Adams v. Tractor & Equipment Co.

180 So. 3d 860, 2015 Ala. LEXIS 55, 2015 WL 1958068
CourtSupreme Court of Alabama
DecidedMay 1, 2015
Docket1121162
StatusPublished
Cited by3 cases

This text of 180 So. 3d 860 (Adams v. Tractor & Equipment Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adams v. Tractor & Equipment Co., 180 So. 3d 860, 2015 Ala. LEXIS 55, 2015 WL 1958068 (Ala. 2015).

Opinion

BRYAN, Justice.

Kenneth R. Adams appeals from a summary judgment in favor of Tractor & Equipment Co., Inc. (“TEC”). We reverse and remand.

Facts and Procedural History

Adams and James “Buddy” Money are the only two members of Waste Two Energy, LLC (“Waste Two”), a limited liability company that operates two landfills in Mobile. In early 2011, Money, the managing member of Waste Two, had discussions with representatives of TEC, a company that repairs, rents, and sells heavy equipment, about servicing heavy equipment used by Waste Two in the operation of its business. On February 1, 2011, Money sent an e-mail to Lloyd Adams, a representative of TEC, stating that he was collecting information regarding Waste Two’s service and equipment needs that could be filled by TEC and that he would complete a credit application, which would include personal financial statements for himself and Adams, and send it to TEC.

On March 3, 2011, Waste Two provided a “credit application and agreement” (“the agreement”) to TEC. Money and Adams were listed as the “officers,: partners, or owners” of Waste Two. The only specific terms contained in the agreement are as follows: “Parts and Services: due net 10th of month following date of purchase”; “Machine Sales: arranged at the time order is received”; “Rentals: net cash payable in advance”; and “Delinquency Charge: 1.5% per month on all past due open balances.” Money signed the agreement as the “principal of the credit applicant or a personal, guarantor of its obligations” and authorized TEC, among other things, to obtain his personal credit profile for purposes of reviewing the credit application. The agreement included a guaranty provision that provided, in pertinent part: “The undersigned guarantor(s), jointly and severally, unconditionally guarantee and warrant the full and complete payment and performance of all obligations of the above applicant to [TEC] ... arising under this agreement, and all [863]*863other extensions of credit, sales, leases and account balances now or hereafter owing by applicant....” The names “James Money” and “Ken Adams” are handwritten on two Unes below the guaranty provision that are each labeled “Guarantor.” Beginning in March 2011 and continuing through July 2011, TEC performed various services on equipment owned by Waste Two. At some point after TEC had performed a substantial amount of work on Waste Two’s equipment, a dispute arose between Waste Two and TEC over the amount of money Waste Two owed TEC for the services it had provided.

On October 17, 2011, Waste Two filed a complaint in the Mobile Circuit Court, asserting claims of breach of- contract and misrepresentation against TEC. On December 19, 2011, TEC filed an answer to Waste Two’s complaint, a counterclaim against Waste Two alleging breach of contract, and a third-party complaint against Money and Adams alleging breach of the guaranty. In its counterclaim and its third-party complaint, TEC sought compensatory damages, attorney fees, interest, and court costs. On January 18, -2012, Waste Two filed an answer to TEC’s counterclaim, and Money, and Adams' filed an answer to the third-party complaint denying the material allegations of the third-party complaint.

On May 10, 2012, TEC filed a motion for a summary judgment with respect to its third-party claims against Adams and Money. To support its motion, TEC attached the agreement, invoices, and other evidence indicating that Waste Two had failed to pay TEC $86,689.80 in principal and an additional $18,398.43 in accrued interest and late fees for services TEC had provided to Waste Two.

On June 29, 2012, Adams and Money, through counsel, filed a response in opposition to TEC’s motion for a summary judgment. In that response, Adams and Money alleged that TEC and Waste Two had an oral agreement pursuant to which TEC was to develop a service plan for Waste Two’s equipment and that ,“[t]he third party defendant’s [sic] entered into the guaranty agreement with TEC pursuant.to the parameters of the agreement enacted by the parties and representations made by Danny Wright[, TEC’s service manager in Mobile,] and others at TEC.” Adams and Money further alleged that TEC had misrepresented the condition of Waste Two’s equipment at the time of service and argued that TEC- should be estopped from asserting its rights under the agreement because, they said, it had unclean hands. They-also-argued that TEC’s summary? judgment motion was premature because they had not completed discovery.

Attached to Adams and Money’s response was an affidavit from their attorney, filed pursuant to Rule 56(f), Ala. R' Civ. P. In the affidavit, their attorney stated that additional time was needed for discovery to adequately oppose TEC’s summary-judgment motion. -In that affidavit, . the ■ attorney stated: “Along with [its] motion; -[TEC] attached Exhibits ‘1’ and ‘2’ showing a copy of the credit application and- agreement and affidavit of Jo-nella Woods (credit manager of TEC), showing merely that [Adams and Money] executed a guaranty agreement,... ” The attorney further stated in the affidavit, however, that the pertinent issue was whether TEC was liable for breach of contract and misrepresentation, which, he said, if true,- would ultimately void the guaranty provision of the agreement.

On August- 1, 2012, before the circuit' court ruled on TEC’s motion for a summary judgment, Adams and Money filed a motion to dismiss TEC’s third-party claims against them. They argued that they had not actually signed the guaranty provision [864]*864and that the unverified handwritten names below the guaranty provision in the agreement were insufficient to satisfy the Statute of Frauds. Adams and Money each attached an affidavit to the motion to dismiss, stating that they had reviewed the guaranty provision and “unequivocally deny signing” the provision. TEC responded and argued that the motion to dismiss should be denied because, it said, the motion was based on evidence outside the pleadings and because Adams and Money had already admitted, in their response to TEC’s summary-judgment motion, that they had signed the guaranty provision as guarantors of Waste Two’s debts to TEC. TEC further stated that the argument asserted in Adams and Money’s motion to dismiss “was never asserted in their answer or opposition to the motion for summary judgment.” See generally Hayes v. Payne, 523 So.2d 333, 334 (Ala.1987) (“Where an answer has been filed and an affirmative defense has not been pleaded, the defense generally is deemed to have been waived.”),

On September 7, 2012, the circuit court conducted a hearing on TEC’s motion for a summary judgment and on Adams and Money’s motion to dismiss. The same day, the circuit court entered an order denying Adams and Money’s motion to dismiss without setting forth its basis for the denial. There is no indication in the record that the circuit court excluded the affidavits attached to the motion to dismiss. See Rule 12(b), Ala. R. Civ. P. (stating that, in a motion to dismiss asserting defense numbered (6) where “matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment”). Accordingly, the motion to dismiss had been converted to a motion for a summary judgment. See Phillips v. Am-South Bank, 833 So.2d 29, 31 (Ala.2002) (“ ‘[W]here matters outside the pleadings are considered on a motion to dismiss, the motion is converted into a motion for summary judgment ... regardless of its denomination and' treatment by the trial court.’ ” (quoting Boles v. Blackstock,

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Bluebook (online)
180 So. 3d 860, 2015 Ala. LEXIS 55, 2015 WL 1958068, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adams-v-tractor-equipment-co-ala-2015.