Justia Contracts Opinion Summaries

Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law

Dow AgroSciences LLC ("DAS"), a counterclaim defendant, petitioned the Alabama Supreme Court for a writ of mandamus challenging a circuit court’s refusal to dismiss a fraud claim filed against it by defendant Robert Ward in an action filed by Andalusia Farmers Cooperative ("AFC") against Ward. Specifically, DAS contended that Ward's fraud claim was plainly barred by the applicable statute of limitations. The Supreme Court agreed and granted the petition. View "Ex parte Dow AgroSciences LLC." on Justia Law

Sonya C. Edwards and Edwards Law, LLC (collectively, "Edwards"), petitioned the Alabama Supreme Court for a writ of mandamus to direct a trial court to enter a summary judgment in their favor in an action filed against them by Ivan Gray. Sonya previously represented Gray in proceedings in federal court. In 2015, after mediation and a settlement, those proceedings concluded with the entry of a final judgment. Thereafter, Gray sought to set aside the settlement, and Sonya terminated her representation of Gray. In 2017, Gray sued Edwards alleging Edwards had entered into a contract with Gray in June 2014 in which Sonya agreed to represent Gray in the federal proceedings in exchange for a contingency fee of 50%. Gray alleged that he paid a total retainer fee in the amount of $14,380.85 to cover expenses. According to Gray's complaint, when his federal case concluded, Edwards disclosed that the actual expenses amounted to $4,516.77, therefore, he felt he was entitled to a refund of $9,864.08. When the refund was not forthcoming, Gray alleged Edward converted his retainer and breached the contract between the two. The Supreme Court determined the "act or omission or failure giving rise to the claim" occurred on September 16, 2015, and that was the operative date from which to measure the applicable two-year limitations period. Gray did not file his action until October 27, 2017, which was beyond the two-year limitations period. Accordingly, Edwards has demonstrated a clear legal right to have a summary-judgment entered in her favor. View "Ex parte Sonya C. Edwards and Edwards Law, LLC." on Justia Law

William DeVos, M.D., and Donald Simmons, M.D. (collectively, "the doctors"), appealed a preliminary injunction entered in an action filed against them by The Cunningham Group, LLC, and Cunningham Pathology, LLC. The doctors separately appealed the trial court's order denying their request to increase the amount of the surety bond for the imposition of the injunction. According to the complaint, the doctors had been employed by The Cunningham Group from April 30, 2007, until August 31, 2018, when the doctors terminated their employment without prior notice. The Cunningham Group, also identified in the complaint, other pleadings, and documents in the record as "Services LLC," provided pathology and cytology services through an agreement with Cunningham Pathology. The doctors entered into employment agreements with Services LLC in 2007, in which they agreed that, if they provided Services LLC less than 12 months' notice of their termination of their employment, they would pay Services LLC an amount equal to one year's annual salary. The doctors also agreed that, for a period of two years after the termination of employment, they would not directly or indirectly solicit any of Cunningham/Services' clients or referral sources without prior consent of Cunningham/Services. Cunningham asserted that Cunningham Pathology was an express third-party beneficiary of the doctors' employment agreements with Services LLC, and asserted claims of breach of contract and breach of fiduciary duty and sought to enforce the restrictive covenants contained in the employment agreements. Cunningham also filed a motion seeking a preliminary injunction to prohibit the doctors from violating the nonsolicitation provisions of the employment agreements. The Alabama Supreme Court found that the doctors would still be required to prove their actual damages should it later be determined that they were wrongfully enjoined. "[A]t this stage the trial court should be concerned only with setting an injunction bond amount that would adequately cover the doctors' prospective costs, damages, and attorney fees if it is later determined that the doctors were wrongfully enjoined." The Supreme Court found that based on the evidence presented to the trial court, a $25,000 injunction bond was "simply inadequate to compensate two physicians for damages and attorney fees in the event it is determined that they were wrongfully enjoined from soliciting and continuing to serve Brookwood through their new pathology business." The trial court's order denying the doctors' request to increase the amount of the injunction bond was reversed, and the case remanded for the trial court to increase the injunction-bond amount. View "DeVos v. Cunningham Group, LLC" on Justia Law

This case challenged a circuit court default judgment against Muhammad Wasim Sadiq Ali and others in favor of Mike Williamson after a case ordered to private arbitration was remanded to the trial court. Williamson, Patrick Watson, Ali, and others formed RPM, a regional supplier of rental cranes based in Birmingham, in 2008. Williamson was employed as RPM's general manager. Ali was the primary investor and majority owner of RPM, and Ali and Watson allegedly represented to Williamson at the time RPM was formed that Williamson would own a 12% share of the company. In 2012, Watson and Ali told Williamson that, in order to accrue his 12% equity interest in RPM at the end of his five-year employment term, he needed to pay $1,000,000, and that, if Williamson could not pay, his employment would be terminated unless he signed an employment agreement. Williamson signed an employment agreement with RPM which contained an arbitration clause. The employment agreement also contained a noncompetition clause that prohibited Williamson, for two years following the termination of his employment with RPM, from competing with RPM and from being employed by any business that is in competition with RPM. In 2013, a dispute between Williamson and RPM arose concerning Williamson's insurance coverage with respect to RPM vehicles. RPM terminated Williamson's employment "for cause," citing his failure to obtain an appropriate certificate of insurance. In 2014, Williamson filed a complaint against RPM Cranes, LLC ("RPM"), asserting claims of breach of contract, unjust enrichment, conversion, unreasonable restraint of trade, and misrepresentation arising from his alleged ownership of, his employment with, and the termination of that employment with RPM. Ali contended the default judgment was void because the trial court lacked personal jurisdiction over him. After review, the Alabama Supreme Court agreed, and reversed and remanded. View "Ali v. Williamson" on Justia Law

Defendant Beulah Jean James Moore ("Beulah") appealed the grant of summary judgment entered in favor of plaintiff Billy Edward Moore ("Billy"), individually and as executor of the estate of his brother and Beulah's husband, Jimmy Lee Moore ("Jimmy"), in an action filed by Billy seeking the enforcement of a prenuptial agreement. The Alabama Supreme Court concluded summary judgment was appropriate. Beulah argued that language in the prenup discussing "spousal consents or waivers" granted her the proceeds of Jimmy's 401(k) plan and the pension plan unless a spousal waiver was executed . However, the Court found agreement made clear that Jimmy and Beulah agreed that the separate property each brought into the marriage--including the 401(k) plan and the pension plan--would remain separate. Jimmy and Beulah further agreed that neither of them would "claim, demand, assert any right to, take or receive any part of the property of the other as described on Schedules 1 and 2," which included the 401(k) plan and the pension plan. The second clause of section 4.4 allowed the owner of "an IRA or other plan account" to "direct" the "distribution of benefits" to one through a "beneficiary designation." Under this clause, Jimmy was permitted to name Billy as the designated beneficiary of the 401(k) plan and the pension plan, which he had done before he married Beulah, who had, in turn, renounced her claim to the plans. "Nothing in section 4.4 suggests that the failure to execute a spousal consent or waiver changes the parties' clear intent throughout the entire prenuptial agreement to renounce claims to the other's property; instead, the purpose of the requirement is to ensure that the parties' desires to retain control over the distribution of their accounts through a beneficiary designation is accomplished." Under those circumstances, Beulah breached the prenuptial agreement by retaining the benefits from the 401(k) plan and the pension plan. Thus, the trial court properly entered a summary judgment in favor of Billy. View "Moore v. Estate of Moore" on Justia Law

Magic City Capital, LLC ("Magic City"), appealed the grant of summary judgment entered by the Madison Circuit Court in favor of Twickenham Place Partners, LLC ("Twickenham"). Because the Alabama Supreme Court determined events that occurred during the trial-court proceedings rendered the action moot and the trial court, therefore, was divested of subject-matter jurisdiction, the Supreme Court dismissed the appeal. View "Magic City Capital, LLC v. Twickenham Place Partners, LLC" on Justia Law

S. Mark Booth petitioned the Alabama Supreme Court for a writ of mandamus directing the the trial court to dismiss an action filed against him by the City of Guin. In 2008, Booth and the City entered into a contract entitled "Commercial Development Agreement." The agreement provided that the City would sell Booth approximately 40 acres of real property located in Marion County at a price of $5,000 per acre. Booth, in turn, promised to subdivide the property into lots for commercial development. The agreement included a provision granting the City the right to repurchase the property should Booth fail to develop the land within three years following the execution of the agreement. In 2017, the City sued Booth, asserting a claim for specific performance pursuant to the agreement's repurchase option. The City alleged Booth failed to construct at least one commercial facility on the property within three years from the effective date of the agreement. The City alleged that it had "timely tendered the purchase price to [Booth] and requested a conveyance of the real property described in the contract but [that Booth] refused to accept the tender or to make the conveyance." Booth moved to dismiss, arguing that, although he had fulfilled his obligations under the agreement by developing a hotel on the property, the City's complaint seeking to specifically enforce the repurchase of the property pursuant to its option to repurchase in Section 4.4(b) of the agreement was time-barred by the two-year statutory limitations period for such options in 35-4-76(a), Ala. Code 1975. After review, the Supreme Court granted Booth's petition as to the City's claims for specific performance, and its claims alleging fraud and breach of contact; the trial court was ordered to dismiss those claims. The Court denied Booth's petition relating to the City's rescission claim. View "Ex parte S. Mark Booth." on Justia Law

Dahyalal Patel filed an action seeking to enforce his ownership rights as a shareholder in Subway No. 43092, Inc. ("the corporation"), against shareholder Ashish Shah ("Shah"), Shah's father, Ramesh Shah ("Ramesh"); and the corporation (collectively,"the Shah defendants"). In 2007, Shah, the owner of eight Subway restaurants in and around Madison County, Alabama, prepared to open a ninth Subway restaurant in Huntsville ("the restaurant"). In July 2008, Shah formed the corporation for the purposes of owning and operating the restaurant. Shah owned 90 percent of the stock of the corporation and Ramesh owned 10 percent. In 2008, Patel met with Shah about Shah's plan to open the restaurant. At some point, Patel and Shah orally agreed that Patel would purchase a 25 percent ownership interest in the corporation. Because Shah estimated that start-up costs for the restaurant would be $240,000, Patel agreed to purchase a 25 percent interest in the corporation for $60,000, payable in monthly installments. After the restaurant opened in December 2008, Shah began making periodic distributions of profits to Patel. Patel eventually paid back the $60,000, and agreed to pay an additional $12,000 for an additional five percent interest. In September 2012, Patel sued the Shah defendants, alleging that Shah had misrepresented the start-up costs for the restaurant in calculating the price of Patel's 25 percent interest. Patel alleged that the actual start-up costs were $140,000 rather than $240,000, as Shah had represented. Accordingly, Patel alleged that he either overpaid for his interest or acquired more than a 50 percent interest in the corporation. Patel further alleged that the distributions of profits he received were not proportional to his interest, even assuming that his interest was 30 percent. In addition, he claimed that Shah had withheld Patel's share of franchise-sales commissions that the corporation received from its franchisor. The Shah defendants raised a number of defenses, among them, statute of frauds and statute of limitations. The trial court granted the Shaw defendants' motion for summary judgment, effectively dismissing Patel's claims. After review, the Alabama Supreme Court affirmed summary judgment in favor of the Shah defendants on Patel's tort claims, other than conversion, and on Patel's conversion claim insofar as Patel alleged conversion of profits, commissions, and his ownership interest in the corporation. The Court reversed the summary judgment on Patel's breach-of-contract and unjust-enrichment claims and on his conversion claim insofar as Patel alleged the conversion of corporate property. This case was remanded for further proceedings. View "Patel v. Shah" on Justia Law

Jason Blanks, Peggy Manley, Kimberly Lee, Nancy Watkins, Randall Smith, Trenton Norton, Earl Kelly, Jennifer Scott, and Alyshia Kilgore (referred to collectively as "the customers") appealed the denial of a motion to compel arbitration and a declaratory judgment entered in an action brought by TDS Telecommunications LLC, and its two affiliates, Peoples Telephone Company, Inc., and Butler Telephone Company, Inc. (referred to collectively as "the Internet providers"). The customers subscribed to Internet service furnished by the Internet providers; their relationship was governed by a written "Terms of Service." The customers alleged that the Internet service they have received was slower than the Internet providers promised them. At the time the customers learned that their Internet service was allegedly deficient, the Terms of Service contained an arbitration clause providing that "any controversy or claim arising out of or relating to [the Terms of Service] shall be resolved by binding arbitration at the request of either party." In the declaratory-judgment action, the trial court ruled that the Internet providers were not required to arbitrate disputes with the customers. The Alabama Supreme Court determined the arbitration clause in the applicable version of the Terms of Service included an agreement between the Internet providers and the customers that an arbitrator was to decide issues of arbitrability, which included the issue whether an updated Terms of Service effectively excluded the customers' disputes from arbitration. Accordingly, the Supreme Court reversed the trial court's denial of the customers' motion to compel arbitration and its judgment declaring the updated Terms of Service "valid and enforceable," and remanded the case for further proceedings. View "Blanks et al. v. TDS Telecommunications LLC" on Justia Law