Justia Contracts Opinion Summaries

John Hoehn ("John") and his wife, Margaret, jointly owned the Foley Flea Market in Foley, Alabama ("the property"). In 2009, John, Margaret, and Roman Fitzpatrick (John and Margaret’s daughter) entered into an agreement to sell John's "1/2 undivided interest in the property" to Fitzpatrick and her then-husband, Paul Kihano. The agreement specified that Margaret would "retain her 1/2 undivided interest in the property." The agreement stated that Fitzpatrick and Kihano "shall be entitled to enter into possession of [the] property so long as [they are] not in default in the performance of [the agreement]." The agreement also made clear that title to John's "1/2 undivided interest in the property" would not pass to Fitzpatrick and Kihano until all the payments had been made under the agreement. John executed a quitclaim deed conveying his one-half interest in the property to Margaret; the quitclaim deed made no mention of the agreement. In 2013, Margaret changed the locks on the property so that Fitzpatrick could no longer access the property or operate the flea market. Fitzpatrick quit making payments under the agreement in December 2013. Fitzpatrick, with her sisters, initiated this lawsuit against Margaret, Kihano, and Mixon alleging intentional interference with a contract and intentional interference with business relations; against John's estate, breach of contract; and against Margaret, Kihano, and Mixon, tortious interference with an inheritance. In case no. 1160393 (Margaret's cross-appeal of the circuit court's judgment in favor of Fitzpatrick on Fitzpatrick's claims of interference with a contract and intentional interference with business relations), the Alabama Supreme Court reversed judgment in favor of Fitzpatrick and rendered judgment in favor of Margaret. In case no. 1160348 (Fitzpatrick's appeal of the amount of Fitzpatrick's compensatory-damages award and the circuit court's judgment in favor of Margaret on Margaret's counterclaim against Fitzpatrick), the Supreme Court dismissed the appeal as moot insofar as Fitzpatrick challenged the compensatory-damages award and affirmed the judgment on Margaret's counterclaim. View "Fitzpatrick v. Hoehn" on Justia Law

STV One Nineteen Senior Living, LLC ("STV"), appealed a circuit court order denying its motion to compel arbitration of certain counterclaims filed against it by Dixie Boyd, by and through her agent, Mary Alice Boyd-Kline, under a valid power of attorney. Dixie Boyd and Mary-Alice Boyd-Kline, as holder of Boyd's power of attorney, signed a "residency agreement" with STV, which operated an assisted-living facility. STV agreed to provide Dixie Boyd with a private apartment and other related services, including, among other things, utilities, housekeeping, laundry, meals, maintenance, planned activities, transportation, and security and protection. The residency agreement contained an arbitration clause. The Alabama Supreme Court determined the plain language of the arbitration clause encompassed Boyd's counterclaims, and the trial court erred, therefore, in denying STV's motion to compel arbitration. View "STV One Nineteen Senior Living, LLC v. Boyd" on Justia Law

EvaBank appealed the grant of summary judgment in favor of Traditions Bank, TBX Title, Inc., and Terry Williams. In 2013, EvaBank customers William Michael Robertson and Connie Robertson, entered into a purchase agreement with Terry Williams, pursuant to which Williams agreed to purchase the Robertsons' property located on County Road 35 in Hanceville ("the property"). EvaBank held two mortgages on the property. Williams financed his purchase through Traditions Bank. TBX Title, a Traditions Bank subsidiary, acted as the closing agent for the real-estate transaction. EvaBank faxed Traditions Bank the payoff statement for the wrong EvaBank customer, Michael Roberson, with an address in Moulton, Alabama. TBX Title closed the real-estate transaction between the Robertsons and Williams. Traditions Bank thereafter delivered a check to EvaBank; EvaBank accepted and negotiated the check and applied the proceeds to the loan of Michael Roberson. TBX Title wired the net sales proceeds from the closing to the Robertsons. TBX Title recorded the warranty deed and mortgage and mailed the deed to Williams. When EvaBank contacted William Robertson about his loan being past due; Robertson responded that the loan should have been paid off at the closing with the proceeds from the sale. EvaBank learned at this point that there was a problem with the payoff statement it had provided. EvaBank sent Traditions Bank an e-mail explaining its mistake and noting that it had made a demand upon William Michael Robertson to pay the remaining balance due on the EvaBank mortgages but that Robertson had refused. Accordingly, EvaBank informed Traditions Bank that it would not release it mortgages encumbering the Robertsons' property until the balance on the loan they were securing had been fully satisfied. Traditions Bank sued EvaBank, asserting a claim of slander of title and seeking a judgment declaring that it was the first lienholder on the property. All parties moved for a summary judgment. The trial court entered judgment in favor of Traditions Bank and TBX Title, on the basis of equitable estoppel, on the claims involving those parties and dismissed all other claims. The Alabama Supreme Court determined that Traditions Bank and TBX Title were on notice of one or more discrepancies between the payoff statement and the closing documents, which, through the exercise of due diligence, would have revealed the fact that the payoff statement was not for the loan secured by the Evabank mortgages encumbering the property being sold by the Robertsons. Therefore, the Court concluded as a matter of law, that Traditions Bank and TBX Title's reliance on the payoff statement, without further inquiry, was not reasonable. Accordingly, they could not rely on estoppel as a basis on which to claim a priority interest in the property. View "Evabank v. Traditions Bank, et al." on Justia Law

United Propane Gas, Inc. ("United Propane"), sought a writ of mandamus compelling the Cullman Circuit Court to vacate its order denying United Propane's motion to dismiss an action filed by Cullman Security Services, Inc. ("CSS"), and to enter an order dismissing the action. The trial court denied the motion to dismiss on the ground that "the outbound forum-selection clause contained in the parties' contract is unfair or unreasonable because it deprives [CSS] of the ability to file a class action in contravention of a recognized Alabama public policy" and found that the parties' contract was a contract of adhesion. The Supreme Court concluded United Propane had shown a clear legal right to have the action dismissed on the basis that venue in the Cullman Circuit Court was, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying the motion to dismiss CSS's action. The trial court was directed to dismiss the cause without prejudice. View "Ex parte United Propane Gas, Inc." on Justia Law

Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine ("HVCM"), one of the defendants in the underlying case, petitioned the Alabama Supreme Court for a writ of mandamus to direct the Marshall Circuit Court to vacate its order denying HVCM's motion to dismiss the claims filed against it by Mike Zak d/b/a Hometown Magazine ("Zak") and to direct that court to enter an order dismissing Zak's claims against it. HVCM was a Washington state based "print broker ... for direct mail advertising." Hometown Magazine was a coupon distributor; Mike Zak was its sole proprietor. In August 2013, Zak and HVCM entered into a "Print Brokerage Agreement" and related "Licensing Agreement" whereby Zak was to become an exclusive "Area Publisher" of HVCM's coupon magazine in three specified zones within Alabama. Zak obtained from the City of Arab ("the City") a business license to engage in "publishing industries." Zak ultimately published a single issue of a publication entitled Hometown Magazine. According to HVCM, "[i]nstead of publishing as [HVCM], Zak formed Hometown Magazine and used the [HVCM] trademark when he sold advertising to local business," i.e., allegedly, "Zak solicited ... clients as [HVCM], sold them advertising using the [HVCM] trademark ..., and never published a magazine as [HVCM]." This action resulted in a dispute between Zak and HCVM. As a result of a Facebook post, which Zak maintained "was entirely fallacious and possessed absolutely no truth," Zak allegedly began to receive queries from customers regarding the legality of his activities. Ultimately, according to Zak, his reputation was allegedly so "irreparably tarnished and damaged" that Zak was forced to close his business. Zak sued the City and various fictitiously named defendants. Specifically, Zak sought to recover both compensatory and punitive damages on various theories, including defamation, negligence, and "wantonness/gross negligence." After review of the trial court record, the Supreme Court held the trial court erred in denying HVCM's motion requesting dismissal of Zak's claims on statute-of-limitations grounds; therefore the Court granted HVCM's petition and issued a writ of mandamus directing the Marshall Circuit Court to vacate its January 3, 2017, order denying HVCM's motion and to enter an order dismissing HVCM as a defendant in the underlying action. View "Ex parte Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine." on Justia Law

The Maintenance Group, Inc. petitioned the Alabama Supreme Court for a writ of mandamus to direct the Madison Circuit Court to enter an order dismissing the claims against it based on lack of personal jurisdiction. This case arises from the sale of an aircraft. The purchaser alleged tortious conduct related to the sale of the aircraft negotiated and consummated outside Alabama by nonresident parties, including Maintenance. The only contact with Alabama being post-purchase travel into and out of Alabama. The Supreme Court concluded that, based on the evidence before the trial court, the purchaser did not establish a sufficient nexus between Maintenance's purposeful activity within Alabama and the claims made in its action sufficient to subject Maintenance to personal jurisdiction in an Alabama court. Accordingly, Maintenance has shown a clear legal right to the dismissal of the complaint on the ground that the trial court lacked personal jurisdiction over it. View "Ex parte The Maintenance Group, Inc." on Justia Law

Jami Johnston appealed a judgment entered in favor of Castles and Crowns, Inc. ("Castles"). Castles was a children's clothing company formed by Julie Vickers and Amy Bowers. Brandi Stuart, Johnston's sister, worked for Castles from 2006 until 2011. From 2009 to 2010, while she was working with Castles, Stuart had 7,149 pounds of Castles' clothing shipped either to Johnston or to consignment companies used by Johnston. In January 2011, Vickers terminated Stuart's employment based on issues with her performance. In April 2011, Castles sued Stuart and Johnston, alleging conversion; civil conspiracy; "willfulness, negligence, and wantonness"; trespass to chattel; and unjust-enrichment against Johnston and Stuart. It also asserted fraudulent-misrepresentation and suppression claims against Stuart. Johnston answered, also asserting a counterclaim against Castles and a third-party complaint against Vickers. In her counterclaim and third-party complaint, Johnston alleged claims of defamation; "negligence, wantonness, and willfulness"; conspiracy; and tortious interference with business and contractual relations. She also sought recovery against Castles under the theory of respondeat superior. In this case, the trial court instructed the jury to consider Castles' unjust-enrichment claim against Johnston if it did not find against Johnston on the conversion and conspiracy claims. The jury found against Johnston on both the conversion and conspiracy claims. However, it then considered the unjust-enrichment claim and found against Johnston on that claim as well. The Alabama Supreme Court concluded the jury's verdict was inconsistent with the trial court's instructions and "was obviously the result of confusion on the part of the jury." After it had discharged the jury, the trial court acknowledged the inconsistency in the jury's verdict. The trial court attempted to cure that inconsistency by setting aside the award in favor of Castles on the unjust-enrichment claim. However, the Supreme Court found the trial court's attempt to reconcile the inconsistency in the jury's verdict was based on mere speculation about the jury's intent. Additionally, the jury failed to follow the trial court's instructions, and Johnston moved for a new trial on that ground. The Supreme Court concluded Johnston was entitled to a new trial because the jury failed to follow the trial court's instructions. For these reasons, the trial court erred when it denied Johnston's motion for a new trial. View "Johnston v. Castles & Crowns, Inc." on Justia Law

Jimmy Nation, Oliver McCollum, James Pickle, James Nation, Micah Nation, and Benjamin Chemeel II (collectively referred to as "the defendants") appealed the circuit court's denial of their motion to compel arbitration of a breach-of-contract claim filed against them by the Lydmar Revocable Trust ("Lydmar"). Lydmar owned a 75% membership interest in Aldwych, LLC. In 2008, Lydmar and the defendants entered into an agreement pursuant to which Lydmar agreed to sell its membership interest in Aldwych, LLC, to the defendants. The defendants paid Lydmar a portion of the agreed price at the time the agreement was executed and simultaneously executed two promissory notes for the balance of the purchase price. By 2014, Lydmar sued defendants for breach of contract for failing to make the required payments. At the request of the parties, the circuit court delayed setting the matter for a bench trial until they had an opportunity to resolve the case without a trial. The parties' attempts failed. Thereafter, defendants filed a motion to compel arbitration of Lydmar's breach-of-contract claim. Lydmar did not file a response to the defendants' motion to compel arbitration. After review, the Alabama Supreme Court reversed, finding defendants submitted evidence showing that Lydmar signed a contract agreeing that all disputes between them related to the defendants' purchase of Lydmar's membership interest in Aldwych would be settled in arbitration and that the contract evidenced a transaction affecting interstate commerce. Lydmar did not refute that evidence, nor did it establish that the defendants waived their right to rely on those arbitration provisions. Therefore, the circuit court erred by returning the case to its active docket and effectively denying the defendants' motion to compel arbitration. View "Nation et al. v. Lydmar Revocable Trust" on Justia Law

Plaintiffs Managed Health Care Administration, Inc. ("MHCA"), and Alabama Psychiatric Services, P.C. ("APS") appealed the denial of their motion to compel Blue Cross and Blue Shield of Alabama ("Blue Cross") to arbitrate their claims. In 1986, Blue Cross contracted with APS, a subsidiary of MHCA, to provide mental-health services to Blue Cross's insureds. In 1991, Blue Cross's contract with APS was transferred to MHCA. In 1995, Blue Cross and MHCA entered into a new contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds. In 2006, Blue Cross and MHCA entered into yet another contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds. In late 2012, Blue Cross decided to replace MHCA, as its behavioral health benefits management vendor, with New Directions Behavioral Health, L.L.C. In 2013, Blue Cross and New Directions Behavioral Health, L.L.C. ("New Directions"), entered into a contract in which New Directions agreed to "arrange for the provision of all Covered Services to Members in accordance with the terms and conditions set forth in this Agreement," which gave New Directions authority to delegate certain services to third parties. pursuant to the authority granted it under the Blue Cross-New Directions 2013 contract and at the request of Blue Cross, New Directions entered into a contract which MHCA in which New Directions sub-delegated to MHCA certain of New Directions' obligations under the Blue Cross-New Directions 2013 contract. A disagreement arose concerning the amount of compensation MHCA was to receive for its services. In 2015, the plaintiffs sued Blue Cross and several fictitiously named defendants alleging fraudulent misrepresentation, fraudulent suppression, breach of an implied contract, and promissory estoppel, claims pertaining to plaintiffs' 2006 contract and for payments of delegated duties. After review, the Alabama Supreme Court concluded plaintiffs demonstrated they had a right to arbitration. The circuit court erred in denying the plaintiffs' motion to compel arbitration, and the Court reversed the circuit court's judgment denying the plaintiffs' motion to compel arbitration in its entirety. View "Managed Health Care Administration, Inc. v. Blue Cross & Blue Shield of Alabama" on Justia Law

Dow Corning Alabama, Inc., Dow Corning Corporation, Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company ("Zurich"), and National Union Insurance Company of Pittsburgh, PA ("National Union"), all petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to transfer the underlying declaratory-judgment action to the Montgomery Circuit Court pursuant to Alabama's forum non conveniens statute. Dow Corning Alabama hired Alabama Electric Company, Inc., an independent contractor, to perform the electrical installation of a vacuum system at Dow Corning Alabama's facility in Montgomery. The contract contained a forum-selection clause. An employee of Alabama Electric was injured while working at Dow Corning Alabama's Montgomery facility. The employee sued the Dow defendants, which in turn tendered their request for defense and indemnity to Alabama Electric and National Trust, both of whom denied coverage. Zurich and National Union settled the Montgomery lawsuit through mediation, and the case was ultimately dismissed. Later, Alabama Electric and National Trust filed an action with the Houston Circuit Court seeking certain declarations concerning their duties and obligations under the master contract and/or the National Trust policy regarding the settlement. The Dow defendants moved to transfer the declaratory judgment action from Houston to Montgomery County pursuant to the forum noon conveniens statute. The Alabama Supreme Court denied the writ application, finding the Dow parties did not satisfy their burden at the trial-court level of demonstrating that a change in venue from Houston County to Montgomery County was warranted under the interest-of-justice prong. View "Ex parte Dow Corning Alabama, Inc." on Justia Law