembers. The circuit court eventually accepted a jury verdict in favor of the husband on the breach-of-contract and breach-of-the-express-warranty claims and entered a judgment on that verdict. The contractor appealed; this Court reversed and remanded. This Court wrote in Smith: 770 So.2d. at 1072-74 (emphasis added.) The facts of this case are very similar to those in Smiththey do not support a finding that the reasons offered for the strike were not pretextual. In this case, the venire consisted of 9 Caucasians and 26 African-Americans, and every Caucasian member of the venire was struck. Potential juror # 24 was struck because his wife was employed by someone who had been asked about that potential juror and who said that that potential juror was quite conservative, very defense-oriented, and did not need to be on the jury. Counsel for the Weatherlys made no attempt to follow up on the comments with questions to juror # 24 regarding whether those comments were true, and no evidence in the record supports his dismissal from the venire. Similarly, the excuse given for striking potential juror # 56 was that while investigating the venire list before trial it was learned that she had previously served as a witness in an unrelated case involving an insurance company and that her husband was associated with the local water-works board and appeared outspoken, argumentative, and closed-minded. Once again, counsel for the Weatherlys made no attempt to follow up with questions concerning these allegations, and the record contains no evidence to support his reason for striking her from the venire. The excuse given for striking potential juror # 101 was that he had served on a federal jury in a civil matter where an inmate sued the state and that he had a background in the military which, as purported by the Weatherlys, "relate[d] to one of the defendants in this case and also witnesses in this case." Therefore, counsel for the Weatherlys deemed him unable to "afford to [the Weatherlys] an opportunity to have a level playing field and be able to [make] a decision ... based on the facts and the evidence." However, the Weatherlys offered no relevant, specific evidence as it related to this particular juror to support their excuse for striking him. Potential juror # 144 was struck, counsel said, because he was a truck driver and had been a plaintiff in a small property-damage case and was leery of the legal system. Again, the Weatherlys offered no relevant evidence in the record to justify striking him and did not attempt to follow up these allegations with questions concerning his ability to be objective or his alleged bias against the legal system. I do not believe any great distinction can be made between Smith and the instant case; but, if it can be, then this is an issue that we need to fully consider in order to clarify the law regarding pretext and the "clearly-erroneous" standard. Otherwise, they both appear to be cases in which potential jurors were dismissed from the venire for reasons that were never explored during voir dire, as to which no relevant evidence was offered, and as to which there was offered no legitimate reason to justify their dismissal. The constitutional principle of Batson depends on this Court's willingness to address forthrightly this problem so that the bench and bar will not be confused. The per curiam opinion issued on the first application for *1064 rehearing in this case provides no such guidance and, when considered in the light of Smith, is quite confusing. Second, I am concerned with this Court's recent determination that the defense of mitigation of damages is an affirmative defense. Rule 8(c), Ala.R.Civ.P., does not explicitly list mitigation of damages as an affirmative defense. The only precedent the Weatherlys can claim on behalf of their contention that mitigation of damages is an affirmative defense is a recent line of cases that seem to deviate from long-standing Alabama caselaw to the contrary. See Harkins & Co. v. Lewis, 535 So. 2d 104 (Ala.1988); see also 5 Wright & Miller, Federal Practice & Procedure, § 1273; cf. People's Shoe Co. v. Skally, 196 Ala. 349, 71 So. 719 (1916); Mobile & O.R.R. v. Williams, 221 Ala. 402, 129 So. 60 (1930). What has changed as to the status of the law between the time this Court issued its original opinion in April and the time it issued its modified opinion on rehearing in July? Certainly no facts or actions at the trial level have changed. Nor has the law changed during that time. The only thing that has changed is this Court's interpretation of controlling precedent time-honored caselaw and the Alabama Rules of Civil Procedure versus derivations insinuated by recent decisions such as Harkins & Co. and federal legal theory from Wright and Miller, both of which stand to alter or change the rule of law in this state. I continue to stand by this Court's conclusion on original submission that because mitigation of damages is not an affirmative defense, the trial court erred in refusing to instruct the jury in this regard. Third, the July 28, 2000, per curiam opinion neglects to conduct the appropriate assessment of the remittitur under the analysis set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) ("BMW I"), Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989), and Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986). The amount of the remittitur appears to be especially egregious in light of the statutory punitive-damages cap that has since been passed by the Alabama Legislature. The Weatherlys' entire case is premised upon an allegation that Mr. Weimorts falsely told them that potential buyers, the Stallworths, had been "approved" for a loan. Essentially, the conduct the trial court found so "reprehensible" was Weimorts's passing along to the sellers, the Weatherlys, information from a mortgage lender. Weimorts testified that at the time of the closing on the Steep Creek house, Heidi Ogleson of American Mortgage had told Weimorts that the Stallworths' loan should close by October 15, 1995. Weimorts testified that he was acting under the assumption that the Stallworths' loan approval was imminent. Section 6-11-20(a), Ala.Code 1975, provides that "[p]unitive damages may not be awarded in any civil action" unless "it is proven by clear and convincing evidence that the defendant consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the plaintiff." "Clear and convincing evidence" is defined as "[e]vidence that, when weighed against evidence in opposition, will produce in the mind of the trier of fact a firm conviction as to each essential element of the claim and a high probability as to the correctness of the conclusion." § 6-11-20(b)(4). "Proof by clear and convincing evidence requires a level of proof greater than a preponderance of the evidence or the substantial weight of the evidence, but less than beyond a reasonable doubt." § 6-11-20(b)(4). "Fraud" is defined as "[a]n *1065 intentional misrepresentation, deceit, or concealment of a material fact the concealing party had a duty to disclose, which was gross, oppressive, or malicious and committed with the intention on the part of the defendant of thereby depriving a person or entity of property or legal rights or otherwise causing injury." § 6-11-20(b)(1). No evidence was presented indicating that Weimorts's alleged misrepresentation or concealment was "gross, oppressive, or malicious" or that it was committed with the intention to injure the Weatherlys. The evidence presented by the Weatherlys indicating that Weimorts had deliberately engaged in fraud consisted of the testimony of the Weatherlys to the effect that Weimorts had told them that the Stallworths had been approved for a mortgage loan. The evidence in opposition indicates that Weimorts relied on the representation of the mortgage lender to the effect that the Stallworths would be approved for a loan and that the closing could occur on October 15. The Weatherlys' evidence cannot produce a firm conviction that Weimorts "consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the [Weatherlys]." § 6-11-20(a). Had this Court properly analyzed the facts in this case under the appropriate BMW, Green Oil, and Hammond standards, it should have been clear that the punitive-damages award is excessive. The July 28, 2000, per curiam opinion does not address each factor individually; therefore, I must point out some deficiencies in the trial court's order. In BMW I, the United States Supreme Court stated: "Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." 517 U.S. at 575, 116 S. Ct. 1589. It further stated: "That conduct is sufficiently reprehensible to give rise to tort liability, and even a modest award of exemplary damages, does not establish the high degree of culpability that warrants a substantial punitive damages award." 517 U.S. at 580, 116 S. Ct. 1589. In evaluating the reprehensibility of the defendants' conduct in the Weatherlys' case, the trial court made the following assessments, which I consider to be legally insufficient to support the punitive-damages award. First, the trial court stated: "Defendants persist in denying any wrongdoing. They admit they have taken no remedial action to prevent such occurrences in the future." I can understand, under the particular facts in this case, the defendants' arguing that they had done nothing wrong. Therefore, the trial court should not have used this argument as support for a finding of reprehensibility. Second, the trial court stated: "This Court notes that additionally, the Defendants had an early opportunity to remedy this problem as reasonable settlement offers were made by representatives for the plaintiffs prior to the institution of litigation." In my opinion, the defendants have the right to defend their actions in a court of law. They cannot be punished for refusing to settle a claim they believe has no merit. The defendants certainly should not be punished to the extent of a $750,000 punitive-damages award for exercising their constitutional right to a trial by jury. Whether a defendant has refused a settlement offer has no place whatsoever in an analysis of whether the defendant's conduct was so reprehensible as to support an award of punitive damages. The trial court's statement suggests that resort to the judicial process comes at the price of judicial retribution. Suddenly, the reprehensibility of the defendants' conduct is *1066 enhanced. Additionally, "persistence in denying wrongdoing" is not a proper indicator of the degree of reprehensibility of the conduct under scrutiny. The evidence presented at trial indicated that the Weatherlys suffered economic damage of no more than $25,000. The jury returned a verdict of $250,000, based primarily on the mental anguish suffered by the Weatherlys. I think it is important to note that the $750,000 punitive-damages award upheld by the July 28, 2000, per curiam opinion is 30 times the economic damage suffered by the plaintiffs. I would also note that there was no expert testimony to support the claims that the aggravation of Mrs. Weatherly's Tourette's syndrome or Mr. Weatherly's depression were caused by stress resulting from the realestate transaction. The trial court did not address this issue in its order. The gross commission on the purchase of the Steep Creek house was $3,850. Of that amount, Weimorts received 70% and Ballard received 30%. The $750,000 punitive-damages award is almost 195 times greater than the total gross commission earned by the defendants. Even with a substantial reduction, the punitive-damages amount would obliterate any profit the defendants derived from this transaction. The trial court did not consider the financial position of the defendant based on its net worth, as BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala.1997) ("BMW I"), contemplates. Instead, the trial court stated that the defendants' insurance would cover up to $1,900,000 of the award, and perhaps a greater amount. The trial court also stated that the defendants "insist that the corporate Defendant has a negative net worth based on the unaudited financial reports" but also noted that "the corporate Defendant has income of over $3 million for each of the last three years." The trial court refused to consider Ballard's net worth in assessing the financial position of the defendants. In 1999, the Alabama Legislature amended § 6-11-21, Ala.Code 1975, by enacting Act No. 99-358, Ala. Acts 1999. That Code section places a statutory cap on punitive damages. Although the statute is not applicable to the present case, which was filed before August 6, 1999, the "effective date" of Act No. 99-358, it is a persuasive indicator that the punitive damages awarded in this case are excessive. The Legislature has spoken as to how courts should make a fair punitive-damages award, and this Court should not ignore its guidance. If the statute were applicable to this case, then, based on § 6-11-21(b) and (c), Ballard would fit within the definition of "small business" and the punitive damages would be capped at $50,000. The vast difference between the $50,000 cap of § 6-11-21 and the $750,000 awarded in this case surely indicates excessiveness. After the closing of the Woodbridge home did not occur as planned, Weimorts continued to work to secure a lender for the Stallworths, so that the Weatherlys could sell the Woodbridge house. Ironically, the Stallworths were initially approved for a mortgage by the Marble Mortgage Company in November 1995, but that company decided to withdraw from doing business in Alabama because it believed the legal climate here was unfavorable. The result of this case will be that even more businesses will want to withdraw from doing *1067 business in Alabama. Any mistake by a realtor who hopes a buyer will obtain financing and who relies on a financing company for such a prediction will be fair game in Alabama for any plaintiff who wants to be a millionaire. Last, I am disappointed, both professionally and personally, in the conduct of counsel for the Weatherlys. In his briefs to this Court, he has effectively accused this Court of tailoring decisions to satisfy special-interest groups and has further insinuated that several of the Justices have thereby violated the Canons of Judicial Ethics. Presumably, he did this all in an effort to more effectively represent his clients. He has done nothing of the sort. He has succeeded in offending the members of this Court and negatively portraying himself before his fellow members of the Bar. Specifically, using offensive language, unfounded accusations, and personal attacks, he has alleged that this Court's decisions depend on campaign contributions; he has done this presumably with the hope of intimidating this body into deciding his case in his clients' favor. By his language, he has violated Rule 3.5(c) of the Rules of Professional Conduct in that he has engaged "in conduct intended to disrupt a tribunal." In insinuating in his brief that this Court's vote on a matter can be bought by special-interest dollars, he has violated Rule 8.2(a) by making statements "with reckless disregard as to [their] truth or falsity concerning the qualifications or integrity" of the members of this Bench. His derogatory comments made about and to this Court might imply to the public that this Court changed its opinion as to his clients' case and ruled in their favor upon rehearing because of fear of exposure and not based on the law and the facts of this case. Therefore, he violated Rule 8.4(d) by engaging "in conduct that is prejudicial to the administration of justice." His explicit remarks in his brief suggesting that our decisions are made in terms of campaign contributions imply that the rich and powerful have an ability to improperly influence Justices in their roles as government officials and therefore violate Rule 8.4(e). These expressions of contempt, threat, and intimidation made when he filed his clients' application for rehearing violate Rule 8.4(g), because by making these expressions he has engaged in conduct that adversely reflects upon his fitness to practice law. Not only do his actions cause me to question his maturity to practice law before this Court, but it is exactly this kind of juvenile behavior that reflects poorly on our entire profession. I could as easily accuse this attorney of petulance resulting from his chagrin at receiving a lower contingent attorney fee after the release of this Court's original opinion. Such an accusation would be inappropriate for a judicial officer; I will not make it. Such conduct is also inappropriate for an officer of the courts; but this lawyer committed just such conduct. This lawyer risked sinking his clients' case by making these unfounded accusations. If this Court were inclined to rule in its own self-interest, perhaps we would posit our decision in this case solely on the basis of our contempt for the attitude of this one attorney; however, this body has always held, and will continue to hold, itself to a higher standard. We will not let our emotions and personal feelings dictate the result in any case; our decisions are governed solely by the law and the facts. However, the public, not knowing enough about the facts of this case or the legal principles governing its result, may mistakenly interpret our decision as one where the mere accusations and political posturing of the attorney intimidated the Court into ruling in his clients' favor, instead *1068 of thinking the Court was persuaded by the legal arguments.[2] Such a perception on the part of the public and the resultant effect upon a client's cause, perhaps a just cause, is enough to call for the most severe sanctions against an attorney who resorts to such tactics. The attorney's language taints the judiciary and the legal profession and could seriously backfire upon his clients. Having said all this, I can say confidently and with a clear conscience that my opinion is based on the law and the facts of this case alone, that I fear no one's reprisal or intimidation for holding this opinion, and that no campaign contribution influenced my opinion.[3] Contrary to the arguments of the plaintiffs, the facts of this particular case show that the defendants are "the little guys" who have been subject to mistreatment. Ever since I became a circuit court judge in Montgomery County in 1975, I have sought to look out for the "little man" to the fullest extent permissible under the law, and I would only hope that all judges exhibit a similar attitude. The attorney for the plaintiffs should be placed under the most severe sanctions appropriate for the kind of unprofessional behavior illustrated by his language in the plaintiffs' application for rehearing. SEE, Justice (dissenting). Although I agree with the statements of the main opinion on this second application for rehearing, I dissent from the overruling of the application. As I stated on July 28, 2000, in my special writing on the first application for rehearing, I believe the punitive-damages award, even as reduced to $750,000, is excessive. BROWN, J., concurs. ENGLAND, Justice (dissenting). I dissent from the overruling of the second application for rehearing. I agree *1069 with the Batson analysis in Chief Justice Hooper's dissenting opinion. [1] Both the Alabama Legislature and Congress have established treble damages as the most common punitive standard. Ala.Code 1975, § 8-19-10(a)(2) (providing for treble damages for certain violations of the Deceptive Trade Practices Act); § 37-2-18 (providing treble damages for certain harm caused by common carriers); 18 U.S.C. § 1964(c) (providing for treble damages for civil violations of the Racketeer Influenced and Corrupt Organizations Act); 15 U.S.C. § 15 (providing for treble damages for violations of the Sherman Act's prohibition on monopolistic practices). I also note that the use of a multiple of compensatory damages as a penalty has ancient and biblical origins. The ancient law of Rome required restitution of four times the amount wrongfully taken. VIII The Interpreter's Bible 326 (1952). Jewish law provided: "If a man shall steal ... a sheep, and kill it, or sell it; he shall restore ... four sheep for a sheep." Exodus 22:1. Zacchaeus promised: "`[I]f I have defrauded any one of anything, I restore it fourfold,'" which was acceptable. Luke 19:1-10. The New Oxford Annotated Bible with the Apocrypha, Expanded Edition (1977), pages 1273-74. These laws provide for the return of the amount wrongfully taken plus three times the amount wrongfully taken. [2] Section 6-11-24(b) provides: "The appellate court shall independently reassess the nature, extent and economic impact of such an award and reduce or increase the award if appropriate in light of all the evidence." We note that although § 6-11-24(b) has not been declared unconstitutional, this Court, in Bozeman v. Busby, 639 So. 2d 501 (Ala.1994), in a 5-3 decision, with Justices Almon, Shores, Kennedy, Ingram, and Cook concurring and Justices Maddox, Houston, and Steagall dissenting, held that § 6-11-23 was unconstitutional to the extent that it permitted a trial court to increase a jury's punitive-damages award. [3] See, e.g., Life Ins. Co. of Georgia v. Parker, 726 So. 2d 619 (Ala.1998) (35:1 ratio of punitive damages to compensatory damages approved in case tried in February 1996, well before this Court's opinion in BMW II was released, and in which the plaintiffs were financially vulnerable and in which substantial litigation costs were incurred); Employees' Benefit Ass'n v. Grissett, 732 So. 2d 968 (Ala.1998) (17:1 ratio of punitive damages to compensatory damages approved in case tried in February 1997, before this Court's opinion in BMW II was released, and in which the plaintiff's economic loss was modest and no compensatory damages were awarded for loss or harm other than denied benefits). [4] Section 6-11-21, Ala.Code 1975, establishes limits on punitive damages for cases filed more than 60 days after June 7, 1999. However, its enforcement would not render this discussion obsolete, because awards of punitive damages, falling under the limits expressed in the statute or not subject to such limits, will continue to be subject to constitutional scrutiny on a case-by-case basis. [5] Exodus 22:1 (five oxen for theft of one ox, four sheep for theft of one sheep); II Samuel 12:6 (four lambs for theft of one lamb); Luke 19:8 (fourfold restitution for falsely accusing); Proverbs 6:31 (sevenfold restitution for theft). [6] Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989). [1] Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). [2] This dangerous but logical interpretation is especially possible in this case because of the newspaper reports about the different result this Court reached on the first application for rehearing. Those reports read like this: "Do you want to win a million dollars? Try criticizing the Alabama Supreme Court. It worked for a Montgomery attorney." Phillip Rawls, "Lawyer Criticizes Supreme Court; Wins $1 Million," The Associated Press for The Huntsville Times, August 14, 2000, at B5. "This is not so much a story of justice served or justice denied as it is of justice being put in an uncomfortable spotlight by a courageous lawyera lawyer even those who usually vilify lawyers can't help but salute.... [The Weatherlys' counsel] asked the high court to reconsiderand brazenly took the justices to the woodshed for what he considered kowtowing to the Big Mules and potential political contributors, like real estate firms, at the expense of the Average Joe.... [T]he justices, for reasons known only to themselves, found on a 6-3 vote that [the Weatherlys'] appeal had merit after all, and the court awarded the couple $1 million in damages.... But what won't go away is the question [the Weatherlys' counsel] asked in his appeal brief: Can we expect impartial justice when a Supreme Court candidate has to grovel among the rich and powerful to raise $5 million to campaign for an office that pays a yearly salary of $124,950? And if not, what can we do about it?" Editorial, "Justices on Trial," The Huntsville Times, August 17, 2000 (as appearing on the "Alabama Live" website). The article neglects to mention the immensely more powerful contributions of wealthy plaintiff trial lawyer firms to judicial candidates and those firms' lengthier history of contributing. [3] I believe that it is a matter of record that real-estate companies contribute very little to judicial campaigns. This fact illustrates the fallacious and notorious nature of the accusation by plaintiffs' counsel regarding campaign contributions and this Court.

December 22, 2000

d557426e-3354-4fca-a066-11ab355186e6

Ex Parte Frontier Corp.

709 So. 2d 1197

1961762

Alabama

Alabama Supreme Court

709 So. 2d 1197 (1998) Ex parte FRONTIER CORPORATION, et al. (In re Jeff THOMPSON v. FRONTIER CORPORATION, et al.). 1961762. Supreme Court of Alabama. January 30, 1998. Mark D. Wilkerson and Leah S. Stephens of Brantley & Wilkerson, P.C., Montgomery; and W.W. Dinning, Jr., of Lloyd, Dinning, Boggs & Dinning, Demopolis, for petitioners. T. Roe Frazer II of Langston, Frazer, Sweet & Freese, P.A., Jackson, MS; and E. Mark Ezell of Ezell & Sharbrough, L.L.C., Butler, for respondent. BUTTS, Justice. The defendants, Frontier Corporation, Frontier Subsidiary Telco, Inc., and Frontier Communications of the South, Inc. (collectively "Frontier"), petition for a writ of mandamus directing the trial court to vacate its order of April 10, 1997, conditionally certifying the plaintiff's action as a class action. We grant the writ. Jeff Thompson, on behalf of himself and others similarly situated nationwide, sued Frontier on April 10, 1997, seeking damages based upon allegations that Frontier had practiced a fraudulent scheme of automatically collecting wire maintenance and repair service charges from all of its residential and noncomplex business line customers who had basic telephone service, although these customers did not have Frontier contracts that authorized such charges. On the same day, without notice to the defendants or a hearing, the trial court entered an order conditionally certifying Thompson's action as a class action. *1198 Frontier moved to vacate the certification order, protesting that it was not given any opportunity to oppose the certification and arguing that the trial court had improperly certified the class without requiring the plaintiff to make an evidentiary showing as is required by Rule 23, Ala.R.Civ.P. The trial court entered an order on June 18, 1997, denying the motion to vacate; however, it ordered the parties to conduct discovery related to all class issues, including numerosity, topicality, commonality, identification of proper parties, adequacy of plaintiffs, and any jurisdictional issues. The trial court ordered that the parties complete the discovery by August 29, 1997, and submit it thereafter to the court for a hearing on the question of decertification of the class. In Ex parte First National Bank of Jasper, [Ms. 1961542, December 16, 1997] ___ So.2d ___, ___ (Ala.1997), this Court held that a trial court's ex parte order of conditional class certification "will not satisfy the requirements of Rule 23, unless the proponent demonstrates a compelling reason for such a certification." We agree that Thompson did not demonstrate a compelling reason for the trial court to enter an ex parte certification order; thus, the mandamus petition is due to be granted. The Marengo Circuit Court is directed to vacate its order conditionally certifying the class. See Ex parte First National Bank of Jasper, supra. See, also, Ex parte Citicorp Acceptance Co., [Ms. 1951977, December 16, 1997] ___ So.2d ___ (Ala.1997); Ex parte Equity National Life Insurance Co., [Ms. 1961160, December 16, 1997] ___ So.2d ___ (Ala.1997); and Ex parte Mercury Finance Corp. of Alabama, [Ms. 1950868, December 16, 1997] ___ So.2d ___ (Ala.1997). WRIT GRANTED. HOOPER, C.J., and SHORES, HOUSTON, KENNEDY, and COOK, JJ., concur. MADDOX and SEE, JJ., concur in the result.

January 30, 1998

9b01ff91-92da-4c49-8235-a04abe855807

Murphy v. Green

794 So. 2d 325

1991882

Alabama

Alabama Supreme Court

794 So. 2d 325 (2000) Martin MURPHY and Knox Poole v. Aubrey GREEN and J. Everette Cobb. 1991882. Supreme Court of Alabama. December 15, 2000. *327 William S. Poole, Jr., Demopolis, for appellants. Ira D. Pruitt, Jr., of Pruitt, Pruitt & Watkins, P.A., Livingston, for appellees. HOUSTON, Justice. This appeal involves a property dispute between two factions in the congregation of the York Presbyterian Church in York, Alabama. The trial court entered a declaratory judgment in favor of the minority group and ordered the pastor and the clerk of the session, along with the majority group, to vacate the church property. The pastor and the clerk appealed. We affirm. The York Presbyterian Church, Inc. (hereinafter the "church," or "York"), was incorporated under the laws of Alabama on April 18, 1973. The church stated, in its certificate of incorporation, that it would elect trustees to serve three-year terms, and that the trustees would hold the title to all real and personal property belonging to the church. The congregation also adopted a "purpose" clause, which stated that the church was incorporated "for the purpose of teaching and preaching the Christian Religion, especially according to the belief, faith and doctrine of the Presbyterian Denomination or any other denomination said congregation may hereafter become affiliated with, and in doing all things incidental thereto." No amendments have been made to the incorporating documents. York called the Reverend Martin Murphy (hereinafter "Murphy") as its minister in 1992. Several members of the congregation, including Aubrey Green, J.E. Cobb, and Warren Grant became upset when Murphy joined the League of the South (hereinafter the "League" or "organization"). According to the record on appeal, the League is a civic group that prides itself in Southern heritage, emphasizes the importance of state and local governance, and supports the concept of secession and *328 the reinstitution of the Confederate States of America. Murphy solicited church members, including Green, Cobb, and Grant and two seminary students,[1] to join the League. He encouraged nonresident League members to join the church, and the church membership soon included the presidents of the national, state, and county League groups. Murphy also used the church as a contact place for the League and listed the church's telephone number and post office box (without mentioning the church's name) in the organization's literature and on his personal Internet Web site. He used the church's copier to duplicate League fliers and announcements. Although Murphy eventually resigned from the League, after resigning he continued to attend League-sponsored meetings and lectures. Green, Cobb, and Grant were elected to serve as trustees (there were 13 trustees) beginning on June 8, 1997. During an August 29, 1998, meeting, the trustees selected Green, Cobb, and Grant as officers to serve on the trustee executive committee. A congregational meeting, held on December 13, 1998, resulted in a new trustee election, with the church reelecting Cobb and Grant, but not choosing Green, who had objected to the election on the grounds that no vacancies existed on the trustee board. However, the trustees ratified the August 29, 1998, officer selection at a subsequent trustee meeting on March 15, 1999. Meanwhile, Green, Cobb, and Grant alerted the Tennessee Alabama Presbytery of the Associate Reformed Presbyterian Church (hereinafter the "Presbytery"), the regional governing body of the church, about the conflicts within the York congregation. After conducting an investigation, the Presbytery's ecclesiastical commission recommended, among other things, that the church have no connection with the League; it reminded Murphy of his ordination vows; and it rebuked church members who were guilty of shunning. The Presbytery voted a year later to dissolve Murphy's pastoral relationship with the church and to dismiss the church from the Presbytery. Because his church was no longer a member of the Presbytery, Green lost his position as the treasurer of the Presbytery. During an emergency congregational meeting held the same day of the dismissal, the church voted to form the York Presbyterian Church (hereinafter "YPC" or the "majority group"), as an independent, unincorporated congregation. Despite Green's complaints that the meeting was not authorized by the church session, YPC elected to maintain Murphy as its temporary minister, with the understanding that a more permanent arrangement would be considered later. The majority group claims to own the church building and the manse. The YPC's desire to own the church property conflicts with the plans of another church created from the same controversy. Those members who did not support Murphy formed and incorporated the York Independent Presbyterian Church, Inc. (hereinafter "YIPC" or the "minority group"). This group also claims to own the property. Green, Cobb, and Grant, acting as trustees of the church, eventually filed this lawsuit against Murphy; Knox Poole, the clerk of the church's session; Kimmett Geist, the church's treasurer;[2] the Presbytery; *329 and the General Synod of the Associate Reformed Presbyterian Church.[3] Green, Cobb, and Grant asked the trial court to find that Murphy and Poole had converted church assets for the League's purposes and to declare Green, Cobb, and Grant to be trustees with control over the church's assets and property. They later amended their complaint to include an ejectment claim when Murphy, Poole, and the majority group refused requests to vacate the church premises. The parties (other than Grant) stipulated that, because of chronic illness and incompetence, Grant would not testify at trial. Upon the motion of Green and Cobb, the trial court later struck Grant as a plaintiff. The trial court held that Murphy and Poole had wrongly converted church property for League purposes. The court also concluded that Green and Cobb were the trustees of the church and had the right to possess the property and the authority to determine which of the two new congregations would possess the church's real and personal property. Finally, the court ordered Murphy, Poole, and the majority group off the property and gave the minority group the right of immediate possession. Murphy and Poole appealed. This appeal presents the following issues: (1) Does the United States Constitution and/or the Alabama Constitution prevent the adjudication of this case on the basis that it involves a spiritual matter? (2) Is the judgment holding that the appellants converted the assets of the church for the benefit of the League supported by the evidence? (3) Is the judgment holding that the appellants failed to act in conformity with the Presbyterian Doctrine of the Associate Reformed Presbyterian Church supported by the evidence? (4) Is the judgment holding that Green and Cobb are among the church's trustees and are members of the trustee executive committee supported by the evidence? (5) Is ejectment an appropriate remedy in this case? (6) Did the trial court err in admitting certain exhibits and accompanying testimony? (7) Did the trial court err by denying the appellants' posttrial and post-judgment motions to exclude a deposition admitted at trial? (8) Did the trial court err by denying the appellants' post-judgment motions to exclude certain exhibits? and (9) Did the trial court err in admitting the interrogatory answers of a nonparty? The trial court's decision is entitled to a presumption of correctness. Under the ore tenus standard of review, a presumption of correctness accompanies the trial court's judgment entered in a nonjury case when it has made findings of fact based on disputed oral testimony, and this Court will not reverse such a judgment unless it is shown to be plainly and palpably wrong, considering all of the evidence and all inferences that can be legally drawn from the evidence. McCrary v. Butler, 540 So. 2d 736, 739 (Ala.1989). The appellants contend that the First Amendment of the United States Constitution[4] and Article 1, § 3, of the *330 Alabama Constitution[5] forbid any court from adjudicating the claims presented in this action because, they say, those issues involve spiritual, ecclesiastical issues. The First Amendment prohibits a court from resolving disputes on the basis of religious practice or doctrine. Presbyterian Church v. Mary Elizabeth Blue Hull Mem'l Presbyterian Church, 393 U.S. 440, 449, 89 S. Ct. 601, 21 L. Ed. 2d 658 (1969). Despite these constitutional limitations, the courts still have jurisdiction to decide cases concerning questions of civil or property rights. Abyssinia Missionary Baptist Church v. Nixon, 340 So. 2d 746, 748 (Ala. 1977); Trinity Presbyterian Church v. Tankersley, 374 So. 2d 861, 865 (Ala.1979). "[T]he courts must decide the property disputes by looking at so-called `neutral principles of law' and not resolve [any] underlying controversies over religious doctrine." Tankersley, 374 So. 2d at 866. The issue of who holds title to church property is a civil matter and is not ecclesiastical in nature. Id. Although it is arguable that spiritual issues prompted the division in the York congregation, this case involves the civil conflicts of trusteeship and property ownership. Because the resolution of these issues requires a court merely to review church records and incorporation documents, without delving into spiritual matters, there is no constitutional bar to a court's hearing this case. The appellants argue that the evidence does not support the judgment holding that they converted church assets for the benefit of the League and thereby violated the church's "purpose" clause. However, the record indicates that they used the church as a base for League recruitment, where they approached church members and seminary students and asked them to join the League. The record contains evidence indicating that they also used church resources for League purposes, using the church's copier to duplicate League fliers and printing on literature and placing on the Internet the church's post office box and telephone number as contact points for persons wanting more information about the League. This evidence was sufficient for the court to conclude that the appellants wrongly converted church assets and violated the purpose clause, which required that the church and its resources be used for faith-based activities. The appellants argue that the evidence does not support the holding that their actions were not in conformity with the Presbyterian Doctrine of the Associate Reformed Presbyterian Church. The appellees do not address this argument in their brief. The trial court found: Even though we have carefully considered this argument, we do not understand how it is relevant to this appeal. The *331 record does not include a copy of the Presbyterian Doctrine to assist us in evaluating the appellants' conduct. Moreover, even if the Doctrine was provided in the record and we concluded that the appellants had violated the Presbyterian tenets, it is not apparent, in a case involving a property dispute, how any violation or lack of violation of these tenets could require a reversal. Thus, we do not reach the merits of this issue. The appellants question whether the evidence supports the finding that the appellees are trustees and are members of the executive committee. The trial court correctly held that the appellees belong to both groups. As stated in its incorporating documents, the trustees at York were elected to serve three-year terms. The appellees were selected on June 8, 1997; thus, their term expired three years later, on June 8, 2000. However, the appellants argue that the appellees' positions as trustees and officers were compromised when the trustees used irregular procedures at a subsequent meeting. When the appellees were elected as officers and executive committee members, Cobb, as the temporary presiding officer, cast a second vote to break a tie, in violation of Robert's Rules of Order, the procedural book used at the church's meetings. Robert's Rules of Order § 46, at 192 ("The chair cannot, however, vote twice, first to make a tie and then give the casting vote.").[6] According to the appellants, this election was illegal, and the members selected at the December 13, 1998, meeting are the trustees of the church. This conclusion would be accurate if the trustees, at the meeting on March 15, 1999, had not ratified the August 29, 1998, election of officers, thereby overruling the December election and reinstating Green, Cobb, and Grant as trustees, as trustee officers, and as members of the executive committee. The appellants claim that ejectment was inappropriate in this case because the court ordered the members of the majority group, who are not parties to this action, off the church property. In order for a person to contest an injury, his interests in a favorable judgment must be "tangible," Reid v. City of Birmingham, 274 Ala. 629, 639, 150 So. 2d 735, 744 (1963), and "concrete," Brown Mech. Contractors, Inc. v. Centennial Ins. Co., 431 So. 2d 932, 937 (Ala.1983). "`The absence of adversary or the correct adversary parties is in principle fatal.'" Rogers v. Alabama Bd. of Educ., 392 So. 2d 235, 237 (Ala.Civ.App.1980) (quoting Borchard, Declaratory Judgments at 76 (2d ed.1941)). Thus, a litigant cannot claim standing to assert the rights of a third party not named in the action. Ex parte Izundu, 568 So. 2d 771, 772 (Ala.1990). The appellants lack standing to contest this portion of the trial court's judgment. Because the ejectment of the majority group is not a concrete injury to the appellants, the only persons who can raise this issue are the members of the majority group who were ejected from the church property. Therefore, the appellants' challenge to the ejectment of the majority group is not properly raised in this appeal. The appellants argue that the trial court erred in admitting, over their objections, certain exhibits and accompanying testimony. The exhibits in question (plaintiffs' *332 exhibits 4, 5, 17, and 18) discussed the League and Murphy's allegiance thereto. Green, through whom the exhibits were introduced, described how he had obtained each exhibit from the Internet Web sites of the League and Murphy. The appellants argue that these exhibits are irrelevant to the conversion claim, under Rule 401, Ala.R.Evid.[7] The appellees, on the other hand, argue that the exhibits were essential to prove their conversion claim against the appellants. The trial court has considerable discretion over relevancy issues. Eason v. Comfort, 561 So. 2d 1068, 1072 (Ala. 1990). This Court will not reverse the trial court's ruling on a question of relevance unless it is plain that the court committed error, Harper v. Baptist Med. Ctr.-Princeton, 341 So. 2d 133, 135 (Ala. 1976), and thereby abused its discretion in admitting or denying the evidence. Ryan v. Acuff, 435 So. 2d 1244, 1250 (Ala.1983). Our review of the record and the exhibits indicates no abuse of discretion. The exhibits supported the appellees' position that the League does not espouse Christian principles and that the appellants were using church resources for non-Christian purposes. Green's testimony was necessary to describe each exhibit to the court before it was admitted into the record. The appellants contend that the trial court erred by denying their posttrial and postjudgment motions to exclude from the trial record allegedly irrelevant portions of the deposition of Kimmett Geist. The appellants submitted at trial a list of those portions of the deposition that they argue are irrelevant,[8] under Rule 401, Ala. R.Evid.[9] The trial judge admitted the deposition, "subject to [the appellants'] objections." Despite these objections and in apparent reliance on these questionable segments of Geist's testimony, the trial court wrote: "While its literature claims that the League of the South professes no racial prejudices at least its member Rev. Martin Murphy has exhibited a bias and prejudice against women." The appellees state that the entire deposition is relevant because it demonstrates that the League proclaims non-Christian beliefs and that Murphy testified falsely when he said that he was no longer associated with the organization. We will not address this issue. We have been cited no caselaw regarding motions to exclude evidence after trial and after judgment. Furthermore, we do not understand how the question whether Murphy is biased against women pertains to an appeal regarding a property dispute. Thus, even if the trial court erred in relying on the deposition, and we do not hold that it did, the error would not require reversal. The appellants argue that the trial court erred by denying their postjudgment motion to exclude two exhibits that they claim were inadvertently admitted into the record. According to the appellants, plaintiffs' exhibits 6 and 17 contain additional pages that the appellants say were not presented to their counsel before they were admitted at trial. The record contains *333 no testimony regarding these extra documents. Because the appellants did not object to the exhibits at trial, they did not preserve this issue for appeal. Ex parte Williams, 571 So. 2d 987, 989 (Ala.1990). In any event, it is the responsibility of the parties, through their counsel, to review the contents of exhibits before they are introduced. See, generally, Averett v. Averett, 255 Ala. 606, 610, 52 So. 2d 371, 375 (1951) (stating that all parties, once in court, must, either themselves or through their attorneys, keep track of their case). Finally, the appellants challenge the admissibility of the interrogatory answers of R.C. Sproul, Jr., a nonparty to this action. Rule 33(a), Ala.R.Civ.P., provides that "[a]ny party may serve upon any other party written interrogatories." (Emphasis added.) Because the rule clearly states that parties can serve other parties, it follows that parties cannot serve interrogatories on a person who is not a party to the action. 2 Charles W. Gamble, McElroy's Alabama Evidence § 290.01(02)(g) (5th ed.1996). Even if the trial court erred when it admitted Sproul's interrogatory answers, that error would be harmless because the record contains other evidence that in itself would be sufficient to support the trial court's judgment. Thus, any error in this regard does not require reversal. The trial court's judgment is affirmed. AFFIRMED. HOOPER, C.J., and SEE, BROWN, and ENGLAND, JJ., concur. [1] Murphy established at the church a seminary affiliated with the Greenville Presbyterian Theological Seminary, of Greenville, South Carolina. [2] The trial court later granted Green, Cobb, and Grant's motion to strike Geist as a defendant. [3] The trial court dismissed as defendants the Presbytery and the General Synod. [4] Amendment 1 of the United States Constitution states: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof...." [5] Article 1, § 3, of the Alabama Constitution states: "[T]he civil rights, privileges, and capacities of any citizen shall not be in any manner affected by his religious principles." [6] In the minutes of the August 29, 1998, meeting, the secretary noted that the meeting was conducted in accordance with Robert's Rules of Order. [7] Rule 401, Ala.R.Evid., reads: "`Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." [8] The appellants sought to exclude testimony regarding derogatory comments Murphy made about women and African Americans. [9] The text of Rule 401 is quoted in note 7.

December 15, 2000

3d968c5c-b909-48a9-8063-bf7bb67b23fb

Ex Parte State Ex Rel. State of Ohio

718 So. 2d 669

1962017

Alabama

Alabama Supreme Court

718 So. 2d 669 (1998) Ex parte STATE of Alabama ex rel. STATE OF OHIO and P.C. (In re STATE of Alabama ex rel. STATE OF OHIO and P.C. v. E.B.M.). 1962017. Supreme Court of Alabama. January 16, 1998. *670 J. Coleman Campbell and Lois Brasfield, asst. attys. gen., Department of Human Resources, for petitioners. Randy Winborn of Yates, Mitchell, Bernauer, Winborn & Morton, Florence, for respondent. HOUSTON, Justice. In State ex rel. State of Ohio v. E.B.M., 718 So. 2d 665 (Ala.1996) (which adequately sets out the facts in this case), this Court reversed the Court of Civil Appeals' January 5, 1996, decision in State ex rel. State of Ohio v. E.B.M., 718 So. 2d 663 (Ala.Civ.App.1996). We held that in order for one to bring an action seeking child support payments under the Uniform Reciprocal Enforcement of Support Act ("URESA"), Ala.Code 1975, § 30-4-80 et seq., it is not necessary that a separate paternity action be filed under the Alabama Uniform Parentage Act ("UPA"), Ala.Code 1975, § 26-17-1 et seq. Specifically, we held that § 26-17-10(d), Ala.Code 1975, a part of the UPA, allows a court to determine paternity through a URESA action so long as the provisions of the UPA are followed and applied. Ex parte State ex rel. State of Ohio v. E.B.M., supra, 718 So. 2d at 666; Ex parte State of California, 669 So. 2d 884 (Ala.1995). We remanded the case for the Court of Civil Appeals to determine whether the trial court's finding for the alleged father was clearly erroneous. On remand, the Court of Civil Appeals, again without addressing the trial court's finding, held that under § 26-17-6(a), the five-year limitations period barred the natural mother from bringing a URESA/UPA action for the purposes of determining the father/child relationship and challenging the presumed father's paternity and, thus, that the trial court's finding was not plainly and palpably erroneous. Ala.Code 1975, §§ 26-17-5(a)(1), 26-17-6(a). In support of its holding, the Court of Civil Appeals cited State ex rel. E.K.D. v. M.R.W., 662 So. 2d 910 (Ala.Civ.App.1994) ("M.R.W."). In M.R.W., the alleged father moved to dismiss a paternity action filed against him, based on the five-year statute of limitations in § 26-17-6(a). The Court of Civil Appeals correctly held that the five-year limitations period applies in an action brought to determine the existence of the father-and-child relationship when a child has a presumed father, as set forth in § 26-17-5(a)(1). In that case, however, the alleged father affirmatively pleaded the statute of limitations. 662 So. 2d at 911. In S.L.C. v. State ex rel. J.J.S., 667 So. 2d 120 (Ala.Civ.App.1995) ("S.L.C."), however, the Court of Civil Appeals stated that even though the alleged father had raised the statute of limitations defense in his amended answer, he had failed to specifically state in his pleadings or arguments before the trial court that the limitations period was five years and that the specific Code section was § 26-17-6(a). The Court of Civil Appeals concluded that because the trial court had not ruled on this issue, the Court of Civil Appeals could not address the statute-of-limitations defense. 667 So. 2d at 122. The defense of the statute of limitations must be affirmatively pleaded, and if an answer does not include an affirmative defense, that defense is deemed to have been waived. See Rule 8(c), Ala.R.Civ.P.; Johnson *671 v. Life Ins. Co. of Alabama, 581 So. 2d 438 (Ala.1991). However, there are exceptions to this rule. Rule 15(b), Ala.R.Civ.P., requires trial courts "to be liberal in granting permission to amend [pleadings] when justice so requires." Even as late as trial, if evidence relating to an unpleaded defense is introduced without objection, Rule 15(b) requires that the pleadings be treated as if that defense had been raised in the pleadings. Johnson v. Life Ins. Co. of Alabama, supra, at 441. From what is before us, it appears that the statute of limitations was not raised at the trial level, nor on appeal. Appellate courts will not consider an issue that was not properly raised or pleaded in the trial court. Smiths Water Authority v. City of Phenix City, 436 So. 2d 827 (Ala.1983) (citations omitted); S.L.C., supra; see 5 Am.Jur.2d Appeal and Error § 726 (1962 & Supp.1991). Whereas it is well settled that an appellate court will affirm the trial court's judgment if the court has reached the right result, even if it reached that result for the wrong reason, see Bennett v. Bennett, 454 So. 2d 535 (Ala. 1984), that rule is not applicable where the trial court's judgment is based on an affirmative defense that was neither pleaded nor argued. See 5 Am.Jur.2d Appeal and Error § 727. Because the defense of the statute of limitations was not presented to the trial court, that defense was waived. Therefore, the Court of Civil Appeals erred in affirming the trial court's judgment based on the Court of Civil Appeals' determination that the action was barred by the five-year statute of limitations of the UPA. The judgment of the Court of Civil Appeals is reversed and the case is remanded for that court to determine whether the trial court's finding for the alleged father was plainly and palpably erroneous. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, SHORES, KENNEDY, COOK, BUTTS, and SEE, JJ., concur. ALMON, J., concurs in the result.

January 16, 1998

712edfcf-bbb7-4c20-92de-1361b4683431

American Bankers Life Assurance Co. v. RICE ACCEPT. CO.

709 So. 2d 1188

1952061

Alabama

Alabama Supreme Court

709 So. 2d 1188 (1998) AMERICAN BANKERS LIFE ASSURANCE COMPANY v. RICE ACCEPTANCE COMPANY, INC. 1952061. Supreme Court of Alabama. January 30, 1998. Michael L. Bell and R. Jeffery Kelsey of Lightfoot, Franklin & White, L.L.C., Birmingham, for appellant. Randy Myers of Richard Jordan, Randy Myers and Ben Locklar, P.C., Montgomery; and W. Sidney Fuller, Andalusia, for appellee. *1189 KENNEDY, Justice. Rice Acceptance Company, Inc. ("Rice"), sued American Bankers Life Assurance Company ("American Bankers"), alleging that American Bankers had committed fraudulent suppression against Rice in its handling of a dispute over a life insurance policy claim; the policy was sold by Rice and issued by American Bankers. Pursuant to a "Service Expense Reimbursement Agreement" (hereinafter "Reimbursement Agreement") executed by Rice and American Bankers, American Bankers moved to compel arbitration of Rice's fraudulent suppression claim. The trial court denied American Banker's motion to compel arbitration. American Bankers appeals from the trial court's order denying that motion. That denial of the motion to arbitrate is an appealable order. See Terminix Int'l Co. Ltd. Partnership v. Jackson, 628 So. 2d 357 (Ala.1993); Ex parte Brice Building Co., 607 So. 2d 132 (Ala.1992). Rice is a consumer loan company, which, in addition to providing consumer loans, often sells credit life insurance on those loans to its customers. Rice contracted with American Bankers for Rice to sell American Bankers insurance policies on the loans. Rice, acting as American Bankers' agent, earned commissions on the policies it sold. American Bankers held commission accounts in which it reserved its agents' commissions, including those of Rice. The Reimbursement Agreement executed by Rice and American Bankers set out numerous rules concerning the policies, including the rates and amounts of commissions provided by American Bankers to Rice for the sale of the policies, as well as the manner in which policy losses and expenses were to be treated by American Bankers. In 1994, Rice and American Bankers were sued by Geraldine Whiting, a beneficiary under a $2,500 American Bankers credit life insurance policy sold by Rice to Whiting's husband. Whiting's complaint alleged that American Bankers had wrongfully refused to pay her claim on her deceased husband's policy. Rice and American Bankers agreed to settle Whiting's claims because American Bankers admitted it had improperly handled the death claim and that the proceeds should have been paid. Rice contends that American Bankers requested Rice to participate in the settlement by contributing approximately 18% of the settlement amount, and that American Bankers represented that it would pay the majority of the settlementapproximately $115,000.[1] However, as a result of the settlement, American Bankers debited approximately $116,949 from Rice's commission account. Rice maintains that it did not learn of this debit until after it had been made. In debiting Rice's account, American Bankers relied on a portion of the Reimbursement Agreement providing for a deduction from Rice's commission earnings of "the cumulative total of all losses and loss expenses, and claims adjustment expenses incurred." Rice then brought this fraud action, alleging that American Bankers had deceitfully induced it to agree to paying a portion of the settlement. American Bankers moved to arbitrate Rice's claim, pursuant to the Reimbursement Agreement's arbitration provision: As noted above, the trial court denied American Bankers' motion to compel arbitration of Rice's claim. In its order denying the motion, the trial court held that the dispute was "independent of or collateral to `the meaning or interpretation' of the [Reimbursement Agreement]." *1190 American Bankers contends that although Rice couches the dispute in terms of fraud the dispute concerns only a difference in interpretation of the Reimbursement Agreement, and, therefore, that the arbitration agreement applies to the dispute. Rice argues that the arbitration clause in the Reimbursement Agreement is a narrow one, concerning only contractual disputes, and that the noncontractual fraud claim is predominantly unrelated to the arbitration clause. In Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), the United States Supreme Court held that the Federal Arbitration Act ("FAA") governs all contracts falling within Congress's power under the Commerce Clause. Allied-Bruce Terminix substantially changed the arbitration law of this State, which had previously been declared in Ala.Code 1975, § 8-1-41(3) ("The following obligations cannot be specifically enforced: ... An agreement to submit a controversy to arbitration[.]"). The federal policy favoring arbitration was recognized by this Court in Allied-Bruce Terminix Companies v. Dobson, 684 So. 2d 102 (Ala.1995), on remand following the United States Supreme Court's Allied-Bruce Terminix decision. In that opinion, this Court stated: 684 So. 2d 102, 107 (quoting Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765, 785 (1983)). In Ex parte Gates, 675 So. 2d 371 (Ala. 1996), this Court considered a petition for a writ of mandamus concerning an arbitration provision in a mobile home installment sales contract. The Gateses, as purchasers of the mobile home, made several claims against the seller and the manufacturer of the mobile home, including claims alleging that the seller had made misrepresentations and concealed material facts in order to induce the Gateses to purchase the mobile home. The arbitration provision in the contract provided for arbitration of "[a]ll disputes, claims, or controversies arising from or relating to this Contract or the relationships which result from this Contract, or the validity of this arbitration clause or the entire Contract." 675 So. 2d at 373. This Court, holding that the trial court had properly compelled arbitration of the Gateses' claims, including their fraud claims, stated: 675 So. 2d at 374-75. The language of the arbitration provision found in the Reimbursement Agreement is clearly narrower than that in Gates. Unlike the arbitration provision in Gates, it does not broadly provide for arbitration of all disputes "related to" the Reimbursement Agreement or "relationships created" by virtue of the agreement. The arbitration provision in the Reimbursement Agreement is limited to disputes "as to the meaning or interpretation of this Agreement." The issue presented by Rice's complaint is whether American Bankers fraudulently suppressed from Rice an intent to deduct the amount of the settlement from Rice's commission account, not whether American Bankers, pursuant to the Reimbursement Agreement, could legally deduct the settlement from Rice's commission account. Therefore, Rice's fraud claim is not subject to the narrow arbitration clause found in the Reimbursement Agreement. In Old Republic Ins. Co. v. Lanier, 644 So. 2d 1258 (Ala.1994), the issue was whether the disputes between the parties fell within the arbitration provisions of their agreements. Identical arbitration provisions in the two applicable agreements between the parties provided that "any dispute arising out of this Agreement" shall be submitted to arbitration. 644 So. 2d at 1260. We held *1191 that the "arising out of" language in the arbitration provisions was intended to cover a narrow scope of disputes, "`i.e., only those relating to the interpretation and performance of the contract itself.'" 644 So. 2d at 1262 (quoting Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458 (9th Cir.1983)). The "arising out of" language was not intended to cover matters or claims independent of, or collateral to, the contract. The language in the arbitration clause in this present case is narrower than the "arising out of" language in Old Republic because it expressly states that "any dispute or disagreement between the parties as to the meaning or interpretation of this Agreement" is subject to arbitration. The arbitration clause is clearly limited to the "meaning or interpretation" of the contract. Resolution of the fraud claim in the instant case does not require an inquiry into the meaning of the contract or its performance, so the fraud claim is not subject to the arbitration provision. Accordingly, we affirm the trial court's order denying the motion to compel arbitration. AFFIRMED. COOK and BUTTS, JJ., concur. ALMON and HOUSTON, JJ., concur specially. SHORES, J., concurs in the result. HOOPER, C.J., and MADDOX and SEE, JJ., dissent. ALMON, Justice (concurring specially). I agree that Rice's fraud claim is outside the scope of the Reimbursement Agreement's arbitration clause, which applies only to disputes "as to the meaning or interpretation of this Agreement." The question whether American Bankers fraudulently represented that it would pay 82% of the settlement of Ms. Whiting's claim is not a dispute as to the meaning or interpretation of the Reimbursement Agreement. I write specially to emphasize that § 8-1-41(3), Ala.Code 1975, is still the law of this State. Except to the extent that the Supremacy Clause of the United States Constitution, art. VI, cl. 2; the Federal Arbitration Act, 9 U.S.C. § 1 et seq.; and decisions of the Supreme Court of the United States[2] bar its operation, § 8-1-41(3) continues in full force and effect. For this reason, I would also hold that § 8-1-41(3) prevents specific performance of this arbitration clause, which states that it is "subject to applicable provisions of the statutes of the state in which the customer is domiciled dealing with arbitration." An arbitration agreement will be enforced only according to its terms and the wishes of the parties. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947, 115 S. Ct. 1920, 1925, 131 L. Ed. 2d 985, 995 (1995). In Fidelity National Title Ins. Co. v. Jericho Management, Inc., [Ms. 1950828, Sept. 12, 1997] (Ala.1997) (pending on application for rehearing), this Court held that the phrase "unless prohibited by applicable law" incorporated § 8-1-41(3). I would hold that the arbitration clause in the Reimbursement Agreement, by incorporating state law, incorporates § 8-1-41(3) so that this clause cannot be enforced in this State. Finally, I am not sure that this contract is one "evidencing a transaction involving [interstate] commerce," 9 U.S.C. § 2, so as to be within the scope of the FAA at all. However, because the clause is so clearly not applicable to this dispute, I have not fully studied the question whether interstate commerce is involved in the contract between American Bankers and Rice Acceptance. HOUSTON, Justice (concurring specially). American Bankers Life Assurance Company, by its own admission, wrongfully refused to pay a $2,500 claim based on a policy covering the life of N.J. Timmons, the common-law husband of Geraldine Whiting. This resulted in Whiting's suing American Bankers and Rice Banking Company for fraud and American Bankers for bad faith refusal to pay a valid insurance claim. Rice had liability insurance that would pay any judgment obtained against Rice in the Whiting action up to the limit of that liability *1192 policy and would pay Rice's expenses in defending the fraud claim. American Bankers admitted to Rice that American Bankers had erred in refusing to pay Whiting, and it agreed to settle with Whiting for $140,000 if Rice's liability insurance would pay 18% of the loss. American Bankers gave Rice no indication that after it had paid the 82% of the settlement that it had agreed to pay, it would reimburse itself by taking that 82% from the commission account American Bankers held for Rice. However, American Bankers did that; and when Rice learned what American Bankers had done, Rice sued American Bankers, alleging that American Bankers had fraudulently suppressed an intent to fund its part of the Whiting settlement from Rice's commission account. The issue is not whether American Bankers, according to the terms of the "Service Expense Reimbursement Agreement," could legally deduct from Rice's commission account the 82% of the settlement; that issue, according to the Reimbursement Agreement, would have to be determined by arbitration. The issue is whether American Bankers fraudulently suppressed from Rice what it intended to do, in order to get Rice and its liability insurer to agree to settle with Whiting. As I understand Rice's contention, it is arguing that if American Bankers intended to make Rice pay the entire settlement for American Bankers' misfeasance, then American Bankers should have told Rice this. Rice's complaint is as follows: [1] Whiting settled her claims for $140,000. [2] E.g., Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), and Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984).

January 30, 1998

e6b02e02-05f4-4ca0-b5b0-ab31005214b0

Fountain Finance, Inc. v. Hines

788 So. 2d 155

1991208, 1991209

Alabama

Alabama Supreme Court

788 So. 2d 155 (2000) FOUNTAIN FINANCE, INC. v. Lavonne Pearson HINES et al. Jim Skinner Ford, Inc. v. Lavonne Pearson Hines et al. 1991208 and 1991209. Supreme Court of Alabama. December 15, 2000. John Martin Galese, Jeffrey L. Ingram, and David A. Norris of Galese & Ingram, P.C., Birmingham, for appellants. *156 David E. Hampe, Jr., Birmingham, for appellee Lavonne Pearson Hines. COOK, Justice. Fountain Finance, Inc. ("Fountain"), and Jim Skinner Ford, Inc. ("Jim Skinner"), are defendants in an action pending in the Jefferson Circuit Court. They appeal from an order denying their motion to compel arbitration of the claims presented by the plaintiffs, Lavonne Hines and others. We affirm. This action began on August 6, 1999, when a complaint was filed by "Lavonne Pearson Hines, individually, ... and as Mother and next friend of Undra Pearson, a minor, and Marshall Pearson, a minor,... in their behalf; [and] Willie B. Hines, an individual." The complaint named as defendants Fountain, Jim Skinner, and "Ron Davis, an individual." The complaint read in toto: The complaint is unverified; it is signed only by the plaintiffs' counsel. Fountain and Jim Skinner each moved to compel arbitration of the plaintiffs' claims. In materially identical language, their motions stated: The motions are unverified. In connection with these motions, Fountain and Jim Skinner submitted the affidavit of John Brown, which read in toto: On December 20, 1999, the trial court granted the motions to compel arbitration. However, on February 29, 2000, it vacated its order granting the motions and entered an order denying them. From that order, Fountain and Jim Skinner appealed. Fountain and Jim Skinner contend that the trial court erred in denying their motions to compel arbitration, because, they argue, Lavonne Hines signed an arbitration agreement and the plaintiffs' claims "fall within the scope of the arbitration agreement." We agree that Lavonne Hines signed an arbitration agreement, but we disagree with the argument that the plaintiffs' claims are subject to it. Not every tort claim involving parties to an arbitration agreement is arbitrable. An arbitration clause cannot be "enforced to require arbitration of a claim alleging an intentional tort that is in no way related to the underlying transaction that gave rise to the arbitration agreement." Green Tree Fin. Corp. v. Shoemaker, 775 So. 2d 149, 151 n. 3 (Ala.2000). "To hold otherwise would allow persons signing broad arbitration provisions to commit intentional torts against one another, which torts are outside the scope of their contemplated dealings, without concern that they might have to answer for their actions before a jury of their peers." Ex parte Discount Foods, 711 So. 2d 992, 994 (Ala.), cert. denied sub nom. Supervalu Inc. v. Discount Foods, Inc., 525 U.S. 825, 119 S. Ct. 71, 142 L. Ed. 2d 56 (1998). The complaint alleges various intentional torts, all arising out of an apparently serious altercation on the Hines property "in the early morning hours" of July 7, 1999. The complaint does not allege that this altercation had anything to do with the contract containing the arbitration provision on which Fountain and Jim Skinner rely. Indeed, the 93-page record filed in *159 this appeal contains no evidence relating to the incident on July 7, 1999. "A motion to compel arbitration is analogous to a motion for a summary judgment. The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that that contract involves a transaction affecting interstate commerce." Ex parte Caver, 742 So. 2d 168, 172 n. 4 (Ala.1999) (emphasis added). "`In order to prevail on an assertion of arbitrability, the moving party is required to produce some evidence which tends to establish its claim.'" Ryan's Family Steak Houses, Inc. v. Regelin, 735 So. 2d 454, 457 (Ala.1999) (emphasis added) (quoting Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 (Ala.1995)). Fountain and Jim Skinner failed to produce any evidence indicating that claims arising out of the incident made the basis of the plaintiffs' lawsuit were arbitrable. To be sure, their motions state: "The instant matter involves claims of wrongful conduct during a repossession of the automobile purchased by the Plaintiff under a retail installment contract signed at the time of signing the arbitration agreement." (Emphasis added.) However, "[m]otions and arguments of counsel are not evidence." Williams v. Akzo Nobel Chemicals, Inc., 999 S.W.2d 836, 845 (Tex.App.1999). "[S]tatements in motions are not evidence and are therefore not entitled to evidentiary weight." Singh v. Immigration & Naturalization Serv., 213 F.3d 1050, 1054 n. 8 (9th Cir.2000). "[B]riefs submitted in support of motions are not evidence to be considered by the Court in resolving a summary judgment motion." Direct Media Corp. v. Camden Tel. & Tel. Co., 989 F. Supp. 1211, 1217 (S.D.Ga.1997). Indeed, the only evidence presented in the record is the affidavit of John Brown. However, his affidavit appears to have been offered only to establish the necessary nexus of the sales transaction with interstate commerce. It conspicuously fails to address the factual basis out of which the plaintiffs' claims arise. Because of the sparseness of the record, we can only surmise that the altercation made the basis of the complaint had something to do with an attempted repossession of a motor vehicle. For example, no evidence in the record indicates that the defendants' alleged presence on the Hines property related in any way to the 1990 Dodge Caravan purchased on March 2, 1998. This is significant, because, if it did not, then the arbitration clause Hines signed in connection with that transaction was immaterial for any conceivable purpose. The record contains no stipulations relating to the plaintiffs' cause of action. Because Fountain and Jim Skinner failed to connect the March 2, 1998, purchase of the 1990 Dodge Caravan to the incident made the basis of the plaintiffs' claims, they failed to satisfy their burden of proof on the question whether the arbitration agreement covered the plaintiffs' claims. Thus, the trial court properly denied the motions to compel arbitration. The order of the trial court is, therefore, affirmed. AFFIRMED. MADDOX, HOUSTON, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. SEE, J., concurs in the result in part and dissents in part. HOOPER, C.J., dissents. SEE, Justice (concurring in the result in part and dissenting in part). I concur in the result of the main opinion to the extent it holds that the intentional-tort *160 claims alleged by Lavonne Pearson Hines's husband, Willie B. Hines, and her children, Marshall Pearson and Undra Pearson, are not subject to arbitration; I agree with that result because Ms. Hines's husband and her children did not agree to arbitration. A party who does not agree to arbitrate a dispute cannot be compelled to submit that dispute to arbitration. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995). This Court has enforced an arbitration provision against a nonsignatory when the nonsignatory claimed the benefit of the contract containing the arbitration provision but attempted to avoid the application of the arbitration provision. Ex parte Dyess, 709 So. 2d 447, 451-52 (Ala.1997). Ms. Hines signed a "retail buyer's order," which set forth the cost of the vehicle and which contained an arbitration provision. In addition to the retail buyer's order, Ms. Hines signed a "retail installment contract" to finance the unpaid balance due on the vehicle. The record gives no indication that Ms. Hines's husband and children are trying to claim the benefit of either the retail buyer's order or the retail installment contract while at the same time seeking to avoid the arbitration provision. Therefore, because their intentional-tort claims are not based on either of these agreements, they are not subject to arbitration. I dissent, however, from that part of the main opinion that concludes that Ms. Hines's own intentional-tort claims are not subject to arbitration. This Court has stated that "[w]hether an arbitration provision encompasses a party's claims `is a matter of contract interpretation, which interpretation is guided by the intent of the parties, and which intent, absent ambiguity in the clause, is evidenced by the plain language of the clause.'" Green Tree Fin. Corp. of Alabama v. Vintson, 753 So. 2d 497, 505 (Ala.1999). The language of the arbitration provision in this case is plain, clear, and unambiguous. By that plain language, Ms. Hines agreed to arbitrate Ms. Hines's intentional-tort claims arise out of the defendants' alleged attempts to repossess the car that Ms. Hines had purchased by the retail installment contract; thus, those claims come within the scope of the arbitration provision contained in the retail buyer's order. The main opinion correctly states that "[a]n arbitration clause cannot be `enforced to require arbitration of a claim alleging an intentional tort that is in no way related to the underlying transaction that gave rise to the arbitration agreement,'" quoting Green Tree Financial Corp. v. Shoemaker, 775 So. 2d 149, 151 n. 3 (Ala.2000). However, given the clear language of the arbitration provision"resulting from or arising out of the terms of financing the carI conclude that the efforts the defendants took to collect the debt were a part of the transaction. See Shoemaker, 775 So. 2d at 151 ("There can be nothing more `relating to' a financial transaction than the efforts a party takes to collect a debt created as a part of that transaction."). Accordingly, I would hold that the trial court erred in *161 denying the defendants' motion to compel arbitration of Ms. Hines's claims. I would affirm the trial court's order insofar as it relates to the intentional-tort claims alleged by Ms. Hines's husband and her children. However, because the scope of the arbitration provision is broad enough to encompass Ms. Hines's claims, I would reverse the order insofar as it relates to Ms. Hines's own intentional-tort claims.

December 15, 2000

7542874e-b888-4ac3-994d-2df728fce4e2

Sims v. Crates

789 So. 2d 220

1990313

Alabama

Alabama Supreme Court

789 So. 2d 220 (2000) Jerry W. SIMS v. Clark McDuffie CRATES and Michael T. Ilczyszin. 1990313. Supreme Court of Alabama. December 29, 2000. *222 Tom Radney of Radney & Brown, P.A., Alexander City, for appellant. Micheal S. Jackson of Beers, Anderson, Jackson, Nelson, Hughes & Patty, P.C., Montgomery, for appellees. LYONS, Justice. Jerry W. Sims filed a wrongful-death action against Michael T. Ilczyszin and Clark McDuffie Crates. The trial court entered a summary judgment in favor of Ilczyszin and a judgment on a jury verdict in favor of Crates. Sims appeals. We affirm the judgment in favor of Ilczyszin, reverse the judgment in favor of Crates, and remand. In the early morning hours of July 24, 1998, Jerry Sims's 16-year-old son, Christopher Brian ("Chris") Sims, shot himself in the head with a .357 handgun while he was at a party hosted by Crates at Ilczyszin's home. Ilczyszin is Crates's stepfather and is a Montgomery police officer. He was on assignment in Hawaii with the Marine Corps Reserve when the incident occurred, and did not know that his stepson was having a party in his home while he was out of town. Crates and Chris Sims became friends while they lived on the same street. At the time of the accident, Crates was 23 and Chris Sims was 16. Chris Sims's parents are divorced. The testimony reflects that during the year before the incident, Chris Sims was admitted by his mother to a substance-abuse program operated by Bradford Health Services. After being discharged from Bradford, Chris went to a facility named The Bridges, but he was discharged from that facility for fighting. His father, who testified that initially he did not believe Chris had a drug problem, then obtained custody of him. Chris was expelled from a private school for fighting, and he switched schools several times. Chris also attended Project Upward, but was expelled from that program for fighting. Chris began working with a logging company owned by the grandparents of one of his close friends, Ronnie Armstrong. At the time of the incident, Chris Sims, Crates, and Armstrong were all working for the logging company and were living in Georgia together. They had returned to Montgomery a week before the incident. Because Ilczyszin was in Hawaii, he did not know they had returned. Before leaving to go on duty with the Marine Corps, he had told Crates that, by the end of August, he would no longer allow him to live in his home because, he had said, Crates was 23 years old and "he needed to get on with his own life." The record indicates that Ilczyszin collects handguns and rifles. The rifles are kept in a locked cabinet. The handguns are kept in Ilczyszin's bedroom in an unlocked cabinet that is built into the headboard of his bed. All of the handguns are kept unloaded, however, and the ammunition is kept in a separate locked cabinet. The testimony during the trial indicated that Chris obtained the ammunition for the.357 handgun from another teenager who attended the party, Isaac Barber, not from Ilczyszin's locked cabinet. Barber testified that he and his brother "took" the ammunition from a neighbor. *223 The evidence indicates that Crates opened Ilczyszin's home to a group of teenagers on the afternoon and evening of July 23. During the night, Chris and Barber went into Ilczyszin's bedroom and took two unloaded handguns. They walked around with the guns in the waistbands of their pants. About a half hour later, the group left and went to Barber's house. There, Chris got into an argument with Jessica Armstrong; the argument resulted in his hitting an aquarium and badly cutting his hand. His friends took him to a local emergency room ("ER"), but he would not get out of the car. Later, when he began to feel sick, they again took him to the ER, where he was treated for the cut to his hand. The group left the ER about 3:45 a.m. and returned to Ilczyszin's house. About 4:00 a.m., Melissa Horn, Ann Barber, and Maria Murphy were in the kitchen with Chris, who at the time was playing with a .357 handgun. He had obtained.357 cartridges in a "ziplock bag" from Isaac Barber. Chris was taking the cartridges in and out of the chamber of the revolver and spinning the chamber around. The girls told him to stop playing with the gun. Chris stated that he could not die, put the gun to his head, and pulled the trigger, but nothing happened. One of the girls left to get someone to take the gun away from Chris, but Chris again put the gun to his head and pulled the trigger. This time the gun discharged and Chris fell to the floor. An autopsy revealed that Chris had alcohol, cocaine, and marijuana in his system. Isaac Barber testified that earlier in the day Ronnie Armstrong and Chris had bought marijuana and the three of them had smoked it. There was no testimony to indicate that Crates had supplied either marijuana or cocaine to Chris that day. There was testimony that alcohol purchased by Crates was present in the home. Jerry Sims sued Crates and Ilczyszin, alleging that his son's death was the proximate result of negligent, willful, or wanton acts on their part. Specifically, he alleged that Ilczyszin had left a loaded handgun in his home with knowledge that Crates would have access to it, and he alleged that Crates had provided alcoholic beverages to Chris Sims, as well as to other minors, in violation of § 13A-11-57 and § 13A-11-10.1, Ala.Code 1975. The defendants asserted in their answer the affirmative defenses of contributory negligence and assumption of the risk. The trial court entered a summary judgment for Ilczyszin. The case against Crates proceeded to a jury trial; the jury returned a verdict in his favor. The court entered a judgment on that verdict. Jerry Sims contends that the trial court erred in entering the summary judgment in favor of Ilczyszin. He argues that Chris Sims was a licensee on Ilczyszin's property at the time of his death and that Ilczyszin, as a homeowner, owed Chris, as a licensee, the duty not to willfully or wantonly injure Chris, or allow Chris to be negligently injured after discovering Chris's peril. Jerry Sims alleges that Ilczyszin allowed Crates to have access to the handguns he kept in the unlocked cabinet, that Ilczyszin was aware that Crates allowed minors to handle the handguns, and that as a police officer he should have been aware of how easy it would be for a teenager to obtain ammunition. Ilczyszin's conduct, Jerry Sims argues, was willful or wanton. Jerry Sims also argues that assumption of the risk and contributory negligence are normally questions for a jury, and that those defenses are not valid defenses to claims based on willful or wanton conduct. *224 Jerry Sims failed to present substantial evidence of willfulness or wantonness on the part of Ilczyszin, who did not even know a party was occurring in his home. Ilczyszin could breach no duty to Chris, because he was unaware of Chris's presence in his home until after the death had occurred. In Raney v. Roger Downs Insurance Agency, 525 So. 2d 1384 (Ala. 1988), the parents of a child injured in the offices of an insurance agency while her mother was cleaning those offices sued the insurance agency and its principals, alleging that the child's injuries were the result of the defendants' negligence or wanton conduct. The defendants had hired the child's mother to clean the insurance agency's offices on the weekends, while the offices were closed. Without the defendants' knowledge, the mother often took her two small children with her when she cleaned the offices. On the day of the injury, one of the children found an open container of white granular powder on a bathroom shelf; there was a spoon in the powder. Thinking the powder was sugar, she put the spoon in her mouth. The powder was lye, and it caused painful burns to the child's mouth. 525 So. 2d at 1385. Because the defendants were unaware that the child was with her mother when the mother was cleaning the offices, this Court affirmed the summary judgment for the defendants, stating that the facts did not support a claim of wantonness. Id. at 1387. See, also, Copeland v. Pike Liberal Arts School, 553 So. 2d 100 (Ala.1989), in which this Court held that the defendant landowner was not liable for an injury the plaintiff sustained when he fell into a ravine on the landowner's property. The landowner did not know the plaintiff was on the property and was unaware of his peril until after his fall. Jerry Sims contends that Ilczyszin's keeping guns in his home constituted willful or wanton conduct toward Chris Sims; this contention does not support his claim. The testimony indicated that most of the weapons in the Ilczyszin home were kept in locked cabinets and that the few kept in unlocked cabinets were unloaded; that ammunition was not stored with those weapons, but was stored separately in a locked area; and that the cartridges Chris placed into the gun with which he shot himself did not belong to Ilczyszin, but were brought to the house by Chris and Isaac Barber. Moreover, we find no evidence to support a claim that Ilczyszin allowed Chris to be negligently injured. Chris's own actions were sufficient to break any chain of causation between Ilczyszin's actions and Chris's death. It is settled law in Alabama that even if one negligently creates a dangerous condition, he or she is not responsible for injury that results from the intervention of another cause, if at the time of the original negligence, the intervening cause cannot reasonably be foreseen. Gilmore v. Shell Oil Co., 613 So. 2d 1272 (Ala.1993). In Gilmore, an employee at a gasoline station/convenience store kept a loaded handgun on a shelf beneath the counter in the store. The plaintiffs son, Michael Gilmore, was a friend of another employee. On the day he died, Michael had gone to the store to visit his friend. The employee who owned the handgun testified that on that day, he had inadvertently left the handgun on the shelf beneath the counter. Michael went behind the counter to make a telephone call; while there, he took the handgun from underneath the counter. His friend testified that Michael "opened the chamber of the handgun and removed all the bullets. Michael then replaced one of the bullets, closed the chamber, put the handgun to his head, and pulled the trigger." 613 So. 2d at 1274. The shot killed Michael. This *225 Court held that his conduct was an efficient intervening cause that negated any liability of the defendants for any negligence on their part in leaving the handgun on the shelf. Id. at 1278. The death of Chris Sims also is an unexplainable tragedy. It is not, however, a tragedy for which Ilczyszin is liable. The trial court properly entered the summary judgment in favor of Ilczyszin. In regard to the judgment in favor of Crates, Jerry Sims contends that the trial court erred in refusing to instruct the jury that contributory negligence and assumption of the risk are not defenses to claims based on willful or wanton conduct. The trial court instructed the jury, in pertinent part: (Emphasis added.) After the trial court concluded its charge to the jury, Jerry Sims's counsel stated to the court: The trial court responded, "Okay." Crates's counsel then stated: The trial court gave no further instructions to the jury. The trial court correctly quoted from Instruction 30.02, Alabama Pattern Jury Instructions: Civil (2d ed.1993), in instructing the jury that the plaintiff could not recover for "any initial simple negligence" of the defendant if the plaintiff was contributorily negligent. The "Notes on Use" that follow APJI 30.02, however, state: (Emphasis added.) Although the language used in the APJI 30.02 "Notes on Use" is advisory, we find, in this instance, the suggested additional language to be sound and applicable. The trial court should have given the additional instruction because whether Crates's conduct was willful or wanton was an issue submitted to the jury. APJI 30.05, dealing with assumption of the risk, is described in the related Notes on Use as an instruction "used for [c]ontributory [n]egligence under certain conditions, [e.g.,] where there is a contractual relationship between the parties." This correlation between the pattern instructions on contributory negligence and those on assumption of the risk indicates that the additional charge in APJI 30.02 also should be given as to the defense of assumption of the risk in a case such as this, where the defendant's alleged willfulness or wantonness, along with the issue of negligence, is an issue submitted to the jury. The trial court had the duty "to instruct the jurors fully and correctly on the applicable law of the case and to guide, direct, and assist them toward an intelligent understanding of the legal and factual *227 issues involved in their search for truth." American Cast Iron Pipe Co. v. Williams, 591 So. 2d 854, 856 (Ala.1991). A party is entitled to have the trial court properly instruct the jury regarding the issues presented in the case, and an incorrect or misleading charge may require a new trial. Towner v. Hosea O. Weaver & Sons, 614 So. 2d 1020, 1023 (Ala.1993). Therefore, because Jerry Sims alleged not only that Crates acted negligently, but also that he acted willfully or wantonly, the trial court should have given the additional charge, as requested by Jerry Sims, in order to instruct the jury fully and correctly. Furthermore, the trial court's error in not giving the jury the complete instruction set forth in APJI 30.02 and the related Notes on Use was not rendered harmless by the fact that the jury returned a general verdict. "Where the verdict is general, but prejudicial error obtains to the court's instructions to the jury on any theory of recovery, the verdict must be set aside because no determination can be made as to which of several issues the jury relied upon in reaching its verdict." Liberty Nat'l Life Ins. Co. v. Smith, 356 So. 2d 646, 648 (Ala.1978). See, also, American Cast Iron Pipe Co., 591 So. 2d at 856. Because the trial court's instructions to the jury were incomplete as to the defenses of contributory negligence and assumption of the risk, and because we cannot determine which issue the jury relied upon in reaching its verdict for Crates, we must reverse the judgment in favor of Crates and order a new trial on Jerry Sims's claims against him. We affirm the summary judgment entered in favor of Ilczyszin. We reverse the judgment entered on the jury verdict in favor of Crates, and we remand the cause for a new trial of the claims against that defendant. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and MADDOX, COOK, and JOHNSTONE, JJ., concur.

December 29, 2000

b27f745d-9245-45bb-9cf1-85a2c5c6e3e6

CC & J., INC. v. Hagood

711 So. 2d 947

1961110

Alabama

Alabama Supreme Court

711 So. 2d 947 (1998) C.C. & J., INC., d/b/a The Movie Gallery v. Henry T. HAGOOD, Jr., as father and next friend of Jody Hagood. 1961110. Supreme Court of Alabama. January 9, 1998. Rehearing Denied April 10, 1998. *949 Charles J. Potts and Susan Gunnells Smith of Janecky, Newell, Potts, Wells & Wilson, P.C., Mobile, for appellant. Floyd C. Enfinger, Jr., Montrose; and Sidney W. Jackson III and Robert J. Hedge of Jackson, Taylor & Martino, P.C., Mobile, for appellee. HOOPER, Chief Justice. A Baldwin County jury found C.C. & J., Inc., d/b/a The Movie Gallery ("Movie Gallery"), liable for the tort of abuse of process in its pursuit of criminal charges against Jody Hagood and awarded Hagood compensatory and punitive damages. The circuit court entered a judgment on that verdict. Movie Gallery appeals, claiming that the trial judge erred by not directing a verdict for it and later by denying its motion for a judgment notwithstanding the verdict; Movie Gallery also argues that the court improperly instructed the jury. We agree that the court should have directed a verdict for Movie Gallery because Hagood failed to present substantial evidence on all elements of his claim. We reverse.[1] This Court has written: Ogle v. Long, 551 So. 2d 914, 915 (Ala.1989). The standard of review for testing the sufficiency of the evidence when the sufficiency is challenged by either a motion for directed verdict[2] or a motion for JNOV is the "substantial evidence rule." Substantial evidence is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). In considering the question of the sufficiency of the evidence, we are required, as was the trial court, to view the evidence in the light most favorable to the nonmovant. Bussey v. John Deere Co., 531 So. 2d 860, 863 (Ala.1988). In this case, the nonmovant is Hagood. The evidence relevant to this appeal, viewed in the light most favorable to Hagood, suggests the following facts: Jody Hagood, an 18-year-old from Trussville, spent the summer of 1992 working at the beaches of Gulf Shores. On August 18, 1992, Hagood and several of his friends entered the Movie Gallery video store in Foley. Hagood gave the store clerk his driver's license and completed a "membership application." On the membership application, Hagood supplied an address in Foley, although his driver's license listed his permanent address as being in Trussville. No notation was made on the application to indicate that the Foley address was a temporary address. The application also listed Hagood's friends as other household members. The terms and conditions of the Movie Gallery "membership" were printed on the back side of the membership application. Hagood denies signing the membership agreement. Hagood and his friends selected three movies to rent. Although the videos were rented in Hagood's name on his account, Hagood did not sign the rental agreement. One of his friends, David Dennis, signed the rental agreement. Hagood did not speak with Dennis about the videos again and, shortly after they were rented, Hagood left Foley to return to high school. The videos were never returned to the store. When they had not been returned after three days, Movie Gallery, following its general procedure, telephoned the number listed on the application as Hagood's home number. Ten days later, Movie Gallery sent a reminder letter to the address Hagood had listed on the application. Movie Gallery received no response to the letter. Three months later, Movie Gallery sent two certified letters to the same address; the letters stated that if the overdue videos were not returned Movie Gallery would turn over its information to the police for criminal prosecution under Alabama's *950 "Theft by Fraudulent Leasing or Rental of Property" statute, Ala.Code 1975, § 13A-8-140 et seq. These letters were returned to Movie Gallery as undeliverable. Because he had left the area, Hagood never received notice that the videos had not been returned or that Movie Gallery was contemplating criminal action against him. On December 15, 1992, after receiving no response from Hagood, Movie Gallery filed a criminal complaint charging Hagood with theft by rental, and a warrant was issued for his arrest. On February 13, 1993, Hagood was arrested under this warrant, after being stopped in Birmingham for speeding. He spent 30 hours in jail before the Baldwin County district attorney agreed to a settlement dismissing all criminal charges in exchange for Hagood's paying one-half of the replacement cost of the videos and promising to pay the other half if David Dennis did not pay that other half. After Movie Gallery filed the complaint, it had no contact with Hagood other than to accept the settlement brokered by the district attorney. The arrest prompted Hagood, through his father, to sue Movie Gallery, alleging several claims, including abuse of process. The trial court granted Movie Gallery's motion for summary judgment on all claims except abuse of process. Hagood's complaint was later amended to include a claim of malicious prosecution. At trial, Hagood voluntarily withdrew the malicious prosecution claim and only the abuse of process claim was submitted to the jury. The jury returned a verdict for Hagood on that count, awarding him $50,000 in compensatory damages and $125,000 in punitive damages. The court had denied Movie Gallery's motion for a directed verdict; it also denied Movie Gallery's motion for a JNOV. The elements of the tort of abuse of process are 1) the existence of an ulterior purpose, 2) a wrongful use of process, and 3) malice. Triple J Cattle, Inc. v. Chambers, 621 So. 2d 1221, 1225 (Ala.1993). With regard to the element of ulterior purpose, Hagood alleged that Movie Gallery pressed criminal charges against him not to see that he was brought to justice, but only to collect a civil debt. Hagood supported this allegation by the following testimony by Kenny Geuertsen, who was the Movie Gallery manager at the time of the rental: The evidence also showed that Movie Gallery had filed approximately 40 criminal warrants against customers who had not returned videos. In light of this evidence, the jury could have believed that Movie Gallery had lapsed into the practice of collecting debts through criminal prosecutions. The jury's finding that Movie Gallery had Jody Hagood prosecuted for the ulterior purpose of collecting a civil debt was supported by substantial evidence. However, Movie Gallery is not liable for abuse of process simply because it prosecuted Hagood with an ulterior purpose. Hagood was required to further show that Movie Gallery wrongfully used the criminal process against Hagood. At the outset of this analysis, it would be helpful to note the difference between an abuse of process claim, on which the verdict was based, and a malicious prosecution claim. Malicious prosecution concerns the wrongful issuance of process; abuse of process concerns the wrongful use of process after it has been issued. Warwick Dev. Co. v. GV Corp., 469 So. 2d 1270, 1274 (Ala.1985); Wilson v. Brooks, 369 So. 2d 1221 (Ala.1979); Clikos v. Long, 231 Ala. 424, 165 So. 394 (1936); Dickerson v. Schwabacher, 177 Ala. 371, 58 So. 986 (1912). In their brief on appeal and in their oral arguments before this Court, Hagood's attorneys emphasized evidence they say shows that Movie Gallery had no basis to support its criminal charge against Hagood, specifically, evidence indicating that Hagood did not sign the rental agreement for the videos, and that he never received notice that the videos had not been returned or that he was in danger of being prosecuted unless they were returned. His attorneys also argued that Movie Gallery forged Hagood's signature on the membership agreement and forged certain terms into the agreement, in order to pursue Hagood criminally. These facts tend to show that Movie Gallery acted wrongfully in swearing out the warrant in *951 the first place; however, the tort that encompasses such a wrongful issuance of a criminal warrant is malicious prosecution, not abuse of process. Most reasonable persons would agree that Movie Gallery was, if not plainly wrong, then at least imprudent in having Hagood arrested on these facts. But the jury could not properly consider the prudence of initiating the warrant because the legitimacy or illegitimacy of the issuance of process is irrelevant in an abuse of process case. Warwick Dev. Co., Wilson v. Brooks, Clikos v. Long, and Dickerson v. Schwabacher, supra. Hagood presents two arguments on the element of wrongful use of process. First, he contends that under our holding in Warwick Dev. Co., supra, this element is satisfied when a defendant is shown to have engaged in fraudulent and deceitful conduct in order to create a legal cause of action and then sues on that cause of action for an ulterior purpose. Evidence presented at trial suggested that Movie Gallery had altered the membership agreement so that it could prosecute Hagood. Hagood reasons that the jury could have found that Movie Gallery manufactured evidence and that its doing so, combined with an ulterior motive of debt collection, was a wrongful use of the criminal process under Warwick. If Warwick stands for the proposition advanced by Hagood, then Warwick is a misstatement of the law. Wrongful activity designed to create a claim goes to the initiation of process, not to its later use. As we have said, any question about the initiation of a judicial proceeding is encompassed in a malicious prosecution claim, not an abuse of process claim. See 1 Am.Jur.2d Abuse of Process § 3 (1994). Warwick is further troubling because, as Justice Jones pointed out in his dissent, it emphasized the element of ulterior purpose to the exclusion of the element of a wrongful use of process. In Alabama, however, the tort of abuse of process has three elements: ulterior purpose, wrongful use, and malice. Triple J Cattle, Inc., supra. Each element must be proven individually. Hagood's second argument is that Movie Gallery's continued pursuit of criminal charges against him so that it could collect a civil debt was an improper use of the criminal process. This argument again confuses the distinction between malicious prosecution and abuse of process. Moreover, this argument has been rejected across the country: Annotation, Abuse of ProcessCollection of Debt, 27 A.L.R.3d 1202, 1207 (1969). Hagood presented no evidence indicating that Movie Gallery performed any act to further the criminal complaint after the issuance of process, and certainly no evidence of an illegitimate act. Hagood has not alleged any wrongful act by Movie Gallery after the warrant was issued. Indeed, it is undisputed that Movie Gallery's only other involvement with Hagood's criminal case was to approve the dismissal of the criminal charges pursuant to the settlement agreed to by Hagood's lawyer and the Baldwin County district attorney. Merely proceeding with a criminal complaint and later agreeing to dismiss the charge cannot constitute a wrongful use because: W. Page Keeton et al., Prosser and Keeton on Torts § 121, at 898 (5th ed.1984); See also Donohoe Constr. Co. v. Mount Vernon Assocs., 235 Va. 531, 539-41, 369 S.E.2d 857, 862 (1988). Even if Movie Gallery had proceeded with the criminal prosecution intending only to collect a civil debt, it cannot be liable for an abuse of process claim unless it somehow acted outside the boundaries of legitimate procedure after the charge had been *952 filed. Because Hagood has presented no evidence of such an act, his claim must fail for want of the essential element of wrongful use of process. An inherent danger in any judicial system is that the court's powers might be made to serve the illegitimate ends of an individual. We cannot say strongly enough that the judicial system should not be used as a club to force a party to submit to the will of another. To guard against its misuse, our system provides wronged parties with some protections, namely the ability to bring claims alleging malicious prosecution and abuse of process. But if this Court allowed a party to succeed in an abuse of process claim without having proven the requisite elements, the equally dangerous potential would exist for parties who legitimately use the criminal justice system to later become liable on claims of abuse of process. Citizens of this state should feel free to petition the courts for redress of wrongs without being encumbered by the fear of such liability. While this Court sympathizes with the plight Jody Hagood endured for the mistake of trusting a friend to return three videos, we must make sure that a plaintiff proves all the elements of the particular cause of action. Because the law of this state requires that a plaintiff prove all three elements of abuse of process, and because Hagood did not meet this burden, the trial court erred by not directing a verdict for Movie Gallery and erred again later in denying its motion for a judgment notwithstanding the verdict. The judgment of the circuit court is reversed and a judgment is rendered for the defendant. REVERSED AND JUDGMENT RENDERED. SHORES, HOUSTON, and KENNEDY, JJ., concur. MADDOX and SEE, JJ., concur in the result. [1] Because we conclude that Movie Gallery was entitled to a directed verdict, we need not address the propriety of the trial court's jury instructions. [2] The "motion for directed verdict" and the "motion for judgment notwithstanding the verdict" have been renamed by a 1995 amendment to Rule 50, Ala.R.Civ.P. See Committee Comments to October 1, 1995, Amendment to Rule 50.

January 9, 1998

0970dac4-4fe2-48db-8d90-31a90b12b70b

Jefferson Cty. Com'n v. Eco Preserv. Serv., LLC

788 So. 2d 121

1990736

Alabama

Alabama Supreme Court

788 So. 2d 121 (2000) JEFFERSON COUNTY COMMISSION v. ECO PRESERVATION SERVICES, L.L.C., and Knobloch, Inc. 1990736. Supreme Court of Alabama. August 18, 2000. Opinion Denying Rehearing December 15, 2000. *123 Edwin A. Strickland, county atty.; and Charles S. Wagner, asst. county atty., Birmingham, for appellant. Albert L. Jordan and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham; and Billy R. Weathington, Jr., of Weathington & Associates, Leeds, for appellees. Stephen D. Christie of Porterfield, Harper & Mills, P.A., Birmingham, for amicus curiae Petro Stopping Centers, L.P., in support of the appellees. James W. Webb, Kendrick E. Webb, and Bart Harmon of Webb & Eley, P.C., Montgomery, for amicus curiae Association of County Comm'ns of Alabama, in support of application for rehearing. MADDOX, Justice. The primary issue presented in this case is whether the Jefferson County Commission acted arbitrarily and capriciously in denying ECO Preservation Services, L.L.C. ("ECO"), and Knobloch, Inc., a crossing permit for construction of a sewer line under a public roadway. The trial court determined that the Commission did act arbitrarily and capriciously and entered a partial summary judgment for ECO and Knobloch. Based on the record before us, we conclude that the trial court properly entered the summary judgment. We affirm. ECO is an Alabama company that is arranging to place an underground sewer line on a Jefferson County road right-of-way for the purpose of collecting sewage originating in Jefferson County and transporting it to a sewage-treatment plant in Tuscaloosa County, for discharge in Bibb County into a tributary of the Cahaba River. Knobloch holds a National Pollution Discharge and Elimination System ("NPDES") permit issued by the Alabama Department of Environmental Management ("ADEM"). Apparently, Knobloch has granted to ECO the long-term right, under the ADEM permit, to discharge treated waste. In August 1997, ECO submitted a request to the Jefferson County Roads and Transportation Department for a road-crossing permit to cross a public right-of-way in western Jefferson County in order to install an underground sewer pipeline. The county engineer, Jerry Drake, denied the request; ECO appealed the denial to the Commission, which also denied the request. In denying the request, the Commission stated: After the Commission denied its request, ECO sued the Commission and its agents. Later, Knobloch was allowed to intervene as a coplaintiff. ECO and Knobloch stated the following items in their demand for judgment: On November 29, 1999, the trial court entered a partial summary judgment for ECO and Knobloch. The summary-judgment order stated, in pertinent part: *125 The Commission moved to vacate the partial summary judgment, on December 7, 1999. The trial court denied this motion on December 17, 1999, and stated, in pertinent part: Also in its December 17 order, the court made that order and its November 29, 1999, order final, pursuant to Rule 54(b), Ala.R.Civ.P. On January 19, 2000, the Commission filed its notice of appeal. The first issue is whether the Commission's appeal is timely. ECO and Knobloch argue that the appeal, which was filed 33 days after the December 17, 1999, final order was entered, was untimely, under Rule 4, Ala.R.App.P., because the order granted injunctive relief. They cite Robinson v. Computer Servicenters, Inc., 346 So. 2d 940 (Ala.1977), for the proposition that even if an injunction order has been made final by a Rule 54(b) certification, it is still subject to a 14-day appeal period. We cannot accept this argument. In Robinson, this Court addressed the issue whether an appeal could be taken from an order granting a permanent injunction in a case in which some issues were still pending. 346 So. 2d at 941. That issue involved this provision of Rule 54(b), Ala.R.Civ.P.: (Emphasis added.) The appeal in Robinson was taken without a certification under Rule 54(b), because the order was appealable under Rule 4(a)(1)(A), Ala.R.App.P.; that rule allows 14 days for an appeal from an interlocutory order granting injunctive relief. The situation in Robinson is not the situation presented by this case. It is clear that the trial court's November 1999 order, which granted ECO and Knobloch's motions for partial summary judgment, granted injunctive relief.[1] However, the 14-day limit prescribed by Rule 4(a)(1)(A), Ala.R.App.P., applies only to interlocutory orders granting an injunction orders that are not otherwise appealable. We conclude that the trial court's December 1999 order was not an "interlocutory order" as that phrase is used in Rule 4. While it is true that after the court entered its December 1999 order there were apparently other claims pending in the trial court, the order was not *126 "interlocutory," because the trial court made the order final pursuant to Rule 54(b), Ala.R.Civ.P. If an injunction order has been made final by a Rule 54(b) certification, as has happened in this case, then the 14-day provision of Rule 4(a)(1)(A) does not apply, because the injunction order is not an "interlocutory order" and is appealable without regard to the provisions of Rule 4(a)(1)(A). We conclude that the 42-day limit, rather than the 14-day limit, applies and that the Commission's appeal is timely. Our holding on this issue finds support from the federal system. A federal statute, 28 U.S.C. § 1292(a)(1), 19 Moore's Federal Practice § 203.10[2][a] (3d ed. 1999). Section 1292(a)(1) gives an aggrieved party the right to take an immediate appeal from an order granting an injunction. See 28 U.S.C. § 1292(a)(1). The exercise of this right, however, is optional, and generally a party is under no obligation to take an interlocutory appeal. See Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 468 (9th Cir.1989) (holding that even though an interlocutory appeal might have been available, the party was not required to pursue it). If no interlocutory appeal is taken from the district court's interlocutory order granting the injunction, the decision may be reviewed on appeal from the final judgment. See Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 608 (7th Cir. 1993)("A party may forgo an interlocutory appeal and present the issue for appeal after final judgment."); and Kurowski v. Krajewski, 848 F.2d 767, 772 (7th Cir.1988) ("Interlocutory orders ... may be stored up and raised at the end of the case...."). Because the appeal was timely, we deny the motion to dismiss the appeal. We now consider the substance of the appeal. The trial court, in entering the partial summary judgment, held that the Commission's decision denying the plaintiffs' request for a road-crossing permit was arbitrary and capricious. The court found that the Commission had produced no evidence to support its conclusory statements that the sanitary-sewer pipelines in Jefferson County, installed by ECO, with their attendant manholes and pump stations, could spill, leak, or otherwise discharge raw sewage in Jefferson County, and concluded that the Commission had failed to show that under Alabama law it had exclusive authority to operate a sewer system in Jefferson County. When reviewing a ruling on a motion for a summary judgment, this Court uses the same standard of review the trial court used "in determining whether the evidence before the court made out a genuine issue of material fact." Bussey v. John Deere Co., 531 So. 2d 860, 862 (Ala.1988). When a party moving for a summary judgment makes a prima facie showing that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law, the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). Substantial evidence is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment *127 can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assur. Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). In reviewing a ruling on a motion for a summary judgment, this Court views the evidence in the light most favorable to the nonmovant and entertains such reasonable inferences as the jury would have been free to draw. Renfro v. Georgia Power Co., 604 So. 2d 408 (Ala.1992). The Commission argues that because Amendment No. 73 to the Alabama Constitution of 1901 vests it with authority to operate a county-wide sewer system, including the "power and authority to manage, operate, control, and administer the sewers and plants," it has the exclusive right to operate a sewer system in Jefferson County. It also argues that it can deny ECO and Knobloch the requested permit to use a right-of-way on county roads based on its general superintendence over public roads in the county. See § 23-1-80, Ala.Code 1975. While the county commission does have general superintendence authority over public roads, see Water Works & Sewer Board of the City of Birmingham v. Shelby County, 624 So. 2d 1047, 1050 (Ala.1993), and Barber v. Covington County Commission, 466 So. 2d 945, 947-48 (Ala.1985), this regulatory authority is not unlimited, and we find no authority for the proposition that the Jefferson County Commission has the exclusive right to maintain a sewer system in Jefferson County. After considering the pleadings, the oral arguments of the parties, and the legal principles involved, the trial court granted ECO and Knobloch declaratory and injunctive relief. In doing so, the trial judge found that the Commission had failed to "convince [the court] that Alabama law grants Jefferson County the exclusive right to provide sanitary sewer service in Jefferson County." The trial judge also found that the Commission had failed to provide "any evidence that the single crossing in question" would, in any way, damage the right-of-way, create any hazard on the right-of-way, or interfere with the use of the right-of-way by any other entity. We conclude that the trial judge did not err. The partial summary judgment is affirmed. MOTION TO DISMISS DENIED; AFFIRMED. HOOPER, C.J., and COOK, LYONS, and JOHNSTONE, JJ., concur. MADDOX, Justice. Jefferson County argues, for the first time on its application for rehearing, that this Court never acquired jurisdiction over this matter because, it says, the complaint made no allegation of fraud, corruption, or unfair dealing. This lack-of-jurisdiction argument was not raised before the trial court or before this Court on original submission. In fact, Jefferson County argued before the trial court and before this Court on original submission that ECO and Knobloch could not seek relief in the courts "absent a showing that the commission acted in an arbitrary, capricious or corrupt manner." Therefore, because the case was submitted to the trial court on the arbitrary-and-capricious standard, this is the law of the case. See Blumberg v. Touche Ross & Co., 514 So. 2d 922 (Ala. 1987). ECO and Knobloch have moved for an award of attorney fees. We deny their motion. APPLICATION OVERRULED; MOTION FOR ATTORNEY FEES DENIED. *128 HOOPER, C.J., and HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] An injunction is "[a] court order commanding or preventing an action." Black's Law Dictionary 788 (7th ed. 1999). Furthermore, a mandatory injunction is "[a]n injunction that orders an affirmative act or mandates a specified course of conduct." Id.

December 15, 2000

7d13b564-488e-4a4a-9da7-802865b6208f

Ex Parte Wallace

795 So. 2d 719

1991453

Alabama

Alabama Supreme Court

795 So. 2d 719 (2000) Ex parte John Kenneth WALLACE. (In re Shelby Kaye Yelverton Wallace v. John Kenneth Wallace). 1991453. Supreme Court of Alabama. November 22, 2000. *720 Jere C. Segrest and Thomas M. Little of Hardwick, Hause & Segrest, Dothan, for petitioner. J.R. Herring, Dothan, for respondent. PER CURIAM. John Kenneth Wallace and Shelby Kaye Yelverton Wallace were divorced by the Houston Circuit Court after a 20-year marriage. The wife appealed, seeking a review of the trial court's award of periodic alimony. The Court of Civil Appeals reversed that portion of the judgment relating to the award of periodic alimony and remanded the case solely "for the court to make an award more in line with what the facts of this case dictate." Wallace v. Wallace, 795 So. 2d 715, 719 (Ala.Civ.App.2000). We granted the husband's petition for certiorari review to consider whether the Court of Civil Appeals erred in reversing the award of periodic alimony. The Court of Civil Appeals' opinion adequately recites the evidence presented to the trial court. We need not recite that evidence here. The Court of Civil Appeals also explained the financial settlement ordered by the trial court: It is settled law in domestic-relations cases that the judgment of a trial court based on evidence presented ore tenus is presumed correct and that its findings "will not be disturbed on appeal unless they are palpably wrong, manifestly unjust, or without supporting evidence." McCoy v. McCoy, 549 So. 2d 53, 57 (Ala. 1989). See, also, McCrary v. Butler, 540 So. 2d 736 (Ala.1989); Jones v. Jones, 470 So. 2d 1207 (Ala.1985); Clark v. Albertville Nursing Home, Inc., 545 So. 2d 9 (Ala. 1989). The reviewing court must determine whether the trial court correctly applied the law to the facts and whether the judgment was an abuse of discretion and plainly and palpably wrong. Franz v. Franz, 723 So. 2d 61 (Ala.Civ.App.1997). After reviewing the record, we conclude that the trial court did not act arbitrarily or otherwise abuse its discretion in fashioning the overall property settlement. The evidence supports the trial court's judgment. Therefore, we reverse the judgment of the Court of Civil Appeals and remand the cause. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.

November 22, 2000

27967f49-0d2a-4c0f-bea0-f2c874c3886a

Massey Bros. Chev.-Olds-Geo, Inc. v. We Davis & Sons Construction Company, Inc.

786 So. 2d 1093

1990738, 1991065

Alabama

Alabama Supreme Court

786 So. 2d 1093 (2000) MASSEY BROTHERS CHEVROLET-OLDS-GEO, INC. v. W.E. DAVIS & SONS CONSTRUCTION COMPANY, INC. 1990738 and 1991065. Supreme Court of Alabama. November 22, 2000. R. Edward Massey III and Edward Massey of Clay, Massey & Associates, Mobile, for appellant. Allan R. Chason of Chason & Chason, P.C., Bay Minette, for appellee. PER CURIAM. In January 1998, W.E. Davis & Sons Construction Company, Inc. ("Davis"), entered into a contract with Massey Brothers Chevrolet-Olds-Geo., Inc. ("Massey"), for the construction of an automobile dealership facility. The amount of the initial construction contract totaled several hundred thousand dollars. At a point during the construction, a dispute arose between the parties concerning the work yet to be done and the amount of money remaining to be paid. As a result of the conflict, Davis sued Massey to perfect and enforce a mechanic's and materialman's lien in the amount of $73,338. Pursuant to an arbitration agreement contained in the parties' contract, the trial court entered a stay and the dispute was submitted to arbitration. On August 11, 1999, the arbitrator entered an award reading, in pertinent part: On August 17, 1999, Massey filed an application for clarification, requesting the arbitrator to review the award and to impose appropriate deadlines for Davis's completion of the "punch items" and sanctions for any nonperformance. On September 16, 1999, the arbitrator entered the following clarification order: Shortly before the deadline, Davis requested a meeting with Joe Massey, one of the owners of Massey; a meeting was scheduled, but it was later canceled by Davis. No more work was done on the project before the October 11 deadline. On the day of the deadline, Davis faxed a letter to the arbitrator, stating that its principal had suffered health problems and requesting a 30-day extension of time to complete the project. Massey objected to the extension, arguing that Davis had essentially been given 60 days from the initial award to begin work on the completion of the project and that he had failed to do so. In a letter dated October 12, 1999, Massey requested that the arbitrator (1) deny the extension; (2) declare that Davis was in default; and (3) nullify the award because of noncompliance. Davis subsequently made three attempts to begin work on the punch items; however, Massey refused Davis access to the premises pending the arbitrator's ruling on Davis's request for an extension. On October 25, 1999, the arbitrator issued a ruling wherein he directed that "[t]he award shall stand as clarified" and that "[n]o further modifications, clarifications, or extensions shall be granted." After the arbitrator denied its request for an extension of time to complete the project, Davis filed a motion in the Baldwin Circuit Court for enforcement of the arbitration award and an entry of judgment against Massey. In its motion, Davis alleged that under the arbitration award Massey was required to pay Davis $55,439 no later than October 11, 1999; that Massey *1095 had failed and refused to pay any portion of that award; and that Massey was in default under the terms of the award. Davis further stated that under the terms of the arbitration award it was required to complete certain punch items, but that Massey had refused to allow Davis back onto its premises to perform work on those items. Massey filed a response, arguing that Davis was in default for failing to comply with the deadlines contained in the clarified award, and arguing that Davis, therefore, was not entitled to receive any sums of money. Massey's response further contained a reference to the arbitrator's denial of Davis's request for an extension of time to complete the punch items. On December 10, 1999, the trial court held a teleconference on Davis's motion to enforce the arbitration award. Three days later, the court made the following entry on the case action summary sheet: Massey filed a notice of appeal from this order granting Davis a 14-day extension (case no. 1990738). On January 28, 2000, the trial court entered the following order: On March 8, 2000, Massey filed a second notice of appeal (case no. 1991065). On appeal, Massey argues that the trial court erred in assuming jurisdiction over matters previously determined by an arbitrator. Specifically, Massey contends that the trial court's order granting Davis a 14-day extension improperly vacated and/or modified the arbitrator's award. We agree. The arbitration agreement entered into by the parties provided, in pertinent part, that "any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration." As noted earlier in this opinion, the arbitrator's award gave a specific deadline for Davis to complete the punch items. Davis did not begin work toward completion of those items before the deadline and, instead, requested a 30-day extension for completing the punch items; the arbitrator denied Davis's request. The underlying dispute in this matter appears to surround the ramifications of the arbitrator's denial of Davis's request for an extension of time to complete the punch items. It was Massey's contention that it was relieved of its obligation to pay Davis when Davis failed to complete the punch items by the deadline. Davis, on the other hand, believing that its completion of the punch items was not a condition precedent to Massey's payment of the award, moved for the entry of a judgment pursuant to the arbitrator's award. Despite the arbitrator's denial of Davis's extension request, the trial court granted Davis a 14-day extension to complete the punch items. We conclude that the trial court had no authority to order such an extension. Because the parties had agreed to arbitrate any claim or controversy, the trial court should have remanded this controversy for the arbitrator to determine penalties for Davis's noncompliance with the October deadline. Massey next argues that the trial court erred in entering a judgment on the arbitration award. Specifically, Massey contends that the trial court incorrectly determined that Massey's payment of the arbitration award was not dependent upon Davis's completion of the punch items. The arbitrator's clarified award provided that Davis was to complete the project "as originally ordered, or by 10-11-99," and that "[o]n 10-11-99, MASSEY BROTHERS CHEVROLET-OLDS-GEO, INC. shall pay over the award as previously stated on that date." The language of the arbitrator's award gives rise to an inference that payment of the award was conditioned upon completion of the project; however, because we have determined that the trial court should have remanded the parties' dispute to the arbitrator, the trial court's judgment is reversed. 1990738REVERSED AND REMANDED. 1991065REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. SEE, J., concurs specially. SEE, Justice (concurring specially). I agree with the main opinion's conclusion that the trial court erred by granting Davis a 14-day extension to complete the punch items. This Court has held that an arbitration award "has the properties of a judgment" and "is subject to attack only *1097 for fraud, partiality or corruption." Carlisle v. McCleskey, 264 Ala. 436, 439, 87 So. 2d 831, 834 (1956). In this case, neither party alleged that the arbitrator was guilty of fraud, partiality, or corruption in making the award. Accordingly, the trial court was without authority to alter the arbitrator's award. I also agree with the main opinion's conclusion that the trial court should have remanded the controversy to the arbitrator. A court may remand an arbitrator's award for clarification if it is ambiguous or incomplete. Lanier v. Old Republic Ins. Co., 936 F. Supp. 839, 846 (M.D.Ala.1996). The arbitrator's award was ambiguous as to whether Davis's completing the punch items was a condition precedent to Massey's paying the award. Therefore, the trial court's remand of the case to the arbitrator for clarification was proper.

November 22, 2000

89907ade-cf8e-4847-81ed-0581ed670c49

Elmore County Com'n v. Smith

786 So. 2d 449

1981750, 1981935

Alabama

Alabama Supreme Court

786 So. 2d 449 (2000) ELMORE COUNTY COMMISSION and Elmore County v. Ray SMITH et al. Richard Payson et al. v. Ray Smith et al. 1981750 and 1981935. Supreme Court of Alabama. July 21, 2000. Rehearing Applications Overruled November 22, 2000. *450 Craig S. Dillard of Webb & Eley, P.C., Montgomery, for appellants Elmore County Commission and Elmore County. Rehearing brief filed by James W. Webb, Craig S. Dillard, and Sheri J. Lowder of Webb & Eley, P.C., Montgomery. J. Robert Faulk of McDowell, Faulk & McDowell, L.L.C., Prattville, for appellant Richard Payson et al. Jacqueline E. Austin and Paul Christian Sasser, Jr., Wetumpka, for appellees. Mary E. Pons, Montgomery, for amicus curiae Association of County Commissions of Alabama. HOOPER, Chief Justice. The opinion of March 24, 2000, is withdrawn and the following is substituted therefor. These appeals involve a question regarding the procedure to be used when abutting landowners seek to vacate a public road. Richard Payson and other owners of land abutting Payson Road sought to close a portion of that road. Payson Road has been used as a public road and has been maintained as such by Elmore County for over 30 years. Payson appeared at a meeting of the Elmore County Commission in late 1997 or early 1998, orally requesting that a portion of Payson Road be closed. Payson and the other abutting landowners then retained an attorney to prepare a "declaration of vacation," pursuant to Ala.Code 1975, § 23-4-20, which was presented to the Commission. On March 23, 1998, the Commission passed a resolution assenting to the vacation of a portion of Payson Road. This resolution was signed by the county administrator; was signed and certified by the chairman of the Commission; was attached to the declaration of vacation; and was filed and recorded in the Probate Office of Elmore County. Ray Smith, as well as other owners and/or occupiers of real property in the vicinity of Payson Road (hereinafter the "Smith plaintiffs"), filed a complaint for declaratory and injunctive relief against Elmore County, the Elmore County Commission, Richard Payson, and the other abutting landowners (hereinafter Payson and the other abutting landowners are referred to as the "Payson defendants"). The Smith plaintiffs alleged that the proper statutory procedures for vacating a road had not been followed. The trial court entered a summary judgment for the Smith plaintiffs. Elmore County and the Elmore County Commission (hereinafter the "Elmore County defendants") appealed; likewise, the Payson defendants appealed. We reverse and remand. In its summary judgment, the trial court held that the requirements of Ala.Code 1975, § 23-4-20, had not been fully complied with; therefore, it held, the Commission did not have the jurisdiction or authority to close Payson Road. Section 23-4-20 provides: A summary judgment should be entered only upon a showing "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c)(3), Ala.R.Civ.P. When the moving party makes a prima facie showing that no genuine issue of material fact exists, the burden shifts to the nonmoving party to rebut that showing by presenting substantial evidence creating a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala.1989). Evidence is "substantial" if it is "of such weight and quality that fairminded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). "In reviewing a summary judgment, this Court will view the evidence in a light most favorable to the nonmovant and will resolve all reasonable doubts against the movant." Culbreth v. Woodham Plumbing Co., 599 So. 2d 1120, 1121 (Ala.1992). Both the Payson defendants and the Elmore County defendants contend that the requirements of § 23-4-20 were complied with in the vacation of Payson Road and that § 23-4-20 provides the only procedures that must be followed when abutting landowners vacate a road. In contrast, the Smith plaintiffs argue that the provisions of § 23-4-2 also apply when § 23-4-20 is invoked. Section 23-4-2 provides: The Smith plaintiffs also contend that the Payson defendants are required to prove that the vacation of Payson Road is a public necessity. The Smith plaintiffs further argue that the manner in which the road was closed deprived them of procedural due process and that the provisions of § 23-4-20 were not met because the vacation of Payson Road deprives them of reasonable and convenient access. We first address the issue whether § 23-4-2 applies when a vacation is undertaken pursuant to § 23-4-20. This Court noted in Gwin v. Bristol Steel & Iron Works, Inc., 366 So. 2d 692, 694 (Ala.1978): "[T]his area of the law (vacation of public streets in a non-eminent domain context) has been confusing and unsettled for at least the past 50 years." (Footnote omitted.) Indeed, more than 20 years after Gwin the law regarding the vacation of public streets by abutting landowners is still confusing and unsettled. In Fordham v. Cleburne County Commission, 580 So. 2d 567, 569 (Ala.1991), this Court stated: "The proper procedures required to enforce § 23-4-20 are found in § 23-4-2." However, that statement, because it was not necessary to the holding in that case, is mere dicta. In Fordham, the landowners abutting Beaver Lane Road sought to vacate that road pursuant to § 23-4-20. The landowners attended a meeting of the Cleburne County Commission and proposed that the road be closed. After an announcement of the proposed road closing had appeared in a local newspaper each week for three weeks, a requirement of § 23-4-2, the Commission adopted a resolution calling for the road to be closed. The Commission later adopted another resolution evidencing its intent to vacate the road. However, this Court held that the Cleburne County Commission "did not meet the strict standards set out in §§ 23-4-2 and 23-4-20" (580 So.2d at 570) because it did not adopt a clear and unequivocal resolution closing Beaver Lane Road. While the Court in Fordham stated in dicta that a vacation pursuant to § 23-4-20 must follow the procedure set out in § 23-4-2, the Court also stated that "public streets, alleys, or highways can be closed and vacated by counties or municipalities in accordance with Ala.Code 1975, §§ 23-4-1 through -6, or by `abutting landowners' in accordance with § 23-4-20." 580 So. 2d at 569 (emphasis added). It is unclear whether the vacation sought in Fordham was initiated pursuant to *454 § 23-4-20 or § 23-4-2 because, although the abutting landowners proposed the closing of the road to the county commission, the landowners did not join in a written instrument declaring the road to be vacated, as required by § 23-4-20. However, it is clear that the road in Fordham was not properly vacated, because the abutting landowners did not follow the provisions of § 23-4-20 and the commission did not follow the provisions of § 23-4-2. Thus Fordham is not strong support for the proposition that in seeking to vacate a road pursuant to § 23-4-20 the abutting landowners must also comply with § 23-4-2. In McPhillips v. Brodbeck, 289 Ala. 148, 266 So. 2d 592 (1972), this Court examined the vacation of a road by an abutting landowner pursuant to Title 56, § 32, Code of Alabama (1940), the predecessor to § 23-4-20, Ala.Code 1975; the earlier statute contains the same requirements as § 23-4-20. In that case, this Court noted a distinction between the vacation of a road by a public authority and the vacation of a road by abutting landowners as follows: 289 Ala. at 154, 266 So. 2d at 597. This statement indicates this Court's recognition that, by enacting Title 56, § 32, the Legislature intended to allow the private interests of abutting landowners to override the public interest in the use of a roadway, so long as those landowners strictly followed the provisions of the statute. In Chichester v. Kroman, 221 Ala. 203, 128 So. 166 (1930), which was criticized but not overruled in Gwin, this Court examined § 10361, Code of Alabama (1924), as amended by Acts 1927, p. 105, a predecessor to Title 56, § 32. In that case, the Court described the factual issues presented as follows: 221 Ala. at 206, 128 So. at 168. In other words, if the landowners joined in a written declaration of vacation, to which the city assented, and the public had another means of ingress and egress, no more was required before the road could be vacated. The question before the Court in Chichester was whether a convenient means of ingress and egress to the complainant's property was otherwise afforded. The Smith plaintiffs cite Holland v. City of Alabaster, 624 So. 2d 1376 (Ala.1993), in support of their argument that the Payson defendants cannot vacate the road unless they can show that the vacation is justified on the ground of public necessity. In Holland, this Court stated that "[a]ny private right of abutting owners is entirely and *455 completely subordinate to the public right, and any invasion of the street in the way of private use can be justified only on the ground of public necessity." 624 So. 2d at 1378. Holland also involved the vacation of a road by abutting landowners pursuant to § 23-4-20; however, Holland held that there was no public necessity for closing the road and it did not address whether an abutting landowner seeking to have a road closed must comply with § 23-4-2. Holland is thus distinguishable from the present case because the holding in Holland was based on a finding by the trial court that the vacation of the road created a public nuisance. In previous cases where this Court has been called on to interpret a statute, this Court has stated: Blue Cross & Blue Shield v. Nielsen, 714 So. 2d 293, 296 (Ala.1998) (quoting IMED Corp. v. Systems Eng'g Assocs. Corp., 602 So. 2d 344, 346 (Ala.1992)). The language of §§ 23-4-20 and 23-4-2 is unambiguous and each statute must be given its plain meaning. The plain language of § 23-4-20 provides the procedures that must be followed when an abutting landowner seeks to vacate a public road. Section 23-4-20 makes no reference to the procedure set forth in § 23-4-2, which by its plain language applies only to those vacations initiated by a municipality or county. We will not read into a statute what the Legislature has not written. We also find persuasive the fact that the subject of the vacation of public roads by abutting landowners and by governing bodies appears in separate articles in the Code. Chapter 4 of Title 23, entitled "Closing and Vacating Streets, Alleys and Highways," contains both Article 1 (entitled "Counties or Municipalities," in which § 23-4-2 is found) and Article 2 (entitled "Abutting Landowners," in which § 23-4-20 is found). The fact that these provisions appear in separate articles indicates that the Legislature did not intend for the procedures in one Article to apply to the subject matter governed by the other Article. Thus, the provisions of § 23-4-20, which relate to "abutting landowners," were not meant to also be subject to the procedures set forth in § 23-4-2, which relate to counties and municipalities. We must conclude from the plain language of the statutes that in order for an abutting landowner to vacate a road pursuant to § 23-4-20, it is not necessary to comply with the procedures set forth in § 23-4-2. To the extent it is inconsistent with our holding today, Fordham is overruled. We must now determine whether Payson Road was properly vacated, pursuant to § 23-4-20. The trial court's order did not state which provision or provisions of § 23-4-20 it found the Payson defendants to have failed to fully comply with. The record indicates, and the Smith plaintiffs do not dispute, that the Payson defendants, acting pursuant to § 23-4-20, joined in a written instrument declaring a portion of Payson Road to be vacated. That instrument was executed, acknowledged, and recorded in the Probate Office of Elmore County. Acting pursuant to § 23-4-20, the Commission adopted a resolution assenting to the vacation of Payson Road, *456 and a copy of that resolution was certified by the chairman of the Commission and was attached to, and filed and recorded with, the declaration of vacation. Thus, the only requirement of § 23-4-20 at issue is whether the vacation "deprive[s] other property owners of such right as they may have to convenient and reasonable means of ingress and egress to and from their property." The Smith plaintiffs contend that the closing of Payson Road forces them to take an alternative road, County Road 7. They argue that County Road 7 is more congested than Payson Road and is impractical to use during early morning and late afternoon rush hours. They also claim that they have difficulty transporting farm equipment on County Road 7 because it is more heavily traveled than Payson Road. In support of this argument, the Smith plaintiffs cite Williams v. Norton, 399 So. 2d 828 (Ala.1981). In Williams, this Court held that the vacation of a public road by abutting landowners denied others the right of the "convenient enjoyment" of their property. The road that was vacated led to a recreational lake; after its vacation the other landowners, to get access to the water, were forced to take a more circuitous route through a private marina, which charged a fee for the use of its facilities. This Court, in Williams, noted that "an individual, as an owner of land which abuts a public road, suffers a special injury if an obstruction of that road denies him convenient access to a nearby waterway or forces him to take a more circuitous route to the outside world." 399 So. 2d at 829. The Smith plaintiffs contend that the closing of Payson Road forces them to take "a more circuitous route to the outside world." We note that in Williams the owners who were denied access owned land abutting the public road that was vacated. In the present case, none of the Smith plaintiffs owns land abutting the vacated portion of Payson Road. The Payson defendants argue that the Smith plaintiffs have not been deprived of reasonable and convenient means of ingress to and egress from their property. In fact, they contend that the alternative means of ingress and egress available to each of the Smith plaintiffs includes at least one paved road, unlike Payson Road, which is in certain places a one-lane dirt road. The Payson defendants contend that Williams is distinguishable from the present case because the vacation of the road in Williams effectively restricted the landowners' access to a body of water, the only alternative access to the water being a few miles away through a private marina that charged a fee. In contrast, the Payson defendants argue, the alternative route in the present case is a wider, paved road that is convenient to the property. The Payson defendants also contend that McPhillips, supra, is distinguishable from the present case. In that case this Court reversed the trial court's judgment upholding the vacation of a portion of a street because the vacation deprived the plaintiff of his only means of access to Mobile Bay without providing an alternative means of access. In McPhillips the landowner's only means of access to Mobile Bay was eliminated. In the present case, however, the landowners continue to have alternative routes for access to their property. "It is not a question of comparing conveniences or desirability, but whether there is left or provided some other reasonably convenient way." Chichester, 221 Ala. at 206, 128 So. at 169. It appears that the trial court entered the summary judgment in favor of the Smith plaintiffs based on a finding that the vacation had deprived the Smith plaintiffs of convenient and reasonable means of ingress *457 to and egress from their property and had thereby violated § 23-4-20. However, when viewed in the light most favorable to the Payson defendants, as the nonmovants, the evidence suggests that the Smith plaintiffs were not deprived of a "convenient and reasonable means of ingress and egress to and from their property." Therefore, we reverse the summary judgment in favor of the Smith plaintiffs and remand the case for further proceedings consistent with this opinion. OPINION OF MARCH 24, 2000, WITHDRAWN; OPINION SUBSTITUTED; APPLICATIONS GRANTED; 1981750REVERSED AND REMANDED; 1981935REVERSED AND REMANDED. MADDOX, HOUSTON, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.

November 22, 2000

aaf5c6ed-1c9b-427f-8575-b5424b44ce7b

Lyons v. Walker Regional Medical Center

791 So. 2d 937

1981178

Alabama

Alabama Supreme Court

791 So. 2d 937 (2000) Margaret LYONS, as the administratrix of the Estate of Kenneth Cook, deceased v. WALKER REGIONAL MEDICAL CENTER and Laurie Hunter. 1981178. Supreme Court of Alabama. December 8, 2000. Rehearing Denied February 23, 2001. *938 Richard S. Jaffe, Stephen A. Strickland, and Cecilee R. Beasley of Jaffe, Strickland, Beasley & Drennan, P.C., Birmingham, for appellant. Jasper P. Juliano and Dorothy A. Powell of Parsons, Lee & Juliano, P.C., Birmingham, for appellees. ENGLAND, Justice. Margaret Lyons, as administratrix of the estate of Kenneth Cook, filed a wrongful-death case against Walker Regional Medical Center and Laurie Hunter, a registered *939 nurse employed by Walker Regional. Walker Regional and Hunter moved for a summary judgment. Initially, the trialcourt denied their motion. Walker Regional and Hunter asked the court again to grant their motion, and the court did. Lyons moved to alter, amend, or vacate the summary judgment, but the court denied her motion. Lyons appealed from the defendants' summary judgment. We reverse and remand. In order to enter a summary judgment, the trial court must determine (1) that there is no genuine issue of material fact and (2) that the moving party is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P. In order to defeat a defendant's properly supported motion for summary judgment, the plaintiff must present "substantial evidence," i.e., "evidence of such weight and quality that fairminded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). In determining whether a summary judgment was properly entered, the reviewing court must view the evidence in a light most favorable to the nonmovant. Long v. Jefferson County, 623 So. 2d 1130, 1132 (Ala. 1993). The trial court recited the following undisputed facts in its initial "Memorandum Opinion and Order" denying the defendants' motion for summary judgment: To maintain a medical-malpractice action, the plaintiff ordinarily must present expert testimony from a "similarly situated health-care provider" as to (1) "the appropriate standard of care," (2) a "deviation from that standard [of care]," and (3) "a proximate causal connection between the [defendant's] act or omission constituting the breach and the injury sustained by the plaintiff." Pruitt v. Zeiger, 590 So. 2d 236, 238 (Ala.1991) (quoting Bradford v. McGee, 534 So. 2d 1076, 1079 (Ala.1988)). The reason for the rule that proximate causation must be established through expert testimony is that the issue of causation in a medical-malpractice case is ordinarily "beyond `the ken of the average layman.'" Golden v. Stein, 670 So. 2d 904, 907 (Ala.1995), quoting Charles W. Gamble, McElroy's Alabama Evidence, § 127.01(5)(c), p. 333 (4th ed.1991). The plaintiff must prove through expert testimony "that the alleged negligence `probably caused the injury.'" McAfee v. Baptist Med. Ctr., 641 So. 2d 265, 267 (Ala. 1994). The trial court initially denied the defendants' motion for summary judgment, holding that the evidence created a genuine issue of fact as to the issue of causation. The defendants moved the court to "reconsider" that denial, arguing, as they do on appeal, that Shanes v. Kiser, 729 So. 2d 319 (Ala.1999), supports their theory that Lyons was required to present the testimony of an expert witness on the question whether the defendants' alleged breach of the standard of care had proximately caused Cook's death. The trial court held, on its reconsideration of the denial, that, based on our holding in Shanes, Lyons could not carry her burden of proving that the defendants' alleged breach had proximately caused Cook's death. We disagree. The defendants' reliance on Shanes is misplaced. In Shanes, the plaintiff's decedent sought emergency treatment for pain in her chest and upper abdomen that radiated to her back. She reported that she did not have a history of heart disease and that she had experienced the symptoms some years earlier. The plaintiff alleged, among other things, that the doctor should have consulted a cardiologist and should have performed other tests that might have revealed the onset of a heart attack. We held that the doctor could not be found to have breached the standard of care, given the uncertainty as to what had caused the decedent's death. Although the medical expert testified, based on statistical probabilities and the decedent's medical history and symptoms, that the death was heart-related, both the medical expert and the doctor who had treated the decedent identified at least three conditions with overlapping symptoms that were not heart-related and that could have resulted in sudden death. Id. at 322. In this present case, Dr. Joseph Embry, a medical examiner with the Alabama Department of Forensic Sciences, stated in his affidavit that it is his professional opinion, within a degree of medical certainty, that Cook died of ketoacidosis due to diabetes mellitus. He also concluded, based upon the autopsy he did on Cook's body, that "no other injuries or natural disease processes caused or contributed to cause his death." Thus, unlike the Shanes case, this case presents little, if any, uncertainty in the record regarding the cause of death. Lyons presented substantial evidence supporting her claim against Walker Regional and Hunter: (1) She offered expert testimony from a similarly situated health-care *943 provider regarding the appropriate standard of care, (2) she presented evidence indicating that the defendants had deviated from that standard of care; and (3) she demonstrated a proximate causal connection between Cook's death and the defendants' omission constituting the breach. Lyons offered the expert testimony of Deborah Calhoun and Susan Atkinson to establish negligence. Calhoun and Atkinson are both registered nurses and work in an emergency room. Calhoun and Atkinson both testified that Walker Regional and Hunter had failed to provide Cook with the professional medical services, care, and treatment that similar medical providers within the medical community possessing and exercising ordinary and reasonable medical knowledge and skills would have provided. Cook's laboratory results stated "PANIC VALUES EXCEEDED." Atkinson testified that Hunter's failure to follow up on, and to report, the panic values was a breach of the standard of care. Dr. Marshall Boone, Jr., the doctor on call at Walker Regional the night Cook died, testified in his deposition that he had treated similar cases of ketoacidosis. He testified that if Cook had been at the hospital (when they discovered that he had ketoacidosis), then he, Dr. Boone, would have placed Cook on IVs to try to get his blood sugars to normal levels. He testified that he would have stabilized Cook's condition and would have put him on a regimen to control his blood sugar. Dr. Boone also testified that, within a reasonable degree of medical certainty, he thought Cook would have survived if he (Dr. Boone) had treated him. Dr. Boone further testified in his deposition: (R. 484-93.) The record suggests that the hospital did not follow its procedures when the results of the electrolytes test were not recorded on the front of Kenneth Cook's chart. Dr. Boone's testimony suggests that the results of the electrolytes test were critical in assessing Cook's ailment. According to Dr. Boone, the results of the electrolytes test could have been used to save Cook's life. Whether Cook would have acquiesced to the treatment that would have been necessary to save his life is pure speculation and, more important, is immaterial to the question whether the defendants' alleged breach of the standard of care proximately caused Cook's death. The defendants also argue that even if they were negligent, they are still not liable because Cook, they say, was contributorily negligent. We do not agree. "In order to prove contributory negligence, the defendant must show that the party charged: (1) had knowledge of the condition; (2) had an appreciation of the danger under the surrounding circumstances; and (3) failed to exercise reasonable care, by placing himself in the way of danger." Brown v. Piggly-Wiggly Stores, 454 So. 2d 1370, 1372 (Ala.1984) (citing Hatton v. Chem-Haulers, Inc., 393 So. 2d 950 (Ala. 1980); and Baptist Med. Ctr. v. Byars, 289 Ala. 713, 271 So. 2d 847 (1972)). The record shows that Cook was never informed of his life-threatening condition. It is questionable whether a blanket statement that "you could die" would have been enough to make him appreciate the danger of his condition, which even the defendants were unaware of until the laboratory results came back. Furthermore, Cook's cellmate testified by affidavit, in part, as follows: His cellmate testified further that Cook tried to return to the hospital after the initial visit. Thus, the record does not support a summary judgment based on a contributory-negligence defense. The burden was on the defendants to make a prima facie showing, by substantial evidence, that no genuine issue of material fact existed. They did not carry their *945 burden. Consequently, we reverse the summary judgment entered in favor of Walker Regional and Hunter and remand this case for proceedings consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, BROWN, and JOHNSTONE, JJ., concur.

December 8, 2000

d390721e-311c-4d19-942e-df388ab837b5

Knapp v. Wilkins

786 So. 2d 457

1981139

Alabama

Alabama Supreme Court

786 So. 2d 457 (2000) Karin Jackie KNAPP v. Jason Barclay WILKINS. 1981139. Supreme Court of Alabama. September 8, 2000. As Modified on Denial of Rehearing November 22, 2000. *458 Joseph J. Boswell, Mobile, for appellant. Charles J. Potts of Janecky Newell, P.C., Mobile, for appellee. JOHNSTONE, Justice. The plaintiff appeals from a judgment and other rulings in favor of the defendant in a tort action arising from a motorvehicle collision. Karin Jackie Knapp ("the plaintiff") sued Jason Barclay Wilkins ("the defendant") and John Wilkins for damages for injuries she sustained. The parties joined in a motion, which the trial court granted, to dismiss the plaintiff's claims against John Wilkins (but not Jason Wilkins). Thereafter, a jury tried the plaintiffs claims against the defendant Jason Wilkins and returned a verdict in favor of the defendant. The plaintiff appeals to this Court on three grounds: 1) the trial court erred in refusing to allow the chiropractor who treated the plaintiff to state his opinion of the cause of the plaintiffs injuries; 2) the trial court erred in refusing to allow the plaintiff to call as an adverse witness Shafawnia Silvers, the defendant's girlfriend at the time of the accident; and 3) the trial court erred in refusing to ask, and in refusing to allow the plaintiff to ask, on voir dire whether the veniremembers who had insurance policies with the defendant's insurance company would be partial to the defendant because of the veniremembers' connections with the insurance company. The only issue addressed in this opinion is whether the trial court erred in refusing to allow the treating chiropractor to testify to the cause of the plaintiffs injuries. Our reversing the judgment of the trial court on this issue pretermits any discussion of the other issues raised by the plaintiff. During the plaintiffs case-in-chief, plaintiffs counsel presented portions of the deposition testimony of the treating chiropractor, Dr. Robert Hutchins. Dr. Hutchins studied chiropractic at St. Louis *459 Community College and Logan College of Chiropractic. By the time he treated the plaintiff, Dr. Hutchins had practiced for 10 years as a licensed chiropractor. He had never treated the plaintiff before July 28, 1996, when she first sought his care for injuries she had sustained in this motorvehicle collision a week earlier, on July 21, 1996. (R. 138.) Dr. Hutchins "did a chiropractic, orthopaedic, and neurological examination of her injuries and concluded that she had sustained several soft tissue and other injuries." (R. 139.) During his treatment of the plaintiff, Dr. Hutchins referred her to Dr. White and Dr. Fleet, neurologists, and to Dr. Morgan, an orthodontist. Dr. Hutchins himself treated the plaintiff a total of 91 times. (R. 145.) The plaintiff tried repeatedly and unsuccessfully to introduce Dr. Hutchins's deposition testimony on the cause of the injuries he had found and treated in the plaintiff. The pertinent questions, answers, objections, proffers, and rulings follow: (R. 140-45.) (Emphasis added.) The following day the plaintiffs counsel continued: (R. 235-39.) (Emphasis added.) Rule 702, Ala.R.Evid., provides: See also § 12-21-160, Ala.Code 1975. "The question whether a witness is qualified to testify as an expert on a particular subject is largely within the discretion of the trial court, and that court's judgment on that question will not be disturbed absent an abuse of discretion." Brown v. Lawrence, 632 So. 2d 462, 464 (Ala.1994). See also Husby v. South Alabama Nursing Home, Inc., 712 So. 2d 750, 753 (Ala. 1998). However, Kitchens v. State, 31 Ala.App. 239, 241, 14 So. 2d 739, 741 (1943) (citation omitted) (emphasis added). Section 34-24-120, Ala.Code 1975, provides: (Emphasis added.) Our case of Mashner v. Pennington, 729 So. 2d 262 (Ala.1998), recognizes that a qualified licensed chiropractor is a "health care provider" under the Medical Liability Act, § 6-5-549.1(c), Ala.Code 1975. "A qualified licensed practitioner of chiropractic is competent to testify as a medical expert in his limited area of the healing art and offer an opinion of reasonable certainty as to whether or not an injury he is qualified to treat, and has treated, is permanent and will require future treatment". Hoefer v. Snellgrove, 48 Ala.App. 11, 15, 261 So. 2d 426, 429 (1971), rev'd on other grounds, 288 Ala. 407, 261 So. 2d 431 (1972). An expert witness may testify to the ultimate issue of causation in a tort action. Macon County Comm'n v. Sanders, 555 So. 2d 1054 (Ala.1990); and Harrison v. Wientjes, 466 So. 2d 125 (Ala.1985). A treating physician is competent to give his opinion of the cause of his patient's injuries. St. Louis & S.F.R.R. v. Savage, 163 Ala. 55, 50 So. 113 (1909). Lowery v. Jones, 219 Ala. 201, 202, 121 So. 704, 706 (1929) (emphasis added). In support of the plaintiff's claim that chiropractor Dr. Hutchins was competent to testify about the cause of the plaintiff's injuries, she cites Hoefer v. Snellgrove, supra. In Hoefer, the trial court had excluded the chiropractor's testimony of his opinion about the permanency of the patient-plaintiff's back injury and about the residual effects of his back injury. The rationale of the trial court was that the chiropractor was not qualified, and that the medical doctor who treated the plaintiff was more qualified, to testify about these matters. Hoefer, 48 Ala.App. at 14, 261 So. 2d at 428. Reversing the trial court, the Court of Civil Appeals held that a qualified chiropractor could testify as an expert about the extent and the permanency *463 of his patient's injury and about the present and future treatment of his patient. Id. Although the issue in Hoefer is not identical to that in the case before us in that Hoefer does not specifically address whether a chiropractor can testify to the cause of his patient's injuries, Hoefer and the other cases and statutes cited in this opinion, considered together, support the proposition that a treating doctor, chiropractic or medical, is qualified to testify about the nature, the extent, the treatment, and the cause of his patient's injuries. For example, in Brown v. Lawrence, 632 So. 2d 462 (Ala.1994), the chiropractor who treated the plaintiff for injuries she suffered in an automobile accident with the defendant was allowed to testify, apparently without objection on these particular points, that "the injury from the accident exacerbated his pre-existing back condition," and that the plaintiffs "cartilage [was] scarred from the accident and ... would probably trigger recurring pain." Brown, 632 So. 2d at 464. See also, e.g., Mississippi Farm Bureau Mut. Ins. Co. v. Garrett, 487 So. 2d 1320 (Miss.1986); and Badke v. Barnett, 35 A.D.2d 347, 316 N.Y.S.2d 177 (1970) (holding that a treating chiropractor is qualified to give his expert opinion regarding diagnosis, causation, and prognosis of the plaintiffs injury). On the basis of the foregoing law, we hold that Dr. Hutchins's education, licensure, and practice as a chiropractor, and his examination and treatment of his patient in his capacity as a chiropractor, qualified him as competent to testify to the cause of the particular injuries he treated. Thus the rulings of the trial court excluding Dr. Hutchins's testimony about causation on the ground "that a chiropractor who is not a medical doctor is not qualified to render an opinion as to the causation of an injury" constitute error to reverse. The judgment of the trial court is reversed and the cause remanded for a new trial. REVERSED AND REMANDED. HOUSTON, COOK, LYONS, BROWN, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX and SEE, JJ., dissent. MADDOX, Justice (dissenting). I do not believe Alabama law permits a chiropractor to testify as an expert witness on the causation of an injury. Therefore, I must respectfully dissent. In my opinion, the trial judge properly refused to admit the testimony of Dr. Robert Hutchins, a chiropractor, regarding the cause of the plaintiffs alleged injuries. I agree that in certain circumstances a properly licensed and qualified chiropractor may be allowed to testify as to the extent, the permanency, and the duration of a patient's injuries, see Hoefer v. Snellgrove, 48 Ala.App. 11, 261 So. 2d 426 (1971), as long as a proper predicate is laid, but I disagree with the proposition that a chiropractor is qualified to testify about the cause of a patient's injuries. I find this case analogous to Kriewitz v. Savoy Heating & Air Conditioning Co., 396 So. 2d 49 (Ala.1981), in which I wrote the Court's opinion. In Kriewitz, the trial court allowed two clinical psychologists to testify that the plaintiffs had suffered brain damage and, in fact, one of the psychologists was permitted to state that one of the plaintiffs had "organic brain syndrome." 396 So. 2d at 52. However, the trial court refused to allow the psychologists to testify as to the cause of the plaintiffs' conditions. This court held, based on § 34-26-1, Ala.Code 1975, which details certain rights and limitations regarding psychologists in Alabama, that the *464 trial court did not err in refusing to permit the psychologists to testify as experts regarding the cause of the plaintiffs' conditions. Sections 34-24-120 and 34-24-122 detail similar rights and limitations regarding chiropractors in Alabama. Given those statutes, I cannot agree that a chiropractor, who does not hold an "unlimited license to practice the healing arts in this state," may testify as to the cause of a patient's injuries. See Kriewitz, 396 So. 2d at 53; and Hoefer, 48 Ala.App. at 15, 261 So. 2d at 429 ("A qualified licensed practitioner of chiropractic is competent to testify as a medical expert in his limited area of the healing art and offer an opinion of reasonable certainty as to whether or not an injury he is qualified to treat, and has treated, is permanent and will require future treatment." (emphasis added)), rev'd on other grounds, 288 Ala. 407, 261 So. 2d 431 (1972). Even assuming, however, that the trial court erred in refusing to allow the chiropractor to testify regarding the cause of the plaintiffs alleged injuries, I would hold that the error was harmless because the same evidence that the trial court refused to admit through the chiropractor's testimony regarding causation was admitted through the testimony of two other medical experts (Dr. William Fleet, a neurologist; and Dr. John Morgan, an orthodontist). Apparently the jury was not convinced that the defendant's alleged negligence was the cause of the plaintiffs injuries, because the jury returned a verdict in favor of the defendant. HOOPER, C.J., concurs. [1] Black's Law Dictionary 312 (6th ed. 1991), defines "diagnosis" as "[a] medical term, meaning the discovery of the source of a patient's illness or the determination of nature of his disease from the study of its symptoms." (Emphasis added.)

November 22, 2000

5e8af0c9-ddc7-4a5e-874b-fb6656ea4655

DeArman v. Liberty Nat. Life Ins. Co.

786 So. 2d 1090

1982252

Alabama

Alabama Supreme Court

786 So. 2d 1090 (2000) Harry DeARMAN and Cherry DeArman v. LIBERTY NATIONAL LIFE INSURANCE COMPANY and Johnny Dollar. 1982252. Supreme Court of Alabama. November 22, 2000. Nat Bryan and Dennis E. Golasich, Jr., of Marsh, Rickard & Bryan, P.C., Birmingham, for appellants. Charles D. Stewart and W. Gregory Smith of Spain & Gillon, L.L.C., Birmingham, for appellee Liberty National Life Insurance Company. J. Fred Wood, Jr., and Christopher A. Bottcher of Dominick, Fletcher, Yeilding, Wood & Lloyd, P.A., Birmingham, for appellee Johnny Dollar. BROWN, Justice. The plaintiffs Harry DeArman and his wife Cherry DeArman appeal from a summary judgment entered in favor of the defendants Liberty National Life Insurance Company ("Liberty National") and its agent David B. "Johnny" Dollar. We reverse and remand. In 1972, the DeArmans purchased a joint whole-life insurance policy from Liberty National. In the fall of 1984, the DeArmans agreed to meet with Dollar, an agent of Liberty National, to discuss the purchase of additional life insurance. Dollar represented the LifePlus policy as an "interest-sensitive" whole-life policy. To *1091 better explain the policy features, Dollar used a "LifePlus Summary Sheet" that stated the projected value of the DeArmans' whole-life policy as compared with the projected value of a Liberty National LifePlus policy over a specified period of time. The summary sheet proposed that, when Mr. DeArman reached age 65, the projected cash value of a LifePlus policy would be $52,807.83, as compared with a projected cash value of $2,830.24 for the joint whole-life policy the DeArmans had at that time. The LifePlus Summary Sheet, included in the record, stated that one of the "special features" of the policy was that it would "BE TOTALLY PAID UP IN ONLY 12 YEARS AT THE CURRENT INTEREST RATE." (Capitalization original.) This quoted phrase was not underlined by Dollar or by Liberty National, but Mrs. DeArman underlined the phrase "BE TOTALLY PAID UP IN ONLY 12," and she wrote on the summary sheet a note stating that the policy "[would] be paid up October 2, 1996." Mr. DeArman applied for a $30,000 Life-Plus policy on October 3, 1984. Additionally, he signed a supplementary application for exchange, permitting Liberty National to use and exchange the available cash values of the DeArmans' existing joint policy to purchase a $3,343 "Single Premium Whole Life Rider" to the LifePlus policy. Liberty National issued the LifePlus policy, effective January 1, 1985. The policy contained language advising the DeArmans to read the policy carefully. It notified the DeArmans that they had the right to cancel the policy within 10 days for a full refund of any premiums, and it stated that the cash values of the LifePlus policy "accumulate based on declared interest and risk rates, subject to guarantees."[1] The DeArmans testified in their depositions that they did not review or read the LifePlus policy or documents until 1995. The DeArmans had no further contact with Dollar regarding the LifePlus policy until 1995. That year, the DeArmans agreed to meet with a representative of Prime America, another insurance company. The agent from Prime America reviewed the LifePlus policy and summary sheet and told the DeArmans that the LifePlus policy would never attain the value projected on the summary sheet and that Mr. DeArman would have to pay premiums for the rest of his life. Following this meeting, Mr. DeArman telephoned Dollar. Dollar advised him that the Life-Plus policy had a current cash value of approximately $4,400 and that the LifePlus policy had not performed as well as projected because (1) the DeArmans had taken out a loan and had cashed in the single-premium-whole-life rider to the LifePlus policy, and had thereby substantially decreased the amount of money earning interest, and (2) the interest rate applicable to the DeArmans' policy had decreased steadily since 1984, when the DeArmans had purchased the LifePlus policy. The DeArmans sued on January 17, 1996. They alleged that Dollar was an agent of Liberty National and that Dollar and Liberty National had misrepresented, failed to disclose, and fraudulently suppressed material facts surrounding their purchase of the LifePlus policy.[2] Both Dollar and Liberty National denied all allegations, and both moved for a summary judgment. Following the submission of *1092 briefs, supporting evidence, and oral arguments, the trial court entered a summary judgment in favor of Dollar and Liberty National on August 3, 1999. The DeArmans appealed from that summary judgment. Although this case arises from the trial court's entry of a summary judgment, we conclude, after reviewing the facts and the relevant caselaw, that no justiciable controversy had arisen at the time the DeArmans filed their complaint. Therefore, the trial court was without jurisdiction to issue its judgment. See Stringfellow v. State Farm Life Ins. Co., 743 So. 2d 439 (Ala.1999). We have addressed the issue of "ripeness" with regard to vanishing-premium cases before. Our first case to address that issue in regard to a vanishing-premium life-insurance policy was Williamson v. Indianapolis Life Ins. Co., 741 So. 2d 1057 (Ala.1999). In Williamson, we responded to a certified question from the United States District Court for the Middle District of Alabama. We held that no cause of action for an alleged fraud related to the purchase of a vanishing-premium policy accrues until the policyholder is required to make a premium payment after the date upon which the policy was to become self-sustaining. Williamson, 741 So. 2d at 1061. Likewise, in Stringfellow v. State Farm Life Ins. Co., 743 So. 2d 439 (Ala.1999), we affirmed the trial court's dismissal[3] of a fraud action based upon the purchase of a vanishing-premium life-insurance policy on the ground that the plaintiff's action had been filed before the date on which, according to the defendants' alleged misrepresentation, the policy was to be self-sustaining. Stringfellow, 743 So. 2d at 441. The situation before us is strikingly similar to the situations in Williamson and Stringfellow. The DeArmans allege that they were told the Liberty National policy would become self-sustaining within 12 years after they purchased it. Specifically, Mrs. DeArman wrote the date October 1996 on the materials Dollar provided to her. However, because the policy was not issued until January 1985, we must conclude that the policy was not represented as becoming self-sustaining before January 1997. The DeArmans filed this action in January 1996, one year before the represented self-sustaining date. Therefore, no cause of action had accrued when the DeArmans filed their complaint and no justiciable controversy existed. Although the Williamson case was released only four days before the trial court entered the summary judgment in this case, the trial court lacked jurisdiction to render a judgment on the merits of this present dispute and should have dismissed the complaint without prejudice and permitted the DeArmans to refile it later. See Stringfellow, 743 So. 2d at 441. The summary judgment is vacated. We remand this action for the trial court to dismiss the complaint without prejudice. Because the DeArmans filed their complaint with the bona fide intention of receiving an adjudication on the merits, the running of the statutory limitations period was tolled while their claims were pending in the trial court and on this appeal. See generally Ward v. Saben Appliance Co., 391 So. 2d 1030 (Ala.1980). JUDGMENT VACATED; ACTION REMANDED. *1093 HOOPER, C.J., and MADDOX, HOUSTON, SEE, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. [1] The guaranteed accumulation interest rate on the LifePlus policy was 4%. [2] The DeArmans' complaint also contained allegations of negligent hiring, training, and supervision and negligent/wanton sale of a product. In their brief to this Court, the DeArmans concede that the summary judgment was proper as to these claims. [3] Although the trial court originally entered a summary judgment in favor of the defendant State Farm, we treated the judgment as a dismissal based on the lack of a justiciable controversy. Stringfellow, 743 So. 2d at 440.

November 22, 2000

efbae87b-e6d1-4dda-acca-8069c3569546

Swift v. Gregory

786 So. 2d 1097

1990914

Alabama

Alabama Supreme Court

786 So. 2d 1097 (2000) Barbara SWIFT v. Frank A. GREGORY, as Administrative Director of Courts. 1990914. Supreme Court of Alabama. November 22, 2000. *1098 James M. Campbell and Christopher M. Hopkins of Campbell & Hopkins, Anniston, for appellant. Submitted on appellant's brief only. LYONS, Justice. The plaintiff, Barbara Swift, appeals from a judgment entered by the Montgomery Circuit Court in favor of the defendant, Frank A. Gregory, as Administrative Director of Courts for the State of Alabama (hereinafter "the Director"). We affirm. Swift served as the register[1] of the Calhoun Circuit Court from February 23, 1975, until September 30, 1996. During her tenure, she elected to participate in the supernumerary program (§ 12-17-140 et seq., Ala.Code 1975).[2] In 1996, Swift filed a declaration of intention to assume supernumerary status because of a permanent disability. Swift furnished certifications from three physicians stating that she is permanently disabled and incapable of carrying out the duties of her position. The Director denied Swift's request for supernumerary status because she was not yet 55 years old.[3] He contends that § 12-17-140 requires that a clerk or register be at least age 55 to assume supernumerary status. Swift sued the Director in the Montgomery Circuit Court, asking the court to hold that § 12-17-140 permitted her to be named as a supernumerary register, on the ground of her permanent disability and thus be entitled to be paid her annual salary, even though she has not reached the age of 55. The parties agreed to submit the matter on the pleadings and the briefs. The trial court entered a judgment in favor of the Director. The pertinent portion of § 12-17-140 states: (Emphasis added.) The statute codified at § 12-17-140, as it was originally enacted by the Legislature, read: Act No. 1205, § 7-112, 1975 Ala. Acts 2384, 2463 (adopted Oct. 10, 1975) (emphasis added). The final sentence quoted above from § 7-112(5) of Act No. 1205, the sentence containing the 55-years-of-age requirement, appears only in the subsection dealing with retirement based on 18 years of service as a register or clerk. However, when the Act was codified, the sentence containing the age requirement was moved to an entirely separate paragraph. Also, the reference to "provisions herein" in § 7-112(5) of Act No. 1205 became "provisions of this division" in § 12-17-140. Swift argues that the Legislature, in the original Act, intended for the age restriction to apply only to subsection (5), dealing with retirement after 18 years of service because, she says, it is illogical to deny supernumerary status on the basis of the age restriction when an applicant is determined to be disabledan involuntary status. She contends that the codification of the Act results in an omission that the Legislature did not intend, an omission that leaves a disabled clerk or register with nothing until she reaches the age of 55. We cannot agree with Swift's contention that the Legislature did not intend for the changes made from the provisions *1100 of the original Act in § 7-112 to the codified statute (§ 12-17-140) to be effective. Once the Code Commission modifies an act and the Legislature thereafter adopts a Code containing the modification, the modification has the force of law. State v. Towery, 143 Ala. 48, 49, 39 So. 309, 309 (1905). In Smith v. State, 223 Ala. 346, 136 So. 270 (1931), the defendant was convicted of giving false weights and measures in the sale of gasoline. The statute proscribing this activity was found in the Agricultural Code of 1927. The 1927 Code version of the statute contained no "intent" element, even though the same provision as it appeared in a 1923 act regarding false weights and measurements had contained the word "knowingly." The manuscript prepared by the codifier eliminated the word "knowingly." The Legislature adopted the manuscript prepared by the codifier and approved by the joint commission. This Court held that the adoption of the Code, including the alteration injected by the codifier, changed the statute to the form used in the later edition of the Code. Additionally, the modifications to § 12-17-140(a), as it is codified, must be evaluated under the rules of statutory construction. IMED Corp. v. Systems Eng'g Assocs. Corp., 602 So. 2d 344, 346 (Ala.1992). The codified statute, however harsh in its result, is plain and unambiguous. Section 12-17-140(a)(1) provides that a register may elect to become a supernumerary register if: (1) she was serving on October 1, 1976; (2) she has served at least five years; (3) she has become permanently unable, physically or mentally, to carry out her duties of the office; and (4) she has provided proper proof of the disability. Swift has fulfilled each of these requirements. Nevertheless, the last paragraph of subsection (a) applies generally to all subparts of § 12-17-140(a). The sentence appearing immediately before that last paragraph refers to a "find[ing by the Administrative Director of Courts] that [an] applicant is qualified under any of [the] subdivisions (1) through (5) of this section." § 12-17-140(a) (emphasis added). The reference to "subdivision (1) through (5)" indicates that this paragraph modifies each of the subsections. A subsequent paragraph without reference to a particular subsection, like the paragraph in dispute here, would also apply to each of the subsections. In his reply brief to the trial court, the Director contended that "[t]he statute at issue is unambiguous [and that] this issue has been addressed by both the Alabama Attorney General's Office [in opinions of the attorney general], and the Examiner of *1101 Public Accounts [in a letter]."[5] These documents (the opinions and the letter) specifically address the issue of whether the age requirement of 55 years applies to clerks and registers seeking to assume supernumerary status based on disability. Each interprets the statute as being conclusive of that issue and determines that supernumerary status based on disability should be denied if the applicant has not attained age 55. The Director relies on these documents as a basis for his contention that Swift "is prohibited from taking supernumerary status until her 55th birthday." While we are not bound by opinions of the attorney general or letters of the examiner of public accounts, we find them persuasive in this case. We further note that when the Legislature revisited § 12-17-140 in 1976 and 1989, it amended the statute significantly, but did not change the section regarding the age restriction and disability. The present subsections (b) and (c) were added to § 12-17-140 in 1976 and 1989, respectively. These sections are somewhat similar (subsection (b) applying to clerks and subsection (c) applying to registers); subsection (c) provides that a register "who has served at least 23 years shall be eligible for supernumerary status at any time notwithstanding any provisions of this title, provided he has paid contributions into the supernumerary fund for the maximum number of years required." These subsections do not mandate a minimum age for eligibility under the supernumerary program. These additions to the statute give further support for the age requirement in § 12-17-140(a)(1); they show that the Legislature was quite capable of creating an eligibility for retirement that functioned regardless of the age of the applicant. Clearly the age-55 requirement for disabled registers applies to § 12-17-140(a)(1), as codified. Therefore, Swift is not presently eligible for supernumerary status based on her disability (see n. 3). If, as Swift argues, the Legislature did not intend such a harsh result, then the Legislature can change the language of the statute so that the age restriction does not apply in the case of a disability, but only the Legislature can do that. The judgment of the trial court is affirmed. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] The office of register first existed in the former courts of equity, but it has now been abolished. However, one holding the position of register in a particular county at the time of the abolition of the office was allowed to continue serving as register in that same county until a vacancy occurred in the office. [2] The supernumerary program was created because, by constitutional provision, Alabama historically denied the Legislature the authority to provide for retirement benefits for state officers. The Legislature created certain supernumerary positions for officials in order to compensate the officers for their service to the State. Johnson v. Board of Control of Employees Retirement Sys. of Alabama, 740 So. 2d 999, 1003 (Ala.1999). [3] Swift's date of birth was December 16, 1945. [4] Section 12-17-140, Ala.Code 1975, appears in Chapter 17, "Circuit and District Court Personnel," Article 4, "Circuit Clerks and Registers," Division 4, "Supernumerary Clerks and Registers." [5] The Director cites the following documents: Op. Ala. Att'y Gen., No. 77-00345 (Sept. 7, 1977); Op. Ala. Att'y Gen., No. 86-00063 (Nov. 27, 1985) (issued to then Administrative Director of Courts Allen Tapley); Op. Ala. Att'y Gen., No. 93-00327 (Aug. 24, 1993) (issued to then Director Oliver Gilmore); and to a letter from the Examiner of Public Accounts dated April 20, 1993, to then Director Oliver Gilmore.

November 22, 2000

3b9b5ba5-b629-4915-909c-1ab04215aa7f

CAPITOL CHEV. AND IMPORTS, INC. v. Grantham

784 So. 2d 285

1990404

Alabama

Alabama Supreme Court

784 So. 2d 285 (2000) CAPITOL CHEVROLET AND IMPORTS, INC., d/b/a Capitol Chevrolet GEO; and General Motors Corporation v. Robert GRANTHAM and Marcia Grantham. 1990404. Supreme Court of Alabama. November 17, 2000. *286 Patricia J. Ponder, E. Luckett Robinson II, and Norman M. Stockman of Hand Arendall, L.L.C., Mobile, for appellants. Micheal S. Jackson and Nancy Jo Rainer of Beers, Anderson, Jackson, Nelson, Hughes & Patty, P.C., Montgomery, for appellees. BROWN, Justice. Capitol Chevrolet and Imports, Inc., d/b/a Capitol Chevrolet GEO ("Capitol Chevrolet"), and General Motors Corporation ("GM"), defendants in an action pending in the Montgomery Circuit Court, appeal from the trial court's order denying their motions to compel arbitration. We reverse and remand. On November 24, 1997, Robert Grantham purchased a 1997 Chevrolet S-10 Blazer from Capitol Chevrolet. Shortly after the purchase, Mr. Grantham and his wife began experiencing problems with the vehicle; primarily, the problems related to a defective keyless-entry system. The Granthams returned the vehicle to Capitol Chevrolet several times for repairs to correct what they referred to as "numerous defective and malfunctioning parts." On May 14, 1998, Marcia Grantham was injured when someone entered the Blazer and robbed her. The Granthams allege that the assailant was able to enter the vehicle because the power locks were malfunctioning. The Granthams sued Capitol Chevrolet, alleging breach of contract, breach of an express and implied warranty, and negligent inspection and repair. Capitol Chevrolet moved to stay the action and to compel arbitration of the Granthams' claims, based upon an arbitration agreement. The arbitration agreement, signed by Robert Grantham, states, in pertinent part: (Emphasis in original.) In opposition to the motion to compel arbitration, the Granthams argued that the arbitration agreement could not be enforced because it was a contract of adhesion and because Capitol Chevrolet, they said, had obtained the agreement in a fraudulent manner. They further argued that the arbitration agreement could not be enforced against Marcia Grantham, because she was not a signatory to the agreement. On January 22, 1999, the Granthams amended their complaint to include GM, the manufacturer of the vehicle, as a defendant. The amended complaint alleged that Capitol Chevrolet had acted as an agent of GM and, therefore, that GM was vicariously liable for the acts of Capitol *288 Chevrolet. GM moved to compel arbitration based upon the arbitration agreement signed by Robert Grantham. On October 18, 1999, the trial court entered the following order: Capitol Chevrolet contends that the trial court erred in denying its motion to compel arbitration of Robert Grantham's claim alleging negligent inspection and repair. The Granthams argue that this Court should affirm the trial court's ruling, on three theories. The first theory is that the arbitration provision is an unenforceable contract of adhesion. The Granthams presented no evidenceonly their bare allegations that would support a finding that the arbitration agreement was an adhesion contract. Thus, in accordance with this Court's decisions in Ex parte Brown, 781 So. 2d 178 (Ala.2000); Ex parte Smith, 736 So. 2d 604 (Ala.1999); Jim Burke Automotive, Inc. v. Murphy, 739 So. 2d 1084 (Ala. 1999); and Med Center Cars, Inc. v. Smith, 727 So. 2d 9 (Ala.1998), we reject the Granthams' argument that the arbitration provision was an unenforceable contract of adhesion. The Granthams next argue that the arbitration provision was fraudulently induced. We disagree. "A party must provide evidence of fraud in the inducement, particularly related to the arbitration clause, in order to avoid arbitration." Ex parte Perry, 744 So. 2d 859, 863 (Ala. 1999). The basis of the fraudulent-inducement claim is an alleged misrepresentation by the finance manager that the arbitration agreement would allow any complaints or problems to be resolved faster than they would be resolved by the court system. The Granthams argue that the finance manager did not inform them that they were waiving the right to a trial by jury. However, the arbitration agreement clearly stated, in bold capital letters, that "buyer/lessee and dealer understand that they are agreeing to resolve the disputes between them described above by binding arbitration, rather than by litigation in any court." Finally, the Granthams contend that the trial court correctly denied the motion to compel arbitration because, they contend, the claims alleging negligent inspection and repair were not within the scope of the arbitration provision. We disagree. As noted earlier, the arbitration agreement signed by Robert Grantham covers "all claims, demands, disputes or controversies of every kind or nature between [the buyer and the dealer] arising from, concerning or relating to ... the performance or condition of the vehicle, or any other aspects of the vehicle." The *289 agreement further provides for arbitration of any disputes concerning "other products or services acquired as an incident to the sale, lease or financing of the vehicle." The Granthams' claim of negligent inspection and repair relates to the performance and condition of the vehicle, as well as to services acquired incident to the sale of the vehicle, and it is, therefore, encompassed by the broad arbitration clause. We further note that the arbitration agreement clearly provides that any "question regarding whether a particular controversy is subject to arbitration shall be decided by the arbitrator." Therefore, we reverse the trial court's order denying Capitol Chevrolet's motion to compel arbitration as to Robert Grantham's negligence claim. Capitol Chevrolet next argues that the trial court erred in denying its motion to compel arbitration of Marcia Grantham's claims. The Granthams contend that, because Marcia Grantham did not sign the arbitration agreement, she cannot be compelled to submit her claims against Capitol Chevrolet to arbitration. We note that Marcia Grantham did not sign any documents related to the sale of the vehicle. This case is similar to Ex parte Warren, 718 So. 2d 45 (Ala.1998). In that case, a husband and wife sued a contractor, alleging breach of contract and fraud. The fraud claim was based on alleged misrepresentations in the contract. As in the instant case, only the husband signed the contract. The Warrens brought their claims as coparties to the contract; however, Mrs. Warren conceded in her brief that she was not a party to the contract containing the arbitration agreement. Mrs. Warren further alleged that she was not a third-party beneficiary of that contract. This Court held: Ex parte Warren, 718 So. 2d at 47. The undisputed evidence demonstrates that Marcia Grantham was a nonsignatory to the sales contracts executed by Robert Grantham and Capitol Chevrolet. She also denies that she is a third-party beneficiary under her husband's contract with Capitol Chevrolet. Thus, in her effort to avoid arbitration, Marcia Grantham has effectively conceded that she has no right to recover under the sales contract. In order to maintain her claims, Marcia Grantham must be treated as a third-party beneficiary. It is well established that a third-party beneficiary is afforded all the rights and benefits, and has imposed upon him or her the burdens, of a contract, including those benefits and burdens associated with arbitration. Ex parte Stamey, 776 So. 2d 85 (Ala.2000). Therefore, Marcia Grantham cannot base her claims on the contract executed between her husband and Capitol Chevrolet, and at the same time seek to avoid the arbitration agreement. See Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42 (Ala.1999); Delta Constr. Corp. v. Gooden, 714 So. 2d 975 (Ala.1998); and Ex parte Dyess, 709 So. 2d 447 (Ala.1997). GM argues that the arbitration agreement between Robert Grantham and Capitol Chevrolet also entitles GM to compel arbitration of the Granthams' claims *290 against GM. Several of this Court's recent arbitration decisions stand for the proposition that in cases where the arbitration agreement is specifically limited to claims that arise between the parties to the contract, the nonsignatory will not be entitled to enforce the arbitration agreement. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala.2000); Ex parte Stamey, supra; First Family Fin. Servs., Inc. v. Rogers, 736 So. 2d 553 (Ala.1999); and Med Center Cars, Inc. v. Smith, 727 So. 2d 9 (Ala.1998). However, in this case, the Granthams allege that an agency relationship existed between GM and Capitol Chevrolet. The arbitration agreement provides that arbitration "is binding upon, and inures to the benefit of, buyer/lessee and dealer and the officers, employees, agents and affiliated entities of each of them." Based upon the language presented here and upon the Granthams' allegation of an agency relationship, we conclude that the arbitration agreement binds not only Capitol Chevrolet, but also GM. For the foregoing reasons, the trial court's order is reversed and the case is remanded. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, and JOHNSTONE, JJ., concur. LYONS, J., concurs in part and concurs in the result in part. LYONS, Justice (concurring in part and concurring in the result in part). As to Part I, I concur in the result as to that portion dealing with the question whether the claims in this action fall within the scope of the arbitration clause. Because such questions are reserved to the arbitrator, this Court should not answer them. See Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409 (Ala.1999). Otherwise, I concur as to Part I. As to Part II, I concur, and, as to Part III, I concur in the result.

November 17, 2000

b4ad26b4-2c1f-450e-8148-af83af2c5652

Ex Parte Alabama Great Southern RR Co.

788 So. 2d 886

1991495

Alabama

Alabama Supreme Court

788 So. 2d 886 (2000) Ex parte The ALABAMA GREAT SOUTHERN RAILROAD COMPANY and Norfolk Southern Railway Company. (Re Roger M. Carreker v. Alabama Great Southern Railroad Company and Norfolk Southern Railway Company). 1991495. Supreme Court of Alabama. December 1, 2000. *887 Crawford S. McGivaren, Jr., and Steve A. Tucker of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, for petitioners. Joel F. Alexander III and Carey W. Spencer, Jr., of Alexander & Colvin, L.L.C., Pelham; and Byron Todd Ford, Eutaw, for respondent. SEE, Justice. Alabama Great Southern Railroad Company ("AGS") and Norfolk Southern Railway Company ("Norfolk Southern"), the defendants in an action pending in the Greene Circuit Court, petition for a writ of mandamus directing the circuit court to vacate its order denying AGS's motion to transfer the action to the Jefferson Circuit Court, pursuant to § 6-3-7, Ala.Code 1975, the statute relating to venue for actions against corporations, and § 6-3-21.1, Ala. Code 1975, the forum non conveniens statute. Because the facts of this case clearly show that under § 6-3-7 Greene County is not a proper venue for this action, we grant the petition as to AGS. Only AGS moved to dismiss or to transfer the action. The circuit court's order references only AGS's motion and denies only AGS's motion. We deny the mandamus petition insofar as it relates to Norfolk Southern, because as to that defendant there is no basis for a writ. See Ex parte National Sec. Ins. Co., 727 So. 2d 788, 789 (Ala.1998) ("The proper method for obtaining review of a denial of a motion for a change of venue in a civil action is to petition for the writ of mandamus."). On August 23, 1999, Roger M. Carreker sued AGS, seeking relief under the Federal Employers' Liability Act, 45 U.S.C. §§ 51 to 60. Carreker later amended his complaint to add Norfolk Southern as a defendant.[1] *888 Carreker's amended complaint alleges that he was "employed by the Defendant as a machine operator working at various locations owned and maintained by [AGS], including [for] a significant period of time at or near Eutaw, Alabama where Plaintiff first experienced significant discomfort in and about his neck, back and hands." On March 12, 1999, and for some time before that date, Carreker alleges, "he was subjected to numerous and constant stresses from vibration, jarring, bouncing and being thrown about the equipment he was operating at or near Eutaw, Alabama and various other locations owned and operated by the Defendant."[2] Specifically, he asserts that he has "suffered severe and permanent injury and damage to his neck, back and hands in the form of osteoarthritis and carpal tunnel syndrome." Carreker filed his complaint in the Circuit Court of Greene County. On October 14, 1999, AGS moved to dismiss the action, or, in the alternative, to transfer it to the Circuit Court of Jefferson County, on the grounds that Greene County was not a proper venue or, in the alternative, on the grounds that the action was subject to transfer pursuant to the doctrine of forum non conveniens. The trial court, concluding that AGS had failed to show that Jefferson County was a "significantly more convenient forum" than Greene County, denied AGS's motion. The trial court's order did not address the improper-venue aspect of AGS's motion. In their petition to this Court, AGS and Norfolk Southern argue that, under § 6-3-7, Ala.Code 1975, venue is improper in Greene County and that the trial court therefore erred in denying AGS's motion to dismiss or transfer; in the alternative, they argue that the trial court abused its discretion in refusing to transfer the action under § 6-3-21.1 for the convenience of the parties and witnesses and in the interest of justice. The proper method for obtaining review of a denial of a motion for a change of venue in a civil action is to petition for the writ of mandamus. Ex parte National Sec. Ins. Co., 727 So. 2d 788, 789 (Ala.1999)(citing Lawler Mobile Homes, Inc. v. Tarver, 492 So. 2d 297, 302 (Ala. 1986)). Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala.1995). When this Court considers a mandamus petition concerning a venue ruling, "our scope of review is to determine if the trial court abused its discretion, i.e., whether it exercised its discretion in an arbitrary and capricious manner." Id. Our review is further limited to those facts that were before the trial court. Ex parte National Sec. Ins. Co., 727 So. 2d at 789; Ex parte American Resources Ins. Co., 663 So. 2d 932, 936 (Ala.1995). Section 6-3-7, Ala.Code 1975, the statute prescribing venue for actions against corporate defendants, was amended by the Alabama Legislature effective July 24, 1999.[3] The statute, as amended, reads, in pertinent part: Ala.Code 1975, § 6-3-7 (Supp.1999) (emphasis added). With regard to statutory construction, this Court has stated that "`... where plain language is used a court is bound to interpret that language to mean exactly what it says," and that "[i]f the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect." Blue Cross & Blue Shield v. Nielsen, 714 So. 2d 293, 296 (Ala.1998). AGS and Norfolk Southern argue that Greene County is not a proper venue, under subsection (a)(1), because, they say, "a substantial part of the events or omissions giving rise to" Carreker's claim, specifically his alleged injuries, did not occur in Greene County. Carreker counters by arguing that Greene County is a proper venue because, he says, he first experienced discomfort to his neck, back, and hands while working for AGS and Norfolk Southern at or near Eutaw, which is in Greene County. "In personal injury actions where the defendant's wrongful act or omission causes bodily harm to the plaintiff, the injury occurs in the county where the bodily harm occurs." Ex parte Graham, 634 So. 2d 994, 997 (Ala.1993). AGS and Norfolk Southern contend that because Carreker's alleged injuries are occupational in nature, they arise out of the cumulative effect of Carreker's job requirements throughout his 21-year career with the railroad. Because Carreker's job with the railroad sent him to various counties throughout Alabama, AGS and Norfolk Southern argue that Carreker has failed to show that "a substantial part of the events or omissions" giving rise to his alleged injuries occurred in Greene County. Ala.Code § 6-3-7(a)(1) (Supp.1999). We agree with AGS and Norfolk Southern. AGS presented substantial evidence indicating that the majority of Carreker's working time during his career with the railroad was not spent in Greene County and that the work he performed in Greene County would not have been significantly different in kind from that which he performed in the numerous other locations in which he worked.[4] *890 In support of his argument that Greene County is a proper venue under subsection (a)(1), Carreker states that "much of the rigorous type work that was required of [him] was performed in Greene County," that he first had "noticeable symptoms of [his] injury" in Greene County, and that his first "significant discomfort" began in Greene County. However, Carreker also concedes, in an affidavit, that he worked in Greene County "for several weeks." He admits in his answers to AGS's interrogatories that "[t]here was no incident on March 12, 1999 that caused [his] injuries," that his alleged injuries are "occupational in nature," and that they arose from his work over a period of time. Carreker simply has not demonstrated that subsection (a)(1) applies to his case. Accordingly, because his claim is based on allegations of occupational injury and because he has failed to show that a substantial part of the events or omissions giving rise to his claimed injuries occurred in Greene County, that county was not a proper venue under § 6-3-7(a)(1).[5] Greene County also was not a proper venue under § 6-3-7(a)(2) and (3), Ala. Code 1975, which allow an action in the county of a defendant corporation's principal state office and in the county of the plaintiffs residence, respectively. It is undisputed that the Alabama Divisions of AGS and Norfolk Southern are both headquartered in Jefferson County, not Greene County. It is further undisputed that Carreker is a resident of St. Clair County, not Greene County. Therefore, under § 6-3-7(a)(2) and (3), Ala.Code 1975, Greene County is not a proper venue for this action Finally, subsection (4) of § 6-3-7(a) provides that if none of the subsections (1), (2) or (3) applies, then a civil action against a corporation may be brought "in any county in which the corporation was doing business by agent at the time of the accrual of the cause of action." Subsection (4) is, therefore, inapplicable to this case because there are at least two counties that would be proper venues, namely, Jefferson County and St. Clair County, under § 6-3-7(a)(2) and (3). Therefore, we hold that the trial court abused its discretion in denying AGS's motion to transfer this action; it is directed to transfer the action insofar as it relates to AGS, pursuant to the statute governing venue of actions against corporations, § 6-3-7, Ala.Code 1975.[6] Accordingly, we grant the petition for the writ of mandamus, insofar as it relates to AGS. Insofar as it relates to Norfolk Southern, the petition is denied. PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED. *891 HOOPER, C.J., and HOUSTON, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] It is undisputed that AGS is a wholly owned subsidiary of Norfolk Southern. [2] In Carreker's subsequent answers to interrogatories from AGS, he makes it clear that he is claiming an occupational injury and that he sustained no injury on March 12, 1999. [3] The amended statute governs this case because Carreker commenced this action on August 23, 1999. See Code Commissioner's Notes to § 6-3-7, Ala.Code 1975 ("Act 99-249, which amends this section, provides in § 4: `This act shall apply to all civil actions commenced or filed after the effective date of this act.' The effective date of Act 99-249 is July 24, 1999."). [4] AGS, in support of its motion to transfer for improper venue, offered the affidavits of J.P. Thomas, R.R. Pressley, and M.K. Monroe. J.P. Thomas is a division engineer, Maintenance of Way Department of the Alabama Division of Norfolk Southern, and he was Carreker's highest-level supervisor for many years. R.R. Pressley is an assistant division engineer, Maintenance of Way Department of the Alabama Division of Norfolk Southern. One of his duties is scheduling the jobs to be performed by machine operators such as Carreker. M.K. Monroe is a track supervisor in the Maintenance of Way Department of the Alabama Division of Norfolk Southern. He asserted in his affidavit that the nature of Carreker's job was such that his job site was "almost constantly changing from week to week." All three men stated that the great majority of Carreker's working time would not have been spent in Greene County and that the work he performed while in Greene County would not have been significantly different in kind from that which he performed in the numerous other locations in which he worked. [5] We note that on April 3, 1995, Carreker filed an occupational-hearing-loss case against Norfolk Southern in Jefferson County. Carreker v. Norfolk Southern Ry., (CV-95-242, Circuit Court of Jefferson County). In that case, Carreker also alleged that he had been employed by the railroad in the capacity of a machine operator since 1978 and that he was injured as a result of his daily use of machines. [6] Because we grant AGS's petition for the writ of mandamus on the ground of improper venue, we pretermit discussion of its alternative groundthe statutory forum non conveniens provisions.

December 1, 2000

ab1de40a-5cb1-426f-8213-ce06101e499f

Ex Parte Univ. of South Ala. Foundation

788 So. 2d 161

1992108

Alabama

Alabama Supreme Court

788 So. 2d 161 (2000) Ex parte The UNIVERSITY OF SOUTH ALABAMA FOUNDATION et al. (Re Franklin Primary Health Center, Inc. v. PrimeHealth, Inc., et al.) 1992108. Supreme Court of Alabama. December 15, 2000. David A. McDonald, Mobile; and Vincent F. Kilborn III of Kilborn & Roebuck, Mobile, for petitioners. Sidney W. Jackson III and Stephen L. Klimjack of Jackson, Taylor, Martino & Hedge, P.C., Mobile, for respondent. MADDOX, Justice. This petition for the writ of mandamus presents a single question: Did the trial court err in failing to dismiss, or to stay proceedings on, a claim, based on the ground that a case pending in a federal *162 district court presented the same cause of action against the same party? Section 6-5-440, Ala.Code 1975, provides, in part, that "[n]o plaintiff is entitled to prosecute two actions in the courts of this state at the same time for the same cause and against the same party." We conclude that the trial court should have stayed proceedings in the pending action; therefore, the petition for the writ of mandamus is granted, and the trial court is directed to stay the proceedings. PrimeHealth, Inc., The University of South Alabama Foundation (the "Foundation"), and Frederick P. Whiddon (collectively, the "petitioners"), are defendants in an action pending in the Mobile Circuit Court.[1] PrimeHealth and the Foundation are also plaintiffs in a related action pending in the United States District Court for the Middle District of Alabama. See University of South Alabama Found. et al. v. W. Dale Walley et al. (No. 99-D-1287-N) (M.D.Ala.2000). The petitioners seek a writ of mandamus directing Mobile Circuit Judge James C. Wood to dismiss the action pending in the Mobile Circuit Court, on the ground that its prosecution violates the provisions of § 6-5-440. Alternatively, they seek to compel the trial court to stay proceedings in that action until the action in the federal district court is concluded. The Foundation is a nonprofit corporation created to provide support for the University of South Alabama. Prime-Health is a wholly owned subsidiary of the Foundation and is also a nonprofit corporation. Franklin Primary Health Center, Inc. ("Franklin"), is a Federally Qualified Health Center ("FQHC") that provides medical treatment and care to Medicaid patients and other underprivileged patients. In January 1997, PrimeHealth entered into an agreement (the "BAY Health Plan") with The Alabama Medicaid Agency ("The Agency") whereby PrimeHealth acted as a Health Maintenance Organization ("HMO") for The Agency relating to all physicians and FQHC's in Mobile County. On November 1, 1997, Franklin and PrimeHealth entered into a provider agreement whereby Franklin operated under the BAY Health Plan as an FQHC and provided services to Medicaid patients in Mobile County. Under the provider agreement and the BAY Health Plan, Franklin provided medical services and then submitted claims directly to PrimeHealth for payment or reimbursement for those services. In turn, PrimeHealth submitted copies of the claims directly to The Agency. On September 29, 1999, the Foundation and PrimeHealth filed an action in the Montgomery Circuit Court against W. Dale Walley, in his official capacity as acting commissioner of The Agency; The Agency; and the Federal Insurance Company, alleging a breach of the BAY Health Plan and seeking a declaratory judgment. That action was subsequently removed to the United States District Court for the Middle District of Alabama, by The Agency, pursuant to the procedures set forth in 28 U.S.C. § 1141(b). The Agency asserted federal-question jurisdiction under 28 U.S.C. § 1331 because the Foundation and PrimeHealth's complaint alleged violations of Title XIX of the Social Security Act (42 U.S.C. § 1396(a)). Franklin sought to intervene, under Rule 24(a)(2), Ala.R. Civ.P., as a defendant *163 in that action, stating in its motion to intervene: The Foundation and PrimeHealth consented to Franklin's intervention, and the federal district court granted Franklin leave to intervene. On January 7, 2000, PrimeHealth, acting pursuant to § 6-6-220 et seq., Ala.Code 1975, filed what it styled a "counterclaim" for a declaratory judgment against Franklin, asking the court to determine all the rights, duties, and obligations between PrimeHealth and Franklin arising from their provider agreement. Franklin later moved to dismiss its petition for intervention, but the federal district court denied that motion because PrimeHealth's "counterclaim" had already been filed against Franklin. See Rule 41(a)(2) and (c), Fed. R.Civ.P. Approximately two months after Franklin had intervened in the action pending in the federal district court, Franklin filed this action in the Mobile Circuit Court against the petitioners and various fictitiously named defendants. Franklin asserted claims alleging breach of the BAY Health Plan and provider agreement, fraud, and defamation; alleging civil RICO liability; and alleging conspiracy. In response, the petitioners filed a "Motion to Dismiss Based on a Prior Suit Pending." See § 6-5-440, Ala.Code 1975. The trial court denied that motion. The mandamus petition asks this Court to direct the Mobile Circuit Court to dismiss the action, based on § 6-5-440, or, alternatively, to order a stay of proceedings until the case in the federal district court is concluded. We first set out the law that governs our review of the petition. The writ of mandamus is an extraordinary remedy, and one seeking it must show (1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another remedy; and (4) properly invoked jurisdiction of the court. Ex parte Compass Bank, 686 So. 2d 1135, 1137 (Ala.1996). A writ of mandamus will issue only to compel the exercise of a trial court's discretion; it will not issue to control or to review a court's exercise of its discretion unless an abuse of discretion is shown. Ex parte Breman Lake View Resort, L.P., 729 So. 2d 849, 851 (Ala.1999), citing Ex parte Auto-Owners Ins. Co., 548 So. 2d 1029 (Ala.1989). The petitioners argue that they have a clear legal right to have the Mobile Circuit Court action dismissed, or, at least, to have proceedings in that action stayed until the action pending in the federal district court is concluded. They point out *164 that § 6-5-440 prohibits a party from maintaining "two actions in the courts of this state at the same time for the same cause and against the same party." On the other hand, Franklin contends that its claims in the action pending in the federal district court are simply claims to recover a portion of money due from The Agency and that its claims in the state action are "more inclusive [than those presented in the federal action] and seek recovery [based on] additional claims and [additional] parties." Based on this argument, Franklin asserts that its claims in the circuit-court action are not prohibited by the provisions of § 6-5-440i.e., it argues that the state-court action and the federal-court action present different causes of action. The petitioners counter by arguing that although the state-court action involves an additional defendant (Dr. Whiddon) and additional claims for relief (fraud, fraudulent suppression, defamation, and conspiracy), it is still based on the same BAY Health Plan and provider agreement as the claims in University of South Alabama Foundation et al. v. W. Dale Walley et al., supra, pending in the federal district court; therefore, the petitioners argue, to allow Franklin to maintain this action in the Mobile Circuit Court violates § 6-5-440. This Court has given this construction of § 6-5-440: Weaver v. Hood, 577 So. 2d 440, 442 (Ala. 1991) (citations omitted). Furthermore, in Ex Parte Breman Lake View Resort, L.P., 729 So. 2d 849 (Ala.1999), this Court explained: 729 So. 2d at 851. (Citations omitted.) We conclude that the principles discussed in Weaver and Breman apply to the situation presented by this petition. In its "counterclaim" filed against Franklin in the action pending in the federal district court, PrimeHealth seeks a declaratory judgment regarding the rights, duties, and obligations of the parties under their provider agreement. Franklin's claims against the petitioners in this statecourt action are based on the same provider *165 agreement and involve the same fact situation as PrimeHealth's "counterclaim" against Franklin in the action pending in the federal district court. Although Dr. Whiddon is not a party to the action pending in the federal district court, we note that he is being sued by Franklin in this action in his official capacity as the managing director of the Foundation. Therefore, the parties in the two actions are the same, for purposes of applying the provisions of § 6-5-440. Cf. Ex parte Butts, 775 So. 2d 173, 177 (Ala.2000) ("A complaint seeking money damages against a State employee in his or her official capacity is considered a complaint against the State...."). Consequently, Franklin's claims against the petitioners in this action are subject to the counterclaim rule explained in Breman. See Ex Parte Parsons & Whittemore Alabama Pine Constr. Corp., 658 So. 2d 414 (Ala.1995) (holding that the plaintiff's prosecution in a subsequent action of claims that had been compulsory counterclaims in the previous declaratoryjudgment action violated § 6-5-440). Because Franklin is subject to the counterclaim rule, and because Franklin has commenced another action in a state court, it has violated the prohibition in § 6-5-440 against maintaining two actions for the same cause in two different courts. Although we have held that Franklin's filing of this action in the Mobile Circuit Court violates the prohibition set out in § 6-6-440, we must determine if Franklin may nevertheless pursue this action based on the limited exception to the rule of § 6-5-440, set out by this Court in Terrell v. City of Bessemer, 406 So. 2d 337 (Ala.1981). In Terrell, this Court recognized a limited exception to the general rule against prosecuting the same cause of action in two different courts, noting that where a single wrongful act gives rise to both a state cause of action and a federal cause of action, the plaintiff may include his statelaw claim with his federal claim and request the court to exercise its power of pendent jurisdiction to hear both claims. Terrell, 406 So. 2d at 339-40. The plaintiff in Terrell included his state-law claims with his federal-law claims; however, the federal district court refused to exercise its discretionary power of pendent jurisdiction. This Court concluded that in a situation where the plaintiff has combined state-law claims with federal claims in an action filed in a federal court and the federal court declines to exercise its discretionary power of pendent jurisdiction over the state-law claims, the plaintiff "should be afforded an opportunity to pursue his alleged common law theories of recovery in state court." 406 So. 2d at 339. Based on the foregoing, and specifically on the authority of Terrell, Franklin would be entitled to pursue its common-law claims in this action only if the federal district court has refused or refuses to exercise its pendent jurisdiction over those claims. Because Franklin has not asserted its common-law claims in the action pending in the federal district court, thereby allowing the federal district court an opportunity to exercise its pendent jurisdiction, the Mobile Circuit Court abused its discretion in refusing either to dismiss this action or to stay proceedings in it until the federal district court has had an opportunity to exercise its pendent jurisdiction. We are presented with two options: (1) to direct the Mobile Circuit Court to dismiss Franklin's action or (2) to direct it to stay proceedings in the state-court action in order to allow Franklin to assert its common-law claims in the federal district court. We believe this second option is more appropriate under the circumstances. Based on the circumstances of this case and given its procedural posture, we grant the petition for the writ of mandamus. *166 The Mobile Circuit Court is directed to stay proceedings in the pending state action and to allow Franklin to assert its common-law claims in the action pending in the federal district court. If the federal district court declines to exercise its pendent jurisdiction over Franklin's common-law claims, then the Mobile Circuit Court will be authorized to lift the stay and allow the action to proceed. PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and COOK, LYONS, and JOHNSTONE, JJ., concur. [1] Frederick P. Whiddon is being sued in his official capacity as the managing director of The University of South Alabama Foundation.

December 15, 2000

4462d8b6-d40a-48a1-8f2a-a94c0393320e

FIRST FAMILY FINANCIAL SERV., INC. v. Jackson

786 So. 2d 1121

1981825

Alabama

Alabama Supreme Court

786 So. 2d 1121 (2000) FIRST FAMILY FINANCIAL SERVICES, INC. v. Riley JACKSON. 1981825. Supreme Court of Alabama. December 1, 2000. *1122 J. Fairley McDonald III of Maynard, Cooper & Gale, P.C., Montgomery; and Richard H. Gill of Copeland, Franco, Screws & Gill, P.A., Montgomery, for appellant. Garve W. Ivey, Jr., of Ivey & Ragsdale, Jasper, for appellee. LYONS, Justice. First Family Financial Services, Inc. ("First Family"), appeals from the trial court's order denying its motion to compel arbitration of claims made against it in a lawsuit filed by Riley Jackson. We reverse and remand. On August 20, 1997, Jackson obtained a loan from First Family. He purchased credit-life insurance in connection with that loan. On February 1, 1999, Jackson sued First Family. In his complaint, he alleged that First Family had represented to him that the full amount of the credit-life insurance premiums collected was paid to an insurance company, but, he claimed, "in fact those amounts were not paid to `others' but were retained in whole or in part" by First Family. Jackson's complaint alleged fraudulent misrepresentation, fraudulent suppression, and breach of fiduciary duty. In addition to alleging that First Family had misrepresented, or failed to disclose, that it received a commission *1123 on the sale of credit-life insurance to its customers, Jackson alleged that First Family had suppressed from him the existence of "the arbitration clause" he had signed in connection with his loan and the effects of that "clause." First Family moved to compel arbitration of Jackson's claims. Among the documents Jackson executed in connection with his loan was a stand-alone arbitration agreement. That agreement reads, in pertinent part: Jackson responded to First Family's motion to compel arbitration by arguing that the parties should be allowed to conduct "full and complete discovery" before the court compelled arbitration, that First Family had waived its right to compel arbitration, and that the arbitration clause was unconscionable. Jackson's argument that First Family had waived its right to compel arbitration is based upon First Family's participation in a class action regarding the credit-life insurance placed on its loans. The class action, styled Batton v. First Family Financial Services, Inc., was litigated in the Calhoun Circuit Court. (The Batton class action was consolidated with a similar class action styled Crook v. Associates Financial Services Co. of Alabama, Inc. References in this opinion to the Batton case refer to the consolidated cases.) Relying on this Court's opinion in McCullar v. Universal Underwriters Life Insurance Co., 687 So. 2d 156 (Ala.1996), the Batton plaintiffs alleged that their creditors could not permissibly calculate credit-life-insurance premiums based upon the gross amount of, or total of payments on, precomputed loans. In August 1997, the Batton parties agreed to settle that case. Pursuant to that agreement, a copy of which is contained in the record before us in this case, the plaintiff class was composed of persons who had purchased credit-life insurance with a premium based on the total of loan payments, during the period November 15, 1985, through November 15, 1995. The class was certified according to Rule 23(b)(3), Ala. R. Civ. P., under which class members had the right to opt out of the class. Jackson was a member of the Batton plaintiff class. He received a notice concerning the action and the proposed settlement, and he opted out of the class. The settlement order and the final judgment so reflect. Jackson points out that the original settlement agreement in the Batton class action contained a provision that would have bound the class members to arbitration. Counsel for the plaintiff class in Batton, who also represent Jackson in this case, objected to that provision and it was removed. Batton class members received only the initial settlement notice, Jackson's *1126 counsel says, and did not receive a notice informing them that the proposed settlement agreement had been amended. The trial court denied First Family's motion to compel arbitration of Jackson's claims, concluding that it had waived its right to compel arbitration by participating in the Batton class action. The trial court's order stated: First Family contends that the trial court erred in denying its motion to compel arbitration, on the basis that it had substantially invoked the litigation process. *1127 First Family maintains that it is entitled to compel Jackson to arbitrate his claims against it in this case because Jackson opted out of the Batton class action; because the loan that is the subject of this case was not at issue in the class action; and because Jackson has asserted claims that were not raised in the class action. Jackson contends that the trial court ruled correctly because First Family "availed itself of the Courts of Alabama to enter into a settlement of a class action covering a period of twenty (20) years" and because that settlement proceeded to a conclusion. He maintains that First Family made such a substantial invocation of the litigation process that it waived its right to compel arbitration of claims brought by persons who opted out of the class. We need not decide whether First Family waived its right to compel arbitration of claims concerning its alleged overcharging of customers for credit-life-insurance premiums brought by persons who opted out of the Batton class and elected to pursue their claims on an individual basis. Although Jackson was a member of the Batton class, he has not pursued in this lawsuit any claims that were pursued by the Batton class. Those claims could have arisen only in regard to loans made from November 15, 1985, through November 15, 1995, which was the period that defined membership in the class. Jackson's complaint in this case refers only to a loan he obtained from First Family on August 20, 1997, far beyond the period covered by the Batton class action. Furthermore, the gravamen of Jackson's complaint in this case is the allegation that First Family misrepresented to him that it relayed to an insurance company all credit-life-insurance premiums collected from him, while suppressing from him the fact that it retained a percentage of those premiums for its own use. The complaint does not allege that First Family overcharged Jackson for those premiumsovercharging was the alleged wrongdoing at issue in the Batton class action. The only relationship this case has with the Batton class action is that First Family and Jackson were both parties in that earlier, different litigation. The question presented here is whether, by participating as a defendant in the Batton class action, First Family waived its right to compel Jackson to arbitrate his claims against it alleging fraudulent misrepresentation, suppression, and breach of fiduciary duty, all arising out of the loan transaction of August 20, 1997. We conclude that it did not. This Court has never looked to previous litigation to determine whether a defendant seeking to compel arbitration has substantially invoked the litigation process. Indeed, we have declined to do so. In Ex parte Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 So. 2d 1 (Ala.1986), the plaintiff sued Merrill Lynch and others in the Jefferson Circuit Court on April 4, 1984. In June 1984, Merrill Lynch moved to stay the action to await the outcome of prior pending federal-multidistrict classaction litigation in which it was a defendant and the plaintiff was a member of the class. On January 25, 1985, the plaintiff opted out of the class in the federal action. On April 18, 1985, Merrill Lynch moved to compel arbitration. The trial court denied its motion, and Merrill Lynch petitioned this Court for a writ of mandamus directing the trial court to grant its motion to compel arbitration.[2] This Court wrote: *1128 "[Merrill Lynch] did not substantially invoke the litigation process in the case before us. The defendants simply filed a motion to compel arbitration and stay proceedings pending arbitration; indeed, the defendants did not even file an answer to plaintiffs complaint." 494 So. 2d at 3. The Court addressed Merrill Lynch's participation in the federal class-action litigation only to the extent that it addressed the plaintiffs argument that she had been prejudiced by the delay between her filing of the complaint and Merrill Lynch's filing of its motion to compel arbitration: Id. The Court did not consider the classaction litigation, which had involved the same claims that the plaintiff brought against Merrill Lynch in Jefferson County, in determining whether Merrill Lynch had substantially invoked the litigation process and thereby waived its right to compel arbitration. Likewise, we have considered only First Family's activity in the case initiated by Jackson in February 1999. We will find a waiver of the right to compel arbitration only when "the party seeking arbitration has so substantially invoked the litigation process that to compel arbitration will substantially prejudice the party opposing it." Georgia Power Co. v. Partin, 727 So. 2d 2, 7 (Ala.1998). In Companion Life Insurance Co. v. Whitesell Manufacturing, Inc., 670 So. 2d 897 (Ala.1995), this Court said: 670 So. 2d at 899. The record in this case shows unequivocally that First Family did not substantially invoke the litigation process before it moved to compel arbitration. The first document First Family filed was its motion to compel arbitration. Like the defendant in Merrill Lynch, First Family did not even answer the complaint. The only other documents in the record that First Family filed are its brief in support of its motion to compel arbitration, evidentiary filings also in support of that motion, and its notice of appeal to this Court. Jackson had the heavy burden of proving both that First Family had substantially invoked the litigation process and that he was prejudiced thereby. See Thompson v. Skipper Real Estate Co., 729 So. 2d 287 (Ala.1999). He did not meet that burden. Because Jackson did not prove that First Family had substantially invoked the litigation *1129 process, we need not address the element of prejudice. We conclude that the trial court could not properly deny First Family's motion on the basis that it had waived its right to compel arbitration. Jackson argues that even if we conclude, as we have concluded, that First Family did not waive its right to compel arbitration of his claims against it, he should have the opportunity to conduct "such discovery as may be needed to complete the record as to whether the arbitration provision in question is binding upon [him]." Because he claims that the arbitration provision is unconscionable, he argues that he is entitled to conduct discovery and to present evidence to the trial court in order to prove his claims. Jackson relies on § 7-2-302(2), Ala.Code 1975, which states: We have remanded a case to the trial court for further proceedings on a record that reflected two attempts to amend the complaint further to provide additional facts. See Jack Ingram Motors, Inc. v. Ward, 768 So. 2d 362 (Ala.1999). Nevertheless, under the circumstances presented by this present case, we conclude that no remand is warranted. Jackson alleges in his complaint that First Family "knowingly and willfully" suppressed from him the existence of the arbitration clause and "the fact that by signing the contract containing the arbitration clause he was waiving his Constitutional right to a trial by jury." One who reviews the arbitration agreement that Jackson signed (quoted above)an agreement appearing in a separate document and not appearing merely as one clause among many clauses in a contractwill find this a curious argument. See Green Tree Agency, Inc. v. White, 719 So. 2d 1179 (Ala.1998) (stating that there can be no fraudulent suppression when the matter allegedly suppressed is disclosed to the plaintiff in a contract that the plaintiff could have read and understood). Furthermore, this Court has previously reviewed an arbitration agreement identical to the one Jackson executed. In First Family Financial Services, Inc. v. Rogers, 736 So. 2d 553 (Ala.1999), the plaintiffs, the Rogerses, argued that they had not agreed to arbitrate, but we noted that that argument was "based on the undisputed fact that they failed to read the 1997 document." Id. at 558. They contended that they did not understand what the document said and that they were misled into signing it.[3] We concluded that the arbitration agreement the Rogerses executed in connection with their loan from First Family was clear and that in "unmistakable terms" it obligated them to arbitrate their claims against First Family. Id. In the trial court and in his brief before this Court, however, Jackson also claims that the arbitration agreement was unconscionable and argues that he should have the opportunity to conduct discovery in order to prove that claim. Before the trial court, Jackson argued that the agreement was unconscionable because, he says, he was unsophisticated, he had no meaningful choice in whether to sign the agreement, *1130 the parties had unequal bargaining power, and the terms of the agreement unreasonably favored First Family. Before this Court, he claims that the arbitration agreement was an adhesion contract, that First Family was more sophisticated than he, and that First Family was in a stronger bargaining position, and he argues that he needs to conduct discovery in order to prove those claims.[4] First Family contends, however, that Jackson is not entitled to discovery. It argues that Jackson has never indicated what kind of discovery he wishes to pursue; that discovery would not assist Jackson in challenging the enforceability of the arbitration agreement in this case because this Court has previously rejected unconscionability arguments similar to Jackson's arguments; and that Jackson's claims must be presented to the arbitrator because, it argues, he alleges fraud in the inducement as to the entire loan agreement, not as to the arbitration agreement alone. First Family correctly states that we have resolved many of Jackson's challenges to the arbitration agreement. See, e.g., Green Tree Fin. Corp. of Alabama v. Wampler, 749 So. 2d 409 (Ala.1999); Ex parte Parker, 730 So. 2d 168 (Ala.1999); Ex parte McNaughton, 728 So. 2d 592 (Ala. 1998), cert. denied, 528 U.S. 818, 120 S. Ct. 59, 145 L. Ed. 2d 52 (1999); Ex parte Napier, 723 So. 2d 49 (Ala.1998). Jackson is correct, however, in arguing that the issue of unconscionability of an arbitration clause is a question for the court and not the arbitrator. Wampler, 749 So. 2d at 415. Jackson is also correct in stating that in the cases cited in this paragraph, among others, we have discussed the kind of record that might support a finding that an arbitration clause is unconscionablea record showing that the plaintiff presented substantial evidence supporting the claim that the clause was unconscionable. The problem in this case is that Jackson did not present the substantial evidence we have discussed in those cases mentioned in the preceding paragraph, but seeks the opportunity to create a record containing such evidence. Jackson asked for an opportunity to conduct discovery, but he offered no evidence whatever in opposition to First Family's motion to compel arbitration. Discovery is not necessary in order for a party to present evidence, such as the party's affidavit detailing the facts about which he has knowledge, or a compilation of information regarding the number of finance companies that will not make consumer loans without the borrower's signing an arbitration clause or agreement. We recently addressed a similar question in Fleetwood Enterprises, Inc. v. Bruno, 784 So. 2d 277 (Ala.2000). In that case, the plaintiff had requested an evidentiary hearing, but had submitted no evidence opposing the defendant's motion to compel arbitration. Justice Lyons, in a special concurrence in Fleetwood Enterprises, wrote: 784 So. 2d at 281-82 (Lyons, J., concurring specially) (citations and footnotes omitted). Like the Bruno plaintiff's requests for a hearing, Jackson's requests for discovery are not the equivalent of the submission of evidence. A party must submit evidence in some form in order to preserve for appellate review that party's contention of unconscionability as a defense to the enforcement of an arbitration agreement. The trial court erred in denying First Family's motion to compel arbitration. The order denying that motion is therefore reversed, and the cause is remanded for the trial court to enter an order granting that motion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] Marie Jackson is not a party in Riley Jackson's lawsuit against First Family. [2] We note that now the proper method for asking this Court to review an order denying a motion to compel arbitration is a direct appeal. First Family followed the proper procedure in this case. See Dean Witter Reynolds, Inc. v. McDonald, 758 So. 2d 539 (Ala.1999). [3] The Rogerses also made a financial-hardship argument similar to the one this Court rejected in Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33 (Ala.1998). [4] Jackson also poses several questions about the settlement notice he received in the Batton case: Whether it led class members to believe that "arbitration was being released along with claims," whether the class notice was ambiguous, and whether the settlement agreement contained language that First Family inserted to protect its own interests. Again, Jackson's claims against First Family in this case are not the same as the class claims made against First Family in the Batton case; therefore, we find no relevance here to his arguments concerning the class notice in Batton.

December 1, 2000

de598b7a-5a00-4039-ab91-e98d78321e25

Stone Bldg. Co. v. Star Elec. Contractors, Inc.

796 So. 2d 1076

1990085

Alabama

Alabama Supreme Court

796 So. 2d 1076 (2000) STONE BUILDING COMPANY v. STAR ELECTRICAL CONTRACTORS, INC. 1990085. Supreme Court of Alabama. December 15, 2000. Rehearing Denied May 4, 2001. *1077 Stephen D. Heninger and R. Edwin Lamberth of Heninger, Burge, Vargo & Davis, L.L.P., Birmingham; and K. Donald Simms of Lusk, Fraley, McAlister & Simms, P.C., Birmingham, for appellant. Carol Ann Smith, Brenen G. Ely, and J. Tobias Dykes of Smith & Ely, L.L.P., Birmingham, for appellee. JOHNSTONE, Justice. A contractor, Stone Building Company (hereinafter "Stone"), appeals an adverse summary judgment on its cross-claim against a subcontractor, Star Electrical Contractors, Inc. (hereinafter "Star"), for Stone's expenses in defending and settling the main action filed by Dennis Cline and his wife for injuries Dennis suffered on the job site on August 6, 1991. In order to procure an electrical subcontract dated *1078 April 20, 1990, Star had promised to obtain liability insurance covering Stone and to "indemnify and save harmless and exonerate" Stone if it were sued for injuries resulting from the job. After Cline suffered his job-site injuries; and after he and his wife sued a number of entities, including Stone and Star, by successive pleadings filed over the course of several years; and after Stone filed cross-claims against Star on the basis of its promises to Stone; and after Stone and Star filed motions for summary judgment against each other on Stone's cross-claims against Star; and after the trial court considered the record that had accumulated over the course of seven years of litigation and considered the arguments of counsel, the trial court entered summary judgment in favor of Star. We affirm in part and reverse and remand in part that summary judgment. The subcontract between Stone and Star reads, in pertinent part, as follows: (C.R. 469, emphasis added.) While installing drywall on this job in the employment of another subcontractor, Cline's metal tape-measure touched a live, uninsulated electrical wire, and the consequent shock injured him and caused him to fall from his ladder and to suffer injuries from his fall as well. Through an original complaint, dated July 2, 1992, and successive amendments, Cline and his wife sued a number of defendants, including Stone and Star.[1] Adding Stone as a defendant in an amendment to the complaint dated September 9, 1992, the Clines alleged: (C.R. 15, emphasis added.) Adding Star as a defendant on March 2, 1995, the Clines amended three paragraphs of their original complaint. Two of the amended paragraphs are pertinent: (C.R. 107-08, emphasis added.) During the course of the litigation, the Clines produced sufficient evidence supporting these allegations against Star to withstand three motions for summary judgment before trial and two motions for judgment as a matter of law during trial, before a jury eventually found in favor of Star on the Clines' claims. In the process of defending the suit by the Clines, on September 17, 1997, Stone filed its cross-claim against Star. There Stone alleged, in pertinent part: (C.R.511-13.) Stone later amended this cross-claim on June 30, 1998, to include the following claims: (C.R. 1185-91, emphasis added.) On March 13, 1998, Stone sent Star a letter stating: "Section (8) of the Uniform Subcontract also provides as follows: (C.R. 2474-75, emphasis added.) In a letter dated March 20, 1998, Star responded: (C.R. 2485-86, emphasis added.) On July 22, 1998, the Clines (through counsel) sent Stone a letter containing a settlement demand for $1,750,000.00: (C.R.2506-07.) The following day, by letter, Stone demanded that Star settle the Clines' claims "on behalf of Stone": (C.R. 2512-13, emphasis added.) Star did not respond at all to this July 23, 1998 demand by Stone. On August 17, 1998, Stone sent Star a third letter: (C.R. 2520, emphasis added.) Star did not respond. On August 25, 1998, Stone and the Clines finalized the settlement agreement for $495,000.00 to be paid by Stone to the Clines. After the trial court denied Star's third motion for summary judgment on the Clines' claims against Star, those claims proceeded to trial. There the trial court denied Star's motions for judgment as a matter of law and submitted the Clines' claims to the jury; but, on March 5, 1999, the jury returned a defense verdict in favor of Star, and the trial court entered judgment accordingly for Star on the Clines' claims. The following September, the trial court decided motions for summary judgment that Stone and Star had filed against each other on Stone's cross-claims against Star. Although the trial court had necessarily found enough evidence that Star itself had negligently injured Cline to defeat all of Star's motions for summary judgment and motions for judgment as a matter of law on the Clines' claims against Star, the trial court misinterpreted the jury verdict in favor of Star on the Clines' claims to signify that, "[t]herefore, there was no evidence that Star, or someone acting `by [or] for and on behalf of Star, including Stone, negligently committed any acts complained of by Cline for which Stone paid damages and now seeks indemnification." (Trial court order dated September 2, 1999, C.R. 2874.) Accordingly, the trial court "overruled" Stone's motion for summary judgment, granted Star's motion for summary judgment, "dismissed" all of Stone's claims against Star, and certified the judgment as final pursuant to Rule 54(b), Ala. R. Civ. P., as other cross-claims against other entities were still pending. Stone appeals. *1087 Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Rule 56(c)(3), Ala. R. Civ. P., and Dobbs v. Shelby County Economic & Indus. Dev. Auth., 749 So. 2d 425 (Ala.1999). "Our review of a summary judgment is de novo, and in determining whether a summary judgment was proper we must view the evidence in a light most favorable to the nonmoving party. Hightower & Co. v. United States Fidelity & Guar. Co., 527 So. 2d 698 (Ala.1988)." Young v. La Quinta Inns, Inc., 682 So. 2d 402, 403 (Ala.1996). All reasonable doubts must be resolved in favor of the nonmoving party. Ex parte Ryals, 773 So. 2d 1011 (Ala.2000). Star contends that the summary judgment in its favor should be affirmed on the ground that Stone filed nothing in opposition to the particular motion for summary judgment granted by the trial court. Stone, however, had previously filed its opposition materials in response to a similar, unsuccessful motion for summary judgment previously filed by Star challenging Stone's same cross-claims; and Stone also filed its own motion for summary judgment, properly supported by evidentiary materials, immediately after Star filed its last motion for summary judgment; and the trial judge considered and decided the two motions for summary judgmentStar's last and Stone'sboth directed to Stone's cross-claims against Startogether, and granted Star's and "overruled" Stone's. Thus, Star's contention before us exalts form over substance. Stone's evidentiary materials were properly before the trial court. Stone contends that Star breached three primary duties it undertook in its subcontract with Stone: the duty to obtain liability insurance covering Stone; the duty to indemnify Stone for sums it might pay in settlement of, or damages for, claims for job-site injuries suffered by third parties like Cline; and the duty to indemnify Stone for the expenses of its defense of such claims. We will discuss Stone's claims grounded on Star's alleged breaches of those duties seriatim. Stone contends that Star failed to provide insurance to cover Stone against liability for the Clines' claims, as required by the 1990 subcontract. Star did, in fact, procure insurance to cover itself but not to cover Stone. Stone alleges breach of contract, misrepresentation, negligent and wanton failure to procure insurance, and negligent and wanton failure to settle. Jim Cooper, who, as an employee of Stone, executed the 1990 subcontract with Star, stated in his affidavit as follows: (C.R. 2232-34, emphasis added.) In the letter referenced as Exhibit "B" in Cooper's affidavit, Cooper requested of Star as follows: (C.R. 2228, emphasis added.) The initial certificate of insurance names Star as the only insured and names Stone as only the "certificate holder." No certificate of record names Stone as an insured during any coverage period that would include the August 6, 1991 date of Cline's job-site injury. (C.R.2235-38.) On the one hand, the text of the subcontract required Star to obtain liability insurance covering both Star and Stone, and the insurance Star did obtain covered only Star and not Stone. On the other hand, Star timely sent Stone the certificate of insurance negotiated and required by Stone's own agent Cooper; this certificate revealed Stone's non-coverage; and Stone accepted the certificate without reservation. While Cooper's affidavit, as parol evidence, cannot contradict the terms of the subcontract, the affidavit can and does establish a waiver of the requirement that Star procure insurance to cover Stone. In fact, Stone did not question or challenge Star about the adequacy of the insurance until Stone amended its cross-claim against Star on June 30, 1998, over seven years after Stone received the certificate of insurance (dated "02/05/91") from Star. Of course, after Cline's injury, Star no longer could procure insurance to cover Stone against the Clines' claims. Thus, had Stone's agent Cooper not waived the requirement for the coverage, Star would have suffered prejudice from Stone's delay in demanding strict compliance with the contract. The legal defects in Stone's contract, fraud, negligence, and wantonness claims against Star grounded on its failure to obtain insurance coverage for Stone are too patent to require further discussion. Accordingly, the summary judgment, insofar as it resolves these claims in Star's favor, is due to be affirmed. Star first argues that the record contained no substantial evidence that any negligence by Star caused Cline's injuries. Star's most voluble argument is that, because its job was located on the fifth floor of the building and Cline was injured on the fourth floor, where the job of another unrelated electrical subcontractor, 4 Star, had been located, Star's conduct could not have caused Cline's injuries. The defect in this argument is that the effects of Star's acts and omissions could extend to the fourth floor. The record does contain substantial evidence that negligence by Star in its electrical demolition work on the fifth floor proximately caused Cline's shock and fall injuries on the fourth floor. Hank Mol, an expert on electrical and construction safety, testified that Star performed all of the electrical demolition on the fifth floor, "including that which ran through the poke-throughs in the ceiling of the fourth floor." (C.R.2404-05.) Mol testified that the condition of the exposed "hot" wire, running from a panel on the fifth floor down through a poke-through in the fourth floor, was a violation of industry standards as codified in the National Electrical Code. (C.R. 2391-94; 2396-98.) Finally, Mol testified that Star had a duty to inspect the premises after Star had finished its demolition work. (C.R.2407-08.) Star next argues that the eventual jury verdict, and the judgment thereon, against Cline on his claims against Star defeated Stone's right to indemnification for the settlement money Stone had paid the Clines for a release from liability for the torts of Star or others in injuring Cline. The subcontract in this case, in Section 8, unambiguously obligated Star to indemnify Stone for "all liability, claims *1090 and demands for bodily injury ... arising out of the work undertaken by [Star]." The general rule is that, "if indemnity is sought against an indemnitor without notice of either the original suit or of the settlement by the indemnitee," then the indemnitee has the burden of establishing that it was actually liable to the plaintiff and that the settlement was a reasonable one. Watts v. Talladega Fed. Sav. & Loan Ass'n, 445 So. 2d 316, 320 (Ala.Civ.App.1984). However, if the indemnitor has been given notice of the action against the indemnitee and has been given an opportunity to defend or to settle the action, then the indemnitor "is precluded from contesting the indemnitee's liability in a subsequent indemnity or third-party action." Id. 41 Am.Jur.2d Indemnity § 46 (1995) (footnotes omitted). Star next argues that Stone did not afford Star an opportunity to participate in the settlement negotiations with Cline. The record contains substantial evidence to the contrary. First, Star learned of Cline's claims when Cline sued Star in 1993. Second, Star is charged with knowledge of its obligation to indemnify Stone as provided by the 1990 subcontract between Star and Stone. Third, Star learned of Stone's intent to seek indemnification when Stone cross-claimed against Star in 1997. Fourth, Star itself had participated in mediation with the Clines. Fifth, Stone had, by its March 13, 1998 letter, demanded that Star settle the Clines' claims and "indemnify, hold harmless, and otherwise exonerate Stone...." Star had rebuffed this demand by Stone. Sixth, Stone had, by its July 23, 1998 letter, supplied Star the details of the Clines' settlement demand and had demanded again that Star *1091 settle the Clines' claims and indemnify, exonerate, and hold harmless Stone pursuant to the subcontract. Star had ignored this second pre-settlement demand letter. Thus, the record contains substantial evidence that Stone provided Star notice and opportunity to participate in the negotiations which culminated in Stone's August 1998 settlement with the Clines. Finally, Star argues that Stone was too tardy in notifying Star of the Clines' suit and of Stone's demand for indemnification under the contract. On the one hand, Stone was tardy in notifying Star. In fact, by the time Stone notified Star by cross-claiming against Star, Star itself had already been sued by the Clines. On the other hand, Star has not pleaded or argued, much less demonstrated, that it was prejudiced in any way by Stone's tardiness. Indeed, Star's motion to dismiss Stone's cross-claims, denied by the trial court on January 30, 1998, asserted that Stone's cross-claim for indemnification was premature, not tardy. There Star asserted that Stone's claim for indemnification would not even accrue unless and until the Clines won their claim for damages against Stone. Neither this motion to dismiss nor any other motion or pleading filed by Star challenged Stone's delay in notifying Star of the Clines' suit or Stone's delay in demanding indemnification from Star; and no motion or pleading filed by Star mentioned or suggested any prejudice to Star from Stone's delay. The absence of any claim or proof by Star that it suffered any prejudice from Stone's tardiness is the distinguishing feature between the case now before us and the similar case of Cochrane Roofing & Metal Co. v. Callahan, 472 So. 2d 1005 (Ala.1985), cited by Star. In Cochrane, unlike in the case before us, the indemnitor, a roofing subcontractor, pleaded and proved without contradiction that, because of the delay of the indemnitee, the general contractor, in notifying the indemnitor of the suit for defective roofing, "the roof, the subject of the suit, had been recovered by another contractor, preventing the subcontractor [the indemnitor] from investigating the problem." 472 So. 2d at 1007. See Restatement (Second) of Judgments § 57, cmt. e ("The notice must be timely in that it must not come so late that the indemnitor is prejudiced in preparing the defense...."). Conversely, tardiness without prejudice provides no defense. In summary, Star has demonstrated neither the absence of genuine issues of material fact nor a right to judgment as a matter of law on Stone's claim for indemnification for the $495,000 in settlement money paid by Stone to the Clines. Accordingly, summary judgment on this claim is not authorized by Rule 56, Ala. R. Civ. P. In pertinent part, the subcontract between Stone and Star required Star to "indemnify and save harmless and exonerate" Stone from certain claims. Jack Smith Enters. v. Northside Packing Co., 569 So. 2d 745, 746 (Ala.Civ.App.1990) (emphasis in original). See generally Winn-Dixie Montgomery, Inc. v. Stimpson, 574 So. 2d 782, 783-84 (Ala.1991) (indemnity agreement providing that "[Winn Dixie] agrees to indemnify and save harmless the Landlord from any claim or loss" entitled Winn Dixie to indemnification "for all expenses incurred as a result of the judgment ..., including a reasonable attorney fee"); and Freeman Wrecking Co. v. City of Prichard, 530 So. 2d 235, 236 (Ala.1988) (indemnity agreement providing that "[t]he City of Prichard agrees to hold FREEMAN WRECKING COMPANY, INC., harmless, and shall further indemnify it for any liability" entitled the indemnitee to an award of attorney fees). Thus, Stone's right to indemnification by Star extends to Stone's expenses of defense, including attorney fees, attributable specifically to Stone's defense against the Clines' claims and accruing after, and only after, Stone demanded indemnification from Star. Accordingly, the summary judgment, insofar as it denies Stone any recovery for attorney fees and other expenses of defending the Clines' claims, is due to be reversed. For the reasons stated, the summary judgment is affirmed insofar as it adjudicates in Star's favor the claims of Stone relating to Star's failure to provide liability insurance coverage to Stone. The summary judgment is, however, reversed insofar as it adjudicates adversely to Stone its claim against Star for indemnification for the $495,000 in settlement money Stone paid to the Clines and Stone's claim against Star for the expenses of defense, including attorney fees; and the case is remanded to the trial court for proceedings on those claims consistent with this opinion. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and MADDOX, COOK, and LYONS, JJ., concur. [1] The litigation began on July 2, 1992 when Cline sued 4 Star Electric and fictitious defendants A, B, C, X, Y, and Z. Although they have similar names, 4 Star Electric is a completely separate entity from Star. Cline added Stone as a defendant on September 9, 1992 and added Star as a defendant on March 2, 1995. On June 5, 1995, the trial court granted 4 Star's motion for summary judgment. 4 Star began Chapter 7 bankruptcy proceedings on December 21, 1995. (C.R.365.) Stone and Star (not 4 Star) are the only parties to this appeal. [2] Stone also alleged fraudulent suppression and conspiracy to defraud. However, Stone has abandoned those claims on appeal.

December 15, 2000

77b92625-0f14-4f8d-8158-d073c28d9922

Patel v. Patel

708 So. 2d 159

1961121

Alabama

Alabama Supreme Court

708 So. 2d 159 (1998) Chiman S. PATEL v. Bharat M. PATEL and Daksha B. Patel. 1961121. Supreme Court of Alabama. January 9, 1998. D. Michael Barrett and C. Robert Poore III of Barrett & Poore, P.C., Birmingham, for appellant. Candice J. Shockley of Holliman, Shockley & Kelly, Pelham, for appellees. *160 COOK, Justice. Chiman Patel appeals a judgment in favor of his nephew, Bharat Patel, and Bharat's wife, Daksha Patel, for $85,908 in compensatory damages and $225,000 in punitive damages on their claim that Chiman fraudulently misrepresented the profitability of a motel they purchased from him in 1993. We affirm. Bharat and Daksha Patel immigrated from India. After living a while in Atlanta, they returned to India for a time. Upon returning to America, they moved to Birmingham and worked for Bharat's uncle, Chiman Patel. They worked for him for approximately 3 years in an unrelated business before seeking his advice regarding purchasing a business of their own. Chiman Patel offered to sell them the Town Motel in Birmingham. He told them that he would sell the motel to them for $450,000 and the testimony at trial indicated that he also told them they could expect to earn $70,000 to $75,000 in profit per year from operating the motel. The plaintiffs said the uncle told them that the purchase price was discounted for them "because they were relatives," and they alleged that because of their culture they did not question Patel's representations to them. The plaintiffs bought the motel from the uncle for $450,000. The purchase price was financed by loans secured by a first mortgage and also by a second mortgage held by the uncle. The uncle later foreclosed on the second mortgage, after the plaintiffs were unable to make their payments. Despite the representations made to Bharat and Daksha, the evidence at trial indicated that both before the sale to them and after he had taken back the motel through foreclosure of the second mortgage, Chiman Patel offered it for sale for $300,000. In addition thereto, the plaintiffs contend that the uncle did not inform them that the short-term rentals that made up much of the motel's income were illegal. Without the illegal income derived from the short-term rentals, the plaintiffs were unable to make all the mortgage payments on the motel.[1] Bharat and Daksha Patel sued the uncle, alleging fraud and breach of contract. The court directed a verdict on the breach of contract claim. The fraud claim was submitted to the jury, which awarded $85,908 in compensatory damages and $450,000 in punitive damages. Following a Hammond/Green Oil[2] hearing, the punitive damages award was reduced to $225,000. The trial court's order requiring a remittitur of the punitive award stated: C.R. at 174-80. This Court on May 9, 1997, issued the "new guidelines" referred to in the trial judge's order. See BMW of North America, Inc. v. Gore, 701 So. 2d 507 (Ala. 1997). We agree with the trial judge that there was sufficient evidence of fraud for the issue to be submitted to the jury. On appeal, the defendant contends that, even with the remittitur, the punitive damages award is excessive. We will, therefore, review the propriety of the remitted punitive damages award pursuant to the guidelines set out in our May 9, 1997, BMW v. Gore opinion. First, in reviewing the propriety of the $225,000 punitive damages award, we look to the (1) degree of reprehensibility involved in this case, (2) the ratio of the punitive damages award to the compensatory damages award and (3) the imposition of criminal or civil penalties for similar conduct. See BMW v. Gore, supra, 701 So. 2d at 509. See also, Hillcrest Center, Inc. v. Rone, [Ms. 1940535, Aug. 1, 1997], ___ So.2d ___ (Ala. 1997). Based on our review of the evidence, we find Chiman Patel's representations to *163 Bharat and Daksha Patel, which resulted in their purchasing the Town Motel, significantly reprehensible. The plaintiffs were relatives of Chiman Patel; they relied on their family relationship, as well as the elder Patel's expertise in the field, to guide them in the purchase of a business. He took advantage of their trust and, instead of giving them honest guidance, relieved himself of the financial drain of operating an unprofitable motel. Chiman Patel was experienced in real estate dealings, and he knew what he was doing when he offered this "special deal" to his unsuspecting relatives. His actions warrant the imposition of punitive damages. There are no comparable civil or criminal penalties for similar conduct, but, given the facts of this case, we do not find the ratio of punitive damages to compensatory damages, approximately 2.6:1, to be out of line. Additionally, applying the factors set forth in Hammond and Green Oil, we consider the effect of the punitive award on the financial status of the defendant. As the trial court indicated, it would be difficult to make a good estimate of the value of Chiman Patel's assets, because of his many business interests and his penchant for dealing in cash. Nevertheless, we find that the punitive award constitutes approximately 7.5% of the defendant's net worth.[4] The payment of this award will certainly sting, but, in our opinion, it will not cripple the defendant financially. In addition, as remitted, the award clearly removes any profit recognized by the defendant as a result of his actions. Finally, the plaintiffs' costs of litigating this case, which ended with a three-day trial, taken by themselves, certainly would not support a $450,000 punitive damages award, nor would they, considered alone, support the remitted award of $225,000. However, considering the guideposts of BMW v. Gore, supra, as well as the Hammond/Green Oil factors, we conclude that the judgment of the trial court is due to be affirmed. AFFIRMED. HOOPER, C.J., and ALMON, SHORES, HOUSTON, KENNEDY, and BUTTS, JJ., concur. MADDOX and SEE, JJ., concur in the result. [1] The plaintiffs made the payments on the first mortgage, but were unable to make payments on the second mortgage. [2] Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986); Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989). [3] The plaintiffs filed the $225,000 remittitur. C.R. at 190. [4] Although the testimony indicated that the defendant's net worth was difficult to ascertain, there was evidence that in 1994 he had represented it to be a little over $3,000,000.

January 9, 1998

1638fc13-4f80-4cfe-bbd1-636838d73209

Ex Parte State Ex Rel. Daw

786 So. 2d 1134

1991060

Alabama

Alabama Supreme Court

786 So. 2d 1134 (2000) Ex parte STATE of Alabama ex rel. Joy M. DAW. (Re State of Alabama ex rel. Joy M. Daw v. Tommy Wayne Daw). 1991060. Supreme Court of Alabama. November 17, 2000. *1135 J. Coleman Campbell and Lois Brasfield, asst. attys. gen., Department of Human Resources, for petitioner. Submitted on petitioner's brief only. MADDOX, Justice. In its opinion in this case, the Court of Civil Appeals stated: "This case requires us to decide whether Rule 32(B)(6), *1136 Ala.R.Jud.Admin., allows a trial court to reduce an obligor's child-support payment to his two minor children by deducting from the obligor's gross monthly income the amount he has been ordered to pay on arrears in a child-support judgment for another child, when the other `child' had reached the age of majority five years earlier." State ex rel. Daw v. Daw, 786 So. 2d 1131, 1132 (Ala.Civ.App.2000). The trial court reduced the obligor's child-support obligation payable to the two minors in the present case by deducting from the obligor's gross monthly income the amount he had been ordered to pay on an arrearage due for the support of his other child, who, by that time, had reached the age of majority. The Court of Civil Appeals, with one Judge dissenting, held that an arrearage constitutes a preexisting child-support obligation and affirmed the trial court's judgment allowing a deduction in the amount of such an arrearage in determining the obligor's gross income. We granted certiorari review to determine whether an obligation relating to a child-support arrearage is considered a "preexisting child support obligation," as that term is used in Rule 32(B)(6), Ala.R.Jud.Admin. After carefully reviewing this question and the arguments presented, we conclude that the Court of Civil Appeals erred in affirming the judgment of the trial court. Consequently, we reverse and remand. The basic facts involved in this dispute are not controverted. They are set out in the opinion of the Court of Civil Appeals, but we elect to set them out again here. Joy M. Daw and Tommy Wayne Daw were married in 1977 and were divorced in 1995. Two children were born of the marriage. In the divorce judgment, the court awarded Joy custody of the two children and ordered Tommy to pay $664.56 per month in child support. At the time of this divorce, Tommy already had a child from a previous marriage, for whom he also owed child-support obligations. He was habitually delinquent with his child-support payments for all three children. In April 1998, Tommy petitioned the trial court to modify his child-support obligation resulting from his 1995 divorce. The Department of Human Resources ("DHR") responded by filing a contempt petition, alleging that Tommy had accrued an arrearage of $20,655.72, plus interest. On November 25, 1998, the trial court entered a judgment finding Tommy in contempt, and it determined, among other things, that he had accrued a total financial obligation of $27,279.03 for his two children from his marriage to Joy. The court ordered him to pay $25 per month toward the arrearage, but reduced his monthly child-support obligation to $387. The trial court arrived at the $387 figure by deducting $75 from Tommy's monthly gross incomethe $75 being the amount Tommy had been ordered to pay on an arrearage due for his first child, who was 24 years old and had been emancipated for 5 yearsand then applying the Child Support Guidelines of Rule 32, Ala.R.Jud.Admin. Because this case ultimately depends on the application of Rule 32(B)(6), we begin by examining the provisions of that rule. In doing so, we are mindful that rules and statutes relating to the same subject matter must be read in pari materia, thus allowing for legal harmony where possible. Burlington Northern R.R. v. Whitt, 611 So. 2d 219, 222 (Ala.1992). In the area of child support, the Legislature has declared that "[the Child Support Act *1137 should] be construed and administered to the end that children shall be maintained from the resources of the responsible parents," § 38-10-11, Ala.Code 1975; this is a goal stated in the Committee Comments to Rule 32(B)(6). See the Comment to Rule 32, Ala.R.Jud.Admin. ("The guidelines [provided by Rule 32] will provide an adequate standard support for children, subject to the ability of their parents to pay, and will make awards more equitable by ensuring more consistent treatment of persons in similar circumstances."). In our opinion, this Court is obligated to construe Rule 32(B)(6) in favor of protecting the welfare of the children involved in childsupport cases. Cf. Waltman v. Waltman, 480 So. 2d 594, 597 (Ala.Civ.App.1985) (stating that provisions relating to child support "are to be construed liberally for the welfare of the children"). In construing rules of court, this Court has applied the rules of construction applicable to statutes. See Ex parte Oswalt, 686 So. 2d 368 (Ala.1996). With these principles in mind, we now consider the intent and purpose of Rule 32(B)(6), which states: "The amount of child support actually being paid by a parent pursuant to an order for support of other children shall be deducted from that parent's `gross income.'" Clearly, this rule allows, in the court's determination of gross income, a deduction to a parent for a prior childsupport obligation if that obligation is pursuant to "an order for support." The rule, however, also allows a deduction to parents in instances where there has been a settlement in place of an order. See Rule 32(B)(6), Ala.R.Jud.Admin. ("If a parent is legally responsible for and is actually providing support for other children, but not pursuant to an order of support, a deduction for an `imputed preexisting child support obligation' may be made from that parent's gross income."). The common thread that runs throughout Rule 32(B)(6) is that in the computation of a new childsupport obligation a deduction is allowed in the amount of any previous child-support obligations. The question presented by this appeal, however, is whether the term "child-support obligation" includes a child-support arrearage. We conclude that the term "child-support obligation," as it is used in Rule 32(B)(6), does not encompass a childsupport arrearage. A child-support obligation is based on the court's expectation that the obligor will pay in accordance with the court's established schedule. A delinquent child-support obligation, however, receives different treatment. It is clear that "child support payments become final judgments on the day they are due." Ex parte State ex rel. Lamon, 702 So. 2d 449, 450 (Ala.1997); see also State v. Handley, 628 So. 2d 726, 727 (Ala.Civ.App.1993); Grogan v. Grogan, 608 So. 2d 397, 398 (Ala. Civ.App.1992); Hardy v. Hardy, 600 So. 2d 1013, 1015 (Ala.Civ.App.1992); Foster v. Foster, 571 So. 2d 1219, 1220 (Ala.Civ.App. 1990); and O'Neal v. O'Neal, 532 So. 2d 649, 650 (Ala.Civ.App.1988). Thus, the character of the obligation changes once it becomes delinquent, because the fact of the delinquency causes the party to whom the debt is owed to become a judgment creditor, a creditor who may then pursue the typical means of collection that are available to the holder of any judgment. Ex parte State ex rel. Lamon, 702 So. 2d at 450. Therefore, a delinquent payment constitutes a legal liability of the obligor, while a child-support obligation is only an expectation that the obligor will make a payment in the future. Although the mother of Tommy's oldest child was deprived of Tommy's assistance during the child's minority, and although she has every right to be paid for the amount, plus interest, that Tommy was *1138 ordered to pay for the support of that child and did not pay, payments on that judgment should not be used to lower the amount he is obligated to provide as support for his two minor children. Consequently, we hold that a past-due child-support payment is not to be treated the same as a preexisting child-support obligation, and we conclude that the trial court improperly allowed Tommy a deduction for his past-due child-support payment for his oldest child when it was computing his "gross income" for purposes of determining his child-support obligation for his two children by Joy. We firmly believe that neither the Legislature, nor this Court when it adopted Rule 32(B)(6), intended to allow an obligor's payments on an arrearage accrued in regard to an earlier-imposed child-support obligation to be used to reduce the amount he is obligated to pay in child support for his minor children. REVERSED AND REMANDED. HOOPER, C.J., and HOUSTON, SEE, LYONS, and BROWN, JJ., concur. JOHNSTONE and ENGLAND, JJ., dissent.

November 17, 2000

b377a405-4a75-4931-9807-5dcf56aec675

Wal-Mart Stores, Inc. v. Goodman

789 So. 2d 166

1981683

Alabama

Alabama Supreme Court

789 So. 2d 166 (2000) WAL-MART STORES, INC., and Denise Milner v. Lashawna Chenice GOODMAN. 1981683. Supreme Court of Alabama. December 22, 2000. *170 Matthew C. McDonald, Michael M. Shipper, and Kirkland E. Reid of Miller, Hamilton, Snider & Odom, L.L.C., Mobile, for appellants. Lawrence T. King of Goozee, King & Horsley, Birmingham; and Albert C. Bulls III, Tuskegee, for appellee. LYONS, Justice. Lashawna Chenice Goodman[1] sued Wal-Mart Stores, Inc., and its employee Denise Milner, alleging malicious prosecution. The jury returned a verdict in favor of Goodman, awarding her compensatory damages of $200,000 and punitive damages of $3 million. Wal-Mart and Milner filed a postjudgment motion seeking a judgment as a matter of law ("JML"), or, in the alternative, a new trial or a remittitur of damages. In partially granting this motion, the trial court found the punitive-damages award excessive and ordered a remittitur to $1 million. Goodman filed a "Motion to Alter, Amend, or Vacate the Remittitur," and, in response, the trial court reinstated the jury's punitive-damages award. The court entered a judgment based on the jury's awards. Wal-Mart and Milner appeal, arguing that the court erred in reinstating the punitive-damages award and in denying their motion for a JML or a new trial. We affirm conditionally. On December 24, 1995, Goodman, along with her two children, went to the Wal-Mart store in Opelika. Goodman claims that the purpose of this trip was to exchange a telephone she says she had purchased at a Montgomery Wal-Mart store. She testified that when she entered the Wal-Mart store, an employee greeter affixed a sticker to the box that Goodman was carrying that contained the telephone and then instructed Goodman to go to the customer-service desk. There, she claims, the customer-service employee told her to *171 leave the telephone and the receipt at the customer-service desk, find an exchange for the telephone, and then return to the customer-service desk. Goodman contends that, finding no suitable replacement for the telephone, she returned to the customer-service desk in order to retrieve the telephone and the receipt; that she placed the telephone in the top part of her shopping cart; and that she then continued shopping in the store. Goodman claims that she made a purchase in the automotive department, where, she said, she explained to the cashier her "failed attempt at exchanging the telephone." Goodman testified that after making that purchase, she went to the toy department, then went to the pet department and there exchanged pleasantries with an acquaintance, and then finally left through the front of the store. Goodman claims that upon exiting the store she was stopped by Milner and another Wal-Mart employee, and she says they asked her to return inside the store to show proof that she had purchased the telephone. Goodman alleges that Milner accused her of stealing the telephone. Goodman testified that she provided Milner with an explanation and with the receipt for the telephone; she claims Milner completely dismissed her explanation and the receipt. Goodman also says that upon reentering the store she asked Milner to verify her story with the employees at the customer-service desk, the cashier in the automotive department, and the employees at the store where she said she had purchased the telephone, in order to provide verification of the receipt. She claims Milner refused to do so. She testified that Milner escorted her and her two children to a back office in the store building. There, Goodman says, she retrieved her receipt and put it in her shoe. The police arrived and arrested Goodman. Goodman, who was pregnant at the time, was handcuffed and taken to jail, accompanied by her two children. She was charged with theft of property. Once at the police station, Goodman claims, she began having lower abdominal pains, which she says continued through the next day, which was Christmas. She testified that because of these pains she had to seek medical treatment. Goodman also testified that she sought treatment from her obstetrician because of the worry and stress she says she was suffering because of the arrest for the alleged theft. Further, she claims that her employer fired her from her job because he heard about her arrest over a police scanner when she was being transported to the police station. Milner's account of the facts, however, is different. She testified that she saw Goodman take a box containing a cordless telephone from a bottom shelf in the electronics department of the Opelika Wal-Mart store. She claims that Goodman placed the box containing the telephone in the top part of the shopping cart with two Wal-Mart bags. Milner testified that she then watched Goodman as she walked through the store. She stated that Goodman first went to the domestics department in the back of the store; then to the boys' wear department; then to the lingerie department, where, Milner says, Goodman had a conversation with a Wal-Mart employee; and then back to the domestics department. Milner claims that, from there, Goodman walked through the automotive, sporting goods, and toy departments before entering a garden-center aisle; Goodman was in that aisle, Milner says, when Milner watched Goodman conceal the telephone. Milner claims that she watched Goodman take automotive merchandise out of one of the Wal-Mart bags and slip the cordless telephone into the remaining empty bag. She contends that Goodman then stopped to look at the fish *172 in the pet department and then exited the store without purchasing the telephone. Milner and another employee stopped Goodman in the parking lot and asked her to accompany them to an office in the back of the store. Milner says that when Goodman was stopped she claimed she had purchased the contents of the bags, but that later she told Milner the telephone belonged to her and that she had brought it into the store in an attempt to exchange it. Milner testified that Goodman told her she had attempted to exchange the telephone after she left the boys' wear department. Milner said she knew this was not true because she had watched Goodman leave the boys' wear department, and, she said, Goodman never went to the customer-service desk. Milner stated that during the interview in the back office, Goodman was uncooperative, would not give Milner any information, and denied the theft. Milner testified that Goodman then presented a receipt, which had been dated a week earlier and which showed a purchase made at a Montgomery Wal-Mart store. Milner claims that she gave no credence to the receipt because she had seen Goodman take the telephone off the shelf in the electronics department and then had seen her conceal it in a bag. Moreover, she stated that because she had seen Goodman leave from the boys' wear department and exit the front of the storenot going to the customer-service desk, as Goodman claimed she had doneshe was sure that Goodman had attempted to steal the telephone. Milner testified that she asked Goodman if she wanted to make a telephone call in order to arrange for her children to be taken home. She said Goodman made three telephone calls but did not find anyone to pick up her children. The police arrived, arrested Goodman, and escorted her and her children through the store to a police vehicle parked in front of the store. Milner claims that, at that time, she confirmed with the customer-service employees that Goodman had not been at the customer-service desk to exchange the telephone. Goodman claims that Wal-Mart employed a "quota-apprehension" system. A Wal-Mart representative testified that all of Wal-Mart's "loss-prevention associates," including Milner, must report to district supervisors the number of apprehensions made per month. This system of reporting follows to the regional supervisors, the divisional supervisors, and ultimately to the loss-prevention vice president. Wal-Mart scores its loss-prevention associates on their apprehension productivity, which is based on the number of apprehensions made by the loss-prevention associate. This score is a factor in determining raises and promotions. The regional loss-prevention associate for Milner's area testified that she tabulates the figures for her region to determine an apprehension average. On Milner's 90-day review form, Milner was described as needing improvement on her number of apprehensions per month. Milner was below average in apprehensions, and she wrote on her 90-day-evaluation form that she was going to improve the number of her monthly apprehensions. In March 1996, the Opelika Municipal Court found Goodman not guilty on the charge of theft. Goodman sued Wal-Mart and Milner (hereinafter referred to collectively as "Wal-Mart") in the Circuit Court of Macon County in March 1997. The complaint contained six counts, all relating to Goodman's arrest at the Opelika Wal-Mart store in December 1995; the counts alleged fraud, false imprisonment, malicious prosecution, negligent or wanton training and supervision, assault and battery, *173 and the tort of outrageous conduct. Goodman amended her complaint in June 1997 to include three new counts: libel, slander, and abuse of process. The trial court entered a summary judgment for Wal-Mart on some of Goodman's claims. The trial court ruled that only Goodman's claims alleging false imprisonment (referred to by the trial judge as "false arrest/false imprisonment") and malicious prosecution would go to trial. On the first day of trial, February 8, 1999, Goodman voluntarily dismissed her false-arrest/false-imprisonment claim, and the case was tried solely on the claim of malicious prosecution. At the close of Goodman's case, Wal-Mart moved for a JML, asserting that Goodman had failed to provide sufficient evidence to submit the question of probable cause and malice to the jury. The trial court denied the motion. Wal-Mart again filed motions for a JML at the close of its case-in-chief and at the close of all the evidence. The trial court denied those motions also. The case was submitted to the jury on February 12, 1999, and the jury returned a verdict in favor of Goodman, assessing compensatory damages of $200,000 and punitive damages of $3 million. The trial court entered a judgment on the verdict. Wal-Mart filed a renewed motion for a JML, or, in the alternative, a new trial or remittitur; the trial court reduced the punitive-damages award to $1 million but denied the motion for a JML or a new trial. Goodman then filed a "Motion to Alter, Amend or Vacate the Judgment" entered by the trial court; the court granted that motion and reinstated the $3 million punitive-damages award. Wal-Mart appealed. Wal-Mart makes several arguments on appeal: (1) that Wal-Mart was entitled to a JML on the basis that Goodman did not present, in support of her malicious-prosecution claim, substantial evidence of either a lack of probable cause or malice; (2) that Wal-Mart is entitled to a new trial (a) on the basis that Goodman intentionally destroyed evidence; (b) because of improper ex parte out-of-court testing, by Goodman's counsel, of Wal-Mart's merchandise-return procedure; and (c) based on Batson[2] violations by Goodman's counsel in striking the jury; (3)(a) that the compensatory-damages award of $200,000for mental anguishis not supported by the record, and (b) that the punitive-damages award of $3 million does not withstand review by the "guideposts" of BMW of North America, Inc. v. Gore[3] or by the factors stated in Hammond v. City of Gadsden[4] and Green Oil Co. v. Hornsby,[5] and therefore should be vacated or substantially remitted; and (4) that if this Court orders a new trial, the new trial should take place in Lee County, based on an application of the doctrine of forum non conveniens. Wal-Mart argues that the trial court erred in denying its motions for JML because, it claims, Goodman failed to present sufficient evidence in support of her claim alleging malicious prosecution. More specifically, Wal-Mart contends that the issue whether Milner had probable cause to effect the arrest of Goodman *174 should not have been presented to the jury because, Wal-Mart argues, there is no genuine issue of material fact as to whether Milner had probable cause to believe that Goodman was shoplifting the telephone. Wal-mart also claims that Goodman, at trial, failed to produce substantial evidence on the issue of lack of probable cause. Because this appeal is from the trial court's denial of a motion for JML or a new trial, we are bound to view the evidence in a light most favorable to the nonmovant. Motion Indus., Inc. v. Pate, 678 So. 2d 724, 726 (Ala.1996). Accordingly, where the evidence in the record is disputed, we consider it in a light most favorable to Goodman.[6] In order for a claim of malicious prosecution to be submitted to a jury, the trial court must determine that the plaintiff has presented substantial evidence of the following elements: (1) that the present defendant instituted a prior judicial proceeding against the present plaintiff; (2) that in instituting the prior proceeding the present defendant acted without probable cause and with malice; (3) that the prior proceeding ended in favor of the present plaintiff; and (4) that the present plaintiff was damaged as a result of the prior proceeding. Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831-32 (Ala.1999). In malicious prosecution cases, "probable cause" is defined as "such a state of facts in the mind of the prosecutor as would lead a man of ordinary caution and prudence to believe or entertain an honest and strong suspicion that the person arrested is guilty." Delchamps, Inc. v. Morgan, 601 So. 2d 442, 445 (Ala.1992) (citation omitted). Thus, the determination of probable cause does not hinge upon whether Goodman was in fact guilty of shoplifting, but whether Milner's subjective belief under the circumstances led her to believe that Goodman was guilty. In order to produce substantial evidence on the element of lack of probable cause, Goodman had to present evidence "of such weight and quality that fair-minded persons in the exercise of impartial judgment [could] reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co., 547 So. 2d 870, 871 (Ala.1989). Malice is an inference of fact, and it may be inferred from a lack of probable cause or from mere wantonness or carelessness if the actor, when doing the act, knows it to be wrong or unlawful. Bryant, 738 So. 2d at 833. Personal ill will or a desire for revenge is not essential for a finding of malice. Delchamps, Inc. v. Larry, 613 So. 2d 1235, 1239 (Ala.1992). However, an inference of malice drawn from the lack of probable cause may be rebutted by evidence showing that the defendant acted in good faith. Bryant, 738 So. 2d at 832. Here, the evidence was in sharp dispute. Goodman's version of the event presented a jury question as to whether a reasonably prudent person acting in good faith would have made further inquiry before prosecuting. Dean Prosser wrote, on determining reasonableness: William L. Prosser, Law of Torts, § 119 at 842 (4th ed.1971) (quoted in Atlantic Zayre, Inc. v. Meeks, 194 Ga.App. 267, 390 S.E.2d 398 (1990) (using Prosser, Law of Torts, § 119, as a basis for its rationale that a store security guard could be found to have acted unreasonably in arresting a customer: the customer had offered "over and over to give an explanation and to fetch [his] receipts [from his car], but was not permitted to."). We find the reasoning of the Court of Appeals of Georgia persuasive under the circumstances presented by this case. The record reflects that Goodman, at the time of the apprehension, presented to Milner a receipt that matched the product code of the merchandise Goodman had allegedly concealed. Although the receipt was dated seven days before the date of the apprehension, Milner made no effort to verify its legitimacy. Before calling the police, she did not confirm with the customer-service-desk employees whether Goodman had, in fact, attempted to exchange the telephone; nor did she confirm with the store greeter whether Goodman had entered the store with the telephone. Therefore, the question whether a reasonable person acting in good faith would have investigated the situation further before proceeding with the arrest was disputed; the trial court correctly allowed the jury to decide the issue of probable cause. Wal-Mart claims that it is entitled to a new trial because, it says, Goodman's counsel, in striking the jury, violated the principles of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). Wal-Mart alleges that Goodman's counsel exercised her peremptory strikes in a racially biased manner by striking 9 of the 10 white persons from the jury venire. Goodman's counsel, while maintaining that no reversible Batson error was ever presented, argues that Wal-Mart's Batson challenge was not timely. Generally, one making a Batson challenge to the composition of the jury must do so before the jury is sworn. Stegall v. State, 628 So. 2d 1006, 1008 (Ala.Cr. App.1993). Additionally, a Batson challenge is untimely if it is made after the venire has been dismissed. McGregory v. Lloyd Wood Constr. Co., 736 So. 2d 571, 577 (Ala.1999). A Batson challenge made after the unselected members of the venire have been released would create the difficulty of a great delay in drawing and summoning a new venire. McGruder v. State, 560 So. 2d 1137, 1143 (Ala.Crim.App. 1989). Wal-Mart claims that before the jury was sworn the parties held an unrecorded sidebar conference with the judge, informing the judge that Wal-Mart wished to make a Batson challenge to Goodman's exercise of her peremptory strikes. Wal-Mart further claims that the trial court, in an effort to accommodate the venire-members, who had been in court all morning, decided to hear the Batson challenge after dismissing both the jury and the unselected members of the venire. Wal-Mart contends that this was made apparent in the record by the language the trial court used after dismissing the jury for the day: "I believe a motion has been made by the defense. You can go ahead and read *176 your motion into the record." Wal-Mart claims that this statement by the court shows that Wal-Mart had made its Batson objection to the court before the court dismissed the jury and the unselected members of the venire. The court entertained a Batson challenge by Wal-Mart in the absence of the jury and the unselected veniremembers. Goodman's counsel responded with explanations for striking the white jurors. The trial court found no Batson violation in Goodman's exercise of her peremptory strikes. This Court is limited to a review of the record, and the record cannot be changed, altered, or varied on appeal by statements in briefs of counsel. Gotlieb v. Collat, 567 So. 2d 1302, 1304 (Ala.1990). Moreover, we cannot assume error or presume the existence of facts as to which the record is silent. Alfa Mut. Gen'l Ins. Co. v. Oglesby, 711 So. 2d 938, 942 (Ala.1997). The first mention in the record of any alleged Batson violation came after the trial court had dismissed the jury and the unselected veniremembers. The sidebar conference, in which Wal-Mart claims the trial court discussed entertaining its Batson challenge, was not reported. We cannot assume facts from the record, nor can we presume that an unreported motion was timely made. We must conclude that Wal-Mart's Batson challenge was untimely. We therefore need not address whether Goodman's proffered explanations were race-neutral. Wal-Mart argues that it should be granted a new trial because, it claims, Goodman intentionally destroyed the box that had contained the cordless telephone in question and thereby caused the parties to be unable to examine the box. Wal-Mart claims the box would have shown whether Goodman had in fact brought the telephone into the Opelika Wal-Mart store. Wal-Mart argued that a "greeter label" would have been affixed to the box when Goodman entered the store. Once the "greeter label" was taken off, Wal-Mart claims, it would have left an impression of the word "VOID." Therefore, Wal-Mart says, the trial court would have been able to determine if Goodman had actually entered the store with the box. Spoliation is an attempt by a party to suppress or destroy material evidence favorable to the party's adversary. May v. Moore, 424 So. 2d 596, 603 (Ala. 1982). Proof of spoliation will support an inference of guilt or negligence. May, 424 So. 2d at 603. One can prove spoliation by showing that a party purposefully or wrongfully destroyed a document that the party knew supported the interest of the party's opponent. Id. Wal-Mart insists that because Goodman's counsel made a copy of the front of the box it is obvious that Goodman knew or should have known the importance of the box as a piece of evidence. However, nothing in the record shows that Goodman knew that the entire box would be a key piece of evidence in her case, and Wal-Mart provided no evidence to show that Goodman intentionally destroyed the box in order to inhibit Wal-Mart's case. Wal-Mart is not entitled to a new trial on the basis that Goodman or her counsel did not preserve the original package. Wal-Mart also argues that it should be granted a new trial because of an "experiment" it says Goodman conducted during the trial. This so-called experiment occurred when Goodman's counsel went to a local Wal-Mart store to investigate the *177 technique Wal-Mart used when customers returned merchandise. In that investigation, Goodman's counsel discussed with one of the assistant store managers the technique by which the greeter labels were applied to merchandise customers carried into the store. During this investigation, Goodman's counsel asked that a greeter label be affixed to a piece of merchandise, a box of wine glasses, to illustrate the merchandise-return procedures. Then Goodman's counsel asked the manager to remove the sticker, just as he would if someone were returning the merchandise. The manager did so, and the word "VOID" did not appear on the box. Goodman's counsel subpoenaed the manager to testify, in an effort to rebut earlier testimony by a Wal-Mart corporate representative claiming that if an affixed "greeter label" was removed from the merchandise, an impression of the word "VOID" would always be imprinted on that piece of merchandise. Alabama State Bar Ethics Opinions RO-84-160, RO-86-125, RO-88-27, and RO-88-34 answer the question whether any ethical prohibition forbids counsel to directly contact and interview witnesses for a defendant corporation without first contacting counsel for the corporation. These opinions stand for this proposition: Ethics Opinion, RO-88-34. (Citation omitted.) The assistant store manager did not act as a corporate agent with the authority to bind Wal-Mart. No evidence indicated that he had the authority to commit Wal-Mart to his statements in any way. Thus, Goodman's counsel was not required to notify Wal-Mart regarding his contact with its employee. Because Goodman's counsel was acting were within the scope of the rules when he interviewed the assistant store manager regarding Wal-Mart's merchandise-return procedures, no objectionable out-of-court "experiment" occurred and the court properly allowed the manager's testimony offered to rebut earlier testimony presented for Wal-Mart. Wal-Mart claims (1) that the award of mental-anguish damages is not supported by the record and (2) that the punitive-damages award does not withstand scrutiny under the principles of BMW v. Gore or Hammond and Green Oil. Wal-Mart asks this Court to vacate, or alternatively, to order a substantial remittitur of the damages award. First, Wal-Mart argues that Goodman presented no direct evidence indicating that she suffered any mental anguish and no corroborative medical evidence indicating that she sought medical treatment for the mental anguish she claimed to have suffered. In its brief, Wal-Mart claims that Goodman's mental anguish was "scant at best" and that in her testimony she described her mental anguish as simply "hard." Moreover, Wal-Mart maintains that Goodman could not corroborate her claim that she sought medical treatment because of the mental anguish and that in fact her testimony was contradicted by the custodian of records from the medical center she claimed to have visited. Wal-Mart *178 also points out that the person who was Goodman's roommate at the time of the incident testified that she posted bail for Goodman and that Goodman was happy and grinning when she was released from jail. A physical injury or physical symptom is not a prerequisite for a finding of mental anguish. Kmart Corp. v. Kyles, 723 So. 2d 572, 578 (Ala.1998). A plaintiff is required only to present some evidence of mental anguish, and once the plaintiff has done so the question whether the plaintiff has suffered mental anguish and, if so, the question of how much compensation the plaintiff is entitled to for the mental anguish are questions for the jury. Kyles, 723 So. 2d at 578. The amount of the jury's award is left to the jury's sound discretion, and it will not be set aside absent a clear abuse of discretion. Id. A jury's verdict is presumed correct, and that presumption is strengthened by the trial court's denial of a motion for a new trial. Id. In Foster v. Life Insurance Co. of Georgia, 656 So. 2d 333, 337 (Ala.1994), this Court stated: This Court then ordered a reduction of the mental-anguish compensatory damages in Foster from $250,000 to $50,000, noting that the plaintiffs suffering during the two months between the injury and the filing of the plaintiffs action could not justify an award exceeding $120,000 for each month. Wal-Mart cites Kyles in order to support its proposition that the compensatory-damages award should be reduced. In Kyles, the jury awarded the plaintiff $100,000 in compensatory damages and $100,000 in punitive damages in her malicious-prosecution case against Kmart Corporation. Kmart suspected Kyles of shoplifting lawn chairs from the front of the store, and it subsequently had a warrant sworn out for her arrest. The grand jury no-billed the charge. Kyles sued Kmart and its loss-prevention employee. At trial, however, Kyles presented no testimony or other evidence indicating that the circumstances surrounding her arrest had caused her to suffer mental anguish, other than her husband's testimony that she cried when she telephoned to ask him to pick her up at the jail. This Court ordered a remittitur of her compensatory damages to $15,000, reasoning that this was the greatest amount of compensatory damages that a jury, using sound discretion, could have awarded her. Wal-Mart also cites Delchamps, Inc. v. Bryant, supra, 738 So. 2d 824, a case in which this Court ordered a reduction of the jury's award of compensatory damages for mental anguish, from $400,000 to $100,000. Bryant was arrested for shoplifting two cartons of cigarettes from a Delchamps grocery store. An employee at the Delchamps store suspected the theft and told the assistant store manager. The manager questioned the suspect in the front of the store, but allowed him to leave. The manager wrote down the license-plate number of the automobile the suspect entered and then telephoned the Jefferson County Sheriff's Department. The investigation by the sheriffs department led to the arrest of Bryant. The criminal case against him, however, was nol-prossed because he presented evidence indicating that at the time of the alleged theft he was incarcerated. Bryant sued Delchamps, *179 Inc., alleging malicious prosecution and claiming compensatory damages for mental anguish. At trial, Bryant testified, describing his arrest and incarceration; his hiring an attorney; the lapse of time between the arrest and the nol-prossing of his case; and his concern that a conviction could lead to his return to prison for a minimum of 10 years. This Court held that the scant direct testimony about mental anguish and the absence of any corroborating description of the intensity of his suffering could not have led a reasonable jury to award $400,000 in compensatory damages. We concluded that the greatest amount of compensatory damages a jury could have awarded based on the evidence was $100,000.[7] Goodman testified at trial concerning the stress she claimed to have undergone because of worry over the case. She also testified that the arrest caused her to suffer lower abdominal pains during her pregnancy, pains she said lasted for several days and caused her to be very anxious over the health of her unborn child. She discussed the embarrassment and humiliation she said she felt because of the arrest on Christmas Eve, a very busy shopping day, and being led out of the Wal-Mart store in handcuffs, escorted by the police officers and accompanied by her two young children. She stated that she remains embarrassed over what has happened. Goodman also stated that at the time of the arrest, she was worried about whether her children were going to be taken away from her because she says she could not immediately find anyone to pick them up from the police station. Moreover, she testified that she was fired from her job as a consequence of the arrest and that she had a difficult time finding other employment. She was given a trial date in February 1996 (for trial of the shoplifting case); because she failed to appear for that trial, she was arrested and placed in a holding cell on March 25, 1996, to await trial. At trial, she was found not guilty. Goodman's evidence of mental anguish afforded Wal-Mart ample opportunity for cross-examination.[8] The jury, after hearing Goodman's testimony and after hearing Wal-Mart's evidence tending to minimize Goodman's injury or harm,[9] awarded her $200,000 in compensatory damages for mental anguish. The jury's award does not shock the conscience of this Court. We cannot say Goodman's mental anguish was limited to the period between her arrest and her acquittal, because her testimony suggested she suffered it for a longer time than that. Compare Southern Energy Homes, Inc. v. Washington, 774 So. 2d 505 (Ala.2000) (upholding damages award to plaintiff who testified that his mental anguish consisted of anger, embarrassment, and disruption of his sleep over a period of nearly five years); Bryant, 738 *180 So. 2d at 839 (reducing the compensatory-damages award for mental anguish lasting for only four months). Given the evidence concerning Goodman's mental anguish, and viewing it from the plaintiff's perspective, we cannot say the amount awarded was beyond what a properly functioning jury, using sound discretion, could award. While the damages award is high and borders upon excessiveness, we have no basis to interfere with the judgment of the jury. We therefore affirm the compensatory-damages award. Wal-Mart argues that the jury's award of $3 million for punitive damages is not supported by clear and convincing evidence, is grossly excessive, and does not withstand the constitutional scrutiny established by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) (hereinafter "BMW"), or the factors this Court set out in Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989) (hereinafter "Hammond/Green Oil"). The trial court ordered a remittitur of the punitive-damages award to $1 million after considering a postjudgment motion made by Wal-Mart. On Goodman's motion, however, the court reinstated the $3-million punitive-damages award. Wal-Mart asks us to vacate, or order a substantial remittitur of, the punitive-damages award, based upon the BMW guideposts and the Hammond/Green Oil factors. We first analyze the punitive-damages award pursuant to the three "guideposts" established by the United States Supreme Court in BMW. This Court analyzes these factors with the presumption that the jury reached a correct verdict based on the issues presented. "Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." BMW, 517 U.S. at 575, 116 S. Ct. 1589. The verdict entered by the jury in the present case is based upon a finding of malice and a lack of probable cause with respect to the arrest made by Wal-Mart. A jury's finding of malicious conduct indicates a very high degree of reprehensible conduct. See TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443, 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993) (upholding the high ratio of a punitive award of $10 million to a compensatory award of $19,000, based upon a finding of malicious conduct by the defendant). In a malicious-prosecution case, the jury may, from evidence indicating a lack of probable cause, infer malice on the part of the defendant. Bryant, 738 So. 2d at 833. However, this inference of malice may be rebutted by evidence indicating the defendant acted in good faith. Id. The evidence presented by Wal-Mart demonstrates that after she detained Goodman, Milner failed to act in good faith by exercising ordinary caution and prudence that would support a finding of an honest or strong suspicion. She failed to verify whether the receipt was legitimate or to investigate Goodman's contentions. The jury apparently determined that this failure indicated a lack of probable cause and indicated malice. On the other hand, Milner and Goodman did not know each other and had never met. They are of the same ethnicity, and no evidence presented at trial suggests that Milner had any vindictive, spiteful, or other improper motives. If the evidence stopped here, we would be inclined to compare this case to *181 Bryant, where no punitive damages were awarded under similar circumstancesa failure to pursue information that would have exonerated the plaintiff. However, this case presents several additional factors. Upon Goodman's acquittal, Wal-Mart again demanded that she return the telephone. Wal-Mart's failure to address the significance of the receipt continues in the proceeding before this Court; it fails to address in its brief here the significance of the receipt. The evidence regarding Wal-Mart's loss-prevention policy, viewed favorably to Goodman, suggested the policy gave an unhealthy incentive for employees to make arrests in order to obtain favorable performance ratings.[10] Even after Goodman was acquitted, Wal-Mart demanded the return of the telephone. Wal-Mart's evidence regarding its merchandise-return practices was impeached by testimony of a Wal-Mart employee. The trial court's order finds the conduct and the degree of reprehensibility sufficient to warrant a 15:1 ratio of punitive damages to compensatory damages. If we attached a presumption of correctness to the trial court's view of the propriety of the ratio, we would abdicate our responsibilities under BMW and Hammond. We must evaluate the evidence and make an independent determination of what would be a proper ratio. We have applied a ratio of three to one in instances of reprehensibility that caused substantial compensable damage without causing physical injury and that involved no outrageous or contemptible conduct. See Prudential Ballard Realty Co. v. Weatherly, [Ms. 1981671, July 28, 2000] ___ So.2d ___ (Ala.2000) (reducing a punitive-damages award to a 3:1 ratio, based on conduct that was reprehensible but that involved no physical injury); American Pioneer Life Ins. Co. v. Williamson, 704 So. 2d 1361 (Ala.1997) (reducing the punitive-damages award to $750,000, for a 3:1 punitive-to-compensatory ratio; the jury had awarded $250,000 in compensatory damages in a breach-of-contract action where the plaintiff had suffered no harm to health and no risk to safety but the defendant's actions were found reprehensible). The Legislature has recently enacted a 3:1 punitive-damages cap for cases such as this present case. See § 6-11-21, Ala.Code 1975. We find the 3:1 ratio appropriate in this case, in view of Wal-Mart's conduct at the time of the arrest and its conduct thereafter, as well as the evidence concerning Wal-Mart's loss-prevention policies. A second indicium of either reasonableness or excessiveness of the jury's punitive-damages award is the ratio between the amount of punitive damages awarded and the actual harm to the plaintiff. BMW, 517 U.S. at 580, 116 S. Ct. 1589. As we stated in Employees' Benefit Ass'n v. Grissett, 732 So. 2d 968, 979 (Ala.1998): (Citations omitted.) The ratio of the jury's $3 million punitive-damages award to its $200,000 compensatory-damages award is 15:1. Given the circumstances of this case, we find that ratio unacceptably high. We have no basis for considering this factor relevant. Our analysis of the BMW guideposts indicates that the punitive-damages award was excessive, because of the low level of reprehensibility and the high ratio between the punitive- and compensatory-damages awards. Next, we analyze the punitive-damages award pursuant to the Hammond/Green Oil factors, which were established by this Court. Again, we analyze these factors with the presumption that the jury reached a correct verdict based on the issues presented. "Punitive damages should bear a reasonable relationship to the harm that is likely to occur from the defendant's conduct as well as to the harm that actually has occurred. If the actual or likely harm is slight, the damages should be relatively small. If grievous, the damages should be much greater." Green Oil Co. v. Hornsby, 539 So. 2d 218, 223 (Ala.1989), quoting Aetna Life Ins. Co. v. Lavoie, 505 So. 2d 1050, 1062 (Ala.1987) (Houston, J., concurring specially). We have determined that the award of $200,000 for compensatory damages, while borderline, was not excessive. These damages were awarded for the mental anguish, or actual harm, Goodman suffered. Wal-Mart's conduct was not grievous. While the evidence supports an award of more than the minimal amount of punitive damages, we conclude that the $3-million award does not bear a reasonable relationship to the actual harm Goodman suffered or was likely to suffer. The review of the reprehensibility of Wal-Mart's conduct is broader in a Hammond/Green Oil review than in a BMW review. We must consider "the duration of [the] conduct, the degree of the defendant's awareness of any hazard which [its] conduct has caused or is likely to cause, and any concealment or `cover-up' of that hazard, and the existence and frequency of similar past conduct." Green Oil, 539 So. 2d at 223. First, this case does not involve a continuing pattern or practice of conduct by Wal-Mart against Goodman. Although Goodman argues that Wal-Mart's policy of evaluating the job performance of its loss-prevention employees was based upon the number of apprehensions that were made, we do not infer that Wal-Mart, in an effort to obtain more apprehensions and arrests, was completely oblivious to the existence, or lack thereof, of probable cause. Next, Wal-Mart was concerned with the likelihood of hazards in effectuating an arrest without probable cause. The company emphasized to its employees that they must be absolutely certain that suspected persons had actually shoplifted merchandise from the store. Overall, the circumstances surrounding the conduct of Wal-Mart at the time of Goodman's arrest, especially the fact that *183 Goodman claimed to have a receipt for the telephone, a claim that warranted further investigation, weigh in favor of an award of punitive damages. However, these circumstances do not warrant a punitive-damages verdict of anything near $3 million, 15 times the compensatory damages of $200,000. If the defendant's wrongful conduct was profitable, then we consider whether the punitive-damages award removes the profit and whether it exceeds the profit so that the defendant recognizes a loss. Green Oil, 539 So. 2d at 223. No evidence indicates that Wal-Mart realized any profit from the arrest of Goodman. To the extent Wal-Mart may have profited, it is clear that the $3-million punitive-damages award would not only remove any profit, but would far exceed any profit. This factor weighs in favor of finding that the punitive-damages award was excessive. Wal-Mart is a large corporation with tremendous financial power; it has a large market value and a large net income. The verdict of $3 million would not have a devastating impact upon Wal-Mart. This factor weighs against a finding of excessiveness. We must consider whether the punitive-damages award sufficiently rewarded the plaintiff's counsel for assuming the risk of bringing the lawsuit and encouraged other plaintiffs to bring wrongdoers to trial. Green Oil, 539 So. 2d at 223. Goodman argues that the litigation costs were substantial; however, substantial litigation costs, alone, will not justify a substantial award. Goodman claims in her brief that the litigation costs she incurred included costs incurred in regard to repeated discovery hearings, which required extensive travel; multiple depositions, which also required extensive travel; numerous discovery motions; and a three-day trial involving numerous exhibits, witnesses, and demonstrative aids. This factor weighs against finding the punitive-damages award excessive. No criminal sanctions have been imposed upon Wal-Mart for its conduct; therefore, this factor is inapplicable. No testimony or documentary evidence presented at trial indicated that other civil actions are pending against Wal-Mart based upon the same corporate conduct. This factor weighs against a finding of excessiveness. After considering each of the Hammond/Green Oil factors, we conclude that one of the factors is inapplicable to the issue of excessiveness. Three of the factors weigh in favor of a finding of excessiveness: the degree of reprehensibility of Wal-Mart's conduct, the degree to which Wal-Mart profited, and the actual or likely harm involved. The same number of factors weigh against a finding of excessiveness: the costs of litigation to Goodman, other civil actions pending, and Wal-Mart's financial position. The final consideration of the question of excessiveness of the punitive-damages award of $3 million, made in light of the factors enumerated above, leads us to conclude that a punitive-damages award of $600,000 would be sufficient to punish *184 Wal-Mart and deter it from further conduct similar to that evidenced in this case, without compromising its due-process rights. A punitive-damages award of $600,000 would reduce the ratio of punitive damages to compensatory damages from 15:1 to 3:1; we consider 3:1 an appropriate ratio, considering the degree of reprehensibility of Wal-Mart's conduct. Wal-Mart argues that it would be in the interest of justice to transfer this case to Lee County, based on the statutory doctrine of forum non conveniens, if this Court orders a new trial. Wal-Mart also argues that the case should be transferred to accommodate the convenience of the parties, pointing out (1) that Goodman no longer lives in Macon County, (2) that the incident forming the basis of the action occurred in Lee County, and (3) that substantially all of the witnesses are located in Lee County. Given these factors, Wal-Mart argues that Lee County would be a more convenient forum in which to conduct the new trial. Wal-Mart relies on Cunningham v. Langston, Frazer, Sweet & Freese, P.A., 727 So. 2d 800 (Ala.1999), in which this Court set out the standard a trial judge should use when considering a request for a change of venue based on a defendant's claim that another county would be a more convenient forum: Cunningham, 727 So. 2d at 806-07 (quoting Ex parte Townsend, 589 So. 2d 711, 714 (Ala.1991)). In Cunningham, this Court upheld the trial court's transfer of a case from Jefferson County even though the plaintiff had filed his action in the Jefferson Circuit Court and that court had jurisdiction over the action. We found it appropriate for the trial court to transfer the action to the Sumter Circuit Court because that court had tried the case that had produced the fee award that was at dispute in the Jefferson County action; the judge of the Sumter Circuit Court was familiar with the underlying issues in the case and with the attorneys involved; and that judge had expressly retained jurisdiction over any matters arising from the underlying case. These factors led the judge of the Jefferson Circuit Court to conclude that *185 Sumter County was a significantly more convenient forum and that the interests of justice or the convenience of parties and witnesses would be best served by transferring the case. Because we are not ordering a new trial in this case, we do not address the merits of Wal-Mart's claim that Lee County is a more convenient venue. If Goodman chooses a new trial over a remittitur of damages, then Wal-Mart may move for a change of venue based on the doctrine of forum non conveniens. It would be premature for this Court to determine now whether a change of venue would be appropriate if the plaintiff chooses a new trial. The judgment is affirmed on the condition that Goodman file with this Court within 21 days a remittitur of punitive damages to the sum of $600,000; otherwise, the judgment will be reversed and the cause remanded for a new trial. AFFIRMED CONDITIONALLY.[*] MADDOX, HOUSTON, COOK, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs in part and concurs in the result in part. HOOPER, C.J., dissents. JOHNSTONE, Justice (concurring in part and concurring in the result in part). I concur in all holdings, except that I concur only in the result of the treatment of the defendants' Batson challenge. I think the record supports an inference that the trial judge knew of the Batson challenge before he discharged the jury venire. While I think the Batson challenge was timely, I do not think the trial judge erred to reversal in overruling the Batson challenge. HOOPER, Chief Justice (dissenting). I must respectfully dissent. Unfortunately, the trial court's judgment in this case turns the concept of justice entirely on its head, rewards the unjust, and punishes a legitimate business for attempting to protect itself from theft. I do not see how any business can long survive when it loses its merchandise through shoplifting and then gets punished for seeking to enforce the laws against theft. I hope the kind of "legal" action this plaintiff engaged in is not occurring throughout the entire State of Alabama. However, if this kind of "legal" actionwhere a person shoplifts, is arrested, and then sues for malicious prosecutionis confined to certain counties in Alabama, I suspect we will continue to see an exodus of businesses from those counties, followed inevitably by the resulting economic decline that increases the poverty of those counties and the covetous desire to empty the coffers of the businesses that remain. The depressing cycle is easy to predict, but extremely difficult to stop, much less reverse. The corrosive effect of such a judgment as we have before us calls for this Court to exercise greater care in reviewing jury verdicts. This Court must, of course, by law, defer to the presumed "correctness" of a jury verdict; however, as a Justice on this Court, I will scrutinize such verdicts with great care, always within the standards set by this Court, and I *186 will leave no stone unturned in an effort to prevent the self-destructive economic and judicial effects that inevitably arise from unjust verdicts. This Court has stated the standard of review for jury verdicts in civil cases: Charter Hosp. v. Weinberg, 558 So. 2d 909, 911 (Ala.1990) (quoting Campbell v. Burns, 512 So. 2d 1341, 1343 (Ala.1987)). See also Williams v. Williams, 786 So. 2d 477 (Ala. 2000) ("that presumption is strengthened by the trial court's denial of the motion for a new trial"). I have tried my best in this case to look for the "reasonable inferences" the jury could have drawn that might support its verdict and damages awards. However, in doing so, I reach a conclusion opposite to that of the majority; I think "the evidence against the verdict is so much more credible and convincing to the mind than the evidence supporting the verdict that it clearly indicates that the jury's verdict was wrong and unjust." Charter Hosp., 558 So. 2d at 911. Let us examine those facts. The plaintiff Lashawna Goodman claimed that she bought the telephone that is the subject of this action, in order to give it to a friend for Christmas. She testified that she saw it advertised in a Wal-Mart advertising flier. Yet, no telephone was offered in a Wal-Mart advertising flier the week before the alleged purchase. (R. 1761-65.) After she was found not guilty on a charge of stealing the telephone, she said she did not give the telephone to the friend because Christmas had already passed once she received the telephone back from the Opelika Municipal Court; that court found her not guilty of theft, in March 1996. She said she threw the telephone away because, she said, it did not work. When Wal-Mart sought to obtain the telephone, in order to test whether it had been given the sticker that merchandise receives when a customer brings it in for return, Wal-Mart discovered that Goodman had thrown away the telephone and the box in which it had been packaged. The only evidence of the existence of that telephone was a photocopy of the back of the box she says had contained the telephone. Therefore, Wal-Mart could not test to see if a sticker had been applied to the box, as Goodman testified. Goodman claimed that the telephone did not work and that it was too late to return it to Wal-Mart.[11] By Goodman's version of the *187 facts, she threw away the box after she had contacted an attorney about suing Wal-Mart. Also, Goodman's friend Elizabeth Thomas testified that the receipt used by Goodman as a part of her defense in the criminal theft action against her was actually a receipt for a telephone that Thomas's husband had purchased for Ms. Thomas.[12] In other words, Goodman took a receipt for someone else's telephone and used it to claim that she had actually purchased the telephone that Wal-Mart accused her of attempting to steal. Goodman and her children lived with Thomas's family for a period of time. The defense focused on the fact that Milner, the loss prevention associate for Wal-Mart who first stopped Goodman, had not attempted to discover the origin of the receipt that Goodman had in her possession. Milner answered that she had plainly seen Goodman take a telephone from the shelf in the electronics section of the Opelika Wal-Mart store and place it in the bottom of a bag in her cart.[13] She then followed her and watched her travel through the store and eventually leave *188 without paying for the telephone.[14] Milner never saw Goodman return to the customer-service desk, as Goodman testified she did. That is a critical fact, because Goodman claimed she had left the telephone at the customer-service desk. Either she had to return to that desk to pick up her telephone, or she stole a telephone from Wal-Mart. Milner also saw that the receipt produced by Goodman had been issued by a different Wal-Mart store a week earlier. Goodman argued at trial that Milner was under some kind of pressure from her supervisor to meet a quota of shoplifting stops. Milner denied this was the case, as did her supervisor.[15] Even if Milner *189 had been under pressure to meet a quota of stops, that certainly does not mean that she would lie about the facts in Goodman's apprehension or set up an innocent person for arrest. At her trial, Goodman claimed that the telephone she was accused of stealing was a telephone she had purchased from a Wal-Mart store in Montgomery. She used Thomas's receipt to support her story. On that basis, the municipal judge found her not guilty.[16] She said she did not remember which Wal-Mart store in Montgomery she had purchased the telephone from or how to drive to that store from her doctor's office, where, she said, she had had an appointmenton December 17, 1995, a Sunday, and the same day she alleged she had purchased the telephone. One "drawing reasonable inferences" from the evidence in this case would conclude that the jury did not evaluate the evidence at all but merely pitied Ms. Goodman's condition and predicament on the day before Christmas 1995.[17] The only logical inference one could draw from the evidence is that Goodman had a receipt that did not belong to her, that she took a telephone off the shelf in the Opelika Wal-Mart Mart store, that she did not pay for that telephone before leaving the store, and that she tried to use the fraudulent receipt to escape punishment for her crime. She then had the audacity to sue Wal-Mart for malicious prosecution, even though the employees of Wal Mart had acted professionally and Wal-Mart was within its rights to have Goodman arrested as a suspected shoplifter. The testimony of Milner, Thomas, and Reese is all logical and consistent, and none of it appears contrived. On the other hand, Goodman's testimony is, of course, self-serving and filled with short and nonexplanatory answers to questions, and it contradicts the testimony of the other key witnesses at trial. It makes much more sense to conclude that Goodman produced the fraudulent receipt in order to escape arrest and a criminal conviction for shoplifting than it makes to conclude that Wal-Mart produced the other witnesses in the case and induced false testimony in order to escape civil liability. The trial judge should have granted Wal-Mart's motion for a judgment as a matter of law, because Goodman did not produce substantial evidence to support a finding of malicious prosecution or to support the jury's damages awards. Even if I *190 could vote to affirm the trial court's imposition of liability, I would demand a much greater remittitur of the punitive damages, because one could hardly call Wal-Mart's conduct in this case reprehensible. Wal-Mart had probable cause to have Goodman arrested, and it did not act maliciously in doing so. The effect of the trial court's judgment and of this opinion could be to encourage shoplifting in this State. I understand that sometimes criminals are able, by cunning manipulation of the criminal-justice system, to escape prosecution for their crimes. However, I do not want to see that unfortunate reality extended to include a criminal's quest to become a millionaire by cunning manipulation of the civil-justice system. I think that kind of manipulation caused the result in this case and that that manipulation poses a serious threat to the civil-justice system of this State. Therefore, I respectfully dissent. [1] Some documents in the record refer to the plaintiff as La Shawna Chenice Goodman or LaShawna Chenice Goodman. [2] Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). [3] BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996). [4] Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986). [5] Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989). [6] The Chief Justice, in his dissent, considers the evidence in a light most favorable to the defendantsagainst whom the jury returned a verdict. However, we are obliged to consider the evidence in a light most favorable to the plaintifffor whom the jury returned its verdict. Motion Indus., Inc., 678 So. 2d at 726. [7] The facts of Bryant, on the issue of liability, are similar to the facts of this present case to the extent that the defendant failed to pursue evidence that would have exonerated the plaintiff. However, in Bryant, the jury did not assess punitive damages. [8] This is not a case where the plaintiff presented only a minimum of evidence regarding mental anguish, so as possibly to avoid being cross-examined by questions calling for information about the plaintiff's prior experiences. Compare Bryant, 738 So. 2d at 835 (testimony from the plaintiff could have led to cross-examination about previous felony convictions); Kyles, 723 So. 2d at 579 (testimony from the plaintiff concerning mental anguish could have led to cross-examination about previous arrests). [9] Wal-Mart attempted to impeach Goodman's testimony concerning medical treatment by pointing out that she had presented no medical records to support her claim that she had received treatment. [10] Wal-Mart has a four-element stop policy. It requires that an apprehension must (a) concern Wal-Mart's property, (b) result from maintained eye contact with the person apprehended, (c) result from observed concealment, and (d) occur after the suspected person has exited the store. The policy does not deal with the question of whether a Wal-Mart employee apprehending someone is to explore any information given in explanation of the alleged wrongdoing. [*] Note from the reporter of decisions: On January 30, 2001, the Supreme Court entered the following order in this case: "IT IS ORDERED ... that the joint motion to dismiss the appeal is granted, and the appeal is dismissed. "IT IS FURTHER ORDERED that costs be taxed as provided in the settlement agreement." [11] Goodman testified: "Q. Where is the phone now? "A. The phone stopped working. I couldn't take it back to exchange it because it had so many days or months on it that youdittoso the phone was throwed away. "Q. You threw the phone away? "A. Yes. I couldn't do anything with it. "Q. Well, did you give the phone as a gift as you said you would? "A. No, because I didn't have it by Christmas. It was in evidence. Locked up. I didn't get the phone back until after the trial. "Q. Did you save the box that the phone came in? "A. I did up until I moved. "Q. You did up until you moved. "A. Um-hmmm. "Q. Well, where is the box now? "A. Throwed it away when I moved. "Q. Let me show you a document which was marked plaintiff's exhibit number two in an earlier deposition. She can look at either one. Will you tell me what that is? "A. This is the back of the telephone that I purchased. It is the box. "Q. When was that document made? "A. Once I contacted to have Albert Bush [sic; Bulls?] be my attorney. "Q. You still had the original box at that time. "A. Yes." Goodman Testimony, R. 1830-31. [12] Elizabeth Thomas testified: "Q. I'll ask you to look at what has been marked as defendants' exhibit one, which is a copy of a receipt. Would you look at that, please, ma'am. Have you ever seen that receipt before? "A. Yes. "Q. Let's talk about the times you have seen it; okay? "A. Okay. "Q. When did you first see it? "A. The very first time I saw this receipt is when my husband gave it to me after leaving Wal-Mart. "Q. Okay. And, then after you discovered that the receipt was goneI understand what you are saying is you saw it on the day you purchased it, December 17; right? "A. Yes. "Q. And then, after you discovered that the box and receipt were gone, when is the next time you saw it, that receipt? "A. It was August of '98, when Mr. Dave Donaldson come to my house. "Q. Who is Mr. Dave Donaldson? "A. He's a private investigator for Wal-Mart. "Q. Did he show you the receipt? "A. Yes. "Q. Did he ask you about the receipt? "A. Yes. "Q. When was the next time you saw the receipt? "A. December 14, I think, it was, when I gave my deposition. ". . . . "Q. And, Ms. Thomas, is that the receipt for the phone that your husband purchased for you on December 17, 1995? "A. Yes, it is. "Q. And, on that day, was Lashawna Goodman with you? "A. Yes." (R. 1840-41.) [13] As the main opinion states, Goodman claimed that she left the telephone at the Opelika Wal-Mart customer-service desk, shopped, and then returned to the customer-service desk to pick up the telephone. That story, even when considered in light of the receipt that Goodman claimed she presented to Milner and said that she had obtained from a Montgomery Wal-Mart store, cannot be reconciled with Milner's testimony that she saw Goodman take a telephone from the shelf and put it in her bag in the shopping cart. Milner looked at the receipt Goodman showed her and saw that it was from another store and had been issued for a purchase on another date. There was no reason for Milner to accept that receipt as an explanation for Goodman's behavior. [14] Milner testified: "A. First when I first observed her, Ms. Goodman was in the electronics department. She was taking a phone off the shelf. Ms. Goodmanexcuse methen proceeded to come out [sic] electronics with two bags of oil and a telephone on top of the buggy. When she left the electronics department, she went down action alley going toward the back of the store. Then she took a left and went all the way down to the domestics department. She went down the aisle looking around, looking for customers, as soon as someoneI assume she was looking for customerssoon as she saw someone coming up the aisles, she immediately leftshe left domestics and went to the other side of the store, which is by little boys' wear. She went in little boys' wear. She was looking around, watching people around her. As soon as somebody came in that area, she left. She left little boys' wear and went through action alley and lingerie and had a conversation with a sales associate. When she left that area, she went all the way to domestics. It was the same thing. As soon as a customer came down the aisle in that area, she would leave. When she left that area she went down through automotives to sporting goods and the toy department and straight down the aisle and then she went on one of our garden center aisles, and then turned the corner, she went down the aisle. She took the motor oil and she put it all in one bag and put the telephone in the bag. Then, when she left there, she stopped by the fish tank, and when she left the fish tank she proceeded to go straight down action alley. I saw Margaret, this is our support team manager, and I asked her to go out with me. So, she came along with me. Ms. Goodman continued to come down and when she got to the checkout line, she went straight through the checkout line. She went outside. That is when I told her who I was and asked her to come with me. "Q. Now, let me ask you this. You say you saw her take the phone off the shelf? "A. Yes, sir. "Q. You saw her put it in the top of the buggy and then she began to walk around? ". . . . "Q. And, let me ask you this: When she was walking through aisles where merchandise was situated, tell me what she was doing? "A. She was looking around. She was not looking at the shelves. "Q. She was not looking at the merchandise? "A. No. ". . . . "Q. What was she looking at? "A. She was looking around, trying the [sic] see if someone was around her." (R. 1630-33.) [15] Michael Reese, Milner's supervisor, testified: "Q. Is it truetell me whether or not loss-prevention associates are told that they have to make a quota or a goal in order to successfully perform. "A. No, sir. I never tell associates that. "Q. And, in fact, that is not part of the Wal-Mart policy; is that correct? "A. No, it is not. "Q. Now, it is in the evaluation; correct? "A. Yes, sir. "Q. And, it is, like, one of the 23 or 21 items in the evaluation? "A. Yes, sir. "Q. Things like handling the situation professionally are in there; is that right? "A. Yes, sir. "Q. And, communicating well with your supervisor, that's in there, too; isn't it? "A. Yes, sir. "Q. Doing the job overall is in the evaluation; isn't that correct? "A. Yes, sir. There is a number of things in there from following proper guidelines to making apprehensions. There are a number of things." (R. 1816-17.) [16] Goodman argued at trial that Thomas's testimony about the fraudulent receipt was irrelevant to the question whether Wal-Mart maliciously prosecuted Goodman because Wal-Mart learned of the deceit with respect to the receipt after the fact. The question in this case was whether, using the information Wal-Mart had at the time of Goodman's arrest, Wal-Mart acted maliciously. It is quite clear that it did not. In having Goodman arrested, Wal-Mart used the eyewitness testimony of its loss prevention associate, a person trained and experienced in observing shoplifting. The receipt was introduced by Goodman at her criminal trial to obtain a not guilty verdict. Goodman used that not-guilty verdict to claim that she was "innocent" of any shoplifting in the Wal-Mart store on the day she was arrested. Wal-Mart attempted to rebut that evidence with Thomas's testimony and to impeach Goodman's testimony. If we accepted Goodman's argument that this information is irrelevant because Wal-Mart did not learn of it until after Goodman's arrest and her criminal trial, then, logically, we would have to say that Goodman's not-guilty verdict is also irrelevant because it occurred after the fact and Wal-Mart could not necessarily have predicted that result based on the information in its possession before the criminal trial. [17] Ms. Goodman was pregnant, and her children were present when she was arrested.

December 22, 2000

97460c25-c70c-4d5a-8c8c-d62d84ce6ed2

Ex Parte Cranman

792 So. 2d 392

1971903

Alabama

Alabama Supreme Court

792 So. 2d 392 (2000) Ex parte Paul J. CRANMAN, as executor of the estate of Matthew Cranman, deceased. (In re Paul J. Cranman, as executor of the estate of Matthew Cranman, deceased v. David Maxwell, M.D., et al.) 1971903. Supreme Court of Alabama. June 16, 2000. Opinion Modified on Denial of Rehearing November 22, 2000. *393 Marion F. Walker, Birmingham, for petitioner. Michael A. Florie and Joseph S. Miller of Starnes & Atchison, L.L.P., Birmingham, for respondents Dr. David Maxwell, Dr. Patricia A. Hubbs, Dr. John Galaznik, and Dr. Joe Bethany (brief on 2d application for rehearing filed by W. Stancil Starnes, Michael A. Florie, and J. Will *394 Axon, Jr., of Starnes & Atchison, L.L.P., Birmingham). David G. Wirtes, Jr., of Cunningham, Bounds, Yance, Crowder & Brown, L.L.C.; and S. Greg Burge of Heninger, Burge, Vargo & Davis, Birmingham, for amicus curiae Alabama Trial Lawyers Ass'n, in support of the plaintiffs application for rehearing. LYONS, Justice. The opinion of November 24, 1999, is withdrawn and the following is substituted therefor. Paul J. Cranman, as executor of the estate of his son Matthew Cranman, deceased, was the plaintiff in a medical-malpractice action. He appealed from summary judgments entered in favor of the defendants David Maxwell, M.D.; Patricia A. Hubbs, M.D.; John Galaznik, M.D.; and Joe Bethany, M.D. (hereinafter sometimes referred to collectively as "the physicians"). The Court of Civil Appeals affirmed, holding that the physicians were entitled to discretionary-function immunity. Cranman v. Maxwell, 792 So. 2d 386 (Ala.Civ.App.1998). We granted Paul Cranman's petition for certiorari review, and we reverse. Matthew Cranman was a student at the University of Alabama in 1994. On September 12, 1994, he went to the Russell Student Health Center of the University of Alabama ("the student health center"), complaining of swelling and pressure in the area of his left testicle. Dr. Maxwell examined him, diagnosed epididymitis (an inflammation of the sperm-collecting tubes near the testicles), and prescribed antibiotics and sitz baths. Matthew returned on October 11, 1994, complaining of low-back pain. Dr. Galaznik examined him, diagnosed muscle pain, and prescribed medication. On November 7, 1994, Matthew again went to the student health center, reporting that he had a possible prostate infection. Dr. Maxwell saw him and determined that he had a slightly tender mass effect in the left epididymis; however, a testicular examination was negative. Dr. Maxwell prescribed more antibiotics and instructed Matthew to return in two weeks. Matthew returned on November 29, 1994, reporting mild discomfort in his left testicle. Dr. Bethany examined him, noted a slight enlargement of the testicle, changed his medication, and recommended that he consult a urologist in his hometown during the semester break. Matthew did not visit the student health center again until August 23, 1995. At that time he complained of a stabbing, burning pain in his left flank. Dr. Maxwell examined him, diagnosed left paralumbar pain, and prescribed medication and physical therapy. Two days later, when Matthew reported for physical therapy, he was examined by Dr. Hubbs, who noted that he was tender along the costal margin, in his left side, and in his flank. Dr. Hubbs thought Matthew had suffered a strain of the chest muscles; she prescribed additional medication, recommended that he try heat or ice, and instructed him to return in a week. When Matthew returned six days later, he reported that he was feeling better, and Dr. Hubbs gave him additional medication. On October 11, 1995, Matthew reported to the student health center with back pain and a flareup of his epididymitis. Dr. Hubbs noted that he had the symptoms of a hydrocele and that he had seen a urologist. She examined him, diagnosed recurrent epididymitis and a back strain, prescribed pain and antibiotic medication and back exercises, and instructed him to return in two weeks if he did not improve. *395 On November 9, 1995, Matthew went to the student health center complaining of nausea, vomiting, and diarrhea. Dr. Maxwell examined him, but Matthew reported no back or testicular pain. On November 17, 1995, Matthew returned, with recurring back pain, and reported that he had been under stress and had not slept for a week. Dr. Hubbs examined him and found that he was experiencing shoulder pain and tightness different from the earlier back pain. She diagnosed upper back and neck strain, prescribed heat and medication, and referred him to physical therapy. In December 1995, Matthew was diagnosed with testicular cancer. Cancerous cells were found in his lungs and behind his kidneys. His left testicle was surgically removed, and he underwent chemotherapy, radiation, and other cancer treatments. In September 1996, Matthew sued Drs. Maxwell, Hubbs, and Galaznik; the student health center; and others. He alleged that the physicians had negligently or wantonly breached the applicable standard of care in treating him, thereby breaching an implied contract to render medical treatment. In their answer, the physicians asserted the defense of immunity because, they claimed, they were engaged in a discretionary function within the scope of their authority as employees of the University of Alabama. They then moved for a summary judgment on the basis of immunity. Matthew then amended his complaint to add Dr. Bethany as a defendant and to dismiss the student health center. Matthew Cranman died on November 6, 1997.[1] On December 31, 1997, the trial court entered a summary judgment in favor of Drs. Maxwell, Hubbs, and Galaznik, concluding that they were protected from liability by discretionary-function immunity. On January 8, 1998, Paul Cranman, Matthew's father and executor, was substituted as a plaintiff, pursuant to Rule 25(a), Ala. R. Civ. P. On January 20, 1998, the trial court entered a summary judgment in favor of Dr. Bethany, based upon immunity. The trial court certified the summary judgments as final, pursuant to Rule 54(b), Ala. R. Civ. P. Paul Cranman appealed to this Court, which transferred the case to the Court of Civil Appeals, pursuant to § 12-2-7(6), Ala.Code 1975. In affirming the summary judgments, the Court of Civil Appeals stated, in pertinent part: Cranman v. Maxwell, 792 So. 2d at 391-92. Paul Cranman petitioned this Court for certiorari review of the Court of Civil Appeals' decision. He frames the issue presented as "whether the physicians in the rendition of purely medical treatment to an individual are performing a discretionary act as contemplated by caselaw and are legally entitled to officer-agent immunity under the Constitution for the State of Alabama, Art. I, Section 14." The Court granted his petition and consolidated this case with three other cases for oral argument. All of the cases question the continuing validity of the doctrine of immunity for health-care providers in the State service. See Wells v. Storey, 792 So. 2d 1034 (Ala.1999); Ex parte Rizk, [Ms. 1970493, Nov.24, 1999] (reh'g pending);[*]Wimpee v. Stella, [Ms. 1971774, Nov. 24, 1999] (reh'g pending).[**] We today reexamine the doctrine of immunity of officers, agents, and employees of the State for torts committed in the course of their performance of their duties.[2] We begin our discussion with a review of the doctrine of immunity where the issue *397 arises in the context of the immunity available to the State in an action against the State ("State immunity") as opposed to the immunity available to individual defendants sued for actions taken on behalf of the State ("State-agent immunity").[3] In Hutchinson v. Board of Trustees of University of Alabama, 288 Ala. 20, 256 So. 2d 281 (1971), this Court traced the history of State immunity in Alabama, using Copeland and Screws, Governmental Responsibility for Tort in Alabama, 13 Ala. L.Rev. 296 (1961), as a rich source of information. Our first Constitution required the Legislature to direct in what manner and in what courts actions could be brought against the State. Art. 6, § 9, Ala. Const. of 1819. The Legislature obliged in the following year with a statute allowing "any claim against the state" to be instituted by petition to the supreme court where two judges would "form a court for the trial of such suit," with provision for trial by jury on demand. Toulmin, Digest of the Laws of Alabama, tit. 61, ch. 28, §§ 8-10 (1823). In the Constitution of 1865, a change in philosophy first surfaced when the privilege of suing the State was shifted from a matter of right to a matter within the discretion of the Legislature.[4] The 1820 legislation and successor provisions permitting actions against the State remained in effect until their repeal in 1875.[5] The Constitution of 1875 included, for the first time, a provision stating that "the state of Alabama shall never be made defendant in any court of law or equity." Art. I, § 15, Ala. Const. of 1875. Art. I, § 14, Ala. Const. of 1901, contains the same provision. In the early years of statehood, this Court allowed a county to enjoy immunity from negligence or nonperformance of its duties except when a statute expressly provided otherwise. A city's liability turned on whether the city was performing a corporate, as opposed to a governmental, function.[6] The aforementioned constitutional prohibition of actions against the State dealt only with the State, not cities and counties. The law applicable to cities and counties was outside the sphere of constitutional regulation.[7] The decisional law underpinning immunity of cities was overturned in Jackson v. City of Florence, 294 Ala. 592, 320 So. 2d 68 (1975), in face of dissents arguing in favor of deferring to the Legislature for change in the longsettled understanding of municipal liability. *398 294 Ala. at 600-04, 320 So. 2d at 75-79. This Court adopted a similar rule allowing actions against counties, in Lorence v. Hospital Bd. of Morgan County, 294 Ala. 614, 320 So. 2d 631 (1975), and Cook v. County of St. Clair, 384 So. 2d 1 (Ala.1980). In Hutchinson, supra, this Court addressed whether the State, acting in its proprietary function, was entitled nonetheless to assert its immunity. Answering in the affirmative, the Court spoke as follows: 288 Ala. at 24, 256 So. 2d at 284. Today we must decide whether agents of the State sued in their individual capacity are entitled under certain circumstances to similarly sweeping immunity, regardless of how we would classify the activity in which they are engaged. No counterpart to Art. I, § 14, Ala. Const. of 1901, which declares the State immune from suit, appears in the Constitution of the United States. Also, the United States Constitution has no counterpart to Art. I, § 13, guaranteeing every person a remedy by due process of law for "any injury done ... in his lands, goods, person, or reputation." The immunity of the United States Government is based upon the decisional law of the federal courts, uninfluenced by the presence of provisions comparable to §§ 13 and 14 of the Alabama Constitution of 1901. Restatement (Second) of Torts § 895A cmt. a (1977). Over time, the United States Congress, unfettered by constitutional restraints on lawsuits against the United States and not subject to any constitutional guaranty that a person would have the right to a civil action to redress an injury, enacted statutes that allowed the United States Government to be sued in certain circumstances. For example, in 1855 Congress established the Court of Claims to hear contract cases; in 1887, the Tucker Act waived immunity from suit and conferred jurisdiction upon the Court of Claims and the United States district courts to hear claims against the United *399 States relating to the "taking" of property; in 1946, the Federal Tort Claims Act allowed actions against the United States for money damages for torts committed by Government employees and eliminated personal liability of those employees. Because the source of the immunity from suit enjoyed by the State of Alabama differs from the source of immunity of the United States Government in that the State's immunity is constitutionally based,[8] neither the Alabama Legislature nor this Court has the power to waive the State's immunity from suit.[9] Nor can the Legislature or this Court eliminate the right to a remedy by a civil action against an individual unless our constitution authorizes it to do so. Copeland and Screws, in their 1961 article, supra, refer to State-agent immunity only in passing, when dealing with the separate concept of governmental immunity.[10] They conclude: Copeland & Screws at 307 (emphasis in original) (footnotes omitted). In England, the doctrine that "the king can do no wrong" came to be accompanied by the concept that his ministers were personally responsible when they acted illegally. Under their authority to create a common law, courts have struggled over the years to develop a meaningful compromise between the two extremes.[11]Restatement (Second) of Torts § 895D, "Public Officers" (1974), codifies this compromise, with its dichotomy between discretionary functions, in regard to which the public officer or employee is immune, and ministerial functions, in regard to which the public officer or employee is personally liable. In Mitchell v. Forsyth, 472 U.S. 511, 521, 105 S. Ct. 2806, 86 L. Ed. 2d 411 (1985), the Supreme Court recognized the footings of the doctrine of immunity in considerations of the separation-of-powers doctrine. Art. III, § 43, Ala. Const. of 1901, requires that each of the three separate coequal branches confine its activities to its respective sphere. While we have not heretofore considered the separation-ofpowers doctrine as part of the equation in determining issues of liability of State agents, other jurisdictions have traced the *400 doctrine of State-agent immunity back to the provisions of their respective constitutions mandating separation of powers. See, e.g., Adams v. City of Tenakee Springs, 963 P.2d 1047 (Alaska 1998); Sutton v. Golden Gate Bridge, Highway & Transp. Dist., 68 Cal. App. 4th 1149, 81 Cal. Rptr. 2d 155 (1998); Department of Health & Rehabilitative Servs. v. B.J.M., 656 So. 2d 906 (Fla.1995); Hiers v. City of Barwick, 262 Ga. 129, 414 S.E.2d 647 (1992), superseded by constitutional amendment, as stated in City of Thomaston v. Bridges, 264 Ga. 4, 439 S.E.2d 906 (1994); Ransom v. City of Garden City, 113 Idaho 202, 743 P.2d 70 (1987); Rumbold v. Town of Bureau, 221 Ill.App.3d 222, 581 N.E.2d 809, 163 Ill.Dec. 655 (1991); Wade v. Norfolk & Western Ry., 694 N.E.2d 298 (Ind.App. 1998); Goodman v. City of LeClaire, 587 N.W.2d 232 (Iowa 1998); Hardy v. Bowie, 719 So. 2d 1158 (La.App.1998); Christensen v. Mower County, 587 N.W.2d 305 (Minn. Ct.App.1998); Mahan v. New Hampshire Dep't of Admin. Servs., 141 N.H. 747, 693 A.2d 79 (1997); Broadway & 67th St. Corp. v. City of New York, 116 Misc.2d 217, 455 N.Y.S.2d 347 (Sup.Ct.1982), order rev'd, 100 A.D.2d 478, 475 N.Y.S.2d 1 (1984); Moody v. Lane County, 36 Or.App. 231, 584 P.2d 335 (1978); City of Brownsville v. Alvarado, 897 S.W.2d 750 (Tex.1995); Hudson v. Town of East Montpelier, 161 Vt. 168, 638 A.2d 561 (1993). Soon after the Constitution of 1901 was adopted, this Court, in Elmore v. Fields, 153 Ala. 345, 45 So. 66 (1907), recognized the right of a citizen to sue a State employee for a tort committed in the line of duty. Elmore was the first Alabama case ever to deal with the issue of immunity for State agents sued in their individual capacity for the commission of a tort. The Court recognized no immunity, citing State v. Hill, 54 Ala. 67 (1875), wherein the Court had held that the State could not be liable under the doctrine of respondeat superior for the torts of its agents. The Court in Elmore also cited United States v. Lee, 106 U.S. 196, 1 S. Ct. 240, 27 L. Ed. 171 (1882), wherein the Supreme Court had quoted from Chief Justice Marshall's opinion in Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 842-43, 6 L. Ed. 204 (1824), as follows: 106 U.S. at 213. Thus, because the State can do no wrong, its agents, when committing a tort, are not acting within their authority and, therefore, they do not act on behalf of the State. Elmore, 153 Ala. at 351, 45 So. at 67. Section 13, with its guaranty of a right to a remedy, was applied in J.B. McCrary Co. v. Phillips, 222 Ala. 117, 130 So. 805 (1930), where a contractor argued that a statute granting Jefferson County the authority to build a sewer system also granted immunity to the county and that the county's immunity shielded it from liability. In rejecting this argument, this Court stated that such a construction of the statute would conflict with § 13 of the Constitution. The Constitution and cases construing it require that we not ignore § 13 in order to protect State agents from suit. However, the vulnerability of State agents to suit, if not constrained, could lead to excessive judicial interference in the affairs of coequal branches of government, contrary to *401 § 43. In Finnell v. Pitts, 222 Ala. 290, 132 So. 2 (1930), a divided Court (4-3) allowed an action in tort to proceed against a State agent. The dissenting opinion of Justice Thomas invoked as an extreme example the problems that would be posed if the majority's holding led to tort actions against the Governor. 222 Ala. at 303, 132 So. at 15. We cannot ignore precedents such as Elmore, J.B. McCrary Co., and Finnell, clearly recognizing an open door to lawsuits against State agents and written by Justices of this Court who lived, worked, and wrote in an era much closer to the drafting of the Constitution of 1901 than we do. Yet, at the same time, we cannot ignore the strong policy against judicial interference in the affairs of State government as articulated in § 14 and mandated by § 43. Although § 14 is, by its terms, restricted to prohibiting lawsuits against the State, we cannot disregard its impact upon our obligation to observe the constitutional separation of powers. However, we cannot give excessive deference to the authority of the legislative branch, grounded in the separation-of-powers doctrine stated in § 43, to eliminate entirely personal liability of State agents. The authority to exercise the judicial power in § 6.01 of Amendment No. 328 appears after Art. I, § 36.[12] Section 36 erects a firewall between the Declaration of Rights that precedes it and the general powers of government, including the authority to exercise judicial power, that follow it. We must, as far as possible, construe §§ 13, 14, 36, and 43 and § 6.01 of Amendment No. 328 "as a whole and in the light of [the] entire instrument and to harmonize with other provisions." State Docks Comm'n v. State ex rel. Cummings, 227 Ala. 414, 417, 150 So. 345, 346 (1933). In light of the foregoing constitutional provisions, we conclude that while we have the constitutional power to decide casesthereby applying the law in cases that come before usif the authority conferred upon this Court pursuant to the Judicial Article (Article VI) conflicts with the provisions of § 13, we must construe § 13 as dominant, subject to our obligation to observe the separation of powers established by § 43. In applying the doctrine of separation of powers, we must recognize § 14 as an expression of a strong public policy against the intrusion of the judiciary into the management of the State while, at the same time, acknowledging that it speaks only to a prohibition of lawsuits against the State and does not mention lawsuits against individuals. For this reason, the express provisions of § 13 establishing the right to a remedy through a lawsuit against an individual must, as to the issue before us, stand above the implications from § 14 in the hierarchy within the declaration of rights. In the final analysis, we cannot invoke merely the authority to declare "sound public policy" through caselaw in order to find State agents immune from suit; in order to declare them immune, we must find the immunity in constitutional provisions. This constitutional backdrop enables us to articulate public policy through caselaw in this troublesome area, using constitutional principles, and not simply personal notions of good government, as our compass. Against this backdrop, we turn to the more recent cases dealing with Stateagent *402 immunity. Seventy-five years after this Court first recognized in Elmore the open door to lawsuits against State agents, this Court decided DeStafney v. University of Alabama, 413 So. 2d 391 (Ala.1981). In DeStafney, after recognizing that a claim alleging personal injury caused by the alleged negligent conduct[13] of a State employee, even when that conduct is committed in the line and scope of her employment, is not within the ambit of the constitutional prohibition against lawsuits against the State as expressed in § 14, this Court adopted a rule of qualified immunity derived from Restatement (Second) of Torts § 895D.[14] The adoption of that rule partially closed the door that had been opened in Elmore. Over the years since this Court decided DeStafney, a case in which an injured child was allowed to sue an employee of a day-care center operated by the University of Alabama, based on the ministerial nature of the employee's duties, the doctrine of State-agent immunity has been applied in a variety of settings. A review of the cases in their factual context illuminates the line the courts of this State have drawn between conduct involved in planning or decision-making in the administration of government[15] and the conduct of those required to carry out the orders of others or to administer the law with little choice as to when, where, how, or under what circumstances their acts are to be done.[16] See the Appendix to this opinion for a compilation of cases from this Court and the Court of Civil Appeals applying the doctrine of State-agent immunity (792 So.2d at 417). The most difficult applications of the rule derived from the Restatement come in instances where the discretion being exercised has little, if any, bearing on the administration of an agency of government or the execution of duties imposed by law. We cannot insulate State employees acting outside that zone, without disregarding § 13. In Taylor v. Shoemaker, 605 So. 2d 828 (Ala.1992), this Court again dealt with the question of qualified immunity and noted the impact of DeStafney on earlier cases: 605 So. 2d at 829-30. This Court in Taylor noted that the sweep of Finnell had been restricted by DeStafney. Our more recent cases dealing with the question when conduct constitutes the performance of a discretionary function as opposed to the performance of a ministerial function have used language that suggests a requirement that the actor be involved in "planning tasks" and "policy-level decision-making" in order to qualify for immunity. See Defoor v. Evesque, 694 So. 2d 1302, 1305 (Ala.1997), followed in Town of Loxley v. Coleman, 720 So. 2d 907 (Ala.1998). Recently, the Court of Civil Appeals referred to conduct that falls under *404 the heading of "ministerial functions" as "characterized by operational tasks and minor decision-making." Kassaw v. Minor, 717 So. 2d 382, 385 (Ala.Civ.App.1998). This language in these recent cases could be read as disallowing State-agent immunity in instances where the actor, even though he may be making a complex decision beyond the range of the lay person, is not involved at the time in decision-making that directly relates to the exercise of a governmental-policy judgment.[17] Under the most elementary elaboration of the DeStafney formulation, conduct related to policy and planning and involving the exercise of judgment carries immunity, while ministerial acts carrying out the commands of decision-makers do not. However, at least two primary problems arise in the application of this test drawn from the American Law Institute's appreciation of prevailing law from around the country. First, as is the case with liability under the Federal Tort Claims Act, as discussed in Berkovitz v. United States, see note 17, cases from other jurisdictions often draw the line in the context of statutory remedies under which all agents enjoy immunity and therefore the point of demarcation relates only to the extent to which the public coffers will be open. These decisions arising in a context where all agents are immune do not have to reckon with the effect upon the rendition of governmental services if agents are inclined to indecision rather than risk personal liability. However, because we are bound by the aforementioned constitutional provisions, we cannot allow such extraconstitutional considerations to control the outcome. Second, as long as the agent has not disobeyed clear instructions, almost any challenged conduct can be reduced to the exercise of some degree of judgment or discretion. However, judicial deference to all conduct in which judgment or discretion is employed would exalt the immunity of § 14 over the right to a remedy preserved by § 13. As an example, there should be some recognizable difference in legal consequence between, on the one hand, a prison warden's decision not to fire or not to sanction the entity contracting with the State Department of Corrections to provide medical services and, on the other hand, a decision by the driver of a pickup truck on how to drive through or around potholes while transporting prisoners. Each situation involves judgment or discretion. Under our recent cases, the warden is immune[18] and the truck driver is not.[19] We cannot, in blind obedience to the doctrine of stare decisis, continue to accept an expansive application of caselaw characterizing as a discretionary function conduct remote from the execution of governmental policy; to do so would perpetuate an erroneous construction of the Constitution. Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 42 (Ala.1998) (Lyons, J., concurring specially) (citing Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, *405 454-55, 59 S. Ct. 325, 83 L. Ed. 272 (1939) (Black, J., dissenting)). The time has come to face the necessity of defining "injury," as that word is used in § 13, in lawsuits against State employees alleging torts committed in the line of duty, in a manner that neither violates § 13 nor prefers § 14 or § 6.01 of the Judicial Article over § 13. We decline to label all discretionary acts by an agent of the State, or all acts by such an agent involving skill or judgment, as "immune" simply because the State has empowered the agent to act. Such an expansive view of the power of the State to act with immunity for its agents would be inconsistent with the rights secured by § 13. We therefore restate the rule governing State-agent immunity: A State agent shall be immune from civil liability in his or her personal capacity when the conduct made the basis of the claim against the agent is based upon the agent's (1) formulating plans, policies, or designs; or (2) exercising his or her judgment in the administration of a department or agency of government, including, but not limited to, examples such as: (3) discharging duties imposed on a department or agency by statute, rule, or regulation, insofar as the statute, rule, or regulation prescribes the manner for performing the duties and the State agent performs the duties in that manner; or (4) exercising judgment in the enforcement of the criminal laws of the State, including, but not limited to, law-enforcement officers' arresting or attempting to arrest persons; or (5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students. Notwithstanding anything to the contrary in the foregoing statement of the rule, a State agent shall not be immune from civil liability in his or her personal capacity (1) when the Constitution or laws of the United States, or the Constitution of this State, or laws, rules, or regulations of this State enacted or promulgated for the purpose of regulating the activities of a governmental agency require otherwise; or (2) when the State agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law. We today only modify Elmore and cases relying upon it so as to preserve the proper balance between §§ 13, 14, 43, and § 6.01 of the Judicial Article. Our decision today strikes a balance between constitutional provisionsbetween the right to a remedy guaranteed by § 13 and the immunity of the State provided for by § 14; this decision is informed by the wisdom of the doctrine of separation of powers, as considered in light of the presence of § 14, and this decision should prevent Justice Thomas's point made by exaggeration in his dissenting opinion in Finnell from becoming prophecy. The Legislature, should it see fit to do so, can create a mechanism for providing State employees with liability insurance or it can propose a constitutional amendment that would authorize statutory procedures to make the *406 State amenable to lawsuits for the torts of its agents while protecting State employees from lawsuits. We now return to the question presented by this case: Whether physicians employed by the University of Alabama to work at the student health center, a facility funded by the State for the purpose of providing readily accessible medical care to students, are entitled to State-agent immunity. The physicians argue that decision-making exercised by a physician in treating a patient should be entitled to immunity because, they say, such decision-making inherently involves the utmost discretion, while the plaintiff Cranman argues that a physician's treatment of a patient is too remote from governmental policy to be entitled to immunity. In response, the physicians argue that governmental policy need not be material to the physician's decision-making because, they say, the business of government is whatever government chooses to do. We determine the immunity issue pursuant to today's restatement of the rule governing State-agent immunity[20] in light of the constitutional provisions that guide our determination. The conduct of the physicians, in their treatment of Matthew Cranman, does not fit within any category of conduct recognized by the restated rule as immune. The physicians are therefore not entitled to State-agent immunity. Thus, we reverse the judgment of the Court of Civil Appeals and remand the case for further proceedings consistent with this opinion. APPLICATION GRANTED; OPINION OF NOVEMBER 24, 1999, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED. HOOPER, C.J., and HOUSTON, J., concur. JOHNSTONE, J., concurs specially. COOK, J., concurs in the judgment and concurs in part in the opinion. BROWN, J., concurs in the judgment. MADDOX and SEE, JJ., dissent. ENGLAND, J., recuses himself. JOHNSTONE, Justice (concurring specially). I concur, but with the reservation that the Restatement (Second) of Torts § 895D "Public Officers" (1974), and not § 14 or § 43 of the Alabama Constitution of 1901, seems to be the current basis for Alabama's doctrine of State-agent immunity, DeStafney v. University of Alabama, 413 So. 2d 391, 393 (Ala.1981), although I recognize that some of our cases, including DeStafney, contain language to the effect that § 14 is, to some extent, the basis. The Restatement of Torts derives principally from the common law and from the public-policy judgments of the legal scholars who have authored the Restatement of Torts in a private capacity and not in the capacity of public officials. This basis of common law and legal scholarship amply supports the re-restatement of the law of Stateagent immunity in this Cranman decision, which is worded to provide a way to distinguish immune conduct from nonimmune conduct with consistent accuracy. COOK, Justice (concurring in the judgment and concurring in part in the opinion). I concur in the judgment. I would concur in the opinion but for two concerns. *407 First, because of the holding in this case, it is unnecessary to "restate the rule governing State-agent immunity" (792 So.2d at 405) in the broad, general terms the main opinion uses in its purported restatement. Specifically, that opinion states: "(5) exercising judgment in the discharge of duties imposed by statute, rule, or regulation in releasing prisoners, counseling or releasing persons of unsound mind, or educating students." 792 So. 2d at 405 (emphasis in main opinion). Because none of these elements is involved in this case, I regard the statements regarding this "rule" as dicta, and I do not concur in them. Second, I disagree with much of the discussion in Part III of the main opinion, regarding the "development of the doctrine of immunity." The discussion implies that Alabama's discretionary-function immunity arises out of Ala. Const.1901, § 14. That is not so. Section 14 "prohibits the State and its agencies from being made defendants in any court of law." Rutledge v. Baldwin County Comm'n, 495 So. 2d 49, 51 (Ala. 1986) (emphasis added). This Court has "interpreted § 14 as affording absolute immunity to some State officials, as well as to the State itself." DeStafney v. University of Alabama, 413 So. 2d 391, 392 (Ala.1981) (on rehearing) (emphasis added). Thus, where § 14 is applicable, it is an absolute defense to tort liability. It has long been recognized, however, that not every person or agency infused with some aspect of governance qualifies for § 14 immunity. "State officers and employees, in their official capacities and individually, ... are absolutely immune from suit [only] when the action is, in effect, one against the State." Phillips v. Thomas, 555 So. 2d 81, 83 (Ala.1989). "In determining whether an action against a state officer is barred by § 14, the Court considers the nature of the suit or the relief demanded, not the character of the office of the person against whom the suit is brought." Ex parte Carter, 395 So. 2d 65, 67-68 (Ala.1980). An action is essentially one against the state "when a result favorable to the plaintiff would directly affect a contract or property right of the State." Id. at 68 (emphasis added). "`[W]hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants.'" DeStafney, 413 So. 2d at 393 (quoting Ford *408 Motor Co. v. Department of Treasury of Indiana, 323 U.S. 459, 464, 65 S. Ct. 347, 89 L. Ed. 389 (1945)). The scope of § 14 is further limited by the fact that it extends only to "the protection of `immediate and strict governmental agencies of the State, as its State Board of Administration, State Docks Commission,... the University of Alabama, the State Insane Hospital, and other mere governmental agencies.'" City of Foley v. Terry, 278 Ala. 30, 34, 175 So. 2d 461, 465 (1965) (emphasis added) (quoting Ex parte Board of School Comm'rs of Mobile County, 230 Ala. 304, 305, 161 So. 108, 109 (1935), which concluded that § 14 does not apply to "county and city boards of education"). Where the action is not one against the State, however, this Court has adopted the discretionary-function analysis of the Restatement (Second) of Torts § 895D (1974). DeStafney, supra; Grant v. Davis, 537 So. 2d 7 (Ala.1988) (citing DeStafney as the progenitor of Alabama cases applying the Restatement approach); Crowe v. City of Athens, 733 So. 2d 447 (Ala.Civ.App.1999) (citing Grant v. Davis as the case adopting the Restatement approach). This Court said in DeStafney: 413 So. 2d at 395. Thus, where an action is against a public official and is not, in reality, one against the State, the immunity analysis involves the principles of the Restatementnot § 14. Defoor v. Evesque, 694 So. 2d 1302, 1305 (Ala.1997) (Restatement principles apply "[w]hen a State employee is sued for negligence in an action that is not, in effect, an action against the State"). See also Alabama State Docks v. Saxon, 631 So. 2d 943, 948 (Ala.1994) ("employees of the State Docks are protected from individual liability only under the doctrine of discretionary function immunity"); Nance v. Matthews, 622 So. 2d 297 (Ala.1993). Admittedly, language in some of our cases suggests that even discretionary-function immunity proceeds from § 14. For example, DeStafney suggested that § 14 "extend[s] a qualified immunity" in such cases. 413 So. 2d at 392 (emphasis added); see also Ex parte Kelley, 739 So. 2d 1095 (Ala.1999); Pack v. Blankenship, 612 So. 2d 399, 403 (Ala.1992) (stating that § 14 also contemplates "qualified immunity," but, nevertheless, using the analysis of the Restatement and the cases applying it). The statement in DeStafney was not followed by any citation of authority, however. Indeed, the contrary proposition was apparent in Ex parte Board of School Commissioners, supra, which directly rejected the contention of the Commissioners that they came "within the protection of section 14." 230 Ala. at 304, 161 So. at 109. In that case, this Court, discussing the immunity afforded to county and city boards of education "from liability for torts of [their] servants or agents," suggested that such immunity flowed from the "broad principle of public policy," rather than from § 14. 230 Ala. at 305, 161 So. at 109. In fact, DeStafney itself went on to explain that the concept of "qualified immunity... accords with the majority rule with respect to public officials and employees, even in those states that have no comparable constitutional immunity." 413 So. 2d at 392 (emphasis added). The Court then proceeded to consider whether *409 the employee of a daycare facility operated by the University of Alabama was entitled to qualified immunity under the principles set forth in the Restatement. 413 So. 2d at 393-96. As a matter of pure logic, the distinction between § 14 and the Restatement is patent and fundamental. If § 14 applies, it matters not whether the challenged conduct of the defendant was discretionary or was ministerial. The official is absolutely immune. In such a case, there is nothing to "weigh" or to "balance." The result is not based on "policy," but on the express prohibition of Alabama's Constitution. On the other hand, where the action is not one against the State, the immunity analysis is based on considerations of public policy and proceeds upon the general principles of the Restatement. In that case, the existence of immunity turns on whether the conduct of the defendant-official involved the exercise of discretion. Such actions involve a discretionary-function analysis not different in any respect from analyses applied in states that do not have a provision comparable to § 14. Thus, the analysis would be the same if the Alabama Constitution did not contain § 14. Because § 14 is superfluous in such cases, it is disingenuous to suggest that discretionary-function immunity is based on § 14. Although some are confused as to the difference between absolute (§ 14) immunity and discretionary-function (Restatement) immunity, this Court must keep the distinction plainly in view. In this case, no one contends that the physicians were acting pursuant to any statutory authority, or that they are "state officials" being sued in their official capacities. There is no means by which the University of Alabama, and by extension, the State of Alabama, could be charged with any judgment in favor of Cranman. Thus, § 14 is simply immaterial to this case. Instead, the case involves ordinary discretionary-function immunity, such as is extended to officials in a myriad of roles invested with a public interest. Thus, I disagree with any implication in the main opinion that discretionary-function immunity arises out of § 14. I agree, however, with the premise of the main opinion that a physician's exercise of discretion in treating a patient at a state university's health clinic is not such conduct that to subject it to liability would violate the doctrine of separation of powers. During oral argument of this case, which was consolidated for oral argument and consideration with three other medical-malpractice actions against State-paid physicians, namely, Wells v. Storey, 792 So. 2d 1034 (Ala.1999); Ex parte Rizk, [Ms. 1970493, Nov. 24, 1999];[*] and Wimpee v. Stella, [Ms. 1971774, Nov. 24, 1999],[*] counsel for the plaintiff patients urged this Court to adopt a rule similar to the one set forth in Kassen v. Hatley, 887 S.W.2d 4, 11 (Tex.1994), which recognizes a distinction "between governmental [discretion] and medical discretion." (Emphasis added.) The rule of Kassen is consistent with, if not identical to, the two-step approach adopted by the United States Supreme Court in Berkovitz v. United States, 486 U.S. 531, 539, 108 S. Ct. 1954, 100 L. Ed. 2d 531 (1988) (officials are immune "only [for] conduct that involves the permissible exercise of policy judgment"), modified, United States v. Gaubert, 499 U.S. 315, 325, 111 S. Ct. 1267, 113 L. Ed. 2d 335 (1991) (immunity attaches only to those decisions that *410 are "susceptible to policy analysis"), and by a growing number of courts that have held that government-paid physicians are not entitled to immunity from actions alleging a breach of the duty to provide due care to their patients. See, e.g., Lather v. Beadle County, 879 F.2d 365 (8th Cir. 1989); Henderson v. Bluemink, 511 F.2d 399 (D.C.Cir.1974); Keenan v. Plouffe, 267 Ga. 791, 482 S.E.2d 253 (1997); Gould v. O'Bannon, 770 S.W.2d 220 (Ky.1989); Green v. Berrien Gen. Hosp. Auxiliary, 437 Mich. 1, 464 N.W.2d 703 (1990); Womble v. Singing River Hosp., 618 So. 2d 1252 (Miss.1993); Frank v. State, 613 P.2d 517 (Utah 1980), modified on other grounds, Hansen v. Salt Lake County, 794 P.2d 838 (Utah 1990); Cooper v. Bowers, 706 S.W.2d 542 (Mo.Ct.App.1986); Comley v. Emanuel Lutheran Charity Bd., 35 Or. App. 465, 582 P.2d 443 (1978); Protic v. Castle Co., 132 Wis.2d 364, 392 N.W.2d 119 (Wis.App.1986); see also Lee v. Bourgeois, 252 Va. 328, 477 S.E.2d 495 (1996); but see Lawhorne v. Harlan, 214 Va. 405, 200 S.E.2d 569 (1973) (intern was entitled to immunity). On the other hand, "[t]he physicians argue that decision-making exercised by a physician in treating a patient should be entitled to immunity because, they say, such decision-making inherently involves the utmost discretion." 792 So. 2d at 406 (emphasis added). The physicians' argument is, in other words, that simply by virtue of their profession they are immune from liability in the practice of that profession. In my view, it is the failure to adopt a Kassen-type rule that would violate the doctrine of separation of powers. Otherwise stated, it is the rule urged by the defendant physicians that would violate that doctrine. As the main opinion points out, some courts have discussed the doctrine of qualified immunity within the context of the separation-of-powers doctrine. See 792 So. 2d at 399-400 (citing cases).[21] The separation-of-powers rationale in the discretionary-function-immunity context is explained as follows: Ransom v. City of Garden City, 113 Idaho 202, 205, 743 P.2d 70, 73 (1987) (quoting Industrial Indem. Co. v. State, 669 P.2d 561, 563 (Alaska 1983)). This rationale rests on two premises. First, there are certain "realms of policy" beyond the judiciary's sphere of "institutional competence," realms into which "courts must not intrude." Id. (emphasis added). Second, the separation-of-powers principle requires deference to the policymakers in the coordinate branches of government as to those matters that involve "issues of basic policy." Id. Neither of these premises supports the proposition *411 that judicial abstention is required or appropriate in a case such as this one. As one justification for judicial deference to certain policy-makers, it is said that "[t]he judicial branch lacks the fact-finding ability of the legislature." Ransom, 113 Idaho at 205, 743 P.2d at 73; Helton v. Knox County, 922 S.W.2d 877, 885 (Tenn. 1996); see also Brooks v. Logan, 127 Idaho 484, 903 P.2d 73 (1995). The truth of this assertion, however, is contextual. In some contextssuch as the one involved in this casethe reverse is true. The distinction was recognized in Womble v. Singing River Hospital, 618 So. 2d 1252 (Miss.1993), where the application of this premise to "medical personnel ... making treatment decisions" was soundly rejected. 618 So. 2d at 1262-63. Specifically, the Supreme Court of Mississippi explained: Id. at 1264 (emphasis added). Similarly, the judiciary of Alabama has "special competence to decide discrete cases and controversies involving particular parties and specific facts." Alabama Power Co. v. Citizens of Alabama, 740 So. 2d 371, 381 (Ala.1999) (emphasis added). Within that sphere, the institutional competence of the judiciary is supreme. The standard of care for medical treatment is the same whether the institution employing the treating physician is a public institution or a private one. In other words, physicians are, in either case, obligatedboth legally and morallyto exercise due care in treating their patients. Determining whether that obligation was met in any given case is a matter peculiarly within the prerogative of the judicial branch. The matter is not, in any sense, legislative or executive. Indeed, the only branch with a legitimate role in issues involving a breach of the standard of care owed by a physician to a patient is the judicial branch, acting in its fact-finding role. The second premise underlying the separation-of-powers rationale is that it requires deference to the policy-makers of the coordinate branches of government in matters involving the "issues of basic policy." Ransom, 113 Idaho at 205, 743 P.2d at 73. Here again, the legislative and executive branches are uninvolved. This is so, because "there is nothing inherently governmental about decisions regarding individual medical treatment. They do not involve the formulation of public policy in any respect. Therefore, the notion of promoting governmental decisions that are in the public good is completely inapplicable." Womble, 618 So. 2d at 1263. Hence, the distinction "between governmental [discretion] and medical discretion." Kassen v. Hatley, 887 S.W.2d at 11 (emphasis added). "[T]he exercise of medical discretion does not require the same protection as the exercise of governmental discretion. Without immunity, some government officials might hesitate to take actions for the public's protection that could subject them to individual liability." Id. "For example, a police officer might decide not to pursue a suspect. However, a doctor cannot avoid personal liability through inaction because physicians are under a duty to exercise ordinary care to treat patients." Id. (Citation *412 omitted.) Thus, "the threat of suit will not discourage physicians from seeking and accepting government employment, because they will face the exact same potential exposure to liability that they would as private physicians." Womble, 618 So. 2d at 1264 (emphasis added). "`The common law of malpractice, as normally applied to private doctors ..., already grants the leeway properly left for expert judgment in the relatively stringent requirements it imposes upon plaintiffs in medical negligence suits. No further leeway is required for the publicly employed doctor ... than for [that doctor's] private counterparts.'" Henderson v. Bluemink, 511 F.2d 399, 402 n. 19 (D.C.Cir.1974) (quoting Spencer v. General Hosp. of District of Columbia, 425 F.2d 479, 489 (D.C.Cir.1969)). Under this distinction, physicians still enjoy immunity for the exercise of "governmental discretion," that is, decisions establishing governmental policy. Otherwise stated, immunity would attach to such decisions as "require governmental judgment." Gleason v. Beesinger, 708 F. Supp. 157, 159 (S.D.Tex.1989). Examples of such decisions would be those related to the questions "whether a patient is eligible for treatment and whether facilities are available to treat a patient," id. at 162 (citing Costley v. United States, 181 F.2d 723, 724-26 (5th Cir.1950)); and whether "to provide health service, which and how many services to provide, and where and how to provide them." Comley v. Emanuel Lutheran Charity Bd., 35 Or.App. 465, 478, 582 P.2d 443, 450 (1978). In short, acts involving only "medical discretion" do not implicate the premises underlying the separation-of-powers rationale. I say once again, the only branch of government with a legitimate role in issues involving a breach of the standard of care owed by a physician to a patient is the judicial branch, acting in its constitutional, fact-finding, remedial role. The rule proposed by the plaintiff in this case and the patients in the cases orally argued with this one does not offend that principle; the rule proposed by the defendant physicians does. This is so, because the separation-ofpowers principle would be offended by a rule that established absolute immunity for State-paid physicians operating within the physician/patient relationship. Such a rule would oust the judiciary of jurisdiction in matters precisely within the sphere of its constitutional prerogative. See Alabama Power Co. v. Citizens of Alabama, supra, 740 So. 2d at 381 (judiciary has "special competence to decide discrete cases and controversies involving particular parties and specific facts"). Ifas the defendant physicians urge us to hold physician immunity includes acts of medical-treatment discretion, then, in every conceivable medical-malpractice action against a State-paid physician, once the physician invoked the defense of discretionary-function immunity, the court would have nothing to do but summarily dismiss the physician from the action. Indeed, during oral argument, counsel were unable to hypothesize any credibly foreseeable scenario under which a State-paid physician would not be immune under the immunity rule urged by the physicians in this case. Simply stated, the rule would leave the judiciary nothing to do in a class of cases committed to it by the constitution. See Ex parte Jenkins, 723 So. 2d 649 (Ala. 1998); Broadway v. State, 257 Ala. 414, 60 So. 2d 701 (1952) (separation-of-powers principle was violated by a statute that deprived the court of the right to act "judicially" in a certain class of cases); Sanders v. Cabaniss, 43 Ala. 173 (1869). This Court may not, under the guise of a separation-of-powers *413 argument, abdicate its constitutional duty to adjudicate disputes between physicians and their patients alleging medical malpractice. It goes without saying that neither the judicial branch nor either of the other two branches of government may voluntarily abdicate its respective constitutional role. Millcreek Township School Dist. v. County of Erie, 714 A.2d 1095, 1103-04 (Pa. Commw.Ct.1998); Texas Boll Weevil Eradication Foundation, Inc. v. Lewellen, 952 S.W.2d 454, 465 (Tex.1997); Turpen v. Oklahoma Corp. Comm'n, 769 P.2d 1309, 1368 (Okla.1988) (Wilson, J., dissenting). Therefore, this Court cannot, consistent with the separation-of-powers doctrine, declare that it will no longer hear a certain class of cases. Today, the Court quite properly declines the physicians' invitation to do that. Thus, I concur in the judgment and, except as to the two matters discussed above, I agree with the main opinion. BROWN, Justice (concurring in the judgment). While the main opinion's attempt to restate generally the law in this area is a worthwhile endeavor, I can concur only in the judgment. I prefer to make at this time no determinations that would reach beyond the issues in the case before us. MADDOX, Justice (dissenting). In my opinion, the facts of this case do not require a conclusion different from that reached in Hutchinson v. Board of Trustees of University of Alabama, 288 Ala. 20, 256 So. 2d 281 (1971). In that case, I discussed the doctrine of sovereign, or governmental, immunity and its applicability to state agencies and their employees, and wrote: "The wall of `governmental immunity' is almost invincible, made so by the people through their Constitution as interpreted by this Court." Hutchinson, 288 Ala. at 24, 256 So. 2d at 283. In my opinion, that statement accurately describes the law of sovereign immunity, which is derived from § 14 of the Alabama Constitution of 1901. Sovereign immunity has a an undeniable constitutional dimension. For that reason, I wrote the following in Hutchinson: 288 Ala. at 24, 256 So. 2d at 285. I believe now, as I did when this Court decided Hutchinson, that only a constitutional amendment can disassemble the wall erected by § 14. My views have not changed since I wrote the opinion in Hutchinson; therefore, I must respectfully dissent. SEE, Justice (dissenting). I dissent from the grant of the application for rehearing, from the substituted opinion, and from the judgment. I believe that the defendant State-employed physicians were entitled to discretionary-function (or "State-agent") immunity. Discretionary-function immunity requires a balancing of the competing policies *414 of the right to a remedy, Art. I, § 13,[22] Ala. Const. of 1901, and sovereign immunity, Art. I, § 14,[23] Ala. Const. of 1901, in light of the separation-of-powers principle of Art. III, § 43,[24] Ala. Const. of 1901.[25] Historically, this balancing was commonly accomplished by determining whether the State-agent's actions were "discretionary" or were "ministerial." See, e.g., Taylor v. Shoemaker, 605 So. 2d 828 (Ala.1992); Phillips v. Thomas, 555 So. 2d 81 (Ala. 1989); Bell v. Chisom, 421 So. 2d 1239 (Ala. 1982); DeStafney v. University of Alabama, 413 So. 2d 391 (Ala.1981). The discretionary/ministerial determination is an always significant, and usually dispositive, factor in the balancing test, because the separation-of-powers concerns of § 43 are unlikely to be meaningfully implicated where "ministerial" actions are at issue. That is, when an executive or administrative officer is under a constitutional, statutory, or regulatory duty to perform a specific and definite (that is, "ministerial") act, the judicial branch is not interfering with the executive or legislative power by directing the officer to do what the constitutional provision, statute, or rule plainly directs. In contrast, where the officer is expected to exercise judgment, this Court encroaches on executive or legislative powers when it imposes liability on that officer for his decision, thereby impermissibly affecting the decision-making of a coordinate branch of government. It is for this reason that the discretionary/ministerial determination will dictate whether discretionary-function immunity is available to the State agent or not; that is, unless for some independent reason the interests of one of the two constitutional provisions§ 13 (right to a remedy) or § 14 (sovereign immunity)significantly outweighs the interests of the other. The original per curiam opinion of November 24, 1999, which is today withdrawn, restated the rule concerning discretionary-function immunity as follows: I concurred with this statement of the law. In the opinion substituted today on application for rehearing, the rule concerning discretionary-function immunity has been changed to read as follows: I disagree with the significant and substantial change in the statement of the law given in the substituted opinion. First, the substituted opinion does not "restate" *416 the law of discretionary-function immunity. Instead, it overrules, in part, the law of discretionary-function immunity as it applies to State-employed physicians. The new statement of the law of immunity omits activities by State-employed physicians. This Court has consistently recognized that State-employed physicians and other State-employed health-care providers, in making health-care decisions, typically are engaging in "discretionary" functions, and are therefore ordinarily entitled to immunity from legal liability in regard to those decisions. See Smith v. Arnold, 564 So. 2d 873 (Ala.1990); Smith v. King, 615 So. 2d 69 (Ala.1993). Indeed, as this Court stated in King, "In Smith v. Arnold,... we recognized that the mental health profession, by its very nature, necessarily involves discretion and difficult decisionmaking." 615 So. 2d at 73. Second, the reasoning of the substituted opinion is circular. The substituted opinion omits the activities of State-employed physicians from those activities entitled to sovereign immunity; thus, the main opinion concludes, the defendant physicians are not entitled to State-agent immunity because they "[do] not fit within any category of conduct recognized by the restated rule as immune." 792 So. 2d at 406. In the exercise of the judicial power to "say what the law is," Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L. Ed. 60 (1803), "to the end that [the government of this state] may be a government of laws and not of men," § 43, Ala. Const. of 1901, this Court's statement of the rule of Stateagent immunity must either, based on precedent, include activities by State-employed physicians or demonstrate why that result is inconsistent with the Constitution of Alabama of 1901. I would apply the rule as stated in the original per curiam opinion of November 24, 1999, because the balancing of the policies of §§ 13, 14, and 43 of the Constitution of Alabama of 1901 weighs in favor of applying discretionary-function immunity to the physicians in this case. The people of Alabama have chosen to provide opportunities for higher education for the benefit of Alabama citizens. See Ala. Const. of 1901, art. XIV, § 256, amended by amend. no. 111, and § 264, amended by amend. no. 399. To further this effort, the Legislature has authorized the University to provide health-care services for students.[26] See Ala.Code 1975, §§ 16-47-1 and 16-47-2. When State-employed physicians provide health-care services, they perform a public responsibility. The denial of discretionary-function immunity for the performance of these public responsibilities would increase the cost of providing higher educationin the form of the payment of damages awards by the University on behalf of the physicians, or in the form of insurance-premium payments made by the University on behalf of the physicians, or in the form of higher salaries to enable the physicians to purchase their own insurance or to compensate the physicians for their risk of liabilityor it would discourage the University from providing student health services, thereby discouraging students from attending the University. See Taylor v. Shoemaker, 605 So. 2d 828, 832 (recognizing that the cost of insurance coverage is an appropriate factor to be considered in determining the applicability of official-function immunity) ("Whether such insurance coverage costs are borne by the officials or by the state, this could have serious ramifications in regard to state *417 budgets and the ability of the state to attract and keep employees."). Thus, because the State-employed physicians were exercising a discretionary function and because it does not appear in this case that the burden on the plaintiff significantly outweighs the benefits of applying State-agent immunity to the defendant State-employed physicians, the balance of the § 13 and § 14 policies, in light of § 43, favors the application of discretionary-function immunity to these State-employed physicians in the performance of their University-related health-care responsibilities. Accordingly, I dissent from the conclusion of the substituted opinion that the trial court erred in entering the summary judgments in favor of the defendant Stateemployed physicians, and I dissent from the judgment reversing those summary judgments. Bell v. Chisom, 421 So. 2d 1239, 1240 (Ala.1982) (State Docks worker could not sue a coemployee); Tutwiler Drug Co. v. City of Birmingham, 418 So. 2d 102 (Ala. 1982) (landowner could not sue city official over legislative matter); Deal v. Tannehill Furnace & Foundry Comm'n, 443 So. 2d 1213 (Ala.1983) (swimmer injured while diving could not sue members of parks commission); Barnes v. Dale, 530 So. 2d 770, 782-84 (Ala.1988) (victim of psychiatric patient could not sue official who allowed patient's release); Grant v. Davis, 537 So. 2d 7 (Ala.1988) (person injured because of defect in road could not sue individual responsible for prioritization of road repairs); Phillips v. Thomas, 555 So. 2d 81 (Ala.1989) (victim of swimming accident could sue individual who erroneously completed a checklist describing pool as fenced); Smith v. Arnold, 564 So. 2d 873 (Ala.1990) (estate of psychiatric patient who committed suicide could not sue consultant); White v. Birchfield, 582 So. 2d 1085 (Ala.1991) (victim of motor-vehicle collision could not sue deputy sheriff on basis of injuries caused by deputy's speeding to a crime scene); Point Properties, Inc. v. Anderson, 584 So. 2d 1332 (Ala.1991) (landowner denied right to excavate could not sue official in individual capacity over attempt to rescind vacation of a road); Taylor v. Shoemaker, 605 So. 2d 828 (Ala. 1992) (automobile-accident victim could not sue individual responsible for decision on whether to apply resources to removal of embedded rails in road); Pack v. Blankenship, 612 So. 2d 399 (Ala.1992) (applicant could not sue individual over denial of a sewer permit); Smith v. King, 615 So. 2d 69 (Ala.1993) (estate of mental-health inmate who committed suicide could not sue individual who had made subjective assessments about inmate's condition); Nance v. Matthews, 622 So. 2d 297 (Ala.1993) (victim of school aide's failure to catheterize recuperating student as she had been instructed to do could not sue the aide's supervisor); Lennon v. Petersen, 624 So. 2d 171 (Ala.1993) (victim could not sue coach for failure to recognize an injury soon enough); Hayes v. Walters, 628 So. 2d 558 (Ala.1993) (victim of injury in gym class could not sue individual with indirect supervisory duties); Patton v. Black, 646 So. 2d 8 (Ala.1994) (claim by student victim of tumbling accident presented jury question as to immunity of teacher); Roden v. Wright, 646 So. 2d 605 (Ala.1994) (landowner claiming to be victim of tortious interference could not sue county commissioner over publication of official's opposition to proposed land usage); Lightfoot v. Floyd, 667 So. 2d 56 (Ala.1995) (student claiming property improperly seized by Department of Public Safety investigator could sue investigator); *418 Wright v. Wynn, 682 So. 2d 1 (Ala.1996) (bystander who attempted to apprehend driver pursued by police officer and was then himself forced to ground and handcuffed by officer could not maintain claim for false imprisonment, but could maintain claim for assault and battery); Defoor v. Evesque, 694 So. 2d 1302 (Ala. 1997) (employment applicant taking hydraulics test who slipped on floor at test site could sue employee who had inspected and cleaned the floor); Couch v. City of Sheffield, 708 So. 2d 144 (Ala.1998) (arrestee could not sue police officer who arrested him for offense of which he later was acquitted, when officer believed he had probable cause for arrest); Town of Loxley v. Coleman, 720 So. 2d 907 (Ala.1998) (inmate who fell from back of pickup truck could sue driver who was trying to avoid potholes in the road as she transported inmates from work site to prison); Ex parte Davis, 721 So. 2d 685 (Ala.1998) (mother of inmate who died while in custody of Department of Corrections could not sue warden and assistant warden of prison who did not override treatment decisions of inmate's doctors); Martin v. Harrelson, 532 So. 2d 1256 (Ala.Civ.App.1988) (prisoner could sue individual who released his property to third party); McCluskey v. McCraw, 672 So. 2d 805 (Ala.Civ.App.1995) (estate of victim of unsafe bridge could not sue engineer and police officer for failure to report condition to county commission); Marnon v. City of Dothan, 677 So. 2d 755 (Ala.Civ.App.1995) (terminated employee could not sue officers responsible for termination); Caldwell v. Brogden, 678 So. 2d 1148 (Ala.Civ.App.1996) (woman who claimed to have been mistakenly arrested could not maintain 42 U.S.C. § 1983 claim against deputy sheriffs who arrested her and dealt with her while she was in custody); McDuffie v. Roscoe, 679 So. 2d 641 (Ala.1996) (estate of person killed as a result of defectively maintained road shoulder could not sue employees of Department of Transportation); Tuscaloosa County v. Henderson, 699 So. 2d 1274 (Ala. Civ.App.1997) (arrestee could sue county license inspector who issued arrest warrants for persons whom he could not contact whose names were on list of those who had failed to renew business licenses); Kassaw v. Minor, 717 So. 2d 382 (Ala.Civ. App.1998) (student who slipped on hallway floor could sue student employee of college maintenance department who had mopped the floor). [1] The Court of Civil Appeals' opinion states that the record does not indicate whether Matthew Cranman's death was caused by cancer, see 792 So. 2d at 389, but the petitioner's brief states that Matthew "died from cancer." [*] Note from the reporter of decisions: On June 30, 2000, the Supreme Court granted the application for rehearing, withdrew the November 24, 1999, opinion, and substituted a new opinion. The November 24, 1999, opinion carried the judgment line "WRIT GRANTED." The opinion substituted on June 30, 2000, was very different; it carried the judgment line "[REHEARING] APPLICATION GRANTED; OPINION OF NOVEMBER 24, 1999, WITHDRAWN; OPINION SUBSTITUTED; WRIT DENIED." The substituted Rizk opinion of June 30, 2000, is published at 791 So. 2d 911. [**] Note from the reporter of decisions: On September 1, 2000, the Alabama Supreme Court withdrew its no-opinion affirmance in Wimpee and issued an opinion. The opinion substituted on September 1, 2000, carried the judgment line "[REHEARING] APPLICATION GRANTED; MEMORANDUM OF NOVEMBER 24, 1999, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED." The substituted Wimpee opinion of September 1, 2000, is published at 791 So. 2d 915. [2] We do not deal here with the absolute immunity of witnesses, judges, prosecutors, and legislators, nor do we overrule Ex parte Purvis, 689 So. 2d 794 (Ala.1996). In Mitchell v. Forsyth, 472 U.S. 511, 105 S. Ct. 2806, 86 L. Ed. 2d 411 (1985), the Supreme Court recognized the absolute immunity of the President of the United States and state and federal legislators and noted the common-law origins of that immunity. Noting that a cabinet official did not enjoy absolute immunity, because of the absence of built-in restraints that are applicable to judges and legislators, the Court wrote: "[M]ost of the officials who are entitled to absolute immunity from liability for damages are subject to other checks that help to prevent abuses of authority from going unredressed. Legislators are accountable to their constituents, and the judicial process is largely self-correcting: procedural rules, appeals, and the possibility of collateral challenges obviate the need for damages to prevent unjust results." 472 U.S. at 522, 105 S. Ct. 2806 (citation omitted). [3] We do not include in this opinion any discussion of actions against State officials for injunctive relief to compel performance of duties imposed by law or the Constitution. See Aland v. Graham, 287 Ala. 226, 250 So. 2d 677 (1971), recognizing exceptions to Art. I, § 14, in such instances; see, also, Williams v. Hank's Ambulance Serv., Inc., 699 So. 2d 1230 (Ala.1997). [4] Art. I, § 15, Ala. Const. of 1865, repeated in Art. I, § 16, Ala. Const. of 1868. [5] Ala. Acts 1874-75, No. 200, p. 271. See, also, Ex parte State, 52 Ala. 231 (1875). [6] Copeland & Screws at 308. [7] Id.; see also Ex parte Board of School Comm'rs, 230 Ala. 304, 305, 161 So. 108, 109 (1935), noting that city and county boards of education enjoy immunity based "upon the broad principle of public policy," a policy declared by authorities not referring to § 14, but resting upon "the assumption that nothing in the Constitution stood in the way." [8] Art. I, § 14, Ala. Const. of 1901. [9] The only statutory basis presently existing for making compensation available to citizens of the State who have suffered injuries caused by the State or its agencies is found in §§ 41-9-60 to -74, Ala.Code 1975, wherein the Legislature established the Board of Adjustment, which functions outside the judicial system. The Legislature, in those Code sections, recognized a moral obligation where there is no legal obligation. Hawkins v. State Board of Adjustment, 242 Ala. 547, 7 So. 2d 775 (1942). It extends a measure of compensation or relief when the rule of sovereign immunity exempts the State and its respective agencies from suit. State ex rel. McQueen v. Brandon, 244 Ala. 62, 12 So. 2d 319 (1943). [10] Copeland & Screws at 307. [11] Restatement (Second) of Torts § 895D, "Public Officers," cmt. a (1974). [12] "That this enumeration of certain rights shall not impair or deny others retained by the people; and, to guard against any encroachments on the rights herein retained, we declare that everything in this Declaration of Rights is excepted out of the general powers of government, and shall forever remain inviolate." Art. I, § 36, Ala. Const. of 1901 (emphasis added). [13] State-agent immunity is unavailable where the governmental agent acts willfully, maliciously, fraudulently, in bad faith, beyond his or her authority, or under a mistaken interpretation of the law. See Wright v. Wynn, 682 So. 2d 1 (Ala.1996); Barnes v. Dale, 530 So. 2d 770 (Ala.1988); Rigby v. Auburn Univ., 448 So. 2d 345 (Ala.1984); DeStafney, 413 So. 2d at 395; Unzicker v. State, 346 So. 2d 931 (Ala. 1977). [14] DeStafney refers to § 14 as a source of qualified immunity. 413 So. 2d at 392. See also Ex parte Kelley, 739 So. 2d 1095 (Ala. 1999); Pack v. Blankenship, 612 So. 2d 399, 403 (Ala.1992). [15] Restatement (Second) of Torts § 895D, "Public Officers," cmt. b (1974). [16] Id., cmt. g. [17] For an illustration of the concept of protecting "only governmental actions and decisions based on considerations of public policy," as that concept applies to the standards for liability under the Federal Tort Claims Act, see Berkovitz v. United States, 486 U.S. 531, 536-37, 108 S. Ct. 1954, 100 L. Ed. 2d 531 (1988). Because all federal employees covered by the Federal Tort Claims Act are immune, the question whether the employee's action or decision is the kind of judgment "that the discretionary function exception was designed to shield" is asked for the purpose of determining the extent of the liability of the United States. [18] Ex parte Davis, 721 So. 2d 685 (Ala.1998). [19] Town of Loxley v. Coleman, 720 So. 2d 907 (Ala.1998). [20] See Part IV, supra, 792 So. 2d at 405. [*] Note from reporter of decisions: The Rizk and Wimpee opinions of November 24, 1999, were later withdrawn and new opinions were substituted. See reporter's notes to earlier citations to these cases in the main opinion, 792 So. 2d at 396. [21] Notably, none of those cases involved the issue on which this case turns, namely, whether State-paid physicians are entitled to qualified immunity from liability for their alleged failure to exercise due care in treating a patient. [22] Section 13 provides: "That all courts shall be open; and that every person, for any injury done him, in his lands, goods, person, or reputation, shall have a remedy by due process of law; and right and justice shall be administered without sale, denial, or delay." [23] Section 14 provides: "That the State of Alabama shall never be made a defendant in any court of law or equity." [24] Section 43 provides: "In the government of this state, except in the instances in this Constitution hereinafter expressly directed or permitted, the legislative department shall never exercise the executive and judicial powers, or either of them; the executive shall never exercise the legislative and judicial powers, or either of them; the judicial shall never exercise the legislative and executive powers, or either of them; to the end that it may be a government of laws and not of men." [25] This Court has recognized that the separation-of-powers principle is an appropriate consideration in determining the applicability of discretionary-function immunity. See, e.g., Phillips v. Thomas, 555 So. 2d 81, 84 (Ala. 1989) (recognizing that the factors set forth in comment f to Restatement (Second) of Torts, § 895D (1974), including "[t]he extent to which passing judgment on the exercise of discretion by the officer will amount necessarily to passing judgment on the conduct of a coordinate branch of government," should be considered in determining the applicability of discretionary-function immunity); Barnes v. Dale, 530 So. 2d 770, 784 (Ala.1988) (same); DeStafney v. University of Alabama, 413 So. 2d 391, 394-96 (Ala.1981) (adopting Restatement (Second) of Torts, § 895D (1974)). [26] Where the Legislature has expressed a view as to the proper balance between the policies of §§ 13 and 14, that determination is due deference; however, the Legislature has not expressed any view as to whether it favors the exercise of immunity in cases like the present one.

November 22, 2000

a1f6a414-ae44-4ea3-b87d-3b9cfcacee85

Ex Parte Ridgeview Health Care Center, Inc.

786 So. 2d 1112

1990722

Alabama

Alabama Supreme Court

786 So. 2d 1112 (2000) Ex parte RIDGEVIEW HEALTH CARE CENTER, INC. (Re Billy Hayes, as administrator of the estate of Lima Hayes, deceased v. Ridgeview Health Care Center, Inc.) 1990722. Supreme Court of Alabama. December 1, 2000. *1113 Daniel S. Wolter and David E. Miller, Jr., of Gaines, Wolter & Kinney, P.C., Birmingham, for petitioner. J.P. Sawyer of Ivey & Ragsdale, Jasper, for respondent. SEE, Justice. Ridgeview Health Care Center, Inc., seeks a writ of mandamus directing Walker Circuit Judge Hugh Beaird to vacate his order compelling Ridgeview to respond to certain discovery requests seeking information that Ridgeview argues is not discoverable under provisions of the Alabama Medical Liability Act of 1987 and the Alabama Medical Liability Act of 1996. We grant the petition. Ridgeview is a "health care provider" within the meaning of the Alabama Medical Liability Act of 1987. See Ala.Code 1975, § 6-5-542(1). Lima Hayes had Alzheimer's disease and was a patient at Ridgeview. In November 1998, Lima Hayes, by and through her son, Billy Hayes, as her guardian and conservator, sued Ridgeview, alleging that it had breached the applicable standard of care by allowing her to: (1) wander away from Ridgeview's facility; (2) fall from her wheelchair at least twice; (3) become dehydrated; and (4) develop large sores on her body. She sought damages under theories of medical malpractice, breach of fiduciary duty, and the tort of outrage. Ms. Hayes subsequently died, and in March 1999 Billy Hayes filed an amended complaint, substituting himself as plaintiff in his capacity as administrator of his mother's estate and adding claims of "negligent, reckless and wanton ... screening, hiring, training, supervision and retention of [Ridgeview's] employees and staff," wrongful death, and breach of contract. Hayes requested production of certain documents and answers to interrogatories. Ridgeview objected to certain of these discovery requests, based on Ala. Code 1975, § 6-5-551[1] (prohibiting "[a]ny *1114 party ... from conducting discovery with regard to any other act or omission"), and Ala.Code 1975, § 22-21-8(b) (providing that "[a]ll accreditation, quality assurance credentialling and similar materials shall be held in confidence and shall not be subject to discovery"). Hayes moved to compel Ridgeview to respond. After conducting a hearing, the trial court ordered Ridgeview to respond to 14 of the requests for production and interrogatories, but limited the required responses to the three years "immediately preceding the date of [Ms. Hayes's] alleged injury."[2] *1115 Ridgeview challenges the trial court's order with respect to all the responses it ordered to requests for production of documents, and with respect to the response ordered to interrogatory number 6. "A petition for the writ of mandamus is the proper means for obtaining review of the question `whether a trial court has abused its discretion in ordering discovery, in resolving discovery matters, and in issuing discovery orders.'" Ex parte Water Works & Sewer Bd. of the City of Birmingham, 723 So. 2d 41, 42 (Ala.1998) (quoting Ex parte Compass Bank, 686 So. 2d 1135, 1137 (Ala.1996)). A writ of mandamus is an extraordinary remedy, and one petitioning for it must show: (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty on the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court. See Ex parte Conference America, Inc., 713 So. 2d 953, 955 (Ala. 1998) (citing Ex parte Edgar, 543 So. 2d 682, 684 (Ala.1989)). Ridgeview first argues that the trial court erred by ordering it to respond to Hayes's requests for production no. 5 and no. 6, which seek information relating to the existence of, and the limits of, Ridgeview's liability-insurance coverage. Ridgeview argues that such information is prohibited from discovery under Ala.Code 1975, § 6-5-548(d). Hayes says that he is entitled to discovery of Ridgeview's insurance-coverage limits because, he argues, the rule prohibiting such discovery does not apply to his claims alleging that Ridgeview negligently, recklessly, and wantonly screened, hired, trained, supervised, and retained its employees. He cites Ex parte McCollough, 747 So. 2d 887 (Ala.1999), arguing that a claim alleging negligent hiring, training, and supervision is "separate and distinct" from a claim alleging a "breach of the standard of care." See § 6-5-548. In McCollough, a majority of this Court held that, under § 6-5-551 as it then read, the plaintiff was entitled to discover information related to other acts and omissions by the defendant nursing home that were relevant to the plaintiffs allegations that the nursing home had negligently hired, trained, and supervised its employees. The nursing home had argued that the requested discovery was prohibited by § 6-5-551, which at the time applicable in McCollough had prohibited a "[p]laintiff... from conducting discovery with regard to any other act or omission or from introducing at trial evidence of any other act or omission." This Court concluded that the requested information was "discoverable within the terms of § 6-5-551." 747 So. 2d at 892. Thus, contrary to Hayes's interpretation, McCollough recognized that a *1116 claim against a health-care provider alleging negligent hiring, training, and supervision is an "action ... for breach of the standard of care" governed by § 6-5-551. Moreover, the amendment to § 6-5-551 makes it clear that a claim against a health-care provider alleging that it breached the standard of care in hiring, training, supervising, retaining, or terminating its employees is governed by the Alabama Medical Liability Act. Section 6-5-551, as amended, provides: (Emphasis added.) Thus, not only are Hayes's claims based on the screening, hiring, training, supervision, and retention of Ridgeview's employees governed by the Alabama Medical Liability Act, but so are all matters of discovery related to those claims. Therefore, Hayes's claims against Ridgeview, including his claims of wanton, reckless, or negligent screening, hiring, training, supervision, and retention of its employees, are governed by the Alabama Medical Liability Act. Although Rule 26(b)(2), Ala.R.Civ. P., permits a party to discover the liability limits of another party's insurance policy, see Ex parte Badham, 730 So. 2d 135, 138 (Ala.1999), the Alabama Medical Liability Act of 1996 expressly prohibits discovery of "[t]he limits of liability insurance coverage available to a health care provider ... in any action for injury or damages or wrongful death, whether in contract or tort, against a health care provider for an alleged breach of the standard of care." Ala.Code 1975, § 6-5-548(d); see id. § 6-5-549.1 (stating that §§ 6-5-548 and 6-5-549 shall be known as the Alabama Medical Liability Act of 1996). Thus, in the case of medical-liability actions, the Legislature has carved out an exception to the provision of Rule 26(b)(2) allowing for the discovery of policy limits of relevant insurance policies. See Ala. Const. of 1901, Amend. No. 328, § 6.11 (providing that the rules of procedure promulgated by this Court "may be changed by a general act of statewide application"). Accordingly, Ridgeview has demonstrated a clear legal right to the order sought. Therefore, we direct the trial court to vacate its order compelling Ridgeview to respond to requests for production no. 5 and no. 6. Ridgeview also asserts that the trial court erred in ordering it to respond to interrogatory number 6 and requests for production no. 2, no. 3, no. 9, no. 11, no. 13, and no. 14. Ridgeview argues that the information and documents sought by these discovery requests concern "other act[s] or omission[s]," which are barred from discovery by § 6-5-551. Ridgeview, however, acknowledges that the information and documents sought are discoverable under this Court's decision in Ex parte McCollough. Ridgeview simply asks this Court to overrule Ex parte McCollough because, it argues, that decision conflicts with the prohibition in § 6-5-551 against "other acts" evidence. We agree that these discovery requests are prohibited by § 6-5-551, as amended. This Court's holding in Ex parte McCollough that a plaintiff's allegation of a health-care provider's "systemic failure" permits the plaintiff to discover other acts or omissions has been superseded by the Legislature's amendment to § 6-5-551. Section 6-5-551, as amended, makes it *1117 clear that in an action against a health-care provider, based on acts or omissions in the "hiring, training, supervision, retention, or termination of [the health-care provider's employees]," the plaintiff is entitled only to discovery concerning those acts or omissions "detailed specifica[lly] and factual[ly] descri[bed]" in the complaint and "alleged by [the] plaintiff to render the health care provider liable to [the] plaintiff." Thus, if the plaintiff alleges that the defendant health-care provider breached the standard of care by negligently training, supervising, retaining, or terminating an employee or by negligently entrusting an employee with an instrumentality, then the plaintiff may discover information only concerning those acts or omissions by those employees whose conduct is detailed specifically and factually described in the complaint as rendering the health-care provider liable. Consequently, Hayes is not entitled to discovery regarding acts or omissions by Ridgeview in the hiring, training, supervising, retaining, or terminating of employees other than those employees whose acts he detailed specifically and factually described in his complaint as rendering Ridgeview liable. Hayes's interrogatory no. 6 and requests for production no. 2, no. 3, no. 9, no. 11, no. 13, and no. 14 seek evidence of other acts or omissions of Ridgeview and its employees beyond those alleged in Hayes's complaint. Therefore, as to interrogatory no. 6 and requests for production no. 2, no. 3, no. 9, no. 11, no. 13, and no. 14, Ridgeview has shown a clear legal right to have the trial court's discovery order vacated.[3] Accordingly, we grant Ridgeview's petition and direct the trial court to vacate its order requiring Ridgeview to disclose the limits of its insurance coverage and to respond to the discovery requests at issue, except to the extent its order required Ridgeview to respond to the interrogatories and requests for production seeking discovery of information concerning those acts or omissions specifically alleged in Hayes's complaint against Ridgeview. PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] Section 6-5-551 was amended, effective May 9, 2000. See Ala. Acts 2000, Act No. 2000-387. Although Hayes's cause of action accrued, and this action was commenced, before the effective date of the amendment to § 6-5-551, that amendment applies to all pending actions because it is remedial in nature and contains no clear language indicating that the Legislature did not intend it to have a retroactive effect. Act No. 2000-387 is a remedial statute because it concerns matters of procedure, rather than vested, substantive rights. See McGlothren v. Eastern Shore Family Practice, P.C., 742 So. 2d 173, 177 (Ala.1999); Jones v. Casey, 445 So. 2d 873, 875 (Ala.1983). [2] Specifically, the trial court ordered Ridgeview to respond to the following requests for production of documents and the following interrogatories: "2. Please furnish each and every document submitted to or received from any government agency, including State or Federal agencies, regarding complaints, inquiries, problems, incidents or otherwise involving or alleging medical malpractice, medical negligence, or substandard care, in the State of Alabama.... "3. Please furnish each and every document, letter, memorandum, correspondence, computer record, etc.[,] which evidences, refers or pertains in any way to complaints, inquiries, problems, incidents or otherwise involving or alleging medical malpractice, medical negligence, or substandard care, by any patient, customer or other individual wherein that document pertains to the acts, omissions, shortcomings, pitfalls, or any other question pertaining not only to the direct care givers but the supervisors and management about medical malpractice, medical negligence, or substandard care.... ". . . . "5. Please furnish a copy of any insurance policy or policies or indemnity agreements that provide coverage or indemnity for the claims made in this lawsuit. "6. Please furnish declaration pages or any information regarding the amount of coverage available for this particular claim or lawsuit. ". . . . "9. Please furnish copies of any memoranda, reports, letters, or other documents associated with the discipline, suspension, warning, or reprimand of any individual who has cared for Plaintiff while Plaintiff was in the care of this Defendant. ". . . . "11. Please furnish a copy of each and every document, letter, memorandum, correspondence, and any other written or typed communication note, etc.[,] pertaining to the Plaintiff. ". . . . "13. Please furnish a copy of each and every letter, memorandum, correspondence, note, etc.[,] received by this Defendant, or forwarded in any way by this Defendant, which in any way pertains to the Plaintiff. "14. Please furnish any and all training, instruction, indoctrination, and/or orientation manuals, guidelines, policies, procedures, rules, documents, or materials given to any individual who has cared for Plaintiff while Plaintiff was in the care of this Defendant up to the filing of the Plaintiff's complaint relating to the proper standard of care to be given to patients while under the care of this Defendant. "1. Please state the name, address, and telephone number of all persons known to this Defendant, or to persons acting on behalf of or under the direction of this Defendant, to have knowledge of any of the facts or matters at issue in this lawsuit, and state their relationship, if any, to this Defendant. ". . . . "6. Provide the name and last known address of each and every employee of this Defendant who was reprimanded or terminated for providing substandard care to patients for the last five years preceding the filing of the Plaintiff's complaint. ". . . . "8. Please provide a detailed description of each and every circumstance known to this Defendant of Plaintiff falling from Plaintiff's wheelchair, including but not limited to: time, date, witnesses, care provided, reasons for falling if known, reports made, and persons notified. "9. Please provide a detailed description of each and every circumstance known to this Defendant of Plaintiff becoming dehydrated to such a point as needing to be hospitalized for dehydration, including but not limited to: time, date, witnesses, care provided, reason for Plaintiff dehydrating if known, reports made, and persons notified. "10. Please provide a detailed description of each and every circumstance known to this Defendant of Plaintiff wandering off of the premises of this Defendant's facilities, including but not limited to: time, date, witnesses, care provided, reason for Plaintiff being allowed to leave premises if known, reports made, and persons notified. "11. State the full name, address, and telephone number of each person who has provided this Defendant with statements regarding this lawsuit." [3] Ridgeview also argues that interrogatories no. 4, no. 5, and no. 7 and requests for production of documents no. 8 and no. 10 seek information and documents protected from discovery under § 6-5-551. However, the trial court did not order Ridgeview to respond to those discovery requests. Ridgeview makes the conclusory argument that certain requests for production seek documents that, under Ala.Code 1975, § 22-21-8, are not subject to discovery. Section 22-21-8(b) provides in relevant part that "[a]ll accreditation, quality assurance credentialling and similar materials shall be held in confidence and shall not be subject to discovery." However, Ridgeview does not show that the documents encompassed by Hayes's discovery requests constitute materials protected by § 22-21-8. See Ala.R.App.P. 28(a)(5).

December 1, 2000

0aff2926-8ad9-4031-b18c-3fd74abc9170

Baugher v. Beaver Constr. Co.

791 So. 2d 932

1981020

Alabama

Alabama Supreme Court

791 So. 2d 932 (2000) Dann BAUGHER and Myra Dasinger v. BEAVER CONSTRUCTION COMPANY. 1981020. Supreme Court of Alabama. November 22, 2000. Rehearing Denied February 23, 2001. Stan Brobston of Brobston & Brobston, P.C., Bessemer, for appellants *933 John D. Gleissner of Rogers & Associates, Birmingham, for appellee. JOHNSTONE, Justice. Beaver Construction Company substantially completed construction of Wildwood Apartments in 1979. Nearly 15 years later, on March 17, 1994, a fire destroyed Wildwood Apartments. At that time, Dann Baugher and Myra Dasinger, tenants of Wildwood Apartments, suffered a loss of property as a result of the fire. On February 14, 1996, Baugher and Dasinger brought a suit to recover damages against Beaver Construction in the Bessemer Division of the Jefferson County Circuit Court. On March 9, 1998, the case was transferred to the Birmingham Division of the Jefferson County Circuit Court. On November 10, 1998, Beaver Construction moved for summary judgment, which the trial court granted on February 12, 1999. Appealing the summary judgment, Baugher and Dasinger argue that the trial court erroneously grounded the summary judgment on the expiration of the period of limitations imposed by the construction statute of repose, §§ 6-5-220 to -228, Ala. Code 1975. Baugher and Dasinger argue that the statute's limitation for the commencement of a civil action against architects, engineers, and builders, which bars all causes of action that accrue more than 13 years after substantial completion of the improvements entailing their services, is unconstitutional. We, however, hold § 6-5-220 et seq., Ala.Code 1975, to be constitutional. Moreover, we agree with the trial court in its holding that § 6-5-221(a) barred Baugher and Dasinger from suing Beaver Construction, which completed construction on Wildwood Apartments nearly 15 years before the cause of action accrued in this case. Accordingly, we affirm the summary judgment in favor of Beaver Construction. Section 6-5-221(a), Ala.Code 1975, reads as follows: (Emphasis added.) Article I of the Alabama Constitution of 1901 is entitled "Declaration of Rights." Article I, Section 13, states: Article I, Section 36, of the Alabama Constitution of 1901 further provides: In reviewing a party's challenge to the constitutionality of a statute on a claim that the statute violates the party's right to a remedy guaranteed by § 13 of the Constitution, this Court has applied both the "vested rights approach" and the "common-law rights approach." See, e.g., Kruszewski v. Liberty Mut. Ins. Co., 653 So. 2d 935 (Ala.1995); Murdock v. Steel Processing Servs., Inc., 581 So. 2d 846 (Ala. 1991); Reed v. Brunson, 527 So. 2d 102 (Ala.1988). We follow this same review process in this case. Because Baugher and Dasinger's property damages occurred after the effective date of the construction statute of repose, their causes of action had not yet accrued when the statute was enacted. Under the vested rights approach, § 6-5-221(a), Ala.Code 1975, does not violate § 13 because it does not deprive Baugher and Dasinger of a vested right in a cause of action. See Kruszewski and Reed, supra. In Reed v. Brunson, 527 So. 2d 102, 115 (Ala.1988), the Court reasoned: (Quoting Fireman's Fund Am. Ins. Co. v. Coleman, 394 So. 2d 334, 352-54 (Ala. 1981).) (Emphasis added and emphasis omitted.) See also Lankford v. Sullivan, Long & Hagerty, 416 So. 2d 996, 1000 (Ala. 1982). The construction statute of repose found in § 6-5-220 et seq., Ala.Code 1975, does operate to abrogate certain common-law rights after the expiration of the 13-year period. This Court has previously identified common-law rights of action against architects, engineers, and builders. See, e.g., Watson, Watson, Rutland/Architects, Inc. v. Montgomery County Bd. of Educ., 559 So. 2d 168, 174 (Ala.1990) (holding that an architect could be held liable for failing to inspect reasonably); McFadden v. Ten-T Corp., 529 So. 2d 192, 201 (Ala.1988) (holding that a contractor, a builder, could be held liable for negligently widening and resurfacing a highway and that the contractor was not insulated from liability by the owner's acceptance of the contractor's work); Jackson v. Mannesmann Demag Corp., 435 So. 2d 725 (Ala.1983) (allowing the plaintiff to pursue his claims, grounded in both negligence and the Alabama Extended Manufacturer's Liability Doctrine, against the engineers responsible for the installation of an electric arc furnace); Cochran v. Keeton, 287 Ala. 439, 252 So. 2d 313 (1971) (holding that caveat emptor does not apply to a builder-vendor's sale of a newly constructed house). While the legislation in question does operate to abolish certain common-law causes of action, nonetheless the legislation passes constitutional muster even judged by the common-law rights approach because the legislation "eradicates or ameliorates a perceived social evil and is thus a valid exercise of the police power." Reed, supra. Reed explains: 527 So. 2d at 116. However, "[i]n this regard, it is not enough for the legislature to merely characterize the problem as a `social evil' and then recite in the enacting clause that the legislation is directed to that evil. There must be a substantial relationship between the act and the eradication of the evil." Lankford, 416 So. 2d at 1001. In § 6-5-225, Ala.Code 1975, the Alabama Legislature expressed its findings and intent in enacting the statute: (Emphasis added.) Buildings are unique in that typically they are intended to endure indefinitely if not permanently. Without this statute, architects, builders, and engineers would remain subject to liability until they die or, indeed, for some months after they have died. See 43-2-350(b), Ala.Code 1975. The construction statute of repose bears a substantial relationship to the eradication or amelioration of this potentially perpetual liability as well as the evils specifically found by the Legislature. Therefore, as a valid exercise of police power, as judged by the common-law rights approach, the statute comports with Article I, Section 13 of the Alabama Constitution of 1901. Furthermore, in the present statute, the Legislature has remedied the defect that caused its precursor to be declared unconstitutional. See Jackson, 435 So. 2d at 729. In Jackson, the Court found that the statute did not provide for those plaintiffs whose causes of action accrued close to the expiration of the limitations period. In the present statute, the Legislature has added a "savings clause" to provide parties who are injured near the expiration of the thirteen-year period sufficient time to file their actions. For the above-stated reasons, we find § 6-5-220 et seq., Ala.Code 1975, to be constitutional under both the vested rights approach and the common-law rights approach. We therefore affirm the summary judgment in favor of Beaver Construction Company. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, LYONS, and ENGLAND, JJ., concur. BROWN, J., concurs in the result. [1] While we have already held that the Legislature has the inherent power to enact a statute of limitations establishing the period within which a claim must be brought, see Sellers v. Edwards, 289 Ala. 2, 265 So. 2d 438 (1972); Plant v. Reid, Inc., 294 Ala. 155, 313 So. 2d 518 (1975), the statute in this case is a statute of repose. Black's Law Dictionary defines "statute of repose": "A statute that bars a suit a fixed number of years after the defendant acts in some way (as by designing or manufacturing a product), even if this period ends before the plaintiff has suffered any injury. Cf. Statute of Limitations. "`A statute of repose ... limits the time within which an action may be brought and is not related to the accrual of any cause of action; the injury need not have occurred, much less have been discovered. Unlike an ordinary statute of limitations which begins running upon accrual of the claim, the period contained in a statute of repose begins when a specific event occurs, regardless of whether a cause of action has accrued or whether any injury has resulted.' 54 C.J.S. Limitations of Actions § 4, at 20-21 (1987)." Black's Law Dictionary 1423 (7th ed.1999). Therefore, because the 13-year period begins to run upon the substantial completion of the improvements, rather than upon the injury to the plaintiff's person or property or upon the accrual of the plaintiff's cause of action otherwise, the statute is a statute of repose, rather than a simple statute of limitations.

November 22, 2000

b045aa1e-9f3b-4694-b1d2-04205e9199b5

Harvey v. City of Oneonta

715 So. 2d 779

1960579

Alabama

Alabama Supreme Court

715 So. 2d 779 (1998) Mattie B. HARVEY v. CITY OF ONEONTA, et al. 1960579. Supreme Court of Alabama. March 13, 1998. Rehearing Denied May 22, 1998. J. Stanton Glasscox, Oneonta; and Steven D. King, Oneonta, for appellant. Alexander M. Smith of Smith & NeSmith, P.C., Oneonta, for appellees. Kenneth Smith, Montgomery, for amicus curiae Alabama League of Municipalities. Brenda Flowers Smith and Charles E. Grainger, Jr., asst attys. gen., for amici curiae Attorney General Bill Pryor and Secretary of State Jim Bennett. PER CURIAM. Mattie Harvey appeals from a judgment denying relief in her action for declaratory or injunctive relief against the City of Oneonta, its mayor, its council members, its city clerk, and Glen Whited, individually. Harvey and Whited were candidates for place number 3 on the Oneonta City Council in the August 27, 1996, election. In her complaint, Harvey sought a declaration that Whited had not complied with the Fair Campaign Practices Act (FCPA), Ala.Code 1975, § 17-22A-1 et seq., and an injunction against certification of Whited as the winner of the election. We dismiss the appeal because the circuit court was without jurisdiction to entertain this action. Ala.Code 1975, § 17-15-6. In Ex parte Baxley, 496 So. 2d 688 (Ala. 1986), this Court, citing § 17-15-6, vacated a *780 judgment of a circuit court that purported to interfere with an election contest properly filed with the Executive Committee of the Alabama Democratic Party pursuant to § 17-16-70, Ala.Code 1975. In Turner v. Cooper, 347 So. 2d 1339 (Ala.1977), the Court cited the predecessor of § 17-15-6 in holding that the circuit court did not have jurisdiction to entertain a count for general equitable relief that was included in the election contest. In Dunning v. Reynolds, 570 So. 2d 668 (Ala.1990), this Court affirmed the circuit court's dismissal, for lack of jurisdiction, of an action seeking a declaratory judgment and a writ of mandamus. The Dunning plaintiffs sought to have a certificate of nomination revoked without having "exhausted [their] remedies before the State Democratic Executive Committee prior first to filing the... action." 570 So. 2d at 669. See also Davis v. Reynolds, 592 So. 2d 546 (Ala.1991), a contest of the general election that followed the primary election the Dunning plaintiffs had attempted to challenge. In Davis, this Court, in affirming the judgment, stated, among other things: 592 So. 2d at 549. The challenge in Davis pertained to a candidate's failure to timely file a statement required by the FCPA. In short, Harvey should have filed an election contest pursuant to § 11-46-69, Ala. Code 1975. Under § 17-15-6, the circuit court did not have jurisdiction to entertain this action for declaratory or injunctive relief. We recognize that this Court made the following statement in City of Talladega v. Pettus, 602 So. 2d 357, 360 (Ala.1992): "Had Pettus filed the action before the certificate was issued or if he had challenged Barton's noncompliance with the provisions of the FCPA before the election, then the court would have had jurisdiction to grant whatever relief was appropriate." Because of this statement, Harvey's actions in filing for declaratory or injunctive relief and in attempting to obtain a ruling before a certificate of election was issued to Whited are understandable. However, the suggestion that Pettus could have filed an action before an election was simply obiter dictum. Moreover, Pettus was an unsigned opinion with two Justices concurring specially and five Justices concurring in the result. The quoted language therefore has no precedential value. After Harvey filed her notice of appeal, Pettus was overruled, again by an unsigned opinion that did not obtain enough votes to become a binding opinion of the Court. Ex parte Krages, 689 So. 2d 799 (Ala.1997). In Krages, the plurality opinion states that certificates of election that have been issued in municipal elections may be revoked pursuant to § 17-22A-21, just as certificates of election in state and county elections may be. The unsigned opinion in Pettus suggested that § 17-22A-21 did not authorize a revocation of a certificate of election issued to a candidate in a municipal election. It further suggested that § 11-46-69(a)(1), which provides for a contest based on "[m]isconduct, fraud or corruption," did not provide for an election contest where the candidate had filed an FCPA-required statement at 4 p.m. on the day before the election. Thus, that opinion concluded, no statutory authority existed for an election contest under the circumstances, and § 17-15-6 barred the action. The unsigned Pettus opinion did not address whether § 11-46-69(a)(2), which provides for a contest based on the ineligibility of the winning candidate, provided for a contest under the circumstances. The Pettus Court was faced with a pre-election filing, albeit one so late as to arguably not constitute a filing before the election. Here, it is undisputed that Whited did not file before the election. Under the holding in Davis v. Reynolds, supra, a candidate who does not file a statement or report required by the FCPA before the election in question is ineligible to be elected to the office at that election. Any challenge to Whited's election on that basis *781 should have been filed as an election contest pursuant to § 11-46-69(a)(2). In spite of the confusing language in Pettus, Harvey should have filed an election contest. She did not do so,[1] and the circuit court did not have jurisdiction to entertain this action for declaratory and injunctive relief. A judgment of a court without jurisdiction is void. An appeal will not lie from a void judgment. Stamps v. Jefferson County Bd. of Educ., 642 So. 2d 941 (Ala.1994); Luken v. BancBoston Mortgage Corp., 580 So. 2d 578 (Ala.1991); Graddick v. McPhillips, 448 So. 2d 333 (Ala.1984); Underwood v. State, 439 So. 2d 125 (Ala.1983); State v. King, 271 Ala. 16, 122 So. 2d 158 (1960). The judgment of the trial court is void, and the appeal is dismissed. APPEAL DISMISSED. HOOPER, C.J., and ALMON, HOUSTON, COOK, and SEE, JJ., concur. MADDOX, J., dissents. [1] Harvey's filing cannot be deemed the equivalent of an election contest. Section 11-46-69(b) states that a contest "shall be instituted in the manner prescribed by Section 17-15-29." Section 17-15-29 requires, among other things, that the plaintiff file security for the costs of the contest. This and other provisions of § 17-15-29 were not followed in Harvey's action for declaratory and injunctive relief.

March 13, 1998

eb37ba91-6c8b-41ad-88bd-740b0ce866a2

Morrison Restaurants, Inc. v. Homestead Village of Fairhope, Ltd.

710 So. 2d 905

1961644

Alabama

Alabama Supreme Court

710 So. 2d 905 (1998) MORRISON RESTAURANTS, INC. v. The HOMESTEAD VILLAGE OF FAIRHOPE, LTD. 1961644. Supreme Court of Alabama. March 6, 1998. *906 Richard W. Fuquay and Kathy P. Sherman of Pittman, Pittman & Carwie, Mobile, for appellant. David P. Broome, Mobile, for appellee. MADDOX, Justice. The main issue in this case is whether a party to a foodservice contract waived its right to assert any rights it might have had under a mediation/arbitration clause in the contract. The trial court, finding no waiver, referred the dispute between the parties to mediation, with nonbinding arbitration to follow if the mediation proved unsuccessful. Based on the particular facts of this case, we conclude that the trial court erred. Morrison Restaurants, Inc. ("Morrison"), entered into a contract with The Homestead Village of Fairhope, Ltd. ("Homestead"), by which it agreed to manage food-service and related operations at Homestead's retirement community. Under the agreement, Morrison provided the services for over a year, during which time Homestead failed to pay Morrison. Consequently, on July 24, 1996, Morrison sued Homestead in the Mobile County Circuit Court, seeking payment for the services it had rendered; Homestead answered, with a general denial, on September 16, 1996. Morrison subsequently filed a motion for a summary judgment on November 1, 1996, accompanied by a narrative statement of facts, an affidavit by Morrison's credit manager, a copy of the agreement, and copies of numerous invoices it had submitted to Homestead. Homestead responded to Morrison's motion by filing its own narrative statement of facts and affidavits by Homestead's general manager and its finance manager. The trial court granted a summary judgment, as to liability, on February 13, 1997. Following the entry of that judgment, but before a scheduled hearing on damages, Homestead obtained new counsel, who filed his notice of appearance on February 19, 1997. On March 24, Homestead's new counsel filed a motion entitled "Motion to Refer to Mediation and/or Arbitration." That motion stated: The trial court granted Homestead's motion. Morrison filed a "notice of appeal" from the trial court's order compelling mediation/arbitration. Before we discuss the issues presented by the parties, we first consider whether the trial court's order was reviewable, thereby quickening this Court's jurisdiction. The fact that Morrison styled its request for relief as an appeal is not determinative. The order entered in this case is one referring a pending case to mediation and/or arbitration. This Court has previously held that a petition for a writ of mandamus is the appropriate method of challenging an order referring a case to arbitration. Ex parte Alexander, 558 So. 2d 364 (Ala.1990). Accordingly, we treat Morrison's "appeal" as, in reality, a petition for a writ of mandamus. See, e.g., Lopez v. Home Buyers Warranty Corp., 628 So. 2d 361 (Ala.1993), on remand from the United States Supreme Court, 670 So. 2d 35 (Ala.1995), for a case in which this Court followed the same procedure. Having determined that this Court does have jurisdiction to decide the issues presented, we now consider Morrison's request for relief. Morrison makes three principal arguments for setting aside the arbitration order: (1) that Homestead had waived its right to have the case referred to mediation and arbitration; (2) that the trial court erred in granting Homestead's motion to refer because it was untimely; and (3) that the trial court erred in granting Homestead's motion to refer because the trial court did not hear arguments from Morrison before granting the motion. *907 We first consider Morrison's argument that Homestead had waived its right to have the case referred to mediation/arbitration. This Court has held: Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So. 2d 897, 899 (Ala.1995). Applying the rule quoted above from Companion Life, we conclude that Homestead had waived its right to mediation or arbitration. Homestead failed to seek mediation or arbitration either in its answer or in its response to Morrison's motion for summary judgment. In fact, eight months passed from the filing of the complaint before Homestead first asserted its right, in a motion filed on March 24, 1997. Further, and perhaps more important, when Homestead did assert its right to mediation or arbitration under the contract, it was not until after it had suffered an adverse ruling, in the form of the summary judgment as to liability. In light of these facts, we conclude that Homestead's actions indicate it intended to avail itself of the litigation process in lieu of the mediation/arbitration provisions in the contract. In addition, to refer the case to mediation or arbitration at such a late date would prejudice Morrison. It is well established that the writ of mandamus is an extraordinary remedy and requires a showing that there is "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala.1991). We conclude that, because Homestead waived its right to mediation or arbitration, each of these elements is met in this case. Consequently, Morrison is entitled to the relief it requests. Because we conclude that Morrison is entitled to the writ of mandamus, we need not consider the other arguments raised by the parties, and we find it unnecessary to address whether the underlying agreement to submit any controversy to nonbinding arbitration is covered by the provisions of the Federal Arbitration Act.[1] Accordingly, we *908 grant the petition for the writ of mandamus. The trial court is directed to vacate its order granting Homestead's motion to refer, and the cause is remanded for further proceedings consistent with this opinion. PETITION GRANTED; CAUSE REMANDED. HOOPER, C.J., and SHORES, KENNEDY, and BUTTS, JJ., concur. [1] The arbitration clause in this case reads as follows: "Any controversy or claim arising out of or relating to this Agreement or the breach, termination or validity thereof which cannot be resolved through good faith negotiations shall be first placed in mediation under the Commercial Mediation Rules of the American Arbitration Association in effect on the date of this Agreement before resorting to arbitration. Thereafter, any unresolved dispute arising out of or relating to this Agreement or the breach, termination, or validity thereof shall be placed in [nonbinding] arbitration, or binding arbitration upon agreement of both parties, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect on the date of this Agreement. The parties agree to exercise their best efforts to promptly settle such controversies and, if not settled, to promptly proceed through mediation and arbitration or other mutually agreeable form of Alternative Dispute Resolution process in order to keep costs associated with the controversy to a minimum." Neither party raises any question relating to the applicability of the Federal Arbitration Act to an agreement reading as this one does. Our holding in this case is based simply on the finding of a waiver.

March 6, 1998

163925e0-68a4-47f5-85cc-01cbf4617ac4

Ex Parte Stewart

786 So. 2d 464

1990418, 1990419

Alabama

Alabama Supreme Court

786 So. 2d 464 (2000) Ex parte Hugh STEWART. Ex parte Kameron Hyde. (Re Hugh Stewart v. The Birmingham News Company; and Kameron Hyde v. The Birmingham News Company). 1990418 and 1990419. Supreme Court of Alabama. September 22, 2000. Order Overruling Applications for Rehearing December 1, 2000. *465 Leah O. Taylor of Taylor & Taylor, Birmingham (rehearing brief filed by Leah O. Taylor and Rhonda Pitts Chambers of Taylor & Taylor, Birmingham), for petitioners. James P. Pewitt of Johnston, Barton, Proctor & Powell, L.L.P., Birmingham, for respondent. PER CURIAM. Hugh Stewart and Kameron Hyde, the plaintiffs in actions pending in the Jefferson County Circuit Court, have petitioned for a writ of mandamus directing the trial court to vacate its order compelling them to submit their claims to arbitration. We deny the writs. The Birmingham News newspaper is published by The Birmingham News Company ("The News") and is sold through a mixed distribution system consisting of employees of The News and independent dealers ("Dealers") who are authorized to act as the exclusive distributors of the newspaper in specific geographical areas. The plaintiffs became Dealers by executing an "Independent News Dealer Agreement" (the "Agreement") with The NewsStewart in 1988 and Hyde in 1994. Pertinent portions of the Agreement read: According to the plaintiffs, in 1997 The News made changes to its distribution system that adversely affected the Dealers' ability to function properly under the Independent News Dealer Agreement. For example, the plaintiffs contend that The News changed its customer-rating procedures in a way that caused Dealers to be held responsible for complaints about service problems over which they had no control. In 1998, The News notified the plaintiffs that their Agreements would not be renewed because, it said, complaints about their service "were at a totally unsatisfactory level." Although the Agreement provided that either party could terminate it without cause by giving written notice 30 days before its expiration, the plaintiffs sued The News, each alleging that the Agreement obligated The News to act in good faith and to maintain a relationship with a Dealer as long the Dealer performed satisfactorily, and that the "unsatisfactory-performance" reason given for nonrenewal of their contracts was a pretext. The plaintiffs claimed that The News had engaged in a scheme designed to eliminate the Dealers and to obtain their distributorships (which, the plaintiffs allege, had become very profitable over the years), without compensation, in order to obtain the Dealers' profits and to establish a monopoly in the newspaper publishing and retaildistribution market. The plaintiffs alleged breach of contract, fraud, conspiracy, violation of Alabama's antitrust statute (Ala. Code 1975, § 6-5-60), unjust enrichment, tortious interference with a business relationship, and deceptive trade practices. The News moved to stay the proceedings in the circuit court and to compel arbitration pursuant to Paragraph 10 of the Agreement. The plaintiffs opposed the motion. After a hearing on the motion, the trial court granted it and ordered *467 the parties to arbitrate. The plaintiffs now seek a writ of mandamus directing the trial court to vacate its order compelling arbitration of their claims against The News. Mandamus is an extraordinary remedy and requires a showing of 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court. When an appellate court engages in mandamus review of a trial court's order granting a motion to compel arbitration, the appellate court applies a de novo standard of review. See Ex parte Inverness Constr. Co., 775 So. 2d 153 (Ala.2000); Ex parte Stamey, 776 So. 2d 85 (Ala.2000); Ex parte Roberson, 749 So. 2d 441 (Ala.1999). In Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), the United States Supreme Court held that the words "involving commerce" in the Federal Arbitration Act, 9 U.S.C. § 2 ("FAA"), are broader than the often-found words of art "in commerce." The Court held, therefore, that they cover more than only persons or activities within the flow of interstate commerce. See Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 195, 95 S. Ct. 392, 42 L. Ed. 2d 378 (1974) (defining "in commerce" as related to the "flow" and defining the "flow" to include "the practical, economic continuity in the generation of goods and services for interstate markets and their transport and distribution to the consumer"). The Court went on to hold that the word "involving" is the functional equivalent of the word "affecting," and that the phrase "affecting commerce" normally signals a congressional intent to exercise its Commerce Clause powers to the full. 419 U.S. at 201, 95 S. Ct. 392. The plaintiffs contend that nothing in the Agreement indicates that it involves interstate commerce within the meaning of the FAA; they further contend that an affidavit filed by The News in support of its motion merely established that The News engages in interstate commerce. The plaintiffs argue that the trial court erred by focusing, they say, on the "overall business" of The News rather than on the limited transactions evidenced by the Agreement. The News bore the burden of proving to the trial court that the Agreement involved interstate commerce, so as to invoke the FAA and render enforceable the arbitration clause in the Agreement. Sisters of the Visitation v. Cochran Plastering Co., 775 So. 2d 759 (Ala.2000); Transouth Fin. Corp. v. Bell, 739 So. 2d 1110 (Ala.1999). Attached to The News's motions to stay the civil actions and to compel arbitration were affidavits of Toby Pearson, the circulation director for The News. In his affidavits, Pearson acknowledged that the plaintiffs and The News had entered into the Agreement and that under the Agreement the plaintiffs bought complete newspapers from The News and distributed them to homes, newsstands, news racks, and other places within defined territories for the period of a year. Pearson affirmed: The plaintiffs do not dispute this. Therefore, the Agreement required them to distribute advertising inserts designated by The News as part of the complete newspaper, which were prepared, printed, and shipped to The News in interstate commerce, and news content, designated as part of the complete newspaper by The News, that was obtained by The News in interstate commerce. Did the flow of interstate commerce end when these inserts and this news content were delivered to The News? The plaintiffs contend it did, and the dissenting Justices agree. The plaintiffs cite the following cases to support their contention: United States v. American Bldg. Maintenance Indus., 422 U.S. 271, 95 S. Ct. 2150, 45 L. Ed. 2d 177 (1975); Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S. Ct. 332, 87 L. Ed. 460 (1943); Burke v. Ford, 377 F.2d 901 (10th Cir.1967); Page v. Work, 290 F.2d 323 (9th Cir.1961); Wirtz v. M & B Constr. Co., 216 F. Supp. 169 (S.D.Fla.1963); Ouendag v. Gibson, 49 F. Supp. 379 (W.D.Mich.1943); Hurst v. Tony Moore Imports, Inc., 699 So. 2d 1249 (Ala.1997). The News contends that the plaintiffs were an integral part of a system for delivering commercial advertising distributed in interstate commerce, citing, among other cases, Lorain Journal Co. v. United States, 342 U.S. 143, 72 S. Ct. 181, 96 L. Ed. 162 (1951); and Evening News Publ'g Co. v. Allied Newspaper Carriers of New Jersey, 263 F.2d 715 (3d Cir.1959), cert. denied, 360 U.S. 929, 79 S. Ct. 1449, 3 L. Ed. 2d 1544 (1959). In Lorain Journal, the United States Supreme Court analyzed the interstate activity of a daily newspaper located in Lorain, Ohio: 342 U.S. at 152, 72 S. Ct. 181. The United States Court of Appeals for the Third Circuit reached the same conclusion in Evening News, which involved a group of news dealers who tried to force a newspaper to eliminate home delivery of some of its newspapers by newsboys. The newspaper sued the dealers, alleging violations of §§ 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2). The dealers argued, as the plaintiffs argue here, that their relationship with the newspaper was intrastate in nature because they delivered newspapers only within their home state. The Third Circuit disagreed with the dealers: 263 F.2d at 717. The Third Circuit found that "home delivery of the News is an integral part of the interstate operation." 263 F.2d at 717. We agree with the Third Circuit's application of Lorain, and we conclude that the cases of the plaintiffs now before us are not materially distinguishable from either Lorain or Evening News.[1] The petitions for the writ of mandamus are due to be denied. The trial court properly directed arbitration pursuant to the arbitration clauses in the Agreement because the plaintiffs were integral and inseparable parts of the flow of interstate commerce. Lorain and Evening News. 1990418WRIT DENIED. 1990419WRIT DENIED. HOOPER, C.J., and MADDOX, BROWN, and JOHNSTONE, JJ., concur. HOUSTON, J., concurs specially. COOK, LYONS, and ENGLAND, JJ., dissent. SEE, J., recuses himself. HOUSTON, Justice (concurring specially). I go with the flow. I concurred in Sisters of the Visitation v. Cochran Plastering Co., 775 So. 2d 759 (Ala.2000). If, as the dissenting Justices contend, Sisters of the Visitation is precedent for granting these mandamus petitions, then I misunderstood what I was voting on in Sisters of the Visitation and I should have concurred only in the result in that case. In my opinion, neither the words nor the reasoning of the majority opinion in Sisters of the Visitation has any precedential value in a case involving an activity in which the flow of commerce must continue in order to fulfill the purpose of the activity. LYONS, Justice (dissenting). I respectfully dissent. The per curiam opinion ignores Chief Justice Rehnquist's description in United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995), of the three categories of regulation subject to the power of Congress under the Commerce Clause of the United States Constitution, and it fails to distinguish Sisters of the Visitation v. Cochran Plastering Co., 775 So. 2d 759 (Ala.2000). Chief Justice Rehnquist in Lopez referred to the channels, instrumentalities, and activities having a substantial relation to commerce. We recognized these categories in Sisters of the Visitation. The first category, regulation of the use of the channels of interstate commerce, involves management of the avenues of commerce and control over the items that might move through them, such as intoxicating liquors, convict-made goods, and *470 stolen goods. Lopez, 514 U.S. at 558-59, 115 S. Ct. 1624. See, also, Gibbs v. Babbitt, 214 F.3d 483 (4th Cir.2000) ("The term `channel of interstate commerce' refers to, inter alia, `navigable rivers, lakes, and canals of the United States; the interstate railroad track system; the interstate highway system; ... interstate telephone and telegraph lines; air traffic routes; television and radio broadcast frequencies).'" 214 F.3d at 490-91 (quoting United States v. Miles, 122 F.3d 235, 245 (5th Cir.1997), cert. denied, 523 U.S. 1011, 118 S. Ct. 1201, 140 L. Ed. 2d 329 (1998)). The second category, regulation of the instrumentalities of interstate commerce, protects things in interstate commerce, for example, by regulating the safety of motor vehicles. Lopez, 514 U.S. at 558-59, 115 S. Ct. 1624; Gibbs v. Babbitt, 214 F.3d at 491. That an item may move in interstate commerce does not make it an instrumentality, or else the weapons shipped in interstate commerce giving rise to violations of the Gun Free School Zones Act of 1990 would have sufficed to place 18 U.S.C. § 922(q), which was before the Supreme Court in Lopez, in the category of regulation of instrumentalities of commerce. Based upon the illustrations given in Lopez dealing with the three categories, I conclude that the delivery of newspapers is not a channel of interstate commerce or an instrumentality of interstate commerce. A contract is neither a channel nor an instrumentality, but suggests instead an activity. The Federal Arbitration Act requires arbitration of "a contract evidencing a transaction involving commerce," 9 U.S.C. § 2, and it defines "commerce" as "commerce among the several States or with foreign nations," 9 U.S.C. § 1. This case, therefore, falls in the third Lopez category, dealing with activities; therefore, as was held in Lopez, to be subject to regulation by the Congress, the activity must have a substantial effect on interstate commerce. In order to decide the questions these plaintiffs present, we must, just as we did in Sisters of the Visitation, confront Wickard v. Filburn, 317 U.S. 111, 63 S. Ct. 82, 87 L. Ed. 122 (1942), where the Supreme Court upheld the constitutionality of regulation of homegrown wheat pursuant to an act of Congress controlling prices of wheat. In Lopez, the Court referred to Wickard as "perhaps the most far reaching example of Commerce Clause authority over intrastate activity." 514 U.S. at 560, 115 S. Ct. 1624. Recently, in United States v. Morrison, 529 U.S. 598, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000), the Court stated: "[I]n every case where we have sustained federal regulation under Wickard`s aggregation principle, the regulated activity was of an apparent commercial character." 529 U.S. at 611 n. 4, 120 S. Ct. at 1750 n. 4 (emphasis added). The Court's describing Wickard as "the most far reaching example" and its referring to "Wickard`s aggregation principle" suggest that Wickard is not a standard to be trotted out and applied willy-nilly whenever Congress attempts to regulate activities in interstate commerce. At stake in Wickard was Congress's attempt to control prices. The aggregated effect of a determination that the activity in Wickard was wholly intrastate would have frustrated the Congressional purpose for controlling the price of wheat. In Lorain Journal Co. v. United States, 342 U.S. 143, 72 S. Ct. 181, 96 L. Ed. 162 (1951), and Evening News Publishing Co. v. Allied Newspaper Carriers of New Jersey, 263 F.2d 715 (3d Cir.), cert. denied, 360 U.S. 929, 79 S. Ct. 1449, 3 L. Ed. 2d 1544 (1959), the two antitrust cases relied on by the per curiam opinion, the relevant Congressional scheme was to prevent monopolies and restraints of trade. In Evening News, the United *471 States Court of Appeals for the Third Circuit observed: 263 F.2d at 717-18 ("outlets" emphasized in Evening News; additional emphasis added). We here deal with the Federal Arbitration Act, a statute requiring arbitration of contracts involving interstate commerce. I do not consider a statute whose purpose is to control wheat prices across the country or a statute whose purpose is to protect competition to be interchangeable with a statute authorizing arbitration. Both the FAA and the antitrust statute are grounded in the authority conferred upon Congress by the Commerce Clause, but the nexus between the applicability of the statute to local transactions and the fulfilment of the Congressional scheme is not nearly as direct or logical in the context of a statute calling for arbitration of disputes arising from contracts involving interstate commerce as it is in the context of a statute establishing price controls or regulating competition.[2] The case for applying "Wickard`s aggregation principle" is therefore not as compelling in regard to the FAA as it is in regard to statutes purporting to control prices or prevent monopolies. How, then, do we strike a balance that respects Congress's authority and upholds the rights of states over local matters? The United States Court of Appeals for the Fourth Circuit discussed this issue in Gibbs v. Babbitt, dealing with the constitutionality of an act regulating the taking of red wolves on private land, as follows: 214 F.3d at 491-92. I would strike the balance by relying upon the standard we set in Sisters of the Visitation, a standard that allows us to focus intensely on the specific transaction before the Court. While that standard considers other interstate contracts of one of the parties that operate in proximity to the contract before the Court ("proximity contracts"), it avoids automatically concluding that proximity to interstate contracts alone warrants the conclusion that the subject contract substantially affects interstate commerce. We held in Sisters of the Visitation, after creating a hypothetical transaction involving a farmer mowing pasture lands, a transaction that lacked a substantial effect on interstate commerce, as follows: 775 So. 2d at 765. In the situation of the plaintiffs now before us, we have no material deviation toward interstate commerce from the hypothetical transaction described above. In each of the two cases before us, the parties to the transaction are local, but one party, The News, is engaged in an activity that involves numerous contracts between it and out-of-state entities that provide a range of materials and services, including comics, Parade magazine, advertising inserts, news content, photographs, paper, and ink. Some of the printed materials expressly solicit interstate business transactions between advertisers and subscribers. The Dealers purchase polyethylene bags and rubber bands from The News. The News obtains these products from outside the State of Alabama. We, therefore, have a deviation toward interstate commerce from the hypothetical transaction based upon the relationship of the parties to other contracts, to which I will return later. The News makes no showing as to whether equipment, such as delivery trucks and other vehicles necessary to perform the distribution contracts, moved in interstate commerce to the Dealers or were acquired for performance of this contract and used solely in performance of the contract. We have no deviation toward interstate commerce from the hypothetical transaction based upon equipment necessary for the performance of the contract. *473 The News makes no showing as to the breakdown between the cost of local labor versus the cost of materials of interstate origin, such as equipment and gasoline necessary to the performance of the contract. We have no deviation toward interstate commerce from the hypothetical transaction based upon the costs attributable to interstate, as opposed to local, activity. The newspapers subject to the contract are delivered locally. Any subsequent entrance into interstate commerce as a result of a local subscriber's mailing a clipping to another state is too incidental to warrant further consideration. The subscriber could respond to a solicitation for sale of a product from outside Alabama. However, we have no evidence as to the extent of such activity. We have no deviation toward interstate commerce from the hypothetical transaction based upon subsequent effect on interstate commerce. The aforementioned proximity contracts are not linked to a showing that litigation, as opposed to arbitration, in connection with The News's contract with the Dealers, would disrupt performance of those proximity contracts with third parties. Indeed, we have no basis on which to conclude that the parties or potential witnesses to these proximity contracts have anything to do with the contract between The News and the Dealers. We have no deviation toward interstate commerce from the hypothetical transaction based upon disruption of proximity contracts with third parties. The most difficult portion of the test is determining the effect of the proximity contracts and the Dealers' purchases from The News of materials that it obtains from outside Alabama. The materials resulting from the proximity contracts come to rest in Alabama, where The News processes and assembles the completed product. The advertising inserts do not move directly between the Dealer and the merchant purchasing the advertising. While the contract requires the Dealers to deliver the inserts, that activity is local. The rubber bands and polyethylene bags sold by The News to the Dealers come to Alabama and then are resold by The News to the Dealers. However, there is no indication that the dispute between the parties relates to the sale of these products. Unquestionably, The News substantially affects interstate commerce in the performance of its proximity contracts. However, the separate contract for the distribution of newspapers affects interstate commerce only to the extent that (a) the contract requires involvement by the Dealers in interstate commerce to perform the contract for distribution, or (b) the distribution itself causes subscribers to purchase goods or services directly from outside Alabama. Based on the absence of evidence to quantify interstate activity in these areas, I am unable to conclude that the performance of the contract between the Dealers and The News has the requisite substantiality of effect on interstate commerce to justify applying the Federal Arbitration Act. To hold otherwise would assume that the framers of the United States Constitution intended that Congress could require arbitration of a contract between a local newspaper and a young person in the neighborhood who throws papers from his or her bicycle. I must dissent, lest we give too much weight to the interstate activity of The News and thereby disregard the proper focus on the contract between The News and the Dealers and the question whether that contract substantially affects interstate commerce. COOK, J., concurs. PER CURIAM. APPLICATIONS OVERRULED. HOOPER, C.J., and MADDOX, BROWN, and JOHNSTONE, JJ., concur. HOUSTON, J., concurs specially. COOK, LYONS, and ENGLAND, JJ., dissent SEE, J., recuses himself. HOUSTON, Justice (concurring specially). In opposition to the applications for rehearing, the Birmingham News Company filed an excellent brief, which I quote from and adopt as part of my special concurrence: *475 "Swift & Co. v. United States, 196 U.S. 375, 399, 25 S. Ct. 276, 49 L. Ed. 518 (1905) (emphasis added). In 1943, in an opinion by Justice Douglas, the United States Supreme Court again discussed the movement of goods in a `current' of interstate commerce and the authority of Congress to regulate it, as well as those who participate in it. Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S. Ct. 332, 87 L. Ed. 460 (1943). In Walling, the Court found that the flow of interstate commerce did not necessarily cease once goods were delivered to a wholesaler located in the state of destination: * "The decisions of the United States Supreme Court in Lorain Journal Co. v. United States, 342 U.S. 143, 72 S. Ct. 181, 96 L. Ed. 162 (1951), and that of the [United States Court of Appeals for the] Third Circuit in Evening News Publishing Co. v. Allied Newspaper Carriers of New Jersey, 263 F.2d 715 (3d Cir.1959), cert. denied, 360 U.S. 929, 79 S. Ct. 1449, 3 L. Ed. 2d 1544 (1959), are hardly the *477 relics that Stewart and Hyde would have this Court believe." [1] We note that we have carefully examined all of the cases cited by the plaintiffs in support of their contention that the flow of interstate commerce ended when the inserts and the news were delivered to The News. We find those cases to be either distinguishable on their facts or otherwise consistent with the holdings in Lorain and Evening News. [2] Justice Houston's special concurrence attempts to distinguish Sisters of the Visitation on the ground that it has no applicability in a case "involving an activity in which the flow of commerce must continue in order to fulfill the purpose of the activity." 786 So. 2d at 469. I respectfully submit that such reasoning erroneously conflates the purpose of the statute and the purpose of the activity.

December 1, 2000

a010227c-d1f5-49c4-9566-528832339205

Mock v. Allen

783 So. 2d 828

1980985

Alabama

Alabama Supreme Court

783 So. 2d 828 (2000) Shellie MOCK, Jr. v. Dr. Robert ALLEN. 1980985. Supreme Court of Alabama. November 17, 2000. *829 Steven F. Schmitt and John G. Smith of Schmitt, Harper & Smith, P.C., Tallassee (rehearing brief filed by John G. Smith of Harper & Smith, P.C., Tallassee), for appellant. Norman E. Waldrop, Jr., and Broox G. Holmes, Jr., of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, L.L.C., Mobile, for appellee. BROWN, Justice. The opinion of June 30, 2000, is withdrawn and the following opinion is substituted therefor. Shellie Mock, Jr., appeals from a judgment entered on a jury verdict in favor of the defendant Dr. Robert Allen. We affirm. The evidence presented at trial established that in September 1991, Mock was involved in an automobile accident while he was in Austin, Texas. As a result of the accident, he suffered injuries to his head, neck, back, left hip/groin area, and left knee. Mock was treated in the emergency room of a hospital in Austin. Because Mock complained of pain in his neck, back, and left hip and groin area, the treating physician x-rayed Mock's left hip and his spine; the results showed no injury. Mock was subsequently released. *830 Mock returned home to Alabama, where he sought treatment from Dr. Andy Kirk for pain and bruising. While he was a patient of Dr. Kirk's, Mock also sought treatment from Scott Hannen, a local chiropractor. However, Mock continued to experience pain in his neck, back, left hip, and left leg. Hannen suggested that Mock see Dr. Robert Allen, a local neurologist. Mock first saw Dr. Allen on November 19, 1991. During Mock's initial appointment, he advised Dr. Allen of his complaints. Dr. Allen performed a thorough physical examination, paying particular attention to the areas where Mock had complained of experiencing painthe neck, back, left hip/groin area, and left leg. According to Mock, Dr. Allen fondled his genitals during this examination. Dr. Allen denied doing so. Following his examination, Dr. Allen's initial diagnosis was that Mock was suffering from cervical and lumbar strain. Dr. Allen wanted to rule out radiculopathy, a disease that would cause pain to radiate through the nerves extending from Mock's spine, through his pelvic region, and into his injured left leg. Dr. Allen determined that several tests needed to be performed before he could make an accurate diagnosis, including an electromyographic test (an "EMG") and a magnetic-resonance-imaging test (an "MRI"). These tests were performed at Southeast Alabama Medical Center on November 21 and 25, 1991. Mock returned to Dr. Allen's office for a follow-up visit on November 25, 1991. After reviewing Mock's EMG and MRI results, Dr. Allen diagnosed Mock as suffering from cervical and lumbar strain. He prescribed a course of treatment that included cervical traction and the prescription medication Limbitrol, a muscle relaxant. Mock claimed that Dr. Allen again fondled him during a physical examination on that follow-up visit. Although Dr. Allen did not recall conducting a physical examination on Mock on that occasion, he said that he may have done so. Dr. Allen, however, denied fondling Mock. At the conclusion of the visit, Dr. Allen instructed Mock to return for another follow-up visit in two weeks. One week later, on December 3, 1991, Mock called Dr. Allen's office, complaining of severe pain. He asked for an immediate appointment. Later that day, Dr. Allen examined Mock. Upon examining Mock's neck, back, and left groin area, Dr. Allen determined that the traction had failed to improve his condition. Dr. Allen gave Mock two injectionsone of celestone soluspan, and one of phenobarbital and instructed him to remain in the examining room for approximately 15 minutes. According to Dr. Allen, this was standard procedure, to ensure that Mock did not have an adverse reaction to the medications. According to Mock, the injections knocked him out and when he awoke Dr. Allen was sitting between his legs "messing with" his genitals. Mock stated that he asked Dr. Allen what he was doing and that Dr. Allen said he was checking for a hernia. Dr. Allen denied touching Mock; he stated that he went in the examining room to see if Mock had had any adverse reaction to the medications, and that when he discovered that he had not, he told him that he could get dressed and leave. Mock dressed and left the office. However, he telephoned Dr. Allen's office the following day, again complaining of severe pain. Dr. Allen spoke with Mock; he gave him the option of returning to his office for another course of injections, or going to the hospital. Mock chose hospitalization, and Dr. Allen's office arranged for him to be admitted to Southeast Alabama Medical Center. Mock was hospitalized from December 4 to December 10, 1991. As required by *831 hospital policy, Dr. Allen performed an initial examination of Mock. Dr. Allen did not recall whether he touched Mock's genitals during that examination, but he stated that it was possible that he did. Dr. Allen ordered intravenous pain medication and muscle relaxants for Mock; he also prescribed intensive physical therapy. Dr. Allen made daily follow-up visits to Mock, to determine how he was responding to the treatment. Mock claimed that during each visit, Dr. Allen fondled him. Mock stated that following one of Dr. Allen's visits, his aunta nurse at the hospitalcame by to visit and he broke down and told her what had happened. After several days, Mock's condition began to improve, and Dr. Allen switched Mock from intravenous to oral medications. Dr. Allen testified that on December 9 he determined that Mock's condition had improved sufficiently so that he could be released from the hospital the following day. Mock maintained that his December 10 release was triggered by a confrontation he had had with Dr. Allen, in which he told Dr. Allen that Dr. Allen could not touch his genital area anymore. Shortly after this confrontation, Mock says, he was told that he was being discharged from the hospital. Upon his discharge from the hospital, Mock was given prescriptions for Voltaren and Elavil, and an appointment card showing a December 19, 1991, office visit with Dr. Allen. On December 12 Mock telephoned Dr. Allen and told him that he was still in pain and that he wanted additional medication. Dr. Allen refused to give Mock any more medication. It appears that, at this point, the doctor-patient relationship between Mock and Dr. Allen ended, and each party claims to be the one who ended the relationship. Mock stated that not long after his discharge, he contacted the hospital and complained about Dr. Allen's alleged improper conduct. Dr. Allen denied that he had touched Mock improperly. Moreover, three nurses who cared for Mock during his hospital stay testified that Mock did not complain of improper conduct by Dr. Allen and that he did not exhibit any signs of emotional distress. Mock made no allegations against Dr. Allen to Dr. William Reynolds, the internist he saw on December 12, 1991, or to Dr. William Hanson, the orthopedic surgeon who treated him beginning in April 1992. Dr. Hanson testified that Mock first consulted him in April 1992 complaining of pain in his chest and on his left side. Dr. Hanson also testified that Mock told him that he was suffering pain in his left pelvic area. Dr. Hanson's notes described the pain as being in the iliac crest, where the sartorius muscle originates. Dr. Hanson testified that the sartorius muscle runs from the pelvic/groin area to the inner knee, and that an examination of the muscle required that it be palpated. The only physician to whom Mock related his complaints against Dr. Allen was Dr. Alan Prince, another local neurologist from whom Mock sought treatment. Dr. Prince testified that an examination of Mock based on his complaints would not have required touching his genitals. At trial, Mock objected to the trial court's ruling that his action against Dr. Allen was governed by the Alabama Medical Liability Act, § 6-5-540 et seq., Ala. Code 1975 (the "AMLA"). As part of his case, Mock unsuccessfully attempted to offer evidence of other alleged wrongful acts by Dr. Allen, namely, that Dr. Allen had had improper contact with five other male patients, each of whom was prepared to testify that Dr. Allen had touched them inappropriately during an examination. The trial court also prohibited Mock's attempt to offer evidence of Dr. Allen's alleged sexual preference. Mock's case against Dr. Allen was submitted to a jury, *832 which returned a verdict in favor of Dr. Allen. Mock first argues that the trial court erred in ruling that his claims against Dr. Allen were governed by the AMLA. The AMLA applies "[i]n any action for injury or damages or wrongful death, whether in contract or in tort, against a health care provider for breach of the standard of care." § 6-5-548(a), Ala.Code 1975. A "health-care provider" includes a "medical practitioner," that is, a medical doctor or osteopath licensed to practice in Alabama. §§ 6-5-542(1) and 6-5-481(1), Ala.Code 1975. Although the AMLA applies only to medical-malpractice actions, a plaintiff cannot avoid application of the AMLA by "creative pleading." This Court has consistently held that it is the substance of the action, rather than the form, that is the touchstone for determining whether an action is actually one alleging medical malpractice. Allred v. Shirley, 598 So. 2d 1347 (Ala.1992); Benefield v. F. Hood Craddock Clinic, 456 So. 2d 52 (Ala. 1984); Sellers v. Edwards, 289 Ala. 2, 265 So. 2d 438 (1972). Over the years, this Court has been called upon to determine whether a number of cases filed against physicians and other health-care providers were, in fact, governed by the AMLA. We have held generally that "[c]laims alleging misrepresentations made during the course of a doctor-patient relationship are claims of malpractice and are governed by the AMLA." Ex parte Sonnier, 707 So. 2d 635, 638 (Ala.1997) (citing Benefield v. F. Hood Craddock Clinic, 456 So.2d at 54). This Court has also held that informed-consent claims brought against physicians and surgeons are governed by the AMLA. See Otwell v. Bryant, 497 So. 2d 111 (Ala.1986); Fain v. Smith, 479 So. 2d 1150 (Ala.1985). Furthermore, this Court has held that claims brought against health-care providers purporting to be claims under the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD") are governed by the AMLA, when the act forming the basis of the patient's claims occurred during the course of the treatment and constituted the treatment sought from the health-care provider. Mobile Infirmary v. Delchamps, 642 So. 2d 954, 956-57 (Ala.1994) (two-year statute of limitations contained in the AMLA applied to a patient's action against a health-care provider for damages under the AEMLD arising out of the surgical placement of a temporomandibular implant in her jaw). Mock argues, however, that the AMLA does not apply to his case because "[t]he acts of intentional sexual assault of which [he] complains were for no medical reason." He cites Gunter v. Huddle, 724 So. 2d 544 (Ala.Civ.App.1998), as support for his contention. In Gunter, the Court of Civil Appeals held that a sexual relationship between a patient and a nonpsychiatric physician was outside the scope of the physician's professional services and did not constitute professional malpractice, in the absence of evidence that the patient had been led to believe by that physician that the sexual relationship was part of the patient's treatment. 724 So. 2d at 546. Although the Gunter decision presented a question of first impression in Alabama, the decision followed the general rule applied in other jurisdictions. However, the instant case does not involve allegations of a sexual relationship, as was the case in Gunter, where the alleged sexual relationship between the patient and her physician was conducted in an office setting as well as away from the office. Indeed, most of the reported cases where appellate courts have declined to hold that the physician's conduct constituted professional malpractice involved either *833 an intimate sexual relationship or sexual misconduct having no connection with the rendering of professional services. See St. Paul Ins. Co. of Illinois v. Cromeans, 771 F. Supp. 349, 352-53 (N.D.Ala.1991) (physician's sexual conduct toward minor patients masturbating in front of them, fondling the patients, attempting to convince patients to have sex with himdid not constitute professional services, and, thus, physician's conduct was not covered by his malpractice insurance); McQuay v. Guntharp, 336 Ark. 534, 540-41, 986 S.W.2d 850, 853 (1999) (physician's fondling of a patient's breasts while using a stethoscope to listen to her heart and lungs did not constitute malpractice); Atienza v. Taub, 194 Cal. App. 3d 388, 393, 239 Cal. Rptr. 454, 457 (1987) (sexual relationship between patient and physician who was treating her for an industrial injury did not constitute malpractice); Odegard v. Finne, 500 N.W.2d 140, 143 (Minn.Ct.App.1993) (sexual relationship between patient and physician who was treating her for colitis was not malpractice); Mindt v. Winchester, 151 Or.App. 340, 345, 948 P.2d 334, 336 (1997) (sexual relationship between patient's wife and the physician treating the patient for infertility was not malpractice); New Mexico Physicians Mut. Liability Co. v. LaMure, 116 N.M. 92, 95-96, 860 P.2d 734, 736-37 (1993) (physician's sexual assault of patient he was treating for an infected thumb was not malpractice and thus was not covered under his malpractice insurance); Standard Fire Ins. Co. v. Blakeslee, 54 Wash. App. 1, 9, 771 P.2d 1172, 1176 (1989) (sexual assault of patient by her dentist was not malpractice and thus was not covered by dentist's malpractice insurance). By contrast, in cases where the alleged sexual misconduct occurs as part of a physician's examination and/or treatment of a patient, the conduct is considered to have occurred during the delivery of professional services, and is therefore cognizable as a medical-malpractice claim. See Hagan v. Antonio, 240 Va. 347, 397 S.E.2d 810 (1990) (physician's act of fondling patient's breasts and making improper comments during what was supposed to be a routine breast examination occurred during the delivery of professional services). Here, Mock went to Dr. Allen complaining of pain to his neck, back, left hip/groin area, and left leg. It was incumbent upon Dr. Allen to examine the painful areas thoroughly in order to diagnose Mock's complaint. Moreover, Dr. Allen testified that he wanted to rule out radiculopathy, a nerve condition originating in the spinal area and extending through the groin and into the leg. Given these circumstances, Dr. Allen's alleged sexual misconduct occurred while he was providing professional services and/or treating Mock's physical injuries. Accordingly, the misconduct Mock accuses Dr. Allen of falls within the ambit of the AMLA. Mock next argues that the trial court erred in ruling that evidence of other similar wrongful acts allegedly committed by Dr. Allen against five other male patients was inadmissible. As noted above, the trial court properly determined that Mock's action against Dr. Allen was governed by the provisions of the AMLA. Therefore, § 6-5-551, Ala. Code 1975, was applicable. That section provides, in pertinent part: In Ex parte Northport Health Service, Inc., 682 So. 2d 52 (Ala.1996), the administrator of a deceased nursing-home resident's estate sued the nursing home, claiming that the facility's employees had abused, mistreated, or neglected the resident. The administrator sought discovery of "similar acts" of abuse. Following the trial court's order finding that information discoverable, the nursing home petitioned this Court for a writ of mandamus. This Court held that the AMLA barred a plaintiffs discovery of "similar acts" or "pattern-and-practice" evidence, and ordered that the trial court vacate its previous discovery order. 682 So. 2d at 55-56. Likewise, in Ex parte Golden, 628 So. 2d 496 (Ala.1993), the plaintiff sued a dentist, claiming that the dentist had engaged in a scheme to defraud his patients. The plaintiff sought discovery of similar acts the dentist had allegedly engaged in with other patients. The trial court denied the discovery, and the plaintiff petitioned this Court for a writ of mandamus. We denied the petition, holding that, contrary to the plaintiff's claims, her case was governed by the AMLA and, thus, that discovery of such evidence was prohibited by § 6-5-551. 628 So. 2d at 498. Mock argues that § 6-5-551 does not provide a blanket prohibition on the discovery or admissibility of "similar-acts" evidence. He points to our decision in Ex parte McCollough, 747 So. 2d 887 (Ala. 1999), as support for his contention. McCollough, however, is factually distinguishable from the instant case. McCollough stands merely for the proposition that evidence of other acts similar to those alleged in the complaint in that case was discoverable, not that it was admissible. The fact that evidence is discoverable does not mean that it will be admissible at trial. See Rule 26(b)(1), Ala.R.Civ.P. ("It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence."). Moreover, in a recent decision, this Court implicitly recognized the inadmissibility of such evidence at trial. In Crowne Investments, Inc. v. Reid, 740 So. 2d 400 (Ala.1999), the granddaughter of a deceased nursing-home resident sued the nursing home, claiming that the facility's breach of the applicable standard of care had resulted in her grandfather's death. At trial, the judge admitted testimony regarding other acts and omissions by the nursing home. The jury returned a verdict in favor of the granddaughter. On appeal, the nursing home argued that the evidence of other acts and omissions was inadmissible under § 6-5-551. We rejected the nursing home's claim, but implicitly recognized that such evidence was normally inadmissible, stating: "A party who opens the door to an otherwise objectionable area of testimony cannot claim error when the opposing party introduces similar evidence." 740 So. 2d at 408. Thus, because the action against Dr. Allen was governed by the AMLA, which includes the provisions of § 6-5-551, Mock was entitled to introduce only evidence concerning Dr. Allen's alleged wrongful acts against him personally; evidence of other wrongful acts allegedly committed by Dr. Allen was properly excluded. Mock also argues that the trial court erred by refusing to allow him to offer evidence concerning Dr. Allen's alleged sexual preference. An examination of the record reveals that at trial Mock sought to read from Dr. *835 Allen's deposition the question, "Are you a homosexual?" and also to read Dr. Allen's denial. Mock then wanted to offer testimony from Dr. Alan Prince to the effect that Dr. Allen had once told him that he had engaged in a homosexual relationship. Mock's argument to the trial court appeared to be that evidence of Dr. Allen's homosexuality would establish Dr. Allen's motive to molest male patients. The trial court determined that the evidence was not relevant at that time, and prohibited Mock's attorney from eliciting this testimony from Dr. Prince. "A trial court has great discretion in determining the admissibility of evidence, and its rulings will not be reversed on appeal absent an abuse of discretion." Grayson v. Dungan, 628 So. 2d 445, 447 (Ala.1993); see also Charles W. Gamble, McElroy's Alabama Evidence § 21.01(6) (5th ed.1996). As this Court explained in Wal-Mart Stores, Inc. v. Thompson, 726 So. 2d 651, 655 (Ala.1998): Here, the trial court acted within its discretion in barring the proffered testimony. Whatever the probative value of this evidence, it was substantially outweighed by the danger of unfair prejudice. Accordingly, the trial court properly excluded that evidence. Based on the foregoing, the judgment of the trial court is affirmed. OPINION OF JUNE 30, 2000, WITHDRAWN; OPINION SUBSTITUTED; APPLICATION OVERRULED; AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, and JOHNSTONE, JJ., concur. LYONS and ENGLAND, JJ., dissent. SEE, J., recuses himself. LYONS, Justice (dissenting). I respectfully dissent. On June 30, 2000, when this Court released its original opinion, I dissented and Justice England and I joined a dissent written by Justice See. On this application for rehearing, Justice See has recused himself. The majority today withdraws the opinion released on June 30 and substitutes a different opinion; Justice See's dissent is not included with the opinion released today. I adhere to the views Justice See expressed in the dissent he issued on June 30, 2000; rather than attempt to restate those views, I attach a copy of Justice See's June 30, 2000, dissent as an appendix to this special writing. ENGLAND, J., concurs. "SEE, Justice (dissenting [from original opinion of June 30, 2000]). "The dispositive issue is whether the Alabama Medical Liability Act of 1987, Ala.Code 1975, § 6-5-540 et seq. (the `AMLA'), applies to this action against a *836 physician. The plaintiff alleges that the defendant, Dr. Robert Allen, improperly `fondled, stroked, caressed or otherwise touched' the plaintiff's genitals during medical examinations. Dr. Allen testified that there was no medical reason for him to engage in the conduct of which he is accused. As to one of the alleged incidents, Dr. Allen testified that he did not remember whether he touched the plaintiff's genitals, but that if he did it was medically appropriate. As to all the other alleged incidents, Dr. Allen stated that there was no medical reason for him to stroke the plaintiff's genitals and that he did not do so. "The trial court held that the AMLA applies to this case and that that Act bars the plaintiff from presenting evidence indicating that Dr. Allen had fondled or stroked the genitals of other male patients. The trial court refused to allow Mock to introduce the testimony of five other patients. The jury found for Dr. Allen, and the court entered a judgment on the verdict. The majority affirms. I do not believe the AMLA applies to all of the alleged incidents; therefore, I must respectfully dissent. "Shellie Mock, Jr., was injured in an automobile accident in 1991. In November 1991, he became a patient of Dr. Allen, a neurologist. Dr. Allen examined or treated Mock several times in November and December 1991. In October 1993, Mock filed this action against Dr. Allen, alleging that Dr. Allen had committed the tort of battery against him when, he said, Dr. Allen `fondled, stroked, caressed or otherwise touched [Mock's] genitals without [Mock's] consent and with no medical reason.'1 Five years later, in 1998, Dr. Allen, for the first time, asserted that the AMLA applied to this case. Dr. Allen filed a motion in limine, asking the trial court to exclude all evidence of similar acts involving other patients, on the ground that such evidence would be inadmissible, pursuant to § 6-5-551.2 Mock opposed the motion, arguing that the AMLA did not apply to this case, because, he argued, Dr. Allen's alleged improper touching of Mock's genitals was outside the scope of the medical treatment. The trial court granted Dr. Allen's motion and excluded the testimony of five other male patients of Dr. Allen, each of whom would have testified that Dr. Allen had improperly stroked his penis during physical examinations or treatment.3 Thus, the trial was essentially a credibility contest between Mockwho testified that Dr. Allen on several occasions improperly touched Mock's genitals and Dr. Allenwho claimed he did not. The jury, apparently finding Dr. Allen a more credible witness than Mock, returned a verdict in favor of Dr. Allen, and the trial court entered a judgment on that verdict. "Mock argues that the AMLA does not apply to his action against Dr. Allen and, therefore, that the trial court erred in excluding the other five patients' testimony that Dr. Allen improperly touched their genitals. Subject to one qualification, I agree. "The Legislature declared that it enacted the AMLA in response to increasing health-care costs caused by `the increasing threat of legal actions for alleged medical injury.' Ala.Code 1975, § 6-5-540. The AMLA applies to actions against a health-care provider alleging a `breach of the standard of care.' Ala.Code 1975, § 6-5-540 et seq. A breach of the standard of care is the `fail[ure] to exercise such reasonable *837 care, skill and diligence as other similarly situated health care providers in the same general line of practice, ordinarily have and exercise in a like case.' § 6-5-548. Thus, the AMLA applies to conduct that is, or that is reasonably related to, the provision of health-care services allegedly resulting in a medical injury. Just as the Alabama Legal Services Liability Act does not apply to every action against a person who is a lawyer, see Cunningham v. Langston, Frazer, Sweet & Freese, P.A., 727 So. 2d 800 (Ala.1999), the AMLA does not apply to every action against a person who is a doctor, see Thomasson v. Diethelm, 457 So. 2d 397 (Ala.1984). It does not, I believe, apply to an action alleging sexual molestation, where the health-care provider concedes that the acts complained of were not medically relevant. Although Mock's claims arise out of conduct that took place at a time when there was a doctor-patient relationship for the purpose of examination and treatment, see Thomasson, that fact alone cannot subject to the provisions of the AMLA all conduct by the doctor, however unrelated to the provision of medical services. Mock alleges that Dr. Allen, during otherwise legitimate medical examinations, did something that Dr. Allen concedes would have been outside the scope of legitimate medical treatment.4 At trial, Dr. Allen testified that, with one possible exception, he had no reason to, and did not, examine Mock's genitals. "The majority concludes that the AMLA applies to Mock's claims against Dr. Allen. As to the alleged incident that Dr. Allen testified might have involved a medically appropriate examination of Mock's genitals, I agree. However, as to the other alleged incidents, I disagree. Dr. Allen testified that, as to those alleged incidents, there was no medical reason for him to touch Mock's genitals, and he has flatly denied doing so. Dr. Allen should not be able to avail himself of the protections of the AMLA with respect to these alleged incidents, which by Dr. Allen's own admission do not involve an alleged breach of the standard of care to be followed in rendering medical treatment. "The trial court excluded the testimony of Dr. Allen's other patients because the AMLA prohibits the introduction of evidence concerning acts other than the one `alleged by [the] plaintiff to render the health care provider liable to [him].' Ala. Code 1975, § 6-5-551. Had the trial court not incorrectly concluded that the AMLA applied, that court would have had the discretion to admit or to exclude the proffered evidence, see, e.g., Bama's Best Party Sales, Inc. v. Tupperware, U.S., Inc., 723 So. 2d 29, 32 (Ala.1998), except as to the alleged incident regarding which Dr. Allen testified that he might have examined Mock's genitals for medical reasons. I would reverse the judgment in favor of Dr. Allen and remand this case for a new trial on the alleged incidents of battery regarding which Dr. Allen has denied touching Mock's genitals; the AMLA would not apply to that trial. Accordingly, I dissent from the affirmance of the judgment in favor of Dr. Allen. Because of the implications of the majority's affirmance an affirmance based on the conclusion that the AMLA applies to a claim against a physician even if the allegation of liability is based on an act or omission that is not even arguably a part of the physician's provision of health-care services,5 I believe the trial court's judgment should be reversed and the case remanded. "___________ *838 1. "Mock also sued Southeast Alabama Medical Center (`SAMC'), where he had been a patient under Dr. Allen's care for a few days. The trial court entered a summary judgment for SAMC; that summary judgment is not at issue in this appeal. 2. "Ala.Code 1975, § 6-5-551, provides: "(Emphasis added.) 3. "Three of the witnesses had been minors when they were Dr. Allen's patients. One of the adult witnesses, who went to Dr. Allen seeking treatment for headaches, would have testified that `[o]n at least four or more occasions, Dr. Allen masturbated [him] until he ejaculated.' Another would have testified that, although he had no complaints about his prostate, rectum, or groin, Dr. Allen `checked' his rectum on two occasions, and that, on a third visit, Dr. Allen rubbed lotion on his thighs and then `grabbed' his penis, at which time, he said, he looked at Dr. Allen with incredulity and Dr. Allen abruptly left the room. At least two of the witnesses would have testified that Dr. Allen did not wear gloves when he stroked their genitals. 4. "Dr. Allen testified in his deposition that `there was no medical or neurological reason that I would have needed to fondle, stroke, or caress Mr. Mock's genitals during the period of time that I saw him from November 19 through December 10, 1991.' He further testified, `There are situations under which a physician may need to stroke, in a medical sense, not in a sexual sense, stroke a person's genitals for purpose of other examination; within the context of my dealing with Mr. Mock, there is no reason that I am aware of that I would have needed to have stroked his genitals, and I did not do that.' 5. "Under the principle implicit in the majority's decision, were a doctor to shoot a patient, the AMLA would apply if that shooting took place during a medical examination."

November 17, 2000

502431a2-9384-47a8-bb68-42c4969920a3

Ex Parte Dan River, Inc.

794 So. 2d 386

1990894

Alabama

Alabama Supreme Court

794 So. 2d 386 (2000) Ex parte DAN RIVER, INC. (In re Dan River, Inc. v. James V. Higgins). 1990894. Supreme Court of Alabama. July 14, 2000. Opinion Overruling Rehearing November 22, 2000. *387 John W. Clark, Jr., and Tommy C. Ritter, Jr., of Clark & Scott, P.C., Birmingham, for petitioner. William P. Boggs and Amy J. Hayes of Boggs & Hayes, Clanton, for respondent. HOUSTON, Justice. On April 26, 1995, James Higgins sued for workers' compensation benefits, alleging that he had "become totally disabled as a result of occupational byssinosis, a disease of the lungs, caused by inhalation of minute particles of dust over a period of time and which ... dust is due to causes and conditions arising out of and in the course of plaintiff's employment [with Dan River, Inc., the defendant]." (Plaintiff's complaint, p. 2, R.7.) (Emphasis added.) Between 1954 and 1977, and on one occasion after 1977,[1] Higgins was exposed to cotton dust and fibers as part of his work environment at Dan River, and Higgins alleges that these materials, the dust and fibers, caused his byssinosis. Byssinosis was the only disease Higgins claimed to have contracted because of his work at Dan River.[2] *388 Three doctors who had examined Higgins testified by deposition. Dr. Brian G. Forrester, a specialist in occupational and environmental medicine, testified as follows, in response to what the attorney for Dan River called "the ultimate question": Dr. Gaeton D. Lorino also testified that Higgins did not suffer from byssinosis: The third doctor, Dr. Robert Fort Hambaugh, Jr., testified that he had been treating Higgins since 1992. Dr. Hambaugh attributed Higgins's breathing problem to his work conditions and exposures to the cotton dust and fibers at work. He treated Higgins for upper and lower respiratory illnesses that he said always followed the same pattern: chronic sinusitis with acute exacerbations, chronic bronchitis with acute exacerbations, always in close proximity to exposure to inhalants while working at Dan River. This same pattern repeated until Higgins retired from Dan River, he said, and the condition then began to improve. Dr. Hambaugh stated that textile fibers are known to cause very serious pulmonary diseases that are chronic, progressive, and even fatal. However, Dr. Hambaugh did not diagnose Higgins with byssinosis: (Emphasis added.) Based upon these doctors' depositions and the testimony of the plaintiff, the trial judge entered this final judgment: (Emphasis added.) The basis for the finding is found in the paragraphs 3, 4, and 6 of the judgment (quoted above), which all refer specifically to byssinosis. Dan River appealed to the Court of Civil Appeals, based upon the fact that not one of the three doctors diagnosed Higgins with byssinosis. The Court of Civil Appeals held, in a 3-2 decision (Robertson, P.J., and Yates and Monroe, JJ., concurring; Crawley and Thompson, JJ., dissenting): Dan River, Inc. v. Higgins, 794 So. 2d 382 (Ala.Civ.App.1999). (Emphasis added.) We granted Dan River's petition for certiorari review. Dan River contends, and we agree, that it was error for the trial court and the Court of Civil Appeals to diagnose Higgins as suffering from byssinosis. The record contains no testimony of a doctor willing to diagnosis Higgins with byssinosis. Even Higgins's own doctor, Dr. Hambaugh, testified, "I have never made the specific diagnosis of byssinosis in this person." To prevail on this workers' compensation claim, Higgins must first prove that he is suffering from an occupational disease, specifically byssinosis. Alabama Code 1975 § 25-5-110, defines "occupational disease": Higgins presented no testimony indicating that he has been diagnosed with byssinosis. Not a single medical expert diagnosed byssinosis; it was error for the trial court to make a diagnosis that the medical experts were not willing to make. We therefore reverse the judgment of the Court of Civil Appeals. By this holding today we limit the holding in 3-M Co. v. Myers, 692 So. 2d 134 (Ala.Civ.App.1997), which stated: 692 So. 2d at 137. The holding in 3-M has no application to this present case because the trial court in 3-M resolved conflicting testimony. We generally agree that a trial court can synthesize a wide range of medical testimony, even conflicting medical testimony, to reach its own conclusions on medical matters. However, trial courts cannot go so far as to find that a plaintiff has a particular disease without the testimony of at least one medical expert, qualified to make such a diagnosis, who is willing to testify that the plaintiff is actually suffering from that disease. Not one doctor diagnosed Higgins's problem as byssinosis. Therefore, it was error for the trial court to find that Higgins had that disease. Our holding here is to be distinguished from the holding in Dan River Mills, Inc. v. Foshee, 365 So. 2d 1232 (Ala.Civ.App. 1979). In that case, the Court of Civil Appeals, affirming a trial court's finding that a plaintiff was suffering from byssinosis after having worked for Dan River, wrote: 365 So. 2d at 1234-36. This present case is distinguishable from Foshee. In Foshee, the trial court heard conflicting testimony from medical experts as to whether the worker was suffering from byssinosis. However, the worker did present a medical doctor who testified that he had diagnosed the worker with byssinosis. If Higgins had presented such testimony in the present case, we would affirm; however, without a byssinosis diagnosis, there is no evidence, much less the "substantial evidence" required by Ala.Code 1975, § 25-5-81(e)(2), to support the trial *393 court's finding that Higgins suffered from byssinosis. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. COOK, J., concurs in the result. HOUSTON, Justice. APPLICATION OVERRULED. HOOPER, C.J., and MADDOX, SEE, and BROWN, JJ., concur. LYONS, JOHNSTONE, and ENGLAND, JJ., dissent. JOHNSTONE, Justice (dissenting). On original submission we reversed the decision of the Court of Civil Appeals affirming the judgment of the trial court awarding the plaintiff workers' compensation for byssinosis arising out of his employment with the defendant Dan River, Inc., where he had breathed textile fibers for about 23 years. Our rationale was that the plaintiff did not prove that his employment had caused his byssinosis inasmuch as he had not proved that he even had byssinosis. While I concurred on original submission, on application for rehearing, my review of Ex parte Price, 555 So. 2d 1060 (Ala.1989), persuades me that the plaintiff did prove that he had contracted byssinosis and that his employment had caused his byssinosis. In Price, this Court stated: 555 So. 2d at 1061-62 (quoting 3 A. Larson, The Law of Workmen's Compensation, § 79.51(a), at p. 15-426.128 (1988), and Fruehauf Corp. v. Prater, 360 So. 2d 999, 1002 (Ala.Civ.App.1978)) (emphasis added). The trial court apparently based its judgment on the testimony of Dr. Robert Ford Hambaugh, Jr., who had treated the plaintiff for the last five or six years or so. Dr. Hambaugh testified in pertinent part: The emphasized language in Dr. Hambaugh's first and last answers quoted above supports the judgment of the trial court. In the context of the law as explained by Price, supra, Dr. Hambaugh's statement that he had never made the specific diagnosis of byssinosis in the plaintiff and his explanation that making such a diagnosis would require taking biopsies from the plaintiffs chest and lungsa procedure he had been unwilling to perform do not detract from the plaintiffs proof enough to invalidate the judgment of the trial court. Rather, Dr. Hambaugh's having "never made the specific diagnosis of byssinosis in" the plaintiff, in the context of Dr. Hambaugh's explanation, imply that he is a cautious, conservative person and a credible witness. We are bound to accept the tendencies of the evidence most favorable to the winner of a judgment based on evidence ore tenus. See Cooper v. Peturis, 384 So. 2d 1087 (Ala.1980). Moreover, such a judgment should not be reversed unless it is palpably wrong and manifestly unjust. Torsch v. McLeod, 665 So. 2d 934 (Ala. 1995). The reason for these rules is that the fact-finder has observed the witnesses' demeanor and the inflections and emphases of the witnesses' delivery of their testimony. Justice v. Arab Lumber & Supply, Inc., 533 So. 2d 538 (Ala.1988). These rules are reinforced by the rule that the beneficent purpose of the Workers' Compensation Act requires all reasonable doubts to be resolved in favor of the employee. Riley v. Perkins, 282 Ala. 629, 213 So. 2d 796 (1968). Thus, I respectfully dissent from the reversal of the judgment of the trial court. LYONS and ENGLAND, JJ., concur. [1] The particular date on which Higgins was last exposed to these materials, which he alleges were toxic, was not established in the record. Dan River contends that the statutory limitations period had expired before Higgins filed this action. However, the statute of limitations is an affirmative defense. Therefore, the burden was on Dan River to show that Higgins had not been exposed to the materials for more than two years before the filing of the complaint. "It is not necessary for the plaintiff to anticipate [the affirmative defense of the statute of limitations] and plead facts in avoidance thereof." Ellis v. Black Diamond Coal Mining Co., 265 Ala. 264, 267, 90 So. 2d 770, 773 (1956). [2] The evidence in the record indicates that Higgins may have suffered occupational diseases other than byssinosis. Because no claims related to diseases other than byssinosis are now before us, we express no opinion as to whether any such claims would be compensable under the Workers' Compensation Act or whether they would be barred by the statute of limitations; nor will we otherwise discuss any such claims.

November 22, 2000

8f25b913-9115-490c-bdf9-a4182f42d6df

Ex Parte American General Finance, Inc.

795 So. 2d 685

1990532

Alabama

Alabama Supreme Court

795 So. 2d 685 (2000) Ex parte AMERICAN GENERAL FINANCE, INC., Robert D. Faulkner, and James Sloop. (Re Mary L. Reynolds v. American General Finance, Inc., et al.) 1990532. Supreme Court of Alabama. December 1, 2000. *686 Robert H. Rutherford and F.A. Flowers III of Burr & Forman, L.L.P., Birmingham; Mack B. Binion of Briskman & Binion, P.C., Mobile, for petitioner. John Ronald Spencer, Mobile; and C.S. Chiepalich, Mobile, for respondents. SEE, Justice. The trial court entered a partial summary judgment in favor of the defendants American General Finance, Inc., Robert D. Faulkner, and James Sloop (collectively "American General"), in a fraud action by Mary L. Reynolds. The Court of Civil Appeals reversed that judgment. See Reynolds v. American Gen. Fin., Inc., 795 So. 2d 681 (Ala.Civ.App.1999). We granted certiorari review to address the question whether, as a matter of law, the plaintiff Reynolds must be held to have discovered the alleged fraud more than two years *687 before she filed her action; if so, then it is barred by the statute of limitations. See Ala.Code 1975, § 6-2-38 (l) and § 6-2-3. Because we hold that Reynolds's fraud action is barred by the statute of limitations, we reverse the judgment of the Court of Civil Appeals. In 1985, Mary L. Reynolds bought a house. Six months later, she sold it to Raymond L. Sherrin and Lezlie Taylor Sherrin for $45,000.[1] Reynolds financed the purchase for the Sherrins. They gave her a promissory note for $41,000 and executed to her a mortgage covering the real estate on which the house was located. The note provided for an annual interest rate of 10% and for monthly payments of $359.80. In April 1988, Reynolds contacted Robert Faulkner, an employee of American General, to inquire about borrowing $5,000 from American General. Reynolds testified that Faulkner said American General would charge "20% interest," and that Reynolds could make "a partial payment assignment of [the] payments" she was receiving from the Sherrins under the promissory note and mortgage. Reynolds met with Faulkner at American General's office and signed two separate, standardized documents. One was entitled, "A Partial Assignment of Promissory Note and Mortgage" and the other was entitled "Settlement Statement." Reynolds admitted that she had the opportunity to read the documents before she signed them, but she stated that she did not do so. She testified, however, that she did ask Faulkner "what it all involved," and that Faulkner responded by saying that "it just had the amount of monthly notes on it, you know, how many notes that it would take to pay that back." The Partial Assignment of Promissory Note and Mortgage states that Reynolds assigns "for a period of 17 months" all her rights, title, and interest in the promissory note and the mortgage the Sherrins had given her. The Settlement Statement lists the "Sale Price" as $5,214.57, and expenses in the amount of $75 for an appraisal fee, $107.50 as a title-policy fee, and $8.50 as a recording fee, and the Settlement Statement is silent as to the interest rate. Reynolds left American General's office with a check for $5,023.57 and copies of the Partial Assignment and the Settlement Agreement. In May 1988, Reynolds again telephoned Faulkner and requested an additional $5,000. Reynolds testified that Faulkner told her over the telephone that "the same terms" (including the 20% interest rate) would apply. Reynolds went to American General's office on May 20, 1988, and signed another Partial Assignment and another Settlement Statement, those documents containing in substance the same language as that contained in the earlier documents. As a result of this second transaction, the first loan was "paid off," Reynolds received an additional $5,000, and she assigned her rights, title, and interest in the Sherrins' promissory note and mortgage "for a period of 38 months." In July 1988, Reynolds and American General entered into a third similar loan transaction. Reynolds received an additional $5,000, the second loan was paid off, and she assigned the Sherrins' payments to American General "for a period of 76 months." In December 1988, Reynolds and American General entered into a fourth similar loan transaction, in which Reynolds received an additional $1,000, the third loan was paid off, and Reynolds assigned the Sherrins' payments to American General "for a period of 87 months." *688 All four of these loan transactions were handled by Faulkner. After each transaction, Reynolds received a copy of the Partial Assignment and a copy of the Settlement Statement for that transaction. In May 1991, Reynolds telephoned American General and spoke with James Sloop, another employee of American General. Reynolds told Sloop about the previous agreements and told him she needed $500. Reynolds and American General entered into a fifth similar loan transaction. Reynolds received a copy of the Partial Assignment and the Settlement Statement from the fifth and final loan transaction. In 1995, the Sherrins decided to sell the house. Reynolds received a telephone call from a title company asking her for the "payoff," or balance owed, on the mortgage.[2] Reynolds told the title company that she did not know the payoff amount and would have to telephone American General for that information. Reynolds telephoned American General for the payoff amount, and she spoke with employee Tracy Skipper. Ms. Skipper told Reynolds that the Sherrins owed approximately $27,000 to her and an additional $10,000 to American General. Reynolds did not agree with the payoff amount Skipper gave her, so she tried to calculate it herself, and concluded "something was wrong." Reynolds later contacted American General and told Skipper that she "didn't agree with the payoff' figure. Reynolds also contacted an attorney and an accountant. Reynolds gave the accountant all the loan documents she had received from American General. The accountant reviewed the documents and told Reynolds that the interest rate on the loans "was more than 20%." On August 7, 1996, more than eight years after the first transaction had closed, and more than five years after the final transaction had closed, Reynolds sued American General, Faulkner, and Sloop, alleging several species of fraud.[3] The trial court entered a summary judgment in favor of American General, Faulkner, and Sloop on all of Reynolds's claims related to the first four loan transactions, "based upon the statute of limitations[,] given [Reynolds's] own admission that she had the same documentation and information in 1988 and 1991 that she states put her on notice of the alleged fraud in 1996 leading to filing of this action." The trial court denied the defendants' motion for summary judgment as it related to Reynolds's fraud claims based on the fifth and final loan transaction, which had occurred in May 1991. The trial court entered a final judgment, pursuant to Rule 54(b), Ala. R.Civ.P., as to all of Reynolds's claims based on the first four loan transactions. Reynolds's claims with respect to the fifth and final loan transaction are still pending before the trial court. The Court of Civil Appeals reversed the summary judgment, holding that "the question whether Reynolds justifiably[[4]] relied upon Faulkner's alleged representations, so that the running of the limitations period was tolled, is to be determined by a jury." Reynolds v. American Gen. Fin., Inc., 795 So. 2d at 685. American General argues that the Court of Civil Appeals erred in reversing the partial summary judgment. It argues that *689 Reynolds's fraud claims are barred, as a matter of law, by the statute of limitations, because, it contends, the loan documents Reynolds received were sufficient to put a reasonable person on notice of the alleged fraud, specifically, that the documents provided notice that the interest rate charged on the loans exceeded the amount represented. We agree. This Court reviews a summary judgment de novo. Ex parte Ballew, 771 So. 2d 1040 (Ala.2000). When a defendant bases its motion for a summary judgment on an affirmative defense, such as the statute of limitations, as American General has done in this case, this Court applies the following standard of review: Bechtel v. Crown Cent. Petroleum Corp., 495 So. 2d 1052, 1053 (Ala.1986). An action alleging fraud is subject to a two-year statute of limitations. Ala. Code 1975, § 6-2-38 (l). "The two-year period does not start to run until the plaintiff has actual knowledge of facts that would ... put a reasonable person on notice of the fraud." Liberty Nat'l Life Ins. Co. v. Parker, 703 So. 2d 307, 308 (Ala.1997) (citing Ala.Code 1975, § 6-2-3[5]; Hicks v. Globe Life & Acc. Ins. Co., 584 So. 2d 458, 463 (Ala.1991)[6]). The question when the plaintiff discovered or should have discovered the fraud for statute-of-limitations purposes is generally one for the jury. Parker, 703 So. 2d at 308. However, this Court has recognized that "there are times when this question is removed from the purview of the jury" and can be decided as a matter of law. Kelly v. Connecticut Mut. Life Ins. Co., 628 So. 2d 454, 458 (Ala.1993). "The question of when a plaintiff should have discovered fraud should be taken away from the jury and decided as a matter of law only in cases where the plaintiff actually knew of facts that would have put a reasonable person on notice of fraud." Hicks, 584 So. 2d at 463. This Court has explained that "it is the knowledge of such facts that would have alerted a reasonable person to the existence of a potential fraud, and not actual knowledge of the fraud itself, that determines whether the question of the tolling of the limitations period in a fraud case [under § 6-2-3] can be decided as a matter of law." McGowan v. Chrysler Corp., 631 So. 2d 842, 845 (Ala. 1993). "As a corollary to this rule, `[w]e have held that fraud is discoverable as a matter of law for purposes of the statute of limitations when one receives documents that would put one on such notice that the *690 fraud reasonably should be discovered.'" Kelly, 628 So. 2d at 458 (quoting Hickox v. Stover, 551 So. 2d 259, 262 (Ala.1989), overruled by Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala.1997)). This corresponding rule does not apply where the documents "are vague or ... do not reasonably indicate that a fraud has occurred, based on the circumstances of [the] case." Id. American General argues that the loan documents Reynolds received from American General in 1988 and 1991 were sufficient to lead her to discover the alleged fraud because these very same documents, by Reynolds's own admission, led her to the actual discovery of the alleged fraud in December 1995, when she says she read the documents for the first time. Therefore, American General argues, her claims are time-barred. American General relies on Lott v. Tarver, 741 So. 2d 394, 397 (Ala.1999).[7] In Lott, the purchasers (the Lotts) alleged that the sellers (the Tarvers) had misrepresented to them the number of years of payments remaining on a mortgage debt that encumbered the property. This Court held that the period allowed by the statute of limitations for the purchasers to file a fraud action against the sellers had begun to run when the purchasers bought the property, because when they bought it the mortgage was already recorded. This Court concluded that because the recorded mortgage clearly showed the date of the final payment, the purchasers could have, by "simple addition," determined that the mortgage debt could not be paid off at the point when they said the sellers had told them it would be paid off. Id. at 398. Although the purchasers in Lott were not provided with a copy of the mortgage, the vendor's-lien deed delivered to them did disclose where the mortgage was recorded. Id. Thus, this Court concluded, knowledge of the contents of the mortgage was, as a matter of law, imputed to the purchasers, by operation of Alabama's recordation statute, Ala.Code 1975, § 35-4-90.[8]Id. American General also relies on this Court's decision in Liberty National Life Insurance Co. v. Parker, 703 So. 2d 307 (Ala.1997), to support its argument that Reynolds's fraud claims are time-barred. That reliance is proper. In Parker, this Court held that, as a matter of law, the plaintiff's receipt of a letter concerning an insurance policy was sufficient notice to start the running of the limitations period. Similarly, in this case we conclude that, as a matter of law, Reynolds's receipt of the loan documents was sufficient notice to start the running of the limitations period. Reynolds argues that the loan documents she received were confusing and did not reasonably indicate that a fraud had occurred; thus, she argues, her receipt of the documents does not warrant a finding that her fraud claims are barred by the limitations period. See Parker, 703 So. 2d at 308. Specifically, Reynolds argues that her fraud claims are not barred because the loan documents that she signed and *691 received from American General in 1988 and 1991 did not mention the interest rate. Justice Johnstone argues in his dissent that the loan documentation could not have placed Reynolds on notice of potential fraud because she, as a lay person, could not have computed from it the actual interest rate being charged. To be put on notice, however, Reynolds did not have to know how to calculate the precise interest rate. Reynolds received the same documentation at each of the five separate loan transactions. Those loan documents were not vague or ambiguous. They clearly recited the amount of the loan, the amount of each monthly payment Reynolds was to receive from the Sherrins, and the number of months those payments were assigned to American General. More important, each set of loan documents (except, of course, the documents Reynolds received at the first transaction, in April 1988) included the "payoff" amount of the previous loan transaction. Thus, the balance of Reynolds's debt to American General was not truly "new information" when she received it from Ms. Skipper in December 1995 (although, of course, the specific amount changes daily). At the latest, then, Reynolds had sufficient information to place her on notice of a potential fraud in May 1991, when she received documentation for the fifth and final loan. Reynolds testified by deposition that she was able to determine, by "adding up" and "multiplying" the figures contained in the loan documents, that "something was wrong." Thus, Reynolds's own testimony demonstrates that she did not need to perform complex mathematical calculations to be put on notice of the alleged fraud. The two-year limitations period, therefore, began to run, at the latest, in 1991 when Reynolds received the last set of loan documents.[9] See Parker, 703 So. 2d at 309. Therefore, we hold that Reynolds's fraud claims, filed in 1996, are time-barred. Accordingly, we reverse the Court of Civil Appeals' judgment and remand the case for that court to enter an order consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, and BROWN, JJ., concur. COOK, JOHNSTONE, and ENGLAND, JJ., dissent. JOHNSTONE, Justice (dissenting). The main opinion holds, in essence, that the plaintiff's paperwork put her on notice that, although American General had represented a 20% interest rate to the plaintiff, American General was charging the plaintiff several percentage points more interest, and the main opinion observes that the plaintiff received this paperwork much more than two years before she filed her lawsuit. This dissent will demonstrate that the paperwork did not put her on notice of the disparity between the interest rate represented and the interest rate actually charged and that only an event less than two years before she filed the lawsuit alerted her to the disparity. *692 As the main opinion explains, American General made a series of five loans to the plaintiff. None of the debts for any of these loans is evidenced by a promissory note. Instead, each loan is memorialized by two documentsa "Settlement Statement" and "A Partial Assignment of Promissory Note and Mortgage." American General used the same preprinted "Settlement Statement" form and the same "A Partial Assignment of Promissory Note and Mortgage" form for all five loans. Only the entries in the blanks in the forms differ from loan to loan. The reference to a promissory note in the "A Partial Assignment of Promissory Note and Mortgage" form is a reference to the note made by the Sherrins to the plaintiff, not a reference to any note made by the plaintiff to American General. I repeat that American General did not use any promissory note to evidence the plaintiffs debt to American General. I attach as Exhibit A to this dissent copies of the paperwork memorializing the first loan and as Exhibit B copies of the paperwork memorializing the fifth and the last loan as fair samples of what the plaintiff received to put her on notice or not to put her on notice. While the paperwork recites the Sherrins' 10% interest rate, nowhere does the paperwork recite any rate for the interest being charged the plaintiff. Likewise, none of the documents supplied by American General to the plaintiff identifies any entry as either the payoff balance or the new amount of any of the successive loans by American General to the plaintiff. I respectfully challenge the reader to calculate from the data entered in the paperwork for each loan what interest rate American General was charging the plaintiff. Those readers who are mathematicians, bankers, or accountants may accomplish the feat. The issue is, though, whether, as a matter of law, this paperwork put the plaintiff, as a layperson, on notice of the disparity between the 20% interest rate represented by American General and the several-points-higher interest rate actually charged the plaintiff by American General. Surely not. The event which alerted the plaintiff that "something was wrong" did not occur until December 1995, less than two years before the August 7, 1996, date when the plaintiff filed her action against the defendants. This event was American General's employee Ms. Skipper's report to the plaintiff of not only the payoff balance of the Sherrins' debt to the plaintiff but also the payoff balance of the plaintiffs own debt to American General. Only this newly acquired information suggested a disparity a disparity between and among the great amount still owed by the plaintiff to American General, the amount already received by American General from Sherrins' payments, and the 20% interest rate previously represented to the plaintiff by American General. Even so, the plaintiff needed the services of an accountant analyzing her paperwork to learn that her suspicions were valid. The most critical part of Ms. Skipper's report to the plaintiff, the balance of the plaintiffs own debt owed to American General, was new information to the plaintiff when she received it from Ms. Skipper in December 1995. The plaintiff could not have calculated her own balance owed to American General by simply subtracting from her original debt to American General the total it would have received in Sherrin mortgage payments over the intervening months inasmuch as the plaintiff's own debt over the same period would have been supplemented by the interest accruing at whatever rate American General was actually charging the plaintiff. Moreover, the plaintiff could not know what American General would claim the plaintiff's *693 unpaid balance to be until Ms. Skipper told the plaintiff in December 1995. Because the loan paperwork, by itself, did not reveal the "facts that would have alerted a reasonable person to the existence of a potential fraud," McGowan v. Chrysler Corp., 631 So. 2d 842, 845 (Ala. 1993) (emphasis omitted), and because the plaintiff did not learn such facts until she received the report from Ms. Skipper less than two years before the plaintiff filed her civil action, it was not barred by the statute of limitations. Thus, I respectfully submit we should affirm the Court of Civil Appeals in its reversal of the partial summary judgment entered by the trial court in favor of the defendants. COOK, J., concurs. [1] Some filings in the record spell these names as "Ray Sherrin" and "Leslie Sherrin." [2] The title company sought the amount of the Sherrins' payoff on the note because the Sherrins were selling the house they had purchased from Reynolds. [3] Reynolds later amended her complaint to add a fraud claim based on the allegation that the defendants had "engaged in the fraudulent practice of `flipping.'" [4] See note 6. [5] Section 6-2-3 provides: "In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting fraud, after which he must have two years within which to prosecute his action." [6] Because this action was filed before March 14, 1997, the applicable standard for determining when the two-year period began to run is that provided by Hicks v. Globe Life & Accident Insurance Co., 584 So. 2d 458, 463 (Ala.1991), overruled by Foremost Insurance Co. v. Parham, 693 So. 2d 409 (Ala.1997). [7] Because the Lotts, the plaintiffs in Lott v. Tarver, filed their action before March 14, 1997, we applied the "justifiable reliance" standard to their case. See Foremost Ins. Co. v. Parham, 693 So. 2d 409, 421 (Ala.1997); and see note 6. [8] The Court of Civil Appeals distinguished Lott from this case on the ground that "the loan documents executed by [American General] and Reynolds did not state the interest rate or the total amount to be repaid by Reynolds." Reynolds v. American Gen. Fin., Inc., 795 So. 2d at 685. In fact, the difference is that in Lott the purchasers did not receive a copy of the mortgage. Instead, the plaintiffs were presumed, by operation of the recordation statute, to know of the facts that would have alerted a reasonable person to the existence of the fraud. In this case, the facts that put Reynolds on notice were in her actual possession from 1988 and 1991, respectively. [9] Reynolds also argues that she did not have actual knowledge of the fraud until January 1996, when she was told by the accountant, whom she had asked to examine the loan documents, that the interest rate charged on the loans was more than 20%. This argument is without merit. As we stated in McGowan, "it is the knowledge of such facts that would have alerted a reasonable person to the existence of a potential fraud, and not actual knowledge of the fraud itself, that determines whether the question of the tolling of the limitations period in a fraud case can be decided as a matter of law." 631 So. 2d at 845 (second emphasis added).

December 1, 2000

b9a91001-9cbd-41ab-8bc2-3cc7b6427f5f

Miller v. Amerada Hess Corp.

786 So. 2d 1106

1990431

Alabama

Alabama Supreme Court

786 So. 2d 1106 (2000) Creighton E. MILLER, as administrator of the estate of Jabe J. Fincher, Sr., deceased v. AMERADA HESS CORPORATION et al. 1990431. Supreme Court of Alabama. December 1, 2000. Donald A. Krispin of Jaques Admiralty Law Firm, P.C., Detroit, Michigan; and Larry Charles Moorer, Mobile, for appellant. George M. Walker of Hand Arendall, L.L.C., Mobile; and Louis C. Woolf of Woolf, McLane, Bright, Allen & Carpenter, Knoxville, Tennessee, for appellees Amerada Hess Corp.; Atlantic Richfield Co.; Ashland Oil, Inc.; Amoco Corp.; Crown Central Petroleum Corp.; Exxon Corp.; Gulf Oil Corp.; Hess Oil Virgin Islands Corp.; Marathon Oil Co.; Monsanto Co.; Shell Oil Co.; Sun Co., Inc. (R&M); Texaco, Inc.; and Union Carbide Corp. Gregory C. Buffalow and Ben H. Harris III of Miller, Hamilton, Snider & Odom, L.L.C., Mobile; and Richard C. Binzley and Harold W. Henderson of Thompson, Hine & Flory, P.L.L., Cleveland, Ohio, for appellees Keystone Tankship Corp., and Marine Transport Lines, Inc. MADDOX, Justice. Creighton E. Miller, administrator of the estate of Jabe J. Fincher, Sr., deceased, sued several defendants, alleging that Fincher's death had resulted from his exposure to benzene and benzene-containing products while he was employed as a merchant mariner, by several employers, over a period of approximately 30 years. Miller stated claims against Fincher's employers, as well as against companies that had manufactured the benzene or the benzene-containing products to which Miller alleged Fincher had been exposed. Two defendants, Keystone Tankship Corporation and Marine Transport Lines, Inc., jointly moved for a summary judgment. On June 5, 1997, the trial court granted their motion and entered a judgment in their favor. Because claims remained pending against other defendants, *1107 however, the trial court's June 5 order was not a final order and was not, therefore, appealable. See Rule 54(b), Ala.R.Civ. App. On August 12, 1999, the remaining defendants jointly moved for a summary judgment. The trial court granted their motion and entered the following order: The case action summary sheet reflects that the trial court entered that order on September 24, and a notation made by the clerk of the court on the judge's written order indicates that it was filed at 11:49 a.m. on that same day. The trial court's September 24 order was a final, appealable judgment because it resolved all of the plaintiffs claims. See Rule 54(b), Ala.R.Civ.App. Accordingly, to pursue an appeal, the plaintiff was required to file his notice of appeal with the circuit clerk within 42 days of September 24, 1999. Rule 4(a), Ala.R.App.P. The plaintiff did not do so. On November 11, 1999, after the 42 day period had expired, the plaintiff moved the trial court to extend the time to file an appeal. The trial court granted the plaintiff's motion, and the plaintiff filed his notice of appeal on November 15, 1999. On January 4, 2000, the defendants filed a motion in this Court to dismiss the appeal on the basis that the trial court had erred in granting the extension; that the extension was not effective; and, therefore, that the appeal was not timely filed. That motion was submitted, to be considered with the merits of the appeal. Timeliness of an appeal is a jurisdictional matter, and an untimely appeal must be dismissed. Rule 2(a)(1), Ala.R.App.P. In Bacon v. Winn-Dixie Montgomery, Inc., 730 So. 2d 600 (Ala.1998), this Court was presented with a similar factual situation similar to the one here now. In that case, the plaintiff did not learn that the trial court had entered a summary judgment for the defendant until after the 42-day period for appealing had expired. In that case, this Court noted that "Rule 77(d)[, Ala.R.Civ.P.,] exclusively governs the situation in which a litigant claims that the clerk's office failed to notify her of the trial court's entry of a judgment." 730 So. 2d at 602. Rule 77(d) provides: In interpreting Rule 77(d), the Court in Bacon wrote: 730 So. 2d at 602. (Some emphasis added.) Given Rule 77(d) and its interpretation in Bacon, we must determine whether the plaintiff now before us has shown "beyond a ... simple reliance on the notification process of the clerk's office." If not, then we must grant the defendants' motion to dismiss this appeal. Plaintiff's lead counsel is from Detroit, Michigan. Lead counsel associated local counsel, who argued against the motion for summary judgment at the hearing the trial court held on September 24. The defendants argue that plaintiff's local counsel was present in the courtroom when the trial judge entered the judgment and thus that the plaintiff had notice of the judgment; the defendants have filed with their motion to dismiss the appeal an affidavit to that effect.[1] Plaintiff's local counsel, Larry C. Moorer, in a counter-affidavit, disputes the defendants' contention that he was present when the judgment was entered.[2] *1109 The record clearly shows that the judgment was entered on September 24. Plaintiff's local counsel, in his affidavit, stated that local practice, i.e., the practice in the Mobile Circuit Court, is for trial judges to place copies of orders or judgments in mailboxes maintained in the courthouse for local attorneys. He also stated that he checked his courthouse mailbox nearly every day the courthouse was open and that he "never received any formal order or judgment ... indicating that the motion for summary judgment had been ruled upon." The plaintiff argues that, because local counsel regularly checked his mailbox in the courthouse, the plaintiff's failure to file a timely notice of appeal was the kind of "excusable neglect" contemplated by Rule 77(d), Ala.R.Civ.P. Consequently, he argues, this case is similar to Turner v. Barnes, 687 So. 2d 197 (Ala.1997), and Sparks v. Alabama Power Co., 679 So. 2d 678 (Ala.1996). Turner and Sparks are distinguishable, however. In Turner and Sparks, this Court noted that the Jefferson County circuit clerk's office followed a practice of entering information from case action summary sheets onto a computer system. In both cases, the appellants' attorneys had contacted personnel of the clerk's office and had been told by those representatives of the clerk's office, who apparently relied on incorrect information contained on the office's computer system, that no judgment had been entered. In Sparks, this Court held that "where there is a material discrepancy between the information contained on the formal case action summary sheet in a case and the information contained in the circuit clerk's computerized docket, a litigant should not be penalized [for] relying in good faith on the information contained in either `document.'" Sparks, 679 So. 2d at 681. We believe the facts and circumstances of this case are more similar to those of Bacon, supra, than to those of Turner and Sparks. In Bacon, the trial had also granted an extension of the time to file a notice of appeal; this Court stated: 730 So. 2d at 601. After stating that "Rule 77(d) exclusively governs the situation in which a litigant claims that the clerk's office failed to notify her of the trial court's entry of a judgment," this Court distinguished the Sparks case, as follows: 730 So. 2d at 602-03. (Emphasis added.) In a footnote to the Bacon opinion, this Court stated: 730 So. 2d at 603 n. 3. Even assuming that the plaintiffs counsel was not present in the courtroom when the trial court entered the judgment, we note that the record does not show that the plaintiffs counsel took action "beyond a ... simple reliance on the notification process of the clerk's office" or court personnel, Bacon, 730 So. 2d at 602. Thus, we conclude that Sparks and Turner are distinguishable from this case and that this case is more similar to Bacon. Accordingly, we conclude that the plaintiff did not show the kind of "excusable neglect" required by Rule 77(d). Thus, we grant the defendants' motion to dismiss the appeal. Because we dismiss the appeal, we do not discuss the merits of the appeal. APPEAL DISMISSED. HOOPER, C.J., and HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. COOK, J., dissents. COOK, Justice (dissenting). Rule 77(d), Ala.R.Civ.P., provides that "upon a showing of excusable neglect based on a failure of the party to learn of the entry of the judgment or order the circuit court in any action may extend the time for appeal not exceeding thirty (30) days from the expiration of the original time now provided for appeals in civil actions." The majority holds that the trial judge abused his discretion in extending the time in which to file a notice of appeal in this case on the ground of "excusable neglect." I disagree; therefore, I respectfully dissent. The majority concedes that the evidence indicates "the practice in the Mobile Circuit Court is for trial judges to place copies of orders or judgments in mailboxes maintained in the courthouse for local attorneys" and that no such copies were placed in the mailboxes until after the 42-day appeal period had expired. 786 So. 2d at 1109. However, Rule 77(d) provides, in part: (Emphasis added.) This language is not "aspirational." Turner v. Barnes, 687 So. 2d 197, 198 (Ala.1997) (emphasis added). Our Rules of Civil Procedure are to "be construed and administered to secure the just, speedy and inexpensive determination *1111 of every action." Ala.R.Civ.P. 1(c). "The dismissal of an appeal as untimely in a case in which the judiciary itself failed to follow the mandates of Rule 77(d) and thereby caused the untimeliness would not be `just.'" Etherton v. City of Homewood, 700 So. 2d 1374, 1378 (Ala.1997). "Indeed, it would be particularly repugnant, not only to the tenor of the rules, but also to justice, equity, and the integrity of the institution. It would be inequitable and unjust to hold a party strictly to the provisions of Rule 77(d) if the judiciary itself does not comply with them." 700 So. 2d at 1378 (emphasis added). This case is essentially indistinguishable from Brotherhood of Railway Carmen Division of Transportation Communications International Union v. Chicago & North Western Transportation Co., 964 F.2d 684 (7th Cir.1992).[3] In that case, an appealable judgment was entered on March 21, 1991, against Brotherhood of Railway Carmen ("BRC") in favor of Chicago & North Western Transportation Company ("CNW"). Id. at 685-86. "Neither party, however, received ... notification from the district court clerk's office of a docket entry to [that] effect." Id. at 686. On April 30, 1991, BRC inquired about the status of the case and "was told that an order ... had been entered on March 21." Id. When BRC moved to extend the time in which to file a notice of appeal, the trial court granted the motion.[4] One of the issues on appeal was whether the trial court had abused its discretion in granting BRC's motion. Id. Specifically, "CNW contend[ed] that the failure of the Clerk to notify the parties of the entry of the March 21 order did not afford BRC `excusable neglect' under ... the Federal Rules of Appellate Procedure." Id. The United States Court of Appeals for the Seventh Circuit disagreed with CNW, and explained: Id. (Emphasis added.) See also Varhol v. National R.R. Passenger Corp., 909 F.2d 1557, 1563 (7th Cir.1990) ("deference" given trial court's finding of "excusable neglect"). This is the approach we should adopt in this case. The majority, however, relies on Bacon v. Winn-Dixie Montgomery, Inc., 730 So. 2d 600 (Ala.1998), in which I also dissented. The rule that proceeds from Bacon and this present case unduly burdens both the members of the bar and courthouse personnel. Under this rule, attorneys cannot rely on the notification system established by law or local rule. Consequently, they will be compelled to inquire in the clerk's office, or physically visit the trial judge's office, at regular intervals to *1112 determine the status of every pending case in which an appealable order may be entered. This procedure will add significantly to the duties of-among others-the trial judge's docket clerk. The rule of these decisions is neither necessary nor practical. It will not "secure," but, rather, will impede, the "just, speedy and inexpensive determination of every action." Rule 1(c). For these reasons, I respectfully dissent. [1] In an affidavit by George M. Walker, attached to defendants' motion to dismiss the appeal, Walker states, in part, that the "[motion for summary judgment] was scheduled for oral argument on Friday, September 24, 1999, before trial judge Edward B. McDermott" and that "Judge McDermott heard argument that day and, at the conclusion of the argument, announced that defendants' Motion for Summary Judgment was granted." Walker further stated in the affidavit: "Local counsel for plaintiff, Larry C. Moorer, argued the motion for plaintiff and was present when Judge McDermott announced that he was granting the motion. Mr. Moorer was also present when I presented Judge McDermott in open court the proposed order which he signed that same day. There was no question in my mind, and there should not have been any question in the mind of anyone in the courtroom that morning, that Judge McDermott had granted defendants' Motion for Summary Judgment and that he had signed, or was going to sign that day, the order I presented to him confirming that." [2] Moorer's affidavit, contained in a document filed in this Court and styled "APPELLANT'S CROSS MOTION TO STRIKE MATERIALS OUTSIDE THE RECORD, AND ALTERNATIVE CROSS MOTION TO REMAND FOR FURTHER FACTFINDING," states: "2. On Friday, September 24, 1999, I appeared before Judge McDermott in the Circuit Court and argued Plaintiff's position in opposition to Defendants' Motion for Summary Judgment. I recall waiting for some time in the courtroom before our case was called. I recall arguing the motion and that the argument was fairly brief, being only a few minutes long. Once the oral argument on the motion was over, I immediately left because I also had a hearing scheduled in Baldwin County that morning. "3. I have read the Motion to Dismiss and the Affidavit of George M. Walker, and I am aware that Defendants/Appellees claim that Judge McDermott actually granted summary judgment at the oral argument on the morning of September 24, 1999; that Mr. Walker presented an order granting summary judgment, and that Judge McDermott signed that order in my presence. I have no recollection of Judge McDermott stating that summary judgment was granted. Had an order been signed in my presence, the uniform practice was that I would have been given a copy of it." He further stated: "I never received notice of the entry of summary judgment until November 10, 1999, when I received a telephone call from the clerk's office concerning disposition of exhibits in the case." He further stated that what he alleged in his affidavit was the practice in the Mobile Circuit Court regarding distribution of orders of the court. [3] "Rule 77(d), Ala.R.Civ.P., is substantially similar to Rule 77(d), Fed.R.Civ.P." Bacon v. Winn-Dixie Montgomery, Inc., 730 So. 2d 600, 603 n. 3 (Ala.1998). Because "the Alabama Rules of Civil Procedure are modeled on the Federal Rules of Civil Procedure, federal decisions are highly persuasive when we are called upon to construe the Alabama rules." City of Birmingham v. City of Fairfield, 396 So. 2d 692, 696 (Ala.1981). [4] With a few exceptions, Fed.R.App.P. 4(a)(1)(A) requires that a notice of appeal be filed "within 30 days after the judgment or order appealed from is entered."

December 1, 2000

42b66606-7a2a-4f1b-95bc-bb3515ad16a8

Ex Parte Vongsouvanh

795 So. 2d 625

1991697

Alabama

Alabama Supreme Court

795 So. 2d 625 (2000) Ex parte Jimmy VONGSOUVANH. (In re Jimmy Vongsouvanh v. Steel Processors, Inc.) 1991697. Supreme Court of Alabama. December 15, 2000. John L. Moore IV, Mobile, for petitioner. Barry C. Prine of Sintz, Campbell, Duke & Taylor, Mobile, for respondent. HOUSTON, Justice. Jimmy Vongsouvanh filed a workers' compensation complaint against his employer, Steel Processors, Inc., seeking permanent-total-disability ("PTD") benefits for mental disorders he claimed to have suffered following a work-related injury. Steel Processors, Inc., does not question whether the accident itself was work-related. Nor does it dispute whether the physical injuries Vongsouvanh suffered were work-related. Instead, it challenges the compensability of his mental disorders, which developed after the accident. *626 Although the trial court found in favor of Vongsouvanh and awarded him permanent-partial-disability benefits, it refused to give him PTD benefits because it concluded that his physical injuries were not the proximate cause of his mental disorders. The Court of Civil Appeals, on April 7, 2000, affirmed, without an opinion. Vongsouvanh v. Steel Processors, Inc., (No. 2990004) 795 So. 2d 848 (Ala.Civ.App. 2000) (table). We granted Vongsouvanh's petition for certiorari review. We reverse and remand. Vongsouvanh was a welder employed by Steel Processors, Inc., when he sustained several injuries in an automobile accident. While traveling on a Virginia highway to a work site in New Jersey, he lost control of the van he was driving and hit a tree. He, along with coworker and passenger Eric Dickson, were pinned in the vehicle for three to four hours. As a result of the accident, Dickson died one week later. The accident caused Vongsouvanh both physical and mental injuries, which impair his ability to perform his job as a welder. Physicians in a Virginia hospital treated him for a fractured right ankle and a damaged right hand. In order to stabilize the fracture, the doctors inserted a plate and two pins in his ankle joint. When he returned to Mobile, an orthopedic surgeon removed the metal objects in his ankle and later performed carpal-tunnel-release surgery to relieve pain in his right hand. Despite these surgeries, Vongsouvanh complained at trial of pain in both his ankle and his hand. Vongsouvanh also suffers from several mental disorders that developed after the accident. His psychiatrist diagnosed him with four mental disorders: (1) depression, (2) chronic-pain syndrome, (3) "status-post-motor-vehicle-accident" with traumatic injuries, and (4) reflex sympathetic dystrophy secondary to the accident. According to his psychiatrist, Vongsouvanh is totally and permanently disabled as a result of the injuries he incurred as a result of the accident. Upon the advice of his doctors and a vocational expert, Vongsouvanh returned to work several months after the incident. Steel Processors accommodated his limitations and provided him with a smaller welding iron and a chair at his work station so that he could sit while he welded. Even so, he was unable to perform adequately his duties as a welder and, for that reason, he left the employer's facility and has not returned to work. The trial court stated that Vongsouvanh was not entitled to PTD benefits because, the court said, his physical injuries were not "the" proximate cause of his mental disorders. (Emphasis added.) Instead, the court concluded that the proximate cause of his mental disorders "was and is the death of [his] co-employee and the guilt and remorse [he] feels as a result of being responsible for that death." The court gave Vongsouvanh an impairment rating of 75% to the whole body and awarded him 300 weeks of permanent-partial-disability-benefit payments less any temporary-total-disability benefits he had previously received. The sole issue here is whether the trial court erred when it denied Vongsouvanh's claim for PTD benefits on the basis that his physical injuries were not "the" proximate cause of his mental disorders. The general rule of appellate review is that when a trial court, in a nonjury case, is presented evidence ore tenus, its findings based on that evidence are presumed correct, unless the court has committed plain and palpable error. Ex parte Powell, 763 So. 2d 230, 232 (Ala.1999). We conclude that the trial court erred when it held that Vongsouvanh had not proved that his physical injuries were a proximate cause of his mental disorders. *627 Vongsouvanh correctly relies on our decision in Ex parte Valdez, 636 So. 2d 401 (Ala.1994), and argues that the trial court applied the wrong standard. In Valdez, the widow and children of an employee who died of lung cancer sued for workers' compensation, alleging that the employee's exposure to an occupational hazard (coaltar epoxy) had caused his cancer and his eventual death. 636 So. 2d at 402. The record indicated the employee had had other nonoccupational hazards, including tobacco use and a genetic predisposition. Id. at 403. No medical expert could conclusively say whether exposure to coal-tar epoxy, or any other particular factor, had caused the employee's cancer. Id. at 403. The trial court in Valdez held that because the plaintiffs had failed to prove that the claimed occupational hazard directly or proximately caused the employee's illness and death, they could not collect benefits. 636 So. 2d at 403. The Court of Civil Appeals affirmed, applying the same standard. Ex parte Valdez, 636 So. 2d 398, 401 (Ala.Civ.App.1993). We reversed the judgment and remanded the case, holding that both the trial court and the Court of Civil Appeals had used the wrong analysis. Recognizing that multiple factors may have caused the employee's cancer, we held that the correct standard was whether exposure to the occupational hazard was a contributing cause of the employee's illness and resultant death. 636 So. 2d at 403. In this case, as in Valdez, multiple factors caused the problem at issue. The evidence in the record indicates that pain caused by Vongsouvanh's physical injuries, as well as mental anguish caused by the death of his coworker, played significant roles in the development of his mental disorders. Vongsouvanh testified at trial that he suffers constantly from the physical pain in his hand and ankle. He also admitted that he is continually haunted by a belief that he is responsible for Dickson's death. No evidence in the record suggests that Vongsouvanh is malingering or is in any manner being disingenuous about his condition. Dr. Arthur Dumont, Vongsouvanh's psychiatrist, confirmed that many factors had contributed to Vongsouvanh's mental disorders. Dr. Dumont, through deposition testimony, opined that Vongsouvanh is totally and permanently disabled and that his disability is causally related to his physical injuries. Dr. Dumont explained that intense guilt and remorse over the death of his friend also caused his mental disorders. In fact, Dr. Dumont asserted in his deposition that Vongsouvanh could remain totally disabled "even if the pain were completely removed right now because of the traumatic psychological nature of the accident, the relationship with the friend and the friend's death." Based on this evidence, we find it clear that Vongsouvanh's mental disorders originated from both physical and emotional factors. Thus, the trial court should have applied the "contributing-cause" standard set forth in Valdez. If the court had used this standard, the evidence in the record would have been sufficient for the court to conclude that Vongsouvanh's physical injuries were a contributing cause of his mental disorders. Steel Processors argues that Vongsouvanh's claim is statutorily barred. The Legislature has limited workers' compensation for mental injuries. Section 25-5-1(9), Ala.Code 1975, defines "injury" for the purposes of the workers' compensation law; it reads, in relevant part: *628 Under Alabama law, for an employee to recover for psychological disorders, the employee must have suffered a physical injury to the body and that physical injury must be a proximate cause of the psychological disorders. See, e.g., Goolsby v. Family Dollar Stores of Alabama, Inc., 689 So. 2d 104, 106 (Ala.Civ.App.1996). The evidence in the record indicates, as discussed above, that Vongsouvanh's physical injury was a proximate cause of his mental disorders. Thus, § 25-5-1(9), Ala. Code 1975, does not bar his recovery. Therefore, the trial court erred by applying the wrong standard and not determining whether Vongsouvanh's physical injuries were a contributing cause of his mental disorders. The evidence indicates that these injuries contributed, and continue to contribute, to cause Vongsouvanh's mental disorders; that Vongsouvanh is totally and permanently disabled; and that he is entitled to PTD benefits. However, if it is later determined that Vongsouvanh has been completely relieved of the physical pain caused by the injuries he received in the accident, but that he still has a mental illness, then Steel Processors may seek a reevaluation of the judgment to be based on our decision today, pursuant to Ala.Code 1975, § 25-5-57(a)(4)b., for a determination of whether the mental illness is proximately caused by physical injury. We reverse the judgment of the Court of Civil Appeals affirming the trial court's judgment denying Vongsouvanh PTD benefits, and we remand this case for the Court of Civil Appeals to direct the trial court to enter a judgment consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. SEE, J., dissents. SEE, Justice (dissenting). I disagree with the main opinion's holding that the trial court erred in denying Vongsouvanh's claim for permanent-total-disability benefits. The main opinion bases this holding on its conclusion that Vongsouvanh presented substantial evidence indicating that his physical injuries were a contributing cause of his mental disorders; however, this Court's standard of review on appeal is not whether the plaintiff presented substantial evidence but, rather, whether the trial court's finding is supported by substantial evidence. It is "settled that the trial court's findings on disputed evidence in a workers' compensation case are conclusive." Ex parte Ellenburg, 627 So. 2d 398, 399 (Ala. 1993). Section 25-5-81(e)(2), Ala.Code 1975, provides that "[i]n reviewing pure findings of fact, the finding of the circuit court shall not be reversed if that finding is supported by substantial evidence." While this Court is authorized to determine whether the trial court's decision is supported by substantial evidence, it is not authorized to independently weigh the evidence. See Ex parte Alabama Ins. Guar. Ass'n, 667 So. 2d 97, 99 (Ala.1995) (holding that the Court of Civil Appeals committed reversible error when it reweighed the evidence in a workers' compensation case).[1] To find causation ordinarily requires that a judge make specific findings of fact. See, e.g., City of Muscle Shoals v. Davis, 406 So. 2d 919, 922 (Ala.Civ.App.1981) (noting that "[s]ince the evidence supports the *629 trial court's findings of fact as to both legal and medical causation, the test of whether the job caused the injury is satisfied"). In this case, the trial court found as a matter of fact that Vongsouvanh's physical "injuries were not the proximate cause of [his] mental disorder." That finding of fact is supported by substantial evidence. Thus, under § 25-5-81(e)(2), Ala.Code 1975, this Court may not reverse the trial court's judgment. I respectfully dissent. [1] The 1992 amendments to the Workers' Compensation Act "did not alter the rule that [the appellate court] does not weigh the evidence before the trial court." Edwards v. Jesse Stutts, Inc., 655 So. 2d 1012, 1014 (Ala. Civ.App.1995).

December 15, 2000

a5736469-133a-4a8b-b0e3-ee0e8b6d4045

Mitchell v. H & R BLOCK, INC.

783 So. 2d 812

1971582

Alabama

Alabama Supreme Court

783 So. 2d 812 (2000) Levon MITCHELL and Geral Mitchell v. H & R BLOCK, INC., and Ruth Wren. 1971582. Supreme Court of Alabama. November 17, 2000. *813 Steven A. Martino of Jackson, Taylor & Martino, P.C., Mobile, for appellants. A. Inge Selden III, Stephen C. Jackson, and Carl S. Burkhalter of Maynard, Cooper & Gale, P.C., Birmingham; and Warren C. Herlong, Jr., of Helmsing, Sims & Leach, P.C., Mobile, for appellees. ENGLAND, Justice. The plaintiffs appeal from the trial court's order denying a class certification. They argue that the trial court abused its discretion in denying the certification. Because the trial court incorrectly adjudicated an issue of law in its analysis done pursuant to Rule 23(b)(3), Ala. R. Civ. P., and because it provided no analysis whatever under Rule 23(a), we reverse the order and remand. The Mitchells sued H & R Block, Inc., and Ruth Wren on behalf of themselves and sought to be allowed to represent a class composed of all Alabama residents similarly situated. The Mitchells' claims arose out of a tax-refund-anticipation-loan ("RAL") program offered through H & R Block's company-owned and franchised offices. The Mitchells allege that H & R Block habitually received hidden profits from tax-refund-anticipation loans that were obtained on behalf of its clients from third-party lenders. The Mitchells originally stated four causes of action: 1) breach of fiduciary duty, 2) fraudulent suppression, 3) fraudulent misrepresentation, and 4) unjust enrichment. However, the Mitchells sought class certification only as to the breach-of-fiduciary duty and unjust-enrichment claims. The trial court denied class certification, based on its finding that the contract used in the RAL program did not establish a fiduciary relationship between H & R Block and the Mitchells. The trial court's order denying class certification discusses the law on class certification; we quote that order here, in pertinent part: Although an order denying class certification is an interlocutory order, it is appealable because it "finally determines a claim of right separate from and collateral to the rights asserted in the cause of action" and makes further judicial proceedings in the action ineffective. Butler v. Audio/Video Affiliates, Inc., 611 So. 2d 330, 331 (Ala.1992). The question whether to certify a class is in the sound discretion of the trial court, and, so long as the trial court considers the correct criteria in making its determination, we review its ruling only to determine whether the trial court abused its discretion. Adams v. Robertson, 676 So. 2d 1265, 1270 (Ala.1995), cert. dismissed as improvidently granted, 520 U.S. 83, 117 S. Ct. 1028, 137 L. Ed. 2d 203 (1997); First Alabama Bank of Montgomery, N.A. v. Martin, 425 So. 2d 415, 423 (Ala.1982), cert. denied, 461 U.S. 938, 103 S. Ct. 2109, 77 L. Ed. 2d 313 (1983). The Mitchells contend that the trial court abused its discretion in denying class certification as to the claims alleging breach of fiduciary duty and unjust enrichment. The Mitchells argue that by signing the loan document all class members authorized H & R Block to act on their behalf for the purpose of obtaining a loan and that H & R Block uniformly acted on that authorization and uniformly obtained undisclosed profits from the third-party lenders involved in the transactions. The Mitchells allege that in every case, H & R Block required its client to sign a loan application authorizing, and requesting, H & R Block to transfer certain information to the lender for the sole purpose of obtaining a loan on behalf of the client. The Mitchells claim that the loan documents, along with H & R Block's consent to the restrictions contained within those documents, created an agency relationship. The Mitchells also argue that the documents used by H & R Block contained uniform language. In its order, the trial court held that the Mitchells' claims were not suitable for class certification, based on its finding that the language of the documents did not create an agency relationship between H & R Block and its clients. Although the issue was not raised by the Mitchells, the trial court went on to discuss the issue whether a fiduciary relationship existed outside the loan document. The trial court determined that finding whether a fiduciary relationship had been established in this manner would involve a "highly individualized inquiry" and that "common questions of law or fact" could not "predominate" in such an inquiry, citing Rule 23(b)(3). The trial court, in effect, adjudicated the issue whether the loan documents and H & R Block's acceptance of the restrictions contained in those documents created a contractual agency relationship, and in its order it stated: We conclude that the trial court erred by adjudicating, during the class-certification *816 hearing, the issue whether the loan documents and the restrictions contained in those documents created an agency relationship. In adjudicating that issue, the court failed to address the hurdles a plaintiff must overcome under Rule 23(a). As the trial court noted in its order, Alabama's Rule 23 and the corresponding federal rule (Rule 23, Fed.R.Civ. P.) are "virtually identical," Marshall Durbin & Co. v. Jasper Utilities Bd., 437 So. 2d 1014, 1025 (Ala.1983), and "[f]ederal authorities are persuasive when [a court is] interpreting the Alabama Rules of Civil Procedure." Rowan v. First Bank of Boaz, 476 So. 2d 44, 46 (Ala.1985). In Briggs v. Countrywide Funding Corp., 183 F.R.D. 576 (M.D.Ala.1997), the United States District Court for the Middle District of Alabama stated: The question of class certification is a procedural one distinct from the merits of the action. Taylor v. Flagstar Bank, FSB, 181 F.R.D. 509 (M.D.Ala.1998) (citing Garcia v. Gloor, 618 F.2d 264 (5th Cir.1980), cert. denied, 449 U.S. 1113, 101 S. Ct. 923, 66 L. Ed. 2d 842 (1981)). In finding that the loan documents and the restrictions contained in those documents did not create an agency relationship between H & R Block and its clients, the trial court made a determination, as a matter of law, on the merits of the Mitchells' contractual-agency argument. A court should not make this kind of determination regarding the merits of a plaintiff's case in a class-certification hearing. See Ex Parte Government Employees Ins. Co., 729 So. 2d 299 (Ala.1999). We note that this Court has stated: Ex parte AmSouth Bancorporation, 717 So. 2d 357, 363 (Ala.1998). In analyzing the question whether a fiduciary relationship existed between H & R Block and its taxpayer clients, the trial court had reason to look beyond the pleadings, because each situation dealt with oral communications between H & R Block and its clients. However, the contractual-agency issue requires the trial court to do nothing more than look to see if a uniform document existed and whether it was used uniformly by H & R Block. In adjudicating the issue of the existence of a contractual-agency relationship between H & R Block and its clients based on the loan document, the trial court erred. The trial court also found that the unjust-enrichment claim was unsuitable for class treatment because it was derivative of the Mitchells' other claims.[2] In its order, the trial court stated: This Court has stated that "[t]he essence of the theories of unjust enrichment... is that a plaintiff can prove facts showing that defendant holds money which, in equity and good conscience, belongs to plaintiff or holds money which was improperly paid to defendant because of mistake or fraud." Hancock Hazlett Gen. Constr. Co., 499 So. 2d 1385 (Ala.1986) (citing Foshee v. General Tel. Co., 295 Ala. 70, 322 So. 2d 715 (1975), and Wash v. Hunt, 281 Ala. 368, 202 So. 2d 730 (1967)). If the trial court had been correct in adjudicating the issue whether the loan document created an agency relationship, then it might have had ample reason to find the unjust-enrichment claim unsuitable for class treatment as being derivative of the fiduciary-duty claim. However, the trial court erred in adjudicating the issue whether the loan documents and restrictions therein created an agency relationship, and, therefore, it erred in finding the unjust-enrichment claim based on the fiduciary-duty claim unsuitable for class certification. This Court has stated that every order addressing class certification must provide a rigorous analysis of the four elements contained in Rule 23(a). American Bankers Life Assurance Co. v. Mercury Fin. Corp., 715 So. 2d 186, 188 (Ala. 1997); see Taylor v. Flagstar Bank, FSB, 181 F.R.D. 509, 512 (M.D.Ala.1998). We review a trial court's decision regarding class certification for abuse of discretion, and the trial court must make that "rigorous analysis" whether it makes a class certification or denies certification. In discussing this requirement, this Court, in American Bankers, cited Rowan v. First Bank of Boaz, 476 So. 2d 44 (Ala.1985), and stated: 715 So. 2d at 188. Here, the trial court's order omitted any analysis of the four requirements contained in Rule 23(a), and it discussed only the predominance requirements contained in Rule 23(b)(3). Additionally, much of the court's discussion centered on the merits of the plaintiffs' agency claim and addressed claims that were not presented for class certification. Because the order does not provide an analysis of the Rule 23(a) requirements, this Court cannot determine whether the trial court complied with Rowan and applied the relevant criteria. The order denying class certification is reversed and the case is remanded for the trial court to make determinations and enter an order addressing the requirements *818 of Rule 23(a) and (b)(3), in light of this opinion. REVERSED AND REMANDED. HOUSTON, COOK, SEE, and JOHNSTONE, JJ., concur. MADDOX, J., concurs in the result. HOOPER, C.J., and BROWN, J., dissent. LYONS, J., recuses himself. HOOPER, Chief Justice (dissenting). It is certainly not pleasant for me to have to say this, but here we go again. Today's opinion suggests that Alabama seems intent upon remaining the poster child for yet another form of abuse of the judicial systemthe "drive-by" class certification. See Victor E. Schwartz, Mark A. Behrens, and Leah Lorber, Federal Courts Should Decide Interstate Class Actions: A Call for Federal Class Action Diversity Jurisdiction Reform, 37 Harv. J. on Legis. 483, 494, 499-501 (Summer 2000).[3] For the following reasons, I must strenuously dissent. I must also state plainly that the main opinion's rationale seems illogical to me. The main opinion contains the following language: 783 So. 2d at 816. (Citations omitted.) This passage from the main opinion makes it clear that the trial court was even less intrusive in its examination of the substantive issues required to address the agency issue than in its review of the fiduciary-relationship issue. Where is the analysis as to whether the trial court went too far as to the agency issue? How did the trial court go too far with one and not the other? I do not see the distinction between addressing the substantive issues behind the question whether there was a fiduciary relationship and addressing the substantive issues behind the agency allegation. The only difference appears to be that the trial judge did not have to expend as much energy on the agency issue. The conclusion of the main opinion does not follow from the facts of the case. The trial judge explained his reasoning carefully; he could not decide whether this putative class action met the threshold requirements of Rule 23, Ala.R.Civ.P., without addressing the agency issue. Are we now restricting the ability of trial judges to make a rigorous analysis of the factors involved in class-action certifications? Even if deciding the agency issue was not essential to the trial court's determination of whether Rule 23 had been complied with, the court had to address the agency issue, or else there was no need to address the fiduciary-relationship issue. But for the failure of the agency issue, there was no need for the trial court to address the fiduciary-relationship issue. If there is no agency relationship between the Mitchells and H & R Block, and there appears not to be one,[4] then the only possible basis for the Mitchells' action against H & R Block would have to be the alleged fiduciary relationship between H & R Block and the Mitchells. However, the trial judge made it clear that the fiduciary-relationship allegation cannot be the basis for a class action, because of the many individual questions that would have to be answered as to each class member's interaction with H & R Block. The main opinion's treatment of the fiduciary-relationship issue ignores Rule 23(b)(3), Ala.R.Civ.P., which requires that the plaintiffs prove "that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." The trial judge's order plainly states that the Rule 23(b)(3) provision was the reason he found it necessary to review the agency issue. Without the agency relationship, this class action does not comply with Rule 23 and, therefore, should not be certified. Those concurring with the main opinion ignore this requirement and state that the trial judge erred. How can such an analysis, if it can be called such, assist the bench and bar *820 with this difficult subject? It simply perpetuates Alabama's reputation for giving simplistic analyses of class-certification questions, a reputation I thought this Court had been trying to correct (at least since I became Chief Justice) by using appropriate rules to promote a disciplined process.[5] Also, the main opinion itself states that there will be times when a court must "`look behind the pleadings ... to examine the nature of the claims and defenses, the relevant facts, and the substantive law, in order to make a meaningful determination of certification issues.'" 783 So. 2d at 816 (quoting Ex parte AmSouth Bancorporation, 717 So. 2d 357, 363 (Ala.1998)). Again, what is the difference between looking behind the pleadings as to the fiduciary-relationship issue and looking behind the pleadings as to the agency-relationship issue? I also wonder what the purpose is in allowing the former and disallowing the latter during the certification process. How does that decision help the trial court, which may conclude, after holding a class-action trial, with all its attendant expenses,[6] that there was no agency relationship between H & R Block and the Mitchells and dismiss the case? How does that promote judicial economy? Given these considerations, I do not understand the reasoning of the main opinion. I would deny the petition because the questions of law or fact common to the members of the class do not predominate over any question affecting only individual members. The trial judge wrote a carefully crafted, 21-page memorandum explaining his decision. He performed the analysis he was required to perform in order to meet the requirement, imposed by the procedural rules and this Court, for a rigorous analysis for certification purposes. This Court must not undercut the very standards it has sought to apply in class actions to protect parties from the excesses that derive from loose standards. I see *821 this Court retreating from the very directives it has issued to the trial courts of this State to rein in "drive-by" class actions. Therefore, I vigorously dissent. [1] In a footnote, the trial court notes that Rule 23, Ala.R.Civ.P., and Rule 23, Fed.R.Civ.P., are "virtually identical," citing Marshall Durbin & Co. v. Jasper Utilities Bd., 437 So. 2d 1014, 1025 (Ala.1983), and that "[f]ederal authorities are persuasive when [a court is] interpreting the Alabama Rules of Civil Procedure," citing Rowan v. First Bank of Boaz, 476 So. 2d 44, 46 (Ala.1985). [2] The trial court found that the unjust-enrichment claim was unsuitable for class treatment because the claim was derivative of the plaintiffs' breach-of-fiduciary-duty, fraudulent-suppression, or fraudulent-misrepresentation claims. However, the plaintiffs seek certification of the unjust-enrichment claim only as it relates to the breach-of-fiduciary-duty claim. [3] The authors state: "Entrepreneurial plaintiffs' lawyers can draft broad claims so as to pull in the greatest possible number of potential class members. A large class gives a plaintiffs' attorney leverage against a defendant and creates the potential to generate lucrative windfall fees with low marginal investment. These fees often are obtained at the expense of the lawyer's own clients." "Kamilewicz v. Bank of Boston Corp. [92 F.3d 506 (7th Cir.1996), cert. denied, 520 U.S. 1204, 117 S. Ct. 1569, 137 L. Ed. 2d 714 (1997)] provides a perfect example. That case involved allegations that the Bank of Boston had over-collected escrow monies from homeowners and profited from the interest. The settlement, approved by an Alabama judge, awarded up to $8.76 to individual class members. The plaintiffs' lawyers received more than $8.5 million in fees, which were debited directly from individual class members' escrow accounts." 37 Harv. J. on Legis. at 494. "Abuse is occurring now. Some state courts are so lax in their application of class certification standards that fundamental due process protections are threatened. In one instance an Alabama judge certified a nationwide class of persons who alleged that their house siding was defective, while a federal district judge later rejected class certification in an action against the same defendant and presenting identical legal issues. The federal judge found that the parties' due process rights, among others, rendered class treatment impossible. "Similarly, an Alabama state court judge certified a nationwide class of consumers who had purchased allegedly defective sport utility vehicles. The state court plaintiffs claimed, inter alia, that design and manufacturing defects caused the vehicles to roll over and that the defendant fraudulently marketed the vehicle. A federal judge in the Eastern District of Louisiana had earlier been confronted with similar factual and legal claims against the same defendant in a similar lawsuit, but had refused to certify a nationwide class because he concluded that certifying a class in such a case would result in denial of due process and jury trial rights. While the state and federal lawsuits were separate actions, the state court was faced with the exact same issues in resolving the class certification motion as was the federal court. The state court judge certified the class anyway, without explaining why or whether he believed the federal court's determination to be erroneous." 37 Harv. J. on Legis. at 500-01. [4] See Peterson v. H & R Block Tax Servs., Inc., 971 F. Supp. 1204 (N.D.Ill.1997) and Basile v. H & R Block, Inc., 729 A.2d 574 (Pa.Super.Ct.1999). [5] See Ex parte AmSouth Bancorporation, 717 So. 2d 357 (Ala.1998); Citicorp Acceptance Co., 715 So. 2d 199 (Ala.1997); Ex parte Exxon Corp., 725 So. 2d 930 (Ala.1998); Ex parte Mayflower Nat'l Life Ins. Co., 771 So. 2d 459 (Ala.2000); Ex parte Government Employees Ins. Co., 729 So. 2d 299 (Ala.1999); Ex parte Water Works & Sewer Bd. of the City of Birmingham, 738 So. 2d 783 (Ala.1998); Ex parte Prudential Ins. Co. of America, 721 So. 2d 1135 (Ala.1998); Ex parte State Mut. Ins. Co., 715 So. 2d 207 (Ala.1997); Ex parte American Bankers Life Assurance Co. of Florida, 715 So. 2d 186 (Ala.1997); Ex parte Mercury Fin. Corp., 715 So. 2d 196 (Ala.1997); Ex parte Equity Nat'l Life Ins. Co., 715 So. 2d 192 (Ala. 1997); Ex parte First Nat'l Bank of Jasper, 717 So. 2d 342 (Ala.1997). [6] That is, if the case goes that far. Defendants often feel forced to settle because of the excessive costs associated with a massive nationwide class action: "Class actionsonce considered an efficient means for grouping together large numbers of individuals with common legal claimshave become a cash cow for plaintiffs' attorneys who find state courts willing to sanction sweetheart settlements that enrich the lawyers, but provide little or no actual benefit to their clients, the class members." 37 Harv. J. on Legis. at 483. "The certification of a class action places tremendous pressure on a defendant to settle, regardless of a case's merit. `For defendants, the risk of participating in a single trial [of all claims], and facing a once-and-for-all verdict is ordinarily intolerable,' even where an adverse judgment is improbable. As Judge Posner of the Seventh Circuit Court of Appeals observed, certification of class actions forces defendants `to stake their companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no legal liability.' He explained further: `[Defendants] may not wish to roll these dice. That is putting it mildly. They will be under intense pressure to settle.' Judge Posner called the resulting settlements `blackmail settlements.'" 37 Harv. J. on Legis. at 490-91. (Citations omitted.)

November 17, 2000

9b1b094b-1b99-4c32-bd98-7d50f14a312c

Liberty Nat. Life Ins. Co. v. Sanders

792 So. 2d 1069

1972247

Alabama

Alabama Supreme Court

792 So. 2d 1069 (2000) LIBERTY NATIONAL LIFE INSURANCE COMPANY and Keith Mahone v. Betty SANDERS. 1972247. Supreme Court of Alabama. November 17, 2000. *1071 Philip H. Butler and Martha Ann Miller of Robison & Belser, P.A., Montgomery, for appellants. Frank H. Hawthorne, Jr., and C. Gibson Vance of Hawthorne, Hawthorne & Vance, L.L.C., Montgomery, for appellee. JOHNSTONE, Justice. Defendants Liberty National Life Insurance Company ("Liberty National") and its former agent Keith Mahone appeal from a $145,000 judgment entered by the Montgomery County Circuit Court in favor of plaintiff Betty Sanders. We affirm. Sanders sued Liberty National and Mahone for fraud; deceit; fraudulent suppression; fraudulent misrepresentation; negligent hiring, training, and supervision; and bad faith refusal to investigate. Sanders dismissed her bad faith refusal to investigate claim. The trial court conducted a jury trial. At the close of Sanders's evidence and at the close of all the evidence, Liberty National and Mahone moved for a judgment as a matter of law, which the trial court denied. The jury returned a verdict of $10,000 in compensatory damages and of $135,000 in punitive damages in favor of Sanders and against Liberty National and *1072 Mahone. The trial court entered a judgment on the verdict. Liberty National and Mahone renewed their motion for a judgment as a matter of law, or in the alternative, for a new trial, or in the alternative, for a remittitur and reconsideration of the taxing of attorney's fees against them as a discovery sanction for tardily taking of the deposition of one Russell Hurst. The trial court denied the motion. Liberty National and Mahone appealed. On appeal, Liberty National and Mahone raise 11 issues: (1) whether Sanders presented substantial evidence to support the $10,000 compensatory damage award; (2) whether Sanders presented clear and convincing evidence to support the $135,000 punitive damage award; (3) whether the trial court erred in charging the jury on spoliation of evidence; (4) whether the trial court erred in charging the jury on the elements of intentional fraud and in including intentional or willful fraud in its charges on punitive damages; (5) whether the trial court erred in refusing to give Liberty National and Mahone's requested jury instruction No. 19 on fraud; (6) whether the trial court erred in refusing to give Liberty National and Mahone's requested jury instruction No. 21 on "lost opportunity"; (7) whether the trial court improperly admitted prejudicial evidence on an irrelevant and immaterial issue; (8) whether Sanders's counsel made improper arguments prejudicial to Liberty National and Mahone; (9) whether the $10,000 compensatory damage award is excessive; (10) whether the $135,000 punitive damage award is excessive; and (11) whether the trial court erred in denying Liberty National and Mahone's motion to reconsider the taxing of the attorney fee as a discovery sanction. "In reviewing a jury verdict, an appellate court must consider the evidence in the light most favorable to the prevailing party...." Delchamps, Inc. v. Bryant, 738 So. 2d 824, 831 (Ala.1999). See also Cobb v. MacMillan Bloedel, Inc., 604 So. 2d 344 (Ala.1992), and Mason & Dixon Lines, Inc. v. Byrd, 601 So. 2d 68 (Ala.1992). A presumption of correctness attaches to a jury verdict, "if the verdict passes the `sufficiency test' presented by motions for directed verdict and a JNOV." S & W Properties, Inc. v. American Motorists Ins. Co., 668 So. 2d 529, 534 (Ala.1995). (Rule 50(a), Ala.R.Civ.P., now designates a motion for a directed verdict as a motion for a judgment as a matter of law, and Rule 50(b) now designates a motion for JNOV as a renewed motion for a judgment as a matter of law.) This presumption is strengthened by a trial court's denial of a motion for a new trial. Christiansen v. Hall, 567 So. 2d 1338 (Ala.1990). "This Court will not, on a sufficiency of the evidence basis, reverse a judgment based on a jury verdict unless the evidence, when viewed in a light most favorable to the [verdict winner], shows that the verdict was `plainly and palpably wrong and unjust.'" S & W Properties, 668 So. 2d at 534 (quoting Christiansen, 567 So.2d at 1341). "Whether to grant or deny a motion for new trial rests within the sound discretion of the trial court, and this Court will not reverse a ruling in that regard unless it finds that the trial court's ruling constituted an abuse of that discretion." Colbert County-Northwest Alabama Healthcare Authority v. Nix, 678 So. 2d 719, 722 (Ala.1995). "Without a showing of such an abuse, the trial court's ruling must be affirmed." Id. Liberty National and Mahone argue that Sanders did not present any evidence of actual damage resulting from Mahone's alleged fraudulent misrepresentation and *1073 suppression. Because Sanders is the jury-verdict winner, we must view the evidence in the light most favorable to Sanders. S & W Properties, supra; Carter v. Henderson, 598 So. 2d 1350 (Ala.1992); Williams v. Allstate Ins. Co., 591 So. 2d 38 (Ala.1991). Thus, the issue before us is whether the evidence viewed in the light most favorable to Sanders supports the jury's award of $10,000 in compensatory damages. Sanders first purchased an insurance policy from Liberty National in 1971. Over the ensuing years, Sanders purchased various policies from Liberty National. In 1986, after Sanders was laid off from her nursing position, Sanders allowed her Liberty National policies to lapse because she could not afford to pay the premiums. In 1993, Sanders decided that she needed life insurance to insure her own life and the life of her son David Ogle, a disabled adult. Ogle, an overweight cigarette-smoking schizophrenic, lived at a nearby hospital, but came home frequently. Needing life insurance and recalling her past experience with Liberty National, Sanders telephoned the local Liberty National office and asked to speak with a salesman about purchasing a life insurance policy. In February 1993, Liberty National sent insurance agents Tim McLain and Keith Mahone to Sanders's mobile home to discuss her purchase of life insurance. At that time Sanders purchased a Liberty National life insurance policy insuring her own life. The policy had a face amount of $10,000 and had a monthly premium amount of $54.22. Additionally, Sanders asked Mahone about purchasing a homeowner's insurance policy. The next day, Mahone returned to Sanders's mobile home with the paperwork for a fire insurance policy insuring Sanders's mobile home. Approximately two or three weeks later, Sanders telephoned Mahone and asked him about purchasing a life insurance policy insuring the life of her son, Ogle. On March 23, 1993, Mahone met with Sanders and Ogle at Sanders's mobile home. Sanders told Mahone that she wanted to purchase a $10,000 policy like the one she had purchased insuring her own life to insure Ogle's life. She told Mahone that she wanted the policy in case anything happened to Ogle. Sanders and Ogle informed Mahone that Ogle was a schizophrenic and a smoker. Mahone completed the application for the life insurance policy. Sanders testified that Mahone told her the policy insuring Ogle would be the same as the one she purchased insuring her own life, that Mahone told her that she would receive $10,000 if anything happened to her son, and that Mahone told her that the policy would be effective when she paid the first premium. Sanders delivered the first month's premium to Mahone. Mahone tendered the application and premium to Liberty National, which rejected Sanders's application because Mahone quoted the wrong premium amount. Liberty National cancelled that policy and returned the premium to Sanders. In April 1993, Sanders asked Mahone to complete another application for a life insurance policy to insure Ogle. Mahone did not explain why Liberty National cancelled the first policy on Ogle. Sanders again brought Ogle home to meet with Mahone, and again told Mahone that Ogle was a schizophrenic and a smoker. She told Mahone that she wanted the policy because she would not have the money to bury Ogle unless she had insurance. Mahone asked Ogle the questions on the application for life insurance. One of the questions was whether the applicant suffered from a "brain disease." Ogle responded, "Yes." On April 19, 1993, Mahone completed, *1074 and Ogle signed, the application for insurance on Ogle's life. The next day, April 20, 1993, Sanders paid the monthly premium of $192 to Mahone. Sanders testified that on April 20, 1993, Mahone On April 23, 1993, Liberty National issued Sanders a policy insuring the life of Ogle, but Sanders never received the policy. On April 24, 1993, Ogle died of natural causes. Later that day, Sanders telephoned Mahone and left a message on his answering machine for Mahone to call her. On the day of Ogle's funeral, Mahone went to Sanders's mobile home. Mahone had Sanders complete a "death claim," which requested a "lump sum" payment of the insurance proceeds. Sanders sent the "death claim" to Liberty National. Mahone told Sanders that she would receive a $10,000 check in the mail from Liberty National. Thereafter, Liberty National mailed Sanders a check in the amount of $193.30, comprising the one premium Sanders had paid plus 10% interest on that premium. Sanders did not accept the check and did obtain counsel, who sent a Mahone letter inquiring when Sanders could expect payment of the full $10,000. Mahone gave the letter to Liberty National. Liberty National sent Sanders's counsel a letter stating it had paid Sanders the full amount owed under the policy. Sanders testified that, because Liberty National refused to pay her $10,000, the face amount of the policy, she had to take a second job to pay for her son's funeral. She testified that she was upset because she did not have the money to bury her son. She testified further that she was upset also because she did not believe Liberty National would pay any claims regarding her fire insurance policy or her life insurance policy on her own life. Because Sanders did not trust Liberty National, she dropped those two Liberty National policies. In defense of themselves, Liberty National and Mahone offer their explanation of the policy and the transaction. The application stated that, if the applicant answered "yes" to the question whether he suffered from a "brain disease," as Ogle answered, then he was eligible only for a "Modified Benefit Limited Payment Life Plan (ALX)." Moreover, Ogle's weight disqualified him for the type of policy that insured the plaintiffs own life and allowed him only a "`Modified Benefit Limited Payment Life Plan' (ALX)." The application did not state, but the "ALX policy" which Sanders never received did state, that the policy would pay the full face-value benefit of $10,000 during the first three years of the policy only if the applicant died from an accidental cause, and that the policy would not pay the full face-value benefit of $10,000 if the applicant died of natural causes before the expiration of those first three years, but would pay only the sum of premiums then paid plus ten percent for death from natural causes during that initial three-year waiting period. Sanders testified that Mahone never told her about the three-year waiting period. She testified that he "assured [her] the policy was effective when I gave him the money" and that, after she paid the premium, he assured her "the policy was effective immediately." While Sanders's testimony to this effect is disputed, the *1075 jury resolved the conflict in favor of Sanders. She testified further that, had she known of the three-year waiting period, she would not have bought the policy. Liberty National and Mahone specifically argue that Sanders failed to prove any actual damage inasmuch as Sanders testified that she would not have purchased the policy if she had known of the three-year waiting period. A fraud victim's proof of reliance, however, hardly negates the victim's proof of damages. This Court has held: Fogleman v. National Surety Co., 222 Ala. 265, 268, 132 So. 317 (1931) (emphasis added). See also Buchanan v. Collier, 555 So. 2d 134, 136 (Ala.1989), John Hancock Variable Life Ins. Co. v. Pierce, 530 So. 2d 719, 725-26 (Ala.1987), and Morris v. Westbay Auto Imports, Inc., 512 So. 2d 1373, 1374 (Ala.1987). See also Hartselle Real Estate & Ins. Co. v. Atkins, 426 So. 2d 451 (Ala.Civ.App.1983) (citing Boriss v. Edwards, 262 Ala. 172, 77 So. 2d 909 (1954), and Martin v. Honeycutt, 341 So. 2d 171 (Ala.Civ.App.1976)) (the measure of damages for a fraudulent misrepresentation of a thing purchased is the difference in the value of the thing as represented and the value of the thing as actually received). The evidence viewed in the light most favorable to Sanders establishes that, although Mahone represented the policy to be worth $10,000.00 for the death of Ogle regardless of when or how he died, in reality the policy, as it would have been received by Sanders, was worth only the paid premium plus ten percent. The evidence is undisputed that Liberty National did not tender $10,000 to Sanders and that Sanders did not accept the $193.30 tendered to her by Liberty National. The law of fraud measures Sanders's actual damages as the almost-$10,000 difference between the value of the policy as represented and the value in reality. Therefore, the evidence supported an award for that difference plus the $193.30 tendered and refused. Indeed, the jury did award Sanders compensatory damages in precisely that sum, $10,000, which placed Sanders in the monetary position she would have occupied if Mahone's representations about the life insurance policy had been true. Sanders's statement that she would not have purchased the policy if she had known of the three-year waiting period proved the reliance elements of her fraud and suppression claims and did not negate her proof of actual damage. See Buchanan, supra. Sanders's proof of mental anguish is further support for the $10,000 compensatory award, already entirely supported by the economic proof. Although Liberty National and Mahone assert that Sanders did not prove "lost opportunity" to support compensatory damages and that therefore Sanders did not prove any damage to support a compensatory award, a fraud victim need not prove all types of damage which could result from the fraud, so long as she does prove damage according to some legally recognized theory, as Sanders did. Moreover, while Sanders did not rely on "lost opportunity" as her theory of recovery of compensatory damages, the record does contain evidence that the defendants' misrepresentations and suppressions cost *1076 Sanders an opportunity to obtain at least $2,500 in immediate coverage for her son. The president of Liberty National, Anthony L. McWhorter, testified that both Liberty National and United American Insurance Company are owned by Torchmark. He stated that Liberty National agents are licensed to sell United American life insurance policies. In 1993, United American had a "stair-step" life insurance policy comparable to Liberty National's ALX policy. The United American "stair-step" policy paid $2,500 for a death from natural causes in the first year and paid $5,000 for a death from natural causes in the second year. McWhorter testified that, although the State of Alabama licenses Liberty National agents to sell United American life insurance policies, Liberty National does not permit its agents to sell United American life insurance policies. He testified also that Liberty National studies the "products" of other insurance companies in order for Liberty National to design its own "products." McWhorter testified that he would not be surprised to learn that other companies sold a better "product," without a three-year waiting period, than Liberty National's ALX policy. Thus, the evidence tends to prove an opportunity for Sanders to have purchased a policy with substantial coverage without the three-year waiting period from another insurance company, if Mahone had been truthful about the waiting period. This evidence of lost opportunity, together with Sanders's evidence of mental anguish supports the jury's award of $10,000 in compensatory damages on theories of damages independent of her primary theory that she was entitled to recover the value of the policy as represented. Additionally, Liberty National and Mahone contend that the $10,000 compensatory damages award is excessive. Because, as explained, the evidence supports the entire quantum of compensatory damages, the award of $10,000 is not excessive. Fogleman, supra. Liberty National and Mahone state their intentional fraud issues as follows: "There is no substantial evidence to support punitive damages," and "the trial court committed prejudicial and reversible error in charging the jury on elements of intentional fraud, and by including intentional or willful fraud in its charges on punitive damages." The defendants do not argue these issues precisely the way they are stated. First, Liberty National and Mahone assert that Sanders dismissed her claim of intentional or willful misrepresentation and that "[t]herefore the only claims which were submitted to the jury were for reckless fraud and fraudulent suppression." In an inconsistent position, Liberty National and Mahone argue that the trial court erred in charging the jury on intentional misrepresentation and in including intentional or willful misrepresentation in its charges on punitive damages. The record of the charge conference before the oral charge and of the oral charge itself proves the contrary. At the charge conference, Liberty National and Mahone did not object to either Sanders's requested jury charge no. 8, Alabama Pattern Jury Instruction: Civil (APJI) 18.04, or Sanders's requested jury charge no. 16, APJI 18.09. The trial court gave Sanders's requested jury charge no. 8, APJI 18.04, in part, in these words: Telling a known falsehood with the intent to deceive is intentional, or willful, fraud if the plaintiff justifiably relies[1] on the falsehood and acts on the falsehood to the plaintiffs detriment, APJI 18.04. The colloquy among counsel and the trial judge about the possibility of Sanders's withdrawing a willful misrepresentation charge refers to Sanders's requested charge no. 6, not no. 8, quoted in pertinent part above. Likewise, the trial judge gave Sanders's requested jury charge no. 16, APJI 18.09, in these words: Moreover, at the charge conference, Liberty National and Mahone specifically and expressly insisted that the trial judge give their requested jury charge no. 11, APJI 11.03, on punitive damages, and the trial judge agreed. (R. 427-28.) The trial judge gave APJI 11.03, as requested by Liberty National and Mahone, virtually verbatim, in these words: (Emphasis added.) Thus, the trial court did submit the theories of intentional, or willful, misrepresentation, as well as intentional, or willful, suppression, to the jury, and Liberty National and Mahone themselves demanded and received one of the punitive damage charges containing the same theories and explaining the recoverability of punitive damages pursuant to the theories. Moreover, Liberty National's and Mahone's not interposing any objection to these two charges for Sanders and demanding the charge on punitive damages constitutes their waiver of any objection to the consideration of these theories and the consideration of punitive damages by the jury. Liberty National and Mahone argue, first, that none of their alleged acts warranted an award of punitive damages. They argue, second, that the punitive damage award of $135,000 is excessive. Punitive damages must be supported by clear and convincing evidence "that the defendant consciously or deliberately engaged in oppression, fraud, wantonness, or malice with regard to the plaintiff." § 6-11-20(a), Ala.Code 1975. Section 6-11-20(b) defines the terms "fraud," "malice," "wantonness," and "oppression": "`Gross' is defined as inexcusable, flagrant, or shameful." Talent Tree Personnel Services, Inc. v. Fleenor, 703 So. 2d 917, 924 (Ala.1997). Additionally § 6-11-27(a), Ala.Code 1975, provides: The acts of Mahone in this case benefited Liberty National. Mahone's misrepresentations and suppressions of material fact caused Sanders to purchase an insurance policy that she otherwise would not have purchased. Mahone intentionally sold Sanders a life insurance policy which differed from the type of policy she had for herself and specifically requested for her son. It required a substantially greater monthly premium with minimal benefits. Liberty National was the recipient of the premium actually paid and was the prospective recipient of the future premiums anticipated. Moreover, Liberty National tried to minimize its obligation on the policy by insisting that Sanders was due only the return of her premium plus 10%. Liberty National's effort to save the money it owed according to Mahone's misrepresentations and suppressions constituted a ratification of his fraud. Additionally, although Mahone was a new agent, inexperienced in the sale of life insurance policies, Liberty National did not monitor Mahone's sales or his sales techniques. Liberty National monitored only Mahone's payment of premium monies to Liberty National. Therefore, Sanders's proof meets the criteria for the imposition of punitive damages not only upon the agent Mahone but also upon the principal Liberty National. Next, Liberty National and Mahone contend that the $135,000 punitive damage award is excessive. Pursuant to a Hammond hearing, the trial court concluded that the award is not excessive. While the trial judge entered a thorough and persuasive order to such effect and addressed all of the applicable factors in the order, and while the record does contain evidence which, viewed in the light most favorable to the verdict winner, supports *1080 an inference of aggravating circumstances, including spoliation discussed at length below, nonetheless, performing our appellate duty to review the award for excessiveness, we conclude that the punitive damage award should be remitted from $135,000 to $60,000. While the compensatory award, which is not excessive, is only $10,000, a $60,000 punitive award would be appropriate because of the aggravating circumstances and because of the complexity and difficulty of the litigation. Liberty National and Mahone contend that the trial court erred in instructing the jury on spoliation of evidence. They argue that Sanders did not produce any evidence of spoliation to support the instruction. However, the record does contain evidence, which, viewed in the light most favorable to the verdict winner, tends to prove that Douglas Harris, a Liberty National officer and witness, wrote and produced false notes purporting to memorialize an exculpatory telephone discussion between him and Liberty National agent Mahone, a telephone discussion which, in fact, never occurred; that Harris likewise presented false testimony to the occurrence and substance of that fabricated discussion; and that Liberty National and Mahone introduced Harris's notes and testimony at trial with knowledge that both were false. The evidence of spoliation is contained in an affidavit sworn by Mahone; Liberty National's answers, prepared, sworn, and executed by Liberty National executive vice-president William R. Dean, to interrogatories propounded by Sanders; the deposition testimony of Harris, Liberty National's policy benefits coordinator; the notes written by Harris, produced by him at his deposition, and introduced by Liberty National and Mahone at trial; Mahone's testimony at trial; and Harris's testimony at trial. In his affidavit Mahone swore that he "was never consulted or questioned by anyone with Liberty National Life in regard to [Sanders's] claim." The evidence of record, viewed in the light most favorable to the verdict winner, supports an inference that, after Liberty National's Mr. Dean searched the claim file, found nothing about any 1993 telephone conversation between Mahone and Harris, and answered Sanders's interrogatories accordingly on October 7, 1996, Harris himself, in preparation for his October 31, 1996, deposition, wrote false notes purporting to memorialize a July 21, 1993, telephone conversation between him and Mahone wherein Mahone said he had properly and timely explained the waiting period and limited benefits to Sanders, and further supports an inference that Harris then produced the false notes and presented false testimony to the same effect at the deposition itself. The evidence likewise supports the inference that both Liberty National and Mahone knew of the falsity of Harris's notes and his testimony when they called Harris as their first witness and introduced both his falsified notes and his false testimony before the jury. Such actions by Harris in his capacity as a Liberty National official, by Liberty National itself, and by Mahone would constitute spoliation. APJI 15.13, given by the trial judge, predicates any adverse inference on the fact-finder's being reasonably satisfied from the evidence that the defendants committed spoliation. Viewing the evidence in the light most favorable to the jury verdict winner, Sanders, Sanders presented sufficient evidence to support the trial court's giving this instruction and allowing the jury to determine whether that evidence also supported a reasonable inference *1081 of the defendants'"guilt, culpability, or awareness" of their wrongdoing. See Alabama Power Co. v. Murray, 751 So. 2d 494 (1999). Next, Liberty National and Mahone argue that the trial court erred in refusing their requested jury instructions no. 19 and no. 21. The record on appeal does not contain Liberty National and Mahone's requested jury instructions nos. 19 and 21. Because the issues raised by Liberty National and Mahone are not presented by the record before us, we cannot conclude that the trial court erred in not giving these requested instructions. See Nelson v. Johnson, 594 So. 2d 1228 (Ala.1992). Liberty National and Mahone contend that the trial court erred in allowing, over their objections, Sanders to introduce evidence concerning the collection of and accounting for premiums on Sanders's fire insurance policy and on her life insurance policy on her own life. They complain that this evidence prejudiced them so much that the error requires a new trial. The defect in the defendants' contention, however, is that Sanders did not succeed in introducing the evidence challenged by the defendants' objections. "Evidence which is not relevant is not admissible." Rule 402, Ala.R.Evid. The Advisory Committee's Notes to Rule 401, Ala.R.Evid., state: In this case, Sanders attempted to introduce evidence about cash receipts evidencing the collection of premiums by Mahone from Sanders. When Liberty National and Mahone objected to Sanders's question on the collection of premiums, the trial court overruled the objection. The witness, however, then asked for the question to be repeated, the court reporter read the question back, and Sanders's attorney stated that the question was too long and that he would start over with a new question. Sanders's next attempts to introduce the evidence about the collection of premiums occurred in the following exchange: As the trial court instructed the jury, counsel's questions have no evidentiary force. Although the questions asked by Sanders's counsel sought evidence irrelevant to the issues, the witness did not answer the first objectionable question and gave negative answers to the second and third objectionable questions, this third being unchallenged by any objection, and Sanders withdrew the fourth and last objectionable question. Because Sanders did not succeed in introducing any evidence regarding the premiums for the policies not at issue, the rulings of the trial court did not prejudice Liberty National or Mahone. Later in the trial, testimony regarding the collection of premiums for Sanders's fire insurance policy and the life insurance policy on her own life was introduced into evidence. Liberty National and Mahone, however, are the parties who introduced that evidence through their own witness, Harris. Once Liberty National and Mahone opened the door with that evidence, Sanders was entitled to cross-examine the witness about his testimony regarding the collection of premiums. Crowne Investments, Inc. v. Reid, 740 So. 2d 400, 408 (Ala.1999), and Brabner v. Canton, 611 So. 2d 1016, 1018 (Ala.1992) We find no prejudicial error as claimed in this issue. Liberty National and Mahone contend that Sanders's counsel made improper arguments twice during his closing argument, but they admit that they did not seek a curative instruction or a mistrial. Seaboard Coast Line R.R. v. Moore, 479 So. 2d 1131, 1136 (Ala.1985). See also Lance v. Ramanauskas, 731 So. 2d 1204 (Ala.1999). "Each case must be decided in view of the unique circumstances involved and the atmosphere created in the trial. Obviously, the trial court is in a better position than this Court to observe these circumstances. See General Finance Corp. v. Smith, 505 So. 2d 1045 (Ala.1987)." Walker v. Asbestos Abatement Servs., Inc., 639 So. 2d 513, 515 (Ala.1994). Consequently, the trial court's ruling on these matters carries a presumption of correctness. Id. Moreover, "where a party objects to improper argument and the trial court sustains the objection, in order to later appeal on the basis of the improper argument it is necessary that the party request a curative instruction from the trial court." Walker, 639 So. 2d at 515. *1083 The first challenged argument was: While counsel should not argue the rulings of the trial judge to the jury, counsel's argument did not cause the ineradicable prejudice addressed by Bennett v. Brewer, 682 So. 2d 448 (Ala.1996), and the cases discussed therein, where counsel referred during closing argument to the opposing parties' wealth. Any prejudicial effect of this argument by Sanders's counsel could have been cured by a curative instruction by the trial court. The failure of Liberty National and Mahone to request a curative instruction waived any error. The next challenged argument by Sanders's counsel was: Inasmuch as the trial court sustained Liberty National and Mahone's objection and they did not request a curative instruction, Liberty National and Mahone "indicate[d their] satisfaction with the ruling: that party cannot later complain of the trial court's failure to do what it was not asked to do." Walker, 639 So. 2d at 515 (citation omitted). Last, Liberty National and Mahone contend that the trial court erred in denying their motion to reconsider the taxing of an attorney fee as a discovery sanction. However, they fail to cite any authority supporting their argument. Rule 28(a)(5), Ala.R.App.P., requires "that `[t]he argument shall contain the contentions of the appellant with respect to the issues presented, and the reasons therefor, with citations to the authorities, statutes and parts of the record relied on.' (Emphasis added.)" McLemore v. Fleming, 604 So. 2d 353 (Ala.1992). Therefore, we will not address whether the trial court erred in denying Liberty National and Mahone's motion to reconsider the taxation of an attorney fee as a discovery sanction. The judgment of the trial court is affirmed on the condition that the plaintiff *1084 accept a remittitur of the punitive damages award from $135,000 to $60,000 and that the plaintiff file with this Court an acceptance of the remittitur within 21 days of the date of our certificate of judgment, or, in the absence of such acceptance of such remittitur, then the judgment will be reversed and the cause remanded for a new trial. AFFIRMED CONDITIONALLY.[*] HOOPER, C.J., and MADDOX, COOK, LYONS, and ENGLAND, JJ., concur. BROWN, J., concurs in the result. HOUSTON, J., concurs in part and dissents in part. SEE, J., dissents in part and dissents from the judgment. HOUSTON, Justice (concurring in part and dissenting in part). I concur except as to the issue of excessiveness of punitive damages. I would affirm the judgment conditioned upon the plaintiff's accepting a remittitur of the punitive-damages award to $30,000; therefore, I dissent insofar as the majority opinion approves a punitive-damages award of $60,000. See Prudential Ballard Realty Co. v. Weatherly, 792 So. 2d 1045 (Ala.2000) (Houston, J., concurring specially). SEE, Justice (dissenting in part and dissenting from the judgment). I dissent from that part of the main opinion holding that the trial court's jury instruction on spoliation of evidence was not error. See Part D.1. of the main opinion. I also dissent from the judgment, because I believe giving the instruction was reversible error that entitles the defendants, Liberty National Insurance Company ("Liberty National") and its agent, Mahone, to a new trial. Because I dissent from the judgment, I express no opinion on the merits of the other issues discussed in the main opinion. I disagree with the main opinion's conclusion that the evidence was sufficient to support the trial court's giving a spoliation-of-evidence instruction to the jury. "It long has been the rule that for the spoliation-of-evidence doctrine to apply, there must be proof of a party's purposeful and wrongful attempted or actual destruction of, tampering with, or suppression of material evidence." Alabama Power Co. v. Murray, 751 So. 2d 494, 501 (Ala.1999) (See, J., dissenting). Moreover, "the spoliation-of-evidence doctrine does not apply where the fact sought to be proved is proved by evidence other than the [altered] evidence." Id., at 502. The evidence at trial was conflicting as to whether Liberty National's investigator, Harris, had talked by telephone with Mahone and whether Harris had made notes memorializing that conversation. Although I agree in the abstract that the alteration of a claims file by the addition of false notes could constitute spoliation of evidence, I disagree that an instruction on spoliation was proper in this case. The ultimate facts sought to be proved by the plaintiff, Sandersthat Mahone did not explain to her that there was a waiting period and that he did not explain the policy benefitswere proven by other evidence, namely, Sanders's testimony and Mahone's affidavit and testimony. At most, the evidence at trial presents an issue of credibility for the jury to decide, and is insufficient to show that Liberty National purposefully and wrongfully altered material evidence favorable to Sanders *1085 by adding false notes to the claims file. Thus, I conclude that the trial court erred in charging the jury on spoliation of evidence. Because I believe that the trial court erred in giving the spoliation-of-evidence instruction to the jury, I would reverse the trial court's judgment and remand the case for a new trial. See my dissent in Alabama Power Co. v. Murray, supra. I therefore dissent. [1] This case was filed while this Court was applying the Hickox v. Stover, 551 So. 2d 259 (Ala.1989), standard of justifiable reliance essential to a fraud action, before Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala.1997), readopted the reasonable reliance standard. The defendants do not challenge the plaintiff's proof of reliance in this case. [2] Because this rebuff by the trial court, in reality and substance, if not in form, overrules the defendants' objection, we treat the rebuff as an adverse ruling. See Hill v. State, 699 So. 2d 974 (Ala.Crim.App.1997), and Greer v. State, 475 So. 2d 885 (Ala.Crim.App.1985). But see Stone v. City of Huntsville, 656 So. 2d 404 (Ala.Crim.App.1994), Davenport v. State, 653 So. 2d 1006 (Ala.Crim.App.1994), and Hammond v. State, 502 So. 2d 843 (Ala.Crim. App.1986). [*] Note from the reporter of decisions: The Supreme Court's docket sheet indicates that on December 18, 2000, the appellee filed an acceptance of the remittitur.

November 17, 2000

310f6d27-a39a-44c0-8745-6b1486d43a47

Northwest Fla. Truss, Inc. v. Baldwin Co. Com'n

782 So. 2d 274

1981684

Alabama

Alabama Supreme Court

782 So. 2d 274 (2000) NORTHWEST FLORIDA TRUSS, INC. v. BALDWIN COUNTY COMMISSION and Board of School Commissioners of Mobile County. 1981684. Supreme Court of Alabama. November 3, 2000. *275 George R. Irvine III of Stone, Granade & Crosby, P.C., Bay Minette, for appellant. Robert A. Wills of Wills & Simon, Bay Minette, for appellee Baldwin County Commission. Robert C. Campbell III and Kathryn W. Petersen of Sintz, Campbell, Duke & Taylor, Mobile, for appellee Board of School Commissioners of Mobile County. James P. Green and Thomas H. Nolan, Jr., of Brown, Hudgens, P.C., Mobile, for amicus curiae Saad & Cooke Corporation. BROWN, Justice. Northwest Florida Truss, Inc. ("NFT"), appeals from a summary judgment entered in favor of third-party defendants the Board of School Commissioners of Mobile County ("the Board") and the Baldwin County Commission ("BCC"). We reverse and remand. This case arises from two separate public-works contracts awarded to Saad & Cooke Corporation ("S & C"), for which NFT contracted to provide metal truss work. The "Semmes II" project involved the construction of an elementary school, while the "Foley" project involved renovation of the Foley Satellite Courthouse. As is the practice in contracts like these, S & C was designated as a purchasing agent on behalf of the Board and the BCC and was given purchase orders to use for the purchase of materials for the projects. At various times throughout the construction process, S & C submitted requests and received payment for its work on these projects. Included in these payments were payments for the materials purchased to complete the respective projects. However, S & C did not pay NFT for the materials it provided in either project. S & C contended that NFT did not provide conforming goods in a timely manner, and, therefore, refused to pay NFT the amount requested. On October 2, 1997, S & C filed a declaratory-judgment action against NFT in the Mobile Circuit Court, seeking a determination of the amount due and owing to NFT and the validity of back charges, offsets, and claims against S & C. After S & C amended its complaint, NFT filed its answer, a third-party complaint, and a counterclaim, on April 7, 1998, adding the Board and the BCC as third-party defendants. The Board answered the third-party complaint, denying all the allegations therein. The BCC answered the third-party complaint, admitting that a purchase order was issued to NFT through BCC vendor S & C; however, it denied all the remaining allegations and alleged that it had paid S & C all amounts due and owing. *276 Thereafter, NFT moved for a summary judgment against the Board and the BCC. Although the Board denied that any contract existed between it and NFT, it contended that even if the trial court determined that a contract did exist, the contract was void under the Alabama bid law. The BCC filed no response to NFT's motion for summary judgment. At oral argument on NFT's motion, the court ordered additional briefing on the bid-law issue. Following additional briefing and argument, the trial court stated that it was inclined to dismiss NFT's claims based on the bid-law defense, but that it would not do so until the Board or the BCC had filed a motion for summary judgment or a motion to dismiss. Heeding the judge's suggestion, the Board and the BCC filed identical motions for summary judgment that were signed by counsel for S & C on behalf of counsel for both entities. Neither motion contained a narrative summary of undisputed facts. NFT filed a brief in opposition to the motions, supported by the affidavit of an NFT representative. However, the trial court granted the motions of the Board and the BCC. Following the entry of a judgment on the third-party complaint, S & C made an offer of judgment for the amount owing on the Foley project, which NFT accepted. A satisfaction of judgment was filed in the Mobile Circuit Court, indicating that the judgment had been paid by S & C and was canceled and satisfied. S & C also filed an offer of judgment for the amount owing on the Semmes II project, which is still pending. We review a summary judgment de novo. Alabama Ins. Guar. Ass'n v. Southern Alloy Corp., 782 So. 2d 203 (Ala. 2000). We apply the same standard of review as the trial court in determining whether the evidence presented to the trial court demonstrated the existence of a genuine issue of material fact. Jefferson County Comm'n v. ECO Preservation Servs., L.L.C., [Ms. 1990736, Aug. 18, 2000] ___ So.2d ___ (Ala.2000) (quoting Bussey v. John Deere Co., 531 So. 2d 860, 862 (Ala.1988)). A summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c)(3), Ala.R.Civ.P. See Ex parte General Motors Corp., 769 So. 2d 903 (Ala.1999), and Lawson State Comm. College v. First Continental Leasing Corp., 529 So. 2d 926 (Ala.1988). However, a party moving for a summary judgment always bears the initial burden of informing the trial court of the basis for its motion and identifying those portions of the record that it argues demonstrate the absence of a genuine issue of material fact. Id. The motions filed by the Board and the BCC were identical. The motions stated: Rule 56(c)(1), Ala.R.Civ.P., requires that a motion for summary judgment "be supported by a narrative summary of what the movant contends to be the undisputed *277 material facts." Although it may be included in the motion or may be separately attached as an exhibit, the rule clearly requires that a narrative summary be included with any motion for summary judgment. The narrative summary must include specific references to pleadings, portions of discovery materials, or affidavits for the court to rely on in determining whether a genuine issue of material fact exists. A summary judgment is not proper if the movant has not complied with the requirements of Rule 56. Moore v. ClaimSouth, Inc., 628 So. 2d 500 (Ala.1993); see also Thompson v. Rehabworks of Florida, Inc., 727 So. 2d 807 (Ala.Civ.App.1997), Hale v. Union Foundry Co., 673 So. 2d 762 (Ala.Civ.App.1995). While the Rule provides that a movant may base its motion upon the pleadings and other documents on file with the court, it does not allow a party to file a simplistic motion devoid of a narrative summary and specific references to those portions of the record demonstrating that no genuine issue of material fact exists. Therefore, the summary judgment entered in this case was improper. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, JOHNSTONE, and ENGLAND, JJ., concur. LYONS, J., dissents. LYONS, Justice (dissenting). The summary-judgment motions at issue in this case were filed by the Board and the BCC after extensive briefing had already taken place in connection with a motion for summary judgment filed by NFT. NFT had submitted an extensive narrative summary in support of its motion for summary judgment, and the Board had submitted its own factual statement in its opposition to NFT's motion. As the majority notes, the motions for summary judgment filed by the Board and the BCC each specifically stated that it was "based upon the previous filings and briefings made in connection with the Motion for Summary Judgment heretofore filed by [NFT]." 782 So. 2d 276. In light of the fact that NFT and the Board had already filed what I consider to be adequate narrative summaries, I consider the Board and the BCC's adoption of the documents previously filed "in connection with" NFT's motion for summary judgment to be sufficient compliance with Rule 56(c). See International Fidelity Ins. Co. v. Gilliam, 659 So. 2d 24 (Ala.1995); Barlow v. Piggly Wiggly Dixieland, Inc., 680 So. 2d 297 (Ala. Civ.App.1996). I would consider the merits of NFT's appeal.

November 3, 2000

ab22c199-f476-4350-8648-78935aa0c134

Benchmark Homes, Inc. v. Aleman

786 So. 2d 1101

1981943

Alabama

Alabama Supreme Court

786 So. 2d 1101 (2000) BENCHMARK HOMES, INC., and James E. Ladner v. Wally ALEMAN and Sondra Aleman. 1981943. Supreme Court of Alabama. November 22, 2000. *1102 Jeffrey L. Luther, Danny J. Collier, Jr., and Kathryn M. Cigelske of Luther, Oldenburg & Rainey, P.C., Mobile, for appellants. Andrew T. Citrin, Daphne, for appellees. LYONS, Justice. Wally Aleman and his wife Sondra Aleman sued Benchmark Homes, Inc. ("Benchmark"), and James E. Ladner, its president. The defendants moved to compel the plaintiffs to arbitrate their claims. The court denied the motion to compel arbitration. The defendants appeal from the order denying their motion. We reverse and remand. In early 1997, Benchmark agreed to sell to the Alemans Lot 16 in the Pleasant View subdivision located in Loxley, and to construct a house on the lot for them. On February 7, 1997, the parties executed a "Residential Construction and Lot Purchase Agreement" ("the construction contract"). The construction contract contained an arbitration clause, numbered Paragraph 13.F. of the section entitled "Miscellaneous." Paragraph 13.F. reads: Benchmark says it substantially completed construction of the Alemans' house in July 1997. On July 30, 1997, the Alemans executed a note and mortgage to Norwest Mortgage Company to obtain financing to purchase the lot and house from Benchmark. On August 31, 1997, the Alemans signed a "Limited New Home Warranty Agreement" ("the warranty *1103 agreement"), which is referenced in, and incorporated into, the construction contract. The warranty agreement also contains an arbitration clause, which is numbered Paragraph 11; it reads: Shortly after signing the warranty agreement, according to the Alemans' complaint, they learned that Benchmark had constructed a retention pond in their backyard. Their complaint contained this statement: On August 31, 1998, the Alemans sued Benchmark; Ladner; Jerry Long, a Benchmark employee who had supervised the construction of the Alemans' house; and Vickey Johnson, a Benchmark employee who the Alemans say, along with Ladner, had represented Benchmark in the transaction with them. The Alemans' complaint alleged that the defendants had fraudulently suppressed from them the fact that a retention pond would be constructed on Lot 16, that the defendants fraudulently induced them to enter into the construction contract, and that the defendants breached the construction contract. The Alemans sought to rescind the construction contract and sought compensatory and punitive damages. Benchmark and Ladner answered the complaint in October 1998; then, in December 1998, they moved to compel arbitration, pursuant to Paragraph 13.F. of the construction contract and Paragraph 11 of the warranty agreement. The Alemans opposed the motion to compel arbitration. They argued that in their complaint they had made no claims pursuant to the warranty agreement and, therefore, the warranty agreement did not apply. Because the warranty agreement did not apply, they said, the only arbitration clause that could apply to this case was that contained in the construction contract. They argued that the focus of their complaint concerned the real estate they bought in connection *1104 with their house and, therefore, they said, their allegations did not "trigger interstate commerce." In response, Benchmark argued that the question was not whether the allegations in the Alemans' complaint involved interstate commerce, but whether the contract in which the arbitration clause is contained involved interstate commerce. Benchmark submitted evidence regarding the effect the construction contract had upon interstate commerce during the construction of the Alemans' house. The record also contains a document entitled "Parties' Notice of Stipulation as to Facts Regarding Defendant's [sic] Motion to Compel Arbitration," which states: The trial court denied the motion to compel arbitration. Benchmark argues that all of the allegations in the Alemans' complaint arise from the construction contract, which it says involves interstate commerce, as Benchmark says the parties stipulated, and, Benchmark says, as agreed by the parties in the warranty agreement. The Alemans argue that the construction contract "evidenced two separate transactions: (1) the purchase of a parcel of land; and (2) the construction of a residence on this parcel of land." This document, they contend, constituted two separate and divisible contracts. The contract for the purchase of the parcel of land, they say, was an entirely intrastate contract that involved the purchase of land located in Alabama by purchasers who were Alabama residents from a seller that was an Alabama corporation. The Alemans admit that the contract for the construction of the house on the land had an effect upon interstate commerce because it involved the use of materials from outside the state. However, they maintain that their claims against the defendants do not arise out of what they insist is a separate, divisible contract for the construction of their house. Their claims, they say, "relate only to the separate, divisible contract involving [their] purchase of Lot 16." We disagree with the Alemans' characterization of the construction contract as two separate, divisible contracts. Title 9 U.S.C. § 2 (Federal Arbitration Act, § 2) applies to an arbitration agreement appearing in "a contract evidencing a transaction involving commerce." The arbitration agreement is enforceable as to a controversy arising out of that transaction. The language of 9 U.S.C. § 2 does not apply the term "involving commerce" to the controversy, but to the contract. At a later point in § 2, the FAA speaks of arbitrability where a party refuses to perform "any part" of the contract. Alabama law governs the question of the severability of a contract. "`A test of severability which has frequently been applied is to the effect that, if the consideration is single, the contract is entire, but if the consideration is either expressly or by necessary implication apportioned the contract will be regarded as severable.'" City of Albany v. Spragins, 208 Ala. 122, 127, 93 So. 803, 808 (1922) (quoting 13 Corpus Juris at 563). See, also, Liles v. Flatley, 643 So. 2d 947 (Ala.1994); Mooney v. Weaver, 262 Ala. 392, 79 So. 2d 3 (1955); Blythe v. Embry, 36 Ala.App. 596, 61 So. 2d 142 (1952). A review of the construction contract indicates that the Alemans agreed to purchase the lot from Benchmark and *1105 to have Benchmark construct a house on that lot for a certain purchase price, pursuant to a single agreement. The contract states: Our conclusion that the contract for the purchase of the lot and the construction of the house is not severable is further supported by Paragraph 3 of the construction contract: Once a motion to compel arbitration has been made and supported, the party opposing the enforcement of the arbitration provision has the burden to present evidence indicating that the alleged agreement to arbitrate is not valid or does not apply to the dispute in question. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110 (Ala.1999). The Alemans do not allege that the arbitration agreement is not valid, and they have not shown that their purchase of the house was a separate transaction so as to make the arbitration agreement inapplicable to this action. As it is written, the contract document indicates the Alemans did not enter into a contract for the purchase of raw land alone; therefore, the construction of the house was an integral part of their agreement with Benchmark. Because we conclude that the Alemans' agreement to purchase the lot and the house constitutes a single contract, Benchmark and Ladner are entitled to enforce the arbitration agreement contained in that contract. The trial court erred in denying the motion to compel arbitration. The order denying that motion is therefore reversed, and the cause is remanded. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.

November 22, 2000

914b0df4-fec6-4e28-94ac-adea9e005625

City of Bayou La Batre v. Robinson

785 So. 2d 1128

1990411

Alabama

Alabama Supreme Court

785 So. 2d 1128 (2000) CITY OF BAYOU LA BATRE v. Vernon ROBINSON. 1990411. Supreme Court of Alabama. December 8, 2000. *1129 Jay M. Ross and Brandy B. Osborne of Ross & Jordan, L.L.C., Mobile, for appellant. John W. Parker, Mobile; and John R. Parker, Mobile, for appellee. LYONS, Justice. The City of Bayou La Batre, the defendant in an action pending in the Mobile Circuit Court, appeals from that court's order denying its motion for a summary judgment. This Court permitted the City to appeal. See Rule 5, Ala.R.App.P. The appeal raises two issues: (1) Whether a municipality may be held liable for false imprisonment based on negligent acts of its agent, and (2) whether a magistrate has judicial immunity when recalling an arrest warrant. On April 27, 1997, Bayou La Batre police arrested Vernon Robinson and charged him with public intoxication. On September 2, 1997, he was found guilty of public intoxication, in the Bayou La Batre *1130 municipal court, and was ordered to pay a fine of $206. Three days later, Robinson paid $5.50 toward the amount due. Because he made no more payments on the fine, Bayou La Batre magistrate Donna Gainey, on November 18, 1997, issued a notice directing Robinson to show cause for failing to pay the fine. Robinson did not respond to the notice. Magistrate Gainey then issued a warrant for Robinson's arrest and sent the warrant to the Bayou La Batre Police Department. On January 26, 1998, Robinson paid the remaining balance of his fine, as well as a $50 "contempt charge," and received a receipt that reflected his full payment of the balance due. Because Robinson had paid all the money owed to the City, Magistrate Gainey, on the same day, entered a "warrant-recall order." She then attempted to fax the recall order to the police department. However, she placed the recall order upside down in the fax machine so that she in fact transmitted the back of the ordera blank pagerather than the recall order itself. Magistrate Gainey then attached the recall order to the case action summary sheet and placed it in Robinson's file in her office. She never received the original warrant back from the police. On the night of February 7, 1998, the Mobile County Sheriff's Department stopped a vehicle in which Robinson was a passenger. A check of Robinson's name through NCIC records[1] revealed an outstanding warrant for his arrestthe Bayou La Batre warrant issued for failure to pay the public-intoxication fine and a related fine on a contempt charge. The sheriff's department contacted the Bayou La Batre Police Department to confirm the existence of the outstanding warrant. When Officer Shane McClain of the Bayou La Batre Police Department looked in the drawer where the department keeps its warrants, he found the warrant for Robinson's arrest. Officer McClain instructed another officer to go to the sheriff's location and pick up Robinson on the warrant. The other officer picked up Robinson; when he was picked up, Robinson protested that he had paid the fine in full and had been issued a receipt. At approximately 2:30 on the morning of February 8, Robinson was brought to the Bayou La Batre jail. Robinson remained there for the next 12 hours. During this time, no one contacted Magistrate Gainey to confirm the status of Robinson's warrant. Robinson sued Bayou La Batre, alleging false arrest and false imprisonment. On any claim against a municipality, liability cannot be imposed beyond the limitations set forth in § 11-47-190, Ala.Code 1975, which provides: (Emphasis added.) Bayou La Batre contends that the immunity of its agent as a judicial officer shields it from liability. Alternatively, it argues that Robinson's action alleges an intentional tort for which it cannot be liable, because of the provisions of § 11-47-190, Ala.Code 1975. We first address the question of a municipality's liability for false imprisonment. This Court at one time held that *1131 false-imprisonment claims against a municipality were barred by the doctrine of immunity. Boyette v. City of Mobile, 442 So. 2d 61 (Ala.1983). However, Boyette was expressly overruled in Franklin v. City of Huntsville, 670 So. 2d 848 (Ala. 1995).[2] This Court stated in Franklin: 670 So. 2d at 852 (emphasis added). The Legislature has defined "false imprisonment" as follows: § 6-5-170, Ala.Code 1975. Had the Legislature intended to restrict the tort of false imprisonment to intentional acts, it easily could have chosen words far more specific than the word "unlawful" to characterize the conduct constituting the tort. The allegations of Robinson's complaint relating to the improper use of a fax machine describe conduct that could constitute "neglect, carelessness or unskillfulness." Assuming Robinson can present substantial evidence to support this allegation, we must conclude that to allow his claim to proceed would not violate the municipality's immunity granted pursuant to § 11-47-190. We now turn to the extent to which the municipality can escape liability by reason of judicial immunity enjoyed by its magistrate. This Court recognized in Gore v. City of Hoover, 559 So. 2d 163, 165 (Ala.1990), that, under principles of vicarious liability, where a municipal employee enjoys immunity, the municipality likewise is immune as to claims based on the employee's conduct. While some aspects of Gore were overruled in Franklin, this holding as to immunity was not.[3] *1132 Broad policy interests support allowing immunity for judges acting within their judicial capacity: 46 Am.Jur.2d Judges § 69 (1994) (footnotes omitted). Judicial immunity does not apply to every act of a judge. "[A] judge is not immune from liability for nonjudicial actions, i.e., actions not taken in the judge's judicial capacity." Mireles v. Waco, 502 U.S. 9, 11, 112 S. Ct. 286, 116 L. Ed. 2d 9 (1991) (citing Forrester v. White, 484 U.S. 219, 108 S. Ct. 538, 98 L. Ed. 2d 555 (1988)). Cronovich v. Dunn, 573 F. Supp. 1330, 1336 (E.D.Mich.1983) (citing Supreme Court of Virginia v. Consumers Union of the United States, Inc., 446 U.S. 719, 100 S. Ct. 1967, 64 L. Ed. 2d 641 (1980)) (holding that the justices on the Virginia Supreme Court were immune from suit because they had exercised a legislative, rather than an executive, function when promulgating rules that restricted advertising by attorneys in the state). In Cronovich, the court found that various acts of sex discrimination charged against the judicial defendants *1133 would have been performed by the "defendants in the ministerial phase of their executive roles"thus, the defendants were not entitled to judicial immunity. 573 F. Supp. at 1337. See, also, Stump v. Sparkman, 435 U.S. 349, 362, 98 S. Ct. 1099, 55 L. Ed. 2d 331 (1978) ("[T]he factors determining whether an act by a judge is a `judicial' one relate to the nature of the act itself."). A judge acting in his or her judicial capacity must enjoy freedom from risk of a lawsuit, lest the administration of justice be inhibited by fear of personal liability. See Dennis v. Sparks, 449 U.S. 24, 31, 101 S. Ct. 183, 66 L. Ed. 2d 185 (1980). This Court has extended the principle of judicial immunity to the discretionary judicial acts of magistrates and clerks of court: Almon v. Gibbs, 545 So. 2d 18, 20 (Ala. 1989) (citing Stump v. Sparkman, supra, and Scott v. Dixon, 720 F.2d 1542 (11th Cir.1983)). This extension of judicial immunity reflects the role that magistrates and clerks of court often play in our judicial system. In Almon, the clerk of court was sued for failing to issue a warrant. 545 So. 2d at 20. This Court held that the determination of whether probable cause existed to issue a warrant is a judicial act, an act that properly affords judicial immunity. Id. The situation with which we are confronted today is whether a magistrate should be protected by judicial immunity for failure to properly recall a warrant. We are not here dealing with the conduct of a judge acting under our unified judicial system. Magistrates are unique in Alabama's system of judicial administration. The office of magistrate is a hybrid creature, combining both clerical attributes and limited judicial attributes. See § 12-14-51(c), Ala.Code 1975 (listing the five statutorily authorized responsibilities of a magistrate, including "[a]ccountability to the municipal court for all uniform traffic tickets and complaints, moneys received and records of offenses"). In fact, Alabama law establishes that all municipal-court clerks are magistrates. See Ala.R.Jud.Admin. 18 I.(B)(1)(a); Curtis v. City of Sheffield, 502 So. 2d 829 (Ala.Crim. App.), rev'd on other grounds, 502 So. 2d 833 (Ala.1986). While this Court has held that magistrates and clerks of court are entitled to judicial immunity for their discretionary judicial acts, see Almon, 545 So. 2d at 20, clerks and magistrates should not enjoy the full benefit of judicial immunity when they are performing administrative tasks. We have recently dealt with immunity of state agents, in Ex parte Cranman, [Ms. 1971903, June 16, 2000] ___ So.2d ___ (Ala.2000). A plurality there stated the basis for determining State-agent immunity in terms of whether the party was required to "exercise judgment" in the execution of the task. The Court adopted this standard in Ex parte Butts, 775 So. 2d 173 (Ala.2000). Under the facts presented in this present case, we conclude that the magistrate, an official with a blend of judicial and administrative duties under § 12-14-51(c), Ala.Code 1975, was, when she faxed the warrant-recall order to the police department upside down, executing an administrative duty that did not involve the exercise of judgment. *1134 In reaching this conclusion, we follow a consistent line of cases from many other jurisdictions throughout the nation dealing with personal liability of administrative officials in the judicial system. In Franklin v. City of Dayton Probation Services Department, 109 Ohio App.3d 613, 672 N.E.2d 1039 (1996), Franklin performed community service and paid a fine as a result of a traffic offense. However, for unknown reasons, the fact that he had paid the fine and performed the service was not properly recorded by the court and, as a result, a warrant was issued for his arrest. The police arrested Franklin, and he spent three days in jail. Franklin then sued the municipal-court clerk, alleging negligence and recklessness in the performance of his duties, negligence and recklessness Franklin claimed resulted in the improper issuance of a warrant for his arrest. The court held that Franklin had pleaded a justiciable claim against the clerk. In Pittman v. Lower Court Counseling, 110 Nev. 359, 871 P.2d 953 (1994), overruled on other grounds, Nunez v. City of North Las Vegas, ___ Nev. ___, 1 P.3d 959 (2000), a defendant, Pittman, elected to perform community service rather than pay a fine for a driving violation. He performed his required service and returned to court with a signed letter attesting to his completion. He gave the letter to the court clerk, but the clerk never recorded it in the proper case file. A warrant was issued for Pittman's arrest, and two years later he was arrested on the outstanding warrant and spent two days in jail. The Nevada Supreme Court held that clerks are required to attend to official court documents and, therefore, that the clerk was not entitled to immunity for the negligent performance of a ministerial act. 110 Nev. at 364, 871 P.2d at 956. In Smith v. Lewis, 669 S.W.2d 558 (Mo. App.1983), a woman was arrested pursuant to a bench warrant that had been previously discharged; she sued the clerk of court and others. The Missouri Court of Appeals held her allegations were sufficient to withstand a motion to dismiss, and it remanded the cause for the trial court to make a factual determination as to whether the clerk's actions were judicial or were ministerial. In Cook v. City of Topeka, 232 Kan. 334, 654 P.2d 953 (1982), the court held that a clerical error that resulted in the failure to properly recall an arrest warrant did not constitute a judicial act, but rather a ministerial act, and, thus, that the clerk of court was not entitled to judicial immunity. In Mauro v. County of Kittitas, 26 Wash. App. 538, 613 P.2d 195 (1980), Mauro failed to pay a speeding ticket and a bench warrant was issued for his arrest. He later paid the ticket and received a receipt reflecting his payment. For unknown reasons, the warrant was never recalled and Mauro was later arrested on the warrant. The court held that the clerk who neglected to recall the warrant was not entitled to judicial immunity, because the required act of recalling the warrant was not discretionary, but purely ministerial. In Dalton v. Hysell, 56 Ohio App.2d 109, 381 N.E.2d 955 (1978), superseded by statute as stated in Blankenship v. Enright, 67 Ohio App.3d 303, 586 N.E.2d 1176 (1990), the court held that a clerk who negligently fails to record a defendant's payment of a traffic fine is not immune from an action for damages. The court stated that because the act was neither a discretionary act nor one done at the instruction of a judge, public policy provided no basis for granting immunity. In Calhoun v. City of Providence, 120 R.I. 619, 390 A.2d 350 (1978), Calhoun was arrested on a warrant for which the underlying charge had been dismissed some months before. He sued the state and *1135 various employees of the court system, alleging a negligent failure to recall the arrest warrant. The court held that the trial court must make the factual determination whether the failure to properly recall the warrant rested with the judge, who would be entitled to immunity, or rather with the clerk of court, who would have been negligent in performing a ministerial task and thus not entitled to immunity. In Connell v. Tooele City, 572 P.2d 697 (Utah 1977), the court found no basis in public policy to extend immunity to a clerk who negligently failed to record the payment of a traffic fine in the proper case file. Because of this oversight, the person who had paid the fine was later arrested and jailed. In Stine v. Shuttle, 134 Ind.App. 67, 186 N.E.2d 168 (1962), the court held that a court clerk could be found liable for false imprisonment based upon his negligence in issuing a warrant for the arrest of a person who had paid his traffic fine. See, also, Claire E. Harkrider, An Act-Based Analysis of Immunity and Its Application to Unconstitutional Acts of Court Clerks, 76 Minn.L.Rev. 1393 (1992) (analyzing the public-policy bases for extending judicial immunity to court clerks and proposing that courts look at the act of the clerk itself rather than the title of the actor when deciding whether to extend immunity). Robinson is entitled to proceed against the municipality on his claim of negligence that he says led to the deprivation of his liberty, and the magistrate does not have judicial immunity for her acts that did not involve the exercise of judgment in the discharge of her administrative duties. Therefore, the trial court's order denying the City's motion for a summary judgment is affirmed. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, and ENGLAND, JJ., concur. BROWN and JOHNSTONE, JJ., concur in part and dissent in part. JOHNSTONE, Justice (concurring in part and dissenting in part). I concur in Part I and in Part II. I respectfully dissent from Part III, however, because the better analysis would seem to be that the judicial decision-making process consists of both the mental formulation of the decision and the physical communication of the decision. Without both, a decision does not exist for any practical purpose. A magistrate or other judge should not be subject to liability for mistakes in the communication aspect of the judicial decision-making process any more than he or she should be subject to liability for mistakes in the formulation aspect. The policy reasons for judicial immunity apply equally to both aspects. Thus, judicial immunity, properly construed, should immunize the magistrate in the case before us from liability for her mistake in the communication aspect of her judicial decision-making process. BROWN, J., concurs. [1] The National Crime Information Center ("NCIC") operates a computer database that provides information on crimes committed in the several states. [2] Bayou La Batre urges us to follow Ohio law, citing Bennett v. Ohio Department of Rehabilitation & Correction, 60 Ohio St.3d 107, 573 N.E.2d 633 (1991), for the proposition that false imprisonment is an intentional tort. Even if the law in Alabama were not settled on this issue, we would note that Bennett is distinguishable because the complaint in that case explicitly alleged a knowing or intentional failure to follow the law; the allegation caused the Ohio court to observe that it had "no occasion herein to determine whether there is a cause of action for an official's negligent failure to follow the law in releasing a prisoner." Id., 60 Ohio St.3d at 110, 573 N.E.2d at 636. [3] See Richards v. Southeast Alabama Youth Services Diversion Center, 105 F. Supp. 2d 1268, 1289 (M.D.Ala.2000). In that case, Judge Albritton correctly analyzed the effect of Franklin on that aspect of Gore dealing with immunity: "In Gore, the Alabama Supreme Court stated that because a city could only be held liable by respondeat superior, if the agent was immune from liability, the city was also immune from liability. [559 So.2d] at 165-66. In so holding, the court relied on cases establishing that where a jury has found that the agent is not liable, the principal also cannot be held liable. Id. This principle was later applied by the Alabama Supreme Court to county defendants in Roden v. Wright, 646 So. 2d 605, 611 (Ala.1994). Significantly, the Alabama Supreme Court also stated that if the agent was entitled to discretionary function immunity in his individual capacity, `the other Marshall County defendants, whose liability is based on the doctrine of respondeat superior, are similarly entitled to immunity.' Id. at 611. In so holding, the court relied on the Gore decision. Id. Although Gore was subsequently overruled by Franklin v. City of Huntsville, 670 So. 2d 848 (Ala.1995), the Franklin decision only overruled the language in Gore indicating that a city could not be held liable for claims of negligent false arrest and imprisonment. [670 So.2d] at 852. As the Franklin court pointed out, Gore was distinct from Franklin in that the Gore decision rested on the fact that the agent was immune, so the principal was also immune, while in Franklin there was no issue of `vicarious' immunity. [670 So.2d] at 851. The Alabama Supreme Court's overruling Gore does not, therefore, mean that the holding of Roden that the county and county commission could not be held liable for tortious interference and similar tort claims when their agent was given discretionary function immunity is overruled."

December 8, 2000

84521629-3d58-4c70-84c7-249816b73b8e

Fleetwood Enterprises, Inc. v. Hutcheson

791 So. 2d 920

1981624

Alabama

Alabama Supreme Court

791 So. 2d 920 (2000) FLEETWOOD ENTERPRISES, INC., and Roger Mitchell v. Tommy HUTCHESON d/b/a Mountaineer Homes; and Mountaineer Homes, Inc. 1981624. Supreme Court of Alabama. November 17, 2000. Rehearing Denied February 23, 2001. *921 Kimberly N. Sibley and Sherry Collum-Butler of Gonce, Young, Sibley & Moreau, Florence, for appellants. Jeffrey L. Bowling of Bedford, Rogers & Bowling, P.C., Russellville, for appellees. PER CURIAM. Tommy Hutcheson d/b/a Mountaineer Homes; and Mountaineer Homes, Inc., sued Fleetwood Enterprises, Inc. ("Fleetwood"), and Roger Mitchell, alleging fraud, breach of contract and "bad faith," after Hutcheson was terminated as a Fleetwood mobile-home retailer. The trial court entered a summary judgment on the breach-of-contract and bad-faith claims asserted by Hutcheson and Mountaineer Homes, Inc. On the fraud claim, a jury awarded Hutcheson and Mountaineer Homes, Inc., $63,100 in compensatory damages and $189,300 (three times the compensatory damages) in punitive damages. Fleetwood and Mitchell appealed, arguing that they were entitled to a judgment as a matter of law because, they contended, there was a total absence of proof of a false representation and Hutcheson had failed to offer legally adequate evidence of any damage. We reverse and render a judgment for Fleetwood and Mitchell. Hutcheson started a retail mobile-home business in Spruce Pine, Alabama, in 1989. At that time, Hutcheson entered into retail agreements with Fleetwood, a mobile-home manufacturer. Hutcheson worked with Fleetwood under annual retail agreements, the last of which expired in January 1995. Hutcheson continued to sell Fleetwood homes after the retail agreement expired. The agreements provided Fleetwood retailers, such as Hutcheson, with geographical protection from competing Fleetwood dealers. The retailers were provided with maps that highlighted their protected areas. Hutcheson's original territory included Franklin, Lawrence, Winston, and Marion Counties. However, in 1994, Fleetwood notified Hutcheson that his customer-satisfaction-index ("CSI") had decreased 40%, and it informed him that because of the decrease it was reducing his protected territory to include only Franklin County. Hutcheson brought his CSI up to 100% by 1996. The last agreement between the parties included a map that indicated Hutcheson's protected area was Franklin County. However, Hutcheson claims that *922 Fleetwood indicated to him that he would regain his original territory once his CSI increased. In the summer of 1996, Hutcheson opened a mobile-home business in Moulton, in Lawrence County. The evidence suggests that Tom Humphries, a Fleetwood representative, told Hutcheson he would need to obtain Fleetwood's approval before taking any Fleetwood mobile homes to the Moulton lot. Roger Mitchell, a sales manager for Fleetwood, testified that he told Hutcheson not to move any Fleetwood mobile homes to the Moulton lot. On August 19, 1996, after Hutcheson had moved five Fleetwood mobile homes to Moulton, Mitchell sent Hutcheson a letter that stated: On August 23, 1996, Mitchell wrote Hutcheson again: On September 21, 1996, Hutcheson met with Fleetwood representatives Mitchell and Mike Sullivan to discuss his providing Fleetwood mobile homes in Moulton. A letter from Mitchell to Hutcheson dated September 25, 1996, but postmarked October 2, 1996, states: Hutcheson had sold three of the Fleetwood mobile homes before the September 1996 meeting. Hutcheson did not move the remaining mobile homes from the Moulton lot until October 3 or 4, 1996. He claims that although he intended to move the two remaining Fleetwood mobile homes before the September 30, 1996, deadline, he wanted and demanded a letter confirming what had transpired at the meeting. On October 18, 1996, Hutcheson received a letter terminating his business relationship with Fleetwood. We review a trial court's denial of a motion for a judgment as a matter of law by the same standard we applied to an order denying the motion formerly known as a motion for a directed verdict. Winn Dixie of Montgomery, Inc. v. Colburn, 709 So. 2d 1222, 1223 n. 1 (Ala.1998). "The standard of review applicable to a directed verdict or to a denial of a motion for a directed verdict is whether the nonmoving party has presented substantial evidence in support of his position." K.S. v. Carr, 618 So. 2d 707, 713 (Ala.1993). "Substantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). We have held: Woodruff v. Johnson, 560 So. 2d 1040, 1041 (Ala.1990). With regard to his fraud claim, Hutcheson and Mountaineer argue that Fleetwood informed Hutcheson in March 1994 that his territory was being reduced because his "customer service index" had fallen. Hutcheson testified that he was led to believe that if he raised his CSI, then his original territory, which had included Moulton, would be restored. "The elements of fraud are: (1) a misrepresentation of a material fact, (2) made willfully to deceive, recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by the plaintiff under the circumstances, and (4) that caused damage as a proximate consequence." Brushwitz v. Ezell, 757 So. 2d 423, 429 (Ala.2000). The parties executed their last retail agreement in March 1994. It was effective from January 1994 through January 1995. Attached *924 to the retail agreement was a map showing Hutcheson's protected territory Franklin Countyshaded out. Fleetwood's former sales manager, Roger Mitchell, testified that this map would have still been in effect even though the agreement to which it was attached had expired. Hutcheson testified that Mike Sullivan, a Fleetwood employee, indicated to him that if he got his CSI up, then Fleetwood would restore his original territory. There was a genuine issue of material fact as to whether Fleetwood misrepresented to Hutcheson that his original territory would be restored once he got his CSI up. Hutcheson claims that, in reliance on Fleetwood's representation that he would receive his original territory if his CSI increased, he increased his CSI and moved some Fleetwood Homes to Moulton. In order to prevail on his fraud claim, Hutcheson must prove that he reasonably relied on Fleetwood's representations. Hutcheson testified that in May or June 1996, he had a discussion with Tom Humphries about taking some Fleetwood Homes to his new lot in Moulton. Hutcheson testified as follows: Humphries testified as follows: Mitchell testified that Hutcheson telephoned him and told him that he was going to start a business in Moulton and wanted to sell Fleetwood homes at his new business. He testified that he told Hutcheson he would call Joel Reagin, a Fleetwood dealer in Decatur, to "see if he minded if Tommy brought products up there that Joel Reagin was not handling." Mitchell testified that when Reagin objected, stating that Moulton was closer to his area, Fleetwood decided not to give the Moulton *925 territory to anyone at that time. Mitchell also gave the following testimony: The facts suggests that Fleetwood, through its employees Humphries and Mitchell, had indicated to Hutcheson that he should not move any Fleetwood homes to the Moulton lot. These facts do not support Hutcheson's contention that he reasonably relied on Fleetwood's representation (that his original territory would be restored if his CSI increased) when he moved the Fleetwood homes to Moulton. Even if we assume that Fleetwood did lead Hutcheson to believe that he would automatically regain his original territory when his CSI increased, Hutcheson could not have reasonably relied on that representation when he moved the homes to Moulton, because Humphries and Mitchell had indicated to him before he moved the homes to Moulton that the Moulton area was disputed territory. Thus, we conclude that the evidence does not support a finding that Hutcheson reasonably relied on the alleged misrepresentations of Fleetwood's representatives. We further conclude that Hutcheson has not demonstrated that the alleged misrepresentation proximately caused the damage he alleges. To the contrary, the evidence suggests that Hutcheson knew or should have known, through his conversations with Humphries and Mitchell, that he needed Fleetwood's approval before moving Fleetwood homes to Moulton. Hutcheson argues that the jury had before it ample evidence from which it could have found that Fleetwood did not disclose its true intentions and motives to Hutcheson when he and Fleetwood representatives met in 1996, after Hutcheson had received the letter asking him to take the Fleetwood homes he had in Moulton back to Spruce Pines or else risk having his business relationship with Fleetwood terminated. In support of this contention, Hutcheson states in his brief that "Roger Mitchell acknowledged that the primary reason for Fleetwood's termination of Hutcheson was the fact that he initially moved houses to Moulton, not that he failed to move them from Moulton." (Emphasis original.) Thus, Hutcheson argues that his moving the Fleetwood home to Moulton was the factor that triggered his termination, and, consequently, that Fleetwood's actions were deceitful because, he argues, the factor that triggered Hutcheson's termination had occurred before Fleetwood sent the letters in August 1996. He claims that Fleetwood induced him to rely on the representations made in the August 1996 letters and at the September 1996 meeting, in order to avoid being terminated, but that Fleetwood had already decided to terminate him for taking the homes to Moulton in the summer of 1996. Mitchell actually testified as follows regarding Hutcheson's termination: Mitchell further testified on recross-examination that if Hutcheson had moved the homes by September 30, 1996, as he had agreed to do, then he would not have been terminated as a retailer with Fleetwood. We find in the record no substantial evidence to support a finding that when the parties met in September 1996 Fleetwood already intended to terminate Hutcheson for moving Fleetwood homes to Moulton, regardless of whether he moved the homes back to Spruce Pines before the September 30, 1996, deadline. Nothing in the record suggests that Hutcheson's relationship with Fleetwood would have been terminated even if he had removed the mobile homes from the Moulton lot by the September 30, 1996, deadline. Hutcheson did not present substantial evidence of fraud. Therefore, Fleetwood and Mitchell were entitled to a judgment as a matter of law on the fraud claim. The judgment in favor of Hutcheson and Mountaineer is reversed, and a judgment is rendered in favor of Fleetwood and Mitchell. REVERSED AND JUDGMENT RENDERED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs in the result.

November 17, 2000

5d4cd4c8-3be2-4b5f-91d2-aa69c1672807

Samek v. Sanders

788 So. 2d 872

1982179

Alabama

Alabama Supreme Court

788 So. 2d 872 (2000) Daniel B. SAMEK and Harold W. Schultze v. Terrill W. SANDERS, as administrator of the Estate of Earl Chamblee, deceased; et al. 1982179. Supreme Court of Alabama. November 17, 2000. Rehearing Denied January 5, 2001. J. Sanford Mullins III, Alton B. Parker, Jr., Peter M. Wright, and Myla Calhoun Choy of Spain & Gillon, L.L.C., Birmingham, for appellants. Kay L. Cason and Donna Eich Brooks of Gorham & Waldrep, P.C., Birmingham, for appellees. ENGLAND, Justice. Earl Chamblee died intestate on May 30, 1998, in Jefferson County. Daniel B. Samek and Harold W. Schultze, his stepsons, filed a complaint seeking a determination of heirship. Their complaint asked the Jefferson Probate Court to declare that they had been "equitably adopted" by Chamblee and thus were heirs to his $2.5million *873 estate. The probate court rejected their claim. They appealed. We affirm. Probate Judge George R. Reynolds tried the case, and the trial lasted four days. Judge Reynolds entered an order that reads as follows: As previously stated, Earl Chamblee's estate included assets worth $2.5 million. The plaintiffs claim a right to inherit Chamblee's estate under the doctrine of equitable adoption or adoption by estoppel. The plaintiffs contend that the trial court erred in ruling that a finding of equitable adoption is appropriate only when the plaintiff has clearly proved a definite contract not only to adopt, but to adopt so as to allow the adoptee to inherit, and for which specific performance could be enforced. We disagree. Adoption is purely statutory; it was never recognized by the rules of the common law. Hanks v. Hanks, 281 Ala. 92, 99, 199 So. 2d 169, 176 (1967). "Equitable adoption is rarely recognized in Alabama and generally requires a finding of an intent to adopt." J.N.H. v. N.T.H., 705 So. 2d 448, 452 (Ala.Civ.App.1997), citing C.H.H. v. R.H., 696 So. 2d 1076 (Ala.Civ. App.1996); and see Hebert v. Stephenson, 574 So. 2d 835 (Ala.Civ.App.1990). On those rare occasions when this Court or the Court of Civil Appeals has recognized an equitable adoption, it has recognized it only when a definite contract was clearly proven, not only to adopt, but to adopt so as to permit the adoptee to inherit, and the contract was one for which specific performance could be enforced. C.H.H. v. R.H., supra., at 1078, citing Prince v. Prince, 194 Ala. 455, 69 So. 906 (1915). The plaintiffs argue that the probate judge erred in requiring that the plaintiffs prove a contract either between Earl Chamblee and the plaintiffs or between Earl and Genevieve. Samek testified it was after 1992 that he discussed adoption with Earl. According to Samek, Earl asked, "Is it too late to adopt you?" As the trial judge's order states, the Alabama statutes allowing adoption of adults, §§ 43-4-1 through -4, Ala.Code 1975, were repealed effective January 1, 1991. In order to be equitably adopted, one must be capable of being legally adoptedand Samek and Schultze could not have been adopted by Earl in 1992. As to a possible contract between Earl and Genevieve, Samek testified that his mother told him "that she and Earl had agreed that Harold and I were the children of the marriage and that we were to be adopted." As the trial judge stated, the parties presented no evidence indicating that Earl was present when this statement was made and there was no evidence that he ever ratified any such statement made by his wife. A close reading of the trial court's order shows that the trial court looked for evidence of a contract, but found no evidence that would support a *876 finding of a contract that would be subject to an order of specific performance. Samek and Schultze produced no evidence of a contract to adopt, and certainly no evidence of a specifically enforceable contract by Earl to adopt them so that they could inherit from him. See Luker v. Hyde, 260 Ala. 248, 69 So. 2d 421 (1953). The plaintiffs' claim of equitable adoption was presented to the court on ore tenus evidence. The judgment of a trial court based on ore tenus evidence is presumed correct, and its findings on such evidence "will not be disturbed on appeal unless they are palpably wrong, manifestly unjust, or without supporting evidence." McCoy v. McCoy, 549 So. 2d 53, 57 (Ala. 1989). See also McCrary v. Butler, 540 So. 2d 736 (Ala.1989); Jones v. Jones, 470 So. 2d 1207 (Ala.1985); Clark v. Albertville Nursing Home, Inc., 545 So. 2d 9, 12-13 (Ala.1989). We cannot say the trial court committed plain and palpable error in refusing to find that Chamblee had equitably adopted his stepsons. Finally, the plaintiffs take issue with this wording in the trial judge's order: The wording the judge was quoting actually comes from Samek's testimony in a deposition that was attached to Samek and Schultze's motion for summary judgment. The plaintiffs argue that the trial court erred by resting its judgment on evidence that was not offered at trial. However, if this was error, the error was harmless. See Rule 45, Ala.R.App.P. Samek testified to the substance of this conversation several times during the trial. Samek's testimony at trial concerning what his mother told him upon her return from Seattle was as follows: Later, Samek testified: The trial court's use of the quoted words from the deposition was harmless error in that those words fairly summarize the substance of the testimony; simply removing the quotation marks would cure any error. We will not reverse a judgment unless "the error complained of has probably injuriously affected substantial rights of the parties." Rule 45, Ala.R.App.P. The trial judge heard ore tenus evidence, and it properly applied the law to that evidence. Its judgment is affirmed. AFFIRMED. HOOPER, C.J., and HOUSTON, SEE, and BROWN, JJ., concur.

November 17, 2000

97a97e9d-fefc-444a-88f6-f46b1b5373ee

Speedway/SuperAmerica, LLC v. Phillips Truck Stop, Inc.

782 So. 2d 255

1990080

Alabama

Alabama Supreme Court

782 So. 2d 255 (2000) SPEEDWAY/SuperAMERICA, L.L.C. v. PHILLIPS TRUCK STOP, INC. 1990080. Supreme Court of Alabama. October 27, 2000. Edward S. Sledge III, Russel Myles, and Jason S. McCormick of McDowell, Knight, Roedder & Sledge, L.L.C., Mobile, for appellant. Thomas M. Galloway, Jr., of Galloway, Smith, Wettermark & Everest, L.L.P., Mobile, for appellee. MADDOX, Justice. This appeal requires an interpretation of the Alabama Motor Fuel Marketing *256 Act, §§ 8-22-1 to -18, Ala.Code 1975 ("AMFMA"), and the specific question presented is whether a truck stop located 80 miles away, on an interstate highway, is "a competitor in the same market area" as the defendant's business, so as to permit the defendant to price its fuel "below cost," allegedly to meet competition. The trial court, after having determined that the truck stop located 80 miles away was not a competitor in the same market area, issued a preliminary injunction against the defendant. We reverse and remand. Speedway/SuperAmerica, L.L.C. ("Speedway"), built a Travel Center truckstop facility at the I-65/Highway 43 interchange located in Satsuma. This facility has 10 fueling lanes with 20 diesel pumps, and it also has 150 parking slots, truck scales, 8 showers, a Hardee's restaurant, and a laundromat. It opened for business on May 20, 1999. Phillips Truck Stop, Inc. ("Phillips"), operates a truck-stop facility on Highway 43, about three and a half miles north of the I-65/Highway 43 interchange where the Speedway facility is located. The Phillips facility has six diesel pumps, a convenience store, a restaurant, and some showers. Phillips filed this action against Speedway, seeking a preliminary injunction to prevent Speedway from pricing its diesel fuel "below cost," as that phrase is used in the AMFMA. At the preliminary-injunction hearing, the parties stipulated, and the trial court agreed, that the hearing would focus on whether Speedway was, in fact, pricing its diesel fuel to "meet competition" of the Flying J truck stop located approximately 80 miles west on I-10 in Gulfport, Mississippi. See § 8-22-8(b), which provides, in part, that "[i]t is not a violation of [the AMFMA] if any price is established in good faith to meet an equally low price of a competitor in the same market area on the same level of distribution selling the same or a similar product of like grade and quality." Even though Speedway agreed that the issue was whether it was meeting the competition of Flying J, it nevertheless expressly reserved the right to challenge the constitutionality of the AMFMA's definition of "cost," inasmuch as the definition of "cost of doing business or overhead expenses" requires fuel retailers to establish a price floor that includes "all costs incurred in the conduct of business." See § 8-22-4(17). Speedway also filed a "Notice of Constitutional Challenge" and served a copy of that notice on the attorney general. The trial court did not specifically address the issue relating to the constitutionality of the AMFMA's definition of "cost of doing business," and neither do we.[1] The trial court conducted a hearing and, after the hearing, granted a preliminary injunction requiring Speedway to refrain from engaging in price competition with the Gulfport Flying J. The court stated that "whether [the phrase] `a competitor in the same market area' [AMFMA language] in this case includes the Flying J[in] Mississippi [on] I-10 is yet to be definitively determined but at this stage it appears not to be such." The trial court also required Speedway to incorporate a 10-cent-per-gallon "cost-of-doing-business" charge into the price of all the diesel fuel it sold for a period of seven days. The trial court further held that at the end of the seven-day period, Speedway could *257 meet the price of a competitor, but the court restricted Speedway to competing with "local" truck stops, not the Gulfport Flying J. The court issued the preliminary injunction until a hearing on the merits could be held to definitively determine if, in fact, the Gulfport Flying J was a "competitor in the same market area" as the Speedway facility. Speedway appeals. We first set out our scope of review and why we believe Speedway's arguments are meritorious. A preliminary injunction is reviewed under an abuse-of-discretion standard. TFT, Inc. v. Warning Systems, Inc., 751 So. 2d 1238, 1241 (Ala.1999). We apply that standard of review to the facts presented in this case. To sustain its argument that it was not violating the AMFMA, Speedway claims that although it was selling its diesel fuel "below cost," as that phrase is used in the AMFMA, it did so "in good faith to meet an equally low price of a competitor in the same market area," within the meaning of that phrase as it is used in § 8-22-8(b); that competitor, it contends, is the Gulfport Flying J. Consequently, Speedway argues that the trial court abused its discretion by issuing the preliminary injunction, given the testimony of three persons, namely Glenn Plumby, Dewey Clower, and Wayne Kittle, who each testified, in effect, that the Gulfport Flying J is within the same "market area" as the Satsuma Speedway truck stop. They stated that, based on the fuel range of essentially all long-haul trucks, any truck stop offering the same or similar amenities within a 100- to 200-mile-range along a route on the Interstate highway system would be operating in competition for the business of those long-haul trucks. In support of its argument, Speedway cites Tennessean Truckstop, Inc. v. MAPCO Petroleum, Inc., 728 F. Supp. 489 (M.D.Tenn.1990). In Tennessean Truckstop, the plaintiff operated an independently owned truck stop adjacent to I-65 in Giles County, Tennessee. The defendant, Mapco Petroleum, Inc., operated a "Delta Express" truck stop at the same intersection. Mapco's truck stop sold diesel fuel at a price several cents per gallon lower than the plaintiff's truck stop. The plaintiff filed an action alleging a violation of the Tennessee Petroleum Trade Protection Act, an act similar to the AMFMA. Mapco presented evidence indicating that other truck stops within 200 miles of the intersection where its store was located sold diesel fuel at the same price or at lower prices. The federal district court held that the plaintiff's argument that the only market relevant to the lawsuit was the local market at the plaintiff's particular intersection ignored the "commercial realities" of the long-haul-trucking market. It held that the relevant geographic market area for the truck stops in that case extended up to 200 miles in either direction. Phillips counters Speedway's argument by basically adopting the reasoning of the trial court's order granting the preliminary injunction, wherein the trial court stated that Speedway's claim that it was meeting the competition of the Gulfport Flying J was "tantamount to `manufacturing competition' for purposes of the AMFMA." Phillips contends that the trial court did not abuse its discretion in finding that Speedway was not in competition with the Gulfport Flying J, because the Flying J was located over 80 miles away and on a different Interstate highway. Phillips also points out that Speedway has another facility at the intersection of Moffett Road and I-65 and that that facility does not price its diesel fuel as low as the Satsuma Speedway facility does, although the Moffett *258 Road Speedway facility is closer to the Gulfport Flying J than the Satsuma Speedway facility is. Based on the information presented to the trial court at the hearing on the preliminary injunction, we agree with Speedway, and we conclude that the trial court abused its discretion in issuing the injunction. It appears to us that the Speedway facility that is the subject of this controversy was designed and geographically located to attract the long-haul-truck traffic along the I-65/I-10 freight lane, as evidenced by the size of the facility, its amenities, and the surveys conducted by Speedway. Furthermore, based on the facts of Tennessean Truckstop and the conclusions the court reached in that case, we conclude that the trial court's finding that Speedway was not in competition with the Gulfport Flying J, because the Flying J was located over 80 miles away and on a different Interstate highway, "ignores the commercial realities of the truck stop competitive market." See 728 F. Supp. at 490. Our conclusion is buttressed by the testimony of the owner of Phillips. William J. Phillips testified that 75% of his facility's business consists of service provided to local truckers traveling Alabama Highway 43, and that the remaining 25% of the business is with truckers who depart I-65 to make deliveries to a local industrial park. Although there is some overlap in the competitive market of Speedway and Phillips for customers of diesel fuel, the Phillips facility does not target the same long-haul-truck traffic the Speedway facility targets. Speedway met its burden of showing that, although it was pricing its diesel fuel "below cost," it did so in good faith for the permissible purpose of "meeting [the] competition" of the Gulfport Flying J. Therefore, the trial court abused its discretion in issuing the injunction. The judgment entering the injunction is reversed, and the cause is remanded for an order or proceedings consistent with this opinion. REVERSED AND REMANDED. HOUSTON, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., concurs specially. HOOPER, Chief Justice (concurring specially). I concur heartily, and I would add that I think the burden upon a plaintiff in a case like this is, and should be, especially high. What exactly is the plaintiff doing in this case? The plaintiff, Phillips, wants the civil government, the courts being one of the three branches of civil government, to exercise its power to coerce a legitimate concern doing business in the marketplace, by prohibiting that business from lowering the prices of its products. That action is an extraordinary interference in the activity of the free market, and it should receive extra careful review and require adequate justification. In looking for adequate justification, I would impose a high standard, perhaps even a standard requiring clear and convincing evidence, when a plaintiff tries to enforce a statute that infringes upon the freedom of the marketplace. The Alabama Constitution guarantees freedom from the improper coercion of the civil government, not from the competition and pressures of the marketplace. Therefore, I would expect, and demand, a higher standard of proof when the State steps in to "manage" the marketplace rather than accepting the natural management that exists in a free economy. *259 Walter Williams, John M. Olin distinguished professor of economics at George Mason University, states: Imprimis newsletter, Vol. 29, No. 8, p. 2 (August 2000). In other words, a person may own property and do what he wishes with it, but if he wants to profit from the use of that property, he must use it for the benefit of others. That is the freedom and the legitimate coercion of the market. It promotes freedom because it prevents unnatural interference of the state in the affairs of the people, an interference that can lead to totalitarianism because the "good will" of the state can become heavy-handed and arbitrary in its application of coercion, i.e., the force of the law. If my livelihood depends upon my satisfying a consumer, then any law requiring that I be fair or keep my prices low is at best superfluous, and at worst tyrannical. Williams explained his position: Id. What has been the logical progression of the "good intentions" of government intervention in the economy? Williams explains: Id. at 3. In this case, the trial court ruled in favor of a local corporation, owned by an Alabama resident, and against a large out-of-state corporate defendant. I am not arguing that the trial court was unfairly prejudiced against the defendant because that defendant is a foreign corporation. However, in certain cases in the courts of this State, there sometimes may have been a temptation to err on the side of "caution" and to rule in favor of a local resident. It also demonstrates the possibility of the state's "beneficence" becoming tyranny. As a member of the judiciary, I cannot, should not, and do not disregard the laws passed by the Legislature; however, when a law impinges upon one's liberty to do business, and does so even for a "good cause," a plaintiff relying on that law and seeking an action as extraordinary as a court order fixing prices should be held to a high standard of proof and justification. I concur in Justice Maddox's opinion. [1] See Lowe v. Fulford, 442 So. 2d 29, 33 (Ala. 1983) ("`Generally courts are reluctant to reach constitutional questions, and should not do so, if the merits of the case can be settled on non-constitutional grounds.... A court has a duty to avoid constitutional questions unless essential to the proper disposition of the case.'" (Citations omitted.)).

October 27, 2000

63f14c18-71ed-43e5-9232-8c3134dfec27

Fleetwood Enterprises, Inc. v. Bruno

784 So. 2d 277

1990912

Alabama

Alabama Supreme Court

784 So. 2d 277 (2000) FLEETWOOD ENTERPRISES, INC., et al. v. Vera BRUNO. 1990912. Supreme Court of Alabama. November 17, 2000. Joseph S. Bird III and Kenneth M. Perry of Bradley, Arant, Rose & White, L.L.P., Birmingham, for appellants. Joseph C. McCorquodale III and Jacqualyn S. Bradley of McCorquodale & McCorquodale, Jackson; and William L. Utsey of Utsey & Utsey, Butler, for appellee. MADDOX, Justice. Fleetwood Enterprises, Inc., North River Homes, Inc., and Fleetwood Homes of *278 Alabama, Inc., are defendants in an action pending in the Marengo Circuit Court. They appeal from the trial court's order denying their motion to compel arbitration of the claims filed against them by the plaintiff Vera Bruno. (Because there is another defendant that has not appealed, we will refer to these three defendants as "the appellants.") We reverse and remand. Bruno's complaint alleged breach of warranty, fraud, and negligence by the appellants in connection with her purchase of a manufactured home in March 1996. Bruno contends that the appellants, along with Southern Lifestyle Manufactured Housing, Inc. ("Southern"),[1] failed to provide adequate warranty service on the home, that they and Southern misrepresented or suppressed material information concerning the condition of the home, and that the appellants defectively manufactured the home. Bruno also claims that the appellants and Southern conspired to defraud her by including in the price of the home certain items, such as a "decor kit" and furniture, that she did not receive. The appellants moved to compel arbitration, based on two documents: 1) the retail installment contract entered into by Southern and Bruno; and 2) a document entitled "Alabama Arbitration Provision," signed by Bruno. The retail installment contract signed by Southern and Bruno contained the following language: The contract also contained the following language, appearing above the signature lines: The appellants were not signatories to this retail installment contract. The "Alabama Arbitration Provision," which Bruno signed on the same day she executed the retail installment contract, reads: (Emphasis in fourth paragraph added.) The trial court entered an order on December 28, 1999, denying the defendants' motion to compel arbitration.[2] In that order, the trial court stated that "there [was] no clear and unmistakable evidence that the parties agreed to submit the issue of arbitrability itself to an arbitrator" and that the trial court "should decide the initial issue of arbitrability under applicable law." The trial court concluded that "[t]he Plaintiff did not knowingly, willingly and voluntarily agree to submit all her claims to arbitration or to waive her right to a jury trial." This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala.2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that that contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala. 1995) (opinion on application for rehearing). In support of their motion to compel arbitration, the appellants presented two documents signed by Bruno: 1) the retail installment contract; and 2) the "Alabama Arbitration Provision." The language of the retail installment contract limits the arbitration clause in that contract to the signatories to that contract (i.e., Southern and Bruno). However, the "Alabama Arbitration Provision" signed by Bruno shows, on its face, that she agreed that that Arbitration Provision "inures to the benefit of and is intended for the benefit of the manufacturer of the mobile home as fully as if the manufacturer were a signatory to the Retail Installment Contract," and that she acknowledged that "the home that is the subject of the Retail Installment Contract has had an impact on interstate commerce through the manufacturing and distribution process." In response to the appellants' evidence, Bruno simply argues that the appellants are not entitled to have the claims against them submitted to arbitration because the appellants are not signatories to the retail installment contract and the Alabama Arbitration Provision. She contends that the Alabama Arbitration Provision is unilateral in nature and is unenforceable because she was the only one that signed it. Bruno makes no argument, for example, that she did not sign the documents, that the appellants misrepresented to her the contents of the documents, that she was fraudulently induced to sign the arbitration provision, that the transaction did not involve interstate commerce, or that the arbitration provisions in the two documents are not broad enough to encompass her claims against the appellants. She also asserts that the agreements are unconscionable because she has filed for Chapter 13 bankruptcy protection and cannot afford to pay arbitration fees. *281 Reviewing the record, we find no evidence to support the trial court's holding that Bruno did not knowingly, willingly, or voluntarily enter into the agreements, particularly the Alabama Arbitration Provision. We conclude that the Alabama Arbitration Provision, by its language, is broad enough to include the claims Bruno asserts against the appellants. We also conclude that the Alabama Arbitration Provision is enforceable against Bruno, although she is the only party that signed that document, because it requires only the purchaser's signature, and Bruno is the party against whom enforcement is sought. See § 8-9-2, Ala.Code 1975; and compare Ex parte Rush, 730 So. 2d 1175 (Ala.1999), and Quality Truck & Auto Sales, Inc. v. Yassine, 730 So. 2d 1164 (Ala.1999). Therefore, Bruno must submit her claims against the appellants to arbitration pursuant to the Alabama Arbitration Provision. We also conclude that the record lacks any evidence to support Bruno's claim that the agreements are unconscionable. Unconscionability is an affirmative defense, Green Tree Fin. Corp. v. Wampler, 749 So. 2d 409, 415 (Ala.1999), and the party asserting the defense bears the burden of proof. Ex parte Napier, 723 So. 2d 49, 52-53 (Ala.1998). Bruno claims that the agreements, assuming they are valid, are unconscionable because, she says, she cannot afford to pay arbitration fees. This bare allegation, without substantial evidence to support it, cannot defeat the appellants' motion to compel arbitration. See Green Tree Fin. Corp., 749 So. 2d at 416 ("[W]e cannot allow a party's poverty, standing alone and independent of other considerations justifying a finding of unconscionability, to constitute a defense to enforcement of an arbitration agreement."); Parkway Dodge, Inc., supra, 779 So.2d at 1206-07; First Family Fin. Servs., Inc. v. Rogers, 736 So. 2d 553 (Ala. 1999); and Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33 (Ala.1998). Consequently, Bruno failed "to present evidence that the supposed arbitration agreement[s][are] not valid or do[] not apply to the dispute in question." See Jim Burke Automotive, 674 So. 2d at 1265 n. 1. The order denying the appellants' motion to compel arbitration, therefore, is reversed and the cause is remanded for an order or proceedings consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and HOUSTON, COOK, SEE, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. LYONS, J., concurs specially. LYONS, Justice (concurring specially). I write to emphasize that a party opposing a motion to compel arbitration, by contending the arbitration clause is unconscionable, must submit evidence in some form in order to preserve that contention for appellate review. It is well settled that a motion to compel arbitration is analogous to a motion for summary judgment. See TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110 (Ala.1999); Allstar Homes, Inc. v. Waters, 711 So. 2d 924 (Ala.1997), clarified as to other issues, Ex parte Perry, 744 So. 2d 859 (Ala.1999); Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102 (Ala.1995). After a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence indicating that the supposed arbitration agreement is not valid or does not apply to the dispute in question. TranSouth Fin. Corp. v. Bell, *282 739 So. 2d at 1114, citing Ryan's Family Steak Houses, Inc. v. Regelin, 735 So. 2d 454 (Ala.1999). None of Bruno's three responses to the motions to compel arbitration was supported by any evidentiary material.[3] Bruno's requests for an evidentiary hearing, standing alone, are not the equivalent of submission of evidence.[4] We do not permit a party to defeat an opposing party's motion for summary judgment simply by requesting an evidentiary hearing. In those instances where we review an interlocutory order denying a motion for summary judgment by entertaining a petition for a writ of mandamus,[5] or by permitting an appeal pursuant to Rule 5, Ala.R.App. P.,[6] it would be improper to uphold the order denying the motion if the record before us was insufficient to justify the denial. We cannot justify disparate procedural treatment based simply on the fact that the underlying facts of this case may, if properly presented, demonstrate unconscionability of an arbitration agreement. [1] Southern is a defendant in this action, but it is not a party to this appeal. [2] The trial court entered an order denying Southern's motion to compel arbitration. Southern filed a motion to alter, amend, or vacate the order; that motion is presently pending in the trial court. [3] Bruno attaches several affidavits as an appendix to her appellate brief. These affidavits have been filed in a separate proceeding. They are dated three months after the trial court entered the order that is before us on this appeal. [4] Compare Jack Ingram Motors, Inc. v. Ward, 768 So. 2d 362 (Ala.1999), where this Court remanded for further proceedings, on a record that reflected two attempts to amend the complaint further to provide additional facts if the trial court felt the amendment necessary. [5] See Ex parte Rizk, [Ms. 1970493, June 30, 2000] ___ So.2d ___ (Ala.2000), acknowledging confinement of such review to cases where a party has unsuccessfully invoked immunity and seeks review by mandamus. [6] See, e.g., Folmar & Assocs. LLP v. Holberg, 776 So. 2d 112 (Ala.2000).

November 17, 2000

054d695b-bd5d-4695-b9ef-0f77381029c5

Ex Parte Grant

711 So. 2d 464

1951586

Alabama

Alabama Supreme Court

711 So. 2d 464 (1997) Ex parte Robert B. GRANT and Fraunda M. Grant. (Re Robert B. GRANT, et al. v. PALM HARBOR HOMES, INC., et al.). 1951586. Supreme Court of Alabama. November 14, 1997. Rehearing Overruled February 20, 1998. Hugh E. Holladay of Blair, Holladay & Parsons, Pell City, for petitioners. Michael L. Bell and Lee M. Hollis of Lightfoot, Franklin & White, L.L.C., Birmingham; and Billy L. Church of Church, Kennedy & Seay, Pell City, for respondent Palm Harbor Homes, Inc. A. Joe Peddy, David A. Hughes, and Bryan Scott Tyra, Birmingham, for respondent Minton Industries, Inc., d/b/a Minton Home Center. ALMON, Justice. Robert B. Grant and Fraunda M. Grant, husband and wife, petition for a writ of mandamus ordering Judge William E. Hereford, of the Circuit Court of St. Clair County, to set aside his order compelling arbitration of the Grants' claims against Palm Harbor Homes, Inc., and Minton Industries, Inc., d/b/a Minton Home Center. The Grants bought a mobile home from Minton. The mobile home had been manufactured by Palm Harbor. The only arbitration clause pertaining to this purchase is in a "Worksheet-Estimate" that a Minton salesperson filled out and signed. The Grants also signed the worksheet. It is dated September 14, 1994. At the top of the worksheet is the following language: An "Arbitration Provision" appears at the bottom of the worksheet, stating, in part: Also before us is a "Mobile Home Invoice and Bill of Sale," dated November 9, 1994, and signed by the Grants, whereby they "hereby acknowledge receipt of the described Mobile Home and a copy of this invoice." The bill of sale gives the price of the unit, its description, its serial number, and other particulars. Because the "Worksheet-Estimate" specifically states that it creates "no contractual obligation or right to buy," it is not a contract. "The requisite elements of [a contract] include: an offer and an acceptance, consideration, and mutual assent to terms essential to the formation of a contract." Strength v. Alabama Dep't of Finance, Div. of Risk Mgmt., 622 So. 2d 1283, 1289 (Ala. 1993); Steiger v. Huntsville City Bd. of Ed., 653 So. 2d 975, 978 (Ala.1995). Roberts v. Lindsey, 242 Ala. 522, 525, 7 So. 2d 82, 84 (1942); Russell v. Russell, 270 Ala. 662, 668, 120 So. 2d 733, 738 (1960). "[T]o constitute consideration for a promise, there must have been an act, a forbearance, a detriment, or a destruction of a legal right, or a return promise, bargained for and given in exchange for the promise." Smoyer v. Birmingham Area Chamber of Commerce, 517 So. 2d 585, 587 (Ala.1987). In the "Worksheet-Estimate" neither party has promised to do anything: "there is no contractual obligation or right to buy until... a retail installment contract or other contract [of] sale is signed by the customer." The "invoice and bill of sale" form contains no arbitration clause. It makes no reference to any terms from the worksheet; rather, the terms of the sale are stated in the bill of sale, just as they are in the worksheet. Other than the purported arbitration agreement, the worksheet expressly disavows the creation of any contractual obligations, and none of the terms of the worksheet are expressly incorporated into any later document by which the parties are contractually bound. Minton and Palm Harbor object that the Grants did not make this argument to the circuit court. However, the face of the documents before us show that there is no contract in which the parties have agreed to arbitrate, and the defendants have not attempted to refute this showing. They argue that "where there is more than one writing involved in a transaction, the court interprets the writings together," ANCO TV Cable Co. v. Vista Communications Ltd. Partnership I, 631 So. 2d 860, 863 (Ala.1993). However, that general principle of contract law cannot apply here, where the "worksheet-estimate" states unequivocally that it creates no obligations or rights in either party. Therefore, we see no basis on which the circuit court could properly have granted the motion to compel arbitration, and we will not deny the writ based simply on the defendants' assertion that the plaintiffs did not point out to the circuit court the language on the face of the documents. Under these facts, we hold, as we did in Crown Pontiac, Inc. v. McCarrell, 695 So. 2d 615 (Ala.1997), that an arbitration clause in a document that reflects initial negotiations does not become a binding agreement to arbitrate when the parties later execute an entirely separate contract that contains no arbitration clause and does not depend for its terms or enforcement upon any terms in the initial document. In short, the evidence before us does not show a contract between Minton Industries and the Grants that contains an arbitration agreement. Therefore, the order compelling arbitration is due to be set aside. *466 Additionally, the order compelling arbitration of the Grants' claim against Palm Harbor is due to be set aside on the authority of Ex parte Isbell, 708 So. 2d 571 (Ala. 1997), because Palm Harbor is not a party to the contract between the Grants and Minton Industries, or to any contract by which the Grants have agreed to submit disputes with it to arbitration. WRIT GRANTED. SHORES, KENNEDY, COOK, and BUTTS, JJ., concur. HOUSTON, J., concurs in the result. HOOPER, C.J., and MADDOX and SEE, JJ., dissent, with opinion by SEE, J. SEE, Justice (dissenting). The majority holds that because the Grants' arbitration agreement with Palm Harbor and Minton is not supported by a legally binding contract, Palm Harbor and Minton cannot compel the Grants to arbitrate. I respectfully dissent. First, the issue whether the arbitration clause, contained in the worksheet estimate, is supported by a legally binding contract is not properly before this Court. The Grants failed to challenge the validity of the contract at trial and therefore may not make such a challenge for the first time on appeal. See Abbott v. Hurst, 643 So. 2d 589, 593 (Ala.1994) (stating in explicit terms that "[t]his Court will not consider an argument raised for the first time on appeal; its review is limited to evidence and arguments considered by the trial court"); Andrews v. Merritt Oil Co., 612 So. 2d 409 (Ala.1992) (same). Second, the arbitration clause is in fact supported by a legally binding contract. The language in the worksheet estimate, which contains the arbitration clause, provides: (Emphasis added.) After signing this worksheet-estimate, which contained the arbitration clause, the Grants did receive credit approval and signed a "retail installment contract or other contract" which described the same mobile home listed on the worksheet estimate. See Stiegler v. Dittman, 584 So. 2d 507, 511 (Ala.1991) (stating "[t]he controlling general principle of law is that two writings connected by reference one to the other, or made with respect to the same subject matter and proved to be parts of an entire transaction, constitute but a single contract as if embodied in one instrument"). The majority disregards the "until the customer's credit has been approved and a retail installment contract ... is signed" language contained in the worksheet-estimate. Instead of denying the existence of a contract, this language creates a condition precedent. Once the condition precedent is satisfied in this case, the Grants' receiving credit approval and signing an additional document the worksheet-estimate becomes a binding contract.[1] See 3A Corbin on Contracts § 628, at 16 (1960); Duncan v. Rossuck, 621 So. 2d 1313, 1314 (Ala.1993) (stating that "a contract provision making the contract subject to the procurement of a loan to finance the purchase price is a valid condition precedent to performance"); Schottland v. Lucas, 396 So. 2d 72 (Ala.1981) (stating that a provision in the contract requiring the buyer to first obtain financing is a valid condition precedent to the creation of a binding contract). Therefore, the arbitration clause contained in the worksheet-estimate is binding and *467 enforceable.[2] See Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995) (stating that arbitration agreements are enforceable when they are encompassed in a valid contract involving interstate commerce). I dissent. HOOPER, C.J., and MADDOX, J., concur. ALMON, Justice. APPLICATION OVERRULED. SHORES, KENNEDY, COOK, and BUTTS, JJ., concur. HOOPER, C.J., and MADDOX, HOUSTON, and SEE, JJ., dissent. HOUSTON, Justice (dissenting). Upon further reflection, I am convinced that the phrase "until the customer's credit has been approved and a retail installment contract ... is signed" creates a condition precedent, which was satisfied upon the Grants' receiving credit approval and signing the retail installment contract before the worksheet estimate became part of the single contract upon the satisfaction of the condition precedent; therefore, I conclude that the arbitration provision was part of the contract. Upon original submission, I should have dissented, instead of concurring in the result. I would grant the application for rehearing; therefore, I dissent. [1] In Crown Pontiac, Inc. v. McCarrell, 695 So. 2d 615, 616 (Ala.1997), the initial arbitration agreement signed by the plaintiff did not become part of the subsequent retail buyer's order because that order expressly provided that it "cancel[ed] and supersede[d] any prior agreement and ... comprise[d] the complete and exclusive statement of the terms of the Agreement." There is no such exclusivity language in the retail installment contract signed by the Grants. Therefore, the subsequently executed retail installment contract in this case fulfilled a condition precedent to the binding effect of the arbitration clause, and did not extinguish the arbitration clause. [2] The majority also cites Ex parte Isbell, 708 So. 2d 571 (Ala.1997) (on application for rehearing), for the proposition that Palm Harbor, as a nonsignatory to the arbitration agreement, cannot compel the Grants to arbitrate. This is inconsistent with the published opinions of the federal circuit courts of appeals that have interpreted the Federal Arbitration Act. See Isbell, 708 So. 2d 571 (Hooper, C.J., dissenting) (citing Thomson-CSF, S.A. v. American Arbitration Ass'n, 64 F.3d 773, 779 (2d Cir.1995); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir.1993), cert. denied, 513 U.S. 869, 115 S. Ct. 190, 130 L. Ed. 2d 123 (1994); McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (11th Cir.1984)).

February 20, 1998

f0040872-0c87-4ec5-8191-7a6423179225

Ex Parte Madison

718 So. 2d 104

1961635

Alabama

Alabama Supreme Court

718 So. 2d 104 (1998) Ex parte Vernon MADISON. (Re Vernon Madison v. State). 1961635. Supreme Court of Alabama. June 19, 1998. *105 Richard R. Williams of Williams & Harper, L.L.C., Mobile, for petitioner. Bill Pryor, atty. gen., and Paul H. Blackwell, Jr., asst. atty. gen., for respondent. SEE, Justice. At his third trial, a jury convicted Vernon Madison of the capital murder of a peace, or law enforcement, officer. The trial court sentenced Madison to death. The Court of Criminal Appeals affirmed. Madison v. State, 718 So. 2d 90 (Ala.Crim.App.1997). On certiorari review, we examine a single issue: Whether the trial court deprived Madison of his constitutional rights by not requiring the jury to reach a unanimous agreement on which of two alternative theories supported his conviction for the capital offense. Because we hold that the requirement for unanimous verdicts does not extend to unanimous agreement on the theory or means by which a defendant committed the crime, we affirm the judgment of the Court of Criminal Appeals. At Madison's first trial, a jury convicted him of capital murder and the trial court sentenced him to death. The Court of Criminal Appeals reversed his conviction and remanded the case for a new trial. Madison v. State, 545 So. 2d 94 (Ala.Crim.App.1987). At Madison's second trial, a jury again convicted him of capital murder, and the trial court again sentenced him to death. The Court of Criminal Appeals again reversed his conviction and remanded the case for a new trial. Madison v. State, 620 So. 2d 62 (Ala.Crim. App.1992).[1] The evidence presented at Madison's third trial showed that on April 18, 1985, Cpl. Julius Shulte, an officer of the Mobile Police Department, was dispatched to Cheryl Green's home to investigate a report that Green's 11-year-old daughter was missing. Corporal Shulte was not in his police uniform and was not in a marked car. He was, however, wearing a Mobile Police Department badge. Madison, who until a few days earlier had been living with Green, came to Green's home, before Cpl. Shulte arrived, to retrieve personal items that Green had thrown out of the house. By the time Cpl. Shulte arrived at Green's home, Green's daughter had already returned. Nonetheless, neighbors asked Cpl. Shulte to stay until Madison had left Green and her child safely alone. Green and Madison came out of the house and talked to Cpl. Shulte, who never got out of his car. After a brief conversation with Cpl. Shulte, Madison appeared to leave. Actually, he walked about a block away and returned with a .32 caliber pistol; he covertly walked up behind Cpl. Shulte, while Cpl. Shulte was still in his car. Madison fired two shots at near point-blank range, one into the back of Cpl. Shulte's head and one into his left temple. Madison then shot Green twice in the back and fled the murder scene. He subsequently told an acquaintance, "I just killed a cop." The indictment read to Madison's third jury charged him with the capital murder of a law enforcement officer who was "on duty" or who was performing some "official or job-related act." Section 13A-5-40(a)(5), Ala. Code 1975, defines the following capital offense: (Emphasis added.) The indictment contained two counts. The counts set forth alternative theories for conviction. Count one charged Madison with the capital murder of a peace, or law enforcement, officer while the officer was on duty. Count two charged Madison with the capital murder of a law enforcement officer who was performing an official or job-related act. Both counts went to the jury. The third jury unanimously convicted Madison of the capital offense of murdering a law enforcement officer in violation of § 13A-5-40(a)(5). The trial court sentenced Madison to death. We affirm the judgment of the Court of Criminal Appeals with respect to all issues, and we specifically address one: Whether the trial court deprived Madison of his constitutional rights by not requiring the jury to reach a unanimous agreement that the murder took place (1) while Cpl. Shulte was "on duty," or (2) because he was engaged in an official act. Madison contends that the trial court, by allowing the jury to consider both counts, rather than requiring the State to elect one of the two counts to submit to the jury, violated his right to a unanimous verdict, which is guaranteed by various constitutional provisions, including the Sixth and Fourteenth Amendments to the Constitution of the United States. He argues that because the jury did not specify the count on which it found him guilty, neither he nor this Court can know whether he was convicted by a jury that was unanimous as to a single count. The State contends that its purpose in charging Madison in a two-count indictment was to meet every probable contingency of the evidence. The State argues that § 13A-5-40(a)(5) states only one offense (the capital murder of a law enforcement officer) and states two alternative theories ("while [the] officer ... is on duty" or "because of some official or job-related act") on which the jury may base its conviction. Thus, the State argues, the trial court did not err in refusing to require it to elect which count would go to the jury. We agree. The Supreme Court of the United States has held that the Sixth Amendment right to a jury trial guarantees a defendant the right to a unanimous verdict in a federal trial.[2]Andres v. United States, 333 U.S. 740, 748, 68 S. Ct. 880, 92 L. Ed. 1055 (1948). However, the Supreme Court has held that, at least in noncapital cases, neither the Sixth Amendment nor the Due Process Clause of the Fourteenth Amendment guarantees a defendant the right to a unanimous jury verdict in a state trial.[3] See Johnson v. Louisiana, 406 U.S. 356, 92 S. Ct. 1620, 32 L. Ed. 2d 152 (1972); Apodaca v. Oregon, 406 U.S. 404, 92 S. Ct. 1628, 32 L. Ed. 2d 184 (1972).[4] In Schad v. Arizona, 501 U.S. 624, 629, 111 S. Ct. 2491, 115 L. Ed. 2d 555 (1991), a plurality of the Supreme Court avoided extending the federal unanimity requirement to a state capital defendant, by concluding that even if the unanimity requirement applied it would *107 not provide relief to the defendant.[5] The defendant in Schad, 501 U.S. at 628, 111 S. Ct. 2491, was indicted by a state grand jury for capital murder, which the relevant statute defined as "murder which is ... wilful, deliberate or premeditated ... or which is committed ... in the perpetration of, or attempt to perpetrate, ... robbery." (Quoting Ariz.Rev.Stat. Ann. § 13-452 (Supp. 1973).) At trial, the prosecution sought to prove the capital murder offense by advancing both a theory of premeditated murder and one of felony murder. Schad, 501 U.S. at 629, 111 S. Ct. 2491. The jury returned a general verdict of guilty, without specifying whether it had reached a unanimous agreement either as to premeditated murder or as to felony murder. Id. Responding to the defendant's argument that the federal unanimity requirement should be applied to state capital defendants, the Supreme Court stated: "Even assuming a requirement of jury unanimity arguendo, that assumption would fail to address the issue of what the jury must be unanimous about." Id. at 630, 111 S. Ct. 2491. The Supreme Court emphasized that "`there is no general requirement that the jury reach agreement on the preliminary factual issues which underlie the verdict' "Id. at 632, 111 S. Ct. 2491 (citation omitted). The rationale of Schad has been adopted in numerous jurisdictions. See People v. Milan, 9 Cal. 3d 185, 194, 507 P.2d 956, 959, 961-62 (1973) (holding that there is no error in instructing the jury on alternative theories if there is sufficient evidence that the defendant committed first-degree murder); People v. Travis, 170 Ill.App.3d 873, 891, 121 Ill.Dec. 830, 841, 525 N.E.2d 1137, 1148 (stating that the jury must be unanimous on the ultimate question of guilt or innocence, not on the theory applied), appeal denied, 122 Ill. 2d 590, 125 Ill.Dec. 232, 530 N.E.2d 260 (1988), cert. denied, 489 U.S. 1024, 109 S. Ct. 1149, 103 L. Ed. 2d 209 (1989); State v. Fuhrmann, 257 N.W.2d 619, 626 (Iowa 1977) (holding that first-degree murder is one crime, although the defendant can commit the crime in several ways); State v. Wilson, 220 Kan. 341, 345, 552 P.2d 931, 936 (1976) (holding that the accused cannot impeach a verdict on the basis that the jury could not agree on the theory of first-degree murder), overruled on other grounds by State v. Quick, 226 Kan. 308, 597 P.2d 1108 (1979); Commonwealth v. Devlin, 335 Mass. 555, 565-68, 141 N.E.2d 269, 274-76 (1957) (holding that a homicide conviction is acceptable even if the jury does not specify a theory); People v. Embree, 70 Mich.App. 382, 384, 246 N.W.2d 6, 7 (1976) (holding that when the evidence shows that the defendant is guilty of premeditated and felony murder, a jury instruction on unanimity is irrelevant); State v. Buckman, 237 Neb. 936, 942, 468 N.W.2d 589, 593 (1991) (holding that the jury need agree only that the defendant committed first-degree murder, not on the theory by which it reached the verdict); State v. Tillman, 750 P.2d 546, 563-65 (Utah 1987) (holding that the jury need not agree on the theory supporting the conviction if there is sufficient evidence to support either theory); but see State v. Murray, 308 Or. 496, 782 P.2d 157 (1989) (holding that the trial court erred in giving jury instructions that offered alternative theories of murder). Like the claim of the defendant in Schad, Madison's claim may be assessed without addressing the question whether the federal unanimity requirement applies to capital defendants in state cases, but by addressing the analytical focal point of the unanimity requirement, that is, the offense. See Schad, 501 U.S. at 630, 111 S. Ct. 2491. Section 13A-5-40(a)(5) defines the single capital offense of the murder of a law enforcement officer, but allows as the basis of the conviction two alternative theories of proof: (1) the theory that the murder was committed while the officer was "on duty"; or (2) the theory that the murder was committed because of "some official or job-related act." See generally Tucker v. State, 537 So. 2d 59, 61 (Ala.Crim.App.1988) ("[The indictment] charged only one offensecapital *108 murder of a peace officerwhich was committed for one of two reasons: either because the officer was trying to arrest [the defendant's] stepmother or because the officer was trying to arrest [the defendant]."); see also Schad, 501 U.S. at 636, 111 S. Ct. 2491 ("If a State's courts have determined that certain statutory alternatives are mere means of committing a single offense, rather than independent elements of the crime, we simply are not at liberty to ignore that determination and conclude that the alternatives are, in fact, independent elements under state law."). The jury was required to be unanimous only as to its verdict finding that Madison intentionally murdered a law enforcement officer in violation of § 13A-5-40(a)(5), not as to whether the murder occurred while the law enforcement officer was on duty or occurred because of an official act on the part of the officer.[6]SeeSchad, 501 U.S. at 629, 111 S. Ct. 2491. The jury rendered a unanimous verdict finding Madison guilty of the offense of murdering a law enforcement officer as that offense is defined by § 13A-5-40(a)(5). The trial court did not err in refusing to require the State to elect a single count, or theory, on which the jury was required to agree. Accordingly, we affirm the judgment of the Court of Criminal Appeals. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, and KENNEDY, JJ., concur. COOK, J., concurs in the result. [1] The Court of Criminal Appeals reversed Madison's first conviction based on the State's use of peremptory strikes in a racially discriminatory manner in violation of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). The Court of Criminal Appeals reversed Madison's second conviction based on the admission of expert-witness testimony founded on facts outside the record, in violation of Ex parte Wesley, 575 So. 2d 127 (Ala.1990). [2] The Sixth Amendment to the Constitution of the United States provides: "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defence." (Emphasis added.) [3] The Fourteenth Amendment provides in pertinent part: "No State shall ... deprive any person of life, liberty, or property, without due process of law...." (Emphasis added.) [4] A plurality of the Supreme Court has noted that a defendant's right to a unanimous jury verdict "is more accurately characterized as a due process right than as one under the Sixth Amendment." Schad v. Arizona, 501 U.S. 624, 634, n. 5, 111 S. Ct. 2491, 115 L. Ed. 2d 555 (1991). [5] We note that regardless of whether the federal right to a unanimous verdict extends to Alabama capital defendants, the Constitution of Alabama of 1901 has long provided criminal defendants a parallel guaranty of a unanimous jury verdict. See Baader v. State, 201 Ala. 76, 78, 77 So. 370, 372 (1917); Brown v. State, 45 Ala.App. 391, 394-95, 231 So. 2d 167, 169-70 (1970); Dixon v. State, 27 Ala.App. 64, 73, 167 So. 340, 348 (1936). [6] In Schad, 501 U.S. at 649-50, 111 S. Ct. 2491, Justice Scalia, concurring in part of the judgment, observed: "[I]t has long been the general rule that when a single crime can be committed in various ways, jurors need not agree upon the mode of commission.... That rule is not only constitutional, it is probably indispensable in a system that requires a unanimous jury verdict to convict. When a woman's charred body has been found in a burned house, and there is ample evidence that the defendant set out to kill her, it would be absurd to set him free because six jurors believe he strangled her to death (and caused the fire accidentally in his hasty escape), while six others believe he left her unconscious and set the fire to kill her."

June 19, 1998

2d12a171-b342-4bb8-84d0-3d62678a5c29

Ex Parte AB/Wildwood Ltd. Partnership

793 So. 2d 784

1981958

Alabama

Alabama Supreme Court

793 So. 2d 784 (2000) Ex parte A.B./WILDWOOD LIMITED PARTNERSHIP. (Re WBT, L.L.C., an Alabama Limited Liability Company v. A.B./Wildwood Limited Partnership). 1981958. Supreme Court of Alabama. November 17, 2000. *785 James A. Harris, Jr., and James A. Harris III of Harris & Harris, L.L.P., Birmingham, for petitioner. R. Dale Wallace, Jr., and Mark M. Hogewood of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for respondent. JOHNSTONE, Justice. A purported assignee of four owners of real estate sues a prospective buyer for specific performance of a purported contract to sell and to buy the land. On certiorari review, we determine that specific performance is not due. Jeff O. Wise, Joan C. Wise, D. Lloyd Bowers, and Carolyn M. Bowers (hereinafter "original owners") owned a parcel of real estate. In December 1995, Ronald Carlson, an agent of A.B./Wildwood (hereinafter "A.B."), negotiated with William H. Moss, the original owners' real estate agent, to purchase the parcel. Thereafter, Moss drafted a contract instrument for the sale and purchase of the parcel. The instrument was later edited by hand many times. (C.R.63-64.) This edited instrument is hereinafter called "the agreement," but its validity is not assumed by this reference. The purchase price in "the agreement" had been crossed out and rewritten a number of times. Only one of the original ownersD. Lloyd Bowersinitialed the changes to the purchase price. Only three of the original ownersJeff O. Wise, D. *786 Lloyd Bowers, and Carolyn M. Bowers signed "the agreement." Joan C. Wise did not sign "the agreement." On March 13, 1996, all four of the original owners transferred the property by general warranty deed, not to A.B., but to WBT, L.L.C. (hereinafter "WBT"), a limited liability corporation whose members included Jeff O. Wise and D. Lloyd Bowers, who were two of the original owners, and Bowers's accountant, "in consideration of the sum of TWO HUNDRED TEN THOUSAND EIGHT HUNDRED NINETY-FOUR AND NO/100 DOLLARS ($210,894.00), and other good and valuable consideration." (C.R.125-27.) A.B. did not know about this property transfer. On January 28, 1997, WBT sued A.B. to enforce "the agreement." WBT sought specific performance and damages for the breach. On May 29, 1998, the trial court granted A.B.'s motion for summary judgment, and WBT appealed. The Court of Civil Appeals reversed the summary judgment entered in favor of A.B. WBT, L.L.C. v. A.B./Wildwood Ltd. Partnership, 793 So. 2d 779 (Ala.Civ.App.1999). On November 18, 1999, this Court granted A.B.'s petition for a writ of certiorari to determine whether the Court of Civil Appeals erroneously found that a valid contract and a valid assignment of that contract existed. In its order granting A.B.'s motion for summary judgment, the trial court decided 1) that WBT had standing to bring suit because "[t]he gauge of the conveyance is certainly broad enough to convey any rights the original owners may have had in the sale of the property"; 2) that "the agreement" was void under the Statute of Frauds because "[t]here [was] no clear expression of consideration"; and 3) that "the agreement" was void for lack of mutuality because "[i]f the original owners were sued by A.B. for specific performance of the contract or for damages for its breach, its claim would fail." (C.R.148-51.) The Court of Civil Appeals held 1) that WBT had standing to bring suit by virtue of the conveyance language in the deed; 2) that "the agreement" was not void under the Statute of Frauds; and 3) that "the agreement" was not void for lack of mutuality. We now reverse the Court of Civil Appeals and remand the cause for reinstatement of the summary judgment in favor of A.B. because, first, "the agreement" was void for lack of mutuality, and, second, WBT was without standing to sue for specific enforcement of "the agreement" inasmuch as the deed from the original owners to WBT did not constitute an assignment of "the agreement." A.B. contends that its contract with the original owners was void for lack of mutuality. The trial court found as follows: (C.R.151.) The Court of Civil Appeals reversed, finding: 793 So. 2d at 782. We note that the "seller's [concession] that it is obligated to perform" is no concession at all, as it serves the self-interest of the seller in the very litigation where the "concession" is made. In a well-reasoned dissent, Judge Yates recognized that "the agreement" was "no valid promise to sell, because one of the original property owners did not sign the contract document." 793 So. 2d at 784. We agree that, because only three of the four original owners signed "the agreement" purportedly between the original owners and A.B., "the agreement" was void for lack of mutuality. Northcom, Ltd. v. James, 694 So. 2d 1329, 1336 (Ala.1997) (emphasis added). Therefore, for the absence of execution by one of the original owners, "the agreement" was void for lack of mutuality because, although the trial court could have ordered A.B. to pay for the land if it were conveyed to A.B., the trial court could not have legally ordered all four original owners to convey the land to A.B., as required by the doctrine of mutuality of remedy. Although we find that a valid contract did not exist between the original owners and A.B., we will address WBT's contention that, in transferring title of the property to WBT by a general warranty deed, the original owners successfully assigned their right to seek specific performance of the contract against A.B. to WBT. For the purposes of this analysis only, we will, arguendo, treat "the agreement" as a valid contract for the sale of the land by the original owners, as promisors-to-sell, to A.B., as promisor-to-buy. In order to constitute an assignment, Russell v. Birmingham Oxygen Serv., Inc., 408 So. 2d 90, 93 (Ala.1981). See also West v. Founders Life Assurance Co., 547 So. 2d 870 (Ala.1989). In the case before us, the trial court and the Court of Civil Appeals found that the broad language of the deed encompassed the original owners' intent to assign rights under "the agreement."[1] *789 Having made "the agreement," however, what claim or right did the original owners have that might be assignable? They had only the claim or right to the agreed purchase price of the real estate once they conveyed it to A.B. The record before us contains no assignment instrument or any other affirmative showing of an intent to assign this very limited right to WBT. What the record does show, rather, is that the original owners did not assign "the agreement," but, instead, committed an outright violation of it and of A.B.'s rights under it. As soon as the original owners, as the promisors-to-sell, and A.B., as the promisor-to-buy, made "the agreement," equitable ownership of the real estate vested in A.B. Lynch v. Partin, 250 Ala. 241, 34 So. 2d 2 (1948); Boozer v. Blake, 245 Ala. 389, 17 So. 2d 152 (1944); and In re Health Science Prods., Inc., 183 B.R. 903 (Bankr. N.D.Ala.1995). From that moment forward, the original owners held in trust for A.B. Lynch v. Partin, supra. A contract for the sale and purchase of real estate entitles the prospective buyer to expect the particular prospective seller who has entered the contract not only to convey the real estate and the title specified by the contract, but also to make and to honor such warranties and covenants of title as are entailed by that type of title. The value of the title may well depend on the solvency of the particular warrantor-covenantor who has contracted to sell to the prospective buyer. Instead of honoring A.B.'s equitable interest and the equitable trust in favor of A.B., the original owners purported to convey fee simple title by general warranty deed to WBT. The reservations in the deed do not make the purported transfer subject to "the agreement" or to A.B.'s rights thereunder in any way. Indeed, in the deed, the original owners covenant with WBT that the original owners "are lawfully seized in fee simple of said premises; that they are free from all encumbrances except as otherwise noted above; [and that the original owners] have a good right to sell and convey the same...." Thus, the deed from the original owners to WBT does not constitute an assignment of "the agreement," but rather constitutes a virtual repudiation of "the agreement" and A.B.'s rights and the original owners' duties thereunder. Therefore, the deed did not confer on WBT any standing to sue A.B. for specific enforcement of "the agreement." Moreover, any privity between the original owners and WBT exacerbates WBT's lack of standing by implicating it in the original owners' inequitable conduct. WBT cannot prevail against A.B. without a valid contract to sell the land and a valid assignment of that contract. As we have explained, the purported contract ("the agreement") was void, and an assignment *790 of it was nonexistent. Because WBT cannot prevail against A.B. in any event, we need not address the Statute of Frauds issue discussed by the parties and the Court of Civil Appeals. The judgment of the Court of Civil Appeals is reversed and the cause remanded with instructions to reinstate the summary judgment entered by the trial court in favor of A.B. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, and ENGLAND, JJ., concur. SEE, J., concurs in Part II and in the judgment. LYONS and BROWN, JJ., concur in the result. SEE, Justice (concurring in Part II and in the judgment). I agree with the main opinion's conclusion that the deed from the original owners to WBT did not constitute an assignment of "the agreement" between them and A.B. that they would sell the property and that A.B. would purchase it. A contract for the sale of land must be in writing to satisfy the Statute of Frauds. § 8-9-2, Ala.Code 1975. An assignment of an interest, the creation of which is governed by the Statute of Frauds, must also comply with the Statute of Frauds. E. Allan Farnsworth, Contracts § 11.3, at 759 (1982) ("Absent a statute to the contrary, no writing is necessary for an effective assignment. However, the land contract provision of the statute of frauds may require a writing if the right assigned is one under such a contract."). In this case, there was no writing purporting to assign "the agreement" from the original owners to WBT. Accordingly, WBT lacks standing to compel specific performance of "the agreement." See, e.g., Nissan Motor Acceptance Corp. v. Ross, 703 So. 2d 324, 326 (Ala.1997) ("A valid assignment gives the assignee the same rights, benefits, and remedies that the assignor possesses."). Therefore, I concur in Part II of the main opinion and in the judgment reversing the judgment of the Court of Civil Appeals and remanding with instructions to reinstate the summary judgment in favor of A.B. LYONS, Justice (concurring in the result). The original owners of the property at issue in this case had a contract with A.B./Wildwood Limited Partnership, which had agreed to purchase the property. Contrary to the terms of the agreement, the original owners sold the property to WBT. That sale by the original owners, assuming they were bound by the actions of their agent and assuming the consideration was not indefinite, constituted an anticipatory breach of the agreement. Once a party has committed an anticipatory breach, the other party is excused from further performance. Shirley v. Lin, 548 So. 2d 1329, 1334 (Ala.1989). See, also, Thomas v. Smoot, 2 Ala.App. 407, 56 So. 1 (1911). WBT, as assignee, is subject to any defenses that A.B./Wildwood had against the original owners. I agree that the trial court properly entered the summary judgment in favor of A.B./Wildwood, because its performance under the agreement was excused by the original owners' anticipatory breach. Therefore, I concur in the result. [1] WBT and the Court of Civil Appeals rely heavily upon the case of Gadsden Homes, Inc. v. Alabama Financery, 248 Ala. 379, 381, 27 So. 2d 626, 628 (1946), for the following proposition: "It is well settled that a contract to sell and convey land, or an option, if not specifically prohibited in the contract, is subject to assignment and the assignee may compel specific performance. 25 R.C.L. 328, § 146; Davis v. Williams et al., 121 Ala. 542, 25 So. 704; Erswell v. Ford, 211 Ala. 242, 100 So. 96." However, Gadsden Homes addresses, and each of the cases cited therein addresses, the effectiveness of an assignment by the prospective buyer, not the prospective seller. In each case, the Court has held that the assignee could compel specific performance on the part of the prospective sellerthe promisor-to-sell. Thus, these cases do not speak to the issue in the case before us, whether the original owners, the promisors-to-sell, may assign their rights under "the agreement" to WBT and thereby confer standing on WBT to require specific performance by A.B., the promisor-to-buy. We merely point out the inapplicability of Gadsden Homes and the cases cited therein. We do not hold that an assignment by a promisor-to-sell could not be legally negotiated, drafted, and effected under any circumstances.

November 17, 2000

ba3a2339-5394-4040-84e4-e77efb136f1b

Ex Parte Burton

783 So. 2d 887

1981604

Alabama

Alabama Supreme Court

783 So. 2d 887 (2000) Ex parte Angela BURTON. (Re Angela Burton v. State). 1981604. Supreme Court of Alabama. July 28, 2000. As Modified on Denial of Rehearing November 3, 2000. *888 Joseph G. Pierce, Tuscaloosa, for petitioner. Bill Pryor, atty. gen., and Stephanie N. Morman, asst. atty. gen., for respondent. PER CURIAM. Angela Burton was convicted of "hindering prosecution in the first degree," a crime defined by § 13A-10-43, Ala.Code 1975, and was sentenced to 17 years' imprisonment. The Court of Criminal Appeals affirmed. Burton v. State, 783 So. 2d 874 (Ala.Crim.App.1999). We granted Burton's petition for certiorari review. She argues that the trial court should have granted her motion for a judgment of acquittal and that the Court of Criminal Appeals erred in holding that the State had proved a prima facie case of the specific charge set out in the indictment against her. We agree. We reverse the judgment of the Court of Criminal Appeals and render a judgment of acquittal. Burton's conviction was based on her allegedly rendering criminal assistance to her sister, Felicia Scott, and her sister's boyfriend, Frederic Polion, following the murder of Carethia Curry. Curry was nine months pregnant when she was shot twice in the head after having her stomach cut open and her baby taken out. Burton's indictment read as follows: The testimony in this case was extensive; it is summarized here. Carolyn O'Neal, Curry's mother, testified that on January 31, 1996, she and Curry had gone shopping for baby clothes with Felicia Scott. O'Neal testified that Curry and Scott discussed going to get pizza and that Scott commented that the "two pregnant women" (referring to herself and Curry) were going to eat pizza. O'Neal testified that Burton was there but made no comment about her sister's statement because Burton was arguing with her boyfriend, Anthony Rowser. Later that day, Scott picked up Curry so they could go eat pizza. On February 1, 1996, Scott told O'Neal that she had dropped Curry off at home the evening before, at 8:30 p.m., and that after that she (Scott) had been in Birmingham having her baby. O'Neal testified that she knew Scott had had a hysterectomy and could not have any more children. O'Neal telephoned the police and reported that Scott and Polion had kidnapped her daughter. On February 5, 1996, when O'Neal learned that Scott had come home with a baby, she telephoned the police and told them she believed Scott had her daughter's baby and that her daughter was still missing. Officer Toni Everett testified that on February 5, 1996, she went to Polion and Scott's residence. Upon seeing a newborn infant, she inquired as to whether the baby belonged to Curry. Scott and Polion told Everett that the baby was their baby. Officer Everett testified that she took a statement from Burton on February 7, 1996. She testified that Burton told her that Scott, Polion, Scott's two boys, and the new baby had come to Burton's home in Birmingham about 11:00 a.m. on February 1, 1996, that they left the next day, and that she did not know where Scott was. Investigator Michael Hearing testified that he first spoke to Burton when she gave a statement to Officer Everett on February 7, 1996, and that he spoke to her again on February 10, 1996. He testified that Burton told him Scott arrived at her house at 2:00 or 3:00 a.m. on February 1, 1996. Hearing testified that a search of Burton's storage facility on March 25, 1996, revealed an incomplete set of sheets carrying a logo of a musical group known as New Kids on the Block. He later discovered that the missing sheet matched the sheet that Curry's body was wrapped in when it was found. He testified that he obtained Burton's telephone records in late April 1999, and they showed that she had made 24 calls to Lee Curtis Turner, Jr., Burton's ex-boyfriend. Hearing testified that Burton told him that Polion had telephoned her several times from his home asking her to call Birmingham area hospitals to see if she could find Scott, and that she had made calls to several hospitals looking for Scott.[3] Burton's telephone records *890 did not reflect that these calls were made on February 1, 1996. Hearing testified that there was no evidence that Burton knew where Curry's body was disposed of. Lee Curtis Turner, Jr., testified that Burton called him on February 1, 1996, at approximately 10:00 p.m. and pleaded with him to come over.[4] When he arrived, he said, Burton told him that Scott and Polion had arrived at her home unexpectedly with a newborn they said was their baby, and that she showed him the baby. Turner testified that Burton had told him on prior occasions that Scott could not have children. He testified that Burton told him that Scott had told Burton she needed to hide the body of a man she had killed after he had tried to rape her. He testified that Burton told him she thought Scott was joking so she asked to see the body. Turner testified that Burton told him Scott opened the trunk of Polion's car and showed Burton the body of Curry, which Burton said had been cut wide open and the baby removed from it. Turner testified that in April 1996, when he was contacted by members of the Tuscaloosa Police Department Homicide Unit, he contacted Burton and that she asked him not to tell the police anything about what she had told him, but that he could tell the police that he saw the baby and that she had said she did not know whose baby it was. Anthony Rowser testified before the grand jury in Burton's case. He testified that Burton had told him that Scott could not have children, that Scott had told Burton that she had killed Curry, that Scott told Burton that Scott went to the house of a friend, Jerry Davis,[5] to get rid of the body, and that Scott had bought the garbage can used for disposing of the body from a WalMart store. Rowser recanted this testimony at trial. He testified that he had made up the story he reported to the police, while he was in jail, and that he had testified falsely to the grand jury because he was upset with Burton over a harassment warrant she had sworn against him. On her appeal to the Court of Criminal Appeals, Burton raised two arguments: (1) that the trial court erred in denying her motion for a judgment of acquittal; and (2) that the trial court erred in admitting into evidence photographs of Curry's mutilated body. The Court of Criminal Appeals affirmed. She raises only that first issue on certiorari review in this Court. "Appellate courts are limited in reviewing a trial court's denial of a motion for judgment of acquittal grounded on insufficiency." McFarland v. State, 581 So. 2d 1249, 1253 (Ala.Crim.App.1991). "The standard of review in determining sufficiency of evidence is whether evidence existed at the time of [the defendant's] motion for acquittal was made, from which *891 the jury could by fair inference find the [defendant] guilty." Linzy v. State, 455 So. 2d 260, 261 (Ala.Crim.App.1984) (citing Stewart v. State, 350 So. 2d 764 (Ala.Crim. App.1977), and Hayes v. State, 395 So. 2d 127 (Ala.Crim.App.), writ denied, 395 So. 2d 150 (Ala.1981)). In determining the sufficiency of the evidence, we view the evidence in the light most favorable to the State. Linzy, supra. Burton moved for a judgment of acquittal at the close of the State's case, and she renewed her motion after the defense had rested. She contends that the State failed to make out a prima facie case of the hindering-prosecution charge set out in her indictment. Section 13A-10-43(a), Ala.Code 1975, sets out the elements of the offense known as "hindering prosecution in the first degree": Thus, in order to convict on the hindering-prosecution charge, the State had to prove that Burton rendered criminal assistance to a person whose conduct had constituted murder or a Class A or B felony, and that she rendered that criminal assistance with the intent to hinder the apprehension, prosecution, conviction, or punishment of that person. Section 13A-10-42, Ala.Code 1975, lists five acts that constitute "criminal assistance." The indictment charged Burton with the act set out in subsection (4) of § 13A-10-42, which provides that a person renders criminal assistance to another person if he or she "[p]revents or obstructs, by means of force, deception or intimidation, anyone except a trespasser from performing an act that might aid in the discovery or apprehension of such person...." Thus, under the indictment brought against her, and pursuant to § 13A-10-42(4), Burton could have rendered the criminal assistance charged only if she prevented or obstructed law-enforcement officers from performing an act that might have aided in the "discovery or apprehension" of Scott and Polion. The State's indictment alleged that Burton, by means of deception, prevented or obstructed law-enforcement officers from performing the act of locating Curry's body, an act the State alleged would have aided the officers in the "discovery" of Scott and Polion. The Court of Criminal Appeals held: 783 So. 2d at 884. The Court of Criminal Appeals further stated: 783 So. 2d at 885. Viewing the evidence in a light most favorable to the State, even if we assume that Burton did lie about Polion's calling her in the early-morning hours of February 1, 1996 and about her calling hospitals in search of her sister, this evidence is insufficient to sustain a conviction of hindering prosecution in the first degree. It is important to note that the indictment charged that Burton hindered prosecution by preventing investigators from performing an actspecifically, locating Curry's bodythat might have aided in the discovery and apprehension of Scott and Polion. Contrary to the Court of Criminal Appeals' holding, Burton's falsehoods regarding the telephone calls between her and Polion could not have prevented investigators from discovering Scott and Polion, because these statements were made after Scott and Polion had been apprehended on February 8, 1996, in Gwinett County, Georgia. Thus, under the indictment, the purpose of locating Curry's body was to aid in discovering and apprehending Scott and Polion. This Court has held: Ex parte Washington, 448 So. 2d 404, 407 (Ala.1984) (citations omitted). Burton was required only to answer the specific charge contained in the indictment and, thus, could be found guilty on hindering prosecution only if she was found to have prevented investigators from "performing an act that might aid in the discovery or apprehension" of Scott and Polion. Once Scott and Polion were apprehended, Burton could not have prevented investigators from discovering or apprehending them. The Court of Criminal Appeals also stated, "Burton's own assertions make it clear that she was asked by police what she knew about Curry's disappearance and that she lied when she told them that she knew nothing." 783 So. 2d at 886. Burton testified that she spoke to Officer Everett before she gave a statement on February 7, 1996. It is unclear from the record when investigators first spoke with Burton, because Burton testified only that she spoke with Officer Everett before February 7, 1996, and Officer Everett could not recall when she first contacted Burton. Burton testified that Officer Everett *893 asked her if she knew anything about Curry's disappearance and that she said no. Whether Burton lied when she told Officer Everett that she did not know anything about Curry's disappearance is a disputed issue because Burton's ex-boyfriend, Lee Curtis Turner, Jr., testified that Burton told him she had seen Curry's body in the trunk of Polion's car. Nevertheless, viewing the evidence in the light most favorable to the State, we must conclude that the evidence was insufficient to support a conviction for hindering prosecution in the first degree as alleged in the indictment. Hearing testified that there was no evidence that Burton knew where Scott and Polion had disposed of Curry's body. It is undisputed that Scott and Polion left Burton's home on February 2, 1996. Nothing in the record suggests that Burton knew where Scott and Polion went once they left her home or that Burton had any contact with Scott or Polion after they left her home. It is difficult to comprehend how Burton's alleged deception regarding her knowledge about Curry's disappearance prevented investigators from locating Curry's body or from discovering or apprehending Scott and Polion, when the undisputed evidence demonstrates that investigators knew of no evidence suggesting that Burton knew where Curry's body had been disposed of or knew where Scott and Polion went after they left her home. Furthermore, it is even more difficult to conclude that Burton, by lying in her statements to police on February 7 and 10, 1996, prevented investigators from discovering and apprehending Scott and Polion, given that Officer Everett had actually found Scott and Polion and had spoken with them at their residence on February 5, 1996. On that day, Everett discovered that Scott and Polion had a newborn in their possession. When Everett asked who the baby belonged to, Scott and Polion told her it was their baby. She testified that Scott told her she had had prenatal care at the Tuscaloosa County Health Department. Officer Everett asked Scott to sign a medical-release form. Scott complied. The Health Department orally informed Officer Everett the next day that Scott had not received prenatal care at its facility and that she had actually had a hysterectomy. Unfortunately, when officers returned to Scott and Polion's residence, they were gone. Scott and Polion were discovered in Gwinett County, Georgia, on February 8, 1996, and Scott was arrested and charged with interference with custody. Under the language of the indictment, and pursuant to § 13A-10-42(4), Burton's culpability could stem only from preventing or obstructing someone "from performing an act that might aid in the discovery or apprehension" of Scott and/or Polion. Because Burton made her statements after law-enforcement officials actually had located and questioned Scott and Polion on February 5, 1996, and after Scott and Polion had been apprehended in Gwinett County, Georgia, we hold that the State failed to present a prima facie case of hindering prosecution, as alleged in the indictment, and that the trial court should have granted Burton's motion for a judgment of acquittal. The Court of Criminal Appeals erred in affirming Burton's conviction. We reverse the judgment of that court and render a judgment of acquittal. REVERSED AND JUDGMENT OF ACQUITTAL RENDERED. HOOPER, C.J., and COOK, SEE, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. HOUSTON, J., concurs in the result. BROWN, J., dissents. BROWN, Justice (dissenting). While I agree that "[t]he person accused of a crime is required at trial to answer *894 only the specific charge contained in the indictment," Ex parte Washington, 448 So. 2d 404, 407 (Ala.1984) (citing Geeter v. State, 35 Ala.App. 207, 45 So. 2d 167 (1950)), I disagree with the conclusion that the evidence presented by the state in this case failed to make a prima facie case of hindering prosecution as alleged in the indictment. The indictment charged Burton with hindering prosecution by preventing or obstructing, by means of deception, law-enforcement officers from performing an act that might aid in the discovery or apprehension of Felicia Scott and Frederic Polion. I believe the evidence presented was sufficient to make a prima facie case on that charge. While investigating the disappearance of Carethia Curry, the law-enforcement officers quickly centered their inquiry on Felicia Scott and Frederic Polion. Officers interviewed Burton, Scott's sister, several times-both before and after they had apprehended Scott and Polion. They asked Scott if she had seen Curry. Although Burton had, in fact, seen Curry's body in the trunk of Polion's car on February 1, 1996, she told the officers that she had not seen Curry. Indeed, Burton had telephoned Lee Curtis Turner on the night of February 1 and had begged him to come over. He testified that when he arrived Burton told him that Scott and Polion had arrived at her home unexpectedly with a newborn they said was their baby. Turner further testified that Burton told him that Scott told her she needed to hide the body of a man she had killed after he had tried to rape her. According to Turner, Burton said that she thought her sister was joking; that she asked to see the body; and that Scott opened the trunk of Polion's car and inside the trunk was the body of Carethia Curry, rather than that of a man. Turner further testified that Burton told him that Curry's body had been cut wide open and her baby removed. After Scott and Polion were apprehended in Georgia, but before Curry's body had been located, the police interviewed Burton again. Burton's responses were similarly unhelpful. The Court of Criminal Appeals determined that although the state's evidence was slight, it was, nevertheless, sufficient to submit the case to the jury. That Court noted: 783 So. 2d at 884-85. In Ex parte Woodall, 730 So. 2d 652 (Ala. 1998), this Court addressed the role of appellate courts in reviewing the sufficiency of the evidence in a criminal case: 730 So. 2d at 658. Although Burton's lies to law-enforcement officers did not ultimately prevent the apprehension and prosecution of Scott and Polion, her lies, nevertheless, delayed their being brought to justice. I believe that the evidence presented by the state did, in fact, make a prima facie case of hindering prosecution, as alleged in the indictment. See Nichols v. State, 500 So. 2d 92, 93 (Ala.Crim.App.1986). Therefore, the trial court correctly denied Burton's motion for a judgment of acquittal. Accordingly, I would affirm the Court of Criminal Appeals' judgment upholding Burton's conviction. [1] At other points in the record, this name is spelled "Felecia." [2] At other points in the record, this name is spelled "Fredrick" or "Frederick." [3] Burton disputes Hearing's testimony. She testified at her trial as follows: "Q. Okay. Now, the state has said several things about a statement wherein you claim that you had called a number of hospitals looking for [Felicia] or "A. Yes, sir. "Q. Did you ever make that statement? "A. Yes, sir, I did. "Q. Okay. When, where and under what circumstances did you say that? "A. They were questioning me about hospital visits and doctor visits that [Frederic] and [Felicia] claimed they had went on. And I told them one time [Frederic] had called and said that he was late getting back and he supposedly went to a doctor visit with [Felicia], would I call and find out where-which hospital, what doctor's office she was in. She had to get some tests run or something. [Frederic] had said. "Q. Okay. You were asked to do that? "A. Yes, I was. "Q. All right. By [whom]? "A. By [Frederic]. "Q. Okay. When? "A. It was in her early months of pregnancy because they supposed to have been running tests on her. "Q. Okay. So that happened but that did not happen at any point between? "A. Not during this time period." [4] Telephone records show that the calls between Burton and Turner did not end until approximately 11:30 p.m. Turner testified that he arrived at her home at 10:15 or 10:30 p.m. [5] Jerry Davis testified that he left work at 4:30 or 5:00 a.m., and upon returning home discovered a car backed up in his yard. He testified that the car was pulling out, as he was pulling in, and that he stopped the car to see who it was. He testified that Scott and Polion were in the car.

November 3, 2000

cf3b5b14-d3ce-4f2b-bb2b-1cb717308c72

Birmingham News Co. v. Horn

790 So. 2d 939

1990700

Alabama

Alabama Supreme Court

790 So. 2d 939 (2000) The BIRMINGHAM NEWS COMPANY v. Sherry HORN. 1990700. Supreme Court of Alabama. November 3, 2000. Rehearing Denied February 23, 2001. *940 James P. Pewitt of Johnston, Barton, Proctor & Powell, L.L.P., Birmingham, for appellant. Leah O. Taylor of Taylor & Taylor, Birmingham, for appellee. JOHNSTONE, Justice. This appeal involves an identical agreement and presents the same issue addressed by this Court in Ex parte Stewart, 786 So. 2d 464 (Ala.2000). Therefore, on the authority of Ex parte Stewart, we reverse the trial court's order denying the motion to compel arbitration filed by The Birmingham News Company, and remand this cause for entry of an order granting the motion to compel arbitration. REVERSED AND REMANDED WITH INSTRUCTIONS. MADDOX, HOUSTON, BROWN, and ENGLAND, JJ., concur. HOOPER, C.J., concurs in the result. COOK and LYONS, JJ., dissent. SEE, J., recuses himself. COOK, Justice (dissenting). I respectfully dissent, for the same reasons expressed by Justice Lyons in Ex parte Stewart, 786 So. 2d 464 (Ala.2000) (Lyons, J., dissenting). LYONS, J., concurs.

November 3, 2000

43f56345-1f80-426a-a037-b818585b3858

Kaylor v. State

782 So. 2d 206

1990246

Alabama

Alabama Supreme Court

782 So. 2d 206 (2000) Charles E. KAYLOR, Sr. v. STATE. 1990246. Supreme Court of Alabama. August 11, 2000. Opinion on Application for Rehearing Overruled October 27, 2000. *207 Charles E. Kaylor, appellant, pro se. William A. Gunter, Department of Conservation and Natural Resources, Montgomery, for appellee. PER CURIAM. Charles E. Kaylor, Sr., appeals from a judgment in favor of the State in a declaratory-judgment action he filed against the Department of Conservation and Natural Resources ("the Department") to determine whether the State has title to a certain tract of land located in Madison County and to determine whether he has rights to the land.[1] We reverse and remand. The parties stipulated to all of the operative facts. Kaylor acquired the disputed tract in 1989 for hunting purposes. Because he wanted a larger area on which to hunt, he applied for a hunting lease of adjoining property that he knew to be owned by the State. The Department, acting on the State's behalf, granted him the lease, but informed him that the tract he had purported to purchase was considered by the Department to be State property also. The Department told him that he had to obtain a hunting lease for that tract as well, if he wished to hunt there. Kaylor and the State then executed a contract with a provision stating that Kaylor did not acquiesce to the State's claim of title to the disputed tract. At one point, the Department informed Kaylor that it would sue him to establish the State's ownership, but for nearly 10 years the Department took no action. Thus, on September 15, 1998, Kaylor sought to end the dispute by suing the Department in the Madison Circuit Court; in his action, he sought a temporary injunction against the Department to prevent it from continuing to lease the disputed tract to the public for hunting purposes until the court decided the issue of ownership. The Department immediately moved to transfer the case to the Montgomery Circuit Court, and the Madison Circuit Court granted that transfer. After the case had been transferred to the Montgomery Circuit Court, the parties submitted the question of ownership to the court and requested a declaratory judgment based on a stipulated statement of facts. The trial court entered a judgment declaring the State to be the owner of the disputed tract. Kaylor appealed. The stipulation of facts relating to the disputed parcel contains a history of that land, revealing how this controversy over ownership came about. The history that *208 we consider germane to this case begins on May 23, 1828, when the Federal Government passed the Muscle Shoals Land Grant ("the 1828 Act" or "the Act"), which identified a vast amount of land to be relinquished by the United States to the State of Alabama for purposes of improving navigation on the Tennessee River. The ensuing land patent, however, was not issued until April 14, 1931, over 100 years later, and was not recorded in the Madison County Probate Office until December 2, 1937. Between the passage of the 1828 Act and the issuance of the land patent over a century later, various partiesother than the Stateare named as owners of the disputed tract in the records maintained by the Madison County tax assessor and the Probate Court of Madison County. On August 24, 1914, the disputed tract was included in lands sold at a tax sale; the State took title to the property after no one bid the required sum. Also, on October 26, 1926, the state auditor, with the approval of the Governor, sold the disputed tract to R.N. Coleman, and R.N. Coleman subsequently conveyed the tract to J.W. Cochran, whose heirs later conveyed the tract to Kaylor. In his brief, Kaylor sets forth the following three issues: (1) whether the State is estopped to deny the recitals of its deed, issued in accordance with §§ 40-10-132, -134, and 135, Ala.Code 1975, in which it purported to convey all rights, title, and interest of the State to the purchaser and his successors in ownership; (2) whether the deed signed by the state auditor with approval of the Governor constitutes a contract that is binding on future State officials or courts; and (3) whether the State should be liable for selling for taxes properties that are listed in the tax records as belonging to the State. The State argues that when the tax deed was issued on the subject property, the property was not subject to taxation; therefore, it argues, the deed executed to Kaylor's predecessor in title was invalid and conveyed no interest in the land. The State also contends that the doctrine of equitable estoppel does not apply to the State. As we view the case, our resolution of the legal issues presented initially depends on when the State acquired legal title to the land that includes the disputed tract. Kaylor argues that the 1828 Act conveyed title to the State. The State contends that it did not obtain legal title to the land until it received the land patent from the Federal Government in 1931. The 1828 Act states, in pertinent part: Muscle Shoals Land Grant, ch. 75, 4 Stat. 290 (emphasis original on "be it enacted" clauses; other emphasis added). One of the first questions we must answer is: Did the Act actually convey the subject land to the State of Alabama, or did the Act merely authorize the subject lands to be later conveyed to the State by patent? The language in the 1828 Act that we have emphasized unequivocally conveys a present interest to the State of Alabama and authorizes the State to sell the land for purposes specified in the Act at terms consistent with the price of public lands of the United States at the time of the sale. In Schulenberg v. Harriman, 88 U.S. (21 Wall.) 44, 61-62, 22 L. Ed. 551 (1874), the United States Supreme Court held that where an act of Congress contains language consistent with an immediate grant of property to a State, subsequent proceedings that might be necessary for the identification of specific tracts do not undermine the status of the act as an immediate conveyance. 88 U.S. at 62 (emphasis added). Given the clear language of the 1828 Act, the State cannot question the status of its title prior to the issuance of the patent in 1931. We do not have before us any information as to how the property granted by the United States to the State in 1828 fell into private hands, thereby creating liability for ad valorem taxes, which culminated in a tax sale in 1914 and a return of title to the State. Nevertheless, under the teaching of Schulenberg, the land was properly subject to liability for ad valorem taxation and the 1926 tax deed from the State to Kaylor's predecessor in title, a deed made as a result of the failure of previous private owners to pay ad valorem taxes, was a valid transfer of the State's interest. Because of our resolution of the issue of the State's authority to convey the property at the time of the issuance of the tax deed in 1926, we pretermit discussion of the other issues raised by Kaylor. We conclude that the judgment entered in favor of the State is due to be reversed and the cause remanded for further proceedings consistent with this opinion. REVERSED AND REMANDED. *210 HOUSTON, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX, J., dissent. MADDOX, Justice (dissenting). I respectfully dissent from the holding that the Muscle Shoals Land Grant Act conveyed the lands described in this case in 1828. In analyzing the question regarding when this conveyance occurred, I note that the 1828 Act does not provide for the issuance of a patent as a condition for the passing of title. Had the Act contained such a provision, then, certainly, Kaylor's argument would have merit. See, e.g., Michigan Land & Lumber Co. v. Rust, 168 U.S. 589, 591, 18 S. Ct. 208, 42 L. Ed. 591 (1897) (holding that legal title passed upon the issuance of a patent where that patent was based on the express provisions of an act of Congress); and Nelson v. Weekley, 177 Ala. 130, 134-35, 59 So. 157, 158-59 (1912) (where the plaintiff prevailed after this Court found that he satisfied the conditions of a Federal act that, if such conditions were met, expressly entitled persons such as the plaintiff to the issuance of a patent by the Land Office). I believe that whether title passes by an act of Congress or by the issuance of a patent depends on when, or under what conditions, the act indicates that the conveyance is to become effective. In McArthur v. Brue, 190 Ala. 563, 67 So. 249 (1914), this Court stated: 190 Ala. at 564-65, 67 So. at 249-50 (1914). Based on the facts of this case and upon my interpretation of the Act, I do not believe that title passed from the Government to the State of Alabama until the patent issued. I base this conclusion on elementary principles of property law, which clearly provide that a conveyance cannot occur without a description of the real property or the establishment of a method by which such a description can be obtained. Bank of Mobile v. Planters' & Merchants' Bank, 8 Ala. 772, 777 (1845). On this point, this Court has stated that a Congressional act conveys legal title "when all the conditions prescribed by Congress for the alienation of the public domain have been complied with [and] the land alienated [has been] distinctly defined." Boone v. Gulf, F. & A. Ry., 201 Ala. 560, 561, 78 So. 956, 957 (1918). I would hold that the Act did not sufficiently describe the lands relinquished to the State, and, thus, was not a conveyance. The 1828 Act effectively set aside a vast *211 amount of land in the Tennessee River valley and made it available for use by the State for the improvement of the navigability of the Tennessee River. The Act authorized the State to select the needed tracts, but did not condition the passing of title on the completion of a survey; thus, the Act did not provide for a method by which the description of the relinquished property could become precisely known. Given the absence of such a provision, I believe Congress intended to pass title to these lands to the State only upon the issuance of a patent that specifically described the property being conveyed.[2] Therefore, I would affirm the judgment of the trial court. HOOPER, C.J., concurs. PER CURIAM. On application for rehearing, the State criticizes our statement in the August 11, 2000, opinion, that this Court did not have before it "any information as to how the property granted by the United States to the State in 1828 fell into private hands, thereby creating liability for ad valorem taxes, which culminated in a tax sale in 1914," 782 So. 2d at 209, and argues that our decision was based upon facts that were not properly before the Court. We remind the State of the stipulation in the record that reflects that the property was assessed to individuals as early as 1898 so as to permit the State to collect taxes from those individuals. The record also reflects that from 1898 through 1920 the property sometimes was assessed to the State and/or the United States. While the record does not tell us the specific basis that justified the State's assessing taxes against the owner of the property in 1913 and selling the property in 1914 for the failure to pay taxes, that fact does not affect our conclusion that the Act passed title to the State immediately, pursuant to Schulenberg v. Harriman, 88 U.S. (21 Wall.) 44, 61-62 (1874), and that the 1926 deed was a valid transfer of the State's interest to Kaylor's predecessors in title. We have overlooked the disrespectful tone of the application for rehearing sot hat we could dispassionately approach the issues on their merits, as we are required by oath to do. We are disappointed that counsel for the State has been less than attentive to the obligations of his oath as an attorney. APPLICATION OVERRULED; OPINION EXTENDED. HOUSTON, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX, J., dissent. [1] This tract has been described by the parties on joint stipulationas "the west half of the northwest quarter of Section 21, Township 1, Range 3E." [2] As I have stated, I recognize that the Federal Government may convey land to a state without requiring the issuance of a land patent. In Schulenberg v. Harriman, 88 U.S. (21 Wall.) 44, 22 L. Ed. 551 (1874), the Supreme Court held that title to lands located in Wisconsin had passed from the Federal Government to that state by virtue of a Congressional Act that set aside that land for the construction of a railroad. Schulenberg, however, is distinguishable from the present case. First, the act in Schulenberg described the granted lands with a higher degree of specificity than that found in the 1828 Act. Second, there is no indication in Schulenberg that a patent was ever issued for the granted lands, as there was in the present case. For these reasons, I believe Schulenberg is inapposite to the present case.

October 27, 2000

a7fc7a55-17f5-4b94-9f55-012d3f12d1e3

Ex Parte Cupps

782 So. 2d 772

1991117

Alabama

Alabama Supreme Court

782 So. 2d 772 (2000) Ex parte Ted Stanley CUPPS. (Re SouthTrust Bank of Alabama, N.A. v. Ted Stanley Cupps). 1991117. Supreme Court of Alabama. October 20, 2000. *773 Charles K. Hamilton of Bainbridge, Mims, Rogers & Smith, L.L.P., Birmingham, for petitioner. A. Joe Peddy and Bryan Scott Tyra of Smith, Spires & Peddy, P.C., Birmingham, for respondent. MADDOX, Justice. Ted Stanley Cupps, the defendant in an action pending in the Walker Circuit Court, petitions for a writ of mandamus directing the circuit court to vacate its order striking his jury demands. The substantive question presented is whether a contractual waiver of the right to a jury trial, which expressly applies only to claims "arising under" the contract containing the waiver, bars a jury trial on all of Cupps's claims against the other contracting party, both his contract claim and his tort claims. For the reasons stated below, we grant the petition in part and issue a writ directing the circuit court to vacate its order insofar as that order related to Cupps's tort claims against South-Trust Bank of Alabama. On December 30, 1996, Ted Stanley Cupps, Ellis Taylor, and Egypt Contracting Company, Inc. ("Egypt"), signed a $301,000 revolving note made payable to SouthTrust Bank of Alabama ("South-Trust"). Cupps and the other borrowers intended to use the proceeds from the note to finance a coal-mining operation. Under the terms of the note, Cupps, Taylor, and Egypt agreed to be equally liable for the debt, although Egypt was primarily responsible for paying it. Cupps, Taylor, and Egypt collectively pledged a total of nine pieces of mining equipment as collateral for the note. In August 1997, Egypt filed a petition for bankruptcy protection. At that time, *774 the outstanding balance on the note was $294,000. By the terms of the note, that balance became due immediately when Egypt filed its bankruptcy petition. At first, SouthTrust demanded payment from both Cupps and Taylor, but it eventually decided to pursue only Cupps, because Taylor owed the bank more than $1 million on unrelated loans. During February and March 1998, Cupps and SouthTrust negotiated a payment plan, referred to by the parties as the "Forbearance Agreement." This agreement allowed Cupps to pay off the loan over an extended period, with South-Trust retaining an interest in the previously pledged collateral. During these negotiations, Cupps told David Patton, the president of SouthTrust's branch in Walker County, that he intended to enter into a mining contract with Birmingham Coal & Coke Company, and he told Patton that his revenue from that contract would enable him to pay the balance on the note. Cupps told Patton that the completion of this contract required the use of all of the mining equipment previously pledged as collateral, including the equipment belonging to Egypt. Cupps alleges that Patton promised Cupps that SouthTrust would not repossess any of the equipment during the time specified by the Forbearance Agreement. Cupps and SouthTrust executed the Forbearance Agreement on March 27, 1998. Under this agreement, SouthTrust agreed to forbear, for 90 days, from pursuing the collection of the outstanding balance of the note; this forbearance was promised in exchange for Cupps's making monthly payments of $5,000 during that period. The Forbearance Agreement also contained a clause by which Cupps and SouthTrust waived their right to a jury trial in the event a lawsuit was filed relating to a dispute "arising under" the contract. It is undisputed that Cupps read and understood this clause when he executed the contract. Several weeks after this agreement was executed, SouthTrust repossessed the equipment Egypt had pledged. Cupps says the seizure of this equipment made him unable to meet his contractual obligations to Birmingham Coal & Coke and caused him to abandon the project he had undertaken by the contract with that company. SouthTrust sold the repossessed equipment at auction and then sued Cupps to recover the amount of debt still outstanding after it had applied the auction proceeds to the debt. Cupps filed a counterclaim against SouthTrust, seeking damages for breach of the Forbearance Agreement; for fraud in the inducement of that agreement; for suppression; and for intentional interference with contractual relations. Cupps also filed a third-party complaint against Taylor, seeking contribution in the event Cupps was found liable for some or all of the outstanding debt. In each of Cupps's pleadings he demanded a jury trial for all of his claims. SouthTrust replied with a motion to strike the jury demands. The trial court granted that motion as to the claims between Cupps and SouthTrust, but denied it as to the third-party claims between Cupps and Taylor. Cupps has petitioned this Court for a writ of mandamus directing the trial court to vacate its order insofar as it strikes his jury demand with respect to his claims against SouthTrust. The standard governing our review of an issue presented in a petition for the writ of mandamus is well established: Ex parte Edgar, 543 So. 2d 682, 684 (Ala. 1989). Mandamus is an appropriate remedy where the availability of a jury trial is at issue, as it is in this case. Ex parte Merchants Nat'l Bank of Mobile, 257 Ala. 663, 665, 60 So. 2d 684, 686 (1952). The legal issue presented by Cupps's petition is whether the jury-waiver clause in the Forbearance Agreement applies to all of Cupps's claims against SouthTrustclaims alleging breach of the Forbearance Agreement; fraud in the inducement; suppression; and intentional interference with contractual relations. The clause provides as follows: (Emphasis added in the text of the clause). Cupps does not dispute the validity of the jury-waiver clause. He does argue, however, that none of his claims "arise under" the Forbearance Agreement or the original loan documents; therefore, he contends, the waiver clause does not apply to any of his claims. Article I, § 11, of the Alabama Constitution of 1901 provides "[t]hat the right of trial by jury shall remain inviolate." The allegiance of Alabama's legal system to this principle is reaffirmed in Rule 38(a), Ala.R.Civ.P., which states, "The right of trial by jury as declared by the Constitution of Alabama ... shall be preserved to the parties inviolate." Thus, this Court's mandate to preserve the right to a trial by jury is clear when that right was available at common law, Ex parte Jones, 447 So. 2d 709, 711 (Ala.1984), if it has not been abridged by Federal law, see Green Tree Fin. Corp. v. Shoemaker, 775 So. 2d 149, 150 (Ala.2000) (stating that arbitration clauses will be enforced in Alabama to the extent required by Federal law), and has not been expressly waived by contract, Gaylord Dep't Stores of Alabama, Inc. v. Stephens, 404 So. 2d 586, 588 (Ala. 1981) (adopting decisions from other jurisdictions holding that the right to a jury trial may be waived by contract). In cases, such as this case, that involve contractual waivers, we give the text of the waiver a narrow and strict construction, in deference to the constitutional guarantee of the right to a jury trial. In Mall, Inc. v. Robbins, 412 So. 2d 1197, 1200 (Ala.1982), this Court stated, "[the] same public policy that applies the rule of strict construction will likewise limit the scope of operation of a jury waiver agreement to those controversies directly related to and arising out of the terms and provisions of the overall agreement containing the jury waiver provisions." Thus, we must strictly construe the operative language of the jury-waiver clause in the *776 present casethat language provides that the waiver applies to "any disputes arising under [the] Forbearance Agreement or the Loan Documents." (Emphasis added.) This Court, when reviewing jury-trial waivers, has typically been asked to determine the meaning of the term "arising under" (and this is the phrase used in the Forbearance Agreement) when the underlying dispute relates to the scope of a jury waiver in a contract containing an arbitration clause. See generally Green Tree Fin. Corp. v. Shoemaker, supra; Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497 (Ala.1999); Capital Inv. Group, Inc. v. Woodson, 694 So. 2d 1268 (Ala.1997); and Koullas v. Ramsey, 683 So. 2d 415 (Ala. 1996). In this kind of case, our conclusion generally depends on whether the parties to the contract intended to arbitrate their claims and to waive their right to a jury trial for the issues raised by the claims. See Vintson, 753 So. 2d at 505 (noting that the scope of an arbitration agreement "`is a matter of contract interpretation'"), and Carl Gregory Chrysler-Plymouth, Inc. v. Barnes, 700 So. 2d 1358, 1360 (Ala.1997) (noting that "[t]he first task of this Court, when reviewing an arbitration provision, is to determine whether the parties agreed to arbitrate the dispute at hand."). In the present case, this Court is presented with the same sort of question: Did Cupps, in agreeing to the waiver clause of the Forbearance Agreement, intend to waive his right to a jury trial on such claims as he has made against SouthTrust? Our cases suggest that the phrase "arising under" is analogous to "arising from," a phrase this Court has previously construed as having a narrowing effect on the scope of arbitration clauses. In Reynolds & Reynolds Co. v. King Automobiles, Inc., 689 So. 2d 1 (Ala.1996), this Court, in explaining its construction of the term "arising from," stated: "This Court has held [that] where a contract signed by the parties contains a valid arbitration clause that applies to claims `arising out of or relating to' the contract, that clause has a broader application than an arbitration clause that refers only to claims `arising from' the agreement." 689 So. 2d at 2-3. In Koullas v. Ramsey, supra, a case involving a similar contract-construction issue, this Court stated that the term "arising under," like the term "arising from," similarly narrowed the scope of arbitration agreements and excluded claims that did not require a reference to, or a construction of, the underlying contract. 683 So. 2d at 418. This Court explained: Koullas, 683 So. 2d at 417-18. Cupps's claims alleging fraudulent inducement, suppression, and tortious interference *777 with contractual relations do not require a reference to, or a construction of, the Forbearance Agreement or the loan documents. The fraudulent-inducement claim and the suppression claim allege torts relating to the formation of the contract and not to the contract itself. The claim alleging tortious interference with contractual relations is even more independent from the contract, because it does not deal with the contract formation whatever. All three of these claims may be resolved without referring to the terms of the Forbearance Agreement or the loan documents; therefore, while these claims may indeed arise out of the business relationship between Cupps and SouthTrust, they cannot be said to "arise under" that agreement or those documents. Consequently, applying the principle set out in Mall, Inc. v. Robbins, supra, we hold that Cupps did not contractually waive his right to a jury trial as to these three tort claims. We grant Cupps's petition insofar as it relates to those claims, and we direct the circuit court to set aside its order denying Cupps's demands for a jury trial on those claims. We reach a different conclusion with respect to Cupps's claim alleging breach of the Forbearance Agreement. A claim alleging breach of contract necessarily requires a construction of the contract upon which the claim is based. See generally Tanner v. Church's Fried Chicken, Inc., 582 So. 2d 449, 452 (Ala.1991) (interpreting a purchase agreement to determine whether the terms of that agreement were breached). Therefore, we conclude that Cupps's claim alleging breach of the Forbearance Agreement "arises under" that agreement and, therefore, that Cupps waived his right to a jury trial as to this claim. Consequently, we deny Cupps's petition insofar as it relates to this claim. PETITION GRANTED IN PART AND DENIED IN PART AND WRIT ISSUED. HOOPER, C.J., and COOK, LYONS, and JOHNSTONE, JJ., concur. [1] After making this statement, the Court in Koullas continued: "If there is no such connection between the claim and the contract, then the claim could not reasonably have been intended to be subject to arbitration within the meaning of a clause that required arbitration only for claims `arising out of or related to' the contract." 683 So. 2d at 418. This particular statement, however, is dictum in that the arbitration clause in that case did not include the language "arising out of or related to." Thus, while it would appear from this sentence that the term "arising out of or related to" receives the same construction as "arising from" and "arising under," our cases clearly treat these two classes of terms differently. See Reynolds & Reynolds Co., 689 So. 2d at 2-3.

October 20, 2000

7bce7939-64b8-49eb-a3f9-a2261bed930e

Ex Parte Potmesil

785 So. 2d 340

1990509

Alabama

Alabama Supreme Court

785 So. 2d 340 (2000) Ex parte Catherine POTMESIL. (In re Catherine Potmesil v. Mercantile Stores Company, Inc.) 1990509. Supreme Court of Alabama. November 3, 2000. *341 Lawrence T. King of Goozée, King & Horsley, Birmingham; and Cheryl D. Eubanks, Fairhope, for petitioner. Dennis McKenna of Prince, McKean, McKenna & Broughton, L.L.C., Mobile, for respondent. BROWN, Justice. On October 20, 1997, Catherine Potmesil fell while shopping at a Gayfers department store, a store operated by a subsidiary of Mercantile Stores Company, Inc. (Hereinafter Mercantile Stores Company, Inc., will be referred to as "Gayfers.") Potmesil, age 90, suffered a broken hip as a result of her fall. Potmesil sued Gayfers, alleging that it had negligently or wantonly caused her fall and her injury. The case was tried in November 1998, and the jury returned a verdict in favor of Gayfers. Potmesil moved for a new trial, but the court denied her motion. The Court of Civil Appeals, on October 29, 1999, affirmed, without an opinion. Potmesil v. Mercantile Stores Co. (No. 2980460), ___ So.2d ___ (Ala.Civ.App. 1999) (table). We granted certiorari review to consider whether the trial court erred in instructing the jury on the law of assumption of the risk. For the reasons discussed below, we reverse and remand. The evidence indicates that Potmesil and her companion, Helen Peterson, spent several hours shopping at a Gayfers store on the day of the incident. As the pair began to exit the store, they walked through the linens department. This area contained bedding displays angled toward the store aisle. According to Peterson, the beds protruded into the aisle at least eight or more inches. As Potmesil walked past the bed displays, she fell to the floor. Potmesil testified that she fell as she was walking down the aisle in the linens department, but that she never saw anything in the area that could have caused her to trip and fall. She stated that she thought she tripped over a rug, because Peterson told her that she saw a rolled rug extending from under a bedding display after Potmesil fell. Peterson testified that she felt Potmesil trip and then noticed a rolled rug at the foot of the bed display protruding out into the aisle. She further stated that the bed and the rolled rug were the only items in Potmesil's path that could have caused her to trip. Peterson also testified that she informed Gayfers personnel that Potmesil had tripped over the rug. Peterson could not recall whether she and Potmesil had walked down the same aisle previously during the day. She stated that neither she nor Potmesil saw the rug before Potmesil fell. Bertha Philpot, a Gayfers sales associate working in the linens department at the time of the incident, testified that rugs are displayed on the floor around the bedding displays and at the foot of the beds. She *342 did not recall seeing a rolled rug protruding into the aisle. Chassity Robinson, Gayfers' loss-prevention manager, testified that she did not see anything in the aisle that could have caused Potmesil to trip and fall. She denied receiving any information from Peterson regarding a rug extending into the aisle that might have caused Potmesil to fall. The trial court charged the jury on the affirmative defense of assumption of the risk. Potmesil objected to this jury charge, arguing that the evidence did not support the charge. After deliberations began, the trial court charged the jury a second time on contributory negligence and assumption of the risk. Potmesil once again objected, arguing that the evidence presented did not warrant a jury instruction on assumption of the risk. The jury returned a verdict in favor of Gayfers. Potmesil filed a motion for a new trial accompanied by the affidavit of a juror Helen McCants, in which McCants stated: "[T]he focus of the conversation among the jurors during deliberations turned to `assumption of the risk.' Once that became the focus of our discussions, we were able to agree to a verdict in favor of [the defendant]." Potmesil contends that the trial court erred in charging the jury on assumption of the risk because, she says, no evidence presented at trial supported the charge. Specifically, Potmesil argues that Gayfers presented no evidence indicating that before she fell she knew of, and appreciated, the risk posed by the instrument that caused her to fall. Gayfers argues that the charge on assumption of the risk was warranted by the evidence. It contends that the evidence was sufficient for the jury to infer that "Potmesil must have known and appreciated the alleged danger." Gayfers relies upon the following evidence in support of its position: Potmesil was an invitee of Gayfers; therefore, Gayfers owed her a duty to have its premises free from danger or, if *343 the premises were dangerous, to give her warning sufficient to enable her, through the use of reasonable care, to avoid the danger. Hose v. Winn-Dixie Montgomery, Inc., 658 So. 2d 403 (Ala.1995). Flagstar Enters., Inc. v. Bludsworth, 696 So. 2d 292, 294 (Ala.Civ.App.1996). The affirmative defense of assumption of the risk requires that the defendant prove (1) that the plaintiff had knowledge of, and an appreciation of, the danger the plaintiff faced; and (2) that the plaintiff voluntarily consented to bear the risk posed by that danger. Gulf Shores Marine Indus., Inc. v. Eastburn, 719 So. 2d 238, 240 (Ala.Civ.App.1998). Assumption of the risk is described as "a form of contributory negligence applicable to factual situations in which it is alleged that the plaintiff failed to exercise due care by placing himself or herself into a dangerous position with appreciation of a known risk." Cooper v. Bishop Freeman Co., 495 So. 2d 559, 563 (Ala.1986), overruled on other grounds, Burlington Northern R.R. v. Whitt, 575 So. 2d 1011 (Ala.1990). This Court has held that "[a]ssumption of the risk proceeds from the injured person's actual awareness of the risk." McIsaac v. Monte Carlo Club, Inc., 587 So. 2d 320, 324 (Ala.1991) (emphasis added). In determining whether assumption of the risk has been proven, the factfinder looks to the plaintiff's state of mind, using a subjective standardasking whether the plaintiff knew of the risk, not whether he should have known of it. McKerley v. Etowah-DeKalb-Cherokee Mental Health Bd., Inc., 686 So. 2d 1194, 1197 (Ala.Civ.App.1996). In cases where the defendant fails to show that the plaintiff subjectively appreciated the danger and voluntarily consented to bear the risk posed by that danger, "the trial court properly would not submit the question to the jury." Superskate, Inc. v. Nolen, 641 So. 2d 231, 237 (Ala.1994). The trial court gave the jury the following instruction on the law of assumption of the risk: Because the evidence gave no indication that Potmesil actually knew of, and appreciated, the danger involved, and voluntarily consented to bear the risk that she would fall while walking down the aisle of Gayfers, the evidence did not support a jury charge on assumption of the risk. Thus, instructing the jury on that defense was reversible error. *344 The judgment is reversed and the cause is remanded. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, LYONS, JOHNSTONE, and ENGLAND, JJ., concur.

November 3, 2000

536791d3-2851-4dea-bed5-7e567c13f89b

Ex Parte Jackson

791 So. 2d 1043

1991742

Alabama

Alabama Supreme Court

791 So. 2d 1043 (2000) Ex parte Jeremiah JACKSON. (Re Jeremiah Jackson v. State). 1991742. Supreme Court of Alabama. November 3, 2000. Angela Setzer and Randall Susskind of Equal Justice Initiative of Alabama, Montgomery; and Shirley Chapin, Tuscaloosa, for petitioner. Bill Pryor, atty. gen., and James R. Houts, asst. atty. gen., for respondent. HOOPER, Chief Justice. The petition for the writ of certiorari is denied. In denying the petition for the writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973). WRIT DENIED. MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.

November 3, 2000

e0016958-0095-4699-bd67-6124a5e39d8b

Hauseman v. UNIV. OF ALA. HEALTH SERV. FOUNDATION

793 So. 2d 730

1990084

Alabama

Alabama Supreme Court

793 So. 2d 730 (2000) Felicia H. HAUSEMAN v. UNIVERSITY OF ALABAMA HEALTH SERVICES FOUNDATION and Dr. Albert D. Pacifico. 1990084. Supreme Court of Alabama. November 3, 2000. Rehearing Denied March 30, 2001. *731 Stephen D. Heninger and R. Edwin Lamberth of Heninger, Burge, Vargo & Davis, L.L.P., Birmingham, for appellant. Randal H. Sellers and Joseph L. Reese, Jr., of Starnes & Atchison, L.L.P., Birmingham, for appellees. BROWN, Justice. The plaintiff, Felicia Hauseman, appeals the circuit court's summary judgment entered in favor of the defendants Dr. Albert Pacifico and the University of Alabama Health Services Foundation ("UAHSF"). Margaret B. Hicks[1] was admitted to the University of Alabama at Birmingham Hospital ("UAB Hospital") and underwent coronary by-pass surgery on August 30, 1996. Her surgeon was Dr. Albert Pacifico, who routinely performed this kind of procedure. Dr. Pacifico was assisted by his cardiovascular-surgery team, consisting of Dr. Chris Akins, the chief resident; Dr. Don Cleveland, the junior cardiac resident; and Dr. Rosensteel,[2] the general-surgery resident. Mrs. Hicks's surgery was successful, and on September 4, 1996, she was discharged from UAB Hospital. However, because of Mrs. Hicks's age and frailty, she was sent to Spain Rehabilitation Center ("Spain Rehab") for cardiac rehabilitation. It was common for elderly or weak patients to be discharged from UAB Hospital to Spain Rehab for additional rehabilitation and/or supportive care. When she was transferred to Spain Rehab, Mrs. Hicks was clinically and medically stable. Although Mrs. Hicks had been discharged from UAB Hospital, Dr. Pacifico was not "through with her care"; he was available to see Mrs. Hicks at Spain Rehab if he was called and asked to do so. Once at Spain Rehab, Mrs. Hicks was placed in the care of Dr. Christopher Kim and Dr. Chi-Tsou Huang. On September 6, Mrs. Hicks's body temperature was 103.8&;~ she also had an elevated white-blood-cell count of 14,800. On September 7, Dr. Rosensteel went to Spain Rehab and examined Mrs. Hicks. Dr. Rosensteel's note stated: "If patient's condition decompensates, will come evaluate the patient." The following day, Mrs. Hicks's white-blood-cell count rose to 16,800. Based on this, Dr. Huang suspected that Mrs. Hicks had developed *732 some kind of infection. A note on Mrs. Hicks's chart, dated September 15, stated: "The sternal wound drains yellowish, turbid discharge quite a lot. CV [cardiovascular team] is aware of it." The next day, doctors at Spain Rehab removed the sternal staples from Mrs. Hicks's chest and pus gushed out. Dr. Huang instructed Dr. Kim to call Dr. Pacifico's team and advise them of the wound status. When Dr. Kim telephoned, he spoke with one of Dr. Pacifico's residents, who advised him that a member of Dr. Pacifico's team would come to see Mrs. Hicks. On September 17, Dr. Huang noted in Mrs. Hicks's chart: "patient wants CV surgery to come and check her wound." The next day, Dr. Huang spoke with Dr. Akins, who told him that a member of Dr. Pacifico's team would come and check Mrs. Hicks. Dr. Huang made several additional notes on Mrs. Hicks's chart concerning requests to the cardiovascular-surgery team to examine Mrs. Hicks and the team's failure to do so. All of the telephone calls made by Drs. Kim and Huang requesting that the cardiovascular-surgery team see Mrs. Hicks were made to resident physicians only; no calls were ever made directly to Dr. Pacifico. Dr. Pacifico did not know that the physicians at Spain Rehab had requested that a physician from the cardiovascular-surgery team see Mrs. Hicks. Dr. Pacifico did not see Mrs. Hicks after her discharge from UAB Hospital on September 4, nor did he have any conversations with any of the physicians at Spain Rehab or any of the cardiovascular-surgery-service residents about Mrs. Hicks after her discharge from UAB Hospital on September 4. Dr. Pacifico testified during his deposition that if anyone from his team had seen Mrs. Hicks, that person would have recommended that a plastic surgeon be called in to consult. According to Dr. Pacifico, this would be the specialist best suited for the surgical management of a sternal-wound infection. Mrs. Hicks was seen by personnel from the infectious-disease and plastic-surgery services on September 19 and 20, respectively. Mrs. Hicks was determined to have a sternal-wound infection. On September 21, 1996, Mrs. Hicks was transferred from Spain Rehab to UAB Hospital. Mrs. Hicks's sternal-wound infection was managed by the plastic-surgery service, rather than the cardiovascular-surgery service. Mrs. Hicks underwent surgical treatment for the sternal-wound infection on September 24 and again on September 27. On October 24, Mrs. Hicks died of multiorgan system failure secondary to sepsis. On March 15, 1997, Felicia Hauseman, Mrs. Hicks's daughter and administrator of her estate, filed a medical-malpractice action against UAHSF, Dr. Pacifico, Dr. Kim, and Dr. Huang. Each defendant moved for a summary judgment. On May 25, 1999, the trial court granted Dr. Huang and Dr. Kim's motions for summary judgment, and entered a final judgment for those defendants, pursuant to Rule 54(b), Ala.R.Civ.P. No notice of appeal was filed from that judgment. On September 23, 1999, the trial court issued the following order with regard to UAHSF and Dr. Pacifico's motion for summary judgment: (R. 263-64.) On October 5, 1999, Hauseman filed a notice of appeal from the summary judgment for UAHSF and Dr. Pacifico. Because this appeal is from a summary judgment, our review is governed by the following standard: Hobson v. American Cast Iron Pipe Co., 690 So. 2d 341, 344 (Ala.1997). Hauseman contends that the summary judgment for UAHSF and Dr. Pacifico was improper as to her malpractice claim against Dr. Pacifico based on his own acts and omissions. "To prove liability in a medical malpractice case, the plaintiff must prove (1) the appropriate standard of care, (2) the doctor's deviation from that standard, and (3) a proximate causal connection between the doctor's act or omission constituting the breach and the injury sustained by the plaintiff." Looney v. Davis, 721 So. 2d 152, 157 (Ala.1998). See Complete Family Care v. Sprinkle, 638 So. 2d 774 (Ala.1994); Bradford v. McGee, 534 So. 2d 1076 (Ala.1988); and § 6-5-484, Ala.Code 1975. To defeat a properly supported motion for a summary judgment on a medical-malpractice claim, the nonmovant ordinarily must present testimony from a "similarly situated" medical expert. Levesque v. Regional Med. Ctr. Bd., 612 So. 2d 445, 449 (Ala.1993). Hauseman appears to claim that because Dr. Pacifico was aware that a sternal-wound infection was a potential complication in surgeries such as the one performed on Mrs. Hicks, he had a duty to provide treatment, despite the fact that no evidence indicated that Dr. Pacifico was ever made aware that Mrs. Hicks had developed an infection or indicated that Dr. Pacifico had been asked to come to Spain Rehab to examine Mrs. Hicks. Hauseman offered no expert testimony indicating that Dr. Pacifico breached the applicable standard of care by failing to personally see or treat Mrs. Hicks at Spain Rehab in the absence of a request to do so. Certainly, had Dr. Pacifico been aware that Mrs. Hicks was suffering from a postoperative sternal-wound infection, he would have had a duty to manage that infection. See McKowan v. Bentley 793 So. 2d 990 (Ala.1999). However, the only criticism Hauseman's expert witness, Dr. Michele Cerino, offered against Dr. Pacifico did not concern any direct acts or omissions. Rather, Dr. Cerino was critical of Dr. Pacifico because his "staff" had failed to answer calls for consult requests. Dr. Cerino testified that by using the word "staff," he was referring to the cardiovascular-surgery-service residents working with Dr. Pacifico. Because Hauseman offered no expert testimony indicating that Dr. Pacifico breached the applicable standard of care by failing to personally see or treat Mrs. Hicks at Spain Rehab in the absence of a request to do so, there was no genuine issue as to any material fact. Therefore, the trial court properly entered the summary judgment in favor of Dr. Pacifico and UAHSF on Houseman's malpractice claim against Dr. Pacifico based on his own acts and omissions. Hauseman also contends that the summary judgment in favor of UAHSF and Dr. Pacifico was improper as to her malpractice claim against Dr. Pacifico based on the theory that he had vicarious liability *735 for the acts and omissions of the residents on his "team." The trial court entered the summary judgment against this claim on the basis that the residents were entitled to qualified or discretionary-function immunity and, therefore, that Dr. Pacifico could not be held liable for their acts and omissions. Hauseman argues that the trial court's ruling is erroneous for two reasons: (1) because, she says, Dr. Pacifico and UAHSF failed to produce substantial evidence indicating that the residents were entitled to qualified or discretionary-function immunity; and (2) because, she says, she produced uncontroverted evidence indicating that the residents were not performing a "discretionary public function" that would entitle them to immunity. In Ex parte Cranman, 792 So. 2d 392 (Ala.2000), this Court traced the evolution of State-agent immunity, restated the law of State-agent immunity, and suggested the formulation of a new test for determining when State employees sued in their individual capacities would be entitled to the benefits of State-agent immunity: 792 So. 2d at 405. Although Cranman was only a plurality decision, this Court subsequently adopted that proposed test in Ex parte Butts, 775 So. 2d 173, 177-78 (Ala. 2000). The resident physicians' treatment of Mrs. Hicks does not fit within any of the categories of immune State-agent conduct set out in the Cranman restatement. Thus, although they were State-employed physicians, the residents were not immune from liability for their acts and omissions. *736 See Wimpee v. Stella, 791 So. 2d 915 (Ala. 2000); Ex parte Rizk, 791 So. 2d 911 (Ala. 2000). Therefore, Dr. Pacifico would not be entitled to a summary judgment on the claims asserted by Hauseman on the basis that Dr. Pacifico could not be liable for acts and omissions for which the residents themselves, by the application of qualified or discretionary-function immunity, would not be liable. Further, although the resident physicians were employed by UAB Hospital, Hauseman presented substantial evidence indicating that the residents were under the supervision and control of Dr. Pacifico because they were part of his "team." This Court has held that an employee in the general employment of one master may become a "loaned" or "borrowed" servant of a special or second master and that the special master may be held vicariously liable for the torts of the borrowed servant. See United States Fidelity & Guar. Co. v. Russo, 628 So. 2d 486 (Ala.1993); Hendrix v. Frisco Builders, Inc., 282 Ala. 473, 213 So. 2d 208 (1968). Coleman v. Steel City Crane Rentals, Inc., 475 So. 2d 498, 500 (Ala.1985), cert. denied sub nom. Illinois Cent. Gulf R.R. v. Coleman, 476 U.S. 1104, 106 S. Ct. 1946, 90 L. Ed. 2d 356 (1986). "`[W]hether one who is usually and normally the servant of one master has become specially and temporarily the servant of another ... is ordinarily a question of fact.'" United States Steel Corp. v. Mathews, 261 Ala. 120, 123, 73 So. 2d 239, 241 (1954) (quoting 2 Mechem on Agency 1447, § 1864). See also Harper v. Gremmel, 703 So. 2d 346, 347 (Ala.1997) (Cook, J., dissenting). That portion of the summary judgment in favor of Dr. Pacifico and UAHSF on Hauseman's claim alleging direct liability on the part of Dr. Pacifico is affirmed. That portion in favor of Dr. Pacifico and UAHSF on Hauseman's claim seeking to hold Dr. Pacifico vicariously liable based on the acts and omissions of the resident physicians who were part of his team is reversed. The case is remanded. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and HOUSTON, COOK, LYONS, and JOHNSTONE, JJ., concur. SEE, J., concurs in part and dissents in part. MADDOX and ENGLAND, JJ., recuse themselves. SEE, Justice (concurring in part and dissenting in part). I concur in that part of the majority's opinion that affirms the summary judgment in favor of Dr. Pacifico and University of Alabama Health Services Foundation ("UAHSF") and against Hauseman on her malpractice claim based on Dr. Pacifico's own acts and omissions. Hauseman offered *737 no evidence indicating that Dr. Pacifico knew of Mrs. Hicks's sternal-wound infection or that he failed to take the necessary steps to remain informed of Mrs. Hicks's condition. I dissent, however, from the part of the majority's opinion that reverses the summary judgment in favor of Dr. Pacifico and UAHSF on Hauseman's malpractice claim that is based on the acts and omissions of the resident physicians. First, for the reasons set forth in my dissenting opinion in Ex parte Cranman, 792 So. 2d 392, 413 (Ala.2000) (See, J., dissenting), I disagree with the majority's reliance on the Cranman test for State-agent immunity. Second, I disagree with the majority's conclusion that there is a genuine issue of material fact as to whether the resident physicians were "loaned" or "borrowed" servants of Dr. Pacifico and UAHSF. In Ex parte Rizk, 791 So. 2d 911 (Ala.2000), this Court concluded that the fact that a state hospital allows a resident physician under its employ to bill patients and receive private compensation through a private corporation does not diminish the physician's status as a State employee. Thus, even if the resident physicians were paid by UAHSF,[3] they are still State employees as employees of the University of Alabama at Birmingham Hospital ("UAB Hospital"). In determining whether the resident physicians are entitled to State-agent immunity, I would apply the rule stated in my dissent in Ex parte Cranman: 792 So. 2d at 415 (See, J., dissenting and quoting from the withdrawn opinion of November 24, 1999). The resident physicians, in assisting with Mrs. Hicks's coronary by-pass surgery and providing her aftercare, were engaged in discretionary functions. See Ex parte Rizk, supra, 791 So. 2d at 914 (See, J., dissenting) (citations omitted). The Alabama Legislature established the University of Alabama as "a seminary of learning" and authorized the governing body of the University, the board of trustees, "to carry into effect the purposes and intent of the Congress of the United States," "to prescribe courses of *738 instruction," and to act in the University's best interest. Ala.Code 1975, §§ 16-47-1 and -34. In furtherance of its educational purposes, the University has created a school of medicine, and, in conjunction with the school of medicine, the University owns and operates UAB Hospital. Ala. Code 1975, §§ 16-47-90 and -95 (authorizing the board or trustees to hold and dispose of any real and personal property for the benefit of the school of medicine). The UAB Hospital provides medical education and training to medical students and resident physicians. The resident physicians in this case were furthering this purpose by caring for Mrs. Hicks. The denial of State-agent immunity to the resident physicians would hinder the educational purposes of the University. See Ex parte Rizk, 791 So. 2d at 914 (See, J., dissenting). Therefore, because the resident physicians were exercising a discretionary function and because it does not appear in this case that the burden imposed on Hauseman by applying the rule of State-agent immunity would significantly outweigh the benefits of applying State-agent immunity to the resident physicians, I would apply that immunity to them. Id. Thus, because I would hold that the resident physicians are immune, I would further hold that Dr. Pacifico and UAHSF cannot be held vicariously liable for the resident physicians' actions. See Roden v. Wright, 646 So. 2d 605, 611 (Ala.1994) (holding that where the theory of liability is the doctrine of respondeat superior, if the agent is not liable then the principal cannot be liable). Therefore, I would affirm the summary judgment in favor of Dr. Pacifico and UAHSF. [1] Mrs. Hicks is referred to as Margaret B. Hicks in the complaint. In other parts of the record, she is referred to as Phyllis Hicks. [2] The record does not indicate Dr. Rosensteel's first name. [3] The evidence does not indicate whether the resident physicians were paid by UAHSF or by UAB Hospital.

November 3, 2000

f8b955d0-7975-4ee7-a4ab-86740a93c5a8

Brannan v. Smith

784 So. 2d 293

1991186

Alabama

Alabama Supreme Court

784 So. 2d 293 (2000) Lloyd BRANNAN et al. v. Hal SMITH, Probate Judge of Lee County. 1991186. Supreme Court of Alabama. November 17, 2000. Kenneth L. Funderburk and Thomas F. Worthy of Funderburk, Day & Lane, Phenix City, for appellants. *294 Stanley A. Martin, Opelika, for appellee. COOK, Justice. Lloyd Brannon and Barbara Jordan, who refer to themselves as residents of an "alleged City of Smith Station, Alabama," and co-chairpersons of the "Just Say No Committee" ("the residents"), appeal from a judgment dismissing their quo warranto action. We affirm. No evidence was presented before the court dismissed this action; therefore, no factual record has developed. However, the residents allege the following: Brief of Appellants, at 4-5 (emphasis in original; citations to the record omitted). The amendment of the "original filing" was the residents' only written response to the January 11, 2000, motion to dismiss. The amendment, which was filed on February 1, 2000, stated: "The Plaintiffs bring this action in Quo Warranto on relation of Lloyd Brannan and Barbara Jordan, as residents of the alleged City of Smith Station, Alabama." In addition to Judge Smith, the petition named as a defendant the City of Smith Station, Alabama (the "City"). The petition was accompanied by a motion to add the City as a party defendant. On February 25, 2000, Judge Smith moved to dismiss the quo warranto petition, arguing, among other things, that the "petition [was] insufficient as a matter of law." In particular, Judge Smith (1) noted that the petition was not brought in the name of the State of Alabama, and (2) stated that the residents had failed to post *295 security for costs. The residents filed no written response to that motion. On February 29, 2000, the circuit court entered a judgment dismissing this quo warranto action, stating: "The court finds that this court has no jurisdiction of this matter based on the provisions of [Ala. Code 1975, § 17-15-6]. Accordingly, the MOTION TO DISMISS ... filed by the Defendant is GRANTED. This proceeding is dismissed." From that judgment, the residents appealed. On appeal, Judge Smith reiterates his challenges to the quo warranto petition. As a third ground, he argues that a writ of quo warranto is not a valid procedural device by which to challenge his role in the incorporation election. Although the residents do not respond to any of these arguments, they, nevertheless, insist that a writ of quo warranto "is proper and available to attack the original incorporation of a municipality." Brief of Appellants, at 8. Judge Smith contends that he is not a proper party to this quo warranto proceeding, because, he asserts, there has been no allegation that he is "`usurp[ing], intrud[ing] into or unlawfully hold[ing] or exercis[ing] any public office, civil or military, any franchise, [or] any profession....'" Brief of Appellee, at 12 (quoting Ala.Code 1975, § 6-6-591). We agree. "In this state quo warranto is a statutory proceeding and to be maintained it must meet the requirements of the statute as to parties and procedure." State ex rel. Norrell v. Key, 276 Ala. 524, 525, 165 So. 2d 76, 77 (1964). A quo warranto action may proceed under either Ala.Code 1975, § 6-6-590 (against a corporation), or under § 6-6-591 (against an individual or a corporation), but not under both. State ex rel. Fuller v. Hargrove, 277 Ala. 688, 689-90, 174 So. 2d 328, 329 (1965) ("Where allegations of the information authorize relief under §§ [6-6-590 and 591], the petitioner must elect under which section he will proceed."). More fully, these sections provide: "[§ 6-6-591](a) An action may be commenced in the name of the state against the party offending in the following cases: (Emphasis added.) The residents have not identified any provision of the quo warranto statutory scheme upon which they rely. Judge Smith is not a corporation and the residents do not allege that he "unlawfully holds or exercises any ... office." The residents challenge only certain actions taken by Judge Smith in connection with the petition authorizing the incorporation election of December 7, 1999. Therefore, the residents have not demonstrated that quo warranto is a valid procedural device by which to proceed against Judge Smith. Judge Smith also challenges the residents' action on the ground that it was not brought upon their relation in the name of the State. Although the State of Alabama is a nominal party in quo warranto proceedings, Baxter v. State ex rel. Metcalf 243 Ala. 120, 9 So. 2d 119 (1942), the petition must be brought in the name of the State. This is so, not only because of the history and purpose of the quo warranto proceeding, but because, among other things, Ala.Code 1975, § 6-6-595, expressly provides: "Whenever an action is commenced under the provisions of this article on the information of any person, his name must be joined as plaintiff with the state." (Emphasis added.) These requirements follow logically from the fact that, historically, "it was required that the proceeding should be instituted in the King's own right, in his name, and at the instance of his legal representative, the Attorney General." State ex rel. Paugh v. Bradley, 231 Mont. 46, 49, 753 P.2d 857, 859 (1988). However, because "private individuals frequently had a stronger interest in initiating quo warranto proceedings than did the government, especially in connection with offices in corporate bodies, there grew up a class of informations in the nature of quo warranto which were in fact initiated by private relators." Id. In Alabama, "[t]he right of the citizen to use the name of the state in prosecuting an information in the nature of quo warranto ... is purely statutory." Ex parte Talley, 238 Ala. 527, 529, 192 So. 271, 271 (1939). The writ retains its public flavor in that the issuance thereof "must serve the public good, although it may also incidentally benefit the person or persons that institute the action." Ex parte Sierra Club, 674 So. 2d 54, 57 (Ala. 1995) (emphasis added). Thus, a quo warranto action may not be prosecuted, as the residents attempt to do, solely in the name of the relator. A corollary difficulty with this proceeding is the apparent failure of the residents to provide security for costs.[2] This requirement is found in both § 6-6-590(b) and § 6-6-591(b). More specifically, § 6-6-590(b) provides: "[A]n action may be commenced ... on the information of any person giving security for the costs of the action, to be approved by the clerk of the court in which the action is commenced." Similarly, § 6-6-591(b) provides that the action "may be commenced ... on the information of any person giving security for the costs of the action, to be approved by the clerk of the court in which the action is brought." *297 The giving of security for the costs of the litigation "is a condition on which the right to proceed in the name of the State is given to individuals." State ex rel. Radcliff v. Lauten, 256 Ala. 559, 561, 56 So. 2d 106, 107 (1952). Otherwise stated, it "is a condition precedent to the jurisdiction of the court." Id., 56 So. 2d at 106-07. See Wenzel v. State ex rel. Powell, 241 Ala. 406, 407, 3 So. 2d 26, 26 (1941) ("failure to give security for costs in such proceedings... is jurisdictional and fatal to the proceedings"). "Without [the giving of] such security, [the relator] usurps the authority of the State." Birmingham Bar Ass'n v. Phillips & Marsh, 239 Ala. 650, 657-58, 196 So. 725, 732 (1940); see also Evans v. State ex rel. Sanford, 215 Ala. 61, 109 So. 357 (1926). For the reasons stated in Parts I, II, and III, we agree with Judge Smith that this quo warranto action was properly dismissed. Although we do not necessarily agree with the rationale on which the circuit court dismissed the action, we will "affirm the trial court's judgment if it is supported by any valid legal ground." Marvin's, Inc. v. Robertson, 608 So. 2d 391, 393 (Ala.1992) (emphasis added). "[A] correct decision will not be disturbed even if the court gives the wrong reasons." Boykin v. Magnolia Bay, Inc., 570 So. 2d 639, 642 (Ala.1990). The judgment of the trial court is, therefore, affirmed. AFFIRMED. HOOPER, C.J., and MADDOX, LYONS, and JOHNSTONE, JJ., concur. [1] After the filing of the quo warranto petition, the action proceeded as one in quo warranto. [2] As we noted previously in this opinion, Judge Smith asserts that no security was given, and the residents do not refute that assertion.

November 17, 2000

0e4cb8c3-e7fb-449d-9f7f-0f475f625f0e

Ex Parte South Baldwin Reg. Med. Center

785 So. 2d 368

1991546

Alabama

Alabama Supreme Court

785 So. 2d 368 (2000) Ex parte SOUTH BALDWIN REGIONAL MEDICAL CENTER. (In re E.P., a minor who sues by and through her parents and next friends, D.P. and S.P. v. Ron McFadden and South Baldwin Regional Medical Center). 1991546. Supreme Court of Alabama. October 27, 2000. *369 Edward C. Greene, D. Brent Baker, and W. Austin Mulherin III of Frazer, Greene, Upchurch & Baker, L.L.C., Mobile; and Oakley Melton, Jr., of Melton, Espy, Williams & Hayes, Montgomery, for petitioner. Frank Woodson of Turner, Onderdonk, Kimbrough & Howell, Mobile; and Thomas O. Bear, Foley, "of counsel", for respondent. HOUSTON, Justice. D.P. and S.P., individually and on behalf of E.P., their six-year-old daughter, sued South Baldwin Regional Medical Center and Ron McFadden, a registered nurse employed at the hospital, for damages based on allegations that McFadden had sexually molested E.P. The trial court entered a summary judgment for the hospital on all of E.P.'s claims (based on allegations of assault and battery, negligent supervision, and breach of duty to a business invitee) and a partial summary judgment for McFadden on the parents' individual claims alleging negligent infliction of emotional distress. The trial court certified the summary judgments as final, pursuant to Rule 54(b), Ala.R.Civ.P. The plaintiffs appealed to this Court, which transferred the case to the Court of Civil Appeals, pursuant to Ala.Code 1975, § 12-2-7(6). The Court of Civil Appeals, in a split decision, reversed the summary judgment on E.P.'s claims and remanded the case for further proceedings. For a complete discussion of the facts, see E.P. v. McFadden, 785 So. 2d 364 (Ala.Civ.App. 2000) (Yates and Monroe, JJ., concurring; Robertson, P.J., concurring in the result; Crawley and Thompson, JJ., concurring in part and dissenting in part). The Court of Civil Appeals unanimously affirmed the partial summary judgment on the parents' negligent-infliction-of-emotional-distress claim. That claim is not before this Court. E.P.'s claims against McFadden remain pending in the trial court. We granted the hospital's petition for certiorari review to consider whether the holding of the Court of Civil Appeals conflicts with this Court's recent decision in Carroll v. Shoney's, Inc., 775 So. 2d 753 (Ala.2000). We conclude that it does; therefore, we reverse the judgment of the Court of Civil Appeals insofar as it relates to E.P.'s claims. The sole issue presented to this Court is whether the Court of Civil Appeals erred in reversing the summary judgment for the hospital on E.P.'s claims of assault and battery, negligent supervision, and breach of duty to a business invitee. Judge Thompson correctly noted in his special writing that "this case presents extremely emotional issues," 785 So. 2d at 368. However, as both Judge Thompson *370 and Judge Crawley recognized, the law in Alabama, as most recently restated in Carroll v. Shoney's, supra, is well established. Judge Crawley, in his special writing, summarized the pertinent law and the relevant facts, as follows: 785 So. 2d at 367-68. We agree with Judge Crawley and Judge Thompson that the Court of Civil Appeals should have affirmed the summary judgment for the hospital, on the authority of Carroll v. Shoney's, supra, and the cases cited therein. See Ala.Code 1975, § 12-3-16 ("The decisions of the Supreme Court shall govern the holdings and decisions of the courts of appeals, and the decisions and proceedings of such courts of appeals shall be subject to the general superintendence and control of the Supreme Court as provided by Constitutional Amendment No. 328."). The main opinion of the Court of Civil Appeals does not cite Carroll v. Shoney's. In fact, it cites no *371 case dealing with the substantive law applicable to the merits of E.P.'s claims against the hospital. The record clearly indicates that McFadden had a history of mental illness (manic depression) and that he had functioned for years as a nurse because of the hospital's willingness to allow him to work while he was receiving treatment. The evidence indicates that although he generally did a good job, McFadden had a history of emotional outbursts with fellow employees and with at least one patient. No evidence indicates that McFadden had ever engaged in sexual misconduct before the incident made the basis of this action. Did hospital administrators exercise sound judgment in allowing McFadden to work at the hospital in direct contact with patients? The answer to that question is debatable. However, the evidence, even viewed in the light most favorable to E.P., as our standard of review requires us to view it, falls woefully short of demonstrating that McFadden's supervisors should have foreseen that he would probably sexually molest a child in the hospital's care. See Ex parte McRae's of Alabama, Inc., 703 So. 2d 351, 352 (Ala.1997), wherein this Court, after citing numerous cases, stated: "The plaintiffs' evidence falls far short of the high standard a plaintiff must meet to hold a defendant liable for the criminal acts of a third party." We also note that this case does not fall within the rule stated in Young v. Huntsville Hospital, 595 So. 2d 1386 (Ala.1992), wherein this Court held that a special relationship had been created that imposed a unique duty on the defendant hospital because the hospital had anesthetized the plaintiff and placed her in a situation that we later described as making her "uniquely dependent upon the hospital for protection." Saccuzzo v. Krystal Co., 646 So. 2d 595, 597 (Ala.1994). The evidence in this present case indicates that the incident giving rise to E.P.'s claims occurred in one of the hospital's patient-care rooms and in the presence of E.P.'s two brothers, her mother and father, and a housekeeper. The record gives no indication that at the time of this incident E.P. was "uniquely dependent upon the hospital for protection," as was the helpless patient in Young. See also Baptist Mem'l Hosp. v. Gosa, 686 So. 2d 1147 (Ala.1996). The judgment of the Court of Civil Appeals is reversed, and the case is remanded for an order or proceedings consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, COOK, SEE, LYONS, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs specially. JOHNSTONE, Justice (concurring specially). While I maintain the dissenting view I expressed in Carroll v. Shoney's, Inc., 775 So. 2d 753 (Ala.2000), that the particular consequence need not be foreseeable for a defendant to be liable to a plaintiff for the criminal conduct of a third party, I agree that the particular (within reasonable limits) criminal conduct itself must be foreseeable and that the particular criminal conduct alleged in the case now before us was not foreseeable. In the context of this distinction, I concur.

October 27, 2000

d300aa14-a7d0-4812-a387-be4cc2b63a39

Tyson Foods, Inc. v. Stevens

783 So. 2d 804

1990131

Alabama

Alabama Supreme Court

783 So. 2d 804 (2000) TYSON FOODS, INC., and Thomas R. Burnett v. Ray STEVENS and Barbara Stevens. 1990131. Supreme Court of Alabama. November 17, 2000. *805 Stephen A. Rowe and David W. Spurlock of Lange, Simpson, Robinson & Somerville, L.L.P., Birmingham, for appellant Tyson Foods, Inc. Hugh E. Holladay, Pell City, for appellant Thomas R. Burnett. J. Hunter Phillips, Ronald W. Farley, and Derek F. Meek of Burr & Forman, L.L.P., Birmingham, for appellees. BROWN, Justice. Thomas R. Burnett owns a family farm in rural St. Clair County. In 1990, Burnett entered into a "Finishing Hog Agreement" with Arkansas California Livestock Company, Inc., a predecessor of Tyson Foods, Inc. ("Tyson"). The contract stated that Burnett was an independent contractor of Tyson, and it provided that he would be responsible for operating and maintaining a hog farm. Tyson would deliver *806 young hogs to Burnett, and he would feed, water, and care for the hogs until they reached market size, at which time Tyson would retrieve the hogs.[1] Pursuant to the contract, Tyson supplied all food, veterinary supplies, and veterinary care for the hogs. Because when they entered the contract Burnett did not yet have hog houses on his property, Tyson determined the location where the houses were to be built, specified the dimensions of the houses, and assisted Burnett in securing financing for construction of the houses. Tyson also required Burnett to construct and maintain a waste-management system in compliance with a design developed by the U.S. Department of Agriculture's Soil Conservation Service. The design provided for waste from the hog houses to be drained into a pipe and then collected in two lagoons. At various times, the waste would be spread onto Burnett's fields for disposal. Once Burnett's construction of the houses and the waste-management system was complete, Tyson delivered hogs to the farm. At any given time, approximately 4,800 hogs were housed on the Burnett farm.[2] Tyson representatives would conduct inspections of the Burnett farm about once a week and note their observations on standardized inspection reports and with handwritten notes. Ray Stevens and his wife, Barbara Stevens, owned property adjacent to Burnett's. Shortly after the hog farm became operational, the Stevenses began to smell a noxious odor emanating from the Burnett farm and saw waste from the farm flow onto their property and into a creek located on their property. In 1991, the Stevenses, along with several other neighbors, filed an action in the Circuit Court of St. Clair County against Burnett and Tyson. However, they dismissed the action, without prejudice, in 1994, after the smells had been significantly reduced. The Stevenses refiled their action in 1998. Their complaint included claims alleging nuisance, negligence, and trespass. The case came to trial in June 1999. At trial, Burnett admitted that there had been recurring odor problems at the time the 1991 lawsuit was filed. He also admitted that the waste-management system installed would regularly stop up and that the obstruction would cause constant leaks, spills, and overflows of the waste.[3] The Stevenses introduced copies of various written inspection reports and photographs taken by Tyson representatives that confirmed the waste-overflow problems. The Stevenses also presented evidence that indicated Tyson knew about the odor problems and had explained to Burnett how he could correct the problems. Although Burnett testified that he could not afford to make the necessary repairs all at once, he also admitted building a vacation home in 1994, as well as constructing a new principal residence on his St. Clair County farm in 1998. Following the introduction of all the evidence, Tyson and Burnett requested a jury instruction on the defense of contributory negligence. Tyson and Burnett alleged that the Stevenses had contributed to the smell on their property because they also had livestock on their 250 acre farm. The *807 livestock owned by the Stevenses included 70 head of cattle, 3 horses, 4 dogs, and 4 guineas. Burnett also presented evidence indicating that the Stevenses ran an automobile-salvage business and stored 100 to 150 vehicles on their property. Although Tyson and Burnett argued that this evidence supported their request for an instruction on contributory negligence, the court denied the requested instruction, stating: The jury returned a verdict awarding the Stevenses $2,500 in compensatory damages and $75,000 in punitive damages. The court entered a judgment on the verdict on June 29, 1999. Thereafter, Burnett filed a motion under Rules 50 and 59, Ala. R. Civ. P. Tyson joined Burnett's motion, seeking, alternatively, a judgment as a matter of law, a remittitur, or a new trial. Following a hearing conducted pursuant to Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), the court entered a detailed order denying the motions and enumerating its findings regarding the factors set out in Hammond, Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989), and BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996). Tyson and Burnett appeal, arguing that the trial court's refusal to instruct the jury on contributory negligence was reversible error. Separately, Tyson also argues that the court improperly sustained the jury's finding that Burnett was an "agent" of Tyson in connection with his operation of the hog farm. Finally, both Tyson and Burnett contend that the trial court erred by entering a judgment on the jury's punitive-damages award. Because this appeal arises from a judgment based on a jury verdict, we "must consider the evidence in a light most favorable to the prevailing party [the Stevenses] and must set aside the verdict only if it is shown to be plainly and palpably wrong." Cobb v. MacMillan Bloedel, Inc., 604 So. 2d 344, 345 (Ala.1992) (citation omitted). A jury's verdict is presumed to be correct, and that presumption of correctness is strengthened by the trial court's denial of a motion for a new trial. Transport Acceptance Corp. v. Vincent, 521 So. 2d 976 (Ala.1988). Under Alabama law, "`[a] party is entitled to proper jury instructions regarding the issues presented, and an incorrect or misleading charge may be the basis for the granting of a new trial.'" King v. W.A. Brown & Sons, Inc., 585 So. 2d 10, 12 (Ala.1991) (citation omitted). When an objection to a jury charge has been properly preserved for review on appeal, as this one was, we look to the entirety of the jury charge to see if there was reversible error, and reversal is warranted only if the error is prejudicial. King, 585 So. 2d at 12. The trial court first charged the jury that it must decide whether Burnett was an agent of Tyson. The trial court further charged the jury on the Stevenses' claims of nuisance, trespass, wantonness, and negligence. The trial court defined "nuisance" for the jury, incorporating into the charge the statutory definition of that term. The trial court charged that a nuisance could result from intentional conduct, unintentional conduct, or negligence, but stated that for the jury to determine a *808 nuisance had stemmed from negligence, it must find a duty, a breach of that duty, causation, and damage before it could find for the Stevenses. With regard to the damages recoverable, the trial court specifically charged: Additionally, the trial court charged that the Stevenses were alleging negligence against Tyson and Burnett. The trial court defined "negligence" as a failure to exercise care and instructed the jury that it must find that the breach of duty, not an intervening, new, or independent act, proximately caused the Stevenses' injury. With regard to the damages recoverable for negligent acts of Tyson and Burnett, the trial court charged: The Stevenses' claims alleging nuisance and negligence were founded upon the smells coming from Burnett's property, as well as upon the waste that flowed onto the Stevenses' property. Although Tyson and Burnett argue that the Stevenses' livestock could have contributed to the nuisance complained of, in view of the facts presented that seems unlikely. Burnett's farm housed 4,800 hogs at any given time, whereas the Stevenses' livestock totaled only 70 head of cattle, 3 horses, 4 dogs, and 4 guineas on their 250 acre farm. The trial court correctly charged that any damages the jury awarded for negligence must be based on damage caused by Tyson and/or Burnett, not by some intervening or independent act. Once charged in this manner, the jury was free to consider all the evidence presented, and, thus charged, it found liability on the part of Tyson and Burnett. In considering the jury charge in its entirety, we find no reversible error. Tyson also argues that the trial court erred in accepting the jury's finding of an agency relationship between Tyson and Burnett.[4] Typically, the existence of an agency relationship is a question of fact for a jury to decide. Carlton v. Alabama Dairy Queen, Inc., 529 So. 2d 921, 923 (Ala. 1988). "Whether a relationship is an independent contractor relationship or is a master-servant relationship depends on whether the entity for whom the work is performed has reserved the right to control the means by which the work is done." Keebler v. Glenwood Woodyard, Inc., 628 So. 2d 566, 568 (Ala.1993). Although Tyson points out that its contract with Burnett specifically stated that Burnett was an independent contractor, whether an agency exists is determined from the facts, not by how the parties choose to characterize their relationship. See Curry v. Welborn Transport, 678 So. 2d 158, 161 (Ala.Civ. App.1996). *809 The Stevenses presented evidence indicating that Tyson specified where the hog houses should be located and how large each house should be, and that Tyson even arranged for financing of the houses. Tyson required that Burnett implement a specific waste-management system. It inspected Burnett's hog operation almost every week and, as evidenced by the inspection reports and photographs, recommended solutions for Burnett's waste-management problems. Tyson provided the hogs and provided food, veterinary supplies, and veterinary care for the hogs. Burnett's primary responsibility was to feed, water, and otherwise care for the animals. The evidence presented was sufficient to create a jury question as to the existence of an agency. Therefore, the trial court did not err in sustaining the jury's verdict as to this issue. Finally, Tyson and Burnett argue that the trial court erred in upholding the jury's punitive-damages award. When considering a defendant's argument that a punitive-damages award is excessive, we consider the "guideposts" established by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), and the factors set forth in Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989). See Employees' Benefit Ass'n v. Grissett, 732 So. 2d 968, 978 (Ala.1998). The Gore guideposts for determining whether a punitive-damages award is excessive are: (1) the degree of reprehensibility of the defendant's conduct; (2) the ratio between the punitive-damages award and the actual harm to the plaintiff; and (3) the possible civil or criminal penalties that could be imposed for comparable misconduct. BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 580, 583, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996). The United States Supreme Court has stated that "[p]erhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." Gore, 517 U.S. at 575, 116 S. Ct. 1589. Although the Gore opinion does not provide a particular measure for evaluating reprehensibility, it acknowledges that acts of affirmative misconduct are more reprehensible than mere negligence. See Life Ins. Co. of Georgia v. Parker, 726 So. 2d 619, 621 (Ala.1998). The evidence presented to the jury included the various written inspection reports and handwritten memoranda of the Tyson representatives, as well as photographs; these items illustrated both the existence of the waste-management-system problems and the failure of either Tyson or Burnett to take action to correct the problems. Burnett admitted the recurrence of odors, admitted he knew of the waste-management-system problems, and admitted he knew how to fix them. Although Burnett denied having the financial capability to repair the waste-management system, the Stevenses rebutted this denial with evidence indicating that Burnett had the ability to construct two new houses, one in 1994 and the other in 1998. While we find Burnett's conduct over the years to be fairly reprehensible, in light of his claim of financial incapability, we do not find that his conduct rises to the level of being highly reprehensible. A second factor in the Gore analysis is the ratio of compensatory damages to the punitive damages awarded. Gore, 517 U.S. at 580, 116 S. Ct. 1589. While the guarantees of due process do not require that we apply a mathematical formula to determine whether a punitive-damages award is excessive, the ratio between compensatory and punitive damages must be reasonable. Employees' Benefit Ass'n v. *810 Grissett, 732 So. 2d 968, 979 (Ala.1998). "This Court has found constitutionally acceptable ratios ranging from 1:1 in Ford Motor Co. v. Sperau, 708 So. 2d 111 (Ala. 1997), to 121:1 in Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala.1997)." Grissett, 732 So. 2d at 979. In this case, the punitive-damages award of $75,000 is 30 times the compensatory-damages award of $2,500. Considering the facts before us, we find the ratio of 30:1 to be unreasonable. The factors to be considered in a Hammond/Green Oil analysis are: (1) the relationship of the punitive-damages award to the likely or actual harm, (2) the reprehensibility of the conduct, (3) any profit gained by the conduct, (4) the defendant's financial condition, (5) the cost of the litigation, (6) any criminal sanctions that may have been imposed as a result of the conduct complained of, and (7) other civil actions of a related nature. Life Ins. Co. of Georgia v. Parker, 726 So. 2d 619 (Ala. 1998). Alabama law requires that punitive damages bear a reasonable relationship to the harm that is likely to occur from the conduct alleged, as well as to the actual harm that has already occurred. Green Oil, 539 So. 2d at 223. "`If the actual or likely harm is slight, the damages should be relatively small. If grievous, the damages should be much greater.'" Green Oil, 539 So. 2d at 223 (citation omitted). The damages awarded in this case stem from the mismanagement of wastes on the Burnett hog farm. Although the Stevenses endured the odors that emanated from the farm, as well as the frequent overflow of waste across their land, the jury awarded only $2,500 in compensatory damages. Burnett repaired the problem in 1998 and has since ceased raising hogs altogether. Therefore, the likelihood of further harm is nonexistent. The second factor in the Hammond/Green Oil analysis is the reprehensibility of Tyson and Burnett's conduct. Factors such as the duration of the conduct, the defendant's awareness of the hazards created or likely to be created by his conduct, any deliberate concealment of those hazards, and the frequency of the kind of conduct complained of, can be considered in determining the reprehensibility of a party's conduct. Green Oil, 539 So. 2d at 223. The conditions created by Tyson and/or Burnett's conduct persisted for several years, and the evidence presented at trial established that both Tyson and Burnett knew about the waste problem, the solutions available, and the harm created by the continued disrepair of the waste-management system. Although this conduct was reprehensible, it was not so reprehensible as to support a punitive-damages award 30 times greater than the compensatory damages. Considering these facts together, in conjunction with the analysis provided in our discussion of the Gore factors, we find the punitive-damages award to be excessive. The third and fourth factors to be reviewed are, respectively, the profit gained by Tyson or Burnett by their conduct, and the defendants' respective financial positions. Both the record and the briefs to this Court are devoid of any direct evidence on these two factors. Although the Stevenses contended that Burnett should have used the money he spent to build homes in 1994 and 1998 to make the repairs to the waste-management system instead, no evidence indicated what, if any, profit Tyson and/or Burnett gained by failing to correct the waste-management problems. Because no party presented adequate evidence at the trial of this case to allow for a full analysis of the third Hammond/Green Oil factor, we are unable to find that Tyson or Burnett profited from the misconduct. Additionally, because *811 neither defendant alleges that the punitive damages were excessive based on the defendants' relative financial positions, an analysis of the fourth factor is unwarranted. We should also consider whether the punitive-damages award sufficiently rewarded the plaintiffs' counsel for assuming the risk of bringing this lawsuit and acted to encourage other plaintiffs to bring wrongdoers to trial. Green Oil, 539 So. 2d at 223. The evidence before the trial court was that this case included the taking of several depositions and the exchange of documents and that the case ultimately resulted in a three-day trial in which several dozen exhibits were introduced. Furthermore, the evidence presented indicated that other people living near the Burnett farm incurred the same kind of injury the Stevenses suffered. An additional factor we should consider is any criminal sanctions that have been imposed on either Tyson or Burnett as a result of the conduct complained of. No criminal sanctions based on this conduct have been imposed on Tyson or Burnett; therefore, we need not analyze this factor. The last factor to be considered in our Hammond/Green Oil analysis is what other civil actions have been initiated based on the same or similar conduct. The Stevenses had filed a previous lawsuit against Tyson and Burnett in 1991, not long after the hog farm began operating. That litigation evidenced the existence of a problem and constituted notice to Tyson and Burnett of the claims and of the likelihood of recurrence if the problems were not fixed. In 1994, after the smells had decreased, the lawsuit was dismissed, without prejudice, only to be filed again in 1998. Although both Tyson and Burnett's acknowledgment of the waste-management problem is demonstrated in the actual filing and subsequent dismissal of the first action against them, the jury did not find the actual harm suffered by the Stevenses significant enough to require a large compensatory-damages award. Therefore, we conclude that the punitive damages awarded are excessive. In considering both the Gore factors and the Hammond/Green Oil factors, we find the punitive-damages award excessive. Therefore, we affirm the judgment, conditioned upon the Stevenses' accepting a reduction of the punitive-damages award to $25,000. If the Stevenses do not file with this Court an acceptance of this remittitur, within 21 days of the date this opinion is issued, the judgment will be reversed and the cause remanded for a new trial. AFFIRMED CONDITIONALLY.[*] HOOPER, C.J., and MADDOX, SEE, LYONS, and ENGLAND, JJ., concur. HOUSTON and JOHNSTONE, JJ., concur in part and dissent in part. HOUSTON, Justice (concurring in part and dissenting in part). I concur except as to the amount of punitive damages permitted; I would affirm the judgment conditioned upon the plaintiffs' accepting a remittitur of the punitive damages to $20,000. Thus, I dissent insofar as the main opinion approves a $25,000 punitive-damages award. See Prudential Ballard Realty Co. v. Weatherly, [Ms. 1981671, July 28, 2000] ___ So.2d ___ (Ala.2000) (Houston, J., concurring specially). JOHNSTONE, Justice (concurring in part and dissenting in part). I concur with the majority in all respects except the remittitur. I think the defendant's *812 environmental pollution so egregious that the entire punitive award is justified. [1] Tyson retained ownership of the hogs at all times. [2] The Burnett farm had a total of 8 hog houses, which were constructed in two clusters of 4 houses each. Each house contained approximately 600 hogs. [3] Burnett testified that he began having problems with the stopping up and overflowing of the waste-management system as early as 1994. [4] Burnett has not filed a separate brief on the agency issue, nor does he join in, or contest, the arguments presented by Tyson. [*] Note from the reporter of decisions: The Supreme Court's docket sheet indicates that on December 8, 2000, the appellee filed an acceptance of the remittitur.

November 17, 2000

e343237d-0e4b-40aa-8eb2-e1a06410748c

Ex Parte Walden

785 So. 2d 335

1990043

Alabama

Alabama Supreme Court

785 So. 2d 335 (2000) Ex parte Willadean WALDEN et al. (Re Willadean Walden et al. v. Smith Children Trust et al.) 1990043. Supreme Court of Alabama. November 3, 2000. *336 David E. Hampe, Jr., Birmingham; and Gatewood Walden, Montgomery, for petitioners. K. Anderson Nelms of Clark & Nelms, Montgomery, for respondents. BROWN, Justice. Willadean Walden appeals from two summary judgments entered in favor of the Smith Children Trust; Annee Caspari, as trustee of the Smith Children Trust; and Hugh V. Smith, Jr., father of the Smith children (these three parties will hereinafter be referred to as "the Smith Children Trust"). We affirm in part, reverse in part, and remand. When this action began, Walden, a high-school graduate, was an 83-year-old widow. Hugh Smith, a lawyer, was her business associate. On January 24, 1991, Walden lent Smith $50,000. To secure the debt, property held by the Smith Children Trust was transferred to Walden by warranty deed. This property consisted of a one-half interest in an office building in Montgomery, Alabama, and a condominium in Destin, Florida. Walden recorded the deed to the Alabama property, but she did not record the deed to the Florida property. After Smith defaulted on the loan in 1993, Walden conducted a title search on the Florida property; the search showed two mortgages, tax liens, condominium liens, and other claims and charges against the property.[1] Fearing that there was no equity in the property, Walden confronted Smith and demanded that he provide her with other collateral. Smith gave Walden a written promise to pay her $50,000 when he sold an apartment building located in Prattville, Alabama.[2] Twelve days later, Smith sold the Florida condominium.[3] He netted approximately $28,000 from the sale. Smith testified by deposition that he informed Walden that the title search on the Florida property was wrong and that there was, in fact, equity in the property; he alleges that she was too hysterical to listen to him and insisted that he provide her with substitute collateral. Smith admits that he did not tell Walden, when she confronted him, that he had listed the condominium with a real-estate broker and that a sale was pending. Walden stated that Smith never told her that the title *337 search was in error or that he had a buyer for the property. On May 10, 1995, the Smith Children Trust sued Walden, seeking a judgment declaring the ownership rights as to the office building in Montgomery. Walden responded with an answer and a counterclaim, alleging, among other things, (1) default on a promissory note; (2) breach of an agreement; (3) fraud in the inducement; (4) fraudulent suppression; and (5) conspiracy to defraud. On April 16, 1997, the trial court entered a partial summary judgment in favor of the Smith Children Trust on Walden's claim alleging conspiracy to defraud. The trial court, pursuant to a pretrial order, allowed Walden to proceed on her other four claims. On May 13, 1997, Walden filed a motion to vacate the partial summary judgment; the court denied that motion. Walden appealed to this Court, which transferred the case to the Court of Civil Appeals, pursuant to Ala.Code 1975, § 12-2-7; however, the Court of Civil Appeals, on December 22, 1997, without an opinion, dismissed Walden's appeal on the basis that it was not from a final judgment. Walden v. Smith Children Trust, 736 So. 2d 696 (Ala.Civ.App.1997) (table). The Court of Civil Appeals dismissed the appeal apparently because the trial judge, when he made the Rule 54(b) certification of finality, had not complied with the additional requirements imposed by the Court of Civil Appeals in Brown v. Whitaker Contracting Corp., 681 So. 2d 226 (Ala.Civ. App.1996) (now overruled by Schneider Nat'l Carriers, Inc. v. Tinney, 776 So. 2d 753 (Ala.2000)). Upon Walden's motion to reconsider, the Court of Civil Appeals reinstated her appeal, on January 13, 1998. Walden v. Smith Children Trust, 738 So. 2d 924 (Ala.Civ.App.1998) (table). On April 3, 1998, the Court of Civil Appeals remanded the case to allow the trial court, if it considered it appropriate to do so, to enter a Rule 54(b) certification complying with Brown. Walden v. Smith Children Trust, 716 So. 2d 705 (Ala.Civ.App.1998). On April 17, 1998, the trial court entered an order setting aside its earlier Rule 54(b) certification; the Court of Civil Appeals, without opinion, dismissed the appeal on April 22, 1998, as not from a final judgment. Walden v. Smith Children Trust, 740 So. 2d 492 (Ala.Civ.App.1998) (table). During a two-year period beginning in 1997, Walden filed numerous motions for leave to amend her counterclaim, re-alleging conspiracy to defraud, as well as stating additional claims alleging "false pretenses" and breach of lease. On October 19, 1998, the trial court entered judgments against Hugh Smith on Walden's breach-of-contract and promissory-note claims. Walden moved for a clarification or modification of a pretrial order entered on October 19, 1998. On January 19, 1999, the trial court entered an order denying Walden's motion to amend her counterclaim, entered a judgment in favor of the Smith Children Trust on Walden's claims alleging fraud and fraudulent suppression, and declared all other pending motions moot. Walden appealed to the Court of Civil Appeals, arguing that the trial court had erred in entering the summary judgments in favor of the Smith Children Trust on her claims alleging conspiracy to defraud and fraudulent suppression. The Court of Civil Appeals, on August 6, 1999, affirmed, without an opinion. Walden v. Smith Children Trust (No. 2980747), 781 So. 2d 1029 (Ala.Civ.App.1999) (table). In its unpublished memorandum of affirmance, the Court of Civil Appeals cited several cases standing for the proposition that mere silence does not constitute fraud, absent a duty to disclose, and that one has no duty to disclose facts to another if the other has not specifically requested information. *338 See Cato v. Lowder Realty Co., 630 So. 2d 378 (Ala.1993), and Hintzel v. Chubb Life Ins. Co. of America, 678 So. 2d 1140 (Ala. Civ.App.1996). Our review of a summary judgment is de novo: Hobson v. American Cast Iron Pipe Co., 690 So. 2d 341, 344 (Ala.1997). Walden argues, in regard to her fraudulent-suppression claim, that Hugh Smith had a duty to inform her that the findings of the title search on the Florida property were incorrect and that he suppressed this information from her. Walden argues that because she presented Smith with the results of the title search, she invited a response from him. Moreover, Walden argues that because she held a warranty deed to the condominium, Smith had a duty to inform her of the pending sale of the property. In order to establish a claim of fraudulent suppression, a plaintiff must produce substantial evidence indicating (1) that the defendant had a duty to disclose a material fact; (2) that the defendant concealed or failed to disclose this material fact; (3) that the defendant's concealment or failure to disclose this material fact induced the plaintiff to act or to refrain from acting; and (4) that the plaintiff suffered actual damage as a proximate result of being induced to act or to refrain from acting. State Farm Fire & Cas. Co. v. Owen, 729 So. 2d 834 (Ala.1998). Section 6-5-102, Ala.Code 1975, establishes two situations in which a duty to speak can arise: "from the confidential relations of the parties or from the particular circumstances of the case." Furthermore, a duty to disclose may arise from a request for information; however, mere silence in the absence of a duty to disclose is not fraudulent. Jewell v. Seaboard Indus., Inc., 667 So. 2d 653 (Ala.1995). Whether one had a duty to disclose is a question of law to be decided by the trial court. State Farm Fire & Cas. Co. v. Owen, 729 So. 2d 834 (Ala.1998) Owen, 729 So. 2d at 840. Factors a court is to consider in determining whether a defendant had a duty to disclose include: (1) the relationship of the parties; (2) the relative knowledge of the parties; (3) the value of the particular fact alleged to have been suppressed; (4) the plaintiff's opportunity to ascertain that fact; (5) the customs of the particular trade; and (6) other relevant circumstances. Id. Hugh Smith, a lawyer who had been in a joint venture with Walden for a number of years, borrowed $50,000 from Walden. Smith conveyed a condominium in Florida to Walden to secure this indebtedness. When Smith's loan became delinquent, Walden had a title search performed on the condominium; the title search revealed various claims against the property, including two unsatisfied mortgages, which, if valid, would have meant there was no equity in the property. Walden confronted Smith, informed him of what the title search had revealed, and demanded substitute collateral. The facts are disputed as to whether Smith informed Walden that one of the mortgages had been paid in full and that the title search was incorrect. However, the undisputed facts establish that Smith remained silent, knowing that Walden had not recorded her deed to the Florida condominium and that he had a sales contract pending on the condominium, a contract that would net him approximately $28,000 after all liens and expenses were paid. After examining the applicable law and the facts of this case, we conclude that the trial court erred in entering the summary judgment in favor of the Smith Children Trust on Walden's claim alleging fraudulent suppression. As to her conspiracy claim, Walden contends that Caspari and Hugh Smith conspired to establish and maintain sham trusts in order to hinder, delay, or defraud Smith's creditors. The record indicates that Walden failed to present substantial evidence creating a genuine issue of material fact as to this claim. Accordingly, the trial court properly entered the summary judgment for the Smith Children Trust on Walden's conspiracy claim. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. [1] The title search revealed two mortgages on the property, one securing a debt of $80,000 and the other securing a debt of approximately $84,000. According to Smith, the first mortgage was satisfied by funds derived from the second mortgage. [2] The handwritten document signed by Smith and given to Walden states: "I hereby assign to Willadean Walden $50,000 in the proceeds from the sale of Danya Park Apartments, Prattville, Alabama, sale to be consummated within the next 24 months or(?) whichever is sooner. "This collateral takes the place of collateral earlier granted to W. Walden at Sandpiper Cove, Destin, Fla." Smith has not sold the apartment complex, and, because of pending federal litigation, the complex cannot be listed on the market. [3] It appears that Smith had put the Florida property on the market and had had a sales contract pending when Walden confronted him.

November 3, 2000

f0d8a926-f311-44ea-a3e1-2cb2e0ea68cd

AMERICAN COMMERCIAL BARGE LINE COMPANY v. Roush

793 So. 2d 726

1990952

Alabama

Alabama Supreme Court

793 So. 2d 726 (2000) AMERICAN COMMERCIAL BARGE LINE COMPANY and American Commercial Barge Line LLC v. Allen Chase ROUSH. 1990952. Supreme Court of Alabama. October 20, 2000. Rehearing Denied March 30, 2001. *727 Brian P. McCarthy and Karen Pailette Turner of McDowell, Knight, Roedder & Sledge, L.L.C., Mobile, for appellants. James B. Newman of Helmsing, Leach, Herlong, Newman & Rouse, Mobile, for appellee. MADDOX, Justice. The plaintiffs American Commercial Barge Line Company and American Commercial Barge Line LLC (hereinafter jointly referred to as "ACBL") sued Allen Chase Roush for indemnification for "maintenance" and "cure" payments ACBL had made to its employee Roy Hester. ACBL made those payments to Hester because Hester, who had been a passenger in an automobile driven by Roush, was injured in an accident while en route to his vessel. Roush moved to dismiss the action, arguing that Alabama law did not recognize a right of indemnity for maintenance and cure payments in the absence of a contractual or statutory right. The trial court granted that motion. ACBL appeals. For the reasons discussed below, we reverse and remand. ACBL employed Hester in various capacities as a seaman from 1972 until his death in 1998. On October 31, 1996, ACBL assigned Hester to the M/V Christian Brinkop, as its captain. The vessel was located at that time in Greenville, Mississippi. Hester set off from Mobile for Greenville as a passenger in Roush's automobile. Before even making it out of Mobile, they were involved in an automobile accident. As a result of that accident, Hester suffered injuries that prevented him from taking command of the Christian Brinkop. He was unable to work from the date of the accident until his death. During that period, ACBL paid $76,275.84 in "maintenance" and $64,708.82 in "cure." On October 27, 1999, ACBL filed this action against Roush, alleging that Roush had negligently or wantonly caused the automobile accident in which Hester was injured. Further, ACBL alleged that it had not been at fault in any way in regard to the automobile accident and, thus, it argued that it was entitled to indemnification from Roush for the amount of the maintenance and cure payments it made to Hester. Roush moved the trial court to dismiss the action, arguing that Alabama law did not recognize a cause of action for indemnification of maintenance and cure payments. In addition, Roush argued, even if Alabama law did recognize such a cause of action, ACBL's action was barred by the statute of limitations because ACBL had filed it more than two years after the date of the accident. The trial court dismissed the action. ACBL appealed. It is well settled that a seaman injured in the service of his ship is entitled to benefits for maintenance and cure from his employer, regardless of fault. That obligation of the employer is "[a]mong the most pervasive incidents of the responsibility anciently imposed upon a shipowner." Aguilar v. Standard Oil Co., 318 U.S. 724, 730, 63 S. Ct. 930, 87 L. Ed. 1107 (1943). "Maintenance" is the right of a seaman to payment by his employer for food and lodging if he is injured or becomes ill while in the service of his ship. Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 527, 58 S. Ct. 651, 82 L. Ed. 993 (1938). "Cure" is the right of a seaman to payment by his employer for medical expenses, Vella v. Ford Motor Co., 421 U.S. 1, 5, 95 S. Ct. 1381, 43 L. Ed. 2d 682 (1975); that right continues until the seaman reaches "maximum cure," Farrell v. United States, 336 U.S. 511, 513, 69 S. Ct. 707, 93 L. Ed. 850 (1949). Maintenance and cure are available to a seaman *728 who is injured on land, as well as at sea, if the injury may be deemed to have occurred in the service of the seaman's ship. See generally Charles L. Black, Jr., and Grant Gilmore, The Law of Admiralty, §§ 6-7, -8 (2d ed.1975). Courts have held that a seaman injured on land while traveling to his ship, as is the case here, may recover maintenance and cure. See Aguilar v. Standard Oil Co. of New Jersey, supra, and Farrell v. United States, supra (in both cases seamen injured while returning to their ships from shore leave were entitled to receive maintenance and cure). An initial question we must address concerns the body of law applicable. In short, is this case governed by maritime law or by the law of Alabama? ACBL argues that this case is governed by maritime law, and we agree. We note that at least one court has held that maritime law does not apply in a similar situation. In Jones v. Waterman Steamship Corp., 155 F.2d 992 (3d Cir. 1946), a seaman was injured when he fell into a ditch while crossing a pier immediately after leaving his ship. The United States Court of Appeals for the Third Circuit held that the seaman's employer would have a cause of action against a third party who owned the property on which the ditch was located, but that the cause of action would be based on state law. The court wrote: "Under the decisions of the American courts there is no doubt that Waterman's cause of action does not lie within the purview of the maritime law." 155 F.2d at 997, n. 3. However, the court provided no substantive analysis explaining its conclusion, and Professors Grant Gilmore and Charles L. Black state that the Third Circuit's holding placed it in the minority of courts that have considered similar cases. They write: Gilmore and Black, supra, § 6-8, p. 319 (footnotes omitted). Gilmore and Black also note that at least one court has implicitly rejected Waterman's conclusion that state law applies. See Gilmore and Black, p. 319 n. 89, citing Richardson v. St. Charles-St. John the Baptist Bridge & Ferry Auth., 284 F. Supp. 709 (E.D.La. 1968). Further, they note: "In all the other cases the judges have assumed without discussion that state law is irrelevant." Id. Our holding in Sheffield v. Owens-Corning Fiberglass Corp., 595 So. 2d 443 (Ala. 1992), is consistent with Gilmore and Black's conclusion. In that case, we held: Id. at 447. This indemnity action arises out of the shipowner's payment of maintenance and cure to the injured seaman, Hester. Therefore, in light of this Court's analysis in Sheffield, and in light of the other authorities discussed above, we conclude that maritime law applies in this case. But see Diamond Blue Charter, Inc. v. Wolfin, 518 So. 2d 467 (Fla.Dist.Ct.App.1988) (shipowner not entitled to indemnification by third-party tortfeasor, where seaman was injured in automobile accident; court held maritime law did not apply, and Florida law did not allow indemnification). State courts have concurrent jurisdiction with federal courts over cases involving maritime law, and when a maritime action is brought in a state court the state court must apply the principles of maritime law. Continental Cas. Co. v. Canadian Universal Ins. Co., 605 F.2d 1340 (5th Cir.1979). Mindful of that rule, we must determine whether maritime law provides for the indemnification ACBL seeks. We recognize that there is not complete agreement among the federal circuit courts that have considered the question whether a shipowner may be awarded indemnification against a third-party tortfeasor who is not bound by any kind of contractual relationship with the injured seaman or the shipowner. The United States Court of Appeals for the Ninth Circuit has held that a shipowner does not have a right of indemnification in such a situation. United States v. Gallagher, 467 F.2d 1103 (9th Cir.1972). Despite the Ninth Circuit's conclusion, we believe the better analysis to be that applied by the United States Courts of Appeals for the Second and Fifth Circuits. The Fifth Circuit has held that a "shipowner may recover those payments from a third-party whose negligence partially or wholly caused the seaman's injury." Bertram v. Freeport McMoran, Inc., 35 F.3d 1008, 1013 (5th Cir.1994). The Second Circuit has reached the same conclusion. In Black v. Red Star Towing & Transportation Co., 860 F.2d 30 (2d Cir. 1988), a seaman employed on a tugboat was injured when a ladder that he was climbing gave way. Mobil Oil Corporation ("Mobil") owned the ladder and the pier to which the ladder was attached. In the litigation that ensued, the trial court held that the seaman's employer was not entitled to be indemnified by Mobil. On appeal, the Second Circuit noted that the seaman's employer and Mobil had no contractual relationship, and the court rejected the employer's theory that it should be allowed recovery under an implied-contract theory. However, the court concluded that the employer was nonetheless entitled to a recovery in equity. See also Amerada Hess Corp. v. Owens-Corning Fiberglass Corp., 627 So. 2d 367, 370 (Ala. 1993) (quoting from Restatement (Second) of Torts § 886B (1977): "`The basis for indemnity is restitution, and the concept that one person is unjustly enriched at the expense of another when the other discharges liability that it should be his responsibility to pay.'"). With regard to the question whether ACBL's indemnification claim is barred by the statute of limitations, we note that in an action seeking indemnification the limitations period does not begin to run until liability has become fixed. See Central Rivers Towing, Inc. v. City of Beardstown, 750 F.2d 565 (7th Cir.1984); see also *730 United States Lines, Inc. v. United States, 470 F.2d 487 (5th Cir.1972); and Alabama Kraft Co. v. Southeast Alabama Gas Dist., 569 So. 2d 697, 700 (Ala.1990). The date the cause of action accrued, then, depends on when the liability became fixed. That is a fact question for the trial court to address on remand. ACBL's complaint states a claim cognizable under maritime law, and the record does not indicate that that claim is barred by the statute of limitations. Accordingly, the judgment of dismissal is reversed and the case is remanded. REVERSED AND REMANDED. HOOPER, C.J., and COOK, BROWN, and JOHNSTONE, JJ., concur. LYONS, J., recuses himself.

October 20, 2000

cc73c9ed-4ef6-4930-8cb8-526208daa207

Lackey v. Central Bank of the South

710 So. 2d 419

1961174

Alabama

Alabama Supreme Court

710 So. 2d 419 (1998) Catherine LACKEY v. CENTRAL BANK OF THE SOUTH. 1961174. Supreme Court of Alabama. February 13, 1998. *420 Norman J. Gale, Jr., of Clay, Massey & Gale, P.C., Mobile; and Patrick H. Sims and Benjamen T. Rowe of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Mobile, for appellant. Michael L. Edwards, Gregory C. Cook, and Teresa G. Minor of Balch & Bingham, L.L.P., Birmingham; and Stephen R. Windom of Sirote & Permutt, Mobile, for appellee. MADDOX, Justice. In October 1991, Catherine Lackey and her husband, James Lackey, purchased a one-year certificate of deposit ("CD") from Central Bank of the South.[1] The CD carried an interest rate of 5.875%. The "certificate of deposit disclosure statement" that accompanied the CD provided that the CD would be "automatically renewed unless the bank sends written notice to the contrary." In October 1992, before the Lackeys' CD had matured, Central Bank sent them a "maturity renewal notice" form. That form contained the following language: The form also had a blank for the renewal interest rate, but Central Bank did not complete that line. Ultimately, Central Bank informed the Lackeys that the new interest *421 rate for the CD would be 3.55% and that if they were dissatisfied with the renewal terms, they could redeem the CD, without penalty. Catherine Lackey sued Central Bank, alleging that the Bank's renewal of the CD at 3.55% constituted a breach of contract. She brought the action on behalf of a putative class of Central Bank CD customers, claiming that these other customers had suffered a similar injury. Initially, the trial court granted Mrs. Lackey's motion for class certification, and this Court refused to grant two mandamus petitions filed by Central Bank seeking to have the certification order overturned.[2] However, in March 1997, the trial court, after considering the parties' arguments and briefs, entered an order decertifying the class. The trial court concluded that, although the certificate of deposit disclosure statement unambiguously stated that the CD would be renewed under its original terms unless Central Bank provided notice to the contrary, Central Bank's renewal notice form was ambiguous. Specifically, the trial court determined that the renewal notice form could reasonably be read as providing notice that Central Bank intended to renegotiate the terms of the certificate of deposit, thereby satisfying the notice requirement of the CD contract. In making this determination, the trial court noted that the renewal notice form told the customers that they would receive another notice explaining the renewal interest rate and noted that Central Bank had not filled in the blank provided for the renewal interest rate. To cure the ambiguity in the renewal notice form, the trial court concluded that extrinsic evidence, including testimony concerning how each customer had interpreted Central Bank's renewal notice form, would be admissible to determine the meaning of the renewal notice form. After determining that Central Bank could admit testimony as to how each individual customer had interpreted the renewal notice form, the trial court found that the need for individualized inquiry made class certification improper. Lackey challenges this decertification order. The decision to certify or not to certify a class action is reviewed under an abuse-of-discretion standard. See, e.g., Butler v. Audio/Video Affiliates, Inc., 611 So. 2d 330, 331 (Ala.1992) ("Certification of a class is within the trial court's discretion, and we will reverse a certification ruling only for an abuse of discretion."). Therefore, the issue in this case is whether the trial court abused its discretion when it determined that class certification was not proper for the breach of contract claim. After reviewing the trial court's decertification order and the record in this case, we conclude that the trial court did not abuse its discretion. The linchpin of Lackey's underlying breach of contract claim is the argument that Central Bank failed to provide the "notice to the contrary" referred to in the certificate of deposit disclosure statement and, therefore, that the CD should have been renewed under its original terms.[3] This argument in turn depends on the legal significance assigned to Central Bank's renewal notice form; if the renewal notice form constituted notice that Central Bank did not intend to automatically renew a customer's CD at the original interest rate, then Central Bank may have complied with its CD contract. For purposes of class certification, however, we are not concerned with the merits of Lackey's underlying claim. For purposes of this appeal, the critical issue is more narrow: whether extrinsic evidence will be admissible to determine how each individual class member interpreted the renewal notice form. *422 We agree with the trial court that the language contained in Central Bank's renewal notice form is ambiguous. Specifically, we believe that it is possible that a trier of fact could determine that the renewal notice form indicated that the renewal terms and interest rate would be modified if the certificate of deposit were renewed. Because the renewal notice form is ambiguous, parol evidence, including evidence of the way in which the parties to the contract interpreted the language of that form, will be admissible to determine its meaning. See, e.g., Hartford Acc. & Indem. Co. v. Morgan County Ass'n of Volunteer Firefighters, 454 So. 2d 960, 961 (Ala.1984) ("Once the court concludes the instrument is ambiguous or uncertain in any respect, determination of the true meaning of the contract is a question for the factfinder.... The surrounding circumstances, including the construction placed on the language by the parties, are taken into consideration in order to ascertain the intention of the parties."). We note that Lackey presents two arguments against admitting parol evidence to determine the meaning of the renewal notice form, assuming that that form was ambiguous. First, she contends that if the renewal notice form is ambiguous, it should be held ineffective as a matter of law, thereby negating any need for an individual inquiry into how each customer interpreted the form. We cannot agree with this argument. To support her argument, Lackey relies on Simmons Mach. Co. v. M & M Brokerage, Inc., 409 So. 2d 743 (Ala.1981). However, Simmons Machinery is inapposite to the present class certification dispute. That case involved the notice requirements of Article Nine of the Uniform Commercial Code, not the construction to be given to a notice such as is involved in the present case. We do not believe that Central Bank's renewal notice form was invalid as a matter of law. Lackey also asserts that, under the rule of contra proferentem, any ambiguity in the renewal notice form must be construed against Central Bank, the party that wrote the form. While Lackey has accurately described a rule of proper contract interpretation, that rule does not mandate class certification in this case. Instead, the rule of contra proferentem is generally a rule of last resort that should be applied only when other rules of construction have been exhausted. 3 Arthur L. Corbin, Contracts § 559 at 268-69 (1962); see also Molton, Allen & Williams, Inc. v. St. Paul Fire & Marine Ins. Co., 347 So. 2d 95, 99 (Ala.1977) (indicating that ambiguities must be interpreted against the party drawing the contract if the circumstances surrounding the contract do not make the terms clear). Therefore, we do not believe the rule of contra proferentem prohibits the admission of any extrinsic evidence in this case.[4] In summary, the way in which Lackey and other Central Bank customers interpreted the ambiguous renewal notice form is relevant to the issue whether Central Bank breached its CD contract; therefore, if Lackey's claim were certified as a class action, then the trial court could be confronted with testimony from literally thousands of customers regarding the way in which they each interpreted the renewal notice form. We cannot hold that the trial court abused its discretion by decertifying the class. See Ala. R. Civ. P. 23(b)(3). AFFIRMED. HOOPER, C.J., and SEE, J., concur. COOK, J., concurs in the result. SHORES and KENNEDY, JJ., dissent. HOUSTON and BUTTS, JJ., recuse themselves. [1] Central Bank of the South is now known as "Compass Bank." However, for purposes of this opinion, we will refer to this party as "Central Bank." [2] A more complete summary of the underlying facts and procedural history of this case may be found in Ex parte Central Bank of the South, 675 So. 2d 403 (Ala.1996), in which this Court refused to grant Central Bank's mandamus petition seeking to overturn the certification order but did modify the definition of the class. [3] For purposes of this appeal only, we have accepted the trial court's conclusion that the CD contract itself was unambiguous and required notice that the CD would not be automatically renewed at the original interest rate. However, we note that Central Bank contends that the CD contract did not unambiguously state that if the relevant CD is renewed it would be renewed under the original terms. [4] Lackey also argues that class certification is proper in this case pursuant to Kleiner v. First Nat'l Bank of Atlanta, 97 F.R.D. 683 (N.D.Ga. 1983). However, in Kleiner, the court specifically noted that neither side had asserted that the contractual provisions at issue were ambiguous. Id. at 693. Therefore, Kleiner is factually inapposite to the present case. In addition, the court in Kleiner noted that its decision to certify the class may not have been supported by other federal decisions. Id. at 692-93.

February 13, 1998

3f8fe2ad-1e84-41da-8d9e-2a04fcd9ce5b

Ex Parte Blankenship

806 So. 2d 1186

1990982

Alabama

Alabama Supreme Court

806 So. 2d 1186 (2000) Ex parte Harold BLANKENSHIP and Louie Fryer. (Re C.S., a minor, who sues by and through her mother and next friend, R.S. v. Theodore L. Jackson[1] et al.) 1990982. Supreme Court of Alabama. November 3, 2000. Rehearing Denied June 8, 2001. Mark S. Boardman and Clay R. Carr of Boardman, Carr & Weed, P.C., Birmingham, for petitioners. Nat Bryan and Thomas M. Powell of Marsh, Rickard & Bryan, P.C., Birmingham, for respondent. HOOPER, Chief Justice. Harold Blankenship is a high-school band director, and Louie Fryer is a high-school principal. They are defendants in an action filed by C.S., a minor, through her mother. C.S. is a student at the school where the defendants Blankenship and Fryer work. The action seeks damages on the theory that Blankenship and Fryer should have prevented C.S. from leaving the school campus with a 19-year-old man who subsequently engaged in sexual intercourse with her. Blankenship and Fryer moved for a summary judgment on *1187 the ground that supervision of a student falls within the doctrine of discretionary immunity. The trial court denied the motion for summary judgment. Blankenship and Fryer now seek a writ of mandamus from this Court directing the Elmore Circuit Court to grant their motion for summary judgmentthey contend that they are entitled to a judgment based on the doctrine of discretionary immunity. The standard governing our review of an issue presented in a petition for a writ of mandamus is well established: Ex parte Edgar, 543 So. 2d 682, 684 (Ala. 1989). We grant the petition and issue a writ directing the trial court to enter a summary judgment for Blankenship and Fryer. This case arises from the statutory rape of C.S., a minor, by Jason Howard, age 19. Howard and C.S. were boyfriend and girlfriend and were members of the same marching band at a public high school in Elmore County. Neither was a student at that high school. Harold Blankenship, director of the marching band, knew that Howard was not a student at the school but allowed him to participate in the band because he believed Howard was a student at Oakdale High School, a private school in Montgomery that does not have a marching band. The evidence indicates that Howard actually had been a student at the Elmore County high school but had dropped out the previous February and that at the time of the statutory rape he was not attending a private school or any other school but was working full time. C.S., age 13, was an eighth-grade student at a junior high school. When C.S.'s parents learned of the romance, they asked Blankenship to keep the two apart. They were assured that the band members would be adequately supervised. However, after Blankenship gave this assurance to C.S.'s parents, the band participated in a trip to Troy to perform at a football game. The band stayed overnight at a hotel in Troy and returned to the Elmore County high school the following day. On the day of their return, Saturday, November 9, 1996, C.S. was supposed to spend the night with a girlfriend, C.W., who was also a participant with the band, rather than going home. C.S.'s parents had given C.S. permission to go home with her friend. When the band arrived at the school, the girls attempted to telephone C.W.'s parents, but they received no answer. They then attempted to contact C.S.'s parents, but could not. The girls then left with Howard and his brother, who had come to the high school to pick up Howard. When they left, another male, not identified in the record before us, was with the group. Howard, C.S., and C.W. left Howard's brother and the other male in Montgomery. Howard, C.S., and C.W. then returned to Elmore County. They stopped at a convenience store in Elmore County. At *1188 some point during the evening, Howard gave C.S. an engagement ring. Apparently, the couple had agreed nine days earlier to marry. The group went from the convenience store to another bandmember's house for a party. C.S. and Howard left C.W. at the party, and they drove to a secluded place and engaged in sexual intercourse.[2] Howard and C.S. returned to the party, where they roasted marshmallows and hot dogs and visited with their friends. Later, the girls found out that their parents were looking for them, and C., another girl at the party, drove them to C.W.'s house. C.W.'s father drove them to a police station because C.S.'s parents had reported that Howard had taken C.S. without their permission. The girls denied the events of the evening, claiming they had spent the time with C. On Monday, C.S. told her father what had really happened, and on Tuesday C.S. and her parents reported the incident to the police. C.S.'s parents acknowledge that it was the responsibility of students and their parents to make arrangements for students to get home after the trip. C.S.'s parents also acknowledge that they could have gone on the trip to Troy as chaperons. The complaint filed against Blankenship and Fryer states several claims alleging that Blankenship and Fryer failed to properly supervise both C.S. and Howard by allowing C.S. to leave the school grounds with Howard. Blankenship and Fryer moved to dismiss the plaintiff's claims against them, under a theory that their actions on November 9, 1996, were covered under the doctrine of discretionary immunity. C.S. countered this motion by arguing that the supervision of C.S. and Howard was ministerial. Specifically, she argued that Blankenship had no authority to allow Howard to participate in the band, because the Elmore County School Board had issued guidelines concerning participation in extracurricular activities. Those guidelines stated that a child could not participate in an extracurricular activity on a particular day if the child had not attended school for that entire day. C.S. argues that Howard was not a student, and, thus, did not meet the school board's requirement for participating in the band program. C.S. claims that this fact removes any discretion Blankenship may have had in allowing Howard to participate in the program. Even if he was a student at Oakdale, he still did not attend an Elmore County school during the day. The trial court denied Blankenship and Fryer's motion for summary judgment. Blankenship and Fryer ask this court to issue a writ of mandamus directing the trial court to enter a summary judgment in their favor, on the ground that their actions were protected by the doctrine of discretionary immunity. In a recent case, Ex parte Cranman, 792 So. 2d 392 (Ala.2000), Justice Lyons restated the rule governing "State-agent immunity": 792 So. 2d at 405. This restatement was adopted by our decisions in Ex parte Rizk, 791 So. 2d 911 (Ala.2000), and Ex parte Butts, 775 So. 2d 173 (Ala.2000). We review Blankenship and Fryer's claim of immunity by the standards set forth in Cranman. Blankenship and Fryer are protected under the doctrine of discretionary immunity because their actions occurred while they were discharging their duties in educating students. The decisions made by Blankenship and Fryer on November 9, 1996, were made while they were acting in their official capacities. C.S. argues that Blankenship and Fryer were performing a ministerial function because the Elmore County School Board had issued a policy concerning participation in extracurricular activities. Along with stating other requirements, the policy states: "It is the policy of the Elmore County Board of Education that a student must be present at school the entire day in order to participate in extracurricular activities that day, except for verifiable medical or legal appointments or prior approval from the school administration." C.S. argues that this policy leaves no room for deviation by either Blankenship or Fryer and that they were operating beyond their authority when they allowed Howard to participate in band activities. We disagree. This "evidence" does not tell us that the band director and the principal were without the authority to decide to offer this program to students not registered at their high school. It is apparent that participation in the marching band is not limited to students at the high school where the defendants work. C.S. herself was not a student of that high school when the incident occurred. She attended a junior high school in Elmore County and was subject to the policies of *1190 the Elmore County School Board. However, the policy C.S. relies on does not limit the discretion of a principal and a band director in allowing students who do not attend their high school or nonstudents to participate in extracurricular activities of that school. Nor is it clear that the policy adopted by the school board prohibits nonstudents or out-of-county students from participating in the band. One with 20/20 hindsight might question the wisdom of Blankenship and Fryer's decision to allow a person they thought was a student from a private school outside Elmore County to participate in the band activities and the wisdom of their failing to verify that he was a student at the private school he claimed to attend. State-agent immunity protects agents of the State in their exercise of discretion in educating students. We will not second-guess their decisions. The trial court abused its discretion in refusing to enter a summary judgment in favor of Blankenship and Fryer on the grounds of discretionary immunity. The trial court is directed to enter a summary judgment in favor of Blankenship and Fryer. PETITION GRANTED; WRIT ISSUED. MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. COOK, J., dissents. [1] Theodore L. Jackson was an Elmore County school system employee named as a defendant in the initial action. He was a defendant when the petition for the writ of mandamus was filed in this Court. However, he was dismissed with prejudice while this petition was pending, and is no longer a party in this action. [2] Howard subsequently pleaded guilty to consensual statutory rape and served two years of supervised probation.

November 3, 2000

5f3c4400-07ef-4282-a871-bccbfe3340bf

Ex Parte Lucas

792 So. 2d 1169

1990112

Alabama

Alabama Supreme Court

792 So. 2d 1169 (2000) Ex parte Leigh Ann LUCAS. (Re Leigh Ann Lucas v. State). 1990112. Supreme Court of Alabama. November 17, 2000. *1170 T. Jefferson Deen III and W. Lloyd Copeland of Clark, Deen & Copeland, P.C., Mobile, for petitioner. Bill Pryor, atty. gen., and Sandra J. Stewart, asst. atty. gen., for respondent. JOHNSTONE, Justice. This Court's opinion of July 28, 2000, is withdrawn, and the following opinion is substituted therefor. Leigh Ann Lucas was indicted for two counts of capital murder, violations of § 13A-5-40(15), Ala.Code 1975. Count I charged Lucas with intentionally causing the death of her two-and-one-half-year-old son "by inflicting multiple blunt force injuries and/or causing directly or indirectly the death of the child." Count II charged Lucas as follows: Lucas was tried before a jury. The jury acquitted Lucas of Count I, but found her guilty of Count II. The trial court sentenced Lucas to life imprisonment without parole. The Court of Criminal Appeals affirmed Lucas's conviction and sentence. Lucas v. State, 792 So. 2d 1161 (Ala.Crim. App.1999). After the Court of Criminal Appeals denied Lucas's application for rehearing and her Rule 39(k), Ala. R.App. P., motion, she petitioned this Court for a writ of certiorari, which we granted. Lucas contends that the trial court erred in denying her motion for a judgment of acquittal on Count II on the ground that the State failed to prove causation. Lucas contends that the evidence does not establish, as required by § 13A-2-5(a), Ala.Code 1975, that, but for Lucas's failure to seek medical treatment for her son, he would have survived. This opinion addresses the issue of whether the evidence establishes causationthat is, whether the evidence establishes, as required by law, that Lucas's failure to provide medical services "caused the death of the child," as alleged in the indictment. Alabama courts have recognized that, under common law, parents have a legal duty to secure medical treatment for their children. Ex parte University of South Alabama, 541 So. 2d 535 (Ala.1989); Osborn v. Weatherford, 27 Ala.App. 258, 170 So. 95 (1936). "`The omission or neglect to perform a duty resulting in death may constitute murder where the omission was willful and there was [a] deliberate intent to cause death....'" Albright v. State, 50 Ala.App. 480, 484, 280 So. 2d 186, 190 (1973), cert. denied, 291 Ala. 771, 280 So. 2d 191 (1973) (citations omitted). Section 13A-2-5(a), Ala.Code 1975, the statute governing causation in criminal cases, provides: Under this statute, Lucas can be held criminally liable for her son's death only if his death would not have occurred but for her failure to provide him with medical treatment. If the State did not introduce evidence that medical treatment would have saved or prolonged the child's life, then the State did not prove that Lucas's failure to provide the child with medical treatment actually caused, or resulted in, the child's death. The proof of causation essential to hold Lucas liable for her son's death in this case is analogous a fortiori to the proof of causation essential to hold a medical service provider liable in a civil medical malpractice case. If Lucas had promptly taken the child to the hospital but the medical service providers had not promptly treated the child, what proof of causation would be necessary to hold the medical service providers civilly liable for the child's death? Indeed, Lucas is one step further removed from the death than the medical service providers would be in an analysis of causation since her only breach of duty was not taking the child to the medical service providers. Moreover, because the case before us is a criminal prosecution, the burden on the State to prove causation is greater than the burden to prove causation in a civil malpractice action. "To prove causation in a medical malpractice case, the plaintiff must prove, through expert medical testimony, that the alleged negligence probably caused, rather than only possibly caused, the plaintiff's injury." University of Alabama Health Servs. Found. v. Bush, 638 So. 2d 794, 802 (Ala.1994) (emphasis added). In the absence of evidence that treatment of the sick patient by the defendant-doctor would have saved or extended the life of the patient, the defendant-doctor cannot be found to have caused the death of the patient. Smith v. Medical Ctr. East, 585 So. 2d 1325 (Ala.1991); Sasser v. Connery, 565 So. 2d 50 (Ala.1990); Harris v. Theriault, 559 So. 2d 572 (Ala.1990); and Peden v. Ashmore, 554 So. 2d 1010 (Ala.1989). In the case before us, the Court of Criminal Appeals held: 792 So. 2d at 1168. Through a preoccupation with the essential element of duty, this holding mistakenly discounts the essential element of causation. The crucial issue is not whether Lucas had a duty to provide her injured child with medical treatment or whether she breached that duty. The evidence is sufficient to establish that Lucas, as the child's mother, at some point owed a duty to seek medical treatment for her child. The evidence is arguably sufficient to establish that, at some point, Lucas breached her duty by failing to seek medical treatment sooner than she finally sought it. The compelling issue on the merits before this Court, however, is whether the evidence establishes that Lucas's breach of duty caused her son's death. Does the evidence establish that but for Lucas's failure to seek prompt medical treatment for her son, her son's life would have been saved or extended? See § 13A-2-5(a). Neither the emergency room pediatrician, Dr. Marsha Raulerson, nor the forensic pathologist, Dr. Leroy Riddick, testified that the child would have lived or lived longer if he had received medical treatment promptly after he was battered. *1172 They were the State's only medical experts. Dr. Raulerson testified that, after she determined that the child had been physically abused, she notified the police and visited Lucas's home with the police. (R. 23.) She testified that, upon viewing the child's room, she noticed some "vomited blood and vomited [bile]" on his sheets and on a towel, and on the basis of her observations of the vomited "green [bile]," she believed the child suffered from an "abdominal obstruction." (R. 1025.) When the prosecutor asked Dr. Raulerson about her experience in treating children with internal injuries, the following exchange occurred: (R. 1026-27.) Although Dr. Raulerson testified that she had treated children who had ruptured appendices, which cause the same symptoms and pain as a ruptured bowel, she did not testify that those children survived longer or survived at all. (R. 1027.) Most notably, she never testified that, had Lucas's son received medical treatment promptly after he was injured, he would have lived any longer than he did. Dr. Leroy Riddick, the forensic pathologist, testified that Lucas's son died from multiple blunt force injuries and that the most fatal injury was the injury to his abdomen. (R. 1268, 1272.) Dr. Riddick testified that a ruptured abdomen would not cause immediate death. (R. 1294.) However, when the prosecutor asked Dr. Riddick whether the child would have lived if he had received medical treatment the day after his injuries were inflicted, Dr. Riddick answered that, because he deals only with dead bodies, not living persons, he had no opinion on whether the child would have survived. (R. 1306.) Although Dr. Riddick testified that the appropriate treatment for the child's ruptured bowel "would have been to find out what was going on inside the abdomen either through X-rays and then surgery and then if it had perforated at that time, put the bowel back together," he never testified that this course of treatment would have prolonged or saved the child's life in this case. (R. 1306-07.) The State argues that, if the direct evidence does not prove causation, nonetheless the circumstantial evidence proves causation. However, Ex parte Bailey, 590 So. 2d 354, 359 (Ala. 1991) (quoting Ex parte Mauricio, 523 So. 2d 87, 94 (Ala.1987)). See also Howard v. Mitchell, 492 So. 2d 1018 (Ala.1986). Thus the record does not contain evidence tending to prove that, but for Lucas's failure to seek prompt medical treatment for her injured son, he would have survived, or survived longer. Accordingly, the State failed to prove the essential element of causation. The State's evidence on its theory that Lucas battered the child to death does not supply proof of causation, as the jury acquitted Lucas on Count I charging that she battered the child to death, and Count II does not accuse her of battering the child to death. Consequently, the trial court erred in denying Lucas's motion for a judgment of acquittal on Count II, and the Court of Criminal Appeals erred in affirming the judgment of the trial court. Therefore, the judgment of the Court of Criminal Appeals is reversed and this cause is remanded for that court to instruct the trial court to enter a judgment of acquittal. OPINION OF JULY 28, 2000, WITHDRAWN; OPINION SUBSTITUTED; APPLICATION OVERRULED; REVERSED AND REMANDED. HOUSTON, COOK, SEE, LYONS, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX and BROWN, JJ., dissent. HOOPER, Chief Justice (dissenting). On July 28, 2000, I concurred in the opinion reversing the judgment of the Court of Criminal Appeals. After reviewing the State's application for rehearing, I have changed my mind. I respectfully disagree with this Court's interpretation of the facts, its application of the law, and its judgment of reversal. The State presented direct evidence concerning the condition of the child injured in this case. The relevant facts of the case at bar are: the child had been physically abused;[1] the child had sustained an abdominal injury 24 to 48 hours before the hospital examination; the child had died one and one-half to two hours before the hospital examination of the child's body; the child had not eaten anything before the hospital examination;[2] there were blood and bile stains on the child's bed and a puddle of blood under the bed; and the child had not been able to walk, or had walked with a limp, the day before the hospital examination.[3] It is true that there was no testimony from a doctor stating: "This child would have lived if he had been seen by a doctor." However, a doctor did say that the *1174 proper course of treatment for an injury of the magnitude that this child suffered would have been surgery. The statute relevant to this case reads: § 13A-2-5(a), Ala.Code 1975. The record shows that this child needed surgery but was never taken to a doctor; the mother passed up the opportunity to correct his problem. Therefore, the mother's conduct in failing to seek medical help for her child, who was near death, resulted in his not receiving the medical attention he needed to avoid death. The jury assessed the evidence, both direct evidence and circumstantial evidence, and decided that the mother had not beaten the child to death (Count I). Instead, the jury determined that her son died because she failed to seek medical attention (Count II). Bone v. State, 706 So. 2d 1291, 1300 (Ala. Crim.App.1997) (quoting Underwood v. State, 646 So. 2d 692, 695 (Ala.Crim.App. 1993)). Mack v. State, 736 So. 2d 664, 675 (Ala. Crim.App.1998). After the jury had reviewed all direct evidence and circumstantial evidence, it found that Lucas had caused the death of her son by neglecting to seek medical attention. The majority states in its opinion: *1175 (Emphasis added in the majority opinion.) (Citations omitted.) The majority suggests, by quoting this language, that the evidence in this case presented "[m]ere possibility, suspicion or guesswork." However, this language more accurately supports the conclusion that the jury considered circumstantial evidence and properly determined that Lucas was guiltythus, it supports the judgment of the trial court and the judgment of the Court of Criminal Appeals. A criminal proceeding differs from a civil proceeding. The majority has compared this case to a civil medical-malpractice case in which a party seeking to impose liability on a physician must present as a witness another doctor to testify that the defendant physician did not meet the standard of care. Therefore, in a criminal case involving a layman parent as the defendant, does the State, seeking to impose liability, need only to present another parent as a witness to testify as to what he or she would have done in a similar situation? We do not have the layperson testify as to the duty of care in a medical-malpractice proceeding; accordingly, we should not require that a doctor testify as to the duty of a parent in a criminal proceeding involving the question when medical help should be sought. A jury can, and a jury did in this case, make such a determination. In other words, the doctor's testimony in this case was not essential to a finding by the jury that the mother's delay in seeking medical treatment caused her child's death. The evidence was sufficient to support the jury verdict finding Lucas guilty of the charge stated in Count II of her indictment. Therefore, I would affirm the judgment of the Court of Criminal Appeals. [1] The child had bruises and abrasions on his body, including his stomach, leg, neck, chest, buttocks, and head (R. 915, 1016-18, 1022, 1248-52); his ribs were protruding through his chest and the area around his ribs was bruised (R. 1251, 1264-65); his left arm was broken (R. 1259-60, 1290); and he had "red dots" around one of his eyes (R. 915). [2] The mother testified that the child was fed doughnuts, Gatorade, etc., just before his death. Dr. Marsha Raulerson, an emergency room pediatrician, attempted to empty the child's stomach, but she found only airno doughnuts or other food. (R. 1022-23) [3] There was conflicting testimony concerning the child's ability to walk. However, an appellate court must view the evidence in a light most favorable to the State when it is reviewing a judgment based on a jury verdict of guilty. The mother should have known that there was an obvious problem with her son's ability to walk.

November 17, 2000

a65075a6-ea9c-4a9f-a7b7-c2812b544c7b

Ex Parte Alabama Bd. of Exm'rs in Counseling

796 So. 2d 355

1990777

Alabama

Alabama Supreme Court

796 So. 2d 355 (2000) Ex parte ALABAMA BOARD OF EXAMINERS IN COUNSELING et al. (Re Theron Michael Covin v. Alabama Board of Examiners in Counseling et al.) 1990777. Supreme Court of Alabama. November 3, 2000. Rehearing Denied February 23, 2001. Bill Pryor, atty. gen., and Robert D. Tambling, asst. atty. gen., for petitioners. Jim L. Debardelaben of Debardelaben, Norwood & Westry, P.C., Montgomery, for respondents. SEE, Justice. The Alabama Board of Examiners in Counseling[1] suspended Theron Michael Covin's professional counselor's license; because of that suspension, Covin sued the Board and four of its seven members, in both their official and individual capacities (hereinafter the Board and the individual members are referred to collectively as the *356 "Board"). The Board moved for a summary judgment; the trial court granted the motion and entered a summary judgment for the Board. The Court of Civil Appeals reversed the summary judgment, holding that Ala.Code 1975, § 34-8A-3(6), exempts Covin from the Board's authority, and, thus, that the Board does not have subject-matter jurisdiction over him and therefore lacks the authority to discipline him. This Court granted the Board's petition for certiorari review. We reverse and remand. The Board received several complaints about Covin, a licensed professional counselor, and brought administrative disciplinary proceedings against him. After conducting a hearing, the disciplinary-hearing officer found Covin guilty of a number of the charges against him and recommended that his license be suspended for six months. The Board adopted the hearing officer's findings of fact and conclusions of law, but ordered that Covin's license be suspended for a full year. Covin filed with the Board a notice of appeal, and, subsequently, filed in the Montgomery Circuit Court a complaint against the Board. Covin's complaint asserts both substantive and procedural challenges to the Board's decision, including a contention that the Board has no authority over his activities because he is a full-time counselor with a private, nonprofit corporation, and, thus, he says, exempted from the Board's discipline by Ala.Code 1975 § 34-8A-3(6). Covin also, pursuant to 42 U.S.C. § 1983, asserts a claim that the Board's actions deprived him of federal constitutional rights. The Board moved to dismiss Covin's complaint or, in the alternative, for a summary judgment. The trial court granted the motion for a summary judgment, concluding that Covin's proper remedy was to file a petition pursuant to the Alabama Administrative Procedure Act ("AAPA"), and because he had not done that, the trial court had no subject-matter jurisdiction over Covin's complaint. See Ala.Code 1975, § 41-22-20 (providing that a party who has exhausted all administrative remedies and who is aggrieved by an agency's final decision in a contested case may seek judicial review by filing a petition for judicial review in the circuit court). The trial court stated that, if it were to review the Board's decision, it would find that Covin is subject to the Board's jurisdiction. Covin appealed the trial court's summary judgment to the Court of Civil Appeals, which reversed and remanded. See Covin v. Alabama Board of Examiners in Counseling, 712 So. 2d 1103 (Ala.Civ.App. 1998). The Court of Civil Appeals concluded that the trial court erred in holding that it lacked subject-matter jurisdiction to consider Covin's complaint, because, the Court of Civil Appeals held, Covin's complaint fulfilled the AAPA's requirements for a petition for judicial review, and, thus, properly invoked the trial court's subject-matter jurisdiction. The Court of Civil Appeals also held that Covin was not precluded from raising his § 1983 claims in the same proceeding in which he sought judicial review of the Board's decision. On remand, the Board again moved to dismiss, or, in the alternative, for a judgment on the pleadings. On December 18, 1998, the trial court denied that motion because, it reasoned, Covin, as a counselor employed by a private, nonprofit corporation, was excluded from the constraints of Ala.Code 1975 § 34-8A-1 et seq.[2] See *357 § 34-8A-3(6). Thus, the trial court held, the Board had no authority to discipline Covin. The Board moved the trial court for a "reconsideration" and asked the trial court to withdraw its order. The trial court,[3] after holding a hearing, but without explanation, entered a summary judgment in favor of the Board as to all claims made in Covin's complaint. Covin again appealed to the Court of Civil Appeals, which reversed and remanded. See Covin v. Alabama Board of Examiners in Counseling, 796 So. 2d 353 (Ala.Civ.App.1999). Covin raised two issues on appeal: first, whether the Board has authority over him, and, second, whether the Board and the members are entitled to immunity from suit. The Court of Civil Appeals concluded that the evidence is undisputed that Covin worked as a counselor for the Center for Counseling and Human Development, Inc., a private, nonprofit organization, and that "[t]he charges levied against [him] relate to his employment with the Center for Counseling and Human Development." 796 So. 2d at 354. The Court of Civil Appeals held that the plain language of § 34-8A-3(6) exempts Covin from the Board's authority, and, thus, that the Board has no subject-matter jurisdiction over him and therefore lacks the authority to discipline him. The Court of Civil Appeals instructed the trial court to reinstate the December 18, 1998, order, thereby reversing the summary judgment entered by Judge McCooey. This Court granted the Board's petition for certiorari review. The Board argues that it did not exceed its statutory authority by suspending Covin's license. The Board maintains that the Court of Civil Appeals failed to consider certain material facts and incorrectly applied the licensure-exemption provision. Section 34-8A-3, Ala.Code 1975, provides in pertinent part: Specifically, the Board asserts that, even though this provision clearly exempts from the licensure requirement persons who are employed in the practice of counseling for a private, nonprofit organization,[4] the Board was authorized to discipline Covin by suspending his license because he had voluntarily sought and obtained a license from the Board and had thereby subjected himself to the Board's authority and its code of ethics. We agree. In support of its argument, the Board relies on Lehmann v. State Bd. of Public Accountancy, 208 Ala. 185, 186, 94 So. 94, 95 (1922), aff'd, 263 U.S. 394, 44 S. Ct. 128, 68 L. Ed. 354 (1923), where this Court stated that "[a] court of equity will not allow the complainant to enjoy the benefits or privileges conferred by [the licensure] statute without also bearing the burdens and inconveniences imposed by it." In Lehmann, a certified public accountant sought to enjoin the State Board of Accountancy from hearing charges against him and from revoking his license. This Court held *358 that the trial court correctly dissolved a temporary injunction that had been entered against the Board, because the bill contained no equity. 208 Ala. at 187, 94 So. at 96. This Court reasoned that the bill contained no equity because "obtaining the license ... is purely voluntary on [the accountant's] part." 208 Ala. at 187, 94 So. at 96. This case is analogous to Lehmann. Section 34-8A-3(6) exempts Covin from the licensure requirement, but he voluntarily sought and obtained a license from the Board. Because Covin voluntarily sought and obtained a license from the Board, he subjected himself to the Board's statutory authority. As this Court stated in Lehmann, a licensee may not enjoy the benefits of licensure, yet avoid the burdens that accompany that privilege. Therefore, we hold, the Board did have subject-matter jurisdiction over Covin and therefore did have the authority to discipline him. We hold that the Board did not exceed its statutory authority by suspending Covin's license.[5] Accordingly, we reverse the judgment of the Court of Civil Appeals holding that § 34-8A-3(6) exempts Covin from the subject-matter jurisdiction of the Board, and we remand the case for an order or proceedings consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. COOK, J., concurs in the result. [1] The Board was created by the Alabama Legislature in 1979, by Act No. 79-423, Ala. Acts 1979, codified at Ala.Code 1975, § 34-8A-1 et seq. [2] The provisions of Ala.Code 1975, § 34-8A-1 et seq., govern the Board's powers and duties relating to counselors. [3] Judge Tracy S. McCooey had at this time replaced Judge William Gordon on the Montgomery Circuit Court. [4] The evidence is undisputed that Covin worked full-time as a counselor for the Center for Counseling and Human Development, Inc., a private, nonprofit organization. [5] The Board argues that Covin's claims are barred by the doctrine of equitable estoppel. Specifically, it argues that Covin should be estopped from arguing that he is exempt from Ala.Code 1975, §§ 34-8A-1 et seq., because, in applying for his license, he represented that he was engaged in the private practice of counseling. This argument is moot because of this Court's conclusion that the Board did not exceed its statutory authority. The Board and its individual members also argue that they are immune to Covin's § 1983 claims. Because we conclude that the Board and the individual members did not exceed their statutory authority, we need not address the issue of immunity. We note, however, that the Board and the Board members, to the extent that they are sued in their official capacities, are not subject to suit under § 1983. See Hafer v. Melo, 502 U.S. 21, 25-26, 112 S. Ct. 358, 116 L. Ed. 2d 301 (1991); Wang v. New Hampshire Bd. of Registration in Medicine, 55 F.3d 698, 700 (1st Cir.1995) ("[I]t is well settled `that neither a state agency nor a state official acting in his official capacity may be sued for damages in a section 1983 action.'" (Citations omitted.)).

November 3, 2000

58d852f6-67f0-4ba3-80b0-58644de201f9

Nickolson v. Alabama Trailer Co., Inc.

791 So. 2d 926

1990697

Alabama

Alabama Supreme Court

791 So. 2d 926 (2000) Dova NICKOLSON, as administratrix of the estate of Michael Gene Nickolson, Jr., deceased v. ALABAMA TRAILER COMPANY, INC., et al. 1990697. Supreme Court of Alabama. November 17, 2000. Rehearing Denied February 23, 2001. *927 W. Lee Pittman of Pittman, Hooks, Dutton & Hollis, P.C., Birmingham, for appellant. *928 Stanley A. Cash and Philip R. Collins of Huie, Fernambucq & Stewart, L.L.P., Birmingham, for appellee Alabama Trailer Company, Inc. ENGLAND, Justice. Michael Gene Nickolson, Jr., was an employee of Alabama Power Company; he was killed in a work-related accident when some utility poles fell from a trailer. His wife, Dova Nickolson, as administratrix of his estate, sued the manufacturer of the trailer, Alabama Trailer Company, Inc., and three of Mr. Nickolson's coemployees, Charlie Harris, Nebraska Burnhart, and Fred Howard, alleging that the manufacturer and the coemployees were responsible for causing the accident that killed Mr. Nickolson. On September 13, 1999, Alabama Trailer moved for a summary judgment. The three individual defendants moved for a summary judgment on October 13, 1999. After hearing arguments on the motions for summary judgment, the trial judge granted the motions and entered a summary judgment for the company and a separate summary judgment for the coemployees. Ms. Nickolson appealed. We affirm in part, reverse in part, and remand. Michael Gene Nickolson, Jr., was an apprentice lineman with Alabama Power Company, working in Anniston. He was killed when utility poles rolled off the poleand-material trailer on which he was working. He was attempting to dislodge a pole tong that had become wedged between two utility poles that he had loaded on the trailer. He fell backwards off the trailer when the utility poles began to roll. One of the poles hit him in the chest, and the blow caused his death.[1] In her complaint, Ms. Nickolson alleged that Alabama Trailer had negligently or wantonly designed, manufactured, and/or sold the trailer involved in her husband's accident, and that Alabama Trailer's negligent or wanton conduct had proximately caused her husband's death. She also alleged that Alabama Power employees Harris, Burnhart, and Howard had breached a duty to provide her husband with a reasonably safe work environment and that their conduct had proximately caused his death. In determining whether a summary judgment was properly entered, this court applies the "substantial-evidence" rule. Under this rule, once the movant makes a prima facie showing that there is no genuine issue as to any material fact and that he is entitled to a judgment as a matter of law, the nonmovant must introduce substantial evidence to rebut this showing. Warehouse Home Furnishing Distribs., Inc. v. Whitson, 709 So. 2d 1144 (Ala.1997). Substantial evidence is "evidence of such weight and quality that fairminded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989). We examine the evidence in the light most favorable to the nonmovant, and we resolve all doubts against the movant. Cantrell v. North River Homes, Inc., 628 So. 2d 551, 553 (Ala.1993). Ms. Nickolson argues on appeal that the summary judgments were improper because, *929 she contends, the evidence before the trial court created genuine issues of material fact. See Rule 56(c), Ala.R.Civ.P. Ms. Nickolson claims that the trailer from which her husband fell was defective and unreasonably dangerous; that Alabama Trailer failed to warn her husband of the dangers associated with the use of the trailer; and thus that Alabama Trailer is liable under the Alabama Extended Manufacturer's Liability Doctrine. The trailer had been designed by Alabama Power Company. Alabama Trailer assembled the trailer pursuant to Alabama Power's specifications. Alabama Trailer argues that its assembly of the trailer was not "causally related" to the alleged defect because it had no input into the design of the trailer. The trial court held, based on Boyle v. United Technologies Corp., 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988), that a manufacturer, such as Alabama Trailer, who manufactures a product pursuant to specifications of a third party is not liable for defects in that third party's design. Ms. Nickolson argues that the trial court misapplied the law in Boyle by concluding that Alabama Trailer had no legal duty to review Alabama Power's plans and specifications for possible flaws. She says that she seeks to have Alabama Trailer held liable on the basis that it did not act as a responsible contractor in building the trailer. She claims that a trier of fact could reasonably find that Alabama Power overlooked a necessary safety measure (having stanchions inserted in the "bolster dogs"[2] when more than one tier of poles is loaded on the trailer), and that Alabama Trailer should be held liable because it never informed Alabama Power of the dangerous condition that would exist in the trailer as a result of the omission of stanchions. We have held: McFadden v. Ten-T Corp., 529 So. 2d 192, 200 (Ala.1988). (Citations omitted.) Thus, in order to defeat Alabama Trailer's motion for a summary judgment, Ms. Nickolson had to present substantial evidence indicating that the absence of stanchions made the specifications "so obviously dangerous that no competent contractor would follow them." Ms. Nickolson submitted expert testimony through the affidavit of Dr. Jeffrey H. Warren, who stated: Alabama Trailer contends that it did not know how Alabama Power intended to use the trailer, and, consequently, could not have seen a danger so obvious as to require it to deviate from Alabama Power's specifications. Ms. Nickolson's expert testified that a reasonable contractor would not have followed the plans and specifications without informing Alabama Power of the significant defect that would be created by the absence of stanchions. This testimony is sufficient to create a genuine issue of material fact as to whether the plans and specifications Alabama Trailer relied upon were so obviously defective that a reasonable builder would be put on notice that the product would be dangerous and would likely cause injury. Viewing the evidence in a light most favorable to Ms. Nickolson, we conclude that the trial court erred in entering the summary judgment in favor of Alabama Trailer. Ms. Nickolson claims that the coemployees Harris, Howard, and Burnhart had a duty to provide Mr. Nickolson with a safe workplace and that they willfully breached that duty; that they willfully failed to control the conditions, methods, and manner in which his work was performed; that they willfully or intentionally removed, or failed to repair, a guard and/or safety device; and that they willfully caused or allowed the trailer to be improperly loaded. She contends that willful conduct on the part of the three coemployees proximately caused her husband's death. Section 25-5-11(b), Ala.Code 1975, allows an employee or his estate to file an action against any person whose willful conduct causes personal injury to the employee. Section 25-5-11(c), Ala.Code 1975, defining "willful conduct," states in paragraph (1) that the term includes "[a] purpose or intent or design to injure another" and provides in that paragraph that "if a person, with knowledge of the danger or peril to another, consciously pursues a course of conduct with a design, intent, and purpose of inflicting injury, then he or she is guilty of `willful conduct.'" Bean v. Craig, 557 So. 2d 1249, 1252 (Ala. 1990). (Citations omitted.) Ms. Nickolson argues that the coemployee defendants' willful conduct is demonstrated by their "utter failure to supervise *931 Gene Nickolson and to provide him with a safe workplace." She concedes that these defendants' did not purposely set out, did not intend, and had no design, to injure or kill Mr. Nickolson; however, she argues that a reasonable person in these defendants' position would have known that injury or death was substantially certain to follow from their actions. She argues that they acted willfully by doing nothing to prevent the poles from rolling off the trailer; by not limiting the number of poles to be loaded on the trailer; by not putting stanchions into the bolster dogs; and by not instructing Mr. Nickolson never to climb on the trailer unless the poles were secured by straps. Although the evidence may suggest that these defendants appreciated the risk that a pole would roll off the trailer and cause injury, the record does not support a finding that they had "actual knowledge" or knew to a "substantial certainty" that injury would occur. The defendant Harris did not work with Mr. Nickolson on the day of the accident and was not at the site at the time of the accident. The defendant Burnhart did not work with Mr. Nickolson on the day of the accident, but arrived at the site just as the accident was occurring. The defendant Howard worked with Nickolson on the day of the accident and had worked with him for eight or nine months before the accident. He testified that he did not expect the poles to roll off the trailer. Because Ms. Nickolson did not present substantial evidence indicating that the coemployee defendants acted willfully, the trial court properly entered the summary judgment in their favor. We affirm the judgment in favor of the coemployee defendants; we reverse the judgment in favor of Alabama Trailer; and we remand the case for further proceedings. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, LYONS, BROWN, and JOHNSTONE, JJ., concur. SEE, J., concurs in part and dissents in part. SEE, Justice (concurring in part and dissenting in part). I concur in that part of the majority's opinion affirming the summary judgment in favor of the coemployee defendants. I dissent, however, from that part of the opinion reversing the summary judgment in favor of the defendant Alabama Trailer Company, Inc. The majority concludes that the plaintiff Ms. Nickolson presented substantial evidence "as to whether the plans and specifications Alabama Trailer relied upon were so obviously defective that a reasonable builder would be put on notice that the product would be dangerous and would likely cause injury." 791 So. 2d at 930. See also McFadden v. Ten-T Corp., 529 So. 2d 192, 200 (Ala.1988) (holding that a contractor "`is justified in relying upon the adequacy of the specifications unless they are so obviously dangerous that no competent contractor would follow them'") (emphasis added). I disagree with the majority's conclusion. In Casrell v. Altec Industries, Inc., 335 So. 2d 128, 133 (Ala.1976), this Court held that "a `defect' is that which renders a product `unreasonably dangerous,' i.e., not fit for its intended purpose." This Court explained that "[t]he important factor is whether [the product] is safe or dangerous when [it] is used as it was intended to be used." Casrell, 335 So. 2d at 133 (citation omitted). In this present case, the majority recognizes that the trailer, as designed *932 with bolster dogs, was safe if used to transport one tier of utility poles. The trailer became "defective" only when more than one tier of utility poles was stacked on it. Ms. Nickolson presented no evidence indicating that Alabama Trailer knew that Alabama Power Company intended to use the trailer to transport more than one tier of utility poles. Because no evidence indicated that Alabama Trailer knew the particular purpose for which Alabama Power Company intended to use the trailer, the defect in the plans and specifications for the trailer would not have been obvious to Alabama Trailer. Thus, Ms. Nickolson did not meet her burden of presenting substantial evidence to rebut Alabama Trailer's prima facie showing that there was no genuine issue as to any material fact. See Warehouse Home Furnishing Distribs., Inc. v. Whitson, 709 So. 2d 1144 (Ala.1997). Because I conclude that Ms. Nickolson did not present substantial evidence of an obviously dangerous design defect, I would affirm the summary judgment in favor of Alabama Trailer. [1] Alabama Power Company investigated the accident and completed a report regarding it. The report stated that the poles on the trailer had been originally 40'5" long and had weighed approximately 1,135 pounds each. The report states that the tops of the poles had been cut off and removed, so that some of the poles that fell from the trailer were 27'9" long and some of them were 31'2" long. [2] "Bolster dogs" helped keep the poles on the trailer. Ms. Nickolson contends that if devices called "stanchions" had been inserted in the bolster dogs, they would have prevented poles that were stacked above the first tier from rolling off the trailer after the securing straps were removed.

November 17, 2000

6fc0128e-c682-4b40-9b5d-fc7bb8f9df91

Ex Parte Davidson

782 So. 2d 237

1991008

Alabama

Alabama Supreme Court

782 So. 2d 237 (2000) Ex parte Roderick B. DAVIDSON. (Re Roderick B. Davidson v. Kimberly Ann Lewis f/k/a Kimberly Ann Davidson.) 1991008. Supreme Court of Alabama. October 13, 2000. *238 G. John Dezenberg, Jr., Huntsville, for petitioner. Barbara C. Miller, Huntsville, for respondent. BROWN, Justice. Roderick B. Davidson, who had been the defendant in a domestic-relations action in the Madison Circuit Court, petitions for a writ of mandamus directing Judge Loyd H. Little to set aside his orders entered in the action after November 12, 1999, and to refrain from exercising further jurisdiction over the modification petition filed in this case regarding custody of the parties' two minor children. Davidson (hereinafter referred to as "the father") contends that the postjudgment motion of Kimberly Ann Lewis ("the mother") was denied by operation of law, pursuant to Rule 59.1, Ala. R.Civ.P., on February 10, 2000; therefore, he claims, the trial judge had no authority to enter the orders it entered on February 18 and 29, 2000. Those orders (1) required him and one of the minor children to be tested and evaluated to determine the father's parenting skills and abilities, and (2) purported to reopen the modification proceedings to review alleged conflicts in the testimony of one of the minor children. We grant the petition. Roderick Davidson and Kimberly Lewis were divorced on November 22, 1991. By the divorce judgment, Davidson was awarded custody of parties' the two minor children, a daughter and a son.[1] On October *239 2, 1992, the mother filed a petition to modify the divorce judgment, seeking a change of custody from the father to the mother. On August 18, 1993, the trial court denied the petition. On July 7, 1998, the mother filed a second modification petition, again seeking a change of custody. The gist of the mother's petition was that a change of custody was warranted because, she alleged, the father was depriving the children of necessary medical care. The father counterpetitioned, claiming the mother was subjecting the children to unnecessary medical procedures and asking that the mother be ordered to pay child support, pursuant to the Child Support Guidelines set out in Rule 32, Ala.R.Jud.Admin. On July 15, 1998, the mother moved an order requiring the father to take a parenting-skills-assessment test. The court initially granted that motion, but on September 11, 1998, it set aside its order granting the motion and denied it. On October 12, 1999, the trial court entered a final judgment on the mother's modification petition and on the father's counterpetition. The court found that the minor children were being "properly and adequately cared for by their father." The court's order also set a visitation schedule and awarded the father child support, but it denied all other claims by the mother and the father. On November 12, 1999, the mother filed a motion to alter, amend, or vacate the October 12, 1999, judgment, pursuant to Rule 59(e), Ala.R.Civ.P.[2] On December 22, 1999, the trial court entered an order stating that it "finds that a substantial conflict exists in the evidence ... in part of the testimony offered by the minor child, [the son]." The trial court noted that the mother had filed several motions before the trial on her modification petition, seeking testing and evaluation of the minor children and the parents, and the trial court found that "upon further review of those motions filed by the [mother], the court is satisfied that it would have been proper to order such testing and evaluation." The trial court then ordered that the father and the minor son be tested and evaluated, providing also that "nothing contained in this order, at this time, modifies or changes any provision of the October 12, 1999, judgment," and that "The custody and visitation arrangements shall remain the same, as well as payment of child support and other financial obligations, pending further order of this court." On January 12, 2000, the trial court entered an amended order on the mother's postjudgment motion. That amended order provided for evaluation and testing of the father and the son by a counselor other than the one named in the December 22, 1999, order. The January 12, 2000, order also directed that the newly named counselor notify the court when his testing and evaluations were completed. The amended order again stated that "nothing contained in this order, at this time, modifies or changes any provision of the October 12, 1999, judgment." However, the trial court stated that "by entry of this order, the court is reopening the case for the taking of additional testimony from Dr. Preston at the appropriate time, as well as other testimony that the court may request or allow from other witnesses at a subsequent hearing." *240 February 10, 2000, was the 90th day after November 12, 1999the date the mother filed her motion to alter, amend, or vacate the judgment. On February 14, the father filed a motion asking the court to immediately terminate the proceedings, arguing that the mother's postjudgment motion had been denied by operation of law, pursuant to Rule 59.1, Ala.R.Civ.P., on February 10, 2000, and, thus, that the court was without jurisdiction to proceed further. On that same day, the father filed a petition for writ of mandamus in the Court of Civil Appeals, requesting that that court direct the trial court to set aside its orders entered after November 12, 1999. On February 18, 2000, the court entered an order on the father's motion, stating in effect that the court was awaiting a ruling of the Court of Civil Appeals on the father's mandamus petition. The court further stated that "this court assumed, perhaps erroneously, as contended by the [father], that this court retained jurisdiction of this child custody case." On February 22, 2000, the Court of Civil Appeals, without an opinion, denied the father's petition for a writ of mandamus. Ex parte Davidson (No. 2990497) ___ So.2d ___ (Ala.Civ.App.2000) (table). On February 28, 2000, the trial court ordered the father and the minor child to comply with its order of December 22, 1999, which required that they schedule appointments for evaluation and testing. On March 1, 2000, the father, acting pursuant to Rule 21, Ala.R.App.P., petitioned this Court for a writ of mandamus directing the circuit court to set aside its orders entered after November 12, 1999. We grant the petition. The writ of mandamus is a drastic and extraordinary remedy, to be issued only when there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Horton, 711 So. 2d 979, 983 (Ala.1998) (citing Ex parte United Serv. Stations, Inc., 628 So. 2d 501 (Ala. 1993)); Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala.1991) (citing Martin v. Loeb & Co., 349 So. 2d 9 (Ala.1977)). Moreover, "`[t]he right sought to be enforced by mandamus must be clear and certain with no reasonable basis for controversy about the right to relief,'" and "`[t]he writ will not issue where the right in question is doubtful.'" Ex parte Bozeman, 420 So. 2d 89, 91 (Ala.1982) (quoting Ex parte Dorsey Trailers, Inc., 397 So. 2d 98, 102 (Ala. 1981)). "[T]he question of subject matter jurisdiction is reviewable by a petition for a writ of mandamus." Ex parte Johnson, 715 So. 2d 783, 785 (Ala.1998) (citing Ex parte Alfa Mut. Gen. Ins. Co., 684 So. 2d 1281 (Ala.1996)). The filing of a petition to modify a domestic-relations judgment is, for purposes of applying the rules of procedure, treated as the filing of a separate action. Thus, the 90-day provision of Rule 59.1, Ala.R.Civ.P., applies to a motion to alter, amend, or vacate a final order entered on a petition to modify the child-custody provisions of a divorce judgment. See, e.g., Snow v. Snow, 531 So. 2d 921 (Ala.Civ.App. 1988). Rule 59.1, Ala.R.Civ.P., provides: "There are only two methods listed in Rule 59.1 for extending the 90-day period: (1) the express consent of all parties to an extension of the 90 day period, [and] (2) the grant of an extension of time by an appellate court." Farmer v. Jackson, 553 So. 2d 550, 552 (Ala.1989). Here, just as in Farmer v. Jackson, neither method was used to extend the period for ruling on the postjudgment motion. If a trial judge allows a postjudgment motion to remain pending and not ruled upon for 90 days, then the motion is denied by operation of law at the end of the 90th day and the trial judge then loses jurisdiction to rule on the motion. See, e.g., Ex parte Hornsby, 663 So. 2d 966, 967 (Ala.1995); see also Ex parte Caterpillar, Inc., 708 So. 2d 142, 143 (Ala.1997). The facts of this case closely resemble those in Farmer v. Jackson, supra. There, the trial court, in response to a postjudgment motion, and within 90 days after it had entered the judgment, entered an order by which it indicated it would "reconsider" its judgment. However, it did not, within the 90 days allowed by Rule 59.1, rule on the merits of the postjudgment motion and either grant it or deny it. This Court stated: 553 So. 2d at 552; see also Borders v. Borders, 702 So. 2d 147, 148 (Ala.Civ.App. 1997). In this present case, the trial court purported to reopen the case, in response to the mother's Rule 59(e) motion, but it did not, within 90 days, rule on the merits of that motion. Indeed, each of the trial court's orders entered after November 12, 1999, specifically stated that it did not change "any provision of the October 12, 1999, judgment." We must conclude that the mother's postjudgment motion was denied by operation of law on February 10, 2000, and that the trial court was without jurisdiction to enter any further order in this case after that date. All orders entered by the court pursuant to the mother's motion to alter, amend, or vacate the October 12, 1999, judgment are void. The circuit court is directed to set aside those orders and to enter no further orders in this case unless one of the parties files a new modification petition, in effect commencing a new action. PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and HOUSTON, SEE, and ENGLAND, JJ., concur. [1] When the modification petition now at issue was filed, the daughter was age 15 and the son was age 9. [2] A Rule 59(e) motion ordinarily must be filed within 30 days from the date of the judgment. The 30th day in this case was November 11 the Veterans Day holiday. Thus, the mother's motion filed on the 31st day was timely. See Rule 6(a), Ala.R.Civ.P.

October 13, 2000

42b76770-9de2-428d-a419-8a39c545e7d1

Okeke v. Craig

782 So. 2d 281

1990367

Alabama

Alabama Supreme Court

782 So. 2d 281 (2000) Ernest I. OKEKE, M.D. v. Donald CRAIG, as administrator of the estate of Ola Mae Craig, deceased. 1990367. Supreme Court of Alabama. November 9, 2000. Richard B. Garrett and John Peter Crook McCall of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellant. M. Clay Alspaugh of Hogan, Smith & Alspaugh, P.C., Birmingham, for appellee. LYONS, Justice. Dr. Ernest I. Okeke appeals, pursuant to Rule 5, Ala.R.App.P., from an order denying his motion to dismiss a complaint filed by Donald Craig, as administrator of the estate of Ola Mae Craig. We answer the question Dr. Okeke presented to us, and we remand the cause for further proceedings. Craig is the son of Ola Mae Craig ("the decedent"). He filed a wrongful-death action on July 21, 1999, against Dr. Okeke, alleging that Dr. Okeke had failed to diagnose his mother's cardiovascular disease. The decedent was under the medical treatment and care of Dr. Okeke from 1985 to 1995, with her last office visit occurring on July 17, 1995. Dr. Okeke prescribed medications for her through November 1995. She was diagnosed with end-stage cardiovascular disease at a time Craig described *282 as the "spring" of 1997, and she died on July 22, 1997. In his complaint, Craig alleges that medications prescribed by Dr. Okeke either caused cardiac injury or masked cardiac symptoms. Craig also alleges that these medications, along with a failure to "timely diagnose, refer to specialists, or treat" the decedent, caused her "untimely" death on July 22, 1997. In response, Dr. Okeke, on July 29, 1999, moved to dismiss Craig's complaint; the trial court denied his motion. On September 28, 1999, Dr. Okeke filed a renewed motion to dismiss the complaint. He argued that at the date of her death, any medical-malpractice claim by the decedent, based on Dr. Okeke's alleged negligence, would have been time-barred and, therefore, that any later claim alleging that a wrongful death had occurred because of that negligence is also barred. The trial court denied Dr. Okeke's motion, but concluded that it involved a controlling question of law as to which there is substantial ground for difference of opinion; that an interlocutory appeal would materially advance the ultimate termination of the litigation; and that the appeal would avoid protracted and expensive litigation. See Rule 5, Ala. R.App. P. This Court granted Dr. Okeke permission to appeal, pursuant to Rule 5. Dr. Okeke presented the following question for our review: Dr. Okeke's question is premised on the proposition that the decedent, at the time of her death, would have been time-barred from filing a medical-malpractice action against Dr. Okeke alleging the same malpractice Craig now alleges. Craig did not respond to Dr. Okeke's petition to appeal or to its statement of the question presented. We permitted the appeal in order to respond to the question. However, in his brief, filed after we had granted the petition for permission to appeal, Dr. Okeke argues additional issues. After presenting argument as to the question stated in his petition, Dr. Okeke argues the separate question whether the decedent's claims, in fact, would have been time-barred as of the date of her death. We granted the petition only as to the question stated in Dr. Okeke's petition. We therefore decline to respond to Dr. Okeke's attempt to convert the premise of the first question into a second issue. We answer only the question stated in the petition to appeal, and, in so doing, we assume, without deciding, that a malpractice claim the decedent might have filed against Dr. Okeke on the day she died would have been time-barred. Dr. Okeke contends, assuming that the decedent would have been barred from pursuing a medical-malpractice cause of action, that Craig, as administrator of her estate, is barred from pursuing a wrongful-death claim. This Court recently addressed this issue in Hall v. Teipie-Ching Chi, 782 So. 2d 218 (Ala.2000). In Hall, the decedent had undergone hip-replacement surgery, and the surgery had caused paralysis. Several months later, he died. The statutory limitations period for filing a medical-malpractice claim, based on the alleged malpractice that had caused the *283 paralysis, had not yet run on the decedent's claim at the time of his death. See § 6-5-482, Ala.Code 1975.[1] His wife, as personal representative of his estate, filed a wrongful-death action against the doctors who had performed the surgery, as well as other defendants. That action was not filed within two years of the alleged negligence, but was filed within two years of the death. The wife claimed that the defendants' acts and omissions constituted negligence, and that that negligence had caused her husband's death. The defendants argued that the malpractice claim alleged in the wrongful-death action should have been presented in an action filed within two years after the alleged malpractice had occurred. However, the wife filed her wrongful-death action within two years from the date of the decedent's death.[2] In Hall, we held that "if a decedent has a viable medical-malpractice claim at the time of his death, his personal representative has two years from the date of the death to file a wrongful-death claim based on the alleged malpractice."[3] 782 So. 2d at 222. Stated in the negative, if no viable medical-malpractice claim exists at the time of a person's death, then her personal representative cannot proceed with a wrongful-death action. We answer the question posed on interlocutory appeal in the affirmative: A wrongful-death action is barred by the statute of limitations if the decedent, on the date of her death, would have been time-barred from filing a medical-malpractice claim based on the medical malpractice that is alleged to have caused the death. However, because we have not considered the question whether the decedent's medical-malpractice claim, in fact, would have been time-barred, we remand the cause for further proceedings consistent with this opinion. QUESTION POSED BY THE INTERLOCUTORY APPEAL ANSWERED; REMANDED FOR FURTHER PROCEEDINGS. *284 HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] Section 6-5-482(a) states: "All actions against physicians, surgeons, dentists, medical institutions, or other health care providers for liability, error, mistake, or failure to cure, whether based on contract or tort, must be commenced within two years next after the act, or omission, or failure giving rise to the claim, and not afterwards; provided, that if the cause of action is not discovered and could not reasonably have been discovered within such period, then the action may be commenced within six months from the date of such discovery or the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier; provided further, that in no event may the action be commenced more than four years after such act...." [2] Section 6-5-410, Ala.Code 1975, the statute providing for a wrongful-death action, states: "(a) A personal representative may commence an action and recover such damages as the jury may assess ... for the wrongful act, omission, or negligence of any person, persons, or corporation ..., whereby the death of his testator or intestate was caused, provided the testator or intestate could have commenced an action for such wrongful act, omission, or negligence if it had not caused death. ". . . . "(d) Such action must be commenced within two years from and after the death of the testator or intestate." [3] In McMickens v. Waldrop, 406 So. 2d 867, 869 (Ala.1981), this Court held that the passage of the Alabama Medical Liability Act, which provides for medical-malpractice claims, did not affect the two-year limitations period of the wrongful-death statute, and that in adopting that Act the Legislature had not intended to affect "the right of a personal representative to bring an action for wrongful death within two years of the death of his `testator or intestate.'"

November 9, 2000

9f1bc13e-19fb-4094-b7fc-813d38e468f4

Union Fidelity Life Ins. Co. v. McCurdy

781 So. 2d 186

1981387

Alabama

Alabama Supreme Court

781 So. 2d 186 (2000) UNION FIDELITY LIFE INSURANCE COMPANY v. Norman McCURDY et al. 1981387. Supreme Court of Alabama. September 22, 2000. *187 Charles D. Stewart of Spain & Gillon, Birmingham; Pamela A. Moore of Carr, Alford, Clausen & McDonald, L.L.C., Mobile; and Davis Carr, Chicago, IL, for appellant. Barry A. Ragsdale of Ivey & Ragsdale, Birmingham; Clatus Junkin of Junkin & Harrison, Fayette; Randolph B. Walton of Walton, Ritchie & Green, L.L.C., Mobile; and Sarah Hicks Stewart, Mobile, for Norman McCurdy. Paul P. Bolus, Alycia K. Jastrebski, and Cathleen C. Moore of Burr & Forman, L.L.P., Birmingham, for amicus curiae American Council of Life Insurance. Kathleen Cobb Kaufman of Carr, Alford, Clausen & McDonald, L.L.C., Mobile, for amicus curiae Alabama Defense Lawyers Association. LYONS, Justice. The opinion of June 30, 2000, is withdrawn, and the following is substituted therefor. Union Fidelity Life Insurance Company ("Union Fidelity") appeals from the trial court's award of $915,000 in attorney fees to class counsel based on a class-action settlement in a case in which the evidence indicated that an extremely small percentage of the class would eventually claim the benefits of the settlement. In January 1996, Norman McCurdy, individually and on behalf of a class of all persons similarly situated, sued Union Fidelity *188 and others,[1] alleging fraud in the procurement of credit-life insurance by failing to disclose that premiums exceeded amounts allowed under Alabama law. In November 1996, this Court, in an unrelated proceeding, established the defendant's liability for such conduct. See McCullar v. Universal Underwriters Life Ins. Co., 687 So. 2d 156 (Ala.1996). After initial proceedings on class certification, the parties entered into a settlement agreement purportedly representing a class of nearly 104,000 individuals with claims averaging approximately $43 and providing a potential class recovery of $4.5 million.[2] Under the terms of the settlement, Union Fidelity agreed to pay reasonable attorney fees over and above the $4.5 million available to the class. The settlement provided that class counsel's attorney fees would be fixed by the trial court at a hearing subsequent to final approval of the settlement. Each party reserved the right to appeal the trial court's award of attorney fees. On December 9, 1999, the trial court preliminarily approved the settlement, before notice was given to members of the class. With regard to notice, Union Fidelity claimed that, because of the nature of its relationship with the class members, it did not have readily available each member's last known address. Union Fidelity asserted that developing a list of such addresses, while not impossible, would take "thousands of hours." We can find nothing in the record indicating that class counsel challenged this assertion. On January 20, 1999, some 4,080 individual notices of settlement were sent to class members who had previously given their addresses to Union Fidelity for unrelated reasons. On January 31 and February 7, 1999, the remaining approximately 100,000 class members were given notice of the pendency of the action and preliminary approval of the settlement through publication in 12 Alabama newspapers. Class members were given until February 23, 1999, to opt out of the settlement, and, if they did not, they had until June 14, 1999, to file a claim accompanied by the required documentation. On March 24, 1999, the trial court conducted a final fairness hearing on the proposed settlement and also heard evidence from both parties on the attorney-fee issue. During the hearing affidavits were filed indicating that, as of the date of the hearing, only 113 claims had been made, resulting in potential disbursements in the amount of $4,520.16. Nevertheless, with no objections having been presented and no one having opted out, the trial court gave the settlement final approval on April 1, 1999. The class members were notified that they could opt out of the settlement if they so chose, but that, in order to participate, they would have to submit a claim form along with supporting documentation. On April 15, 1999, the trial court conducted a hearing on determining a reasonable attorney fee and awarded class counsel a fee of $915,000. Union Fidelity appeals only the attorney-fee award. Abuse of discretion is the applicable standard for reviewing the trial court's award of an attorney fee. See Ex parte Horn, 718 So. 2d 694, 702 (Ala.1998); and Edelman & Combs v. Law, 663 So. 2d 957, 958 (Ala.1995). The issue before us is whether the trial court abused its discretion in awarding *189 $915,000 in attorney fees based primarily upon the common-fund theory, when attorney fees were not to be taken as a percentage of the class recovery, class notice was given primarily by publication, and only a minor percentage of the class had filed claims. Alabama recognizes the American Rule, which generally requires each party to pay its own attorney fees. See Horn, 718 So. 2d at 702. This rule applies to class actions when "the plaintiffs successful litigation confers `a substantial benefit on the members of an ascertainable class, and where the court's jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them.'" Hall v. Cole, 412 U.S. 1, 5, 93 S. Ct. 1943, 36 L. Ed. 2d 702 (1973) (quoting Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393-94, 90 S. Ct. 616, 24 L. Ed. 2d 593 (1970)). This Court has recognized that attorneys who recover an award for the class are entitled to a reasonable fee for their services. Edelman & Combs, 663 So. 2d at 958. When a class benefits through the use of Rule 23, Ala. R. Civ. P., the class generally bears the costs associated with the litigation, out of the proceeds collected through the litigation. Id. Where class counsel has provided a benefit to the class and an award of an attorney fee is appropriate, some courts have used a percentage of the common fund generated as the starting point for determining an appropriate attorney fee, see Edelman & Combs, 663 So. 2d at 959, while other courts have worked from a benchmark based on the number of hours expended, the so-called "lodestar," see Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir.1973). As we have said before, Alabama will look to federal law in interpreting this most complex area of litigation. Adams v. Robertson, 676 So. 2d 1265, 1268 (Ala.1995). However, we note that federal law is merely persuasive and a starting point for our evaluation. The trial court's award was based primarily on the common-fund theory, by which attorney fees in a class action are to be based on a reasonable percentage of the fund generated for the benefit of the class. Edelman & Combs, 663 So. 2d at 959. Normally, attorney fees paid under the common-fund theory are deducted from the amount recovered and are not an additional sum due from the defendant.[3] See Camden I Condominium Ass'n, Inc. v. Dunkle, 946 F.2d 768, 774 (11th Cir.1991) ("[A] key element of the common fund case is that fees are not assessed against the unsuccessful litigant (fee shifting), but rather, are taken from the fund or damages recovery (fee spreading)."). While this Court has held that the common-fund approach is the preferred method for calculating attorney fees in class actions, see Edelman & Combs, supra, the decision whether to apply the common-fund approach or the lodestar approach is within the trial court's discretion. See, e.g., Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir.2000). We must determine whether the common-fund *190 approach was appropriate in this case. Union Fidelity agreed to pay reasonable attorney fees separate from any amount paid to the class.[4] The $915,000 award constitutes just over 20% of what class counsel called the "common fund." This amount is well within the general guidelines set forth by this Court. See Edelman & Combs, 663 So. 2d at 961 (citing Reynolds v. First Alabama Bank of Montgomery, N.A., 471 So. 2d 1238 (Ala. 1985), for the general rule that sets attorney fees between 20% and 25% of the common fund). Union Fidelity argues that the trial court abused its discretion in applying the common-fund approach because, it says, no actual fund was created, and, therefore, it says the trial court should have used the lodestar method in determining the fees in this case. We do not find the existence of a separate fund determinative of the relevance of the common-fund approach. It is clear that Union Fidelity admitted liability for $4.5 million. A solvent company that agrees to pay reasonable attorney fees over and above the amount of an admitted liability should not, by failing to create an escrow account, forfeit the application, if only by analogy, of standards pertaining to computation of reasonable attorney fees based upon recovery of a common fund. See In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liability Litigation, 55 F.3d 768, 821 (3d Cir.1995) ("Courts have relied on `common fund' principles and the inherent management powers of the court to award fees to lead counsel in cases that do not actually generate a common fund."). Class counsel argue that they created a $4.5 million common fund for the benefit of the class. Specifically, they argue that Union Fidelity created an internal fund through which it intended to pay all claims made against the settlement. While provisions for establishing such a fund are not included in the settlement agreement, class counsel cite an interrogatory response in which Union Fidelity stated that a fund was created for this purpose. Union Fidelity, on the other hand, insists that its interrogatory response was a typographical error, and it filed affidavits indicating that no such fund was, in fact, created. Class counsel further argue that, under the common-fund approach, the attorney fees should be computed in light of the size of the potential recovery to the class, without regard to sums actually recovered by the class. Class counsel cite Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S. Ct. 745, 62 L. Ed. 2d 676 (1980), and City of Ozark v. Trawick, 604 So. 2d 360, 364 (Ala.1992), for the proposition that attorney fees should not be contingent upon the actual benefits paid to the class. In Boeing, class notice was primarily obtained by means other than publication.[5] In Trawick, there is no indication that publication was the primary means of notice.[6]Boeing and Trawick both turn on the conclusion that, once informed, each class member is free to make a conscious decision to forgo the benefits bestowed upon him or her as a member of the class. *191 See Trawick, 604 So. 2d at 364. We agree that an informed decision not to participate should not diminish the award to class counsel, because the benefit in such circumstances has actually been provided, and the class member has simply chosen not to reap the rewards due him or her. However, this case is very different from both Boeing and Trawick. Here, roughly 4% of the just over 100,000 class members received notice of the settlement by mail. The parties concluded that determining addresses for notice by mail to the other 96% of the class was too difficult and time-consuming. Therefore, notice to the remaining class members was effected through two-day publication in several Alabama newspapers. While notice by publication may have been the best notice practicable, its effect in this case produced results dramatically different from those obtained in Boeing and Trawick. Twenty percent of the admitted liability was disbursed to the class in Boeing. While the opinion in Trawick does not state the total amounts paid to the class, nearly 90% of the class members participated in the Trawick settlement. At the hearing on attorney fees in this case, the parties contemplated payment of less than 1% of the admitted liability.[7] Because of the extremely low percentage of participation, we simply do not have in this case the same level of confidence we had in Trawick that the absence of claims implies that class members made informed decisions not to participate in the settlement.[8] Thus, because of the extremely low percentage of participation, we cannot follow the general rule that normally applies in cases such as Boeing and Trawick, where the absence of participation was held not to affect the computation of a reasonable fee under the common-fund doctrine.[9] We therefore hold that, because the percentage of class participation was low enough to undermine the assumption of an informed decision, the trial court abused its discretion in basing attorney fees primarily on the common-fund approach. We further hold that, when a trial court is faced with such circumstances as are present in this case, it shall employ the lodestar analysis to determine appropriate attorney fees. However, because the trial court also buttressed its attorney-fee determination with the conclusion that it would arrive at the same fee based upon the lodestar analysis, we must review the trial court's consideration of an appropriate multiplier to be applied to the lodestar. The lodestar method relies heavily upon the time expended by class counsel. This method was adopted by the United States Court of Appeals for the Third Circuit as the preferred method for calculating attorney fees in class actions. Lindy Bros., supra. Under the lodestar approach, *192 the trial court must first determine the number of hours reasonably spent by class counsel on the matter, and then multiply those hours by a reasonable hourly rate. Goldberger, 209 F.3d at 47. Once this lodestar figure has been determined, the court can adjust it upward or downward, depending on a variety of factors, eventually arriving at a final fee. Id. This adjustment is called a multiplier. Id. In this case, the trial court added a multiplier of two under the lodestar method in order to justify the fee awarded. We review the reasonableness of such a multiplier under the circumstances of this case. In Peebles v. Miley, 439 So. 2d 137 (Ala.1983), this Court established several factors to be used in determining the reasonableness of an attorney fee. These same factors should be used to determine whether a multiplier is warranted when a court is calculating attorney fees in the class-action setting. See Edelman & Combs, 663 So. 2d at 960 (applying the Peebles factors generally to class actions). In Edelman & Combs, this Court listed the Peebles factors: 663 So. 2d at 959-60 (quoting Peebles, 439 So.2d at 140-41). The actual benefit to the class falls under Peebles factor number 6 ("measure of success achieved") and is an extremely important factor that must be examined with close scrutiny when the benefit to the class is extremely low. The record before us simply does not give sufficient justification for the multiplier used by the trial court. We therefore reverse the order awarding the fee and remand with instructions and guidance concerning further proceedings. We have no information before us concerning the benefit to the class other than the text of the settlement and the fact that only 113 claims had been submitted by class members, totaling $4,520.16, as of the date of the hearing on attorney fees. We do not have before us the total number of claims submitted or dollars paid from April 15 to June 14, 1999, the end of the claims period. However, the record indicates that the trial court was aware that claims were likely to only reach about $10,000, as previously noted, less than 1% of the potential liability. Also, we have no data supporting the allegations that the difficulty in determining addresses of class members outweighed the benefit that notice by first-class mail would have rendered to the vast majority of the class members who were entitled to recover their portion of the $4.5 million liability. We do know that each claimant is required to submit various documents in order to participate in the recovery, and we know that the average claim is approximately $43. In Goodrich v. E.F. Hutton *193 Group, Inc., 681 A.2d 1039 (Del.1996), the Delaware Supreme Court affirmed the trial court's attorney-fee award. The Court distinguished Boeing and expressed the importance of considering the actual benefits to the class when setting attorney fees when small claims are involved and recovery is dependent upon the submission of substantial documentation: Goodrich, 681 A.2d at 1049. In order to file a valid claim in this present case, the settlement required each class member to We are not saying that, under the circumstances of this case, the benefit to the class should be discounted because of unwarranted complexity of the claims process. Nor are we holding that the benefit to the class should be viewed solely in terms of the amounts actually claimed. We simply express our concern that Union Fidelity may have had copies of some or all of such records with respect to each class member and needed only an address and perhaps less documentation in order to disburse the settlement. If this was the case, then Union Fidelity could be vulnerable to charges that it negotiated successfully for the inclusion of unduly onerous requirements so as to keep down the number of class members who would be willing or able to submit well-documented claims for comparatively small sums. We merely direct the trial court's attention to the specifics of the claims process in order to fully identify the actual benefits to the class and weigh them appropriately under the Peebles factors listed above. To aid the trial court in its further analysis of the Peebles factors, specifically in its determining if a multiplier is warranted under the lodestar method of setting an attorney fee, we call to the trial court's attention Strong v. BellSouth Telecommunications, Inc., 173 F.R.D. 167 (W.D.La. 1997), aff'd, 137 F.3d 844 (5th Cir.1998). On account of the relatively minimal benefits bestowed upon the class, the trial court in Strong denied a recommendation by both parties to increase attorney fees for class counsel by $1.5 million. The court looked at the actual benefits bestowed upon the class, in comparison to the "potential *194 maximum value of the settlement," and stated: Strong, 173 F.R.D. at 172. As in this present case, on appeal class counsel in Strong cited Boeing and argued that the district court abused its discretion by establishing the attorney fees based on the actual benefits received by class members, rather than on the entire common fund. 137 F.3d at 844. In Strong, the United States Court of Appeals for the Fifth Circuit distinguished Boeing, determining that a common fund had not been created. Id. at 851. The Fifth Circuit also affirmed the trial court's decision not to increase the fee, holding that the trial court had not abused its discretion in weighing the actual benefit to the class when determining whether to apply a multiplier to its initial lodestar figure. Id. Again, we do not suggest that the pejorative labels placed on class counsel in Strong are appropriate in this case, because we do not have an adequate record from which to draw positive or negative conclusions. But, on remand, development of the record is essential because, on its face, the amount of attorney fees in this case appears to be grossly disproportionate to the actual benefits bestowed upon the class, and, therefore, a multiplier of two would appear not to be justified. Class counsel argue that their fee is justified because no one objected to the settlement and because the trial court approved the settlement as fair, reasonable, and just.[10] We note that, by setting fees over and above any recovery paid to the class instead of setting fees as a percentage to be deducted from the recovery, each class member has the potential to recover 100% of his or her damages. While this methodology provides the highest recovery for each class member and commendably puts the attorney fees to one side while the issue of fairness of the settlement is resolved, it nonetheless makes possible a scenario in which there will be no objectors from the class membership at the hearing on attorney fees. When the defendant pays the attorney fees, separate and unrelated to the benefits available to the class, the class members have no incentive to challenge the fee because it will not diminish their recovery. Therefore, only the settling defendant is in a position to oppose the attorney-fee award; yet, it may have a conflict of interest in terms of offering candid evidence concerning actual benefits to the class. That same party will have recently joined hands with class counsel in extolling the virtues of the settlement, in order to gain the trial court's approval at the fairness hearing mandated by Rule 23(e), Ala. R. Civ. P. A defendant would be reluctant to denigrate the adequacy of notice or benefit to the class, *195 because doing so may undermine the settlement altogether and thereby defeat its attempt to buy its peace, a consideration perhaps more important than concerns over paying excessive attorney fees. The trial court is, therefore, forced to determine the appropriate fee award without the benefit of a fully adversarial process. We decline to leave the defendant to suffer the consequences of an arrangement that requires the defendant to pay an inflated attorney fee. Rule 23(e) requires judicial approval of an award. Fees awarded by the court in class-action settlements should be fair and reasonable when viewed in light of the actual benefits to the class. Attorney fees in class actions should not expose the judicial system to contempt and ridicule in an already skeptical era.[11] To assure the requisite adverseness and impartiality in determining whether a multiplier is warranted in light of the actual benefits provided, the trial court should appoint an expert, through the use of Alabama Rule of Evidence 706, and/or a special master pursuant to Alabama Rule of Civil Procedure 53, to evaluate the settlement, to point out any deficiencies, and to recommend a reasonable attorney fee based on the actual benefit to the class. See Edelman & Combs, 663 So. 2d at 961 (appointing an "attorney ad litem" to represent the interests of the class as to the settlement, including the amount of attorney fees); and Goldberger, 209 F.3d at 56 (using special masters to examine the benefits to the class and the reasonableness of attorney fees). Such an appointment is appropriate in this proceeding. Although the common-fund approach remains the preferred method for calculating attorney fees in class actions in Alabama, when the percentage of the class members responding to the class notice is so low as to undermine the assumption of an informed decision, we distinguish Trawick and hold that the trial court must use the lodestar method to calculate appropriate attorney fees. In using that method the court is to consider the benefits of the settlement, along with the remaining Peebles factors, in determining whether a multiplier is warranted under the lodestar analysis, whether it be positive, negative, or neutral. Under such circumstances as are here presented, where we have concerns that the failure of class members to participate in the claims process may not be attributable to an informed decision by each class member, the court must closely scrutinize the fairness of the settlement and the true benefit to the class, in order to set appropriate attorney fees. An independent party vested with authority under Rule 706, Ala. R. Evid., and/or Rule 53, Ala. R. Civ. P., would best assist the court in being certain that its decision is properly informed. APPLICATION FOR REHEARING OVERRULED; OPINION OF JUNE 30, 2000, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, and BROWN, JJ., concur. *196 ENGLAND, J., dissents from the order overruling the application for rehearing; and concurs in part and dissents in part. COOK and JOHNSTONE, JJ., dissent. ENGLAND, Justice (concurring in part and dissenting in part). The application for rehearing has caused me to reconsider whether we have identified an abuse of discretion by the trial court. I continue to concur to reverse the order awarding attorney fees and to remand this case and with the order that a special master be appointed. However, I respectfully dissent from that part of the opinion that concludes that the trial court must use the lodestar method in determining the amount of attorney fees to be awarded in this case. The majority holds that "[a]lthough the common-fund approach remains the preferred method for calculating attorney fees in class actions in Alabama, when the percentage of the class members responding to the class notice is so low as to undermine the assumption of an informed decision, we distinguish Trawick and hold that the trial court must use the lodestar method to calculate appropriate attorney fees." 781 So. 2d at 195. I disagree with this holding. We have previously held that "[w]here a recovery is made on behalf of a class, it is reasonable to award attorney fees on the basis of a percentage of the amount recovered." Edelman & Combs v. Law, 663 So. 2d 957, 960 (Ala.1995). The trial court should have the flexibility to use the common-fund method, but it should be directed to consider the amount actually paid out, in addition to the amount available to the class, as factors in setting the fee, should the court set the fee using the common-fund method. JOHNSTONE, Justice (dissenting). The defendant-appellant Union Fidelity, as part of the settlement, has agreed to pay class counsel's attorneys' fees in addition to the entire loss suffered by the class. Therefore the amount of the attorneys' fees cannot adversely effect the members of the class one iota. Conversely, we cannot enhance the fairness of the settlement to the class members, as the fairness, vel non, of the settlement to the class members is not before us. The main opinion advances two reasons for reversing and remanding at the behest of the defendant-appellant. Neither reason justifies any relief to the appellant. Indeed, each reason militates in favor of affirming, not reversing. The first reason is that "we do not have an adequate record from which to draw positive or negative conclusions." 781 So. 2d at 194. The appellant bears the burden of making and transmitting a record that supports relief. Rules 10 and 12, Ala. R.App. P., and Smith v. Haynes, 364 So. 2d 1168 (Ala.1978). If the record does not support relief, then the duty of the appellate court to judge appeals impartially requires the appellate court to deny relief rather than to rescue the appellant by remanding for the appellant to make a record which will support relief. See Cowen v.. M.S. Enters., Inc., 642 So. 2d 453 (Ala.1994), King v. Garrett, 613 So. 2d 1283 (Ala.1993), and Moody v. Hinton, 603 So. 2d 912 (Ala.1992). The second reason advanced by the main opinion for reversing and remanding is: 781 So. 2d at 194-95. Thus, the main opinion reasons, in effect, that the defendant-appellant's likely duplicitousness and lack of candor requires us to rescue the defendant-appellant by reversing and remanding. A base motive for failing to make a record that will support relief hardly justifies an exception to the rule that an appellant cannot win relief on a record that does not support relief. COOK, J., concurs. [1] Through a series of mergers and/or consolidations, all of the defendant insurance companies are now represented by Union Fidelity, the sole appellant in this case. [2] The fairness of the settlement is not before us. [3] We note that Alabama also recognizes the common-benefit theory, which permits an award of attorney fees to be paid by the defendant independent of any fund, when the plaintiffs have conferred some kind of benefit upon the general public. See Horn v. City of Birmingham, 718 So. 2d 694, 702 (Ala.1998); Battle v. City of Birmingham, 656 So. 2d 344, 347 (Ala.1995); Bell v. Birmingham News Co., 576 So. 2d 669, 670 (Ala.Civ.App.1991). However, because this class action did not confer a benefit on the general public, that theory does not apply here. [4] The rules concerning recoverability of attorney fees in class actions where the parties propose a fee in a stated amount as part of the settlement are relevant to the extent that their rationale might offer an analogy to guide us in weighing the reasonableness of the attorney fees awarded in this case. [5] Publication in Boeing was utilized in combination with direct mail to class members and to securities firms with instructions to forward the notice to class members who were customers of the firms. [6] Class members were taxpayers whose records reflected addresses. [7] At the hearing on attorney fees, the trial court contemplated that total claims might reach $10,000 by the end of the class period; this equates to .2% of $4.5 million. [8] The trial court conducted a hearing on the reasonableness of attorney fees, with 90 days left before the deadline for submitting claims. At that time, 63 days had elapsed since the first notices had been sent out, and only $4,520.16 in claims had been submitted. The trial court failed to mention this factor in its order. We note that the claims in this case averaged approximately $43 per class member, a sum not so insignificant as to justify the nonresponsive behavior of the class. [9] Williams v. MGM-Pathe Communications Co., 129 F.3d 1026 (11th Cir.1997), is not inconsistent with this opinion. On remand, the district court was permitted to use either the common-fund approach or the lodestar approach in determining fees. We deem the lodestar method appropriate here, in light of the startlingly low percentage of projected claims. [10] As previously noted, matters concerning the validity of the underlying settlement, including the adequacy of the notice, are not directly before us at this time. Consideration of the settlement at this stage of the proceedings is relevant only to the extent it is necessary to evaluate the benefit to the class for purposes of fixing a reasonable attorney fee. [11] Justice Johnstone's dissent supports review of this proceeding by the same principles applicable to the settlement of a garden-variety personal-injury claim. Such an approach overlooks the court's supervisory role in cases involving settlement of class actions. See Rule 23(e), Ala.R.Civ.P. We must look further than the rights of the immediate parties in fashioning rules governing settlement in class-action litigation, lest we legitimate procedures that could undermine the integrity of the judicial system.

September 22, 2000

a78c1286-a54a-4d14-9ece-212eda2dd87a

Ex Parte Hardy

804 So. 2d 298

1981646

Alabama

Alabama Supreme Court

804 So. 2d 298 (2000) Ex parte John Milton HARDY. (Re John Milton Hardy v. State). 1981646. Supreme Court of Alabama. November 3, 2000. Rehearing Denied June 1, 2001. *299 Donald A. Chapman, Decatur; James R. Mason, Jr., Decatur; and John Mays, Decatur, for petitioner. Bill Pryor, atty. gen., and Michael B. Billingsley, asst. atty. gen., for respondent. JOHNSTONE, Justice. John Milton Hardy was indicted, tried, convicted, and sentenced to death for the robbery-murder of Clarence Nugene Terry, a capital crime defined by § 13A-5-40(a)(2), Ala.Code 1975. He appealed to the Court of Criminal Appeals, which affirmed his conviction and death sentence. Hardy v. State, 804 So. 2d 247 (Ala.Crim. App.1999). He petitioned us for a writ of *300 certiorari on July 9, 1999, which we granted as a matter of right in compliance with Rule 39, Ala.R.App.P., as it existed before the recent amendments which became effective for death penalty cases on May 19, 2000. We affirm. The opinion of the Court of Criminal Appeals describes the robbery-murder itself: 804 So. 2d at 255. The opinion of the Court of Criminal Appeals continues: 804 So. 2d at 255-56. Hardy was tried jointly with Sneed for the capital robbery-murder. Both Hardy and Sneed objected strenuously and persistently to being tried together. At trial, Hines identified the image of the gunman on the videotape as Hardy. Likewise at trial, Decatur Officer Eric Partridge, Decatur Investigator Thomas Townsend, and the Decatur chief investigator for the case, Dwight Hale, identified the videotape image of the gunman as Hardy. *302 804 So. 2d at 271-72. "Hale, the chief investigator for this case, testified that he spent a total of about 15 hours around Hardy after Hardy's apprehension, which included interviewing Hardy in Louisville and transporting him to Alabama." 804 So. 2d at 271. Similarly, at trial, Hines and Hale identified the videotape image of the unarmed intruder as Sneed. Sneed v. State, 783 So. 2d 841, 855 (Ala. Crim.App.1999). Id., at 855. Moreover, at trial, the State introduced a version of a purported statement by Sneed admitting to being the unarmed robber. The statement had been redacted extensively to eliminate all references to Hardy. Hardy, 804 So. 2d at 260. Neither Hardy nor Sneed testified at trial. The jury rejected both defenses and returned guilty verdicts and death penalty recommendations against both Hardy and Sneed. The trial court sentenced both to death. Hardy contended at trial and on appeal, and still insists before us, that Sneed's defense was so antagonistic to Hardy's that the trial court's trying the two defendants jointly constituted reversible error. Indeed, although the trial court had ordered Sneed's counsel not to identify Hardy as the gunman, Sneed's counsel's cross-examination of the State's witnesses and Sneed's counsel's closing arguments necessarily implied that Hardy was the gunman. Among numerous statements by Sneed's counsel implying that Hardy was the gunman are the following typical remarks in argument: (R. 3590-3623.) (Emphasis added.) While the arguments of counsel do not constitute evidence and the trial court repeatedly so instructed the jury, these remarks by counsel would necessarily convey to the jurors the impression that they were learning the inside story on the robbery-murder, a bell that no instructions or rulings could unring. The particular rulings at issue are the trial court's denials of Hardy's timely filed and heard motion for a severance of his trial from Sneed's trial and his several renewals of this motion for severance during the trial. The law establishes two tests for determining whether two defendants' respective defenses are so antagonistic that a joint trial constitutes error. Neither of the two tests identifies reversible error in Hardy's case. The first test is that "[t]he defenses must be so antagonistic that the jury, in order to believe the defense of one defendant, must necessarily disbelieve the other defendant's defenses[;]" that is, "severance is required because of mutually antagonistic defenses only when the defenses are so antagonistic that the acceptance of one party's defense will preclude the acquittal of the other." Hill v. State, 481 So. 2d 419, 424 and 425 (Ala.Crim.App. 1985) (internal quotation marks omitted). On the one hand, we must disagree with the rationale of the Court of Criminal Appeals that, Hardy, 804 So. 2d at 260. As a matter of practical psychology and advocacy, the only way for Sneed to persuade the jury to acquit him of capital murder and to convict him of only a lesser included offense on his theory that he was an accomplice only in the robbery, with no intent to kill anyone, was to deflect all of the blame for the capital murder onto the only other party within the jurisdiction of this jury, namely Hardy himself. As a practical matter, as distinguished from a mere theoretical possibility, the jury would not accept Sneed's defense without redressing Terry's murder by convicting Hardy. The jury could hardly acquit Hardy of the capital murder if Sneed successfully deflected all the blame for the capital murder from himself to Hardy. The jury could hardly accept Sneed's defense that Hardy was the gunman and the sole intentional murderer and still accept Hardy's defense that he was not a participant in the crime at all. Thus this first test identifies the defendants' respective defenses as so antagonistic as to require separate trials. On the other hand, the terms of this very same test coupled with the eventuality that the jury, in fact, disbelieved and rejected Sneed's defense, renders harmless the rulings by the trial court denying Hardy's motion, and his renewals thereof, for a severance. That is, because the jury did not believe Sneed's defense, it did not necessarily preclude the jury from accepting Hardy's defense. The second test is Greathouse v. State, 624 So. 2d 202, 205 (Ala.Crim.App.1992), aff'd, 624 So. 2d 208 (Ala.1993) (emphasis added) (citations and internal quotation marks omitted). This second test may be more appropriate than the first test to the dynamics of the particular case before us. That is, while the jury apparently disbelieved the self-serving aspect of Sneed's defense, his denial of complicity in the intentional murder itself, the jury likely inferred from Sneed's defense that Hardy was, in fact, the gunman. The second test, however, does not entitle Hardy to a reversal because, as already quoted, "it does not apply when independent evidence of each defendant's guilt supports the jury's verdict." Id., at 205 (internal quotation marks omitted). In the case before us, superabundant evidence, entirely independent of Sneed's influence on the trial, proves Hardy's guilt of capital robbery-murder. The independent evidence consists of Hardy's own inculpatory statements, Hines's testimony about the prelude to and the aftermath of the robbery-murder, the videotape of the robbery-murder, and the identification of the videotape image of the gunman as Hardy by Hines, Partridge, and Townsend, who were all thoroughly knowledgeable of Hardy's features and appearance before and after the commission of the robbery-murder. While our analysis of the issue of antagonistic defenses differs in part, as discussed, from the rationale of the Court of Criminal Appeals, we have relied on the authorities cited by that Court and we agree with the result reached by that Court. While trying Hardy jointly with Sneed was judicially risky in this case, it did not prejudice Hardy in the final analysis, and, accordingly, it does not entitle him to relief. Hardy further claims that he was not validly arrested in Kentucky and that, therefore, the Alabama courts did not acquire jurisdiction to try him. Specifically, Hardy claims that his arrest in Kentucky was illegal because he was not arrested pursuant to a valid fugitive arrest warrant signed by the Governor of the State of Alabama. Therefore, Hardy maintains, his extradition to Alabama was not valid. The evidence, however, shows that Alabama courts properly acquired jurisdiction over Hardy to conduct the proceedings in this case. The record contains a copy of a warrant for Hardy's arrest for this capital robbery-murder and a supporting affidavit. The affidavit was sworn by Lieutenant Richard H. Crowell of the Decatur, Alabama, Police Department on September 10, 1993, and the warrant was issued by District Judge David J. Breland of Morgan County, Alabama, on September 10, 1993. The arrest warrant is not a fugitive arrest warrant. On September 11, 1993, on this warrant, Hardy was arrested in Kentucky, and he was soon returned to Alabama, where he appeared before Judge Breland at an initial appearance hearing, where Judge Breland advised him of the charge against him. A second arrest warrant was issued on October 25, 1993, after the grand jury had indicted Hardy for capital murder on October 22, 1993. After the indictment was served on Hardy pursuant to this second warrant, he was arraigned on January 6, 1994, in the Morgan County, Alabama, Circuit Court. At the arraignment, the trial judge granted the defense an additional 30 days in which to file "pre-arraignment motions." *306 On February 4, 1994, Hardy moved to dismiss the indictment against him on the ground that he was "illegally arrested pursuant to an invalid arrest warrant which was served upon [him] in the State of Kentucky, outside the jurisdiction of this Honorable Court." After hearing testimony and arguments, the trial court denied the motion. At the hearing on Hardy's motion to dismiss, Sergeant Mark Fox of the Jefferson County, Kentucky, Police Department testified that he arrested Hardy on September 11, 1993, after Fox received a copy of the warrant issued on September 10, 1993, for Hardy's arrest for allegedly committing the capital offense in Decatur, Alabama. Sergeant Fox testified that he served this arrest warrant on Hardy during this arrest. After Hardy's arrest and during his interrogation in Kentucky by Decatur, Alabama, Detectives Boyd and Hale, Hardy told the detectives that he wanted to return to Alabama. Hale then explained to Hardy that he would have to appear before a Kentucky judge before he could return to Alabama. Hardy testified, at the hearing on his motion to dismiss in the Morgan County, Alabama, Circuit Court, that he appeared before a Kentucky judge and signed a form waiving his right to any extradition proceedings. Hardy testified that he voluntarily signed the extradition waiver because he wanted to return to Alabama. Even though Sergeant Fox did not arrest Hardy pursuant to a valid fugitive arrest warrant, his arrest of Hardy was valid under Kentucky law, specifically § 440.280, Ky.Rev.Stat.Ann. (Michie 1985), the Kentucky counterpart of Alabama's § 15-9-41, Ala.Code 1975. Section 440.280, Ky.Rev.Stat.Ann., provides: Likewise, § 15-9-41, Ala.Code 1975, provides: The facts in the case before us show that Sergeant Fox, the Kentucky officer, arrested Hardy, although without a Kentucky warrant or a fugitive warrant, upon "reasonable information that [Hardy stood] charged in the courts of [Alabama] with a crime punishable by death or imprisonment for a term exceeding one (1) year." § 440.280, Ky.Rev.Stat.Ann. (Michie 1985). Thus Sergeant Fox's arrest of Hardy was validly authorized by statute. See Ex parte Hamm, 564 So. 2d 469 (Ala.), cert. denied, 498 U.S. 1008, 111 S. Ct. 572, 112 L. Ed. 2d 579 (1990); § 440.280, Ky.Rev. Stat.Ann. (Michie 1985), and § 15-9-41, Ala.Code 1975. Further, Hardy's waiver of extradition and voluntary agreement to *307 return to Alabama operated not only to validate his return to Alabama but also to waive the requirement of the Kentucky statute for a formal complaint and further proceedings in the Kentucky courts. See, e.g., Williams v. State, 535 So. 2d 225, 228 (Ala.Crim.App.1988); and Davis v. State, 536 So. 2d 110, 114-16 (Ala.Crim.App.1987). Finally, "by [the service of the indictment], the [Alabama] court acquir[ed] jurisdiction of [Hardy's] case." Fields v. State, 121 Ala. 16, 17, 25 So. 726, 726 (1898). See also Ross v. State, 529 So. 2d 1074, 1078 (Ala.Crim.App.1988). Hardy contends further that the trial court erred in overruling his objections to certain witnesses' identifying the videotape image of the gunman as Hardy. Part V of the opinion of the Court of Criminal Appeals addresses this issue of the circumstances that will justify a witness's identifying a person's image on a videotape. Hardy, 804 So. 2d at 268-75. We expressly approve the splendid discussion of this issue by the Court of Criminal Appeals. These rulings by the trial court do not constitute reversible error. Hardy argues that the prosecutor's jury argument prejudiced Hardy's defense by stating that the prosecutor had signed the indictment and by implying that the Grand Jury had returned the indictment. Hardy contends that the prosecutor's remarks implied that he had special knowledge of the case and a belief in the truth of the indictment itself. Hardy did not object to the prosecutor's remarks to this effect at trial. We agree with the Court of Criminal Appeals to the extent that its rationale is that the trial court's jury instructions limiting the purposes for which the jurors could consider the indictment and the arguments of counsel prevented the prosecutor's remarks from putting the trial court itself into plain error. This Court has recently noted: Ex parte Burgess, [Ms. 1980803, August 25, 2000] ___ So.2d ___, ___ (Ala.2000). On the other hand, we do not agree that such remarks cannot prejudice a defendant. Any suggestion that a grand jury and a prosecutor have adversely judged the defendant's case to the extent of returning and signing an indictment against the defendant cannot improve the jurors' *308 impartiality or their respect for the defendant's presumption of innocence. While reading the indictment and explaining its function to the jury is a traditional and accepted practice, any statement or intimation that a grand jury returned the indictment or that the district attorney signed it is superfluous and potentially prejudicial. The truth of such a remark neither eliminates the prejudice nor supplies any relevance. A motion in limine to prevent such remarks followed by the remarks themselves, an apt objection by the defense, and an adverse ruling by the trial court could present this Court with an issue of substance in this regard. The Court of Criminal Appeals has not erred to reversal in its treatment of any of the other issues argued by Hardy. Likewise, our search of the record reveals no plain error either argued or not argued. Moreover, we agree with the independent assessment by the Court of Criminal Appeals that the death penalty is appropriate in this case. Accordingly, the judgment of the Court of Criminal Appeals is affirmed. AFFIRMED. HOOPER, C.J., and HOUSTON, COOK, BROWN, and ENGLAND, JJ., concur. MADDOX, SEE, and LYONS, JJ., concur in the result.

November 3, 2000

37c496f7-8481-461e-a975-b8c4365044e6

Colonial Bank v. Patterson

788 So. 2d 134

1990237, 1990293

Alabama

Alabama Supreme Court

788 So. 2d 134 (2000) COLONIAL BANK v. R.D. PATTERSON. R.D. Patterson v. Colonial Bank. 1990237, 1990293. Supreme Court of Alabama. November 17, 2000. Rehearing Applications Denied January 12, 2001. *135 Samuel H. Franklin and Sara Anne Ford of Lightfoot, Franklin & White, L.L.C., Birmingham, for appellant/cross appellee Colonial Bank. L. Vastine Stabler, Jr., Birmingham, for appellee/cross appellant R.D. Patterson. LYONS, Justice. R.D. Patterson sued Colonial Bank ("Colonial"), alleging negligence, breach of contract, conspiracy, wrongful dishonor of a check, and intentional interference with business relations. In response, Colonial filed a counterclaim to collect a debt Patterson owed Colonial. Colonial moved for a summary judgment; the trial court granted its motion as to the claims alleging negligence, breach of contract, and wrongful dishonor. The case proceeded to trial on the claims alleging conspiracy and intentional interference with business relations. At the close of Patterson's case, Colonial moved for a judgment as a matter of law ("JML"). The trial court entered a JML in favor of Colonial on its counterclaim, but denied a JML as to the rest of the claims. Patterson's claim alleging intentional interference with business relations was submitted to the jury,[1] which returned a verdict in favor of Patterson, awarding him compensatory damages in the amount of $60,640, and punitive damages in the amount of $939,000. The trial court set off the amount of Colonial's counterclaim, $27,274.54, and entered a judgment based on the verdict. After it set off the amount of Colonial's counterclaim, the court entered a judgment for Patterson for $972,365.46. Colonial renewed its motion for a JML and moved, in the alternative, for a new trial or a remittitur of the damages award. The trial court denied the JML, but ordered a remittitur of the punitive-damages award in the amount of $575,160, thereby reducing the punitive-damages award to $363,840. The plaintiff accepted the remittitur. Colonial appealed. It argues: (1) that the trial court erred by not entering a JML on Patterson's claim alleging intentional interference with business relations; (2) that the trial court erred in submitting Patterson's punitive-damages claim to the jury; and (3) that the trial court erred by not ordering a total, or substantially greater, remittitur of the punitive-damages award. Patterson cross-appealed from the trial court's order of remittitur, contending the remittitur is not supported by the law or facts of the case. (See Rule 59(f), Ala. R.Civ.P.) We reverse the judgment for Patterson, because the trial court erred in denying Colonial's motion for a JML, and *136 we render a judgment for Colonial; we dismiss the cross-appeal as moot. Patterson and Steve Nordness were equal owners and the only members of the board of directors of Resource 100 Management Group, Inc. ("Resource 100"), an employee-leasing agency. Nordness was the president of the corporation, and Patterson was the secretary and treasurer. Resource 100 presented its certificate of incorporation to Colonial and opened a business account. Originally, Nordness was the sole signatory on the account, but later Patterson was added. Nordness and Patterson began having strained business relations. Nordness informed Patterson that Resource 100 was in a bad financial condition and could no longer pay either of them a salary. Patterson thereupon began paying his own salary, from the Resource 100 account, using counter checks. Nordness discovered by conversation with Randy Watts, who handled Resource 100's books, that counter checks were being written on the account. Nordness asked Colonial to find out who the payee was on these counter checks, and Colonial informed him that it was Patterson. Nordness asked Steve Blake, a Colonial representative, how he could have Patterson's name removed from the account. Blake advised him that he had several options-that he could: (1) take the money out of the account and open a new account; (2) take the money out of the account and deposit it in another bank; or (3) present Colonial with a corporate resolution removing Patterson's name from the account. Nordness chose this third alternative. He returned to the bank with two documents: one purporting to dismiss Patterson from the company, and another representing that a resolution by the board of directors had removed Patterson as a signatory on the account. The resolution was signed by Nordness as president and as secretary of Resource 100. Colonial responded by authorizing a stop order on all counter checks. In early 1997, Patterson presented to the bank a counter check payable to himself. Colonial refused to honor the counter check and informed Patterson that his name had been taken off the account. Patterson then contacted Blake, who explained that the documents received by Colonial indicated that Patterson had been removed from Resource 100's board of directors and had been removed as a signatory on the account. Patterson told Blake that these documents were erroneous and that he had never been informed of a board-of-directors meeting and had not consented to the action purportedly taken by the board. Patterson claims that Colonial was involved in helping Nordness "shove" Patterson out of Resource 100. He argues that Colonial and Nordness engaged in discussions concerning Nordness's possibly "buying" Patterson out of the business. Patterson claims that Blake created a plan that would give Nordness control of the company and would aid Colonial in recovering its money on several unpaid loans it had made to Patterson. Patterson claims that Blake suggested that Colonial lend Nordness the money to purchase Patterson's interest in Resource 100 and that the loan transaction be conducted in such a way that at closing a check could be written by Nordness directly to Colonial covering Patterson's indebtedness. Nordness eventually did approach Patterson and offer to buy Patterson's interest in the corporation or to sell Patterson Nordness's own interest. Patterson refused Nordness's initial offer, but eventually he sold his stock in the company to Nordness for less than Nordness's original offer. Colonial argues that the trial court erred in denying its JML motion *137 because, it argues, Patterson did not present substantial evidence as to all of the elements of his claim alleging intentional interference with a business relationship. To defeat a JML motion directed to such a claim, a plaintiff must present substantial evidence of the following elements: (1) the existence of a contract or business relation; (2) the defendant's knowledge of the contract or business relation; (3) intentional interference by the defendant with the contract or business relation; (4) the absence of justification for the defendant's interference; and (5) damage to the plaintiff resulting from the interference. Soap Co. v. Ecolab, Inc., 646 So. 2d 1366, 1370-71 (Ala.1994). The tort of intentional interference with business relations was recognized so as to provide a remedy in the situation where a third party intentionally interferes with the relationship of two contracting parties. Cahaba Seafood, Inc. v. Central Bank of the South, 567 So. 2d 1304, 1306 (Ala.1990). Moreover, a party to a particular contract cannot, as a matter of law, be liable for tortious interference with that contract. Bama Budweiser of Montgomery, Inc. v. Anheuser-Busch, Inc., 611 So. 2d 238, 247 (Ala.1992). In Bama Budweiser, the owner of Bama Budweiser, Schilleci, sued Anheuser-Busch, alleging the tort of intentional interference with business relations. Anheuser-Busch had assigned different areas of primary responsibility to its wholesalers. Schilleci approached one of Anheuser-Busch's wholesalers, Daniel, about purchasing two of the wholesale beer distributorships in Alabama. The two came to an agreement regarding the sale, an agreement contingent upon Anheuser-Busch's approval of Schilleci as a wholesaler. Eventually, Schilleci was approved as a transferee of the wholesale beer distributorships. The parties signed an agreement, and Schilleci was given his territory. Soon after Schilleci began distributing in his assigned territory, he discovered that he was not the sole distributor in the area and that an informal agreement had been made between Daniel and Horn, another wholesale beer distributor, by which Horn would be allowed to distribute in that particular territory. Schilleci sent a letter to Anheuser-Busch, asking that it resolve the problem. Anheuser-Busch, however, recommended that Horn be allowed to continue distributing in that area. Schilleci argued that Anheuser-Busch had interfered with the contract between Schilleci and Daniel by allowing the holder of another of Anheuser-Busch's accounts to work in Schilleci's territory. This Court held that Anheuser-Busch was a party to the contract between Daniel and Schilleci because, without Anheuser-Busch's approval, neither Schilleci nor Daniel could market or sell Anheuser-Busch products. By accepting the assignment of Daniel's contract with Anheuser-Busch, Schilleci bound himself to the terms of that agreement. In the present case, Patterson's claim alleging intentional interference with business relations revolves around the dishonor of a counter check that Patterson presented to Colonial on the Resource 100 account. This dishonor forms the basis of Patterson's argument. Patterson argues that Colonial dishonored the counter check, as a means to accomplish an interference with Patterson and Nordness's stockholder relationship and their negotiations over the sale of stock. He claims that by not releasing any funds from the Resource 100 account to Patterson, Colonial forced Patterson to sell his share of the business because, he says, without funds from that account he had no income, and the sale of his stock allowed Colonial to recover the unpaid balances on its loans to Patterson. Early in the business relationship, and after the Resource 100 account had been *138 established, Patterson and Nordness entered into an agreement with Colonial by which each would be a signatory on the account. Each of them signed documents that related to the account and defined the rules governing the account. The signature-card contract, which both Patterson and Nordness also signed, incorporated Colonial's "Rules and Regulations for Depository Accounts." These rules and regulations regarding "Business and Organization Account Authorized Representatives" provide: (Emphasis added.) Clearly, Colonial had the prerogative to choose not to honor Patterson's counter check.[2] It is evident in the rules, which both Nordness and Patterson signed, that Colonial reserved the right to withhold funds at the onset of any dispute between authorized representatives, such as Nordness and Patterson. Moreover, Nordness and Patterson agreed, when they signed the signature contract card, that any authorized representative would have full authority for all actions relating to the account. Thus, Nordness, by virtue of the contract between Resource 100 and Colonial, had the authority to inform Colonial to place a stop order on all counter checks; he exercised that authority and Colonial placed the stop order. Colonial, acting under the authority of the contract signed by both Patterson and Nordness as signatories on the account, chose not to honor the counter check presented by Patterson. Patterson argues that the interference arose in regard to the separate relationship between Nordness and him, a relationship as to which, he says, Colonial was not a party. However, when tripartite relationships exist and disputes arise between two of the three parties, then a claim alleging interference by the third party that arises from conduct by the third party that is appropriate under its contract with the other two parties is not recognized. Bama Budweiser, 611 So. 2d at 247; see, also, Ex parte Blue Cross & Blue Shield of Alabama, 773 So. 2d 475 (Ala.2000). Patterson also contends that Colonial had the burden to show that its actions were taken without malice or with justification. First, his argument improperly *139 presupposes that he had a cause of action for interference, and, therefore, the relevance of the defense of justification.[3] Second, this argument would superimpose on a wrongful-interference claim a requirement of good faith that would compel a party to forgo any reliance on a legal right conferred by the agreement underlying the depositor relationship. Colonial had the legal right to do exactly as it did, given the clear language of the Rules and Regulations for Depository Accounts and the undisputed evidence regarding a dispute between Patterson and Nordness. The conduct of Colonial that Patterson condemns is specifically allowed by the agreement, and Patterson, by characterizing that conduct as conduct taken in bad faith, cannot defeat Colonial's right to take that action. Government St. Lumber Co. v. AmSouth Bank, N.A., 553 So. 2d 68, 73 (Ala.1989) ("`The obligation to act in good faith does not bar a party from enforcing whatever legal rights he possesses. In the name of good faith, a party cannot be required to [forgo] or surrender a right that he otherwise possesses.'" (quoting Rigby Corp. v. Boatmen's Bank & Trust Co., 713 S.W.2d 517, 535 (Mo.App.1986))). For Patterson to succeed on his attempt to limit the scope of the rules and regulations so as to prevent them from applying to this transaction, we would have to alter some unambiguous language. The rules regarding restrictions on withdrawals begin with the phrase "In the event of any controversy" (emphasis added), and while they contain an illustration concerning a dispute over who makes withdrawals, to confine the operation of the rules to such a circumstance would be to rewrite the agreement.[4] The rules and regulations preclude our imposing on Colonial a liability for refusing to allow withdrawal of money. The dishonor of Patterson's check had precisely that effectPatterson could no longer draw checks on the business account in order to pay his salary. Because Patterson's claim alleging intentional interference with business relations is based on Colonial's dishonoring the counter check, and because Colonial, as a party to the business relationship with Patterson and Nordness, had the legal right to take that action, the trial court should have granted Colonial's motion for a JML on Patterson's claim alleging a wrongful interference with a business relationship. The judgment is reversed and a judgment is rendered for Colonial. The cross-appeal is dismissed as moot. 1990237REVERSED AND JUDGMENT RENDERED FOR COLONIAL BANK. 1990293DISMISSED AS MOOT. HOOPER, C.J., and MADDOX, COOK, and JOHNSTONE, JJ., concur. [1] The trial court did not charge the jury on the claim of conspiracy, and Patterson did not object to the court's failing to do so. Thus, the jury deliberated only on the claim of intentional interference with business relations. Because Patterson did not object to the jury charges, we do not address the merits of that claim. [2] In fact, the trial court instructed the jury that Colonial had acted within its contractual rights, in accordance with the rules and regulations governing the checking account, in refusing to allow Patterson to withdraw money from the account while there was a dispute between Patterson and Nordness as to who was authorized to withdraw money from the account. [3] Cases dealing with a malicious abuse of a lawful privilege are therefore not applicable here. See, e.g., Pegram v. Hebding, 667 So. 2d 696 (Ala.1995). [4] The pertinent portion of the section of the rules and regulations regarding "Withdrawals" provides: "In the event of any controversy between those of you who have signed a signature card for a joint account or the authorized representatives who have signed a signature card for a non-personal account, such as a dispute over who has the right to make withdrawals from the account or who is the owner of the funds on deposit in the account, we may (but do not have to) refuse to allow certain withdrawals until we are satisfied that the dispute is resolved or the demand is withdrawn. We will not be responsible for any damages you may suffer as a result of our refusal to allow you withdraw money due to the dispute or demand...."

November 17, 2000

68fdbbfc-d4d5-4d8e-ab30-9141e24032fd

Lee v. YES of Russellville, Inc.

784 So. 2d 1022

1991407

Alabama

Alabama Supreme Court

784 So. 2d 1022 (2000) Helen LEE d/b/a American Quality Service a/k/a American Quality Service of Tennessee v. YES OF RUSSELLVILLE, INC., et al. 1991407. Supreme Court of Alabama. November 17, 2000. *1023 Oscar M. Price III and William D. Jones III of Johnston, Barton, Proctor & Powell, L.L.P., Birmingham; and R. Eric Summerford, Sr., of Summerford & Stoner, Decatur, for appellant. Phil D. Mitchell and Bingham D. Edwards of Edwards, Mitchell & Reeves, Decatur, for appellees. MADDOX, Justice. The Franklin Circuit Court denied the plaintiff Helen Lee's motion to stay proceedings pending mediation/arbitration. She appealed. For the reasons discussed below, we affirm, but we set out some of the principles of law that should guide the trial court in the further proceedings in this case. The trial court's order denying Lee's motion to compel mediation/arbitration made no specific findings of fact. However, it appears from the materials before this Court that YES of Russellville, Inc., and/or Narendra Sheth owned property in Franklin County upon which it/he/they wished to construct a Holiday Inn Express hotel. Sheth negotiated with Joseph Hemingway *1024 to have the hotel built. Lee claims that documents in the record form a contract between her and the defendants (YES of Russellville, Inc., and Narendra Sheth). The first document is in the form of a letter from "American Quality Service" to Sheth proposing certain terms for the contract for constructing the hotel. Sheth signed that letter/proposal as "OWNER OR OWNER/AGENT." Hemingway signed the letter/proposal as "Const. Director (V.P.)" for "American Quality Service." The second document is entitled "NOTICE TO PROCEED." It states: "Notice to proceed is hereby given to American Quality Service to proceed with construction of the following project.... AMERICAN QUALITY SERVICE, hereafter, shall be known as Owner's Authorized Contractor on the aforementioned project and Narenda [sic] Sheth shall be known, hereafter, as Owner of said project." Hemingway appears to have signed as "(authorized agent)" under the words "AMERICAN QUALITY SERVICE," and Sheth appears to have signed as "(owner and/or owner agent)" under the word "OWNER." The third document, which is titled "AIA Document A201-1997," is incorporated by the letter/proposal. The AIA document contains the following introductory passage concerning dispute resolution: The document includes further provisions requiring that "any claim arising out of or related to the Contract" be submitted to mediation "as a condition precedent to arbitration or the institution of legal or equitable proceedings by either party." The document also provides that "[c]laims not resolved by mediation shall be decided by arbitration." Construction commenced, and apparently a substantial amount of work was completed before a dispute over payment arose. On October 28, 1999, "Joe Hemingway d/b/a American Quality Service" sued YES and Sheth, alleging that he had performed work under the contract from October 1998 to September 1999 but that YES and Sheth had failed to pay him for the work. Hemingway asserted claims of breach of contract and money due on open account, and he sought enforcement of a lien he had filed on the Holiday Inn property and its improvements. YES and Sheth answered and also moved to consolidate Hemingway's case with a case YES and Sheth had filed against Hemingway. The record does not reflect that those cases were ever consolidated. YES and Sheth moved for a summary judgment, arguing that Hemingway was not licensed to do business as a general contractor. See § 34-8-1 et seq., Ala. Code 1975. YES and Sheth argued that, therefore, the construction contract was null and void, citing White v. Miller, 718 So. 2d 88 (Ala.Civ.App.1998). While that motion was pending, Helen Lee moved to amend the complaint to substitute herself as plaintiff. She contended that American *1025 Quality Service was a trade name under which she operated a sole proprietorship and that Hemingway had acted as her agent in dealing with YES and Sheth. The trial court granted Lee's motion and substituted "Helen Lee d/b/a American Quality Service a/k/a American Quality Service of Tennessee" as the plaintiff. The court denied the defendants' motion for a summary judgment. Lee then moved to stay the proceedings pending mediation and arbitration, citing the dispute-resolution provisions in the AIA document discussed above. YES and Sheth opposed that motion, arguing that they did not have a contract with Lee and that, therefore, they could not be required to submit to arbitration. In addition to their argument that the contract was void, as discussed above, they argued that, if the contract was not void, it was a contract between them and Hemingway. They argued that Hemingway had signed the contract documents as an agent of and as "Const. Director (V.P.)" of "American Quality Service." Because no legal entity named "American Quality Service" exists, they argued, Hemingway, in his individual capacity, was the party with whom they had contracted, if the contract was not void. Thus, they argued, they had no contractual relationship with Lee. The trial judge denied Lee's motion to stay the proceedings. He did not, however, make any findings of fact or explain his reasons for denying the motion. Lee appeals from the order denying her motion. A trial court's denial of a motion to stay proceedings pending arbitration is reviewable by direct appeal. A.G. Edwards & Sons, Inc. v. Clark, 558 So. 2d 358 (1990).[1] Our review of that decision is de novo. Patrick Home Ctr., Inc. v. Karr, 730 So. 2d 1171 (Ala.1999). Lee argues that the trial court erred in denying her motion because, she says, the contract between her and the defendants clearly provides that disputes relating to the contract must be resolved through mediation and arbitration. The defendants do not appear to dispute that the claims made in this case are related to the alleged contract. They do argue, however, that the trial court correctly denied the motion to arbitrate because there is no contract or, if there is a contract, because Lee is not a party to the contract. It is well settled that Alabama law disfavors predispute agreements to submit disputes to binding arbitration. Indeed, the Code of Alabama of 1975 specifically prohibits the enforcement of predispute agreements to arbitrate. § 8-1-41(3), Ala. Code 1975. However, Section 2 of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the "FAA"), provides that predispute arbitration agreements in contracts involving interstate commerce are binding.[2] Further, the United States Supreme Court has held: Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 686-87, 116 S. Ct. 1652, 134 L. Ed. 2d 902 (1996) (emphasis added in Casarotto omitted here). Similarly, the Supreme Court has held that an arbitration provision in a contract must be reviewed by a state court "on the same footing as [the] contract's other terms." Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 275, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995), quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S. Ct. 2449, 41 L. Ed. 2d 270 (1974) (internal quotation marks omitted). The Supreme Court wrote in Dobson: Dobson, 513 U.S. at 281, 115 S. Ct. 834. Decisions of the Supreme Court of the United States, of course, are binding on this Court. Martin v. Hunter's Lessee, 14 U.S. (1 Wheat.) 304, 4 L. Ed. 97 (1816). Thus, this Court and all the other courts of this State are required faithfully to follow and to apply the decisions of that Court. With regard to arbitration provisions, the Supreme Court has made it clear that they may be denied application only for reasons that could make other provisions of a contract inapplicable. In Shearson Lehman Bros., Inc. v. Crisp, 646 So. 2d 613 (Ala.1994), this Court considered the question whether arbitration may be required where a document alleged to form a contract between the parties includes an arbitration clause but where the existence of a contract is in dispute. After reviewing a number of authorities, this Court concluded that a court must determine the threshold question whether a contract exists. See also Oakwood Mobile Homes, Inc. v. Barger, 773 So. 2d 454 (Ala.2000) ("[An attempt] to avoid or to rescind a contract is subject to arbitration[,] but a challenge to the very existence of a contract is not subject to arbitration."); Southern Energy Homes, Inc. v. Kennedy, 774 So. 2d 540 (Ala.2000) (citing Shearson Lehman); NationsBanc Invs., Inc. v. Paramore, 736 So. 2d 589, 594 (Ala.1999) ("The trial court must determine if the contract ever existed.... Only after making this determination could the trial court properly deal with the issue of arbitration."); compare Ex parte Perry, 744 So. 2d 859 (Ala.1999) (holding that a claim of fraudulent inducement to enter the contract would be resolved by an arbitrator). Whether there is a contract at all, under the facts of this case, depends in *1027 large part on application of the law of agency. An agent acting with actual or apparent authority who enters a contract on behalf of a principal binds the principal but not himself. Pate v. T-Square, Inc., 545 So. 2d 70 (Ala.Civ.App.1989); Davis v. Childers, 381 So. 2d 200 (Ala.Civ.App.1979). However, if an agent acting within his authority enters a contract on behalf of an undisclosed principal, the agent is liable on the contract (B & M Homes, Inc. v. Hogan, 376 So. 2d 667 (Ala.1979); Pate, supra; and Davis, supra); the undisclosed principal is also liable. Woods v. Commercial Contractors, Inc., 384 So. 2d 1076 (Ala. 1980); Davis, supra; Restatement (Second) of Agency, § 186 (1958). The defendants argue that the parol evidence rule bars admission of any evidence showing that the words "American Quality Service" referred to Lee. Thus, they argue, no evidence may be admitted to show that Hemingway was Lee's agent, and because Hemingway was not licensed as a general contractor in Alabama, they argue that the contract was void and the proceedings should not have been stayed. The defendants rely on Hunter v. Austin Co., 336 So. 2d 203 (Ala.Civ.App.1976), in which the Court of Civil Appeals quoted with approval from Richmond Locomotive & Machine Works v. Moragne, 119 Ala. 80, 24 So. 834 (1898). In Richmond Locomotive, this Court wrote: 119 Ala. at 83, 24 So. at 834. The application of the parol evidence rule in agency cases involving undisclosed principals appears to conflict with the principles stated in Restatement (Second) of Agency, § 186, cmt. c: (Emphasis added.) In addition, there appears to be a large body of caselaw from other jurisdictions holding that parol evidence is admissible to prove that one who signed a contract did so on behalf of an undisclosed principal. See, e.g., Ford v. Williams, 62 U.S. (21 How.) 287, 289, 16 L. Ed. 36 (1858) ("[N]otwithstanding the rule of law that an agreement reduced to writing may not be contradicted or varied by parol, it is well settled that the principal may show that the agent who made the contract in his own name was acting for him. This proof does not contradict the writing; it only explains the transaction."); Garland v. Fleischmann, 831 P.2d 107 (Utah 1992); IX Wigmore on Evidence § 2438 (Chadbourne rev.1981). Despite the appearance of a conflict with the Restatement and with the decisions of other jurisdictions, this Court reaffirmed the Richmond Locomotive rule in Rush v. Thomas Duckett Constr. Co., 380 So. 2d 762 (Ala.1979), many years after the American Law Institute had adopted the Restatement (Second) of Agency in 1957. The parties do not directly address this issue in their appellate briefs, and, therefore, we *1028 will not depart from Richmond Locomotive and Rush today. In Hunter, which applied the Richmond Locomotive rule, a leasing contract was signed by "Clarence Hunter, T/A Hunter Cricket Farm By Clarence Hunter, Lessor." 336 So. 2d at 204. In litigation that ensued, Clarence Hunter and his wife argued that by signing the contract as he did he was indicating that he was signing as an agent for his wife, who did business under the name Hunter Cricket Farm. The Court of Civil Appeals held that because the letters "T/A," which presumably were an abbreviation for "trading as," had no meaning in the law, there was no ambiguity in the contract and Hunter was liable under the contract, but his wife was not. In Hunter, Hunter indicated only that he was signing "T/A," or "trading as" a trade name. In contrast, Hemingway signed the letter/proposal as "Const. Director (V.P.)" for "American Quality Service." He signed the notice to proceed as "(authorized agent)" under the words "AMERICAN QUALITY SERVICE." Thus, Hemingway did not "[describe] himself as agent, trustee, or the like, without more," 119 Ala. at 83, 24 So. at 834 (emphasis added), as Hunter did in the Hunter case. Instead, he identified himself as an agent of American Quality Service. Accordingly, we conclude that the contract is ambiguous and that parol evidence would be admissible, in addition to the contract documents themselves,[3] to show that Hemingway was acting as Lee's agent. As this Court has held, "the existence and scope of an agency relationship are questions of fact to be determined by the jury." Standard Plan, Inc. v. Tucker, 582 So. 2d 1024, 1029 (Ala.1991). Whether the agency existed is, we conclude, a question for a jury to decide. We emphasize that the question of agency is only a threshold issue. If a jury determines that an agency relationship did not exist, then the contract would be void because Hemingway was not a licensed general contractor. White v. Miller, 718 So. 2d 88, 89 (Ala.Civ.App.1998) ("It is well settled that `[e]xpress or implied contracts entered into by an unlicensed general contractor are null and void because they violate public policy.'"). However, if the jury determines that the agency relationship did exist, and thus that Lee is a valid party to the contract, the dispute must proceed to arbitration. The next question we address is whether Lee substantially invoked the litigation process and thereby waived her right to compel mediation and arbitration. A party may waive the right to arbitrate by substantially invoking the litigation process, if the party opposing arbitration is substantially prejudiced as a result. Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So. 2d 897 (Ala.1995). For a court to find that a party substantially invoked the litigation process, his actions must "bespeak[] an intention to abandon the right in favor of the judicial process." Id. at 899. A party's failure to seek arbitration in an initial pleading is not sufficient, by itself, for a court to conclude that the party waived his right to compel arbitration. See Ex parte McKinney, 515 So. 2d 693 (Ala.1987). The determination of a waiver must be made based on the particular facts of each case. Companion Life, supra. "[T]here is a presumption against a court's finding that a party has waived the right to compel arbitration." Eastern Dredging & Constr., Inc. v. Parliament House, L.L.C., 698 So. 2d 102 (Ala. 1997). A party seeking to prove a waiver *1029 of a right to arbitrate carries a heavy burden, and the courts will not lightly infer a waiver of the right to compel arbitration. Mutual Assurance, Inc. v. Wilson, 716 So. 2d 1160 (Ala.1998). Hemingway filed the initial complaint on October 28, 1999. The defendants answered on November 18, 1999, and then moved for a summary judgment on December 8, 1999. On January 21, 2000, Lee moved to stay pending mediation/arbitration. Three days later, Lee filed the amended complaint. Approximately three months passed between the filing of the initial complaint and Lee's filing her motion to compel arbitration. Lee took no action other than filing the initial complaint (according to her argument, through Hemingway), moving for the stay, and filing her amended complaint. From the materials before us, it does not appear that a substantial amount of discovery occurred. In light of those facts, and in light of the strong policy against finding a waiver, we cannot conclude that Lee's actions show an intention to forsake arbitration in favor of the litigation process. Therefore, we cannot accept the defendants' arguments that we should hold that Lee waived her right to compel arbitration. Compare Morrison Restaurants, Inc. v. Homestead Village, 710 So. 2d 905 (Ala.1998) (party waived right to compel arbitration by waiting until after trial court had ruled adversely to it by granting the other party's motion for a summary judgment). Accordingly, if the jury finds that in fact Lee and Hemingway had the agency relationship Lee claims, we see no impediment to proceeding to arbitration. For the foregoing reasons, and based on the record before us, we affirm the order denying Lee's motion to stay proceedings pending mediation/arbitration. AFFIRMED. HOOPER, C.J., and HOUSTON, COOK, and BROWN, JJ., concur. LYONS, JOHNSTONE, and ENGLAND, JJ., dissent. SEE, J., recuses himself. JOHNSTONE, Justice (dissenting). I respectfully dissent. Whatever rights Lee may claim under the contractmonetary rights, arbitration rights, or other rightsdepend entirely on her claim that Hemingway was her agent. If he was her agent, then she, acting by and through him as her agent, chose and invoked court litigation instead of arbitration and thereby waived any arbitration right by filing and prosecuting the lawsuit. If Hemingway was Lee's agent, then the lawsuit to collect from the defendants is her own lawsuit, and Hemingway's litigation is Lee's litigation. Indeed, in her verified "Substitution of Parties and Amended and Restated Complaint," she swears that she authorized Hemingway to file the lawsuit. (C. 122.) I further disagree with the main opinion insofar as the first sentence of Part II can be interpreted as meaning that the denial of a motion to compel mediation alone pursuant to a contract requiring only mediation would be reviewable by appeal. This language is overbroad and unnecessary to the decision in this case, which addresses a contract requiring both mediation and arbitration conjunctively. LYONS and ENGLAND, JJ., concur. [1] The contract at issue required that the parties first submit their dispute to mediation. Should the parties fail to resolve all their disputes in mediation, the contract required them to proceed to binding arbitration. Although this is not solely an arbitration provision, then, we nonetheless conclude that our caselaw stating the method of review to be applied in cases involving arbitration clauses is applicable, because the contract ultimately requires the parties to submit to binding arbitration to resolve their dispute if mediation fails to resolve it. We note that we have previously reached the same conclusion in other cases. See, e.g., Homes of Legend, Inc. v. McCollough, 776 So. 2d 741 (Ala.2000). [2] It appears undisputed that this case involves interstate commerce. [3] Lee argues that the documents show plainly that Hemingway was acting as her agent.

November 17, 2000

60b90828-b8be-4b2c-b6af-ba7f5567cb85

Knowles v. State Farm Mut. Auto. Ins. Co.

781 So. 2d 211

1981554

Alabama

Alabama Supreme Court

781 So. 2d 211 (2000) Daniel H. KNOWLES v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. 1981554. Supreme Court of Alabama. September 29, 2000. *212 Desmond V. Tobias of Windom & Tobias, L.L.C., Mobile, for appellant. James W. Killion and Harry V. Satter-white of Janecky Newell, P.C., Mobile, for appellee. ENGLAND, Justice. This case arises from an accident that occurred during a Halloween "haunted hayride" in 1996 at Woodmen of the World Lodge # 3854 in Saraland. Daniel H. Knowles fell off the back of a flatbed trailer being pulled by a truck driven by Joseph H. Dodd. The fall caused Knowles to have a permanent closed head injury. Knowles sued Dodd, alleging that Dodd had been acting as an agent of Woodmen of the World Life Insurance Society ("Woodmen"), and, as its agent, had negligently or wantonly caused the accident and Knowles's injury. Knowles also sued Woodmen, claiming it was liable to him under a respondeat superior theory and under a negligent-entrustment theory. Knowles also sued his own automobile liability-insurance carrier, State Farm Mutual Automobile Insurance Company, under the uninsured- and underinsured-motorist provisions of his policy.[1] Dodd moved for a summary judgment, claiming that under Alabama's "Volunteer Service Act," § 6-5-336, Ala.Code 1975, he was immune from liability in regard to the accident. This Act protects volunteers from liability for negligence "if ... [t]he volunteer was acting in good faith and within the scope of such volunteer's official functions and duties for a nonprofit organization." § 6-5-336(d). All parties concede that Dodd was a volunteer and, because he was a volunteer, was not liable to Knowles as a matter of law. Dodd, Woodmen, and Knowles submitted to the Court a proposed order, upon which the three agreed. By that order, the court entered a summary judgment for Dodd based on the Volunteer Service Act. *213 Subsequently, the parties agreed to mediate. As a result of the mediation, Woodmen agreed to pay, and Knowles agreed to accept, $32,500 in full settlement of his claim against Woodmen. Based on this pro tanto settlement, Woodmen was being dismissed, with prejudice, on June 21, 1999. State Farm moved for a summary judgment. By its summary-judgment motion, as amended, State Farm contended it was entitled to a judgment on three grounds: 1) that Knowles was not entitled to uninsured-motorist benefits because he had accepted a settlement of insurance proceeds from Woodmen's insurance carrier in the amount of $32,500 (i.e., Woodmen argued that the defendant Dodd was not an "uninsured motorist" within the meaning of that term as defined in the State Farm policy); 2) that Knowles was not entitled to uninsured-motorist benefits because he had not presented substantial evidence (see § 12-21-12, Ala.Code 1975) indicating that the amount of damages necessary to compensate for the injury he had suffered exceeded the limits of liability coverage provided by the policy issued by Woodmen's insurance carrier; and 3) that even if Knowles were to be entitled to underinsured-motorist benefits, State Farm would not become liable under Knowles's policy until the tortfeasor's (Woodmen's) policy limits had been exhausted. In support of its motion for summary judgment, State Farm filed a copy of the policy of "commercial general liability insurance" issued by Scottsdale Insurance Company to Woodmen, and in force at the time of the accident, insuring Woodmen against liability up to $1 million. State Farm also filed a copy of its own policy of insurance issued to Knowles. The trial judge entered a summary judgment for State Farm, and Knowles appealed.[2] Rule 56, Ala.R.Civ.P., sets forth a two-tiered standard for determining whether to enter a summary judgment. In order to enter a summary judgment, the trial court must determine: 1) that there is no genuine issue of material fact and 2) that the moving party is entitled to a judgment as a matter of law. In determining whether a summary judgment was properly entered, the reviewing court must view the evidence in a light most favorable to the nonmovant. See Turner v. Systems Fuel, Inc., 475 So. 2d 539, 541 (Ala.1985); Ryan v. Charles Townsend Ford, Inc., 409 So. 2d 784 (Ala.1981). Was State Farm entitled to a judgment on the grounds that Knowles was not entitled to uninsured-/underinsured-motorist benefits because he had accepted $32,500 from Woodmen's liability-insurance carrier in full settlement of his claim against Woodmen? State Farm correctly notes the obvious: that in order for Knowles to recover uninsured-motorist benefits under his State Farm policy, he must show that the law or the terms of that policy entitle him to those benefits. The State Farm policy provides uninsured-motorist coverage by the following language: Section 32-7-23(b)(4), Ala.Code 1975, provides that an underinsured-motorist carrier, such as State Farm, is not liable for underinsured-motorist benefits unless "[t]he sum of the limits of liability under all bodily injury liability bonds and insurance policies available to an injured person *214 after an accident is less than the damages which the injured person is legally entitled to recover." The statute reads: State Farm's policy adds a provision tracking that statutory language: Knowles accepted a $32,500 pro tanto settlement from Woodmen of the World, which was insured for $1 million by Scottsdale Insurance Company. State Farm argues that by accepting that amount in settlement and by consenting to the entry of a summary judgment for Dodd on the basis of the Volunteer Service Act, Knowles necessarily agreed that there was a respondeat superior relationship between Dodd and Woodmen. Knowles argues that he is entitled to uninsured-motorist benefits under his State Farm policy because, given the application of the Volunteer Service Act, he cannot recover damages from Dodd. The fact that Knowles could not recover damages from Dodd, because of the application of the Volunteer Service Act, would, standing alone, suggest that he might be entitled to benefits under the uninsured-motorist provisions of the State Farm policy. See Hogan v. State Farm Mut. Auto. Ins. Co., 730 So. 2d 1157 (Ala.1998).[3] However, we have before us the additional fact that Knowles settled his claims against Woodmen for $32,500. It follows that if Dodd was an agent of Woodmen, and Knowles accepted $32,500 from Woodmen's liability-insurance carrier, $32,500 out of $1 million in available insurance proceeds, then State Farm would have had no obligation to pay uninsured- or underinsured-motorist benefits. Isler v. Federated Guar. Mut. Ins. Co., 594 So. 2d 37, 39-40 (Ala.1991). The summary judgment is affirmed. AFFIRMED. MADDOX, COOK, and JOHNSTONE, JJ., concur. HOOPER, C.J., and HOUSTON, SEE, LYONS, and BROWN, JJ., concur in the result. HOUSTON, Justice (concurring in the result). Knowles's uninsured-motorist coverage provided: (Emphasis in original.) Joseph H. Dodd was the owner and driver of an uninsured motor vehicle from which Knowles fell; however, it is admitted by all parties that at the time Knowles fell from the vehicle owned and operated *215 by Dodd, Dodd was a "volunteer" as that term is defined in the Volunteer Service Act, Ala.Code 1975, § 6-5-336. As a volunteer, Dodd is immune from liability for the act causing Knowles's injury; therefore, Knowles was not legally entitled to collect damages for his personal injury from Dodd. Therefore, State Farm is not liable to Knowles under Knowles's uninsured-motorist coverage. To the extent that Hogan v. State Farm Mutual Automobile Insurance Co., 730 So. 2d 1157 (Ala. 1998), is inconsistent with this, I would overrule Hogan. We can affirm the trial court's judgment if it is supported on any valid legal ground, even if that ground was not raised below. Smith v. Equifax Servs., Inc., 537 So. 2d 463, 465 (Ala.1988). LYONS, Justice (concurring in the result). Because I dissented in Hogan v. State Farm Mutual Auto. Ins. Co., 730 So. 2d 1157 (Ala.1998), overruled on other grounds, Williamson v. Indianapolis Life Ins. Co., 741 So. 2d 1057 (Ala.1999), I concur in the result only. At that time, I stated: Hogan, 730 So. 2d at 1159 (Lyons, J., dissenting). Dodd successfully invoked the "Volunteer Service Act," § 6-5-336, Ala.Code 1975, in order to establish immunity for his conduct. I would affirm the judgment of the trial court because Dodd was not an uninsured motorist and therefore State Farm had no obligation under its policy to pay uninsured-or underinsured-motorist benefits. HOOPER, C.J., and SEE, J., concur. [1] Knowles's wife joined his complaint, stating a derivative claim against the same defendants for damages for loss of consortium. [2] Knowles's wife did not appeal. [3] In Hogan, we held that a passenger who was precluded from suing the owner or operator of a motor vehicle because of the Volunteer Service Act might be entitled to recover uninsured-motorist benefits. Hogan was later overruled, in part, on another issue. See Williamson v. Indianapolis Life Ins. Co., 741 So. 2d 1057 (Ala.1999).

September 29, 2000

f36627c9-0b45-4770-a68e-4d48bb590554

Ex Parte Williams

782 So. 2d 842

1991200

Alabama

Alabama Supreme Court

782 So. 2d 842 (2000) Ex parte Herbert WILLIAMS, Jr. (Re Herbert Williams, Jr. v. State). 1991200. Supreme Court of Alabama. November 9, 2000. Ellen L. Wiesner of Cannon & Dunphy, S.C., Brookfield, Wisconsin, for petitioner. Bill Pryor, atty. gen., and J. Clayton Crenshaw, asst. atty. gen., for respondent. Prior report: Ala.Cr.App., 782 So. 2d 811. PER CURIAM. The petition for the writ of certiorari is denied. In denying the petition for the writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Criminal Appeals' opinion. Horsley v. Horsley, 291 Ala. 782, 280 So. 2d 155 (1973). WRIT DENIED. HOOPER, C.J., and MADDOX, COOK, LYONS, and JOHNSTONE, JJ., concur.

November 9, 2000

77faf90d-20a3-4ca4-adda-367517cbd7f9

Ex Parte Cobb

781 So. 2d 208

1991230

Alabama

Alabama Supreme Court

781 So. 2d 208 (2000) Ex parte Shelton COBB and Amy Cobb. (Re Shelton Cobb and Amy Cobb v. Serra Toyota, Inc.) 1991230. Supreme Court of Alabama. September 29, 2000. *209 S. Andrew Scharfenberg and Timothy A. Palmer of Ogletree, Deakin, Nash, Smoak & Stewart, P.C., Birmingham, for petitioners. Cecil H. Macoy, Jr., and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for respondent. COOK, Justice. Shelton Cobb and Amy Cobb, the plaintiffs in an action pending in the Jefferson Circuit Court, petition for a writ of mandamus directing the trial court to vacate its order compelling them to submit their claims to arbitration. The Cobbs leased an automobile from Serra Toyota, Inc., on March 26, 1999. According to the Cobbs, in response to a specific question they say they were asked while they were signing the lease documents, Serra's agent told them that all aspects of the lease transaction had been approved. The Cobbs took possession of the car and left the dealership. Some time later, when the Cobbs brought the car to Serra for a repair, they were told that Serra had voided the lease transaction because their financing request had not been approved. The Cobbs were not allowed to leave with the new car, and Serra returned their old car to them. The Cobbs sued Serra, stating a detinue claim; alleging fraudulent misrepresentation, fraudulent suppression, deceit, and conversion; and asking for compensatory and punitive damages, attorney fees, costs, and "such other relief to which [they] may be entitled." In response, Serra moved to dismiss or, in the alternative, to stay the action and compel arbitration. Serra relied on an arbitration clause in the Lease Agreement; that clause provided, in part, as follows: In support of its motion, Serra submitted the affidavit of its secretary/treasurer, Marty Brill, who stated that the Retail Buyer's Order signed by the Cobbs contained a sentence reading: "VEHICLE IS BEING DELIVERED SUBJECT TO FINANCIAL APPROVAL." (Brill stated that that sentence was written in bold print.) Brill also stated that the Cobbs' request for financing was denied. The Cobbs amended their complaint to add a request for the additional relief of "possession of the vehicle at issue or its alternate value." After conducting a hearing on Serra's motion, the trial court ordered arbitration and placed the case on its "administrative *210 docket." The Cobbs filed this mandamus petition. In Ex parte Payne, 741 So. 2d 398 (Ala. 1999), this Court was faced with facts substantially similar to those presented by the Cobbs' petition. In that case, Payne's application for financing for the purchase of a new car was not approved. Although Payne resisted the dealership's efforts to regain possession of the car, the dealership obtained a writ of seizure, which was executed by the sheriff's department. Payne moved for a hearing on the writ of seizure, filed an answer to the dealership's detinue action, and filed a counterclaim alleging breach of contract, fraud, and deceit. In Payne, as here, the trial court granted the dealership's motion to compel arbitration pursuant to an arbitration provision in the "Retail Purchase Order" executed by the parties. Payne sought a writ of mandamus directing the trial court to vacate the order compelling arbitration of her counterclaims against the dealership. We granted the petition, holding, in pertinent part: Ex parte Payne, 741 So. 2d at 402-04. Here, the Retail Buyer's Order signed by Serra and the Cobbs provided, in large, boldface type, that the car was being delivered to the Cobbs "SUBJECT TO FINANCIAL APPROVAL." This condition precedentobtaining "financial approval" did not occur, and the record before this Court shows that, after the Cobbs' financing request was rejected, Serra did not view the Lease Agreement as a binding contract. Attached to the Cobbs' mandamus petition is a copy of the Lease Agreement containing the arbitration provision Serra seeks to enforce. Written across the first page of the Lease Agreement and across the first page of the Retail Buyer's Order are the words "VOID" and "TURNED DOWN." Because neither the Lease Agreement nor the Retail Buyer's Order is a binding contract, Serra cannot enforce the arbitration provision it relies on. The Cobbs have demonstrated a clear legal right to the relief they seek. Ex parte Edgar, 543 So. 2d 682 (Ala.1989). Therefore, we grant the Cobbs' petition for a writ of mandamus and we direct the trial court to vacate its order compelling the Cobbs to arbitrate their claims against Serra.[1] PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] Because neither the Lease Agreement nor the Retail Buyer's Order is a binding contract, it necessarily follows that the Cobbs may not proceed upon any claims sounding in contract that would be based upon these documents.

September 29, 2000

105fe7e5-4c5c-48e8-a17c-3cdca5712dde

US Diagnostic, Inc. v. Shelby Radiology, PC

793 So. 2d 714

1982181

Alabama

Alabama Supreme Court

793 So. 2d 714 (2000) US DIAGNOSTIC, INC., and Advanced Medical Imaging Center, Inc. v. SHELBY RADIOLOGY, P.C. 1982181. Supreme Court of Alabama. September 29, 2000. Rehearing Denied April 6, 2001. *716 Robert S.W. Given, F.A. Flowers III, and Harlan F. Winn III of Burr & Forman, L.L.P., Birmingham, for appellants. Christopher M. Mitchell of Costangy, Brooks & Smith, L.L.C., Birmingham; and Richard Jordan and Randy Myers of Richard Jordan, Randy Myers & Ben Locklar, P.C., Montgomery, for appellee. COOK, Justice. US Diagnostic, Inc. ("Diagnostic"), and Advanced Medical Imaging Center, Inc. ("AMI"), appeal from a judgment entered on a jury verdict in favor of Shelby Radiology, P.C. ("Shelby"), in the amount of $1,134,013 for fraud that Shelby alleged was committed against it. We affirm. Shelby is incorporated under the laws of Alabama for the purpose of providing radiology services, and it has provided such services at various locations throughout Alabama, including Shelby Baptist Medical Center in Alabaster. It has also provided services for AMI at its outpatient diagnostic center located in Montgomery. Until October 1995, AMI was owned by Central Alabama Medical Enterprises ("CAME"), an entity based in Montgomery. Diagnostic is a "publicly traded company" that "owns over one hundred [diagnostic] imaging centers throughout the United States." Brief of Appellant, at 9. The dispute in this case began after Diagnostic purchased AMI from CAME, in October 1995. At that time, Shelby had in its employ three radiologists, namely, Drs. H. Peter Jander, Daniel W. Thompson, and Michael Mead. It was regularly servicing three diagnostic facilities, namely, Shelby Medical Center, Shelby Outpatient Diagnostic Center, and AMI, and the workload had become too demanding for these three radiologists. Therefore, the *717 three doctors began considering possible solutions. Under one option, Shelby would simply discontinue providing its service to AMI. Under a second option, Shelby would hire a fourth radiologist and continue to service all three facilities. The doctors concluded, however, that the second option would be viable only if Shelby could secure from Diagnostic a contract that would be "noncancelable" for three years. Dr. Jander first discussed these options by telephone with Dr. Robert Burke, president of Diagnostic. Then, on November 13, 1995, he addressed a letter to Dr. Burke, which stated in part: Included with the letter was a five-page document entitled "Radiology Services Agreement" ("RSA"). The RSA purported to be an exclusive, three-year, noncancelable contract, within the context of the parties' preceding telephone discussion. The contractual period was to begin on January 1, 1996, and end on December 31, 1998. On January 9, 1996, Dr. Jander addressed another letter to Dr. Burke. The letter stated in part: "I have discussed our position with respect to the imaging center with my partners.... We would appreciate an expedicious [sic] answer since we plan to add a fourth radiologist if our proposal is agreeable to you."[2] (Emphasis added.) Dr. Jander met Dr. Burke at a conference in Montgomery on February 13, 1996, and the two discussed the RSA further. At that meeting, Dr. Burke told Dr. Jander that he had misplaced the RSA and he requested another copy. Consequently, on February 20, 1996, Dr. Jander transmitted by telefax a second copy of the January 9, 1996, letter and the RSA. In March 1996, Shelby began negotiating with Dr. John Lindsey for his possible employment as the fourth radiologist. For Dr. Lindsey, who was informed during these negotiations of the RSA, the three-year provision was a primary consideration. As a result, Dr. Jander again telephoned Dr. Burke. Regarding this conversation, Dr. Jander testified: (Reporter's Transcript, at 231-33.) During that conversation, Dr. Burke allegedly told Dr. Jander that he had "accepted this... 3 year contract with no termination clause"; to "go ahead and hire Dr. Lindsey"; and that "there might be minor, inconsequential modifications that might come up when it [went] through his legal department." (Reporter's Transcript, at 309.) (Emphasis added.) Dr. Jander then told Dr. Lindsey: "I am confident we have this contract, Dr. Burke gave me his word, so I have no doubt that we will have that contract." Id. at 233. Shelby signed a contract with Dr. Lindsey on March 21, 1996. Also, Shelby increased its insurance coverage from $1 million to $3 million to comply with a requirement of AMI, and it continued to service AMI. July 1996 passed, however, without Shelby's receiving a signed contract from Diagnostic. Consequently, Dr. Jander telephoned Dr. Burke again. Dr. Burke informed Dr. Jander that he was no longer president of Diagnostic and that Jander should contact his successor, Joseph Paul. Dr. Jander tried a number of times to reach Mr. Paul by telephone, but without success. Therefore, on November 13, 1996, he addressed a letter to Paul, which stated in part: Shelby did not receive a response from Paul. Instead, it received a letter dated November 19, 1996, from Timothy C. Watkins, the administrator of AMI, complaining of Shelby's performance. Subsequently, Shelby received a letter from Watkins dated January 16, 1997, purporting to terminate the relationship between Shelby and Diagnostic within 30 days. On June 26, 1997, Shelby sued Diagnostic and AMI. Through its complaint and a subsequent amended complaint, Shelby claimed damages based on allegations of fraud and breach of contract. The defendants moved for a judgment as a matter of law ("JML") at the close of the plaintiff's case and again at the close of all the evidence. The trial court submitted the case to a jury on claims of breach of contract, promissory fraud, ordinary fraud, *719 and fraudulent suppression. The jury returned a verdict in favor of the defendants on the breach-of-contract claim.[3] However, it found in favor of Shelby on the fraud and suppression claims, awarding compensatory damages of $1,134,013. The trial court denied the defendants' postjudgment motions, and the defendants appealed from the judgment based on that verdict. The defendants contend that the trial court erred in denying their postjudgment motions for a JML.[4] More specifically, they first contend that if Shelby has a fraud claim, it is only a claim of promissory fraud. For reasons that shall be discussed, we disagree with that contention. They also argue that Shelby failed to present substantial evidence of each element of its fraud and suppression claims. We first address the arguments as they relate to the promissory-fraud claim. In Howard v. Wolff Broadcasting Corp., 611 So. 2d 307 (Ala.1992), cert. denied, 507 U.S. 1031, 113 S. Ct. 1849, 123 L. Ed. 2d 473 (1993), and cert. denied sub nom. I.M.T.C., Inc. v. N.L.R.B., 507 U.S. 1032, 113 S. Ct. 1851, 123 L. Ed. 2d 474 (1993), this Court set forth the elements of promissory fraud: 611 So. 2d at 311. (Emphasis omitted.) See also Pinyan v. Community Bank, 644 So. 2d 919, 923 (Ala.1994); Capitol Constr. Co. v. Alabama Exterior Supply, Inc., 696 So. 2d 1087, 1090 (Ala.Civ.App.1997). Promissory fraud thus involves a promise to do, or to abstain from doing, an act in the future. Hillcrest Center, Inc. v. Rone, 711 So. 2d 901, 904 (Ala.1997). Shelby bases its promissory-fraud claim on one statement allegedly made by Dr. Burkethat Shelby would promptly receive a written contract that contained all the important provisions that were contained in the RSA, in particular, the three-year, noncancelable provision. Of course, Dr. Burke unequivocally denies making this representation. Equally unequivocal, however, was Dr. Jander's testimony that he did make it. Moreover, Dr. Thompson corroborated Dr. Jander's testimony. More specifically, Dr. Thompson testified that he discussed the RSA with Dr. Burke by telephone sometime before May 30, 1996. Dr. Thompson testified as follows: The jury heard substantial evidence from which it could conclude that Dr. Burke made this promise. "The burden is on the plaintiff to prove that when the promise was made the defendant intended to deceive." Goodyear Tire & Rubber Co. v. Washington, 719 So. 2d 774, 776 (Ala.1998) (emphasis added). "The plaintiff cannot meet his burden merely by showing that the alleged promise ultimately was not kept; otherwise, any breach of contract would constitute a fraud." Id. (emphasis added). In this case, the best evidence that Dr. Burke never intended to perform this promise came from Dr. Burke himself. He testified unequivocally that he did not take the RSA "seriously." (Reporter's Transcript, at 816-17.) He also testified that he "absolutely [did] not" intend to execute any contract with Shelby that contained a three-year, noncancelable provision. Id. at 815. We emphasize that the issue is not whether Dr. Burke intended to execute some contract, as the defendants state it, but whether he intended to execute the RSA, or a contract that differed in no material respect therefrom. The three-year, noncancelable provision was, as Dr. Jander described it, "the key." He said, "Everything else [was] minor." Id. at 310. On that issue, therefore, the evidence is clear. There was also substantial evidence indicating that he intended to deceive Shelby. In particular, Dr. Burke testified he did not want to lose Shelby's services and that he did intend ultimately to execute a contract for its services. Dr. Jander had, however, made it clear to Dr. Burke that if Diagnostic did not accept the RSA, with its "key" provisions, the parties would simply "go [their] merry ways." Moreover, it was undisputed that, in March 1996 when Dr. Burke made the promise, Diagnostic had no administrator to operate AMI. This was so, because the employment of the former administrator had been terminated on February 26, 1996, and her successor did not assume his duties until May 1996. Thus, if Shelby had discontinued its services in March, Diagnostic would have had neither an administrator nor servicing radiologists. The jury could have inferred, on the basis of ordinary experience, that the defendants would be in a better bargaining position after Shelby had executed the employment contract with Dr. Lindsey, the fourth radiologist. This is especially true in light of the March telephone conversation in which Dr. Jander told Dr. Burke that, in regard to whether to hire Dr. Lindsey, Shelby was "at the end of [its] rope." Consequently, the jury had before it substantial evidence, both direct and circumstantial, indicating that the defendants intended to deceive. In short, Shelby presented evidence sufficient to defeat the defendants' motion for a JML on the promissory-fraud claim. To prevail on a claim of ordinary fraud, that is, fraudulent misrepresentation, a plaintiff must produce substantial *721 evidence indicating (1) that the defendant made a false representation (2) of a "material existing fact," (3) upon which the plaintiff reasonably relied (4) to his damage as a proximate result. General Motors Corp. v. Bell, 714 So. 2d 268, 291 (Ala.1996); Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359, 364 (Ala.1993); Kline v. Resort Inv. Corp., 547 So. 2d 495, 497 (Ala.1989); Peek v. Reserve Nat'l Ins. Co., 585 So. 2d 1303, 1307 (Ala.1991). Dr. Burke allegedly told Dr. Jander that the "key" terms of the RSA were acceptable to Diagnostic. This, Shelby contends, was the false statement of material existing fact that forms the basis of its ordinary-fraud claim. As with the promise to submit an executed document consistent with the RSA, there is ample evidence that this statement was made and that it was false. We turn our attention, therefore, to an argument raised by the defendants as to the element of reasonable reliance. The record contains substantial evidence indicating that Shelby relied on the promise and the misrepresentation, in that it executed an employment contract with Dr. Lindsey and upgraded its insurance coverage, based on the expectation that it had a deal with Diagnostic for a three-year, noncancelable relationship. The defendants contend, however, that Shelby's reliance on Dr. Burke's misrepresentation was unreasonable as a matter of law, because, they argue, the parties had no written contract, and, they say, the parties and their lawyers knew, or reasonably should have known, that an oral, three-year service contract would violate the Statute of Frauds. See Ala.Code 1975, § 8-9-2(1). Relying on Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359, 364 (Ala. 1993), they argue that the Statute of Frauds negates the element of reliance. We agree that Wilma is applicable to this case, but not for the proposition cited by the defendants. Wilma "involve[d] a dispute over whether the parties [had] entered into a lease of shopping center property" for the "placement of a Piggly Wiggly grocery store in the shopping center." Id. at 360. "Wilma Corporation, the proposed landlord, brought claims alleging breach of contract and fraud against the proposed tenants: Fleming Foods of Alabama, Inc., Fleming Companies, Inc., Dixieland Food Stores, Inc., and Aubrey Cochran (collectively referred to as `Fleming')." Id. At a meeting of the parties, after three years of negotiations, Cochran, who was the "director of retail development for Dixieland," signed a document entitled "`Build and Lease Agreement and Sublease Lease Information ["the lease order"], which specified the terms of [the] anticipated lease.'" Id. It was undisputed that the lease order was not intended to represent the final agreement of the parties. In conjunction with his execution of the lease order, however, Cochran allegedly declared "that the lease agreement was a `done deal.'" Id. at 361. Wilma sued Fleming, after Fleming had refused to "proceed with the lease agreement," id.; that declaration was the basis of Wilma's fraud claim. The trial court entered a summary judgment in favor of Fleming, holding, among other things, that the breach-of-contract claim was barred by the Statute of Frauds, and that Wilma's reliance on Cochran's statement "that the lease agreement was a `done deal,'" was unjustified. Id. This Court agreed with the trial court on those points and affirmed the summary judgment. Id. at 366. *722 That case involved a number of issues pertinent to this appeal. One issue was whether Cochran's misrepresentation gave rise to a claim of promissory fraud, or of ordinary fraud. A second issue involved the implications of the Statute of Frauds for the element of reliance. Fleming contended that Cochran's statement was essentially a promise, which, to the extent it was actionable at all, gave rise only to a claim of promissory fraud. Wilma, however, argued that Cochran purported to represent a currently existing fact, namely, "that the parties had reached an agreement." Id. at 363. This Court agreed with Wilma. Relying on Standard Furniture Manufacturing Co. v. Reed, 572 So. 2d 389 (Ala.1990), it concluded that the misrepresentation related to "a present fact, that which was to be performed in the future." 613 So. 2d at 364. In other words, it determined that Wilma's claim was one of ordinarynot promissory fraud. The Court held, however, that Wilma's reliance on Cochran's misrepresentation was unjustifiable as a matter of law. It did so, in part, on the basis of the Statute of Frauds. Over Wilma Corporation's objections, it held that the Statute of Frauds was a good defense to Wilma Corporation's breach-of-contract claim. Cochran did not have written authority to bind Fleming to the lease order. Id. at 362-63. See Hight v. Byars, 569 So. 2d 387, 388 (Ala.1990) ("in order for an agent to act on a principal's behalf regarding a matter controlled by the Statute of Frauds, the agent's authority must be in writing"). Corollarily, the Court concluded that the Statute of Frauds negated the element of reliance in Wilma Corporation's fraud claim. Specifically, the Court explained: 613 So. 2d at 366. In this case, Dr. Burke's statement that the "key" terms of the RSA were acceptable to Diagnostic differs in no relevant respect from Cochran's misrepresentation "that the lease agreement was a `done deal.'" Thus, we agree with Shelby that it states a claim of ordinary fraud. At first glance, therefore, the defendants' reliance on Wilma for the proposition that the Statute of Frauds negates the element of reliance appears valid. Although the Wilma Court specifically rejected Wilma Corporation's objection to Fleming's Statute of Frauds defense, in doing so it illuminated a crucial distinction between these cases. Wilma Corporation argued for the application of the "fraudulent conduct exception" to Fleming's Statute of Frauds defense. Id. at 363. The Court rejected that argument, because the fraud involved in Wilma was not "inherent fraud." Id. The Court explained: Id. (emphasis added). The distinction between these cases is this: Wilma did not involve promissory fraud; this one does. Wilma Corporation was not required to prove that a promise was made with the intent to deceive and without the present intent to perform. As we discussed in Part III, Shelby has made such a showing. Thus, Shelby, unlike Wilma Corporation, presented substantial evidence of "inherent fraud." In this case, therefore, the Statute of Frauds does not operate to negate the element of reliance in Shelby's fraudulent-misrepresentation claim. Cf. Trum v. Melvin Pierce Marine Coating, Inc., 562 So. 2d 235 (Ala.1990) (Statute of Frauds precluded a breach-of-contract claim based on alleged breach of an oral, four-year employment contract; nevertheless, a promissory-fraud claim was viable, because the evidence indicated that the defendant never intended to keep the promise). Thus, Shelby presented evidence sufficient to overcome the defendants' motion for a JML on the fraudulent-misrepresentation claim. To prevail on a fraudulent-suppression claim, the plaintiff must present substantial evidence of "(1) the suppression of a material fact (2) that the defendant has a duty to communicate (3) because of a confidential relationship between the parties or because of the circumstances of the case and (4) injury resulting as a proximate consequence of the suppression." Ex parte Dial Kennels of Alabama, Inc., 771 So. 2d 419, 421 (Ala.1999). See also Ala. Code 1975, § 6-5-102. Shelby contends that Dr. Burke fraudulently suppressed, among other things, the facts that (1) the RSA was not acceptable to Diagnostic and (2) that Diagnostic was not taking the RSA seriously. The defendants argue that Dr. Burke had no duty to disclose these facts to Shelby. We disagree with the defendants. "A duty to disclose [may] arise from a request for information." Ex parte Dial Kennels, 771 So. 2d at 421 (emphasis added). "[O]ne who responds to an inquiry has a duty to speak the entire truth...." Id. at 422. (Emphasis added.) "[W]here one responds to an inquiry, it is his duty to impart correct information, and he is guilty of fraud if he ... gives equivocal, evasive, or misleading answers calculated to convey a false impression ..., or if he fails to disclose the whole truth." Boswell v. Coker, 519 So. 2d 493, 495 (Ala.1987) (internal quotations omitted). In this case, the jury had before it ample evidence indicating that Dr. Burke was confronted with such multiple inquiriesboth from Dr. Jander and from Dr. Thompsonas to require him to disclose fully the true status of the contract negotiations and indicating that he failed to do so. Thus, the trial court properly denied the defendants' motion for a JML on the fraudulent-suppression claim. We have considered all the arguments of the defendants, and we find in them no reason to reverse the judgment of the trial *724 court. Consequently, that judgment is affirmed. AFFIRMED. LYONS and ENGLAND, JJ., concur. MADDOX, HOUSTON, and BROWN, JJ., concur in the result. HOOPER, C.J., and SEE, J., dissent. HOOPER, Chief Justice (dissenting). On review of a ruling on a motion for a judgment as a matter of law, this Court must review the evidence in the light most favorable to the nonmoving party; here, that was the plaintiff Shelby. Renfro v. Georgia Power Co., 604 So. 2d 408 (Ala. 1992). Viewing the evidence in that manner, I see no evidence of promissory fraud that proximately caused any damage to Shelby. I see no advantage to the defendants in Dr. Burke's hiding from Dr. Jander his disagreement over the terminability of the contract. In 1996, Diagnostic found a group of radiologists who would perform the work at a less expensive rate than Shelby was charging. Diagnostic canceled the services of Shelby under the 1992 contract. Why would Dr. Burke want to keep Diagnostic in a contract that he intended to terminate anyway? Based on the plaintiff Shelby's briefs, it seems that is how Shelby wants this Court to understand the evidence in this case. This logical gap creates an irreparable break in the chain of proximate causation in this case. What was Shelby's damage? If Shelby had in fact entered into a contract with Diagnostic that was cancelable at will without Shelby's knowledge, and had entered that contract without knowing that fact,[5] and Diagnostic had then canceled the contract, then Diagnostic's actions could have resulted in damage that might be actionable in court. However, it appears that the alleged promise from Dr. Burke to enter into a contract containing a three-year noncancelable provision was unconnected to Shelby's loss of the contract. I did not know that the courts of this State held parties to agreements that have not been made final. Therefore, the main opinion will have unpredictable effects upon the law of contract. The opinion could possibly stand for the following dangerous propositions: If I indicate to a prospective contracting party that I will agree to something and then delay the preparation of the contract, is there potential liability if I later decide against entering into the contract? If the delay results from the fact that I want to prepare a counteroffer that contradicts what I originally "promised," am I guilty of promissory fraud? What effect will such a proposition have on the contract-negotiation process? If I say I will include a provision in a contract and on reflection decide against it, am I guilty of promissory fraud because the other party was presumptuous enough to act on a contractual provision that did not yet exist? The problems stated above are the very reason we have written contracts. Our society does not demand that people act in a certain way until it is clear that they have agreed to so act. Such an agreement becomes clear when a signed contract exists by which a court or arbitrator can later analyze what the parties agreed to in black and white. I consider the main opinion an ingenious way for the losing party in a contract negotiation to profit from its *725 own hasty and impatient action. That principle undermines the sanctity of a contract. For these reasons, I respectfully dissent. SEE, Justice (dissenting). I dissent from the main opinion's affirmance of the trial court's judgment denying Diagnostic and AMI's motions for a judgment as a matter of law ("JML") on Shelby's fraudulent-misrepresentation, promissory-fraud, and fraudulent-suppression claims. Because Shelby could not have reasonably relied on Dr. Burke's representations, I would reverse the trial court's judgment and enter a judgment in favor of Diagnostic and AMI. In affirming the trial court's judgment, the main opinion would distinguish Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359 (Ala.1993), in which this Court held that the plaintiff-landlord failed to present substantial evidence creating a genuine issue of material fact as to whether it had justifiably relied on the alleged misrepresentation of the tenant's agent that the lease was a "done deal." This Court found that the fact that the landlord knew or should have known that the lease agreement had to be in writing indicated that the landlord could not have justifiably relied upon the oral representations by the tenant's agent. The main opinion in this case concludes that, unlike the landlord in Wilma, Shelby proved promissory fraud. I disagree. An essential element of any fraud claim is reasonable reliance. Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala.1997). "The element of [reasonable] reliance is assessed according to the circumstances surrounding the representation...." Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So. 2d 359, 364 (Ala.1993). First, Dr. Burke specifically told Dr. Jander that "there might be minor, inconsequential modifications that might come up when [the contract proposed by Shelby went] through [Diagnostic's] legal department." Thus, Shelby knew that the contract was not final. Second, this was "an arm's-length transaction between two corporations whose agents knew or should have known of the requirements of the Statute of Frauds." Wilma, 613 So. 2d at 366. Shelby regularly provides radiology services to numerous hospitals and was represented by counsel in this transaction; therefore, Shelby knew or should have known that an oral, three-year service contract would violate the Statute of Frauds, Ala.Code 1975 § 8-9-2(1).[6] Moreover, the evidence indicates Shelby had actual knowledge of the requirement of a writing. Dr. Jander repeatedly asked Dr. Burke and Mr. Paul about the status of Shelby's proposed contract, and he admitted at trial that he fully "[understood] the importance of signed contracts." I conclude that Shelby could not have reasonably relied upon the alleged misrepresentation or promise by Diagnostic; therefore, I believe the trial court erred in denying the defendants' motions for a JML and in submitting the fraudulent-misrepresentation, promissory-fraud, and fraudulent-suppression claims to the jury. [1] "In reviewing a ruling on a motion for a [judgment as a matter of law], this Court views the evidence in the light most favorable to the nonmovant[, Shelby, in this case,] and entertains such reasonable inferences from that evidence as the jury would have been free to draw." Daniels v. East Alabama Paving, Inc., 740 So. 2d 1033, 1037 (Ala.1999). [2] The letter also contained two proposals for additions to the RSA regarding (1) scheduling in general, and (2) scheduling of "myelography" procedures in particular. [3] Although there appears to be some confusion as to the jury's actual disposition of the breach-of-contract claim, for the purposes of this appeal, we will assume it was decided in favor of Diagnostic. [4] The defendants do not argue that the amount of the verdict was excessive. [5] With respect to a written contract, that would be impossible unless Diagnostic prepared two different contracts, one for Shelby's review that contained the three-year non-cancelable provision and one for signature that was terminable at will. Clearly, that situation would create a case of fraud. [6] "The requirement that [long-term] transactions be in writing is well known in our society, particularly in the context of commercial business transactions." Wilma, 613 So. 2d at 366.

September 29, 2000

475da3b6-1466-4a05-882e-c6a74a202c43

Mutual Assur., Inc. v. Chancey

781 So. 2d 172

1982161

Alabama

Alabama Supreme Court

781 So. 2d 172 (2000) MUTUAL ASSURANCE, INC. v. Phillip CHANCEY and Beth Chancey. 1982161. Supreme Court of Alabama. May 26, 2000. Opinion Modified on Denial of Rehearing September 29, 2000. *173 Bibb Allen, Deborah Alley Smith, and Susan Scott Hayes of Rives & Peterson, P.C., Birmingham, for appellant. Frank H. Hawthorne, Jr., and C. Gibson Vance of Hawthorne, Hawthorne & Vance, L.L.C., Montgomery; and David G. Wirtes, Jr., and George M. Dent III of Cunningham, Bounds, Yance, Crowder & Brown, L.L.C., Mobile, for appellees Phillip Chancey and Beth Chancey. Stanley Rodgers and Jeffrey T. Kelly of Lanier Ford Shaver & Payne, P.C., Huntsville, for appellee Kimberly Whitchard. Michael K. Wright and Sybil Vogtle Abbot of Starnes & Atchison, L.L.P., Birmingham, for appellee East Alabama Behavioral Medicine, P.C. Carol Ann Smith and J. Tobias Dykes of Smith & Ely, L.L.P., Birmingham, for amicus curiae Alabama Defense Lawyers Ass'n. COOK, Justice. Phillip Chancey and his wife Beth Chancey sued Dr. Kimberly Whitchard and her employer, East Alabama Behavioral Medicine ("EABM"), stating claims based primarily on theories of negligence, wantonness, and "abandonment." Mutual Assurance, Inc., the defendants' liability insurer, moved to intervene. The trial court denied the motion to intervene, and Mutual Assurance appealed from the denial. We affirm. Mutual Assurance sought to intervene for the purpose of requesting interrogatories or special verdict forms so that it could ascertain the basis of the jury's verdict in case the jury finds against its insureds. Mutual Assurance contends that it is seeking to resolve any questions regarding coverage so that if a judgment is rendered against its insureds, it will know if the judgment falls within the scope of the insureds' coverage. Mutual Assurance states in its brief: Appellant's Brief, p. 2.[1] Mutual Assurance contends that the trial court abused its discretion in denying its motion to intervene. It urges this Court to overrule Universal Underwriters Insurance Co. v. East Central Alabama Ford-Mercury, Inc. ("Universal I"), 574 So. 2d 716 (Ala.1990), and United States Fidelity & Guaranty Co. v. Adams, 485 So. 2d 720 (Ala.1986), and to recognize on the part of a defendant's liability insurer an absolute right to intervene in order to request interrogatories or special verdict forms to ascertain the basis of any verdict against the defendant. Mutual Assurance asserts that, absent intervention, it will not be able to ascertain whether a judgment against its insureds falls within the scope of its coverage. "[A]n order denying intervention as of right is appealable." Universal I, supra, 574 So. 2d at 719. See also Thrasher v. Bartlett, 424 So. 2d 605 (Ala.1982). Rule 24(a), Ala. R. Civ. P., provides for intervention as of right: As Mutual Assurance points out, we addressed this issue in Universal I and in Adams, holding that an insurer has no absolute right to intervene in an action against its insured. Mutual Assurance asks us to overrule Universal I and Adams and their progeny and to recognize an insurer's right to intervene because, it argues, (1) a liability insurer has a sufficiently direct interest to support a right to intervene in an action against its insured if the claims may or may not be covered by the insurance policy,[2] and (2) a declaratory-judgment action is an insufficient alternative in cases where the question of coverage is dependent upon the factual basis of a jury's verdict. We decline Mutual Assurance's request to overrule Universal I and Adams. In Universal I, as in the instant case, the defendant's insurer sought to intervene in an action brought against its insured; it sought intervention "for the sole purpose of submitting special interrogatories or a special verdict form to the jury." 574 So. 2d at 718. We concluded that an insurer "does not have a direct, substantial, and protectable interest" under Ala. R. Civ. P. 24(a)(2) because its interest is contingent upon the plaintiff's recovery on the underlying claims. See also Adams, supra. We find no basis on which to distinguish this present case from Adams and its progeny and no compelling reason to overrule *175 Adams and Universal I. Therefore, in this case, as we held in Universal I and Adams, the trial court correctly denied the insurer's motion to intervene as of right. See also Restor-A-Dent Dental Laboratories, Inc. v. Certified Alloy Prods., Inc., 725 F.2d 871 (2d Cir.1984). In Universal I, we stated that the insurer would not be barred from litigating the coverage issue in a declaratory-judgment action after the resolution of the underlying claims against its insured. See Universal I, 574 So. 2d at 723. Mutual Assurance contends that a declaratory-judgment action litigating the coverage issue following the resolution of this action based on the claims against its insureds will be insufficient because, it says, the declaratory action could involve the same factual issues that are to be adjudicated in this action against its insureds. Mutual Assurance argues that a declaratory-judgment action would be dismissed because it would present an issue that had been presented in this present action against its insureds. "`Jurisdiction of a declaratory judgment action will not be entertained if there is pending at the time of the declaratory judgment action another action or proceeding to which the same persons are parties, and in which are involved and may be adjudicated the same identical issues that are involved in the declaratory judgment action.'" Home Ins. Co. v. Hillview 78 West Fire District, 395 So. 2d 43, 44 (Ala.1981), quoting Mathis v. Auto-Owners Ins. Co., 387 So. 2d 166, 167 (Ala.1980). See also Ex parte Breman Lake View Resort, L.P., 729 So. 2d 849 (Ala.1999). However, the threshold issue of coverage in a potential declaratory-judgment action by Mutual Assurance and the issues presented in this underlying action against the insureds are not the same. Therefore, a declaratory-judgment action to determine the coverage issue would not be foreclosed. Mutual Assurance also argues that the trial court abused its discretion in denying Mutual Assurance's motion for permissive intervention under Rule 24(b)(2). It argues that even though, if the jury in the present action finds against its insureds it would have the right to file a declaratory-judgment action, a declaratory-judgment action would not allow it to determine what the jury relied on in finding against the insureds. Rule 24(b) permits permissive intervention "Upon timely application ... (2) when an applicant's claim or defense and the main action have a question of law or fact in common." That rule provides that "In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties." We also addressed this issue in Universal I, supra, in which we held that it was not an abuse of discretion for a trial court to deny an insurance company's motion for permissive intervention for the purpose of requesting special verdict forms or interrogatories for submission to the jury. See also Universal Underwriters Insurance Co. v. Anglen ("Universal II"), 630 So. 2d 441 (Ala.1993). Permissive intervention is within the broad discretion of the trial court and the court's ruling on a question of permissive intervention will not be reversed unless the court clearly abuses its discretion. Universal II, 630 So. 2d at 443. Although Mutual Assurance argues that it cannot, under our present "alternative procedure," inquire of the jury the *176 basis for its finding, Mutual Assurance has not demonstrated to this Court why that alternative procedure, set forth in Universal I, will not allow it to achieve its objective.[3] The alternative procedure would allow Mutual Assurance to accomplish its objective after the resolution of the underlying claims against its insureds, without prejudicing the plaintiffs or the defendants in this action presenting those claims. Based on the facts of this case, we conclude that the trial court did not abuse its discretion in denying Mutual Assurance's motion to intervene. We see no compelling reason to overrule Universal I and Adams, or to reject the alternative procedure we set out in Universal I by which permissive intervention may be allowed. The order denying intervention is affirmed, based on the authority of Universal I, Universal II, and Adams. AFFIRMED. MADDOX, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. LYONS, J., concurs specially. HOUSTON and SEE, JJ., dissent. LYONS, Justice (concurring specially). Whether to allow an insurer permissive intervention, pursuant to Rule 24(b), Ala. R. Civ. P., in a tort action against its insured, so that the insurer can invoke Rule 49, Ala. R. Civ. P., and thereby obtain clarification of coverage issues, falls within the sound discretion of the trial court. Allowing such intervention, therefore, would not constitute an abuse of discretion. Further, even if the court denies the motion to intervene, the trial court could use Rule 49 in submitting the tort claim to the jury. Finally, a trial court could deny the intervention motion conditionally, based upon the condition that the party opposing *177 intervention acquiesces in the use of Rule 49, so long as the substantial rights of other parties are not affected. HOUSTON, Justice (dissenting). I would reverse and remand, because I would overrule Universal Underwriters, Ins. v. East Central Alabama Ford-Mercury, Inc., 574 So. 2d 716 (Ala.1990), and United States Fidelity & Guaranty Co. v. Adams, 485 So. 2d 720 (Ala.1986). USF & G v. Adams was decided by a division of this Court; because I was not a member of that division, I had no opportunity to vote on the opinion in that case. I dissented in Universal Underwriters, and, although the case as released did not show that I joined Justice Jones's dissenting opinion, I did. See Universal Underwriters Ins. Co. v. Anglen, 630 So. 2d 441, 444 (Ala.1993) (Houston, J., concurring in part and dissenting in part). A liability insurer has a right to intervene in an action against its insured when that action asserts both covered and noncovered claims, to ascertain, through the use of a special verdict form or interrogatories to the jury, the factual basis of any verdict returned against its insured. Mutual Assurance should not be precluded from seeking a change in the law by reason of its not having requested relief under Rule 24(a), Ala. R. Civ. P., to which it was not entitled under existing law and which the trial court could not have granted under existing law. "Alabama law does not require the performance of a vain or useless act." Mutual Assurance, Inc. v. Wilson, 716 So. 2d 1160, 1165 (Ala.1998). See Goodyear Tire & Rubber Co. v. Vinson, 749 So. 2d 393, 403 (Ala.1999) (on application for rehearing) (Houston, J., dissenting, joined by Maddox, J.). SEE, Justice (dissenting). The majority concludes correctly that our precedent requires an affirmance of the trial court's order denying Mutual Assurance's motion to intervene in this action. See Universal Underwriters Ins. Co. v. East Cent. Alabama Ford-Mercury, Inc., 574 So. 2d 716 (Ala.1990). However, I agree with Justice Houston that this Court should overrule Universal Underwriters. As this Court has recognized, "[a]bsent a special verdict, the fact of coverage is impossible to prove." Alabama Hospital Ass'n Trust v. Mutual Assurance Soc'y of Alabama, 538 So. 2d 1209, 1216 (Ala.1989). This Court's attempt to craft an alternative by permitting the insurer to litigate the issue of coverage before the same jury that decided liability, see Universal Underwriters, 574 So. 2d at 723-24, requires: (1) that the insurer litigate its claim before a jury it had no role in selecting; (2) that the insurer's counsel overcome the rapport opposing counsel has developed with the jury; and (3) that the insurer face the potential prejudice inherent in having the jury that determined the plaintiff was entitled to recover also determine whether the defendant's insurance covers that liability. When an action against an insured includes both covered and noncovered claims, the insurer should be permitted to intervene in that action for the limited purpose of requesting a special verdict form or special interrogatories in order to discern the factual basis of any verdict against the insured. I respectfully dissent. [1] Mutual Assurance's insurance policy is not included in the record on appeal. [2] Mutual Assurance urges this Court to adopt Justice Jones's dissenting opinion in Universal I. [3] In Universal I, we developed the following alternative procedure allowing permissive intervention: "Under this alternative procedure for permissive intervention, the trial would be bifurcated. In the first phase of the trial, the jury or judge would resolve issues of liability between the plaintiff and the insured defendant. The second phase would occur only if the jury or judge in the first phase rendered a verdict or judgment against the insured defendant. In the second phase, the insurance company would be allowed to enter and try, before the same jury or judge, only the insurance coverage issue. We emphasize that because of the many factors involved, a bifurcated trial is not a matter of right for the insurer, but, rather, the decision of whether to allow intervention under this alternative procedure will rest within the discretion of the trial court as governed by the interests of justice and those factors articulated in [Ala.] R. Civ. P. 42(b). In order to avail itself of this remedy, the insurer must make, within a reasonable time, a motion to intervene under this procedure. The motion should be similar to a complaint for declaratory judgment made pursuant to [Ala.] R. Civ. P. 57. Should the trial court choose to allow intervention under this procedure, the insurer would be included in the discovery process with all parties in the underlying action. We note particularly that the insurer would be required to make available to the plaintiff, in the underlying action, all facts discoverable pursuant to the Alabama Rules of Civil Procedure, as well as the relevant insurance policy or policies. During the first phase, neither the jury nor the judge would consider the insurer's participation or the coverage issue. The jury would become aware of the insurer and the coverage issue only in the event that it rendered a verdict in the plaintiff's favor in the first phase. The judge would consider the coverage issue only if he or she rendered a judgment for the plaintiff in the first phase. If such a verdict or judgment occurs, then the trial would proceed to the second phase. In the second phase, the same jury or judge would hear and decide the coverage issue between the defendant insured and the insurer." Universal I, 574 So. 2d at 723-24.

September 29, 2000

389f71d1-4cd7-4a92-aa9f-46fa0ed1c4ce

Ex Parte Rizk

791 So. 2d 911

1970493

Alabama

Alabama Supreme Court

791 So. 2d 911 (2000) Ex parte Botros RIZK, M.D. (In re Luciana Robinson, as administratrix of the estate of Elouise Robinson, deceased v. University of South Alabama Medical Center et al.) 1970493. Supreme Court of Alabama. June 30, 2000. Rehearing Overruled November 11, 2000. Philip H. Partridge and Thomas H. Nolan, Jr., of Brown, Hudgens, P.C., Mobile, for petitioner. S. Greg Burge and R. Edwin Lamberth of Heninger, Burge, Vargo & Davis, *912 L.L.P., Birmingham, for respondent Luciana Robinson. David G. Wirtes, Jr., of Cunningham, Bounds, Yance, Crowder & Brown, L.L.C., Mobile, for amicus curiae Alabama Trial Lawyers Ass'n. Robert L. Williams of Spain & Gillon, L.L.C., Birmingham, for amici curiae The University of Alabama School of Medicine and The University of South Alabama College of Medicine. JOHNSTONE, Justice. The opinion of November 24, 1999, is withdrawn and the following is substituted therefor. Defendant-petitioner Dr. Botros Rizk petitions this Court for a writ of mandamus directing the trial court to vacate its order denying Dr. Rizk's motion for summary judgment and to grant him summary judgment on the ground of his qualified immunity from suit. We determine that the writ must be denied. Luciana Robinson, as administratrix of the estate of Elouise Robinson, deceased, filed a wrongful death action on the theory of medical malpractice pursuant to § 6-5-548, Ala.Code 1975. One of the defendants is Dr. Botros Rizk, a resident at the University of South Alabama Hospitals and Clinics (USAHC), a state institution. The complaint alleges that negligence by Dr. Rizk in performing an emergency caesarean-section delivery and in providing after-care proximately caused the death of his patient, whose estate the plaintiff Robinson administers. Dr. Rizk moved for summary judgment. One of his grounds is that his status as a state employee performing a discretionary function immunizes him from suit. The trial judge denied Dr. Rizk's motion for summary judgment, Dr. Rizk sought permissive appeal under Rule 5, Ala. R.App. P., the trial judge denied permission, and Dr. Rizk petitioned this Court for a writ of mandamus directing the trial judge to grant the motion for summary judgment. While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion for summary judgment grounded on a claim of immunity is reviewable by petition for writ of mandamus. Ex parte Purvis, 689 So. 2d 794 (Ala.1996). This Court will address only the issue of qualified immunity, or, as we will call it in this context, State-agent immunity, and will state only the operative facts material to that issue. Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Rule 56(c)(3), Ala. R. Civ. P., Young v. La Quinta Inns, Inc., 682 So. 2d 402 (Ala.1996). A court considering a motion for summary judgment will view the record in the light most favorable to the nonmoving party, Hurst v. Alabama Power Co., 675 So. 2d 397 (Ala.1996), Fuqua v. Ingersoll-Rand Co., 591 So. 2d 486 (Ala. 1991); will accord the nonmoving party all reasonable favorable inferences from the evidence, Fuqua, supra, Aldridge v. Valley Steel Constr., Inc., 603 So. 2d 981 (Ala. 1992); and will resolve all reasonable doubts against the moving party, Hurst, supra, Ex parte Brislin, 719 So. 2d 185 (Ala.1998). An appellate court reviewing a ruling on a motion for summary judgment will, de novo, apply these same standards applicable in the trial court. Fuqua, supra, Brislin, supra. Likewise, the appellate court will consider only that factual material available of record to the trial court for its consideration in deciding the *913 motion. Dynasty Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala.1991), Boland v. Fort Rucker Nat'l Bank, 599 So. 2d 595 (Ala.1992), Rowe v. Isbell, 599 So. 2d 35 (Ala.1992). Dr. Rizk was a full-time third-year resident at USAHC, a division of the University of South Alabama and a state entity for the purposes of immunity analysis. Sarradett v. University of South Alabama Medical Center, 484 So. 2d 426 (Ala.1986). The only compensation he received was his salary paid by USAHC. He was licensed to perform the caesarean section and to provide the aftercare under the supervision of an attending physician. Robinson, the plaintiff, challenges Dr. Rizk's status as a state employee by citing facts to the effect that USAHC allowed the attending physician, through a private medical business entity, to bill patients for his services in supervising Dr. Rizk and other residents and to receive private compensation pursuant to such billings. This side agreement, however, does not diminish Dr. Rizk's status as a state employee, as he received none of the side-agreement moneys. Robinson's claim against the attending physician is not before us in this case. The determinative issue is whether Dr. Rizk is protected from Mrs. Robinson's suit by State-agent immunity. Our recent case of Ex parte Cranman, 792 So. 2d 392 (Ala.2000), recounts the evolution of Stateagent immunity, restates the law of State-agent immunity, and, according to that restatement, decides this very same issue whether a physician employed by a state university in its health facility is immune from suit for negligence in treating a patient there. Cranman holds that the physician is not protected by State-agent immunity. Cranman controls this case. The restatement in Cranman reads: 792 So. 2d at 405. Dr. Rizk's treatment of his patient, the plaintiff's decedent, does not fit within any of the categories of immune State-agent conduct contained in the Cranman restatement. Therefore, Dr. Rizk is not immune. Accordingly, the trial court did not err in rejecting Dr. Rizk's claim of immunity in the summary-judgment proceedings. Thus, the petitioner is not entitled to a writ of mandamus directing the trial judge to enter summary judgment. APPLICATION GRANTED; OPINION OF NOVEMBER 24, 1999, WITHDRAWN; OPINION SUBSTITUTED; WRIT DENIED. HOOPER, C.J., and HOUSTON, LYONS, and ENGLAND, JJ., concur. COOK and BROWN, JJ., concur in the result. MADDOX and SEE, JJ., dissent. COOK, Justice (concurring in the result). I concur in the result. See my special writing concurring in the judgment in Ex Parte Cranman, 792 So. 2d 392 (Ala.2000). SEE, Justice (dissenting). I dissent from the denial of the writ of mandamus. I would issue the writ directing the trial court to enter a summary judgment in favor of the defendant, Dr. Botros Rizk, on the ground that he is entitled to discretionary-function, or state-agent, immunity. I dissent for the reasons stated in my dissent in Ex parte Cranman, 792 So. 2d 392, 413 (Ala.2000) (substituted opinion on application for rehearing). I would apply to the facts of this case the following balancing test (this is the test stated in the withdrawn Cranman opinion of November 14, 1999): 792 So. 2d at 414-15 (See, J., dissenting and quoting from the withdrawn opinion). Dr. Rizk, in performing an emergency cesarean-section upon his patient Elouise Robinson and in providing her aftercare, *915 was engaged in discretionary functions. See Smith v. Arnold, 564 So. 2d 873 (Ala. 1990); Smith v. King, 615 So. 2d 69 (Ala. 1993). The Alabama Legislature established the University of South Alabama as "a state institution of higher learning" and authorized the governing body of the University, the board of trustees, in order "to carry into effect the [Legislature's] purposes," to "prescribe courses of instruction" and "[to] do whatever else they may consider in the best interest of the institution." Ala.Code 1975, §§ 16-55-1 and -4. In furtherance of its educational purpose, the University has created a college of medicine, and, in conjunction with the college of medicine, the University owns and operates the University of South Alabama Medical Center ("USAMC").[1] See id. § 16-55-3 (authorizing the board of trustees to hold and dispose of any real and personal property). The USAMC provides medical education and training to medical students and resident physicians. As a third-year resident physician employed by the University, Dr. Rizk was furthering the educational purpose of the University and its college of medicine when he provided medical care and treatment to Ms. Robinson.[2] The denial of state-agent's immunity to Dr. Rizk and other resident physicians at the University would hinder the educational purpose of the University by impeding the University's ability to attract, educate, and train medical students and resident physicians, and it would thereby lessen the availability of qualified physicians to provide medical care and treatment to the citizens of the State of Alabama. Therefore, "because [Dr. Rizk was] exercising a discretionary function and because it does not appear in this case that the burden on the plaintiff significantly outweighs the benefits of applying State-agent immunity to [Dr. Rizk], the balance of the § 13 and § 14 policies, in light of § 43, favors the application of discretionary-function immunity to [Dr. Rizk] in the performance of [his] University-related health-care responsibilities." Ex parte Cranman, 792 So. 2d at 417 (on application for rehearing) (See, J., dissenting). I therefore dissent from the denial of the writ of mandamus. MADDOX, J., concurs. [1] In Sarradett v. University of South Alabama, 484 So. 2d 426, 427 (Ala.1986), this Court held that in operating the USAMC the University is performing a governmental function, and, thus, that the USAMC is a state entity immune from suit under Ala. Const. of 1901, art. I, § 14. [2] This Court has held that state-employed physicians engage in discretionary functions in making health-care decisions. See, e.g., Smith v. Arnold, 564 So. 2d 873 (Ala.1990). Although this factor alone is not determinative, it does favor the application of Stateagent's immunity. See this Court's June 16, 2000, opinion in Ex parte Cranman, 792 So. 2d at 413 (See, J., dissenting).

November 11, 2000

ef4c7f62-879c-425d-8bc1-71b40587dbb9

Thermo-Sav, Inc. v. Bozeman

782 So. 2d 241

1991106

Alabama

Alabama Supreme Court

782 So. 2d 241 (2000) THERMO-SAV, INC. v. Elizabeth BOZEMAN. 1991106. Supreme Court of Alabama. October 27, 2000. *242 Mark N. Chambless and Daniel L. Feinstein of Chambless, Math, Moore, Brown & Carr, P.C., Montgomery, for appellant. Jerry L. Thornton, Hayneville, for appellee. ENGLAND, Justice. Thermo-Sav, Inc., appeals an order of the Lowndes Circuit Court holding an arbitration clause unenforceable and denying its motion to compel arbitration. This case arose as a result of a dispute regarding work Thermo-Sav performed on Elizabeth Bozeman's home and payment Bozeman was to make pursuant to a contract she and Thermo-Sav signed. Thermo-Sav argues that the trial court erred in denying its motion to compel arbitration. We affirm. Bozeman entered into a contract with Thermo-Sav, whereby Thermo-Sav was to build a 16' × 16' room addition onto Bozeman's home. After negotiating the cost of the job, Thermo Sav's employee, Jeff Davis, filled in some information on the contract and presented it to Bozeman for her signature. The contract was printed on one piece of paper, and it included yellow and pink carbon copies. Davis gave Bozeman a carbon copy after she signed the contract. Bozeman testified by sworn affidavit, in part, as follows: The arbitration provision is found on the reverse side of the contract, under a section entitled "GOVERNING LAW." That section reads in its entirety as follows: On July 6, 1999, Thermo-Sav filed with the American Arbitration Association a demand for arbitration; it sought damages for breach of contract, based on Bozeman's failure to pay the balance called for under the contract. Bozeman filed an action for a declaratory judgment in the Lowndes Circuit Court on September 30, 1999, requesting a stay of arbitration and a declaration that the arbitration clause was unenforceable. Although the trial judge entered an order that he called an order denying Thermo-Sav's motion to compel arbitration, we note that the order is actually a final order, an order that grants Bozeman the relief she sought in her declaratory-judgment action, i.e., a declaration that the arbitration provision was unenforceable. The Federal Arbitration Act ("FAA") provides that an arbitration provision is enforceable except "upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. It goes without saying that signing an agreement providing that all disputes are to be resolved exclusively through arbitration is equivalent to waiving one's right to a trial by jury. However, "arbitration is a creature of contract and ... a party cannot be required to submit to arbitration any claim that he or she has not agreed so to submit." Ex parte Warren, 718 So. 2d 45, 47 (Ala.1998). Bozeman testified that Davis gave her the contract on a clipboard, that she read what she thought was the entire contract, and that she signed at the bottom of the page, unaware of the additional terms printed on the reverse side of the contract. The front of the contract contains no language indicating that additional terms appear on the reverse side of the contract or directing the contracting party's attention to those additional terms. Thermo-Sav knew the reverse side of the contract contained additional terms, the contract being on a form it used in the regular course of its business. Yet, its employee, Davis, did not direct Bozeman's attention to the additional terms. We conclude that the "Governing Law" provision, which contained the arbitration clause, was not a part of the contract because there was no indication on the front of the contract that additional provisions appeared on the back of the contract and that those additional provisions were a part of the contract. The evidence suggests that Bozeman was not aware of any of the terms that appeared on the reverse side of the contract. Because Thermo-Sav knew of those provisions and failed to bring them to Bozeman's attention, the circuit court could have concluded that Bozeman did not agree to be bound by those provisions and *244 that those provisions, including the arbitration clause, are not enforceable against her. The judgment of the trial court is affirmed. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, and JOHNSTONE, JJ., concur. BROWN, J., recuses herself.

October 27, 2000

57f6b233-1e3e-4b10-b2f7-65d7349632dd

Ex Parte Thorn

788 So. 2d 140

1991278, 1991279

Alabama

Alabama Supreme Court

788 So. 2d 140 (2000) Ex parte Martha THORN and Rex Thorn, and Ex parte Thorn's Diesel Service, Inc. (Re Raymond Victor Bethel v. Diesel "Repower," Inc., et al.) 1991278 and 1991279. Supreme Court of Alabama. December 15, 2000. *141 Richard A. Lawrence, Montgomery, for petitioners. Michael K. Wright and Geoffrey S. Bald of Starnes & Atchison, L.L.P., Birmingham, for respondent. SEE, Justice. These petitions for the writ of mandamus seek an order directing the Montgomery Circuit Court to strike, as to the theory of piercing the corporate veil, plaintiff Raymond Victor Bethel's jury demand and to separate or sever that aspect of the case for trial before the judge. We grant the petitions. In April 1998, Bethel sued Diesel "Repower," Inc. ("Diesel"), and its president, Rex Thorn, alleging breach of contract, fraud, fraudulent suppression, and negligence. Bethel's allegations arose out of two contracts between him and Diesel. The first contract was for Bethel's purchase of a marine engine and transmission; the second was for Bethel's purchase of three generators. Bethel claimed that he never received from Diesel the engine, the transmission, or any of the generators that he says he purchased and paid for in full. The original complaint requested a jury trial. Thorn and Diesel each moved, pursuant to Rule 12(b)(6), Ala.R.Civ.P., to dismiss Bethel's complaint for failure to state a claim upon which relief can be granted. The trial court granted Thorn's motion to dismiss, but denied Diesel's. The trial court entered a final judgment in favor of Thorn and against Bethel, pursuant to Rule 54(b), Ala.R.Civ.P. Bethel appealed from the trial court's judgment, as it related *142 to the fraud and fraudulent-suppression claims. This Court held that Bethel had stated claims against Thorn for promissory fraud, fraudulent misrepresentation, and fraudulent suppression. See Bethel v. Thorn, 757 So. 2d 1154, 1162 (Ala.1999). After this Court had issued its opinion, Bethel filed an amended complaint, seeking to add Martha Thorn and Thorn's Diesel Service, Inc. ("Service"), as parties to the case, and to pierce Diesel's corporate veil. Bethel alleged that Diesel and its successor corporation, Service, were alter egos of Rex and Martha Thorn. Bethel also requested a jury trial on all counts asserted in the amended, or in the original, complaint. The Thorns and Service moved to sever the claims seeking to pierce the corporate veil and impose individual liability on Rex and Martha Thorn, and to strike the jury demand as to those claims. The trial court denied the Thorns and Service's motions, and they now petition this Court for writs of mandamus. The Thorns and Service contend that a party seeking to pierce the corporate veil has no right to a jury trial because, they argue, that theory is equitable in nature. They further argue that to include the piercing-the-corporate-veil issue in the jury trial would allow irrelevant and prejudicial evidence to be presented to the jury. We agree. In Ex parte Edgar, 543 So. 2d 682 (Ala.1989), this Court stated the standard governing the issuance of a writ of mandamus: In determining whether a party has a right to a jury trial, this Court has looked to Article 1, § 11, of the Constitution of Alabama of 1901. This Court has stated: W & H Mach. & Tool Co. v. National Distillers & Chem. Corp., 291 Ala. 517, 520, 283 So. 2d 173, 175-76 (1973). At common law, purely legal claims were guaranteed the right to a jury trial. Finance, Investment & Rediscount Co. v. Wells, 409 So. 2d 1341, 1343 (Ala.1981) (citing Tillery *143 v. Commercial Nat'l Bank, 241 Ala. 653, 4 So. 2d 125 (1941)). On the other hand, equitable claims carried no constitutional right to a jury trial. Wells, 409 So. 2d at 1343 (citing Pugh v. Calloway, 295 Ala. 139, 325 So. 2d 135 (1976)). The doctrine of "piercing the corporate veil" is equitable in nature. 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 41.25 (perm. ed. rev.vol.1999); accord Lyons v. Lyons, 340 So. 2d 450, 451 (Ala.Civ.App. 1976) ("A court of equity looks through form to substance and has often disregarded the corporate form when it was fiction in fact and deed and was merely serving the personal use and convenience of the owner."). In W & H Mach. & Tool Co. v. National Distillers & Chem. Corp., supra, this Court held that a claim to pierce the corporate veil on an alter ego theory was an equitable claim and, therefore, provided no right to a jury trial. In that case, the plaintiff sued in assumpsit, at law, to recover money damages for the price of goods sold to the subsidiary debtor corporation, a company alleged to be the instrumentality and alter ego of the defendant holding corporation. 291 Ala. at 519, 283 So. 2d at 175. The circuit court transferred the case from its law division to its equity division, concluding that the claims could be disposed of only in equity. Id. Acknowledging that "[t]he right to a jury trial is the real issue in contention between the parties," 291 Ala. at 520, 283 So. 2d at 175, this Court denied the plaintiff's petition for a writ of mandamus, holding that the application of the instrumentality rule in the nontort context properly invoked the jurisdiction of the equity division of the trial court. 291 Ala. at 522, 283 So. 2d at 177. National Distillers was decided before the July 3, 1973, effective date[1] of the Alabama Rules of Civil Procedure,[2] which merged legal and equitable actions into one "civil action." Rule 2, Ala.R.Civ.P. Although the Rules "supply one uniform procedure by which a litigant may present his claim in an orderly manner to a court empowered to give him whatever relief is appropriate and just,"[3] they leave intact one procedural difference between equity and lawthe right to a jury trial. Under Rule 38(a), Ala.R.Civ.P., "[t]he right of trial by jury as declared by the Constitution of Alabama or as given by a statute of this State shall be preserved to the parties inviolate"; however, the fact that law and equity have been merged necessarily means that courts will be presented "cases in which issues to be tried to the jury are combined with issues to be tried to the court." Committee Comments to Rule 38, Ala.R.Civ.P. The test for determining when there is a right to trial by jury is: "[I]f an issue is of a sort which heretofore would have been tried to a jury, then the party has a constitutional right... to have it tried to a jury under the merged procedure." Committee Comments to Rule 38, Ala.R.Civ.P. *144 In Finance, Investment & Rediscount Co. v. Wells, supra, decided in the context of a shareholder's derivative action, this Court revisited the question of when parties have a right to a jury trial. In that case, minority shareholders alleged mismanagement, breach of fiduciary duty, misappropriation of corporate funds, and diversion of corporate opportunities. 409 So. 2d at 1342. This Court decided that those claims had been properly tried without a jury, because a shareholder's derivative action is equitable in nature; but this Court stated that the plaintiff's promissory-note claim had been properly tried before a jury, "because it was a purely legal [claim] asserted by [the] plaintiffs in their individual capacity and was not an issue raised derivatively on behalf of the corporation." Id. at 1343. On rehearing, in order to harmonize Wells with Ross v. Bernhard, 396 U.S. 531, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970), this Court reconsidered its original holding and announced that the right of trial by jury extended to a stockholder's derivative action, even though such an action was historically equitable. Wells, 409 So. 2d at 1344. Ross v. Bernhard, 396 U.S. 531, 542, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970), held that "the Seventh Amendment preserves to the parties in a stockholder's suit the same right to a jury trial that historically belonged to the corporation and to those against whom the corporation pressed its legal claims." Bernhard explained that the preliminary question whether the derivative shareholder action may proceed is a question in equity to be decided by the trial court. 396 U.S. at 538, 90 S. Ct. 733. Once that question is answered, the corporation becomes the real party in interest and the jury may decide the legal issues: Bernhard, 396 U.S. at 538-39, 90 S. Ct. 733. Thus, under Bernhard, equitable issues are still to be determined by the trial court. Once the equitable issues are determined, the legal claims are submitted to the jury for its determination. 396 U.S. at 539-40, 90 S. Ct. 733. That a particular claim has equitable issues does not automatically take that claim away from the jury; instead, under postmerger law, in a civil action involving both equitable and legal issues, the trial court must decide the equitable issues without the assistance of a jury and, if a jury is requested, try the legal issues with a jury. Ex parte Reynolds, 447 So. 2d 701, 703 (Ala.1984) ("It is for the trial court to determine the equitable issues, and for the jury to determine any remaining legal issues."). Accordingly, when both legal and equitable claims are joined in one action, then, the trial judge must arrange the order of trial so that the judge's decision on the equitable issues does not operate to deny a trial by the jury of the legal issues. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959) (stating that "only under the most imperative circumstances, ... can the right to a jury trial of legal issues be lost through prior determination of equitable claims"); accord Crommelin v. Fain, 403 So. 2d 177, 185 (Ala.1981). A jury first must decide any factual issues that are purely legal in nature, along with any factual issues common to the legal and equitable claims. See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479, 82 S. Ct. 894, 8 L. Ed. 2d 44 (1962) (holding that because the factual issues relating to the petitioner's *145 breach of contract claim "[were] common with those upon which [the] respondents' claim to equitable relief [was] based, the legal claims involved in the action [had to] be determined prior to any final court determination of respondents' equitable claims"); see also 9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2302.1, at 29 (2d ed.1995); 1 Champ Lyons, Jr., Alabama Rules of Civil Procedure Annotated § 2.2 at 24 (3d ed. 1996) ("[Beacon Theatres] held that the questions of fact common to the legal and equitable [claims] must be decided first by the jury, for to permit the court to make findings on these common issues of fact would deprive the litigant of his right to [a] jury trial."). Once those factual findings are made, the trial judge must determine the remaining equitable issues. See Dairy Queen, 369 U.S. at 470, 82 S. Ct. 894. As discussed above, the piercing-the-corporate-veil doctrine is an equitable doctrine. See National Distillers, supra. However, that doctrine is not a claim; "[i]t merely furnishes a means for a complainant to reach a second corporation or individual upon a cause of action that otherwise would have existed only against the first corporation." 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 41.10 (perm. ed. rev.vol.1999). Therefore, to the extent that Bethel's claims raise equitable issues, the trial court must dispose of those issues without a jury, and to the extent Bethel's underlying claims of promissory fraud, fraudulent misrepresentation, and fraudulent suppression sound in law, those claims must be decided by a jury. In addition, those factual questions that are purely legal in nature, as well as those common to the legal and equitable issues, must first be decided by the jury. Dairy Queen, Inc., supra. Bethel argues that this conclusion is contrary to a number of cases upholding jury determinations to pierce the corporate veil. See Thorne v. C & S Sales Group, 577 So. 2d 1264 (Ala.1991) (upholding a jury's determination that a stockholder had used the corporation as an alter ego and holding the stockholder liable for breach of contract); Baldwin County Sav. & Loan Ass'n v. Chancellor Land Co., 533 So. 2d 217 (Ala.1988) (stating that whether one is the alter ego of another is a question of fact for the jury). However, in each of these cases, the issue of a party's right to a trial by jury on equitable claims was never raised and, therefore, was not considered by this Court. We grant in part the petitions of the Thorns and Service for the writ of mandamus. We direct the trial court to vacate its order denying the Thorns and Service's motions to strike the jury demand. The legal issues first must be tried to the jury, and then the equitable issues must be tried to the court. The trial court did not abuse its discretion in denying the Thorns and Service's motions to the extent they requested a severance of the piercing-the-corporate-veil issues, because those issues are not a claim;[4] therefore, the petitions are denied to the extent they sought severance. However, we direct the trial court to separate the equitable issues for purposes of trial.[5] See Rule 42, Ala.R.Civ. *146 P., "Comments on 1973 Adoption" ("[T]he merger of law and equity, and consequent possibility of intermingling of issues to be tried by the jury with issues to be tried by the court, necessitates a rule such as this one which will permit the court to shape the order of trial."). PETITIONS GRANTED IN PART AND DENIED IN PART; AND WRITS ISSUED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs specially. JOHNSTONE, Justice (concurring specially). There are good reasons why those aspects of Bethel's claims seeking to pierce the corporate veil are equitable. First, in some, Bethel seeks for the Court to relieve him of his original agreement and acknowledgment that the other party to the contract was a corporate entity and seeks for the Court to reform the contract into one binding the principals of the corporate entity, instead of the corporate entity itself. Second, in others, Bethel seeks to impose tort liability on Mrs. Thorn for the torts of what Bethel originally agreed and acknowledged was a corporate entity, as though, in essence, Mrs. Thorn were in partnership with Mr. Thorn. A different case entirely would be presented if Bethel had always dealt with the Thorns as individuals or as business partners and had originally sued them in those capacities. In such an event, their interposing as a defense that they were really merely the principals of a corporate entity would not necessarily avoid Bethel's right to a jury trial on that aspect of the case; in that case, Bethel, not asking the Court for reformation or other equitable dispensation, could maintain, if true, that this particular defense by the Thorns was a mere sham. Because such a position would not be seeking an equitable remedy, it would be triable by a jury. [1] See Supreme Court of Alabama Order of January 3, 1973, adopting the Alabama Rules of Civil Procedure, reprinted in Alabama Rules of Court 1977, at XIII (West 1976). [2] This Court, in National Distillers, recognized that the Alabama Rules of Civil Procedure had become effective while that case was pending. Accordingly, this Court stated, "We do not decide whether, or to what extent, these `Rules' apply to these causes. Neither do we decide to what extent Rules 38 and 39 may affect these causes, should the `Rules' be considered applicable by the trial court." National Distillers, 291 Ala. at 522 n. 3, 283 So. 2d at 177 n. 3 (citation omitted). [3] Committee Comments to Rule 2, Ala. R.Civ.P. [4] See 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 41.10 (perm. ed. rev.vol.1999). Further, "severance" is defined as the "separation of claims, by the court, ... to permit separate actions on each claim or to allow certain interlocutory orders to become final." Black's Law Dictionary 1378 (7th ed.1999). [5] Because we grant the Thorns and Service's petitions on the ground that Bethel does not have a right to a jury trial on the alter ego/piercing-the-corporate-veil issues, we pretermit discussion of the Thorns and Service's alternative argument that the petitions should be granted to avoid prejudice.

December 15, 2000

c6e66153-5483-41b9-b5f5-3800acfd52be

Ex Parte Coosa Valley Health Care, Inc.

789 So. 2d 208

1990702

Alabama

Alabama Supreme Court

789 So. 2d 208 (2000) Ex parte COOSA VALLEY HEALTH CARE, INC. (Re S.W. Roper v. Coosa Valley Health Care, Inc., d/b/a Coosa Valley Health Care, et al.) 1990702. Supreme Court of Alabama. December 29, 2000. *209 Thomas R. Elliott, Jr., Paige Elliott-Pinson, and J. Michael Keel of London & Yancey, L.L.C., Birmingham, for petitioner. James L. Wilkes II and Timothy C. McHugh of Wilkes & McHugh, P.A., Tampa, Florida; and Wilkes & McHugh, P.A., Birmingham, for respondent. BROWN, Justice. Coosa Valley Health Care, Inc. ("Coosa Valley"), one of the defendants in a civil action pending in the Etowah Circuit Court, petitions for a writ of mandamus directing Judge Donald W. Stewart to vacate or amend his discovery orders of October 27, 1999, and December 27, 1999, compelling Coosa Valley to produce certain information and materials requested by the plaintiff. Coosa Valley contends that discovery of this information and these materials would contravene § 6-5-551, *210 Ala.Code 1975, a portion of the Medical Liability Act of 1987. In 1991, after experiencing complications from a stroke, Lucille A. Roper became a resident of a nursing-home facility operated by Coosa Valley. Mrs. Roper resided at the Coosa Valley facility from 1991 until February 15, 1999, when she was discharged to Gadsden Regional Hospital. On March 1, 1999, Mrs. Roper was admitted to McGuffey's Nursing Home. McGuffey's Nursing Home is not affiliated with Coosa Valley. Mrs. Roper resided at McGuffey's until March 23, 1999, when she was again admitted to Gadsden Regional Hospital; she died at that hospital on March 24, 1999. At the time of her death, Mrs. Roper was 91 years old. On March 22, 1999, two days before her death, Mrs. Roper, acting by and through her son, S.W. Roper, sued Coosa Valley. The complaint described a number of fictitiously named defendants. Following Mrs. Roper's death, her son filed an amended complaint, adding McGuffey's and Gadsden Regional Hospital as defendants. On September 24, 1999, the trial court ordered that S.W. Roper be substituted as plaintiff in this action, and a second amended complaint was filed on October 28, 1999, to effectuate this change. The complaint alleged, among other things, negligence in the treatment Mrs. Roper received while a resident of the Coosa Valley facility. The complaint alleged that Coosa Valley had provided Mrs. Roper negligent care, and it alleged the following, based on that alleged negligent care: As part of the negligence claims, Roper also asserted that Coosa Valley had been negligent in hiring its employees and that it had failed to adequately train and supervise them. Count one of the complaint alleges that Coosa Valley and certain fictitiously named *211 defendants were negligent, wanton, or reckless in the following respects: The plaintiff sought discovery from Coosa Valley, by serving on it interrogatories and requests for production. As to some of the requests and interrogatories, Coosa Valley provided the requested discovery, but it filed objections to others, claiming that they violated § 6-5-551, Ala.Code 1975; § 22-21-8; the work-product doctrine; the attorney-client privilege; and general principles of relevancy, materiality, and overbreadth. On July 20, 1999, the plaintiff moved to compel discovery. After conducting a hearing, the trial court entered an order, on October 27, 1999, stating: Coosa Valley moved the trial court to reconsider its order of October 27, 1999. After conducting another hearing, in which Mr. Roper argued that this Court's decision in Ex parte McCollough, 747 So. 2d 887 (Ala.1999), mandated that Coosa Valley furnish the requested discovery, the trial court denied Coosa Valley's motion to reconsider. *216 On January 18, 2000, Coosa Valley filed this petition for the writ of mandamus, requesting that this Court direct the trial court to "vacate the Order or strike those paragraphs and amend the Order to reflect same, thus relieving [Coosa Valley]as is required by lawfrom compliance with Paragraphs One (1), Five (5), and Seven (7) of the Order." Coosa Valley does not request relief from paragraphs two, three, four, and six, of the trial court's order. Thus, we will not review those portions of the order. Rule 26, Ala.R.Civ.P., governs the discovery of information in civil actions. When a dispute arises over discovery matters, the resolution of the dispute is left to the sound discretion of the trial court. "Discovery matters are within the trial court's sound discretion, and its ruling on those matters will not be reversed absent a showing of abuse of discretion and substantial harm to the appellant." Wolff v. Colonial Bank, 612 So. 2d 1146, 1146 (Ala. 1992) (citations omitted). See also Justice Maddox's dissent in Ex parte Hicks, 727 So. 2d 23, 33 (Ala.1998); the holding in the majority opinion in Hicks was overruled by Ex parte Henry, 770 So. 2d 76, 81 (Ala. 2000). The writ of mandamus is a drastic and extraordinary remedy, to be issued only when there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Horton, 711 So. 2d 979, 983 (Ala.1998) (citing Ex parte United Serv. Stations, Inc., 628 So. 2d 501 (Ala. 1993)); Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala.1991) (citing Martin v. Loeb & Co., 349 So. 2d 9 (Ala.1977)). However, "`[t]he right sought to be enforced by mandamus must be clear and certain with no reasonable basis for controversy about the right to relief,'" and "`[t]he writ will not issue where the right in question is doubtful.'" Ex parte Bozeman, 420 So. 2d 89, 91 (Ala.1982) (quoting Ex parte Dorsey Trailers, Inc., 397 So. 2d 98, 102 (Ala. 1981)). "A petition for the writ of mandamus is the proper means for obtaining review of the question `whether a trial court has abused its discretion in ordering discovery, in resolving discovery matters, and in issuing discovery orders.'" Ex parte Water Works & Sewer Bd. of the City of Birmingham, 723 So. 2d 41, 42 (Ala.1998) (quoting Ex parte Compass Bank, 686 So. 2d 1135, 1137 (Ala.1996)). Coosa Valley first contends that the complaint contains only general allegations of wrongdoing and, thus, does not comply with the specificity requirements of § 6-5-551, Ala.Code 1975. We disagree. It is evident from a reading of the excerpt we have quoted above from the complaint that the plaintiff's allegations are more specific than the allegations this Court held to be sufficient in Ex parte McCollough, 747 So. 2d at 888-89. See also Mikkelsen v. Salama, 619 So. 2d 1382 (Ala. 1993); Baptist Med. Ctr. Montclair v. Wilson, 618 So. 2d 1335 (Ala.1993). Moreover, the complaint alleges ongoing breaches of the standard of care, including allowing the development of conditions that develop over a extended period, such as malnutrition, dehydration, bedsores, and pressure sores. Thus, the complaint is sufficient to state a cause of action. However, the plaintiff remains under an obligation to "amend his complaint timely upon ascertainment of new or different acts or omissions upon which his claim is based." § 6-5-551. Coosa Valley next argues that § 6-5-551 prevents the plaintiff Mr. Roper from discovering evidence of other acts or omissions. Coosa Valley contends that the discovery Mr. Roper may seek is limited to information and materials related to the specific acts or omissions alleged in the complaint, citing Ex parte Northport Health Service, Inc., 682 So. 2d 52 (Ala. 1996), as support for its claim. Mr. Roper argues that he is entitled to discovery of the information he requested that may relate to other acts or omissions because, he argues, the rule prohibiting such discovery does not apply to the claims alleging that Coosa Valley negligently, recklessly, and wantonly screened, hired, trained, supervised, and retained its employees. He cites Ex parte McCollough, supra, 747 So. 2d 887, arguing that a claim alleging negligent hiring, training, and supervision is "separate and distinct" from a claim alleging a "breach of the standard of care." See § 6-5-548, Ala.Code 1975. Coosa Valley recognizes that its contention is contrary to our decision in Ex parte McCollough, supra, but argues that that decisionwhich held that evidence similar to that sought in Ex parte Northport Health Service was not pattern-and-practice evidence, but was, instead, discoverable as necessary for the plaintiff to prove a "systemic-failure" claimwas a departure from the well-reasoned analysis of its predecessors and the plain intent of the Legislature. In effect, what Coosa Valley seeks in this mandamus petition is an overruling of this Court's decision in Ex parte McCollough. This Court's decision in Ex parte McCollough recognized that an action against a health-care provider alleging negligent hiring, training, and supervision is an "action... for breach of the standard of care" and is thus governed by § 6-5-551; however, we concluded that the requested information was "discoverable within the terms of § 6-5-551." 747 So. 2d at 892. Since we decided McCollough, the Legislature has amended § 6-5-551. That section, as amended, provides (with some of the amendatory language emphasized): (Emphasis added.) The amendment to § 6-5-551 became effective May 9, 2000. Although Mr. Roper's cause of action accrued, and this action was commenced, before the effective *218 date of the amendment, "that amendment applies to all pending actions because it is remedial in nature and contains no clear language indicating that the Legislature did not intend it to have a retroactive effect." Ex parte Ridgeview Health Care Ctr., Inc., 786 So. 2d 1112, 1114 n. 1 (Ala. 2000). This Court recently addressed this same issue in Ex parte Ridgeview Health Care Center: 786 So. 2d at 1116-17. Based on our decision in Ex parte Ridgeview Health Care Center, we conclude that paragraphs five and seven of the order dated October 27, 1999, were too broad. Mr. Roper is entitled to discovery of information involving the provision of care and/or services to Lucille Roper, but not to other persons. Thus, to the extent that in paragraphs five and seven the trial court compelled Coosa Valley to produce materials involving persons other than Lucille Roper, the trial court abused its discretion. Thus, Coosa Valley has shown a clear legal right to have those two paragraphs vacated to the extent they require production of information regarding the care and treatment of anyone other than Lucille Roper.[4] *219 With regard to paragraph one of the October 27, 1999, order, we do not find that the trial court abused its discretion in compelling Coosa Valley to produce a list of its employees. As Mr. Roper explained, the purpose for requesting a list of employees was "to identify all individuals who either witnessed or had the opportunity to witness the circumstances, events or occurrences, [that were] relevant to the facts and issues in the instant case." Given the allegations contained in Mr. Roper's claims of "systemic failure," not all of the claims involve care by medical personnel, and, thus, it is likely that the employees to which some of those claims relate would not be named in Lucille Roper's medical records. Thus, for Coosa Valley to produce a list of employees who worked at its nursing facility during the last four years Lucille Roper resided there would be a reasonable way for Mr. Roper to investigate and prove his claims of negligence, wantonness, willfulness, and/or breach of a contractual duty by Coosa Valley to provide adequate hiring, training, staffing, etc., of its personnel. Accordingly, we conclude that the trial court did not abuse its discretion in ordering Coosa Valley to furnish the information contained in interrogatory number two. Coosa Valley contends that the trial court abused its discretion by ordering it to furnish the relevant documentation for a four-year period, as opposed to a two-year period. Coosa Valley argues that the trial court ignored the applicable two-year statute of limitations, § 6-5-482, Ala.Code 1975. Its argument appears to be that because Mr. Roper could not assert a claim based on events occurring before March 22, 1997, he is barred from discovering any information or documents relating to events occurring before that date. Given that Mr. Roper's claim was one of "systemic failure," the applicable statute of limitations is not dispositive of questions regarding the scope or propriety of his discovery requests. Because this case is before us on a mandamus petition, the materials presented for our review are limited; thus, we are unable to determine precisely when Mrs. Roper's medical problems began. Based on the pleadings, it is obvious that her condition deteriorated over an extended period of time; thus, we conclude that it was not an abuse of discretion for the trial court to allow discovery for the four-year period preceding Mrs. Roper's removal from Coosa Valley's facility. Coosa Valley also argues that the information at issue was not discoverable because, Coosa Valley says, it is "quality-assurance information" and is therefore privileged under § 22-21-8, Ala.Code 1975. However, as this Court noted in Ex parte St. Vincent's Hospital, 652 So. 2d 225, 230 (Ala.1994), the burden of proving that a privilege exists and proving the prejudicial effect of disclosing the information is on the party asserting the privilege. Coosa Valley has offered no evidence to show that the information sought was maintained for purposes of quality assurance or for any other purpose covered by § 22-21-8. Compare Ex parte Qureshi, 768 So. 2d 374 (Ala.2000); Ex parte Krothapalli, 762 So. 2d 836 (Ala.2000) (in each of those cases, the petitioner submitted evidence in the form of affidavits establishing that the information sought by the *220 discovery requests was privileged). Accordingly, Coosa Valley did not meet its burden of proving that the information sought by the discovery requests was privileged. To the extent paragraphs five and seven of the October 27, 1999, order require Coosa Valley to disclose information related to persons other than Lucille Roper, the circuit court is directed to vacate those paragraphs. To the extent of the relief granted by the preceding sentence, the petition is granted. Otherwise, it is denied. PETITION GRANTED IN PART AND DENIED IN PART; WRIT ISSUED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs specially. SEE, J., concurs in the result. JOHNSTONE, Justice (concurring specially). I concur in the scholarly main opinion. While § 6-5-551, Ala.Code 1975, as amended effective May 9, 2000, does not prohibit the discovery or proof of acts or omissions against victims other than the plaintiff, this legislation does require that an act or omission against another victim must be pleaded with "a detailed specification and factual description" before it can be discovered or proved. This legislative mandate would seem to require, as a necessary part of the "detailed specification and factual description" of the act or omission, an identification of both the alleged wrongdoer and the alleged victim, either by name or by reasonably certain generic description, in order to distinguish that particular act or omission from others of the same kind. While the pleading in the case before us is obviously sufficient in its allegations of wrongful acts or omissions against Mrs. Roper, the pleadings do not isolate any other particular act or omission by any particular identified wrongdoer against any particular identified victim other than Mrs. Roper. [1] Plaintiff's Interrogatory number 2 reads as follows: "Please identify fully all individuals who were employed [by] COOSA VALLEY HEALTH CARE CENTER during the following period of time: the last four (4) years of the residency of LUCILLE A. ROPER; state whether each individual provided any care or services to LUCILLE A. ROPER, and state whether each individual is currently an employee of COOSA VALLEY HEALTH CARE CENTER or COOSA VALEY HEALTH CARE, INC. "The purpose of this interrogatory is to identify all individuals who either witnessed or had the opportunity to witness the circumstances, events or occurrences, which are relevant to the facts and issues in the instant case. This interrogatory is intended to include any caregiver or other employee, including dietary workers, laundry workers, maintenance person or any other person whatsoever." [2] The plaintiff's requests for production numbered 6 through 10 read as follows: "REQUEST NO. 6: Please produce complete and legible copies of all documents pertaining to investigations relating to alleged abuse, mistreatment and/or neglect of residents or to the health, safety, and/or welfare of residents which have been initiated against Defendant and/or which Defendant conducted during the last four (4) years of Plaintiff's [i.e., Mrs. Roper's] residency. "REQUEST NO. 7: Please produce complete and legible copies of each and every letter, note, memoranda [sic] or other document and communication received by Defendant relating to complaints about resident care, mistreatment or abuse by nursing personnel during the last four (4) years of Plaintiff's residency. "REQUEST NO. 8: Please produce complete and legible copies of all disciplinary reports, memoranda, notes, letters or other documents and communication relating to Physician and nursing personnel working the day, evening, and night shifts during the last four (4) years of Plaintiff's residency. "REQUEST NO. 9: Please produce complete and legible copies of any and all employee complaints communicated to Defendant, including all complaints communicated to Defendant by memoranda, letter, note or any other form of document or communication during the last four (4) years of Plaintiff's residency. "REQUEST NO. 10: Please produce complete and legible copies of all nursing personnel evaluations during the last four (4) years of Plaintiff's residency." [3] Plaintiff's request for production number 30(4) requested "All work schedules and time sheets showing the identity, number (quantity), and classification of any nursing personnel, as such term is defined above, for each tour of duty, including relief or pool personnel who worked on any unit or wing in COOSA VALLEY HEALTH CARE where LUCILLE A. ROPER resided during the last four (4) years of her residency." [4] Coosa Valley also claims that the order compelling discovery must be vacated because it requires the disclosure of confidential patient information, in violation of various state and federal regulations. Because our decision limits discovery to materials involving only the care and treatment of Lucille Roper, this argument is moot.

December 29, 2000

0060015f-284a-4440-a05f-7676b084514b

HUNT TRANSITION & INAUG. FUND, INC. v. Grenier

782 So. 2d 270

1981751

Alabama

Alabama Supreme Court

782 So. 2d 270 (2000) HUNT TRANSITION AND INAUGURAL FUND, INC. v. John GRENIER. 1981751. Supreme Court of Alabama. November 3, 2000. *271 Dan J. Willingham of Fuller & Willingham, Cullman, for appellant. J. Mark White and Julia S. Stewart of White, Dunn & Booker, Birmingham, for appellee John E. Grenier. Billington M. Garrett and Alyce S. Robertson, asst. attys. gen., for appellee Attorney General Bill Pryor. PER CURIAM. The Hunt Transition and Inaugural Fund, Inc. ("the Fund"), appeals from the trial court's judgment directing the disposition of money held by the Fund. Because we hold that the trial court lacked subject-matter jurisdiction, because of the absence of a justiciable controversy, and, thus, that its judgment is void, we vacate that judgment and dismiss the appeal. The Fund was incorporated in December 1986 for the. purpose of "provid[ing] a non-profit organization to receive and administer funds provided by contributions, subscriptions and other sources." The articles of incorporation provide that the funds are to be used for the following purposes: Except for its initial, organizational meeting in February 1987, the Fund's board of directors did not meet until after this action had been filed. Governor Guy Hunt was elected in 1986 and was reelected in 1990 to a second four-year term. In 1993, he was convicted of converting Fund money for his direct personal gain, in violation of the Alabama Code of Ethics for Public Officials, Ala. Code 1975, § 36-25-5, and was removed from office. See Ex parte Hunt, 642 So. 2d 1060 (Ala.1994). As part of his sentence, Hunt was ordered to pay approximately $200,000 in restitution to the Fund. In March 1998, Hunt made his final restitution payment. In February 1999, John Grenier, as chairman, president, and a director of the Fund, petitioned for a judicial determination, or, in the alternative, a declaratory judgment, naming the Fund and Attorney General Bill Pryor as defendants. Grenier alleged that, because Hunt was *272 not then Governor nor a candidate for Governor, "there is no present possibility that the purposes for which the Fund was formed can be served by the Fund"; that, because the board of directors had not met for several years, there was uncertainty "about the disposition of the remaining funds which include recently received contributions from [Hunt]," that is, the restitution payments by Hunt; and that "a justiciable controversy exists on the exact determination of these funds." Grenier further alleged that Attorney General Pryor is a necessary party if the court determines that the money should be conveyed to the State. The other directors of the Fund moved to dismiss Grenier's petition, asserting that Grenier had presented no justiciable controversy. Grenier amended his petition to include an interpleader count and moved to strike the motion to dismiss filed by the Fund's other directors, asserting that they lacked standing to move to dismiss. Grenier claims that the proper defendant is the Fund and that the directors have not moved to intervene or to be made parties to the lawsuit. Attorney General Pryor answered and cross-claimed, asserting that the Fund had failed to hold annual meetings or to take any action to further its corporate purpose and that it had thereby abandoned its corporate franchise. He also asserted that under the Fund's articles of incorporation the only remaining valid purpose for which funds can be dispersed is the renovation and improvement of the Governor's Mansion. After the lawsuit was filed, the Fund had called a meeting; the attorney general was concerned that the Fund would dispose of its moneys before the court made a determination, so he sought a temporary restraining order ("TRO"); the court entered a TRO restraining the Fund from "disbursing" its funds. Grenier subsequently paid the Fund's money (a total of $216,715.50) into court.[1] The Fund moved to dismiss on the basis of a failure to state a claim on which relief could be granted and on the basis that the case presented no justiciable controversy. The court denied the motion to dismiss, set a date for the final hearing, and ordered that the TRO remain in effect until that date. After conducting a hearing, the trial court entered an order directing payment of the Fund's only outstanding debt, awarding attorney fees to Grenier's counsel, and ordering that the remainder of the paid-in funds "be paid to the Governor's Mansion Advisory Board" for the maintenance and upkeep of the Governor's Mansion. The Fund appeals from that order. The Fund argues that Grenier presented no justiciable controversy to confer on the trial court jurisdiction to grant declaratory relief. We agree. For a court to grant declaratory relief, it must have before it a bona fide, presently existing justiciable controversy that affects the legal rights or obligations of the parties. See King v. Calhoun Community College, 742 So. 2d 795, 797 (Ala. Civ.App.1999); see also State ex rel. Baxley v. Johnson, 293 Ala. 69, 73, 300 So. 2d 106, 110 (1974) ("There must be a bona fide existing controversy of a justiciable character to confer upon the court jurisdiction to grant declaratory relief under the declaratory judgment statutes, and if there was no justiciable controversy existing when the suit was commenced the trial court had no jurisdiction."). "Unless the trial court has before it a justiciable controversy, it lacks subject matter jurisdiction *273 and any judgment entered by it is void ab initio." Ex parte State ex rel. James, 711 So. 2d 952, 960 n. 2 (Ala.1998) (citing Stamps v. Jefferson County Bd. of Educ., 642 So. 2d 941, 945 (Ala.1994); Luken v. BancBoston Mortg. Corp., 580 So. 2d 578 (Ala.1991); Wallace v. Burleson, 361 So. 2d 554, 555-56 (Ala.1978)). This Court has held that a declaratory-judgment action will not lie for an anticipated or future controversy. See Luken v. BancBoston Mortg. Corp., supra, 580 So. 2d at 580; Graddick v. McPhillips, 448 So. 2d 333, 336 (Ala.1984). In Smith v. Alabama Dry Dock & Shipbuilding Co., 293 Ala. 644, 309 So. 2d 424 (1975), this Court held that there was no justiciable controversy in an action filed by a corporation seeking a declaratory judgment upholding a proposed retirement plan for certain corporate employees. The corporation named as defendants individual stockholders of the corporation who had voted against the proposed retirement plan and who were expected to contest the legality of any payments to be made under the plan. The trial court entered a summary judgment in favor of the corporation. On appeal by the defendant shareholders, this Court dismissed the appeal because there was no justiciable controversy, and, thus, the trial court lacked jurisdiction. This Court stated: Smith, 293 Ala. at 651, 309 So. 2d at 429 (citations omitted). Similarly, in this case, a justiciable controversy does not exist merely because the Fund's board of directors has "not met for a number of years," because "[Grenier] is in doubt as to the proper disposition of [the] funds," or because Grenier anticipates that the board of directors of the Fund may sometime in the future use the Fund's moneys for an ultra vires purpose. The fact that the board of directors had never met (other than for its initial, organizational meeting) at the time Grenier filed his complaint to determine the proper disposition of the funds strongly indicates that no controversy then existed as to the use of the Fund moneys. Indeed, Grenier himself could have called a meeting of the board of directors for the purpose of determining the proper disposition of the funds. But, instead of asking the board of directors to determine the proper disposition of the fundsthe very function of the board, Grenier sought the "guidance" of the court. The evidence in the record simply does not indicate any dispute between the other directors and Grenier over the use of the funds. Although the trial court enjoined the Fund from disposing of its funds, the testimony in the record indicates that after Grenier filed his complaint the board met two or three times "[t]o discuss what might be done with the money held by the [Fund]," but that the board never voted on how to use it. Because the board of directors has taken no action as to the use of the funds, it is not certain that the funds will ever be used for purposes not permitted under the articles of incorporation.[2] *274 We hold that Grenier's allegations are insufficient to confer on the trial court jurisdiction to grant declaratory relief and to direct the disposition of the moneys held by the Fund. Because no justiciable controversy exists between the parties, the trial court lacked subject-matter jurisdiction to enter its judgment; therefore, that judgment is void. Accordingly, because a void judgment will not support an appeal, we vacate the trial court's judgment and dismiss the appeal. See Luken, 580 So. 2d at 581; Underwood v. State, 439 So. 2d 125, 128 (Ala.1983); Smith, 293 Ala. at 652, 309 So. 2d at 430; State ex rel. Baxley, 293 Ala. at 75, 300 So. 2d at 111. JUDGMENT VACATED; APPEAL DISMISSED; MOTION FOR ATTORNEY FEES ON APPEAL DISMISSED AS MOOT. HOOPER, C.J., and MADDOX, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. [1] We note that the record does not indicate that Grenier was authorized by the Fund's bylaws or by its board of directors to pay the Fund's money into the court. [2] Contrary to Grenier's allegation that no corporate purpose remains to be served, viable uses of the funds still exist under the Fund's articles of incorporation, notwithstanding that Hunt is no longer Governor. The trial court, in its order, directed that the funds be used for one of these purposesto improve the Governor's Mansion.

November 3, 2000

99c4fd8e-d2e0-4edf-9894-0929e5434b32

Ex Parte Moore

793 So. 2d 762

1971987

Alabama

Alabama Supreme Court

793 So. 2d 762 (2000) Ex parte John MOORE. (Re Southern Housing, Inc. v. John Moore). 1971987. Supreme Court of Alabama. April 21, 2000. Opinion Modified on Denial of Rehearing September 29, 2000. *763 Ira B. Colvin, Reform, for petitioner. David L. Selby II and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for respondent. COOK, Justice. John Moore sued Southern Housing, Inc. The jury awarded him $75,000. Southern Housing moved for a judgment notwithstanding the verdict (i.e., a judgment as a matter of law; see Rule 50, Ala. R. Civ. P.) or a new trial. The court denied the motion. Southern Housing appealed. The Court of Civil Appeals reversed the judgment of the trial court. See Southern Housing, Inc. v. Moore, 793 So. 2d 760 (Ala.Civ.App.1998). We have granted Moore's petition for certiorari review. We reverse the judgment of the Court of Civil Appeals and remand for an order or proceedings consistent with this opinion. Moore purchased a mobile home in 1994, from Southern Housing, a mobile-home retailer. On November 21, 1994, after experiencing problems with the mobile home, Moore sued Southern Housing and the mobile-home manufacturer. The complaint was dismissed on September 28, 1995, for failure to prosecute, but was reinstated on December 4, 1995. On October 31, 1996, Moore filed a voluntary bankruptcy petition under Chapter 13. However, Moore did not disclose, to the bankruptcy court, his pending lawsuit against *764 Southern Housing and the manufacturer. The bankruptcy court entered a confirmation order approving Moore's Chapter 13 plan, which paid nothing to his unsecured creditors. In Moore's action against Southern Housing, the jury awarded Moore $75,000. Following the trial, Southern Housing discovered that Moore had filed a bankruptcy petition and had failed to disclose to the bankruptcy court his pending case against Southern Housing and the manufacturer. Southern Housing moved for a JNOV or a new trial, on the grounds that the verdict was against the great weight of the evidence, and, alternatively, on the grounds that Moore was judicially estopped from pursuing the claim. Southern Housing's motion was denied by operation of law, pursuant to Rule 59.1, Ala.R.Civ.P. Southern Housing appealed to this Court, and we transferred the appeal to the Court of Civil Appeals, pursuant to § 12-2-7(6), Ala.Code 1975. On appeal, Southern Housing argued that Moore did not have standing to pursue his claim against Southern Housing, because Moore had filed a bankruptcy petition and, Southern Housing argued, the claim had been part of the bankruptcy estate. The Court of Civil Appeals agreed with Southern Housing, concluding that Moore did not have standing to maintain his lawsuit because, it held, the cause of action had become part of Moore's bankruptcy estate, pursuant to 11 U.S.C. § 1306(a)(1). Relying on Cooks v. Jim Walter Homes, Inc., 695 So. 2d 19 (Ala.Civ. App.1996), the Court of Civil Appeals reversed the judgment and remanded with instructions for the circuit court to enter a judgment in favor of Southern Housing. Traditionally, the rule in Alabama has been that Cooks, 695 So. 2d at 21. However, in a recent opinion the United States Court of Appeals for the Second Circuit stated: "Although some courts of appeals have held that Chapter 7 debtors have no standing to pursue causes of [action] that belong to the estate, see, e.g., Bauer v. Commerce Union Bank, 859 F.2d 438, 441 (6th Cir. 1988), we reach the contrary holding with respect to Chapter 13 debtors who pursue such causes of action." Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513, 515-16 (2d Cir.1998). We find the Second Circuit's opinion to be well reasoned. In holding that Chapter 13 debtors have standing to pursue causes of action that belong to the bankruptcy estate, the Second Circuit looked at both the legislative history of 11 U.S.C. § 1306 and the purpose for denying standing to bankruptcy debtors. The court in its discussion of standing stated: *765 Id. at 516. The Second Circuit, in considering the differences between Chapter 7 and Chapter 13 bankruptcy proceedings, explained that the purpose for denying standing to debtors in Chapter 7 proceedings is absent in Chapter 13 proceedings: Id. A Chapter 13 debtor does not lose standing to proceed on a cause of action after a proceeding in bankruptcy is instituted, as does a debtor under Chapter 7. Moore's bankruptcy proceeding was instituted under Chapter 13. Therefore, Moore has standing to pursue the cause of action against Southern Housing, even though that cause of action belongs to the bankruptcy estate. We recognize that the rule stated in Olick v. Parker & Parsley Petroleum Co. is a refinement of the rule that has been traditionally followed in Alabama. As the bankruptcy courts have shown a willingness to acknowledge the differences in the language in the bankruptcy statutes designating Chapter 13 and Chapter 7 bankruptcies, so has this Court. See Jinright v. Paulk, 758 So. 2d 553 (Ala.2000). To the extent Cooks v. Jim Walter Homes, Inc., is inconsistent with this opinion, it is overruled. Southern Housing, in addition to arguing that Moore does not have standing, argues that Moore should be judicially estopped from making his claims. This Court, in Jinright, has very recently addressed this issue. The doctrine of judicial estoppel "requires a determination that (1) the positions asserted are in fact inconsistent, and (2) the inconsistency would allow a party to benefit from deliberate manipulation of the courts." Chandler v. Samford Univ., 35 F. Supp. 2d 861, 863 (N.D.Ala.1999). Moore, admittedly, did not disclose his cause of action against Southern Housing during the bankruptcy proceedings. However, in Jinright, we acknowledged that in Chapter 13 bankruptcy proceedings the debtor may repay creditors while maintaining his or her assets and that the repayment plan may last up to five years and may be amended at any time prior to a discharge by the bankruptcy court. We held that "a debtor's mere knowledge or awareness of a potential claim and the debtor's failure to include the claim as an asset on the bankruptcy schedules filed with the court, without more, are not sufficient to invoke the application of the doctrine of judicial estoppel." Jinright, 758 So. 2d at 559.[1] In Jinright, we held that the doctrine of judicial estoppel did not apply to bar bankruptcy *766 debtors from pursuing their claims because, "[a]lthough the Jinrights' initial failure in their bankruptcy proceedings to list their claim against Paulk and Option Builders as an asset was inconsistent with the claims they made in their lawsuit against Paulk and Option Builders, nothing before us indicates that the Jinrights will benefit from that omission, nor has there been any showing that Paulk and Option Builders have been prejudiced by the omission." 758 So. 2d at 560. Likewise, nothing now before us indicates that Moore will benefit from his omission or that Southern Housing, as a noncreditor, was prejudiced by that omission. Therefore, the judgment of the Court of Civil Appeals is reversed and the case in remanded for an order or proceedings consistent with this opinion. REVERSED AND REMANDED. MADDOX, HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., concurs in part and dissents in part. HOOPER, Chief Justice (concurring in part and dissenting in part). I concur with the opinion to the extent it holds that a Chapter 13 debtor does not lose standing to proceed on a cause of action after a proceeding in bankruptcy is instituted. I dissent, however, from the holding that Moore's claims are not judicially estopped. The majority opinion relies on this Court's recent decision in Jinright v. Paulk, 758 So. 2d 553 (Ala.2000). However, the facts of this case are distinguishable from those of Jinright. Unlike the debtors in Jinright, Moore had filed his lawsuit before he filed his bankruptcy petition. Moore failed to disclose that lawsuit to the bankruptcy court. This Court stated in Jinright that "a debtor's mere knowledge or awareness of a potential claim and the debtor's failure to include the claim as an asset on the bankruptcy schedules filed with the court, without more, are not sufficient to invoke the application of the doctrine of judicial estoppel." 758 So. 2d at 559. However, Moore had more than "mere knowledge or awareness of a potential claim." The Jinright opinion also stated that "[t]he inquiry regarding the applicability of the doctrine of judicial estoppel to a particular case will raise some questions of fact in addition to questions of law." 758 So. 2d at 559. One of the questions of fact a court should consider in determining whether judicial estoppel applies is "whether a debtor who is engaged in bankruptcy proceedings knew or should have known about claims or causes of action that should be disclosed as assets." Jinright, 758 So. 2d at 559. Moore obviously knew about his cause of action against Southern Housing, because he had filed a lawsuit based on that cause of action before he filed his bankruptcy petition. It would be appropriate to apply the doctrine of judicial estoppel in this case. Today's holding creates a disincentive for debtors engaged in bankruptcy proceedings to disclose their claims to the bankruptcy court. Therefore, I must dissent from that portion of the opinion refusing to apply the doctrine of judicial estoppel. COOK, Justice. OPINION OF APRIL 21, 2000, MODIFIED; APPLICATION OVERRULED. MADDOX, HOUSTON, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., and SEE and BROWN, JJ., dissent. *767 HOOPER, Chief Justice (dissenting). I dissent from the overruling of the application for rehearing, for the reasons stated in my writing on original deliverance. SEE, Justice (dissenting). I would grant Southern Housing's application for rehearing. I would hold that Moore does not have standing to pursue his prepetition cause of action against Southern Housing, because the bankruptcy court's order confirming Moore's Chapter 13 plan provides that that cause of action does not vest in Moore until he has been discharged by the bankruptcy court or the case has been dismissed. On original submission, I concurred in this Court's holding, based on the reasoning of the United States Court of Appeals for the Second Circuit in Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513, 515-16 (2d Cir.1998), that a Chapter 13 debtor, unlike a Chapter 7 debtor, has standing to pursue a cause of action that is property of the bankruptcy estate. I continue to concur in that conclusion as a statement of the general rule. See Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1209 n. 2 (3d Cir.1991); Cable v. Ivy Tech State College, 200 F.3d 467, 472-74 (7th Cir. 1999); see generally In re Bowker, 245 B.R. 192, 194 (Bankr.D.N.J.2000) (discussing the "three distinct conclusions" reached by the courts that have decided "[t]he issue ... whether a chapter 13 trustee has standing to pursue prepetition litigation that is property of the chapter 13 estate": "(1) the chapter 13 trustee has the exclusive standing to sue on behalf of the estate; (2) the chapter 13 debtor and the trustee have concurrent authority to proceed on behalf of the estate; or (3) the debtor alone has the necessary standing to prosecute litigation on behalf of the bankruptcy estate"). However, I do not agree that in this case Moore has standing to pursue his cause of action against Southern Housing. I believe that the language in the bankruptcy court's order confirming the Chapter 13 plan deprives Moore of standing. See 11 U.S.C. § 1327(b). In In re Tippins, 221 B.R. 11 (Bankr. N.D.Ala.1998), the bankruptcy court stated: 221 B.R. at 16-17. Thus, § 1327(b) provides an exception to the general rule that a Chapter 13 debtor has standing to pursue a cause of action; specifically, that exception applies where a contrary provision appears in the plan or in the order confirming the plan. The order confirming Moore's Chapter 13 plan states that "[t]he property of the estate shall not vest in the debtor(s) until a discharge is granted under § 1328 or the case is dismissed"; that order thereby deprives Moore of standing to pursue his cause of action against Southern Housing until such time as he has been discharged by the bankruptcy court or the case has been dismissed. The bankruptcy court has not discharged Moore, and the case has not been dismissed. Consequently, Moore does not have standing to pursue his claim against Southern Housing. Therefore, I would affirm the judgment of the Court of Civil Appeals, which reversed the trial court's denial of Southern Housing's motion for a judgment as a matter of law. See Southern Housing, Inc. v. Moore, 793 So. 2d 760 (Ala.Civ.App.1998). Accordingly, I dissent from the order overruling the application for rehearing. BROWN, Justice (dissenting). Having considered the principles of law stated in the well-reasoned opinion of noted Bankruptcy Judge James Sledge in In re Tippins, 221 B.R. 11 (Bankr.N.D.Ala. 1998), I believe we should grant Southern Housing's application for rehearing. [1] The Eleventh Circuit's reasoning stated in Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir.2000), is persuasive as to this issue: "We therefore echo the conclusion of the Seventh Circuit and `read the two sections, 1306(a)(2) and 1327(b), to mean simply that while the filing of the petition for bankruptcy places all the property of the debtor in the control of the bankruptcy court, the plan upon confirmation returns so much of that property to the debtor's control as is not necessary to the fulfillment of the plan.'" 216 F.3d at 1340. The Eleventh Circuit went on to say: "[A]fter confirmation, only the amount required for the plan payments remained property of the estate." 216 F.3d at 1340. None of the evidence presented in this case suggests that the bankruptcy court would have used Moore's claims against Southern Housing toward the fulfillment of Moore's bankruptcy obligations.

September 29, 2000

5854797c-171b-473b-9cc3-f1c99c774f63

Ex Parte Shelton

851 So. 2d 96

1990031

Alabama

Alabama Supreme Court

851 So. 2d 96 (2000) Ex parte Lereed SHELTON. (Re Lereed Shelton v. State). 1990031. Supreme Court of Alabama. May 19, 2000. Opinion Modified on Denial of Rehearing October 27, 2000. *97 William H. Mills of Redden, Mills & Clark, Birmingham, for petitioner. William H. Pryor, Jr., atty. gen., and Stephanie N. Morman, asst. atty. gen., for respondent. *98 JOHNSTONE, Justice. In district court Lereed Shelton was convicted of assault in the third degree, a violation of § 13A-6-22, Ala.Code 1975. The district court ordered him to pay a $500 fine and $333.75 as restitution to the victim. Shelton appealed for a trial de novo in circuit court. Pursuant to a jury trial during which Shelton represented himself, Shelton was convicted of assault in the third degree. The sentence of the trial court imposed 30 days' imprisonment, a $500 fine, restitution of $516.69 payable to the victim, and court costs. The trial court, however, suspended the 30 days' imprisonment, placed Shelton on probation, and imposed certain conditions, including timely payment of the sums ordered. Shelton appealed to the Court of Criminal Appeals, which, holding that he did have a constitutional right to counsel because he had received a sentence to suspended imprisonment, remanded his case for the trial court to determine whether Shelton made a knowing, intelligent, and voluntary waiver of his right to counsel. Shelton v. State, 851 So. 2d 83 (Ala.Crim. App.1998). On remand, the trial court conducted a hearing at which Shelton was represented by counsel. Shelton testified that he was not informed that he had a right to counsel and that he was not asked whether he wanted to be represented by counsel. He also testified that he was not informed that he could possibly serve time in jail for his conviction. On cross-examination, Shelton stated that he was aware he could be represented by counsel if he "went and paid the money" to hire a lawyer. He stated further that he believed that the trial court would consolidate his case with his son's case and that they would share the same lawyer. The record does not contain evidence that anyone told Shelton that the trial court would appoint a lawyer to represent him if he could not afford one. The prosecutor argued that, although the record did not reflect that anyone informed Shelton of his right to counsel and that he waived his right, Shelton was aware of his right to counsel because he was present when his son, who was Shelton's codefendant, was informed of his right to counsel and because the trial court warned Shelton throughout the proceedings that he needed a lawyer. The prosecutor stated further that Shelton did a "very good job of representing himself." Thereafter, trial court entered the following order: The trial court does not state in this order that it actually informed Shelton of his right to counsel. The trial court does not state that it informed Shelton that the court would appoint a lawyer to represent him if he could not afford to hire a lawyer. On return to remand, the Court of Criminal Appeals, citing the United States Supreme *99 Court in Argersinger v. Hamlin, 407 U.S. 25, 92 S. Ct. 2006, 32 L. Ed. 2d 530 (1972), and Scott v. Illinois, 440 U.S. 367, 99 S. Ct. 1158, 59 L. Ed. 2d 383 (1979), held that Shelton did not have a constitutional right to counsel because his sentence was suspended and he was not actually imprisoned.[1] After the Court of Criminal Appeals overruled Shelton's application for rehearing and denied his Rule 39(k), Ala. R.App. P., motion, he petitioned this Court for a writ of certiorari. We granted Shelton's petition to determine the following: 1) whether Shelton had a constitutional right to counsel even though he was never actually imprisoned; 2) whether Shelton knowingly, intelligently, and voluntarily waived his right to counsel; and 3) whether the trial court denied Shelton his right to a restitution hearing in violation of § 15-18-67, Ala.Code 1975. In concluding, in this second opinion, that Shelton did not have a constitutional right to counsel, the Court of Criminal Appeals relied on the following holding of the United States Supreme Court in Argersinger v. Hamlin, 407 U.S. at 37-40: This Argersinger holding necessarily requires a court reviewing a claim of violation of a defendant's right to counsel to determine the existence of the right retroactively on the basis of the sentence imposed on the unrepresented defendant. The defendant in Argersinger was convicted, without the aid of counsel, of the misdemeanor offense of carrying a concealed weapon. He was sentenced to 90 days in jail. The Court held that, because the defendant had been imprisoned and had suffered an actual loss of liberty, he was entitled to representation by counsel. The Court did not address the issue of a defendant's right to counsel when no loss of liberty has occurred. Argersinger, 407 U.S. at 37. In another case, Scott v. Illinois, supra, the United States Supreme Court considered the right to counsel of an indigent defendant who was convicted of shoplifting, a crime punishable by a maximum fine of $500 or by a maximum term of imprisonment of one year, or by both. The defendant was fined $50, but was not sentenced to any term of imprisonment. In that case, the Court concluded that the defendant was not entitled to appointed counsel: Neither Argersinger nor Scott addresses the issue currently before uswhether a suspended or probated sentence to imprisonment constitutes a "term of imprisonment." However, some federal and state courts have interpreted Argersinger and Scott to mean that a defendant who is convicted, without the aid of counsel, of a misdemeanor offense and is sentenced to a term of imprisonment which is suspended or probated, does not have a right to appointed counsel because the defendant was not "actually imprisoned." See People v. Reichenbach, 459 Mich. 109, 587 N.W.2d 1 (1998); Layton City v. Longcrier, 943 P.2d 655 (Utah App.1997); Griswold v. Commonwealth, 252 Va. 113, 472 S.E.2d 789 (1996); State v. Hansen, 273 Mont. 321, 903 P.2d 194 (1995); United States v. Smith, 56 F.3d 66 (6th Cir.1995); United States v. Castro-Vega, 945 F.2d 496 (2d Cir.1991); United States v. Nash, 703 F. Supp. 507 (W.D.La.), aff'd, 886 F.2d 1312 (5th Cir.1989); State v. Sanchez, 94 N.M. 521, 612 P.2d 1332 (N.M.App.1980); and Cottle v. Wainwright, 477 F.2d 269 (5th Cir.), vacated on other grounds, 414 U.S. 895, 94 S. Ct. 221, 38 L. Ed. 2d 138 (1973). On the other hand, other courts have held that an indigent defendant who receives a conditionally suspended or probated sentence to imprisonment is entitled to representation by appointed counsel because that defendant has been "sentenced to a term of imprisonment." United States v. Reilley, 948 F.2d 648 (10th Cir. 1991); United States v. Foster, 904 F.2d 20 (9th Cir.1990); United States v. Sultani, 704 F.2d 132 (4th Cir.1983); United States v. Leavitt, 608 F.2d 1290 (9th Cir.1979); and United States v. White, 529 F.2d 1390 (8th Cir.1976). For example, in Reilley, the defendant was charged with leaving property unattended in a national park for longer than 24 hours in an undesignated area, a crime punishable by a maximum fine of $500 or by a maximum term of imprisonment of six months or by both. *101 The defendant established his indigence and requested appointed counsel, but the trial court denied his request. He was convicted and was sentenced to 30 days' imprisonment, suspended on the condition that he timely pay his $500 fine. In vacating the defendant's 30-day prison sentence, the Reilley court reasoned: Applying the rationale of Reilley, Argersinger, and Scott, we hold that the defendant in this case was entitled to representation by counsel because he was sentenced to a term of imprisonment, albeit suspended. We do not conclude that a defendant convicted of a petty or misdemeanor offense can establish a violation of his right to counsel when the defendant has not been sentenced to a term of imprisonment. For these reasons, we reverse the holding of the Court of Criminal Appeals that a defendant sentenced to conditionally suspended incarceration for a misdemeanor conviction but not actually incarcerated, does not (retroactively) have a right to counsel. Furthermore, we hold that the Court of Criminal Appeals improperly overruled Williams v. City of Phenix City, 659 So. 2d 1004 (Ala.Crim. App.1995), and Culberson v. State, 709 So. 2d 1327 (Ala.Crim.App.1997), which hold that a conditionally suspended or probated sentence of incarceration cannot be imposed on an indigent defendant who has been denied his right to counsel.[3] Our inquiry does not end with the determination that Shelton had a right to counsel. We must determine whether the defendant effectively waived his right to counsel in this case. A defendant may not be imprisoned for any offense, whether a petty, misdemeanor, or felony offense, unless the defendant either had counsel or made a knowing, intelligent, and voluntary waiver of his right to counsel. Argersinger, 407 U.S. at 37, 92 S. Ct. 2006. "Presuming waiver from a silent record is impermissible. The record must show, or there must be an allegation and evidence which show, that an accused was offered counsel but intelligently and understandingly rejected the offer." Carnley v. Cochran, 369 U.S. 506, 516, 82 S. Ct. 884, 8 L. Ed. 2d 70 (1962). See Lake v. City of Birmingham, 390 So. 2d 36 (Ala.Crim.App. 1980). To establish a knowing and intelligent waiver of counsel, "the record at the outset of the trial should establish three factors: 1) that the defendant was informed that he had the right to counsel, 2) that the defendant was informed that if he could not afford counsel the state would appoint counsel to represent him, and 3) an affirmative showing by the defendant that, understanding these rights, he still elects to proceed without counsel." Jenkins v. State, 482 So. 2d 1315, 1317 (Ala. Crim.App.1985). The record fails to establish that Shelton "was offered counsel" as required by Carnley, supra. Likewise the record fails to establish any of the three factors required by Jenkins, supra. The trial judge's admonitions to Shelton to the effect that he needed a lawyer are a far cry from explanations of the right to counsel or offers of appointed counsel if Shelton could not afford to retain counsel. Therefore, *102 we cannot say that Shelton intelligently and understandingly waived his right to counsel. Shelton claims also that he was denied his right to a restitution hearing pursuant to § 15-18-67, Ala.Code 1975. The Court of Criminal Appeals held that Shelton did not preserve this issue for appellate review because he did not object at the original sentencing hearing to the trial court's failure to conduct a restitution hearing. Perkins v. State, 715 So. 2d 888, 892 (Ala.Crim.App.1997); Dollar v. State, 687 So. 2d 207, 208 (Ala.Crim.App.), rev'd on other grounds, 687 So. 2d 209 (Ala.1996). We agree. During neither the original sentencing proceedings nor the first remand proceedings did Shelton request a restitution hearing or object to the trial court's failure to conduct a restitution hearing. He did not make any argument that the restitution was not supported by the evidence. Cf. Ex parte Clare, 456 So. 2d 357, 359 (Ala.1984) (holding that defendant's argument regarding the amount of restitution ordered was preserved for appellate review even though defendant did not object during the restitution hearing because defense counsel "made known to the [trial] court his disagreement with the State concerning the amount of restitution"). Shelton did not present this issue concerning a restitution hearing to the trial court until the commencement of the second remand proceedings. Because Shelton did not timely raise this issue before the trial court for its consideration, this issue has not been properly preserved for our review. Moreover, during the trial, the State presented medical bills showing that the victim owed $516.69 for treatment for injuries he suffered as a result of the assault by Shelton. Shelton had ample opportunity to present evidence to dispute the restitution amount. Having held that a defendant who receives a suspended or probated sentence to imprisonment has a constitutional right to counsel, and having found that Shelton did not intelligently and understandingly waive that right and that he suffered a deprivation of that right, we affirm Shelton's conviction but reverse that aspect of his sentence imposing 30 days of suspended jail time. The remaining aspects of the sentence are affirmed. We remand this cause to the Court of Criminal Appeals for that court to remand with instructions to the trial court to vacate that aspect of Shelton's sentence imposing the suspended jail time. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and HOUSTON, COOK, LYONS, and ENGLAND, JJ., concur. MADDOX, J., dissents. BROWN, J., recuses herself.[*] MADDOX, Justice (dissenting). I see no need to reach the question whether Shelton was entitled to counsel in this case because I believe that, even if he had that right, he waived it, as the trial court determined on remand from the Court of Criminal Appeals. I recognize that, as the main opinion states, "[a] defendant may not be imprisoned for any offense, whether a petty, misdemeanor, or felony offense, unless the defendant either had counsel or made a knowing, intelligent, and voluntary waiver of his right to counsel." 851 So. 2d at 101. I also agree that we may not presume *103 waiver of this important right from a silent record, see Carnley v. Cochran, 369 U.S. 506, 516, 82 S. Ct. 884, 8 L. Ed. 2d 70 (1962), but I respectfully disagree with the proposition that the record in this case is silent as to the question of waiver. The record shows that the Court of Criminal Appeals had remanded this case for the trial court to determine whether Shelton had intelligently and knowingly waived his right to counsel. At the trial court's hearing on that question, the State argued that during his prosecution Shelton was repeatedly told of his right to counsel and nevertheless chose to represent himself. Based on that argument, the trial court entered an order finding that Shelton had waived his right to counsel. Under the facts of this case, I am reluctant to question the judgment of the trial court. Furthermore, because the defendant received only a suspended sentence and was not incarcerated, I do not believe that he, in fact, had a right to counsel. Consequently, I respectfully dissent. [1] The Court of Criminal Appeals affirmed Shelton's conviction, but remanded for the trial court to conduct a new sentencing hearing and to allow Shelton the right to allocution. [2] The United States Supreme Court expounded further on the requirement that a defendant must be "sentenced to a term of imprisonment" in Nichols v. United States, 511 U.S. 738, 749, 114 S. Ct. 1921, 128 L. Ed. 2d 745 (1994), which held that "an uncounseled misdemeanor conviction, valid under Scott because no prison term was imposed, is also valid when used to enhance punishment at a subsequent conviction." Nichols overruled Baldasar v. Illinois, 446 U.S. 222, 100 S. Ct. 1585, 64 L. Ed. 2d 169 (1980), which held that a prior uncounseled misdemeanor conviction, constitutional under Scott, could not be used to enhance a second misdemeanor conviction to a felony conviction. Applying Argersinger and Scott in Ex parte Reese, 620 So. 2d 579, 580 (Ala.1993), this Court recognized that a defendant has a right to counsel in a misdemeanor case in which the defendant receives a jail sentence. This Court held that, because the defendant was sentenced to six months in jail for a prior misdemeanor possession conviction, he was entitled to counsel in that case; and, therefore, without a showing that the defendant either had counsel or waived his right to counsel, that prior conviction could not be used to enhance his current conviction. 620 So. 2d at 581. Reese did not address the specific issue of whether a defendant who receives a suspended or probated sentence, but is not actually imprisoned, for a misdemeanor conviction is entitled to counsel. [3] We note further that the holding of the Court of Criminal Appeals in Benson v. City of Sheffield, 737 So. 2d 1059 (Ala.Crim.App. 1999), is improper for the same reasons stated in this opinion. [*] Justice Brown was a member of the Court of Criminal Appeals when that court considered this case.

October 27, 2000

676cfd36-c170-478b-9a4a-a670e696e983

Ex Parte Duvall

782 So. 2d 244

1982307

Alabama

Alabama Supreme Court

782 So. 2d 244 (2000) Ex parte Paul DUVALL and Paul Marusich. (Re David Lawrence v. Paul Duvall and Paul Marusich). 1982307. Supreme Court of Alabama. October 27, 2000. *245 William A. Gunter, asst. atty. gen., Department of Conservation and Natural Resources, for petitioners. J. Myron Smith, Prattville, for respondent. BROWN, Justice. Paul Duvall and Paul Marusich, the defendants in a civil action pending in the Elmore Circuit Court, petition for a writ of mandamus directing Judge Ben A. Fuller to grant their motion for summary judgment. They contend that they are entitled to a judgment on the basis of their claimed governmental immunity. Paul Duvall is a conservation enforcement officer with the Alabama Marine Police Division of the Alabama Department of Conservation and Natural Resources. On or about December 19, 1997, Officer Duvall traveled in his state vehicle to Paul Marusich's house on Cotton Blossom Road in Millbrook, in order to pick up a number of hunter-education booklets that Marusich had in a vehicle assigned to him by the State. Marusich, a conservation enforcement officer with the Game and Fish Division of the Alabama Department of Conservation and Natural Resources, was off duty at the time. Duvall was on duty and was dressed in his marine police uniform, which included a badge and a gun belt. While Duvall and Marusich were standing in the front yard, an automobile driven by 19-year-old David Lawrence passed in front of Marusich's house. Inside the car with David Lawrence were Lawrence's brother and three other young men. According to Marusich, one of the passengers made an obscene hand gesture toward Marusich's children, who were also in the front yard.[1] Cotton Blossom Road was a cul de sac, so Marusich knew the car would have to pass by his house again in order to reach a thoroughfare. Marusich asked Duvall to help him stop the car when it came back by his house. Marusich said he wanted to find out who was in the car, why they were in the neighborhood, and why they had made the gesture toward his children. Marusich also said there had been some recent acts of vandalism in the neighborhood. As the car driven by Lawrence passed by, Duvall motioned for the driver to stop. The evidence conflicts as to what happened then. Lawrence stated that he and his passengers drove down Cotton Blossom Road in order to pick up a friend who was *246 going with them to play football in Coosada. Lawrence said he left the friend's home and then proceeded back up Cotton Blossom Road; that as he approached the Marusich house, Duvall stepped into the street and motioned for him to stop the car; that he stopped his car; that Duvall went to the front passenger side of the car and asked Lawrence's brother why he was riding through the neighborhood making obscene gestures; and that Marusich began yelling at Lawrence from farther away. According to Lawrence, he believed Duvall was wearing a fireman's uniform. Lawrence said that Duvall asked him more than once to produce his driver's license. Lawrence also said that he questioned why Duvall wanted to see his driver's license, and that he then reached in his pocket. According to Lawrence, Duvall then grabbed his left arm, pulled him from the car, pushed him down on the hood of his car, handcuffed him, and told him he was under arrest. Duvall stated that he placed Lawrence under arrest in order to ensure his safety and the safety of Officer Marusich. According to Duvall and Marusich, after Lawrence was handcuffed, his demeanor changed and he apologized for being disrespectful to the officers. Duvall ran a check on Lawrence's license and discovered no outstanding citations or other "holds." Duvall then removed the handcuffs and allowed Lawrence to leave. In May 1998, Lawrence sued Duvall and Marusich, alleging assault, unlawful arrest, false imprisonment, and conspiracy. Additionally, Lawrence claimed that Duvall and Marusich had acted under color of state law to deprive him of his constitutional rights, by claiming to be state law-enforcement officers. Duvall and Marusich moved for a summary judgment, arguing that they were entitled to discretionary-function immunity and/or qualified immunity. On September 2, 1999, the trial court denied Duvall and Marusich's motion for summary judgment. On September 30, 1999, Duvall and Marusich filed this petition for the writ of mandamus. The denial of a motion for summary judgment based on a claim of immunity is reviewable by petition for writ of mandamus. Ex parte City of Gadsden, 781 So. 2d 936 (Ala.2000). Ex parte Kelley, 739 So. 2d 1095, 1096 (Ala. 1999). Duvall and Marusich argue that they are protected from Lawrence's claims by the doctrine of State-agent immunity. They cite § 6-5-338, Ala.Code 1975, in support of their claim. That statute provides: Are Duvall and Marusich "peace officers" within the meaning of § 6-5-338? Conservation enforcement officers, as a general rule, are empowered to enforce this State's game and fish laws. See §§ 9-2-86, 9-11-5, Ala.Code 1975. However, § 33-5-5, Ala.Code 1975, states: Thus, a conservation enforcement officer has the authority to arrest an individual for violating a criminal statute. See Maxwell v. State, 587 So. 2d 436, 439 (Ala.Crim. App.), cert. denied, 587 So. 2d 440 (Ala. 1991) (marine police officer checking boat registration had authority to arrest occupant of the boat for possession of marijuana that was in plain sight). In Ex parte Cranman, [Ms. 1971903, June 16, 2000], ___ So.2d ___ (Ala.2000), this Court traced the evolution of State-agent immunity, restated the law of State-agent immunity, and proposed a new test for determining when State employees sued in their individual capacities were entitled to the benefits of State-agent immunity: ___ So.2d at ___. Although Cranman was only a plurality decision, this Court subsequently adopted that proposed test in Ex parte Butts, 775 So. 2d 173, 177-78 (Ala. 2000). The first question we must decide is whether Duvall and Marusich were engaged in a discretionary function when they arrested Lawrence. "Discretionary functions have been described by this Court as being `those acts as to which there is no hard and fast rule as to the course of conduct that one must or must not take and those acts requiring exercise in judgment and choice and involving what is just and proper under the circumstances.'" Ex parte City of Montgomery, 758 So. 2d 565, 569 (Ala.1999) (quoting Wright v. Wynn, 682 So. 2d 1, 2 (Ala.1996)). See also Moore v. Adams, 754 So. 2d 630, 632 (Ala.1999). However, acts taken in bad faith, or willful or malicious conduct, will not be considered discretionary in nature. Couch v. City of Sheffield, 708 So. 2d 144, 153 (Ala.1998); Wright v. Wynn, 682 So. 2d at 2; see also Barnes v. Dale, 530 So. 2d 770 (Ala.1988); DeStafney v. University of Alabama, 413 So. 2d 391 (Ala. 1981). Duvall and Marusich's act of arresting Lawrence was clearly a discretionary function. There is no hard and fast rule concerning when there is probable cause to arrest a person pursuant to § 32-5A-4, Ala.Code 1975, for refusing to comply with a lawful order or direction of a police officer. See Sly v. State, 387 So. 2d 913 (Ala.Crim.App.), cert. denied, 387 So. 2d 917 (Ala.1980) (although an officer does not have unbridled power to arrest for refusal to obey "any" order, an officer's "request" to see a driver's license constitutes a lawful order under § 32-5A-4). Given the evidence indicating Marusich knew of recent acts of vandalism in the neighborhood, and given the evidence that Marusich did not recognize the Lawrence car as belonging to someone living on the cul de sac, we conclude that Duvall and Marusich were justified in performing an investigatory stop to determine what Lawrence and his companions were doing in the neighborhood. Moreover, when Lawrence did not comply with Duvall's repeated requests to produce his driver's license, Duvall and Marusich had probable cause to arrest Lawrence. See Sly v. State, 387 So. 2d at 915. Although the evidence contains slight discrepancies as to Lawrence's noncompliance with Duvall's request, the evidence nonetheless compels the conclusion that Duvall and Marusich had probable cause to arrest Lawrence. Duvall and Marusich made a prima facie showing that they arrested Lawrence with probable cause and without bad faith or a malicious intent, and Lawrence did not refute this showing. We conclude that Duvall and Marusich's arrest of Lawrence was within the discretionary-function/State agent's immunity provided in § 6-5-338. Given this conclusion, we further conclude that Duvall and Marusich had a clear legal right to have a judgment entered in their favor. The trial judge is directed to vacate his order denying their motion for a summary judgment, and to enter a summary judgment for Duvall and Marusich on Lawrence's claims. *249 PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and MADDOX, J., concur. HOUSTON, COOK, SEE, and LYONS, JJ., concur in the result. JOHNSTONE, J., dissents. JOHNSTONE, Justice (dissenting). I respectfully dissent. The defendants had no reasonable suspicion that would meet the criteria of Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968), to stop the car, no right to order Lawrence to do anything, no probable cause to believe that Lawrence had committed any crime, and no right to arrest him. Thus they acted willfully and beyond their authority and therefore without immunity. Ex parte Cranman, [Ms. 1971903, June 16, 2000] ___ So.2d ___ (Ala.2000), and Ex parte Butts, 775 So. 2d 173 (Ala.2000). The record contains substantial evidence that the defendants' claim of suspicion is a mere pretext to protect them from liability for abusing their power to avenge what they perceived as an insult or breach of decorum. This pretext, like a pretextual reason for an insurer's refusing to pay a claim in a bad-faith-failure-to-pay case, or an employer's pretextual reason for discharging an employee in a wrongful-discharge case, presents an issue of fact to decided at trial. Ex parte Usrey, 777 So. 2d 66 (Ala.2000); Motion Indus., Inc. v. Pate, 678 So. 2d 724 (Ala.1996); Culbreth v. Woodham Plumbing Co., 599 So. 2d 1120 (Ala.1992); National Sec. Fire & Cas. Co. v. Bowen, 417 So. 2d 179 (Ala.1982); Bird v. Nail Air Freight, Inc., 690 So. 2d 1216 (Ala.Civ.App.1996), cert. denied, 690 So. 2d 1219 (Ala.1997); Carroll v. A.J. Gerrard & Co., 684 So. 2d 128 (Ala.Civ.App.1995). The writ is not due. [1] Lawrence disputed this contention and offered evidence to the effect that the passenger was merely waving to someone he recognized from school.

October 27, 2000

612e150b-9e19-496f-b414-7f8f7c32cb50

Ex Parte Athens State College

795 So. 2d 709

1990632

Alabama

Alabama Supreme Court

795 So. 2d 709 (2000) Ex parte ATHENS STATE COLLEGE and Dr. Jerry Bartlett, in his capacity as president of Athens State College. (Re Athens State College and Dr. Jerry Bartlett, in his capacity as president of Athens State College v. Betty Ruth). 1990632. Supreme Court of Alabama. September 22, 2000. Rehearing Denied November 22, 2000. *710 Barnes F. Lovelace, Jr., of Harris, Caddell & Shanks, P.C., Decatur, for petitioners. Frederick L. Fohrell and Robert C. Lockwood of Wilmer, Cates, Fohrell & Kelley, Huntsville, for respondent. David R. Boyd and Theresa R. Jenkins of Balch & Bingham, L.L.P., Montgomery, for amicus curiae Alabama Association of School Boards. J. Cecil Gardner of Gardner, Middle-brooks, Fleming, Gibbons & Kittrell, Mobile; and Sam Heldman of Gardner, Middlebrooks, Fleming, Gibbons & Kittrell, Washington, D.C., for amicus curiae Alabama Education Association. BROWN, Justice. We granted the petition of Athens State College ("Athens State") and its president, Dr. Jerry Bartlett, for a writ of certiorari to review the Court of Civil Appeals' judgment construing the Fair Dismissal Act, § 36-26-100 to -108, Ala.Code 1975, and applying it to the particular facts of this case. During the 1970s, Athens State began sponsoring Limestone County's Retired Senior Volunteer Program ("RSVP"). RSVP, a program authorized under Title II, Part A, of the Domestic Volunteer Service Act of 1973, provided opportunities for retired members of the community to engage in volunteer services. Funds for RSVP were derived from federal grants, an appropriation from the State Legislature, and local funding from the City of Athens, the Limestone County Commission, and the local United Way. As a sponsor, Athens State furnished operating space and equipment for the program; it also managed the program's funds, which were maintained in a separate account. Betty Ruth became director of the RSVP at Athens State around 1977. In 1989, the Alabama Department of Examiners of Public Accounts ("DEPA") was asked if state law permitted Athens State to sponsor RSVP. That agency concluded that § 38-1-6, Ala.Code 1975, "does not extend authority to an institution of *711 higher education, such as Athens State College to be a `sponsor' in the RSVP."[1] As a result of the DEPA opinion, Athens State's president at that time, James R. Chasteen, advised Ruth in writing that the College would no longer serve as an RSVP sponsor. State Senator Jim Smith disagreed with the opinion issued by DEPA. In an October 1989 letter to DEPA, Smith stated his belief that Athens State, as a state entity, was a legitimate sponsor of RSVP under § 38-1-6. Smith also requested an attorney general's opinion regarding the legality of Athens State's sponsorship of RSVP. In January 1990, the attorney general issued an opinion to Senator Smith, stating that § 38-1-6 permitted state institutions to sponsor RSVP; therefore, Athens State's sponsorship, the attorney general said, was permissible. The attorney general's opinion stated that Athens State could legitimately sponsor RSVP if certain conditions were met: (1) the College was not required to provide monetary support; (2) the College could withdraw as sponsor at any time; and (3) the College was not required to make up any deficiency in funds for RSVP. Following the issuance of the attorney general's opinion, Athens State continued to sponsor the Limestone County RSVP. After conducting a routine audit in 1995, DEPA determined: "[T]he services provided by [Athens State] to RSVP exceed the scope of the [1990] attorney general's opinion in that the real value of the services rendered constitutes monetary support. Furthermore, the Department is concerned that this support is being provided through the use of restricted funds in an unauthorized manner." On April 18, 1995, Dr. Bartlett, the president of Athens State, informed Ruth of the DEPA opinion and notified her that Athens State was withdrawing its support of the program. On April 24, 1995, Ruth responded, suggesting that Athens State sign a contract with RSVP enumerating the services provided by RSVP. The following day, Dr. Bartlett contacted DEPA and requested that it explore Ruth's suggestion. On May 3, 1995, the DEPA office recommended to Dr. Bartlett that Athens State "abide by the [DEPA] correspondence of March 8, 1995." Athens State's attorney reviewed the laws applicable to RSVP and advised Dr. Bartlett to discontinue "any relationship with Limestone County RSVP." In August 1995, Athens State, through Dr. Bartlett, notified Ruth that it intended to terminate her job, and by the end of the month Athens State wrote Ruth, informing her that she would not be reemployed by Athens State. Dr. Bartlett explained in the letter to Ruth: *712 Several months after Ruth's job was terminated, the attorney general issued an opinion stating that providing in-kind services was not providing monetary support. Nevertheless, the opinion noted that Athens State's assistance to RSVP was voluntary and could be terminated at any time. By July 5, 1995, United Way had assumed the role of sponsor of the RSVP; Ruth continued to serve as the director. Despite the fact that Ruth did not lose her position, she appealed the decision made by Athens State and Dr. Bartlett, and on February 17, 1997, an employee panel, pursuant to § 36-26-105, reviewed the termination. After a hearing, the panel held that Athens State had the right to discontinue the RSVP, but that Ruth should have been reinstated as a nonteacher employee. Athens State petitioned the Limestone Circuit Court for a writ of certiorari, requesting that the court review the panel's decision. Ruth responded to the petition and filed a declaratory-judgment counterclaim and a petition for a writ of mandamus, or in the alternative, a writ of certiorari, alleging that Athens State and Dr. Bartlett had violated the Fair Dismissal Act and the written policies and regulations of Athens State. Ruth sought a judgment declaring that she was entitled to reinstatement, compensation, and backpay. Ruth and Athens State both filed summary judgment motions.[2] In July 1998, the circuit court entered a summary judgment in favor of Ruth, holding that substantial evidence supported the panel's decision. The court also held that because the Teacher Tenure Act, §§ 16-24-1 to -38, Ala.Code 1975, had been interpreted to prohibit the dismissal of a tenured teacher when a nontenured teacher held a position for which the tenured teacher was qualified, Ruth should have been offered a position held by a probationary employee. Athens State and Dr. Bartlett appealed. On August 20, 1999, a divided Court of Civil Appeals affirmed the circuit court's judgment. The Court of Civil Appeals, construing § 36-26-102, Ala.Code 1975 (the Fair Dismissal Act), in pari materia with § 16-24-8 (the Teacher Tenure Act), upheld the panel's decision requiring Athens State to place Ruth in another nonteacher position for which she was "qualified." Athens State College v. Ruth, 795 So. 2d 703 (Ala.Civ.App.1999). Judges Crawley and Thompson dissented. On certiorari review, we reverse and remand with instructions. This case presents the narrow question whether the Fair Dismissal Act requires that a nonprobationary, nonteacher employee, whose position is terminated on the basis of a "justifiable decrease in jobs in the system," be placed in another employment position currently held by a probationary, nonteacher employee, for which position the nonprobationary employee is "qualified" but has never before held. Based on the particular facts of this case, we hold that it does not. In reviewing the employee review panel's decision, this Court is We begin our review with an examination of the pertinent language of the Fair Dismissal and Teacher Tenure Acts. Ruth, as a nonprobationary, nonteacher employee of a state two-year college,[*] was subject to the termination procedures set forth in the Fair Dismissal Act, §§ 36-26-100 to -102. Section 36-26-102 states that a nonprobationary "employee's employment shall ... not be terminated except for failure to perform his or her duties in a satisfactory manner, incompetency, neglect of duty, insubordination, immorality, justifiable decrease in jobs in the system, or other good and just causes." The contract of a tenured teacher may be canceled for "incompetency, insubordination, neglect of duty, immorality, justifiable decrease in the number of teaching positions or other good and just cause." § 16-24-8. In Ex parte Alabama State Tenure Commission, 595 So. 2d 479 (Ala.1991), a teacher, Jones, became ineligible to teach driver's education because his driver's license had been suspended and his automobile insurance was canceled. After Jones was terminated, based on his inability to perform his primary teaching assignment, he appealed to the Alabama State Tenure Commission. The Commission reversed the board's termination, finding that Jones's termination was arbitrarily unjust because, it found, the board had hired nontenured teachers to teach subjects for which Jones was certified to teach. This Court upheld the Tenure Commission's finding and held that the board had to show that there were no nontenured teachers hired to teach in the same fields that the discharged tenured teacher was qualified to teach in. 595 So. 2d at 482. Although in this present case the Court of Civil Appeals construed § 36-26-102 in pari materia with § 16-24-8, Judge Crawley questioned the correctness of the majority's holding. He wrote in his dissent: 795 So. 2d at 708-09. (Emphasis original.) We agree with Judge Crawley. Based on the facts before us, we conclude that § 36-26-102 should not have been construed in pari materia with § 16-24-8. Tenured teachers are afforded special protections. The "special" consideration given tenured teachers is reflected in the Tenure Act's purpose, which is "to promote stability in employment and to prevent a board from discharging a tenured teacher instead of a nontenured teacher." Ex parte Alabama State Tenure Comm'n, 595 So. 2d at 481. Id., 595 So. 2d at 481-82 (quoting Ex parte Wright, 443 So. 2d 40, 42 (Ala.1983)). The purpose of the Fair Dismissal Act, on the other hand, is "to provide nonteacher employees a fair and swift resolution of proposed employment terminations." Bolton v. Board of School Comm'rs of Mobile County, 514 So. 2d 820, 824 (Ala.1987). Thus, while §§ 36-26-102 and 16-24-8 may contain similar language, the two provisions are by no means identical. Ruth's only connection with Athens State was based on the college's sponsorship of the RSVP. No evidence indicated that Ruth had ever been employed by Athens State in any capacity before the college became involved in the RSVP. Athens State terminated its relationship with the RSVP; thus, the position of RSVP director was no longer available. Accordingly, Ruth was dismissed because of a justifiable decrease in jobs. Athens State and Dr. Bartlett followed the termination procedures set forth in the Fair Dismissal Act. Athens State was justified in terminating Ruth's employment, and it should not have been required to find another position for which she was "qualified," particularly since she continued to serve as RSVP director under the sponsorship of the United Way. The judgment of the Court of Civil Appeals is reversed, and the case is remanded for that court to instruct the circuit court to enter a judgment in favor of Athens State and Dr. Bartlett. REVERSED AND REMANDED WITH INSTRUCTIONS. HOOPER, C.J., and MADDOX, HOUSTON, SEE, and LYONS, JJ., concur. JOHNSTONE, J., concurs specially. ENGLAND, J., concurs in the result. JOHNSTONE, Justice (concurring specially). While I concur in the main opinion, including its rationale, I also agree with the observations of Justice England in his special writing. *715 ENGLAND, Justice (concurring in the result). I write to point out that the main opinion should not be read to hold that there are no circumstances when the language in the Teacher Tenure Act would be useful in interpreting provisions of the Fair Dismissal Act. Unlike the circumstances of this present case, where the entire department was abolished, there may be circumstances where the Teacher Tenure Act would be helpful in determining what meaning should be given to certain provisions of the Fair Dismissal Act. See Ledbetter v. Jackson County Bd. of Educ., 508 So. 2d 244 (Ala.1987) (construing § 36-26-102, part of the Fair Dismissal Act, and § 16-24-3, part of the Teacher Tenure Act, together and holding that a lunchroom worker's partial termination from her employment, caused by a reduction of her work hours, triggered her right to a hearing). [1] Section 38-1-6 provides: "(a) The state government and all county and municipal governments in this state are hereby authorized to voluntarily participate in any program which is related to any form of assistance for the aged, including, but not limited to, such programs as senior citizens volunteers, foster grandparents, senior aids, various programs of the Federal Department of Health, Education and Welfare and any other program supported by the federal government, private foundations or other political or private organizations which establish assistance programs for the aged. Participation in said old-age assistance programs may be in the form of moneys, services rendered or any other form of voluntary participation available." [2] Athens State and Dr. Bartlett also filed an opposition to Ruth's motion for summary judgment. [*] Note from the reporter of decisions: Athens State College is a two-year institution, offering junior- and senior-level classes. See § 16-60-110(5), Ala. Code 1975 (Athens State College is "[a]n educational institution offering instruction on the level of difficulty of the third and fourth years above the high school level.").

September 22, 2000

71de93b5-9204-4bba-ab61-4b7e5d467011

Ex Parte Meadows

782 So. 2d 277

1990851

Alabama

Alabama Supreme Court

782 So. 2d 277 (2000) Ex parte Wesley MEADOWS. (Re Wesley Meadows v. John Bailey d/b/a Super Star Homes; et al.) 1990851. Supreme Court of Alabama. November 3, 2000. *278 Britt S. Booth of Booth Law Offices, P.A., Montgomery, for petitioner. James E. Wilson, Jr., Montgomery, for respondents. ENGLAND, Justice. Wesley Meadows, the plaintiff in an action pending in the Lowndes Circuit Court, petitions for a writ of mandamus directing Judge H. Edward McFerrin to set aside an order compelling arbitration of Meadows's claims and to conduct a jury trial on the question whether Meadows signed the arbitration agreement the judge was enforcing. On October 21, 1999, Judge McFerrin entered an order granting a motion to dismiss and to compel arbitration, filed by the defendants John Bailey d/b/a Super Star Homes (a mobile-home dealership); Maurice Bailey d/b/a Innovative Mortgage Company; and Pioneer Housing Systems, Inc. (the manufacturer of a mobile home Meadows had purchased at Super Star Homes). The defendants alleged in their motion that Meadows's claims were subject to an agreement to submit them to binding arbitration. Meadows challenged the authenticity of the signature on the document containing the arbitration agreement, the signature the defendants allege is Meadows's signature. The trial court concluded that an arbitrator should determine the authenticity of the signature. We grant the petition and issue the writ. On March 4, 1996, Meadows purchased a mobile home manufactured by Pioneer Housing Systems, Inc. ("Pioneer"). He purchased it from Super Star Homes and secured financing from Maurice Bailey. On January 28, 1998, Meadows sued the manufacturer, the dealer, and the lender, alleging breach of warranty, breach of contract, and fraud. On March 3, 1998, after the defendants had filed a motion to dismiss and to compel arbitration, Meadows filed a sworn statement denying the authenticity of the signature on a particular document dated February 7, 1996, entitled "Sales Contract." That document contained *279 an arbitration provision. Meadows based his complaint on a March 4, 1996, contract he entered into with Super Star Homes. He contends that he never signed the "Sales Contract" dated February 7, 1996; in moving to dismiss and to compel arbitration, the defendants relied on the arbitration clause in that Sales Contract. On April 2, 1998, the defendants submitted an affidavit signed by John Bailey in which he claimed that he had witnessed Meadows sign the document containing the arbitration agreement. On June 2, 1999, Meadows submitted a report and an affidavit from a handwriting expert; the expert declared the signature on the document containing the arbitration agreement to be a forgery. On July 7, 1999, the trial court entered this handwritten order on the case action summary: A petition for a writ of mandamus is the appropriate means by which to seek review of a trial court's order granting a motion to compel arbitration. Jones v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 604 So. 2d 332 (Ala.1991). "The writ of mandamus is an extraordinary remedy. One petitioning for it must show 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte Shelton, 738 So. 2d 864, 869 (Ala.1999). Meadows argues that he was entitled to a jury trial on the issue of the validity of document containing the arbitration provision. The defendants argue that an arbitrator should decide that issue because, they say, Meadows challenges the validity of the entire contract, not just the arbitration clause. The record shows that Meadows based the claims in his complaint on a contract dated March 4, 1996. Meadows denies signing the document dated February 7, 1996, that contains the arbitration provision the defendants relied upon in their motion to dismiss and to compel arbitration. Thus, Meadows challenges the existence of a contract evidenced by the document dated February 7, 1996, and styled "Sales Contract." The United States Court of Appeals for the Eleventh Circuit has stated: *280 Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 853-54 (11th Cir.1992). (Citations omitted.) The Eleventh Circuit has also adopted the following rule: Id. at 854 (quoting T & R Enters. v. Continental Grain Co., 613 F.2d 1272, 1278 (5th Cir.1980)). This Court has held that "`because an "arbitrator's jurisdiction is rooted in the agreement of the parties," a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate.'" Shearson Lehman Bros., Inc. v. Crisp, 646 So. 2d 613, 616-17 (Ala.1994) (quoting Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1140-41 (9th Cir.1991) (citations omitted)). "`A contrary rule would lead to untenable results. Party A could forge party B's name to a contract and compel party B to arbitrate the question of the genuineness of [his or her] signature.'" Oakwood Mobile Homes, Inc. v. Barger, 773 So. 2d 454, 460 (quoting Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1140 (9th Cir.1991)). Meadows contends that his signature was forged on the document dated February 7, 1996. On February 25, 1998, Meadows testified by affidavit that the signature on that document, the document that contained the arbitration clause, was not his signature. On March 31, 1998, John Bailey signed an affidavit stating: "I was present with Mr. Meadows on February 7, 1996 when he signed the Sales Contract to purchase the home and explained the terms of the contract to Mr. Meadows." On June 1, 1998, Meadows presented the affidavit of Richard A. Roper, Ph.D., a forensic examiner of questioned documents; Dr. Roper stated: Dr. Roper examined Meadows's signatures appearing on several documents, including (1) an original "Driver's Daily Vehicle Inspection Report"; (2) a photocopy of a page of insurance-coverage options; (3) a photocopy of a page of an employment application; (4) an expired driver's license; a Social Security card; and an International Mason's V.I.P. card; and (5) several daily log sheets. Meadows unequivocally denied signing the February 7, 1996, document that purports to bear his signature; thus, in effect, he denies the existence of a February 7, 1996, contract. He cannot be compelled to arbitrate the issue whether he entered into a contract in February 1996. Meadows provided substantial evidence to support his contention that he did not sign the document. He testified under oath that he did not sign the document, and he presented testimony from an expert, Dr. Roper, who corroborated Meadows's testimony that he did not sign the document. Meadows was entitled to have a jury determine whether he signed the February 7, 1996, document that contained the arbitration provision. *281 We grant the petition and issue the writ of mandamus. The circuit judge is directed to conduct a trial by jury only on the issue whether Meadows signed the document dated February 7, 1996. PETITION GRANTED; WRIT ISSUED. MADDOX, HOUSTON, COOK, SEE, LYONS, and JOHNSTONE, JJ., concur. HOOPER, C.J., dissents.

November 3, 2000

bb960990-1351-4379-9067-34704f28db1c

Ex Parte Sneed

783 So. 2d 863

1981660

Alabama

Alabama Supreme Court

783 So. 2d 863 (2000) Ex parte Ulysses Charles SNEED. (In re Ulysses Charles Sneed v. State). 1981660. Supreme Court of Alabama. June 30, 2000. As Modified on Denial of Rehearing September 15, 2000. *864 Joseph W. Propst II, Decatur; and Michael K. Congiardo, Hartselle, for petitioner. Bill Pryor, atty. gen., and Michael B. Billingsley, asst. atty. gen., for respondent. PER CURIAM. Ulysses Charles Sneed was convicted of capital murder for the killing of Clarence Nugene Terry. The murder was made capital because it was committed during the course of a robbery in the first degree. See § 13A-5-40(a)(2), Ala.Code 1975. Sneed was tried with a codefendant, John Milton Hardy; Hardy also was convicted of capital murder. See Hardy v. State, [Ms. CR-95-0589, March 26, 1999] ___ So.2d ___ (Ala.Crim.App.1999). (Hardy's case is pending before this Court on certiorari review (no. 1981646).) The jury, by a vote of 10-2, recommended that Sneed be sentenced to death by electrocution. The trial court, after independently weighing the aggravating and mitigating factors, concurred with the jury's recommendation and sentenced Sneed to death.[1] The Court of Criminal Appeals affirmed Sneed's conviction and sentence. See Sneed v. State, 783 So. 2d 841 (Ala.Crim. App.1999). This Court granted Sneed's petition for certiorari review. Because we find that the trial court erred in admitting into evidence an edited and redacted version of a statement that Sneed had made to police officers, we reverse and remand. The record indicates the following facts.[2] On August 29, 1993, Sneed and Chris Hines drove from Louisville, Kentucky, to Alabama. The two men came to Alabama to look for jobs. Sneed stayed with Hines and Hardy, who is Hines's cousin. In the early morning hours of September 7, 1993, Sneed and Hardy borrowed Hines's automobile and went to buy beer; Hardy was driving and Sneed was a passenger. Hardy drove to his house, where he picked up a rifle and put it in the car. He then drove to Bud's Convenience Store in Decatur. Hardy pulled his shirt sleeves from his shirt, and Hardy and Sneed tied the sleeves around their faces as masks. Sneed opened the door to the convenience store. Hardy stepped into the store and began firing his rifle at Terry, the store clerk. Hardy's first shot missed Terry, who tried to hide behind the counter. As Hardy fired at Terry, Sneed ran behind the counter toward the cash register. While Sneed attempted to open the cash register, Hardy leaned over the counter and shot Terry in the chest. Hardy then walked around the counter and shot Terry five times in the head and face. While Terry lay dying on the floor, Sneed and Hardy continued their attempt to open the cash register; they were unsuccessful. Sneed and Hardy unplugged the cash register and took it with them as they ran from the store. These events were recorded on the convenience store's surveillance video camera. Later that morning, Sneed, Hardy, and Hines went to Hardy's father's house, where Sneed and Hardy had left the cash register. Using a sledgehammer, the *865 three men tried to open the register. When the police recovered the cash register, they found Hines's fingerprint on it. The police showed the surveillance video to several people, including Hines. Four of those people, including Hines, identified Hardy as the shooter and Sneed as the unarmed man. In his statement to police, Sneed admitted that he had participated in the robbery, but stated that he did not intend for anyone to get hurt. The indictment against Sneed alleged that he had committed the capital offense of murder during the course of a first-degree robbery, in violation of § 13A-5-40(a)(2), Ala.Code 1975. At his arraignment, Sneed pleaded not guilty.[3] At trial, Sneed's defense was that, although he had participated in the robbery, he was not the gunman and he did not intend that anyone be killed. In his petition for certiorari review, Sneed presents 14 issues for our review; however, we address only the issue whether the trial court erred in admitting into evidence Sneed's edited and redacted statement. Because Sneed and Hardy were tried together, the prosecution did not introduce into evidence the complete statement Sneed gave to police officers, but instead, introduced his statement in an edited and redacted form. In the edited and redacted version of the statement, in places where Sneed had actually said "we" or "he," the prosecution had substituted "I," and in addition, it had eliminated all references to Hardy. The prosecution used the edited and redacted statement in an effort to avoid violating Hardy's confrontation right guaranteed by the Confrontation Clause of the Sixth Amendment to the United States Constitution. See Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620, 20 L. Ed. 2d 476 (1968). In Bruton, the Supreme Court held that the admission of a non-testifying defendant's confession, implicating his codefendant in the crime, violated the codefendant's rights under the Confrontation Clause of the Sixth Amendment. 391 U.S. at 126, 88 S. Ct. 1620. See, also, United States v. Lopez, 898 F.2d 1505, 1510 (11th Cir.1990). However, in Richardson v. Marsh, 481 U.S. 200, 107 S. Ct. 1702, 95 L. Ed. 2d 176 (1987), the Supreme Court limited its holding in Bruton, holding that the admission of a non-testifying defendant's confession does not violate the Confrontation Clause if the confession is redacted so as to eliminate the codefendant's name and any reference to his or her existence, and if the court gives the jury a proper limiting instruction. See Richardson, 481 U.S. at 208-09, 107 S. Ct. 1702. As previously noted, the State chose to try Sneed and Hardy together. In order to have the benefit of Sneed's statement in the case against him without violating Hardy's rights, the State, over Sneed's objection, had the edited and redacted statement admitted into evidence. His statement, as edited and redacted, put him in the role of a sole actor in the events leading up to the murder. The statement Sneed gave to police officers states: State's Exhibit # 67 (misspelled and omitted words and grammatical and punctuation errors in original). However, the edited and redacted statement admitted into evidence at trial reads: State's Exhibit # 69 (omitted words and grammatical and punctuation errors in original). Sneed's defense at trial was that he had participated in the robbery, but not the murder; that he was one of the people shown on the videotape, but he was not the gunman; and that he did not intend for anyone to be killed during the robbery. He argues that "[t]he redacted statement distorted the facts of the case and enlarged [his] role in the offense, effectively nullifying [his] defense that he lacked the specific intent to commit murder." The redaction of his statement was prejudicial, Sneed says, because the full statement was consistent with, and supportive of, his theory of the case, while the redacted statement was factually incorrect and made it appear that he alone had planned the robbery and was the sole active participant in it. Sneed maintains that the redaction in this case served to protect the rights of his codefendant, Hardy, while it distorted the facts presented to the jury; therefore, he concludes, the redaction was so prejudicial that the trial court should not have admitted it into evidence. Sneed also argues that the redaction of his statement violated the rule of completeness, i.e., the rule that "[c]onfessions or declarations, whether offered in evidence in a civil or criminal case, must be received as a whole." Eiland v. State, 52 Ala. 322, 335 (1875); accord Levy v. State, 49 Ala. 390, 393 (1873) ("The whole of a confession or admission must be given in evidence, and taken together; in other words, it must not be garbled."). Finally, Sneed points out that "[t]he right of cross examination, thorough and sifting, belongs to every party as to the witnesses called against him" (quoting § 12-21-137, Ala. Code 1975), and argues that the redaction of his statement unlawfully limited his right to cross-examine the police officer who took the statement, because he could not ask the officer questions that elicited references to Hardy's involvement in the crime. The State argues that the admission of the edited and redacted statement did not hamper Sneed's ability to put forth a defense because, it says, Sneed had the benefit of the videotape evidence from the store's surveillance camera, he had the opportunity to cross-examine two police officers, and the trial court instructed the jury that his statement, as introduced, was incomplete. The State also argues that the admission into evidence of the statement *869 did not violate the rule of completeness, relying upon United States v. Long, 900 F.2d 1270, 1279 (8th Cir.1990). Long held that the rule requiring completeness of a statement by an accused does not apply when the meaning of a redacted statement is clear despite the redaction. The State's argument ignores the reality that the redaction in this case made a liar out of Sneed. The jurors, who heard only the edited and redacted statement, heard Sneed describe himself as the central figure in the crime, without reference to the participation of anyone else in the events leading up to the murder, such as driving the car, obtaining the murder weapon, passing six gasoline stations before settling on the scene of the crime, or making a mask from shirt sleeves. It appears from the statement that Sneed drove the car, obtained the murder weapon, drove past six stations looking for the easiest target, devised the means of making the masks, and induced Hardy to carry the weapon into the store. At trial, however, Sneed's theory of defense was irreconcilably inconsistent with the edited and redacted statement. Although the videotape evidence from the surveillance camera and Sneed's cross-examination of the two officers supported his defense at trial, the videotape and the officers were incompetent witnesses as to the aforementioned events leading up to the murder. The videotape showed that Sneed was not acting alone and that Sneed was not the gunman; however, even though it provided a remarkable amount of evidence, it was simply unable to capture Sneed's intent at the time Sneed and Hardy entered the store. Evidence from the videotape and the officers does not overcome the distorted statement's contradiction of Sneed's defense that he lacked the specific intent to commit murder. Although the police officers and the trial court told the jury that the edited and redacted statement was not Sneed's entire statement, its inconsistency with his defense at trial was not cured by so informing the jury. The police officers testified on cross-examination that Sneed had told them that he did not intend for anyone to die, that he was unarmed, and that he had no role in the murder. The State contends that the officers' testimony provides the "completeness" to the statement that was missing because of the redaction. However, that testimony contradicts the logical inference that Sneed's role in the offense, as described in the edited and redacted version of the statement made available to the jury, was primary. The jury could simply have believed that Sneed said one thing to the officers and another in his written statement. The State recognizes in its brief that this Court has not previously addressed how the doctrine of completeness applies to a statement edited and redacted in accordance with Richardson, supra. Other jurisdictions have addressed this issue, however, as the Court of Criminal Appeals in its opinion and the State in its brief have noted. The United States Court of Appeals for the Second Circuit has acknowledged that a district court, in deciding whether to redact portions of a defendant's statement, must balance its interest in protecting a codefendant's Sixth Amendment confrontation right against its interest in the judicial economy that is promoted by trying two or more defendants together. United States v. Mussaleen, 35 F.3d 692 (2d Cir.1994); United States v. Castro, 813 F.2d 571 (2d Cir.), cert. denied, 484 U.S. 844, 108 S. Ct. 137, 98 L. Ed. 2d 94 (1987). The Second Circuit has applied an abuse-of-discretion standard when reviewing a district court's balancing of these competing interests. Mussaleen, 35 F.3d at 696; Castro, 813 F.2d at 576. See, also, State v. Mahboubian, 74 N.Y.2d 174, 543 N.E.2d 34, 544 N.Y.S.2d *870 769 (1989) (the trial court's redaction of a statement and the denial of a severance were reviewed for abuse of discretion). In Mussaleen, the district court had redacted portions of defendant McKinnon's pretrial statement in an effort to protect his codefendant Mussaleen's Sixth Amendment confrontation right. McKinnon argued that the redaction distorted his statement and that it violated the rule of completeness. The Second Circuit concluded that the redacted version of McKinnon's statement did not unfairly distort the original and did not exclude exculpatory information. The Second Circuit also concluded that because the redacted version of the statement conveyed the substance and context of the statement as a whole, it did not offend the rule of completeness. It found that the district court had not abused its discretion in redacting portions of McKinnon's statement. 35 F.3d at 696. In Castro, the district court had redacted the portion of defendant Castro's statement that attributed the ownership of a bag of cocaine to a codefendant. The Second Circuit held that even though the meaning of Castro's statement was changed "somewhat" by the redaction, the district court had not abused its discretion by redacting the statement and suggesting that on cross-examination of a law enforcement officer Castro could present to the jury the point that he denied ownership of the cocaine. In Mahboubian, however, the Court of Appeals of New York found that Mahboubian had suffered undue prejudice as a result of the trial court's redaction of large portions of the statement he had made to police officers. Approximately 58 of 146 pages were redacted, eliminating all references to Mahboubian's codefendant Sakhai. In concluding that the trial court had abused its discretion by substantially redacting the statement, the Court of Appeals said that the redacted material "supported Mahboubian's defense arguments and if believed, it explained much of the evidence against him." 74 N.Y.2d at 188, 543 N.E.2d at 41, 544 N.Y.S.2d at 776. The United States Court of Appeals for the District of Columbia Circuit has held that the "redaction of a confession violates the rule of completeness only if the redacted version `distorts the meaning of the statement or excludes information substantially exculpatory of the defendant.'" See United States v. Washington, 952 F.2d 1402, 1404 (D.C.Cir.1991), cert. denied, 503 U.S. 1009, 112 S. Ct. 1773, 118 L. Ed. 2d 432 (1992) (quoting United States v. Kaminski, 692 F.2d 505, 522 (8th Cir.1982)). In Washington, however, the Court concluded that because the defendant was able to present during cross-examination the allegedly exculpatory material redacted from his statement, he was not denied "`"a meaningful opportunity to present a complete defense."' Crane v. Kentucky, 476 U.S. 683, 690, 106 S. Ct. 2142, 90 L. Ed. 2d 636 (1986) (quoting California v. Trombetta, 467 U.S. 479, 485, 104 S. Ct. 2528, 81 L. Ed. 2d 413 (1984))." Washington, 952 F.2d at 1404. We now apply the foregoing legal principles to the case before us. Sneed's jury would have had to conclude that the edited and redacted version of his statement admitted at trial was untruthful in order to accept his defense that he lacked the specific intent to commit murder. In this respect, Sneed's rights were sacrificed in order to accommodate the State's interest in conducting a joint trial. It is axiomatic that an admissible confession is a voluntary statement by the defendant waiving his privilege under the Fifth Amendment to the United States Constitution against being compelled to be a witness against himself. The scope of the waiver must be measured by the *871 words used in his voluntary act-i.e., his confession. Here, Sneed voluntarily gave a statement, but the State's significant and prejudicial alteration of the import of that statement effectively compelled his testimony as to matters to which he did not agree when he gave his statement. We recognize that the trial court was attempting to perform the difficult task of balancing Sneed's right to offer his statement in support of his theory of defense, Hardy's Sixth Amendment right to confrontation, and the interest of judicial economy. In this instance, however, Sneed's statement was edited and redacted to the point that it was unduly prejudicial to him; therefore, the trial court abused its discretion in admitting into evidence Sneed's edited and redacted statement. Given the circumstances of this case, we conclude that Sneed is entitled to a new trial. We reverse the judgment of the Court of Criminal Appeals and remand the cause for further proceedings consistent with this opinion. REVERSED AND REMANDED. HOUSTON, COOK,[*] LYONS, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J.,[*] and MADDOX, SEE, and BROWN, JJ., dissent. SEE, Justice (dissenting). Having reviewed the record in this case, I must respectfully dissent. I would affirm Sneed's conviction and sentence. Rule 13.3(a)(1), Ala.R.Crim.P., provides that "[t]wo or more offenses may be joined in an indictment, information, or complaint, if they ... [a]re of the same or similar character." Rule 13.4(a), Ala. R.Crim.P., provides that "the court may order an election or separate trials of counts [or] grant a severance of defendants" when "it appears that a defendant or the state is prejudiced by a joinder of offenses or of defendants," but the preference for joint trials was stated in Richardson v. Marsh, 481 U.S. 200, 210, 107 S. Ct. 1702, 95 L. Ed. 2d 176 (1987): (Footnote omitted.) Because of these benefits, the use of joint trials has been repeatedly approved. See Zafiro v. United States, 506 U.S. 534, 537, 113 S. Ct. 933, 122 L. Ed. 2d 317 (1993). The preference for joint trials and the interests of judicial economy must be balanced against the court's interests in protecting a codefendant's right of confrontation. In Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620, 20 L. Ed. 2d 476 (1968), the Supreme Court of the United States held that the admission into evidence of a *872 nontestifying defendant's confession, implicating his codefendant in the crime, violated the codefendant's rights under the Confrontation Clause of the Sixth Amendment. 391 U.S. at 126, 88 S. Ct. 1620. See also United States v. Lopez, 898 F.2d 1505, 1510 (11th Cir.1990). However, in Richardson v. Marsh, 481 U.S. 200, 107 S. Ct. 1702, 95 L. Ed. 2d 176 (1987), the Supreme Court limited Bruton, holding that the admission of a nontestifying defendant's confession does not violate the Confrontation Clause if the confession is redacted to eliminate the codefendant's name and any reference to his existence, and the court gives the jury a proper limiting instruction. See Richardson, 481 U.S. at 208-09, 107 S. Ct. 1702. The decision to grant a severance lies within the broad discretion of the trial court, and such a decision will not be overturned absent an abuse of that discretion. See Hill v. State, 481 So. 2d 419, 424 (Ala. Crim.App.1985); Ex parte Washington, 562 So. 2d 1304, 1305 (Ala.1990); Greathouse v. State, 624 So. 2d 202, 204 (Ala. Crim.App.1992). For a defendant to establish an abuse of discretion, he "`must show that he "received an unfair trial and suffered compelling prejudice against which the trial court was unable to afford protection."'" Hill, 481 So. 2d at 424 (citations omitted). Minnis v. State, 690 So. 2d 521, 525 (Ala. Crim.App.1996), quoting Hinton v. State, 548 So. 2d 547, 555 (Ala.Crim.App.1988), aff'd, 548 So. 2d 562 (Ala.), cert. denied, 493 U.S. 969, 110 S. Ct. 419, 107 L. Ed. 2d 383 (1989) (citations omitted). Although Sneed's original statement was altered by the redaction, the substance of the redacted material was presented to the jury through the testimony of other witnesses, through demonstrative evidence, and through facts elicited on cross-examination. Sneed's defense was that, although he was aware that he and Hardy were going to rob the convenience store, he did not intend for anyone to die. His defense was presented to the jury through the surveillance camera videotape and through Sneed's cross-examination of Officers Boyd and Hale. The video showed that Sneed was not acting alone and that Sneed was not the gunman. The trial court provided Sneed with wide latitude on cross-examination of the State's witnesses. On cross-examination, Officers Boyd and Hale testified that the statement admitted into evidence was not Sneed's entire statement; that Sneed told them that he had not intended for anyone to die; and that he was unarmed and had had no role in the murder. Moreover, the trial court instructed the jury that the redacted statement was not Sneed's entire statement. Based on the foregoing evidence, I cannot conclude that Sneed's ability to put forth a defense was hampered. Sneed also argues that the admission of the redacted statement violated the rule of completeness. The general rule on this issue is that "when part of a defendant's post-arrest statement is introduced into evidence, the defendant has the right to have the entire statement introduced." United States v. Smith, 794 F.2d 1333, 1335 (8th Cir.1986); see also Bridges v. State, 516 So. 2d 895 (Ala.Crim.App.1987). This rule, however, is not absolute. When a defendant's confession is redacted to avoid violating the Sixth Amendment rights of a codefendant, "`the rule of *873 completeness is violated, and severance required, only where admission of the statement in its edited form distorts the meaning of the statement or excludes information substantially exculpatory of the declarant.'" United States v. Long, 900 F.2d 1270, 1279 (8th Cir.1990), quoting United States v. Kaminski, 692 F.2d 505, 522 (8th Cir.1982). See also United States v. Smith, 794 F.2d 1333, 1335 (8th Cir.1986); United States v. Lopez, 898 F.2d 1505, 1510 n. 11 (11th Cir.1990). Although the redaction did edit Sneed's statement, the meaning of that statement became apparent through the testimony of witnesses, both on direct and on cross-examination, and through demonstrative evidence, including the surveillance videotape of the crime. "The rule of completeness is not violated when the meaning of the redacted statement becomes clear despite the redaction." Long, 900 F.2d at 1279. Finally, Sneed argues that the admission of the redacted statement limited his ability to cross-examine witnesses. I do not find this argument persuasive, given the wide latitude afforded Sneed by the trial court. After examining both Sneed's arguments and the record, and after reviewing the trial court's balancing of the competing interests of protecting a codefendant's confrontation right against the interest in judicial economy, I would hold that the trial court did not abuse its discretion in admitting into evidence Sneed's redacted statement. The admission of the redacted statement did not hamper Sneed's ability to put on his defense, did not violate the rule of completeness, and did not limit his ability to cross-examine witnesses. HOOPER, C.J., and MADDOX, J., concur. BROWN, Justice (dissenting). I dissent not only for the reasons stated in Justice See's dissent, but also because I believe Judge Patterson was correct in his statement regarding harmless error: Sneed v. State, 783 So. 2d 843, 852 (Ala. Crim.App.1999) (footnote omitted). I would therefore affirm Sneed's capital-murder conviction and the sentence. PER CURIAM. APPLICATION OVERRULED; OPINION OF JUNE 30, 2000, MODIFIED. HOUSTON, COOK, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., and MADDOX, SEE, and BROWN, JJ., dissent. HOOPER, Chief Justice (dissenting). I must respectfully dissent. The majority concludes that "the redaction in this case made a liar out of Sneed," 783 So. 2d at 869, and prevented him from effectively presenting the defense that he lacked the specific intent to kill. However, the redaction did not make a liar out of Sneed. The evidence did. Aside from the allegedly improperly redacted statement, the videotape from the security camera, the testimony from Sneed's cross-examination of the two police officers who recorded his original statement, and the trial court's instruction to the jury that the statement, *874 as introduced in its redacted form into evidence, was not his original, complete declaration provided ample opportunity for Sneed to present his defense. It was solely for the consideration of the jury, which heard firsthand the testimony, observed the evidence, and witnessed the events as they unfolded in the courtroom, to weigh that evidence accordingly; this Court is wrong to question the jury's determination in that regard. My conclusion in this particular case does not undermine my firm belief that the state should be especially careful when redacting an accused's statementespecially as in the instant case, where pronouns are "blanketly" substituted to omit any mention of a coconspiratorlest it accidentally omit proof of the substantive elements of an offense. However, in this case, any error that may have inadvertently occurred in the admission of the redacted statement into evidence could be interpreted as harmless in light of the other, significant evidence presented by the state, which could have been interpreted by the jury as negating Sneed's defense that he lacked the specific intent to kill. I would, therefore, affirm the judgment of the Court of Criminal Appeals affirming Sneed's capital-murder conviction and his sentence. [1] By the same vote of 10-2, the jury recommended that Hardy be sentenced to death. The trial court also concurred with the jury's recommendation as to Hardy and sentenced him to death. [2] These facts were obtained both from the evidence presented at trial and from Sneed's unredacted statement. [3] Sneed also pleaded not guilty by reason of mental disease or defect. However, Sneed withdrew this plea at trial following opening statements. [*] Although Chief Justice Hooper and Justice Cook did not sit at oral argument of this case, they have listened to the tape of oral argument.

September 15, 2000

193bf5ef-6daf-4791-b817-336b5d7e5b57

BAMA BUDWEISER OF MONTOGOMERY, INC. v. Anheuser-Busch, Inc.

783 So. 2d 792

1981898

Alabama

Alabama Supreme Court

783 So. 2d 792 (2000) BAMA BUDWEISER OF MONTGOMERY, INC. v. ANHEUSER-BUSCH, INC., et al. 1981898. Supreme Court of Alabama. May 19, 2000. Opinion Overruling Rehearing September 29, 2000. *793 W. Stanley Gregory and Thomas F. Monk of Thorington & Gregory, Montgomery, for appellant. Sterling G. Culpepper, Dorman Walker, and Marc Ayers of Balch & Bingham, L.L.P., Montgomery, for appellee Anheuser-Busch, Inc. Walter R. Byars and B. Saxon Main of Steiner-Crum, Byars & Main, P.C., Montgomery, for appellee Alabama Wholesale Beer Association. SEE, Justice. This appeal involves a dispute between a beer wholesaler and a beer manufacturer. The wholesaler, Bama Budweiser of Montgomery, Inc., argues that the trial court erred by construing Act No. 98-286, Ala. Acts 1998, a local act pertaining to Montgomery County, in harmony with the general laws of this State prohibiting a wholesaler from selling outside the exclusive sales territory assigned by the manufacturer, in this case, Anheuser-Busch, Inc. See Ala.Code 1975, § 28-8-8(a)(2); § 28-9-5(2). Bama Budweiser also argues that the trial court erred in allowing the Alabama Wholesale Beer Association (the "Wholesale Association"), of which Bama Budweiser is a member, to intervene in this litigation and assert a position adverse to Bama Budweiser's. Because we hold that the trial court properly construed Act No. 98-286, and that, although the trial court erred in allowing the Wholesale Association to intervene, that error was harmless, we affirm the judgment of the trial court. In 1984, the Legislature enacted Act No. 84-374, codified at Ala.Code 1975, §§ 28-8-1 through 28-8-8, under the heading "Exclusive Sales Territories and Wholesalers" (hereinafter referred to as the "Territorial Act"). The Territorial Act requires each manufacturer and importer of alcoholic beverages who sells its products through wholesalers to "designate exclusive sales territories for each of its brands sold in Alabama" and to "name one licensed wholesaler for each sales territory who, within such territory, shall be the exclusive wholesaler for said brand or brands." Ala.Code 1975, § 28-8-2. The Territorial Act prohibits a wholesaler from selling to retailers outside its exclusive sales territory, see Ala.Code 1975, § 28-8-8(a)(2), and also prohibits a retailer from buying from any wholesaler other than the wholesaler in whose exclusive sales territory the retailer is located, see § 28-8-8(a)(3). The Territorial Act also requires each wholesaler to "service retail licensees within [the wholesaler's exclusive sales territory] without discrimination." Ala.Code 1975, § 28-8-5. *794 In 1988, the Legislature enacted Act No. 88-80, Ala. Acts 1988, codified at Ala.Code 1975, §§ 28-9-1 through 28-9-11, under the heading "Business Relations Between Wholesalers and Suppliers of Beer" (hereinafter referred to as the "Franchise Act"). The Franchise Act contemplates that a manufacturer or importer of beer who sells its products through a wholesaler must, with regard to each of its brands, designate exclusive sales territories within each of which only a single wholesaler may sell that brand to licensed retailers. See Ala. Code 1975, § 28-9-4. Like the Territorial Act, see § 28-8-8(a)(2), the Franchise Act prohibits a wholesaler from "sell[ing] or deliver[ing] beer to a retail licensee located outside the sales territory designated to the wholesaler by the supplier of a particular brand or brands of beer." Ala.Code 1975, § 28-9-5(2). In 1997, a retailer not involved in the present case asked the Alabama Alcoholic Beverage Control Board for its opinion concerning whether some wholesalers had improperly discriminated among retailers in their exclusive sales territories, in violation of § 28-8-5. These wholesalers provided services to chain stores on Saturdays that they refused to provide to independent retailers on Saturdays. The ABC Board concluded that the wholesalers had not engaged in discrimination in violation of § 28-8-5. See ABC Opinion re: Guthrie Enterprises v. Turner Beverage Co. In April 1998, the Legislature enacted Act No. 98-286, a local act applicable to Montgomery County. It provides: "No... wholesaler ... shall refuse to sell to a... retail[er] ... or to provide a service to a ... retail[er] ..., if the same service is provided to other ... retail[ers]...." 1998 Ala. Acts, Act No. 98-286, § 2. The effective date of that Act was July 1, 1998. Although manufacturers and importers of beer and other alcoholic beverages are free to designate exclusive sales territories in any configuration they wish, see § 28-8-2 and § 28-9-3, in practice the exclusive sales territories designated by every major beer manufacturer follow county lines, with one exception. That exception is that in June 1989 Anheuser-Bush, Inc., divided Montgomery County into two exclusive sales territories, assigning the northern part of the county, including the City of Montgomery, to Bama Budweiser, and the southern part of the county to Horn Beverage Company.[1] On June 30, 1998, Anheuser-Busch filed this action against Bama Budweiser and Horn Beverage Company, seeking a judgment declaring that Act No. 98-286 was unconstitutional. Horn Beverage answered, admitting the allegations of the complaint and joining in Anheuser-Busch's prayer for relief. Bama Budweiser, on the other hand, counterclaimed, seeking a declaration that Act No. 98-286 is constitutional and that Bama Budweiser's future sales to Montgomery County retailers outside the exclusive sales territory assigned to it by Anheuser-Busch would not violate its agreement with Anheuser-Busch. The Wholesale Association moved to intervene as a plaintiff, filing a complaint in intervention seeking a declaratory judgment construing Act No. 98-286 in harmony with the Territorial Act and the Franchise Act or, in the alternative, a judgment declaring Act No. 98-286 unconstitutional. Bama Budweiser objected to the Wholesale Association's intervention, but the trial court granted the motion. Wyatt Supermarket, Inc., moved for leave to file a brief as an amicus curiae and filed one in support of Bama Budweiser. *795 In December 1998, the circuit court heard oral arguments on the three claims for declaratory relief. In June 1999, the court issued an opinion and a final judgment, adopting in that judgment the construction of Act No. 98-286 proposed by the Wholesale Association and declining to rule on the constitutional issues. The circuit court's judgment provided in pertinent part: Bama Budweiser appealed. It argues that the circuit court erred in allowing the Wholesale Association to intervene in this litigation because, it argues, the Wholesale Association did not have standing. We agree. It is undisputed that the Wholesale Association does not itself have a protectable interest at stake in this litigation. The Wholesale Association argues, however, that it has standing to assert the interests of its members. As an initial matter, we note that this Court has previously held that an association has no standing to intervene in an action when it has no grievance apart from the grievances of its members. See City of Birmingham v. Fairview Home Owners Ass'n, 259 Ala. 500, 66 So. 2d 775 (1953). Although this Court has never explicitly overruled that holding, it implicitly did so in Alabama State Florists Ass'n, Inc. v. Lee County Hosp. Bd., 479 So. 2d 720, 722 (Ala.1985), where it held that an association of florists, whose members were taxpayers, had standing to challenge expenditures of public funds by a public authority. See Blue Cross & Blue Shield of Alabama v. Protective Life Ins. Co., 527 So. 2d 125 (Ala.Civ.App.1987) (recognizing that Alabama State Florists Ass'n implicitly overruled City of Birmingham and holding that, under the rule of Warth v. Seldin, 422 U.S. 490, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975), an association may have standing as the representative of its members). To eliminate potential confusion, we take this opportunity to explicitly overrule City of Birmingham v. Fairview Home Owners Ass'n and expressly adopt the federal test for association standing. See Warth 422 U.S. at 515, 95 S. Ct. 2197 (holding that an association can have standing to sue on behalf of its members only when it seeks relief that "can reasonably be supposed ... will inure to the benefit of those members of the association actually injured"). Accordingly, an association can seek relief on behalf of its members when: Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S. Ct. 2434, 53 L. Ed. 2d 383 (1977). In this case, however, only two of the Wholesale Association's members would have had standing to sue in their own right: Bama Budweiser and Horn Beverage, the only wholesalers doing business *796 in Montgomery County. Moreover, the Wholesale Association took a position directly contrary to Bama Budweiser's. Thus, it cannot be fairly said that the relief the Wholesale Association sought would inure to the benefit of its injured members; therefore, the Wholesale Association did not have standing to intervene as a plaintiff in this matter. See Southwest Suburban Bd. of Realtors, Inc. v. Beverly Area Planning Ass'n, 830 F.2d 1374, 1381 (7th Cir.1987) (holding that an association did not have association standing to sue some of its members on behalf of other members). Although the circuit court erred in allowing the Wholesale Association to intervene, that error is a ground for reversal only if it "has probably injuriously affected substantial rights" of Bama Budweiser. Rule 45, Ala. R.App. P. Bama Budweiser argues that it was prejudiced by the Wholesale Association's intervention because, it argues, the Wholesale Association injected issues into this litigation that had not been raised by a proper party. We disagree. Bama Budweiser, relying on Rowen v. Le Mars Mutual Insurance Co. of Iowa, 282 N.W.2d 639, 645-46 (Iowa 1979), and Morrow v. Drumwright, 202 Tenn. 307, 315, 304 S.W.2d 313, 316-17 (1957), argues that a party is prejudiced when it has to meet new issues raised by an improper party. Specifically, Bama Budweiser argues that it was prejudiced by the Wholesale Association's participation because the Wholesale Association advocated a construction of Act No. 98-286 different from the construction any of the proper parties had advocated. This argument, however, is without merit. Anheuser-Busch and Bama Budweiser each made a request for a declaratory judgment, a request that required the circuit court to construe Act No. 98-286. A court, in construing a statute, is not limited to choosing among the statutory interpretations advocated by the parties. Instead, the court has a duty to construe the statute correctly, even if the correct construction is not one of the constructions advocated by the parties to the action. The Wholesale Association did not inject a new issue into this case merely by advocating a particular construction of the Act. Because Bama Budweiser was not prejudiced by the intervention of the Wholesale Association, the trial court's error in allowing the Wholesale Association to intervene was harmless. See Rule 45, Ala. R.App. P. Bama Budweiser argues that Act No. 98-286 impliedly repeals, as to Montgomery County, those portions of the Territorial Act and the Franchise Act that prohibit a beer wholesaler from selling to retailers located outside the wholesaler's exclusive territory, and those portions of these Acts that prohibit beer retailers from buying from a wholesaler whose exclusive territory does not include the retailer's location. Thus, Bama Budweiser concludes, Act No. 98-286 permitsindeed, requiresBama Budweiser to sell its Anheuser-Busch products and to provide related services without discrimination to all licensed retailers in Montgomery County who want to do business with Bama Budweiser. "The implied repeal of a statute by another statute is not favored by the courts and will be found only when the two statutes are so repugnant to, or in such conflict with, one another that it is obvious that the Legislature intended to repeal the first statute." Anniston Urologic Assocs., P.C. v. Kline, 689 So. 2d 54, 59 (Ala.1997). Furthermore, "[t]he rule of construction is to harmonize seeming conflicts." Reid v. City of Birmingham, 274 Ala. 629, 636, 150 So. 2d 735, 741 (1963). The circuit court, *797 applying these rules of construction, concluded: The circuit court correctly construed Act No. 98-286 in harmony with the Territorial Act and the Franchise Act. The provisions of Act No. 98-286 are not "so repugnant to, or in such conflict with, [the Territorial Act and the Franchise Act] that it is obvious that the Legislature intended to repeal [the Territorial Act and the Franchise Act with respect to Montgomery County]." See Anniston Urologic Assocs., 689 So. 2d at 59. Bama Budweiser argues that the circuit court's construction does not comport with the plain language of the Act and leaves the Act no room to operate. See Ex parte Jackson, 625 So. 2d 425, 428 (Ala.1992) ("[E]very clause in an act must be accorded a field of operation if possible."). We disagree. The nondiscrimination provision of Act No. 98-286 is more specific than the Territorial Act's nondiscrimination provision, found in § 28-8-5. While § 28-8-5 requires that wholesalers sell to retailers in their exclusive sales territories "without discrimination," it does not state that a wholesaler must provide exactly the same services to all retailers. See ABC Opinion re: Guthrie Enterprises v. Turner Beverage Co. On the other hand, Act No. 98-286 prohibits a wholesaler from refusing to "provide a service to a ... [retailer] ... if the same service is provided to other [retailers]." Therefore, Bama Budweiser's argument that the trial court's construction of Act No. 98-286 left that Act no room to operate in is without merit.[2] The circuit court correctly held that Act No. 98-286 did not implicitly repeal any part of the Territorial Act or the Franchise Act. Although it erred in allowing the Wholesale Association to intervene in the action, that error did not prejudice Bama Budweiser and was, therefore, harmless. Accordingly, we affirm the circuit court's judgment. AFFIRMED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. SEE, Justice. On application for rehearing, Bama Budweiser argues that our construction of Act No. 98-286 must take into consideration Senate Joint Resolution 1 ("S.J.R.1") adopted by the Senate at the 1999 Extraordinary Session of the Legislature. We note that an identical resolution, House Joint Resolution 17, was adopted by the House of Representatives at the same session. Apparently, neither house voted on the other's resolution, see Ala. Const. of 1901, art. IV, § 66, and neither S.J.R. 1 nor H.J.R. 17 was signed by the Governor, see Ala. Const. of 1901, art. V, § 125. S.J.R. 1 states that the intent of Act No. *798 98-286 "was to require, permit, and allow licensed beer wholesalers to sell to licensed beer retailers, and [that the Act] would permit or allow licensed beer retailers to purchase from licensed wholesalers in Montgomery County, the products of any manufacturer or importer outside the exclusive sales territory of that wholesaler designated by that manufacturer or importer." The Senate adopted S.J.R. 1 on November 15, 1999well after the trial court had entered its judgment and, indeed, after Bama Budweiser had filed its initial brief to this Court. Thus, because S.J.R. 1 was not presented to the trial court and was presented for the first time on appeal, this Court cannot consider that ground. See Smith v. Equifax Servs., Inc., 537 So. 2d 463, 465 (Ala.1988) ("[T]his Court will not reverse the trial court's judgment on a ground raised for the first time on appeal...."). Moreover, and more important, S.J.R. 1 is not law. This Court stated in Laidlaw Transit, Inc. v. Alabama Education Association, 769 So. 2d 872, 883 (Ala.2000), referring to another joint resolution: Therefore, S.J.R. 1 does not control our construction of Act No. 98-286. APPLICATION OVERRULED. MADDOX, HOUSTON, COOK, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur. HOOPER, C.J., dissents. HOOPER, Chief Justice (dissenting). "In the government of this state, except in the instances in this Constitution hereinafter expressly directed or permitted, ... the judicial [department] shall never exercise the legislative and executive powers, or either of them; to the end that it may be a government of laws and not of men." § 43, Ala. Const., 1901. (Emphasis added.) In DeKalb County LP Gas Co. v. Suburban Gas, Inc., 729 So. 2d 270 (Ala. 1998), this Court restated the appropriate method for interpreting statutes: 729 So. 2d at 275-76, quoting Blue Cross & Blue Shield v. Nielsen, 714 So. 2d 293, 296 (Ala.1998). (Citations omitted.) See also IMED Corp. v. Systems Eng'g Assocs. Corp., 602 So. 2d 344, 346 (Ala.1992). The majority has attempted to harmonize the territorial legislation of § 28-8-1 et seq., Ala.Code 1901, and Act No. 98-286, which states; at § 2: The requirement that wholesalers have exclusive territories in the State of Alabama need not be interpreted as conflicting with Act No. 98-286 and therefore in need of harmonization. The unambiguous meaning of Act No. 98-286 is that it carves out an exception in Montgomery County to the more general territorial legislation. It specifically grants Montgomery retail licensees the right to purchase beer from any wholesale beer distributor licensed in Montgomery County. It creates more choices for the retailers in Montgomery County. It is unambiguous. The majority has effectively added to Act No. 98-286 the words "within the wholesaler's assigned territory." Doing that means interpreting Act No. 98-286 in such a way that it no longer carves out an exception to the territorial legislation for Montgomery County. The interpretation the majority has placed upon the Act does not harmonize it; it nullifies it. Because Act No. 98-286 is unambiguous and need not be interpreted as conflicting with the more general law in § 28-8-1 et seq., this Court's alteration of that Act is a bit of judicial construction and legislationit is an exercise of the legislative power and is uncalled for. When this Court issued its opinion in this case on May 19, 2000, I mistakenly concurred. I realize now I should not have concurred. The appellant, Bama Budweiser of Montgomery, Inc., in its application for rehearing, requests this Court to consider Senate Joint Resolution 1 ("S.J.R.1") in determining the legislative intent behind Act No. 98-286. S.J.R. 1 was adopted November 15, 1999, by the Senate, at the 1999 Extraordinary Session of the Legislature. That document should put to rest any question as to the purpose of Act No. 98-286. The very title of the resolution defines its purpose: "EXPRESSING LEGISLATIVE INTENT REGARDING ACT 98-286, WHICH REGULATES SALES AND SERVICES PROVIDED BY ALCOHOLIC BEVERAGE WHOLESALERS IN MONTGOMERY COUNTY." However, this resolution is not needed to determine the intent of the Legislature, because the intent is clear from the language of the statute. If the language in a statute is "plain, ordinary, and commonly understood," this Court must interpret it as it is written. On the old Mobile County Courthouse are these words: "The laws of our land build on reason and experience, and the chief of all laws is the will of the people." The Legislature, not the judiciary, expresses the will of the people. I find this Court's opinion to be an exercise of power beyond its legitimate prerogative in our form of government. Therefore, I respectfully dissent from the order denying the application for rehearing. [1] See Bama Budweiser of Montgomery, Inc. v. Anheuser-Busch, Inc., 611 So. 2d 238, 241-43 (Ala.1992), for an explanation of the events leading up to Anheuser-Busch's division of Montgomery County into two sales territories. [2] Our conclusion makes it unnecessary to address Bama Budweiser's argument that, under its proposed construction of Act No. 98-286 it would be entitled to a judgment declaring that its selling to Montgomery County retailers outside its exclusive sales territory would not breach its agreement with Anheuser-Busch.

September 29, 2000

c6382360-1932-4f09-aea3-57bf47005f1c

Cox v. Hughes

781 So. 2d 197

1981934

Alabama

Alabama Supreme Court

781 So. 2d 197 (2000) Matthew COX et al. v. Alice Gearlene Plier HUGHES et al. 1981934. Supreme Court of Alabama. September 22, 2000. *198 William P. Powers III, Columbiana, for appellants. Thomas T. Gallion III and Jamie A. Johnston of Haskell, Slaughter, Young & Gallion, L.L.C., Montgomery, for appellees. COOK, Justice. The opinion of June 30, 2000, is withdrawn, and the following is substituted therefor. Ray Cox, Karen Cox, and Matthew Cox appeal from an adverse summary judgment in their action seeking to set aside conveyances they alleged to be fraudulent. We affirm in part; reverse in part; and remand. This action involves an attempt by the Coxes to collect a $629,000 default judgment entered against Alice Gearlene Hughes in an earlier case. That judgment had been affirmed by this Court in Hughes v. Cox, 601 So. 2d 465 (Ala.1992). To aid the reader in understanding this case, we *199 shall repeat here the pertinent facts as they were set forth in Hughes: 601 So. 2d at 466-67 (footnotes omitted). This Court affirmed that order. Id. at 473. The Brief of Appellees offers the following additional information regarding the businesses and relationships involved in this dispute: Brief of Appellees, at vi (citations to the record omitted). On October 25, 1995, the Coxes filed a complaint against Alice Gearlene Hughes, individually, and Alice Gearlene Hughes d/b/a Plier-Hughes, Inc. Throughout the record and the briefs, this corporation is variously called Plier-Hughes, Inc., and Plier & Hughes, Inc. For the sake of consistency, we shall hereinafter refer to it as Plier-Hughes, Inc. Also named as defendants were Oscar B. Plier, Ollie M. Plier, and Tabitha Hughes. The complaint, which was styled as a "Petition to Set Aside Fraudulent Conveyances and Transfers and Declaratory Judgment," alleged that the Coxes are "judgment creditors of the Defendant, Gearlene Hughes d/b/a Hughes Realty and Hughes Realty of Clanton," and that "Oscar B. Plier, Ollie M. Plier and Tabitha Hughes, who are the father, mother, and daughter [respectively] of ... Gearlene Hughes, ... are the persons to who[m] the defendant, Alice Gearlene Hughes, fraudulently transferred and conveyed personal property, stock in Plier-Hughes, Inc., and real property." The complaint alleged that the transfers were "fraudulent in nature, and designed to evade creditors." It also sought a judgment "set[ting] aside" and "[holding] for naught" all such "conveyances and transfers." The Coxes also sought to pierce the corporate veil. The defendants moved for a summary judgment, which the trial court granted, and the Coxes appealed. On appeal, the Coxes address only one transaction that they have alleged to be fraudulent. Specifically, they challenge a transaction that was evidenced by a handwritten document, dated November 7, 1984, by which Hughes purported to *201 transfer 50 shares of stock in Plier-Hughes, Inc.her entire ownership interest in the corporationto her father and mother. The Coxes allege that this transaction was fraudulent. In other words, they contend that this transaction was merely an attempt by Hughes to avoid the collection of their $629,000 judgment against her. The dispositive issue on appeal is whether the Coxes presented substantial evidence to support this contention. In Granberry v. Johnson, 491 So. 2d 926 (Ala.1986), this Court discussed the showing necessary to void a transaction as fraudulent: 491 So. 2d at 928-29 (emphasis added). As Granberry teaches, the debtor-creditor relationship in this case was created *202 not on the date the Coxes filed their action, or on the date they received a default judgment, but on the date their cause of action against Hughes accrued. Based on the date the Coxes purchased their house, we conclude that their cause of action accrued in January 1986. (See Hughes, quoted above.) The first question, therefore, is whether the Coxes presented substantial evidence indicating that their debt predated the allegedly fraudulent conveyance. The evidenceat first glanceappears to answer that question in the negative, inasmuch as the stock sale was manifested by a handwritten document dated November 7, 1984. That document stated in pertinent part: (Emphasis in original.) Beneath the text appear the signatures of Gearlene Hughes and Oscar B. Plier and Ollie M. Plier. The Coxes, however, presented the affidavit testimony and document analysis of Keith Nelson, a "certified forensic document examiner." He examined between 30 and 40 documents from the records of Plier-Hughes, Inc., including the handwritten, November 7, 1984, stock-sale document. His report states in pertinent part: (Emphasis and footnote added.) Of particular significance, when considered in connection with Nelson's conclusions, is the "personal financial statement" of Gearlene Hughes, which is dated December 16, 1986, that is, approximately two months after the Coxes filed their complaint against her in the underlying action. Hughes submitted this statement to First Alabama Bank "for the purpose of procuring, establishing and maintaining credit." "Schedule 3Non-marketable Securities," shows 100% of the shares of Plier-Hughes, Inc., valued at $580,862, "registered in the name of Gearl[ene] Hughes." Of course, this was more than two years after she had purportedly transferred all her ownership in the company to her father and mother in exchange for the cancellation of a debt owed to the corporation. The defendants do not refuteor even addressthis evidence in their brief. They state only that "Gearlene Hughes continued as a shareholder in a company until 1984," at which time, they say, "all of her shares were transferred to Oscar Plier and Ollie Mae Plier"; consequently, they allege, the Pliers became the "sole shareholders" of the corporation. Brief of Appellees, at vi. These "facts," they insist, are "undisputed." Id. Of course, those facts are disputed, for the time and the manner in which Hughes disposed of her stock in the corporation is the core of the dispute in this case. This evidence is sufficient to support an inference that Hughes did, in fact, own allor a large blockof the stock in the corporation in December 1986; that she subsequently prepared the handwritten stock-sale document; and that she back-dated that document to a period predating the accrual of the Coxes' cause of action to avoid the consequences of an adverse judgment. The Coxes, therefore, presented substantial evidence indicating that their "debt antedated the conveyance." Granberry, at 491 So. 2d at 929. The evidence was sufficient to shift the burden to the defendants to show that "(1) the grantor owed a debt to the grantee; (2) the consideration for the conveyance was the extinguishment of the existing debt; and (3) the value of the property conveyed was no more than a fair equivalent for the debt amount." Id. This, the defendants failed to do. Regarding the "debt," the defendants state only that "[t]he consideration for the transfer of shares of stock in Plier-Hughes, *205 Inc., was the forgiveness of debt in the amount of $66,800." Brief of Appellees, at vi. Evidence of this debt, however, is not apparent in the record. For example, the record contains 15 checks drawn on the account of Plier-Hughes, Inc., totaling $6,500. They are made to, and signed by, Gearlene Hughes. The record also contains a number of checks similarly made out and signed, which are drawn on the account of Plier & Hughes Contractors. These checks are dated from 1972 to 1978, and total $43,200.[2] But even if the two amounts were added, they would total only $49,700not $66,800 as the defendants allege the debt totaled. It must also be remembered that Hughes purportedly conveyed her stock to Oscar and Ollie Plier, individually, not to the corporation, from which she borrowed at least some of the money. It goes without saying that transactions with a corporation are not legally equivalent to transactions with individuals. Moreover, there is no allegationmuch less evidencesuggesting the fair market value of the shares Hughes conveyed to her parents. Thus, significant factual issues remain as to the exact amount of Hughes's debt, to whom it was owed, and the value of the stock she purportedly conveyed. The defendants offer no explanation for these ambiguities and omissions in the evidence. This is especially significant in view of the fact that "[c]onveyances of property between family members in the face of a pending suit against the grantor must undergo especially careful scrutiny." Granberry, 491 So. 2d at 929 (citing Reese v. Smoker, 475 So. 2d 506 (Ala.1985)). On the state of this record, we cannot say the defendants met their burden of showing a bona fide transaction to extinguish an existing debt. For these reasons, the summary judgment was inappropriate as to the fraudulent-transfer claim. Therefore, as it relates to that claim, the judgment is reversed. As it relates to the claim seeking to pierce the corporate veil, the judgment is affirmed. The cause is remanded for further proceedings consistent with this opinion. APPLICATION FOR REHEARING GRANTED; OPINION OF JUNE 30, 2000, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, LYONS, JOHNSTONE, and ENGLAND, JJ., concur. SEE, J., concurs in the result. SEE, Justice (concurring in the result). I agree that the judgment on the claim seeking to pierce the corporate veil should be affirmed and that the trial court erred in entering a summary judgment in favor of Hughes and the other defendants on the Coxes' fraudulent-transfer claim; I do not agree that the dispositive issue on the fraudulent-transfer claim is the question of when Hughes transferred her Plier-Hughes stock to her parents. Therefore, I concur in the result. There is a question of fact as to when Hughes transferred her Plier-Hughes stock to her parents. The main opinion applies Ala.Code 1975, § 8-9-6, which was repealed effective January 1, 1990. If the transfer occurred after January 1, 1990, then the Alabama Uniform Fraudulent *206 Transfer Act, Ala.Code 1975, §§ 8-9A-1 through 12, applies. See Act No. 89-793, Ala. Acts 1989, § 14.[3] However, whether the transfer was made before or after the Coxes' cause of action accrued, and whether the transfer was made before or after the effective date of the Alabama Uniform Fraudulent Transfer Act, the summary judgment in favor of Hughes was improper as to the fraudulent-transfer claim because there is a question of fact as to whether Hughes transferred her stock in Plier-Hughes, Inc., to her parents with the actual intent to defraud the Coxes. If Hughes did transfer her stock with the intent to prevent the Coxes from satisfying their judgment against her, then, under either the Alabama Uniform Fraudulent Transfer Act or the prior fraudulent-transfer law, this case would be one of actual fraud, not constructive fraud, and the Coxes would be entitled to set aside the transfer regardless of whether it was made before or after their cause of action accrued. See Ala. Code 1975, § 8-9A-4(a); Granberry v. Johnson, 491 So. 2d 926, 928-29 (Ala.1986). Thus, the issue whether Hughes transferred the stock before or after the Coxes' claim arose is not dispositive.[4] I would reverse the summary judgment in favor of Hughes on the Coxes' fraudulent-transfer claim because there is a question of fact as to whether Hughes transferred her Plier-Hughes stock to her parents with the intent to prevent the Coxes from being able to satisfy their *207 judgment against her. Therefore, I concur in the result of the main opinion. [1] Nelson cataloged the documents as "Q1" through "Q38." The challenged stock-sale document is either "Q15" or "Q16." [2] Because Plier-Hughes, Inc., was incorporated in 1974, the two companies apparently functioned simultaneously. [3] The Alabama Uniform Fraudulent Transfer Act carries forward the preexisting distinction between actual fraud and constructive fraud; however, in certain cases of constructive fraud, the Act eliminates the requirement that the plaintiff-creditor show that his claim arose before the alleged fraudulent transfer. Compare Ala.Code 1975, § 8-9A-4, and the comments thereto, with Granberry v. Johnson, 491 So. 2d 926, 928-29 (Ala.1986) (quoted in the main opinion). Ala.Code 1975, § 8-9A-4(a), deals with actual fraud, and it carries forward the preexisting rule that "[a] transfer made by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made, if the debtor made the transfer with actual intent to hinder, delay, or defraud any creditor of the debtor." Whether the asset was transferred to a relative is a factor to consider in determining whether the transfer was made with "actual intent." See § 8-9A-4(b)(1); § 8-9A-1(8). Section 8-9A-4(c) deals with constructive fraud. Unlike the old rule stated in Granberry that, in cases of constructive fraud, the debtor must show "that his or her debt antedated the conveyance," the new law set forth in § 8-9A-4(c) provides that, in certain circumstances, a transfer is constructively fraudulent as to a creditor, "whether the creditor's claim arose before or after the transfer was made." (Emphasis added.) Section 8-9A-5 carries forward the traditional rules concerning constructive fraud and sets forth the circumstances in which a transfer is constructively "fraudulent as to a creditor whose claim arose before the transfer." [4] The main opinion's conclusion that the Coxes' cause of action accrued in January 1986 is, therefore, unnecessary. It also appears to be incorrect. The Coxes alleged against Hughes, among other claims, fraud and misrepresentation. See Hughes v. Cox, 601 So. 2d 465, 467 (Ala.1992). The Hughes opinion states that the Coxes did not discover until June 1986 that their house had no septic tank. See id. at 466. A fraud claim accrues at the time the plaintiff "discovers" the fact constituting the fraud. See Gray v. Liberty Nat'l Life Ins. Co., 623 So. 2d 1156, 1159 (Ala. 1993). The time of discovery is the earlier of actual discovery or actual knowledge of facts that would put a reasonable person on notice of the fraud. See Liberty Nat'l Life Ins. Co. v. Parker, 703 So. 2d 307, 308 (Ala.1997). The question of when the party discovered or should have discovered the fraud is generally one for the jury; however, it may be decided as a matter of law where the plaintiff actually knew of facts that would have put a reasonable person on notice of the fraud. See id. Thus, absent evidence of facts that would have put the Coxes on notice, one must conclude that their fraud claim did not accrue in January 1986 because they did not know until June 1986 that their home had no septic tank.

September 22, 2000

af939a61-3bbb-4510-b9fc-40122809b65f

Ex Parte Brookwood Health Services, Inc.

781 So. 2d 954

1981866

Alabama

Alabama Supreme Court

781 So. 2d 954 (2000) Ex parte BROOKWOOD HEALTH SERVICES, INC., d/b/a Brookwood Medical Center. (Re Brookwood Health Services, Inc. v. The Alabama State Health Planning and Development Agency et al.) 1981866. Supreme Court of Alabama. October 13, 2000. *955 John T. Mooresmith, John C. Morrow, Cary Tynes Wahlheim, and Cameron Turner Earnhardt of Burr & Forman, L.L.P., Birmingham, for petitioner. Mark D. Wilkerson and R. Winston Lee of Brantley & Wilkerson, P.C., Montgomery, for respondent Alabama State Health Planning and Development Agency. R. Marcus Givhan of Johnston, Barton, Proctor & Powell, L.L.P., Birmingham; Charles M. Crook of Balch & Bingham, L.L.P., Montgomery; and Frank C. Ellis, Jr., of Wallace, Ellis, Fowler & Head, Columbiana, for respondent Shelby County Health Care Authority d/b/a Shelby Medical Center and Nursing Home. BROWN, Justice. Brookwood Health Services, Inc. ("Brookwood"), appealed to the Montgomery Circuit Court from a decision of the Alabama State Health Planning and Development Agency ("SHPDA"). The Montgomery Circuit Court transferred the appeal to the Shelby Circuit Court, under the doctrine of forum non conveniens. Brookwood petitions for a writ of mandamus directing the Montgomery Circuit Court to set aside its transfer order, arguing that the court abused its discretion in entering that order. We grant the petition and issue the writ. In May 1996, Brookwood applied for a certificate of need ("CON") to construct and operate a cancer-treatment center in Shelby County. The Shelby County Health Care Authority ("the Authority"), acting with the assistance of Baptist Health Systems ("Baptist"), timely intervened in Brookwood's CON application and requested a contested-case hearing. Two months after Brookwood filed its application, the Authority submitted its separate CON application to construct and operate a cancer-treatment center in Shelby *956 County. Brookwood timely intervened in the Authority's CON application and requested a contested-case hearing. Because it had two separate CON applications, SHPDA assigned the review of both applications and their respective interventions to the same administrative law judge ("ALJ"). Before the hearings, the ALJ denied the Authority's request for consolidation and comparative review; however, she allowed the contested-case hearings to be conducted back-to-back for the convenience of the witnesses and the parties. The contested-case hearing on Brookwood's application was held first. Following the conclusion of that hearing, the Authority designated all of the testimony and evidence received in the Brookwood hearing as evidence in support of its application for a CON. Subsequently, the ALJ issued her findings of fact and conclusions of law, and she recommended that both Brookwood and the Authority be granted a CON for the construction and operation of a cancer-treatment center in Shelby County. The Certificate of Need Review Board ("CONRB") conducted public hearings on both Brookwood's proposal and the Authority's proposal and voted consecutively to approve both projects. Thereafter, Brookwood and Baptist separately filed requests for a fair-hearing review of the CONs granted. Although the hearings were conducted by the same Fair Hearing Officer ("FHO") on the same day, the FHO did not merge or consolidate the cases. The FHO upheld both the CON granted to Brookwood and the CON granted to the Authority. On December 11, 1998, Baptist filed in the Shelby Circuit Court a petition for judicial review of the CON granted to Brookwood. On December 23, 1998, Brookwood filed in the Montgomery Circuit Court a petition for judicial review of the CON granted to the Authority. The Authority, on January 22, 1999, moved to transfer Brookwood's appeal from the Montgomery Circuit Court to the Shelby Circuit Court. In its order transferring Brookwood's appeal to the Shelby Circuit Court, the Montgomery Circuit Court stated: Brookwood filed a motion to "reconsider" the transfer. The Montgomery Circuit Court denied the motion. Brookwood petitioned the Court of Civil Appeals for a writ of mandamus directing the circuit court to set aside the transfer order. The Court of Civil Appeals denied the petition on July 20, 1999, without an opinion. Ex parte Brookwood Health Servs., Inc., (No. 2981098) 781 So. 2d 1034 (Ala.Civ.App.1999) (table). Brookwood now petitions this Court for the writ. See Rule 21, Ala. R.App.P. Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought, (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so, (3) the lack of another adequate remedy, and (4) properly invoked jurisdiction of the court. Ex parte Integon Corp., 672 So. 2d 497, 499 (Ala.1995). "A petition for the writ of mandamus is a proper method for presenting *957 a venue challenge based on the doctrine of forum non conveniens." Id. (citations omitted). We apply the abuse-of-discretion standard when considering a mandamus petition challenging a venue ruling, and we will not issue the writ unless the trial court exercised its discretion in an arbitrary and capricious manner. Id. To determine whether the trial court's order was an abuse of its discretion, we must look to the Alabama Administrative Procedure Act ("AAPA"), codified at Ala.Code 1975, §§ 41-22-1 through 41-22-27. Section 41-22-20(b) states the proper forum for appeals from administrative agencies: Ala.Code 1975, § 41-22-20(b). Brookwood filed its appeal of the order granting the Authority's CON to the Montgomery Circuit Court, one of the courts specifically provided for in the AAPA. We have said that a trial court, when considering a motion to transfer under the doctrine of forum non conveniens, "should give deference to the plaintiffs proper choice of venue" and that it should not grant a motion to transfer unless the transferee forum is "significantly more convenient" than the transferor forum. Ex parte Bloodsaw, 648 So. 2d 553, 555 (Ala.1994). The movant bears the burden of demonstrating that the inconvenience and expense of litigating the case in the venue selected is such that the right to select the forum is overcome. Ex parte New England Mut. Life Ins. Co., 663 So. 2d 952, 956 (Ala.1995). Furthermore, the trial court is allowed to consider any matter useful to determine the "degree of actual difficulty and hardship that would result" from litigating the matter in the chosen forum. Ex parte Bloodsaw, 648 So. 2d at 555. The Authority's chief argument in favor of the transfer was that the record on appeal to the circuit court was virtually identical in both cases because at its hearing before the ALJ the Authority did not present separate testimony and evidence, but merely designated that it wished the ALJ to consider the record created in the Brookwood hearing. Because the appeal to the circuit court is from the ruling of an administrative agency, the circuit court is limited in its review to the record created during the SHPDA proceedings. See Ex parte Smith, 435 So. 2d 108, 110 (Ala.Civ.App.1983). No witnesses will be called, and no additional evidence can be offered; the record is complete. Therefore, convenience of the witnesses is not a consideration in favor of a transfer on forum non conveniens grounds. A second ground upon which the Authority moved for a transfer was the "interest of judicial economy." Although it may be simpler to have one judge consider the written record, we must recognize that these are, in fact, two separate actions. From the beginning, the actions of the ALJ, the CONRB, and the FHO all indicated a desire by SHPDA to keep the two cases separate. In its brief to this Court, SHPDA maintains that the trial court *958 abused its discretion in granting the motion to transfer. We agree. Because Brookwood's appeal stems from the grant of a separate, independent CON, and the two appeals in the circuit courts are founded upon different allegations and theories, no threat of conflicting judgments exists. The Circuit Court of Montgomery County is directed to set aside the transfer order. PETITION GRANTED; WRIT ISSUED. HOOPER, C.J., and HOUSTON, JOHNSTONE, and ENGLAND, JJ., concur.

October 13, 2000

272dc3a6-5416-406a-a5e1-6f9b835409a5

Ex Parte Master Boat Builders, Inc.

779 So. 2d 192

1991229, 1991245

Alabama

Alabama Supreme Court

779 So. 2d 192 (2000) Ex parte MASTER BOAT BUILDERS, INC., and James Michael Rice and Ex parte Elton O. Tanner, Jr. (Re Wayne R. Mitchell v. Master Boat Builders, Inc., et al.) 1991229 and 1991245. Supreme Court of Alabama. September 15, 2000. *193 J.W. Goodloe, Jr., of Vickers, Riis, Murray & Curran, L.L.C., Mobile, for petitioners Master Boat Builders, Inc., and James Michael Rice. Robert H. Smith of Galloway, Smith, Wettermark & Everest, Mobile, for petitioner Elton O. Tanner, Jr. James A. Yance, Gregory B. Breedlove, David G. Wirtes, Jr., and George M. Dent III of Cunningham, Bounds, Yance, Crowder & Brown, L.L.C., Mobile; and Allen A. Ritchie of Walton, Ritchie & Green, L.L.C., Mobile, for respondent. MADDOX, Justice. These petitions for the writ of mandamus arise out of a pending lawsuit between a partner and his copartners; the plaintiff has alleged multiple claims arising out of partnership business. The controlling legal issue presented by these petitions is whether the plaintiff must seek an equitable accounting before proceeding with his action at law for damages. Our answer to this question depends on whether the Alabama Partnership Act ("APA"), in effect at the time of the formation of the partnership, applies, or whether the Alabama Uniform Partnership Act ("AUPA") (repealing *194 the APA) applies. The trial court concluded that the provisions of the AUPA applied; it therefore denied the defendants' motions for a summary judgment and their alternative motions to strike the plaintiff's jury demand, each of which raised this legal issue. Wayne R. Mitchell, the plaintiff in this action, and Elton O. Tanner, James Michael Rice, and Master Boat Builders, Inc. ("MBB"), the defendants, formed several partnerships during the mid 1980s; these petitions relate to two of them. The first partnership, entitled MASCO I, was formed on December 28, 1984, in order to manage the operation of an oil supply vessel, for which the partnership was named. The managing partners of MASCO I included Tanner and Rice. According to the MASCO I partnership agreement, Mitchell and MBB were general partners only. The second partnership, MASCO IV, was formed on March 18, 1985. Although MASCO IV's partnership agreement listed MBB as its only managing partner, Rice, as MBB's president, actually managed MASCO IV's affairs. The general partners of MASCO IV included Mitchell and Tanner. Mitchell held a 10% interest in each partnership, based on his contributions of $18,500 to MASCO I and $19,500 to MASCO IV. His capital contributions gave him proportional shares in the vessels owned by each partnership and entitled him to 10% of the income from both operations after the deduction of certain expenses. In October 1996, Mitchell was notified by the other partners of MASCO I and MASCO IV that they wished to dissolve the partnership. Mitchell, unhappy with the dissolutions, balked at the offers of $20,000 for his shares in each partnership and requested that Tanner, who provided accounting services for MASCO I and MASCO IV (as well as for Mitchell individually), provide him with information explaining his distributions. Tanner refused to do so. Mitchell also requested similar information from the defendants, but was refused by them as well. Mitchell sued Tanner, Rice, and MBB (sometimes collectively referred to herein as "the defendants") in May 1997, alleging suppression, breach of fiduciary duty, conversion, and misrepresentation.[1] Mitchell also alleged that Tanner, in his capacity as Mitchell's personal accountant, had committed accounting malpractice with respect to his handling of Mitchell's investment in the partnership. Mitchell sought damages for each of these claims, all of whichwith the exception of the accounting-malpractice claimarise out of partnership affairs, but he did not seek an equitable accounting before requesting such damages. Each of the defendants answered by affirmatively asserting that Mitchell's failure to request an equitable accounting before filing an action for damages precluded the action against them. The defendants moved to dismiss Mitchell's complaint on that basis, or, alternatively, to strike Mitchell's jury demand. The record before us suggests that the trial court denied those motions. In August 1999, the defendants, in motions for summary judgment, again argued that an equitable accounting was necessary before Mitchell's claims could proceed to a jury trial, and again the trial court disagreed and denied the motions. The defendants then filed these petitions, seeking writs of mandamus directing the trial court to set aside its orders denying the motions for summary judgment. In their petitions, the defendants seek writs instructing the trial court to either enter judgments in their favor or strike Mitchell's jury demand. We grant parts of the relief requested. As we have already said, the precise issue presented in this case is this: Which one of Alabama's two partnership acts applies to Mitchell's claims, the APA or the AUPA? Before the passage of either Act, this Court had always adhered to the common-law principle that a partner may not recover in an action at law against fellow partners for matters arising out of partnership affairs until there had been a settlement of partnership accounts. Broadmoor Realty, Inc. v. First Nationwide Bank, 568 So. 2d 779, 783 (Ala.1990); Sanders v. Kirkland & Co., 510 So. 2d 138, 140 (Ala.1987); Hunter v. Parkman, 254 Ala. 494, 498, 48 So. 2d 878, 881 (1950). This principle was grounded in notions of equity that had long been a part of our law. The enactment of the APA in 1971 was considered by this Court to be a codification of that principle, cf. Broadmoor Realty, 568 So. 2d at 783, a position that was consistent with the position of most jurisdictions that had adopted the same basic set of partnership statutes generally known as the Uniform Partnership Act, or "UPA." See Harold Gill Reuschlein & William A. Gregory, The Law of Agency and Partnership 287 (2d ed. 1990). Indeed, the APA (or UPA) provided for an accounting as the only apparent remedy to partners for claims arising out of partnership business. See § 10-8-47, Ala.Code 1975; see also Broadmoor Realty, 568 So. 2d at 782-83 (citing § 10-8-47 in footnote 4 and discussing Alabama's historical view of actions between partners). In 1996, however, the Legislature enacted the AUPA, marking a significant departure from the previous view of intrapartnership actions. This Act provided partners with the option of forgoing an equitable accounting before pursuing actions at law against copartners. § 10-8A-405(b), Ala.Code 1975. This change reflected a rejection of the traditional view that actions between partners involving partnership affairs were exclusively equitable actions, a view that was the foundation of any remedy under the repealed APA. Thus, the question whether the APA or the AUPA applies to Mitchell's partnership claimsa question that impacts his right to a jury trial as to those claims ultimately requires this Court to decide whether those claims lie only within the trial court's equitable jurisdiction, a question that can be determined only from an examination of the provisions of the AUPA regarding its application to partnerships formed before December 31, 2000. Because the issue presented involves a question whether the underlying claims are with the court's equitable jurisdiction, it is clear that the issues stated in the defendants' petitions are reviewable on a mandamus petition. See Ex parte SouthTrust Bank, 679 So. 2d 645, 646-47 (Ala.1996) (holding that mandamus review is proper where "the question is whether the plaintiff's claims are within the exclusive jurisdiction of equity"); see also Ex parte Merchants Nat'l Bank of Mobile, 257 Ala. 663, 665, 60 So. 2d 684, 686 (1952) (holding that decisions regarding the availability of a jury are reviewable by mandamus). The standard governing our review of an issue presented in a petition for the writ of mandamus is well established: Ex parte Edgar, 543 So. 2d 682, 684 (Ala. 1989). These petitions call for this Court to review the trial court's refusal to strike the plaintiff's jury demand and to require an accounting. We conclude that mandamus relief is available for these defendants, provided they meet the usual requirements for the issuance of the writ. *196 We must construe § 10-8A-1106, Ala. Code 1975, which determines how the AUPA applies to partnerships that were formed before the AUPA's effective date, as these partnerships were. Section 10-8A-1106 states, in pertinent part: Because the partnerships in this case were formed before December 31, 2000, and there has been no pertinent election made pursuant to subsection (c), subsection (a) is the only applicable portion of this section. In reading subsection (a), this Court must look to the plain meaning of the language chosen by the Legislature, because that language is the strongest expression of the Legislature's intent. This Court has previously stated: IMED Corp. v. Systems Eng'g Assocs. Corp., 602 So. 2d 344, 346 (Ala.1992). Mitchell argues in his brief that subsection (a)(1) provides that the AUPA applies to any partnership "continuing in business although `dissolved' within the terms of the former provisions of the [APA]" without regard as to when that partnership was formed, and that the facts presented in this case show that "the partnerships were technically `dissolved.'" We believe this reading of the provisions of the AUPA is too narrow. Although we do not believe the partnerships had been "dissolved" when the action was filed, we primarily note that the construction urged by Mitchell ignores the text of the subsection when read in its entirety. Subsection (a)(1), in its plain terms, states that until January 1, 2001, the AUPA applies only to a partnership formed after January 1, 1997, unless the partnership formed after that date "is continuing the business of a dissolved partnership under ... [the APA]." § 10-8A-1106(a)(1), Ala.Code 1975. We interpret this provision to mean precisely what it saysthat the AUPA applies to any partnership formed between January 1, 1997, and January 1, 2001, unless that partnership is doing business as a dissolved partnership. We also note that the Legislature separately addresses partnerships formed before the effective date of the AUPA in subsection (a)(2). This paragraph states that for the AUPA to apply to a partnership formed before the AUPA's effective date, that partnership must have made the applicable election under subsection (c). We have often stated that "the meaning of statutory language depends on context," and that, as a result, statutes must be read as whole in order to ascertain the meaning and intent of each component. Ex parte Jackson, 614 So. 2d 405, 406 (Ala.1993). *197 Thus, we are unable to conclude, as the respondent (plaintiff) urges us to do, that the latter portion of subsection (a)(1), which contains a proviso regarding dissolved partnerships, refers to a class of partnerships that are separate from those formed after January 1, 1997, and before January 1, 2001. It is undisputed that MASCO I and MASCO IV were formed in 1984 and 1985 respectively; therefore, we conclude that § 10-8A-1106 does not apply to these partnerships, because MASCO I and MASCO IV were formed long before the first possible effective date in that section. Because this section does not apply to either of these partnerships, the AUPA, as a whole, cannot apply. For that reason, we hold that the question whether Mitchell is entitled to a jury trial is governed by the APA. As we stated earlier, this Court has always held the view that the APA merely codified the historical remedy provided at common law to a partner who has sued fellow partners over matters that resulted from partnership affairs,[2] and this remedy has always required an equitable accounting. Broadmoor Realty, 568 So. 2d at 782-83. We note, as an initial matter, that we cannot conclude that Mitchell's failure to seek an accounting calls for either a dismissal of his complaint or a summary judgment against him, and, therefore, we choose not to issue a writ directing the trial court to vacate its orders denying the defendants' motions for summary judgment. Nevertheless, we observe that an accounting is indeed necessary before Mitchell can recover any damages, and that his action for damages cannot proceed before a settling of partnership accounts has occurred. Therefore, we conclude that Mitchell is not entitled to a jury at this time for all claims arising out of the partnership business.[3] We conclude, however, that Mitchell's claim against Tanner alleging accounting malpractice does not arise out of the partnership business, and is therefore not subject to the requirement that there be an equitable accounting before damages may be recovered. We note that an accounting is not always necessary before a partner can sue a copartner. Moody v. Headrick, 247 Ala. 455, 457, 25 So. 2d 137, 139 (1946). In Broadmoor Realty, Inc. v. First Nationwide Bank, 553 So. 2d 122 (Ala.1989), this Court stated, "`"In suits upon contracts or transactions outside of the partnership, the partners stand in the same relation to each other in the courts as other persons."'" 553 So. 2d at 124 (quoting Linch v. Linch, 145 Neb. 792, 795, 18 N.W.2d 98, 100 (1945) (citation omitted)). Thus, if the business relationship from which the claims arise is not in furtherance of the partnership's business, then that relationship cannot be said to "arise" out of that partnership within the meaning of the rule under the APA. The essence of the relationship determines whether it arises out of partnership business. Mitchell and Tanner shared an accountant-client relationship outside the partnership operations, and Mitchell's accounting-malpractice claim arises out of that relationship rather than out of his dealings with Tanner as his partner in MASCO I and MASCO IV. For *198 that reason, we conclude that the trial court did not abuse its discretion in denying the motion to strike Mitchell's jury demand as to this particular claim. Based on the foregoing, we issue a writ directing the trial court to set aside its order denying the defendants' motions to strike Mitchell's jury demand as to all claims arising out of partnership businessnot including Mitchell's claim against Tanner for accounting malpracticeuntil there has been a final settlement of all partnership accounts. After a final settlement of all partnership accounts, Mitchell's jury demand will be reinstated. 1991229PETITION GRANTED IN PART; WRIT ISSUED. 1991245PETITION GRANTED IN PART; WRIT ISSUED. HOOPER, C.J., and HOUSTON, COOK, SEE, LYONS, BROWN, and ENGLAND, JJ., concur. JOHNSTONE, J., concurs in the result. JOHNSTONE, Justice (concurring in the result). I concur in the result because the main opinion, by limiting the relief granted and preserving the plaintiffs right to a jury trial of his damages claims against all defendants, achieves substantial justice. My reservation with the rationale is that the plaintiff did duly demand the partnership accountings and the defendants refused the plaintiff the accountings before the plaintiff filed his action. [1] These claims are based on Mitchell's allegations that the defendants had engaged in malfeasance with respect to the management of the capital assets held by MASCO I and MASCO IV. [2] The only course of action that a partner may initially seek under the APA for wrongs committed within the context of a partnership is found in § 10-8-47, Ala.Code 1975. We note that the Legislature has since expanded the possible courses of action that a partner may seek with its enactment of § 10-8A-405, Ala.Code 1975, which has replaced § 10-8-47 as a course of action for only those partnerships satisfying the conditions prescribed by § 10-8A-1106. [3] Mitchell argues in his brief that the defendants waived the issues raised in these petitions by not pleading these matters in their answer to Mitchell's first complaint. We conclude that this argument is without merit, because the defendants properly pleaded these issues in their answers to Mitchell's subsequently filed amended complaint. See Rule 8(c), Ala.R.Civ.P.

September 15, 2000

ff938019-32a3-4d4b-b07b-ac7d0ac9f2ec

Ex Parte Brown

781 So. 2d 178

1981782

Alabama

Alabama Supreme Court

781 So. 2d 178 (2000) Ex parte Gloria J. BROWN. (In re Gloria J. Brown v. Homes of Legend, Inc., et al.) 1981782. Supreme Court of Alabama. June 30, 2000. Rehearing Overruled September 29, 2000. G. Houston Howard II of Howard, Dunn, Howard & Howard, Wetumpka, for petitioner. David L. Selby II and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for respondent Homes of Legend, Inc. PER CURIAM. Gloria Brown, the plaintiff in an action currently pending in the Autauga Circuit Court, petitions for a writ of mandamus directing the trial court to vacate and set aside its order requiring the plaintiff to arbitrate her claims against Homes of Legend, Inc. We deny the writ. Brown purchased a mobile home from Homes of Legend in December 1997. Included in the sale was a warranty that contained an arbitration clause. After moving in, Brown experienced a number of problems with the home; she eventually sued Homes of Legend, claiming breach of warranty. Homes of Legend moved to compel arbitration. The trial court granted its motion, stating that, under the arbitration clause included within the warranty, this case should be submitted to arbitration. Brown petitions for a writ directing the trial court to set aside that order. This Court has held that when the issue raised in a petition for the writ of mandamus is the correctness of a ruling on the question of arbitrability, that ruling is reviewed de novo. Ex parte Roberson, 749 So. 2d 441, 446 (Ala.1999). In accordance with our recent decision in Southern Energy Homes, Inc. v. Ard, 772 So. 2d 1131 (Ala.2000), we hold that the trial court properly compelled arbitration. We reject Brown's argument that the arbitration clause was an adhesion contract. *179 See Med Center Cars, Inc. v. Smith, 727 So. 2d 9 (Ala.1998); Ex parte Smith, 736 So. 2d 604 (Ala.1999); and Jim Burke Automotive, Inc. v. Murphy, 739 So. 2d 1084 (Ala.1999) WRIT DENIED. HOOPER, C.J., and MADDOX, SEE, LYONS, and BROWN, JJ., concur. HOUSTON, COOK, JOHNSTONE, and ENGLAND, JJ., dissent. HOUSTON, Justice (dissenting). See my special concurrence in Southern Energy Homes, Inc. v. Lee, 732 So. 2d 994, 1000-04 (Ala.1999). COOK, Justice (dissenting). I dissent for the same reasons Justice Johnstone expressed in his dissenting opinion in Southern Energy Homes, Inc. v. Ard, 772 So. 2d 1131 (Ala.2000). PER CURIAM. APPLICATION OVERRULED. HOOPER, C.J., and MADDOX, LYONS, and BROWN, JJ., concur. SEE, J., concurs specially. HOUSTON, COOK, JOHNSTONE, and ENGLAND, JJ., dissent. SEE, Justice (concurring specially). I concur in the overruling of the application for rehearing. I would, however, modify this Court's original opinion (in which I concurred) to clarify that the arbitration compelled by the trial court is nonbinding. In Homes of Legend, Inc. v. McCollough, 776 So. 2d 741 (Ala.2000), this Court construed the same arbitration provision at issue in this case and held that it provided for nonbinding arbitration. Thus, based on this Court's decision in McCollough, the trial court properly granted Homes of Legend's motion to compel arbitration and ordered Brown to submit her claims to arbitration in accordance with the terms of the arbitration provision in Homes of Legend's written warranty. See id.; 9 U.S.C. § 4. JOHNSTONE, Justice (dissenting). I respectfully dissent for the reasons stated in my dissent in Southern Energy Homes, Inc. v. Ard, 772 So. 2d 1131 (Ala. 2000).

September 29, 2000