Justia Business Law Opinion Summaries

Peacock Timber Transport, Inc. ("Peacock"), appealed the grant of summary judgment entered by the Montgomery Circuit Court in favor of B.P. Holdings, LLC, William Blount, Derek Parrish, Diamond Homes, LLC, and Sunbelt Environmental, LLC ("the defendants"). Blount and Parrish are partners in Blount Parrish & Company ("BPC"), an investment firm that specializes in public financing. In 2001 Blount formed Diamond Homes to take over unfulfilled contracts that had been entered into by a now bankrupt company, Dencraft Furniture Company; Blount and Parrish owned Diamond Homes in equal portions. In relation to a bond issue closed by BPC, B.P. Holdings had acquired an interest in Dencraft before its bankruptcy. In their efforts to make Diamond Homes succeed, Blount and Parrish had personally guaranteed substantial debt taken on by Dencraft and by Diamond Homes. Diamond Homes eventually "closed down with very few assets, mostly unused raw materials, and several hundred thousand in debt, some of which was guaranteed by [Blount] and/or [Parrish]." Peacock obtained a judgment against B.P. Holdings. Although Blount was a defendant in Peacock's action and although judgment in that action was entered against B.P. Holdings, the judgment stated that "[s]aid verdict was also returned in favor of ... Blount." Parrish was not a party to Peacock's 2003 action. $1,120,000 was deposited in B.P. Holdings' account as compensation for work BPC and others had performed on behalf of Jefferson County in closing a bond issue -- at that time, B.P. Holdings had not yet satisfied the 2003 judgment. The amount of the fee earned by BPC for the Jefferson County transaction was used to pay other consultants; B.P. Holdings did not earn any portion of the $1,120,000 but, according to Parrish's affidavit testimony, was used as a conduit to receive the money and to transfer the money to the appropriate parties. Blount's deposition testimony indicated that he was aware of the 2003 judgment at the time of the transfer but that he "believe[d] [that] the judgment [had been] appealed. So [he] [did not] know if that judgment was a live judgment or not." Peacock then sued B.P. Holdings, Blount, and Parrish seeking to have the transfer set aside as fraudulent. Upon review, the Supreme Court reversed the summary judgment in favor of the defendants, and remanded the case for the circuit court to determine whether Peacock was entitled to avoid the transfer under the AFTA and whether the corporate veil of B.P. Holdings should be pierced, thereby holding Blount and Parrish personally liable for the transfer. View "Peacock Timber Transport, Inc. v. B.P. Holding, LLC, et al. " on Justia Law

According to Braden Furniture Company, Inc., between 2003 and 2010, Bonnie Manning, an assistant bookkeeper, accessed Braden Furniture's accounting program and created over 200 unauthorized checks, totaling over $470,000, that she then deposited in her account at Union State Bank. The majority of the checks did not identify a payee. Braden Furniture sued Union State Bank, RBC Bank, and Manpower, Inc., alleging common-law negligence and wantonness and violations of sections 7-3-404(d), 7-3-405(b), and 7-3-406, Ala. Code 1975. Union State Bank moved for a summary judgment. The trial court entered summary judgment for the Bank. Upon review, the issue before the Supreme Court was whether provisions in the Alabama Uniform Commercial Code ("the UCC") displaced common-law claims of negligence and wantonness when a drawer seeks to recover the loss of payment for unauthorized checks. Braden Furniture contended that the trial court erred in holding that the provisions of the UCC displaced its common-law claims of negligence and wantonness because, allowing its common-law claims to proceed did not "create rights, duties and liabilities inconsistent" with the UCC. The Supreme Court concluded that the trial court did not err in entering a summary judgment for Union State Bank in this regard. View "Braden Furniture Company, Inc. v. Union State Bank " on Justia Law

Limestone Creek Developers, LLC ("LCD"), sued Stuart Trapp and two companies in which Trapp had a controlling interest (Kyvest, Ltd., and Redesign, Inc.) after Trapp was unable or unwilling to close on a contract he had personally entered into agreeing to purchase all the lots in a new subdivision owned by LCD. The trial court entered a summary judgment in favor of the Trapp defendants, and LCD appealed. While expressing no opinion with regard to whether that contract violated state law, the Supreme Court nevertheless held that the contract in question was void because it violated section 1.2.3 of the MCSR. Accordingly, the trial court correctly entered a summary judgment in favor of the Trapp defendants on LCD's breach-of-contract claim, as well as LCD's other claims, which were dependent on that contract. The judgment of the trial court was affirmed. View "Limestone Creek Developers, LLC v. Stuart Trapp et al. " on Justia Law

Dawn Elaine Patterson and her husband Brooks appealed the judgment entered by the Jefferson Circuit Court dismissing their claims against Consolidated Aluminum Corporation ("CAC") and its corporate owner Lonza America, Inc. ("Lonza"), as being barred by the applicable statute of limitations. On September 11, 2008, Dawn Patterson was diagnosed with malignant mesothelioma. On August 13, 2009, the Pattersons initiated this legal action, alleging that Dawn's mesothelioma was caused by exposure to asbestos. The Pattersons did not allege that Dawn had been directly exposed to materials containing asbestos at her home or workplace; rather, they alleged that Dawn was a victim of secondary exposure to asbestos as a result of her close contact with her father, Jerry Dison, and her grandfather, Melvin Lester, who they alleged had worked around materials containing asbestos for many years and who had allegedly brought home the asbestos dust that ultimately caused Dawn's mesothelioma. The Pattersons accordingly named Dison's and Lester's employers as defendants in their complaint, as well as various manufacturers of asbestos-containing products that Dison and Lester were alleged to have been exposed to in the course of their employment. The complaint also asserted claims against unknown defendants that had not yet been identified. The Pattersons sought to amend their complaint to substitute them for fictitiously named defendants. The trial court initially allowed the amendment but, in response to a motion filed by CAC and Lonza, subsequently held that the Pattersons' claims against them was barred by the statute of limitations. Upon review, the Supreme Court agreed: because the Pattersons did not promptly move to amend their complaint to substitute CAC and Lonza as defendants after learning of their identity and potential liability, they were not entitled to the benefit of the relation-back doctrine. View "Patterson v. Consolidated Aluminum Corp. " on Justia Law

Auto Owners Insurance, Inc. ("Auto Owners"), appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon served as an agent for Auto Owners since 1995. The agency agreement the parties signed provided for commission to Blackmon for the sale of Auto Owners policies; the agreement also included an arbitration agreement should there be a dispute among them. In 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings. In its complaint, Blackmon alleged that Auto Owners had initiated the arbitration proceedings against Blackmon in Eaton County, Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners bases its claims on a 2005 document and 2009 supplemental agreement. Auto Owners moved to dismiss, or in the alternative, to compel arbitration. The circuit court denied Auto Owners' motion, and Auto Owners appealed. Upon review of the documents at the heart of this dispute, the Supreme Court concluded the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed the circuit court and remanded the case with instructions that the lower court grant the motion and either issue a stay of these proceedings pending arbitration, or dismiss the case. View "Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc." on Justia Law

Town & Country Property, L.L.C., and Town & Country Ford, L.L.C. (collectively referred to as "T&C") appealed a circuit court's grant of summary judgment Amerisure Insurance Company and Amerisure Mutual Insurance Company (collectively referred to as "Amerisure"), holding that Amerisure was not obligated to pay a $650,100 judgment entered on a jury verdict in favor of T&C and against Amerisure's insured, Jones-Williams Construction Company, because, the trial court reasoned, the faulty construction of the T&C facility upon which the judgment was based was not an "occurrence" covered under the commercial general-liability ("CGL") insurance policy Amerisure had issued Jones-Williams. On October 21, 2011, the Supreme Court affirmed in part the judgment entered by the trial court, agreeing that faulty construction did not in and of itself constitute an occurrence for CGL-policy purposes and that, accordingly, "Amerisure was not required to indemnify Jones-Williams for the judgment entered against it insofar as the damages represented the costs of repairing or replacing the faulty work." On remand, the parties filed briefs with the trial court: T&C argued that the vast majority of the $650,100 judgment should be attributed to covered damage, while Amerisure argued that the damages T&C sought for the repair and/or replacement of defective construction exceeded the amount of the verdict and thus none of the judgment should be attributed to covered damage to personal property or nondefective portions of the T&C property. In its order resolving the issue on remand, the trial court identified $257,500 in damages claimed by T&C at trial as representing the repair or replacement of faulty construction. It therefore subtracted that amount from the $650,100 awarded by the jury and awarded T&C $392,600 plus interest and costs. Upon a review of the record, the Supreme Court found that the $392,600 judgment entered by the trial court was not supported by the evidence. The judgment entered by the trial court on remand was accordingly reversed, and the case was again remanded for the trial court to enter a final judgment in favor of T&C for the amount of damages the Supreme Court deemed T&C was entitled to: $600. View "Town & Country Property, L.L.C. v. Amerisure Insurance Co. " on Justia Law

White-Spunner Construction, Inc., and Hartford Fire Insurance Company ("Hartford") appealed the grant of summary judgment and the award of attorney fees in favor of Construction Completion Company, LLC ("CCC"), in CCC's action alleging that White-Spunner failed to pay it for labor and materials it provided as a subcontractor to White-Spunner in the fall of 2008 in conjunction with White-Spunner's work as the general contractor on a public-works project at Auburn University CCC cross-appealed, arguing that the Mobile Circuit Court erred in dismissing its bad-faith and fraud claims against Hartford, which had issued payment bonds to White-Spunner for the project. Upon review, the Supreme Court reversed the grant of summary judgment based on the fact that CCC's claims against White-Spunner and Hartford stemmed from an illegal contract CCC entered into with an unlicensed contractor that provided that contractor's employees would complete the work CCC was contracted to perform. As a result of this reversal, the Court dismissed the cross-appeal as moot. View "White-Spunner Construction, Inc. v. Construction Completion Company, LLC" on Justia Law

Monte Sano Research Corporation ("MSRC"), Steven L. Thornton, and Steven B. Teague appealed a preliminary injunction entered against them in an action brought by Kratos Defense & Security Solutions, Inc.; Digital Fusion, Inc. ("DFI"), and Digital Fusion Solutions, Inc. ("DFSI") alleging breach of the duty of loyalty, breach of contract, tortious interference with business and contractual relationships, and civil conspiracy. Additionally, Kratos sought injunctive relief. Thornton and Teague were employees of DFI, which also engaged in government subcontract work; they became employees of Kratos when Kratos Defense merged with DFI in 2008. In February 2009, Thornton and Teague met with Doyle McBride, a NASA consultant who had never been employed by Kratos, to discuss starting a new company to perform government contract work. Several months later, MSRC was incorporated, with McBride and Teague each owning 50 percent. Thornton had no legal interest in MSRC at its formation. McBride acquired office space, issued stock, filed tax returns, obtained business licenses, registered to engage in government contracting, attended meetings, and talked with prime contractors on MSRC's behalf. In June 2011, Thornton's supervisor at Kratos learned that several employees under Teague's supervision had resigned in a short period. Following an investigation, Kratos terminated Teague's employment on June 23, 2011; Thornton resigned four days later. Teague and Thornton then went to work for MSRC. Thornton subsequently purchased MSRC from McBride and became its CEO and president. Subsequently Kratos filed a complaint against MSRC, Thornton, and Teague alleging specifically that Thornton and Teague, while employed by Kratos, assisted in the creation of MSRC, solicited Kratos employees, wrongfully diverted business opportunities, and misappropriated confidential and proprietary information. Kratos also alleged that MSRC wrongfully diverted business opportunities and misappropriated confidential and proprietary information. Kratos applied for a temporary restraining order ("TRO") and for a preliminary injunction on June 29, 2011. On appeal, MSRC, Thornton, and Teague argued that the preliminary injunction should be dissolved. MSRC, Thornton, and Teague raised several issues on appeal; however, because the Supreme Court concluded that the trial court's order was overbroad and that it failed to comply with Rule 65, Ala. R. Civ. P., the Court did not reach any of their other issues. View "Monte Sano Research Corp. v. Kratos Defense & Security Solutions, Inc." on Justia Law

Northstar Battery Company, LLC ("Northstar"), petitions this Court for a writ of mandamus directing the Cullman Circuit Court to vacate its order denying Northstar's motion to dismiss the action filed against it by Apel Steel Corporation ("Apel") and to enter an order dismissing the action for lack of in personam jurisdiction. The case stemmed from a contract in which Apel Steel was working as a subcontractor for a battery manufacturing plant in Springfield, Missouri. Northstar Battery, owner of the plant, contracted with Walton Construction to serve as general contractor. Apel had further subcontracted a portion of its work to JS Nationwide, who erected structural steel at the plant. Sparks from welding started a fire which resulted in the destruction of property/equipment, and caused heat and smoke damage in the affected area of the plant. The contract between Apel and Walton contained a provision by which Apel allegedly waived all rights against JS Nationwide. Counts against Northstar alleged negligence, unjust enrichment, breach of contract, misrepresentation and conspiracy. Northstar moved to dismiss citing lack of personal jurisdiction. Finding that Apel failed to carry its jurisdictional burden, the Supreme Court held that the trial court "clearly" erred in denying Northstar's motion to dismiss. Accordingly, the Court granted Northstar's petition and issued the writ. View "Apel Steel Corporation v. JS Nationwide Erectors, Inc." on Justia Law

Monte Sano Research Corporation (MSRC), Steven L. Thornton, and Steven B. Teague appealed a preliminary injunction entered against them in an action brought by Kratos Defense & Security Solutions, Inc., a California-based aerospace and defense contractor, Digital Fusion, Inc. (DFI), an Alabama-based holding company, and Digital Fusion Solutions, Inc. (DFSI), a Florida corporation and a subsidiary of DFI (referred to collectively as Kratos), alleging breach of the duty of loyalty, breach of contract, tortious interference with business and contractual relationships, and civil conspiracy. Additionally, Kratos sought injunctive relief. MSRC was formed in 2009 to procure government subcontract work at Redstone Arsenal in Huntsville. Thornton and Teague were employees of DFI, which also engaged in government subcontract work; they became employees of Kratos when Kratos Defense merged with DFI in 2008. Kratos terminated Teagues employment on June 23, 2011. Thornton resigned from Kratos four days later. A dispute arose between the parties which implicated the employment contracts for Thornton and Teague when they sought subsequent work. Upon review of this case, the Supreme Court found that because the provisions of Rule 65(d)(2) of the Alabama Rules of Civil Procedure were not complied with and because there was no evidence of an irreparable injury or the lack of an adequate remedy at law, the trial court erred in issuing the preliminary injunction. The Court reversed the trial courts order entering the preliminary injunction and remanded the case to the trial court with directions that it dissolve the injunction it issued September 10, 2011. View "Monte Sano Research Corp. v. Kratos Defense & Security Solutions, Inc." on Justia Law