Justia Business Law Opinion Summaries

Appellants in this case were nine Alabama municipalities and the Birmingham-Jefferson Civic Center Authority appealed the grant of summary judgment entered in favor of Appellees, sixteen online travel service companies and related entities (the "OTCs"). The issue was whether the OTCs were liable for paying the municipalities a lodgings tax under the local lodgings-tax ordinances of the respective municipal plaintiffs. After considering the record in this case, the briefs of the parties, and the trial court's order, the Supreme Court agreed with the trial court's reasoning in its summary judgment order, and therefore affirmed the judgment in favor of the OTCs.

Fred and Nancy Eagerton appealed a summary judgment granted in favor of Vision Bank in the bank's action seeking to enforce the Eagertons' obligations under certain guaranty contracts. "Dotson 10s, LLC" was organized to operate a tennis club in Fairhope. Dotson 10s executed a note and security agreement with Vision Bank, and the bank obtained in exchange, unlimited personal guarantees from John and Elizabeth Dotson, and limited guarantees from the Eagertons. The Dotsons executed a second loan to which the Eagertons were not a party. The Dotsons defaulted on both loans, and the bank sued the Dotsons as the primary obligors, and the Eagertons as personal guarantors. Dotson 10s then filed for bankruptcy protection. Part of the reorganization plan provided in part that the two loans would be combined and paid in full. Dotson 10s subsequently defaulted on the bankruptcy plan. The properties were foreclosed and sold, with the proceeds applied to the consolidated loan. The circuit court then entered a partial summary judgment in favor of the bank against Dotson 10s, but denied the motion as to the Eagertons. The bank argued that the Eagertons were still responsible under their guaranty contracts for the deficiency remaining on the consolidated loan. The Eagertons argued that the creation of the consolidated loan without their knowledge or consent, operated to discharge them from any further obligations under their guaranty contracts. Upon review, the Supreme Court agreed, and reversed the circuit court's judgment in favor of the bank, and remanded the case for further proceedings.

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 and Auto Owners entered into an "agency agreement" authorizing Blackmon to act as an agent for the sale of Auto Owners' insurance in Alabama (the 1995 agreement). A 2005 document entitled "Letter of Instructions" was alleged to be an independent document from the 1995 agreement. Auto Owners contended that the 2005 document was contemplated by and incorporated into the 1995 agreement. The 2005 document contained instructions governing the issuance of a variety of bonds by an agency of Auto Owners. In late 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 home state of Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners based its claims on the 2005 document and a 2009 agreement. Upon review of the matter, the Alabama Supreme Court concluded that the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed that order and remanded the case for the circuit court to grant the motion to compel arbitration and either issue a stay of these proceedings pending arbitration or dismiss the case.

Wright Brothers Construction Company, Inc. and GIBCO Construction petitioned the Supreme Court for a writ of mandamus to direct the circuit court to vacate its order that denied their motion to transfer their case to another circuit court. In 2008, Rogers Whited was involved in a two-vehicle accident at a quarry located in Jefferson County. Both Whited and the driver of the other vehicle were employed by GIBCO, who, along with Wright Brothers, was engaged in a project at the quarry. In 2010 Whited filed a complaint against Wright Brothers, GIBCO, and Sharon Gilbert, the owner and president of GIBCO, in the Walker Circuit Court seeking damages for personal injuries allegedly caused by the accident. In May 2010 Wright Brothers moved to transfer the action to Jefferson County, stating that Whited alleged in his complaint that he was a resident of Blount County, that the accident occurred in Jefferson County, and that therefore Jefferson County, not Walker County, was the proper venue for Whited's action. In June, Whited filed his response in opposition to Wright Brothers' motion, stating that he was a resident of Walker County, not Blount County. Contemporaneously with that response in opposition, Whited also filed an amendment to his complaint stating that his statement that he was a resident of Blount County was a "clerical error." Upon review, the Supreme Court found that the proper venue for this case was Jefferson County, and that the trial court had "an imperative duty to transfer the case and refused to do so." Accordingly, the Supreme Court granted Wright Brothers' petition and issued the writ.

Now defucnt Galt Industries, its former president, his wife, and a former employees sued Aegis Strategic Investment Corporation and its sole shareholder Mark Heisz, alleging Aegis failed to fulfill certain terms of an asset-purchase agreement. Following a jury trial, the trial court entered a judgment awarding Galt $824,000 in damages, and held Aegis jointly and severally liable for those damages. Aegis appealed. Finding that the evidence presented at trial did not support the trial court's decision, the Supreme Court reversed the decision and remanded the case for further proceedings.

Jim Walter Resources, Inc. (JWR) sought a petition for a writ of mandamus to direct the Tuscaloosa County Probate Court to record certain filings without the payment of a recording tax. Walter Energy, JWR's parent company, acquired Western Coal Corporation of Canada. As part of the acquisition, Walter entered into a credit agreement with Morgan Stanley, which required Walter's subsidiaries to execute contingent guaranties of Walter's financing debt in the event Walter defaulted. JWR secured its guaranty of Walter Energy's financing debt by executing mortgages on its real and leasehold properties. Also as part of the credit agreement, JWR was required to record the mortgages in the probate offices in the counties in which the properties were located. When JWR sought to record the mortgages and related UCC filings in Tuscaloosa, the Tuscaloosa County Probate Court refused to record the documents unless JWR paid the recordation tax. The probate judge maintained that there was no statutory requirement that under Alabama law that the debt being secured be the mortgagor's debt, and as such, because JWR was recording its financing statements for Walter's debt, JWR was still responsible for paying the tax. Upon review, the Supreme Court found that JWR's liability was contingent on Walter's default, and JWR's contingent guaranty did not constitute an unqualified promise to pay Walter's indebtedness under the credit agreement. The Court found the contingent guaranty was not within the scope of the applicable statute, and accordingly, the Court granted JWR's petition and issued the writ.

Plaintiff Claudia Dabbieri filed a complaint at the Perry County circuit court naming Donald Wease, Alabama Cable and Fiber Repair, PDQ CATV, Inc., City Boy's Tire and Brake, Inc. (CBT), Continental Tire the Americas, LLC, and several fictitiously entities as defendants, asserting claims arising out of a motor-vehicle accident. CBT moved to dismiss the case for lack of personal jurisdiction. The trial court denied that motion, and CBT petitioned the Supreme Court for a writ of mandamus to direct the trial court to grant CBT's motion to dismiss. CBT is a Florida company, but operates a shop in Perry County. Plaintiff was driving a truck owned by Wease. Wease and Alabama Cable had all four tires on the van replaced. Plaintiff brought the van to CBT to replace the tires. Shortly thereafter, one of the tires failed, causing the van to leave the road and roll. Plaintiff sustained severe injuries. Later investigation would reveal that the tire failure was probably caused by tread separation which might have been caused by the improper sizing of the tires on the van. Finding that there was "limited evidence" that gave no indication that CBT "purposefully availed" itself of the protection of Alabama law, the Supreme Court granted CBT's petition and issued the writ.

Betty Bradberry and Inez T. Jones, as the "personal representatives of the heirs-at-law and/or wrongful death beneficiaries of" the decedents, Roland E. Bradberry and George D. Jones, respectively (Plaintiffs), appealed the grant of summary judgment in favor of Carrier Corporation and multiple other defendants in the their wrongful-death action based on their decedents' exposure to asbestos in their work environment. Plaintiffs alleged that the defendants were jointly and severally liable for the death of their decedents through the contamination of the decedents' work sites. During the pendency of the proceedings, some of the defendants filed for bankruptcy. When those insolvent defendants moved to sever themselves from case due to the stay provisions under the bankruptcy code (and ultimately be dismissed), Plaintiffs fought to keep the action against all defendants together, arguing that the asbestos claims were one single cause of action that could not be split. The solvent defendants moved for a summary judgement to dismiss the case, arguing there was insufficient evidence to indicate the decedents had been exposed to any asbestos-containing projects manufactured or supplied by each defendant. The trial court ultimately granted summary judgment to all defendants, and Plaintiffs appealed. Upon careful review of the trial record and the applicable legal authorities, the Supreme Court affirmed the grant of summary judgment as to all defendants.

GE Capital Aviation Services, Inc., (now known as GE Capital Aviation Services, LLC), Pemco World Air Services, Inc., and Alabama Aircraft Industries, Inc. have fiercely litigated a commercial-contract dispute since 2004 in which each party alleged breach-of-contract and fraud claims against the other. The parties entered an agreement for the conversion, maintenance and inspection of aircraft leased through GE Capital. GE Capital and Pemco each sought punitive damages in addition to compensatory damages. The litigation culminated in a jury trial that lasted approximately three weeks. The jury returned a verdict in favor of Pemco on all of its claims, awarded Pemco $2,147,129 in compensatory damages and $6,500,000 in punitive damages, and returned a verdict in favor of Pemco on all of GE Capital's counterclaims. GE Capital appealed the jury verdict and the trial court's order denying GE Capital's postjudgment motions. GE Capital did not appeal the judgment in favor of Pemco on its counterclaims. Upon review, the Supreme Court reversed the trial court's order denying GE Capital's motion for a JML as to Pemco's fraud claims and its breach-of-an-implied-contract claim. The Court also reversed the trial court's order denying GE Capital's motion for a new trial. The case was remanded for further proceedings.

In separate petitions, the Hampton Insurance Agency and Ginger Spencer, Acceptance Indemnity Insurance Company and Ashland General Agency all defendants in an action filed by Mary Alice Patton, d/b/a Hole in the Wall Lounge, petitioned the Supreme Court for a writ of mandamus to direct the trial court to transfer the action to the Tuscaloosa Circuit Court. Ms. Patton purchased insurance for her lounge from Ms. Spencer, an independent insurance agent for Hampton. At issue was the nature and extent of the coverage Ms. Patton sought. The lounge was destroyed by fire in 2009. Upon filing her insurance claim, Ms. Patton was informed that her policy did not include coverage for property damage. Accordingly, Ms. Patton sued because "defendants were negligent and/or wanton in their procurement of full coverage insurance for [Patton] on her lounge building and its contents." Hampton responded with a motion to dismiss or in the alternative, to transfer the case on grounds that the case was filed in an improper venue. Upon review, the Supreme Court found that the defendant insurance companies met the requirements for the writ of mandamus. The Court directed the trial court to vacate its order denying defendants' motions to transfer, and to enter orders granting those motions to transfer to the Tuscaloosa Circuit Court.