Justia Business Law Opinion Summaries

Bruce L. Johnson, Michael L. King, and William Harrison sued Luke Edwards, the Apostolic Advancement Association, Heritage Real Investment, Inc., Alabama-Mississippi Farm, Inc., and several officers and board members of those organizations. Plaintiffs filed an application for the entry of a default judgment against Edwards pursuant to Rule 55, Ala. R. Civ. P., for his failure to plead or otherwise to defend the allegations in the complaint. The trial court held a hearing on plaintiffs' second application for a default judgment. The trial court thereafter entered a default judgment against the defendants and awarded damages. After review of the matter, the Supreme Court concluded that the defendants' notice of appeal was untimely. Therefore the Court was without jurisdiction to hear the appeal. View "Edwards v. Johnson" on Justia Law

Terminix International Company, L.P., and Terminix International, Inc. appealed a trial court's order denying Terminix's motion to vacate or modify an arbitration award entered in favor of Walter Scott III and his wife, Paige. Terminix also appealed the trial court's order referring the Scotts' motion for sanctions to arbitration. In 2001, the Scotts entered into a termite-control-services contract with Terminix for a service known as the Termite Baiting System Protection Plan. Pursuant to the baiting plan, Terminix agreed, among other things, to install the baiting system, to monitor it, and to add or remove termite bait from the system as needed. In 2004 or 2005, Terminix lost the licensing rights to service or sell the termite-baiting-system plan. As a result, Terminix was no longer allowed to monitor or service the baiting system it had installed at the Scotts' house. The Scotts were not informed of this development until 2007, when they received a letter from Terminix which encouraged the Scotts to "update" their baiting system with another Terminix service or to convert their baiting system to the Terminix Liquid Defend System. The Scotts then entered into a new termite-service contract with Terminix for the new system. No live termite infestation was found in the Scotts' house since Terminix began servicing the house in 2001. However, in February 2010, a Terminix employee discovered extensive termite damage throughout the Scotts' house. Terminix agreed to repair the damage. Terminix stated it expended approximately $52,645 in repairs when a dispute arose with the Scotts over the scope of repairs to be made in a bathroom. Later that year, the Scotts petitioned the trial court, pursuant to the Federal Arbitration Act ("the FAA"), to arbitrate certain fraud claims arising from their dispute with Terminix. The Alabama Supreme Court agreed with Terminix to the extent that it argued the trial court erred in denying its postjudgment motion to vacate the ultimate arbitration award without first conducting a hearing on the motion as to the issue of arbitrator bias, and that was not harmless error. However, the Court found that the trial court did not err in denying the postjudgment motion to vacate the arbitration award without first conducting a hearing on the motion as to the issue whether the arbitrator had exceeded his authority under the termite-service contract. Furthermore, the trial court was without jurisdiction to adjudicate in any respect the Scotts' ALAA claim because that claim did not survive the trial court's failure to reserve jurisdiction to hear the claim. View "Terminix International Company, L.P. v. Scott " on Justia Law

Raymond James Financial Services, Inc. (RJFS), and its employee, Bernard Michaud appealed a trial court order vacating an arbitration award in their favor and entering a judgment in favor of Kathryn Honea. Honea had multiple investment accounts with Raymond James and sued RJFS alleging violations of the Alabama Securities Act and sought damages for breach of contract, breach of fiduciary duty, negligence, wantonness, and fraud. RJFS moved to compel arbitration, and the trial court granted the motion. An arbitration panel unanimously entered an award in favor of RJFS on Honea's claims. Honea filed a motion at circuit court to vacate the award. The trial court ultimately vacated the award, and RJFS appealed. On appeal, the Supreme Court reversed the trial court's judgment vacating the arbitration award, holding that a provision in the arbitration agreement Honea signed when she opened the accounts required the trial court to conduct a de novo review of the arbitration award, and remanded the case for it to conduct such a review. Both parties acknowledged on appeal that the award had not been entered as a judgment of the trial court. Because the award to RJFS was not entered as a judgment of the trial court as required by statute, the Supreme Court could reach no other conclusion but that the trial court lacked subject-matter jurisdiction to review the award on remand. Accordingly, the trial court's judgment purporting to vacate that award and to enter a judgment in favor of Honea was void. This appeal was dismissed. View "Raymond James Financial Services, Inc. v. Honea " on Justia Law

Target Media Partners Operating Company, LLC and Specialty Marketing Corporation d/b/a Truck Market News, have litigated a commercial contract dispute since 2007. Each party alleged breach-of-contract claims against the other. The litigation ended with a jury verdict in favor of Ed Leader, Target Media's vice president of trucking on the promissory-fraud claim against him; in favor of Specialty Marketing on its fraudulent misrepresentation claim, and in favor of Target Media on its breach of contract counterclaim. Target Media and Leader appealed the judgment entered in favor of Specialty Marketing on its claims against Target Media and Leader. After careful review of the trial court record, the Supreme Court affirmed the trial court's order that denied Target Media and Leader's postjudgment motion, but the case was remanded for re-review of the punitive damages award. View "Target Media Partners Operating Company, LLC v. Specialty Marketing Corporation" on Justia Law

Garfield W. Ivey, Jr. appealed circuit court judgment in favor of James C. King. In 2007, King sued Dollar & Eads, P.C., Rhonda Dollar, and Phillip Eads ("Dollar & Eads"), Peggy G. Northcutt a/k/a Peggy G. Fannin ("Northcutt"), who was employed by Dollar & Eads, P.C., and Al Northcutt, asserting various claims related to an alleged embezzlement of funds belonging to dissolved entities in which King and Ivey were members. King and Ivey entered into a settlement agreement with Dollar & Eads, which settled King's and Ivey's respective claims against Dollar & Eads for $627,684. King and Ivey agreed to divide the settlement amount between them based on their ownership interests in the various dissolved entities. A dispute over the split of the settlement proceeds was the subject of this appeal: Ivey claimed King was entitled to a certain amount based on Ivey's computation of King's ownership interest in each of the dissolved entities. But the parties' disagreement over how to split the settlement was the subject of a series of motions and circuit court orders in an attempt to resolve the dispute. The last order from the circuit court denying Ivey's motion to alter, amend or vacate an April 11, 2012 judgment was denied, and that was appealed to the Supreme Court. Upon review, the Court found no error or abuse of discretion in denying Ivey's motion. Accordingly, the Supreme Court affirmed the circuit court's judgment. View "Ivey, Jr. v. King " on Justia Law

Precision Gear Company, Precision Gear LLC, and General Metal Heat Treating, Inc. were granted permission to appeal an interlocutory order denying their motion to dismiss the third-party claims against them filed by Continental Motors, Inc. The trial court certified a question to the Supreme Court of whether, in a suit for non-contractual indemnification arising from an accident and alleged damage that occurred out of state, Alabama's six year statute of limitation for implied contract actions controlled because the foreign jurisdiction's law considered its common law and statutory claims for indemnity as claims based upon contract implied in law or quasi-contract, or whether Alabama's two year statute of limitation for tort actions controlled. Upon review, the Alabama Supreme Court concluded that Alabama's two-year statute of limitations applied in this case and that Continental Motors' claims against the gear manufacturers were time-barred. View "Precision Gear Co. v. Continental Motors, Inc. " on Justia Law

Plaintiff SafetyNet Youth Systems, LLC sued Defendants Guarantee Insurance Company, Patriot National Insurance Group, Randy Thomas, and Paul Harper in Dallas County Circuit Court. Defendants sought the writ of mandamus to direct the Dallas court to grant their motion for a transfer of venue to Lee County. Upon review, the Supreme Court concluded Dallas County was an inappropriate forum, and granted defendant's petition and issued the writ. View "Safetynet Youth Systems, LLC v. Guarantee Insurance Co." on Justia Law

Riverfront, LLC, petitioned the Supreme Court for a writ of mandamus to direct the Etowah Circuit Court to vacate its order denying Riverfront's motion to enforce a forum-selection clause in a lease agreement between it and Fish Market Restaurants, Inc., and George Sarris (collectively, "Fish Market") and to direct the circuit court either to dismiss the action filed against it by Fish Market or to transfer the action to the Tuscaloosa Circuit Court. Upon review of the clauses at issue and the Etowah court record, the Supreme Court concluded that Riverfront established it had a clear legal right to the enforcement of the forum-selection clause in the lease because Fish Market failed to establish that enforcement of the clause would be unfair or unreasonable. The circuit court exceeded the scope of its discretion in denying Riverfront's motion to dismiss or, in the alternative, to transfer the case to the Tuscaloosa Circuit Court. Therefore, the Supreme Court directed the Etowah court to either dismiss this case without prejudice, or to transfer to the Tuscaloosa Circuit Court, the forum agreed to in the lease. View "Fish Market Restaurants, Inc. v. Riverfront, LLC" on Justia Law

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

Defendants Marathon Construction and Demolition, LLC, and OAX, LLC, appealed a circuit court order granting injunctive relief to the plaintiff King Metal Recycling and Processing Corporation. King Metal sued Marathon and OAX, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations, and breach of fiduciary duty/duty of loyalty. King Metal alleged that it had entered into an agreement with Marathon to purchase, demolish, and redevelop the former Delphi Industrial Complex in Limestone County ("the Delphi Project"). King Metal also alleged that OAX was formed by it and Marathon as the entity through which they would complete the Delphi Project. King Metal alleged that it filed the complaint after becoming concerned that it was being "frozen out" of the Delphi Project. It also filed a motion for a preliminary injunction. The trial court entered an order for a writ of seizure in which it ordered that the net proceeds of the Delphi Project be seized. Defendants filed a motion to quash the order for a writ of seizure, arguing, in part, that the writ was the incorrect procedure for the remedy sought and asserting that King Metal should have instead requested a temporary restraining order. King Metal filed a motion in opposition to the defendants' motion to quash the order for a writ of seizure, and after a hearing, the writ of seizure was set aside, and a temporary restraining order issued instead. The Supreme Court reversed the trial court's decision to enjoin sale portion of the Delphi site because it did not conform with the Alabama Rules of Civil Procedure. "This decision should not be interpreted as precluding King Metal, should it deem it necessary, from asking the trial court to again issue a preliminary injunction, provided that any such injunction complies with Rule 65, Ala. R. Civ. P." View "Marathon Construction & Demolition, LLC v. King Metal Recycling & Processing Corp. " on Justia Law