Rel: July 19, 2024
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is published in Southern Reporter.
ALABAMA COURT OF CIVIL APPEALS SPECIAL TERM, 2024 _________________________
CL-2023-0197 _________________________
Andy Sumblin
v.
Zachary Ward, as administrator of the Estate of Keith Ward
Appeal from Coffee Circuit Court (CV-19-900012)
LEWIS, Judge.
Andy Sumblin appeals from a judgment entered by the Coffee
Circuit Court ("the trial court") in favor of Zachary Ward, as
administrator of the Estate of Keith Ward ("the Estate"). We reverse the
judgment and remand this cause with instructions. CL-2023-0197
Procedural History
On February 20, 2019, Sumblin d/b/a M.O.D. Sod ("Sumblin"), filed
a complaint seeking to collect a debt allegedly owed by Keith Ward d/b/a
Ward Lawn Care ("Ward"). After Ward failed to answer the complaint,
Sumblin filed, on April 11, 2019, a motion seeking an entry of default and
a default judgment. On August 21, 2019, Sumblin filed a summary-
judgment motion. On September 12, 2019, the trial court entered a
judgment; that judgment was amended on that same day. In its final
form, the judgment provided, in pertinent part:
"This matter came before the Court on the Motion for Entry of Default and for Default Judgment filed by [Sumblin] on April 11, 2019…. Having considered the Motion and all matters brought before the Court and for good cause shown, it is hereby ORDERED ADJUDGED and DECREED as follows:
"1. The Motion for entry of default is GRANTED.
"2. The Motion for default judgment is GRANTED and a final default judgment is ENTERED in favor of … Sumblin and against … Ward in the amount of Thirteen Thousand Two Hundred Forty-Three and 74/100 Dollars ($13,243.74), plus costs."
(Capitalization in original.)
Over two years later, on January 6, 2022, "the Estate of Keith
Ward" filed a motion seeking to vacate the trial court's judgment
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pursuant to Rule 60(b)(6), Ala. R. Civ. P., along with exhibits in support
of the motion. On March 24, 2022, Sumblin filed a response in opposition
to the Rule 60(b)(6) motion and moved the trial court to strike the
exhibits attached thereto. On March 25, 2022, the Estate responded to
Sumblin's March 24, 2022, filing.
After a hearing on March 29, 2022, the trial court entered an order
on April 6, 2022, vacating the September 12, 2019, judgment. On April
15, 2023, Sumblin filed a suggestion of the death of Ward and a motion
requesting that the Estate be substituted as the defendant. That motion
was granted on April 18, 2022. An answer to the complaint was
thereafter filed on September 14, 2022. After a trial, the trial court
entered a judgment on February 17, 2023, providing:
"This matter came before the Court for bench trial on [Sumblin's] complaint seeking damages for an unpaid debt owed by Defendant Ward Lawn Care and Defendant Ward. Upon considering the evidence[,] the Court awarded damages to [Sumblin] in the amount of $12,091.39.
"[Sumblin] sought damages for an unpaid debt of $8,594.95, plus interest[,] attorney fees, and court costs. Because the evidence showed [Ward] was likely incompetent beginning in November 2017, the Court declined to award damages for interest accrued past December 2017.
"The evidence showed … Ward … owned and operated a lawn care business, Ward's Lawn Care. [Sumblin's] business
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records indicated [Ward] purchased sod for several years and routinely paid the bill after an invoice was sent to [Ward]. During late 2017, [Ward] became delinquent on paying his bill. [Sumblin] mailed [Ward] several invoices and a letter demanding payment. Despite the debt owed, [Ward] did not respond to the letter and [Sumblin] continued to sell sod to [Ward]. [Sumblin] filed suit and [Ward] failed to answer. A default judgment was entered against [Ward] but was later set aside after the Court learned [Ward] had become stricken with brain cancer and had died. The evidence showed [Ward] likely lacked sound mental capacity after he underwent two surgeries to remove a brain tumor. Testimony showed [Ward] began experiencing symptoms of confusion, memory loss, and paralysis during the same time he uncharacteristically failed to pay his bills. Because the evidence showed [Ward's] mental capacity began to fail in November 2017, the Court finds [Ward] should not be liable for interest accrued after December 2017.
"[Sumblin] requested the … [E]state be liable for the unpaid debt. The evidence showed [Ward] purchased sod on behalf of his business, 'Ward's Lawn Care.' [Ward] paid for the sod using checks labeled with the company’s name[,] 'Ward's Lawn Care.' [Sumblin] provided business records showing that 'Ward's Lawn Care' owed the debt. [Sumblin's] sod farm manager testified [Ward] purchased sod at the reduced merchant rate because he owned and operated a landscape company, 'Ward's Lawn Care.' Finally, the [Estate] provided evidence showing [Ward] had properly registered the lawn care business, 'Ward's Lawn Care' with the Alabama Secretary of State.
"Alabama appellate courts have held that 'permitting the piercing of the corporate veil is not a power that is lightly exercised. The concept that a corporation is a legal entity existing separate and apart from its shareholders is well settled in this state.' Co-Ex Plastics, Inc. v. AlaPak, Inc., 536 So. 2d 37 (Ala. 1988). Alorna Coat Corp. v. Behr, 408 So. 2d
4 CL-2023-0197
496 (Ala. 1981). The Courts have established that 'the corporate veil may be pierced where a corporation is set up as a subterfuge, where shareholders do not observe the corporate form, where the legal requirements of corporate law are not complied with, where the corporation maintains no corporate records, where the corporation maintains no corporate bank account, where the corporation has no employees, where corporate and personal funds are intermingled and corporate funds are used for personal purposes, or where an individual drains funds from the corporation.' See, e.g., Forester & Jerue, Inc. v. Daniels, 409 So. 2d 830 (Ala. 1982); Hamrick v. First National Bank of Stevenson, 518 So. 2d 1242 (Ala. 1987); Deupree v. Ruffino, 505 So. 2d 1218 (Ala.1987); Messick v. Moring, 514 So. 2d 892 (Ala. 1987); East End Memorial Association v. Egerman, 514 So. 2d 38 (Ala. 1987).
"While the Court recognizes [Sumblin] is owed a significant unpaid debt, this Court is reluctant to create the slippery slope precedent of piercing the corporate veil based on the evidence presented in this case. Upon consideration of the foregoing, it is ORDERED, ADJUDGED, and DECREED:
"1. The Court finds in favor of [Sumblin] and against Defendant Ward's Lawn Care.
"2. [Sumblin] is awarded damages in the amount of $12,091.39. (The total damages were calculated as follows: $8,594.95 unpaid debt: plus $388.92 in finance charges through December 2017; plus $412.36 court costs: plus $2,695.16 attorney fee calculated by figuring 30% of unpaid debt.)
"3. The Court denies [Sumblin's] request to find …Ward or his estate individually liable."
"4. Any other relief sought and not granted herein is denied."
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Sumblin timely filed his notice of appeal to this court on March 30,
2023.
Discussion
I. Order Setting Aside the Default Judgment
On appeal, Sumblin first argues that the trial court erred by
granting the Rule 60(b)(6) motion to set aside the default judgment. The
Estate argues that, because Sumblin did not file a petition for a writ of
mandamus from the order granting the Rule 60(b)(6) motion, he may not
challenge that order on appeal. We note, however, that our supreme
court has explained:
"[O]rdinarily 'interlocutory orders merge with final judgments' and, therefore, most interlocutory orders may be appealed once a final judgment is entered. McCormack v. AmSouth Bank, N.A., 759 So. 2d 538, 541 (Ala. 1999). See also Barnes v. George, 569 So. 2d 382, 383 (Ala. 1990) (allowing challenge to grant of Rule 60(b)(2) motion for new trial after judgment in the new trial)."
Caton v. City of Pelham, 329 So. 3d 5, 19 (Ala. 2020); see also R.E. Grills,
Inc. v. Davison, 641 So. 2d 225, 227 (Ala. 1994) ("[U]nless in the
circumstances of the case a petition for a writ of mandamus is the only
procedure available to secure relief, a party does not waive a right to
appeal from a trial court's interlocutory order or ruling solely by not filing
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such a petition."). Therefore, we will proceed to address the merits of
Sumblin's argument.
Sumblin specifically argues that the Estate failed to meet its
burden of introducing arguments and evidence of all three factors set
forth in Kirtland v. Fort Morgan Authority Sewer Service, Inc., 524 So.
2d 600 (Ala. 1988). See Sampson v. Cansler, 726 So. 2d 632, 633 (Ala.
1998) (explaining that, "[a]lthough Kirtland involved a Rule 55(c)[,Ala.
R. Civ. P.] motion to set aside a default judgment, [the supreme court]
also appl[ies] the Kirtland analysis to Rule 60(b)[, Ala. R. Civ. P.] motions
to set aside default judgments").
In Kirtland, our supreme court set forth the following mandatory
factors that a trial court must consider when ruling on a motion to set
aside a default judgment: "1) whether the defendant has a meritorious
defense; 2) whether the plaintiff will be unfairly prejudiced if the default
judgment is set aside; and 3) whether the default judgment was a result
of the defendant's own culpable conduct." Kirtland, 524 So. 2d at 605;
see also Sampson v. Cansler, 726 So. 2d 632, 633 (Ala. 1998). Sumblin
initially focuses on whether the Estate showed the presence of a
meritorious defense.
7 CL-2023-0197
With respect to a party's burden of proving the Kirtland factors,
particularly proving a meritorious defense, our supreme court has
explained:
" '[T]he trial court has broad discretion ... in deciding whether to deny or to grant a motion to set aside a default judgment. In exercising that discretion, the trial court must apply the three- factor analysis set forth in Kirtland. However, the law is well settled that " ' "in order to trigger the mandatory requirement that the trial court consider the Kirtland factors, the party filing a motion to set aside a default judgment must allege and provide arguments and evidence regarding all three of the Kirtland factors." ' " Hilyer v. Fortier, 176 So. 3d 809, 813-14 (Ala. 2015) (quoting D.B. v. D.G., 141 So. 3d 1066, 1071 (Ala. Civ. App. 2013), quoting in turn Brantley v. Glover, 84 So. 3d 77, 81 (Ala. Civ. App. 2011)).
" ' … It is well settled that bare legal conclusions unsupported by affidavit or other evidence do not suffice to demonstrate a meritorious defense under Kirtland. See Martin v. Robbins, 628 So. 2d 614, 617-18 (Ala. 1993) (noting that "[a] defaulting party has satisfactorily made a showing of a meritorious defense if the allegations in an answer or in a motion and its supporting affidavits, if proven at trial, would constitute a complete defense to the claims against the defaulting party or if sufficient evidence has been adduced either by affidavit or by some other means to warrant submitting the case to the jury"); see also Royal Ins. Co. of America v. Crowne Invs., Inc., 903 So. 2d 802, 808 (Ala. 2004) (noting that "[t]he existence of a meritorious defense is a
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'threshold prerequisite,' Kirtland, 524 So. 2d at 605, because without a meritorious defense, a finding that the plaintiff would not be prejudiced and a finding that the defendant was not culpable would matter little"). …
" '….
" 'With regard to a meritorious defense in the context of a Kirtland analysis, this Court has stated:
" ' "[A] defaulting party has satisfactorily made a showing of a meritorious defense when allegations in an answer or in a motion to set aside the default judgment and its supporting affidavits, if proven at trial, would constitute a complete defense to the action, or when sufficient evidence has been adduced either by way of affidavit or by some other means to warrant submission of the case to the jury....
" ' "The allegations set forth in the answer and in the motion must be more than mere bare legal conclusions without factual support; they must counter the cause of action averred in the complaint with specificity -- namely, by setting forth relevant legal grounds substantiated by a credible factual basis. Such allegations would constitute a 'plausible' defense."
" 'Kirtland, 524 So. 2d at 606 (emphasis added).'
9 CL-2023-0197
" 'Carroll[ v. Williams], 6 So. 3d [463,] 467-68 [Ala. 2008)].' "
Ex parte Bhones, 285 So. 3d 740, 745-46 (Ala. 2019) (quoting Ex parte
Ward, 264 So. 3d 52, 56 (Ala. 2018)); see also Appalachian Stove &
Fabricators, Inc. v. Roberts, 544 So. 2d 893, 897 (Ala. 1989) (holding that,
"[t]o show the existence of a meritorious defense, [the defendant] had to
allege sufficient facts or produce enough evidence to counter the
plaintiffs' claims").
Here, the Estate offered no evidence of a meritorious defense.
Instead, the Estate simply argued that Sumblin did not present "any
evidence of [Ward's] alleged debt except [Sumblin's] own sworn affidavit"
and that Sumblin had not presented "invoices or delivery receipts
indicating any unpaid balance by [Ward]." However, the Estate did not
argue that Sumblin's testimony was somehow insufficient to establish
Sumblin's case.1 Moreover, the Estate did not allege the existence of any
facts that would contradict Sumblin's testimony that "if proven at trial,
would constitute a complete defense to the action, or [that] sufficient
1Indeed, our supreme court has recognized testimony as adequate,
even without documentary evidence, to prove a case seeking compensation "for work and labor done and materials furnished." Loggins v. Robinson, 738 So. 2d 1268, 1269 (Ala. Civ. App. 1999). 10 CL-2023-0197
evidence ha[d] been adduced either by way of affidavit or by some other
means to warrant submission of the case to the jury." Kirtland, 524 So.
2d at 606. Therefore, we conclude that the Estate failed to meet the
burden of proving the existence of the first Kirtland factor.
Our supreme court has explained that, when a defendant fails to
satisfy the initial burden of alleging and demonstrating the existence of
all the Kirtland factors, the trial court exceeds its discretion in setting
aside the default judgment. Bhones, 285 So. 3d at 747. In this case,
though, even though the motion to set aside the default judgment stated
that it was filed pursuant to Rule 60(b)(6), because the motion relied on
the allegation that Ward was incompetent, we construe the motion as
relying on Rule 60(b)(4), Ala. R. Civ. P. See, e.g., Pharo v. Pharo, 199 So.
3d 93, 95 n.1 (Ala. Civ. App. 2015) (construing "allegations made in the
motion and the statements in the accompanying affidavit as challenging
service by publication, and, thus, seeking relief under Rule 60(b)(4)[, Ala.
R. Civ. P.,]" because "an appellate court ' "looks to the essence of a motion,
rather than its title, to determine how that motion is to be considered
under [the] rules [of civil procedure]." ' ") (quoting Ex parte Alfa Mut. Gen.
Ins. Co., 684 So. 2d 1281, 1282 (Ala. 1996), quoting in turn Union Springs
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Tel. Co. v. Green, 285 Ala. 114, 117, 229 So. 2d 503, 505 (1969)); and
Keith v. Moone, 771 So. 2d 1014, 1017 (Ala. Civ. App. 1997), rev'd on
other grounds, Ex parte Keith, 771 So. 2d 1018 (Ala. 1998) (holding that
"[a] default judgment entered against an incompetent person is void; a
void judgment may be vacated at any time."). This court has held that a
party seeking relief pursuant to Rule 60(b)(4) is not required to make a
showing with respect to the Kirtland factors. Pharo, 199 So. 3d at 95. 2
Therefore, we decline to reverse the trial court for failure of proof with
respect to the Kirtland factors.3
2It appears that a majority of the justices of our supreme court are
of the opinion that the consideration of the Kirtland factors is not appropriate where relief from a default judgment is available under Rule 60(b)(4) because of a lack of due process. See Cornelius v. Browning, 85 So. 3d 954, 958 (Ala. 2011). We note, though, that then-Justice Parker concurred in the result of the Cornelius opinion, writing that he would apply the Kirtland factors in analyzing that case. See Cornelius, 85 So. 3d at 962 (Parker, J., concurring the result). "This court is bound by the decisions of the Alabama Supreme Court." State Farm Mut. Auto. Ins. Co. v. Carlton, 867 So. 2d 320, 325 (Ala. Civ. App. 2001).
3With respect to the sufficiency of the evidence concerning competency, although Sumblin briefly asserts that Ward did not prove incompetency, Sumblin does not make a sufficient argument supported by legal authority. See Rule 28(a)(10), Ala. R. App. P. Therefore, we will not address that argument. 12 CL-2023-0197
II. The Final Judgment
We next turn to Sumblin's arguments with respect to the final
judgment. Because the trial court made specific findings of fact, we may
review the arguments relating to the sufficiency of the evidence, even
though Sumblin did not file a postjudgment motion challenging the
sufficiency of the evidence. See Adams v. Adams, 21 So. 3d 1247, 1253-
54 (Ala. Civ. App. 2009).
A. Amount of Interest
Sumblin's first argument with respect to the final judgment is that
the trial court erred in determining that no interest should accrue after
November 2017, which was when the trial court concluded that Ward's
incompetency commenced. Sumblin specifically argues that the trial
court erred in determining that interest does not accrue during the time
a party is incompetent. We note, however, that Sumblin's argument on
this point is a legal argument that was not raised to the trial court.
Therefore, it is not preserved for this court's review. See, e.g., Ex parte
Knox, 201 So. 3d 1213, 1218 (Ala. 2015) (holding that a new legal
question may not be considered for the first time on appeal) and Andrews
v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992) (holding that an
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appellate court "cannot consider arguments raised for the first time on
appeal; rather, [its] review is restricted to the evidence and arguments
considered by the trial court"). Our supreme court has recently
" '[An appellate court] cannot consider arguments advanced for the purpose of reversing the judgment of a trial court when those arguments were never presented to the trial court ....' State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 821 (Ala. 2005). When a postjudgment motion is the only mechanism for bringing an alleged error to the circuit court's attention … the alleged error must be raised in a postjudgment motion. Lay v. Destafino, [Ms. 1210383, Feb. 17, 2023] ___ So. 3d ___, ___ (Ala. 2023) ('While it is true that postjudgment motions under Rule 59(e)[, Ala. R. Civ. P.,] are usually elective rather than mandatory, such a motion is necessary to preserve an objection for appellate review when -- as here -- that motion is the only possible mechanism for bringing the alleged error to the trial court's attention.')."
Edwards v. Crowder, [Ms. SC-2023-0151, May 24, 2024] ___ So. 3d ___,
___ (Ala. 2024).
In the present case, Sumblin requested an award of interest, and
the trial court partially granted that request, but the trial court limited
the amount of interest awarded, specifically determining that interest
did not accrue during the time that Ward was found to have been
incompetent. Sumblin did not challenge the trial court's legal
determination by arguing that Ward's incompetency was not a valid basis 14 CL-2023-0197
for limiting the award of interest. Because it appears from the record
that Sumblin did not become aware that the trial court intended to limit
the interest award due to the finding of incompetency until the entry of
the trial court's judgment, a postjudgment motion was " 'the only possible
mechanism for bringing the alleged error to the trial court's attention.' "
Edwards, ___ So. 3d at ___ (quoting Destafino, ___ So. 3d at ___); see also
Docen v. Docen, 294 So. 3d 767, 771 (Ala. Civ. App. 2019) (holding that,
although the appellant "first learned the basis for the child-support
award when he received the order ruling on his postjudgment motion,"
he was required to file a second postjudgment motion to preserve his
challenge to the trial court's alleged error on that point). Because, like
in Edwards, Sumblin failed to bring the trial court's attention to its
alleged error regarding the limitation of interest due to incompetency, we
conclude that the error was not preserved for this court's review.
Sumblin also makes a brief argument that the trial court erred in
determining the date of Ward's incompetency. He asserts that the
November 2017 date conflicts with the administrator's admission that
the incompetency began in November 2018. We note, however, that,
upon being asked when Ward became incompetent, Zachary Ward
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testified "Probably late 2017 is when you could recognize problems and
things started going south up to the first surgery." Because there was,
in fact, testimony in support of the 2017 date, we cannot conclude that
Sumblin has shown error on this point.
B. Costs of Collection
Sumblin's next argument concerns the award of attorney's fees as
a cost of collection.4 In this case, Sumblin claimed an award of reasonable
attorney's fees pursuant to a contract. Sumblin presented an itemized
statement of his attorney's fees as well as testimony concerning the
reasonableness of the charges. In its judgment, however, the trial court
awarded a fee in the amount of 30% of the debt without reference to the
statement of fees and testimony concerning the reasonableness of the
charges. Sumblin argues that the trial court's disregard for the evidence
presented concerning the reasonableness of the attorney's fees is
reversible error.
4We construe Sumblin's argument as challenging the sufficiency of
the evidence to support the award of an attorney fee. Because the trial court made a specific finding of fact with respect to the attorney-fee award, no postjudgment motion was necessary to preserve the issue of the sufficiency of the evidence. See, e.g., Ex parte James, 764 So. 2d 557, 559 (Ala. 1999). 16 CL-2023-0197
Our supreme court has explained that, in determining an attorney
fee award, a trial court should consider the following 12 factors:
" '(1) the nature and subject matter of the employment; (2) the learning, skill, and labor requisite to its proper discharge; (3) the time consumed; (4) the professional experience and reputation of the attorney; (5) the weight of the attorney's responsibility; (6) the measure of success achieved; (7) the reasonable expenses incurred by the attorney; (8) whether the fee is fixed or contingent; (9) the nature and length of a professional relationship; (10) the fee customarily charged in the locality for similar legal services; (11) the likelihood that a particular employment may preclude other employment; and (12) the time limitations imposed by the client or by the circumstances.' "
Carver v. Foster, 928 So. 2d 1017, 1025 (Ala. 2005) (quoting Irons v. Le
Sueur, 487 So. 2d 1352, 1359 (Ala. 1986)). Our supreme court further
explained in Carver that "the reasonableness of an attorney-fee award
cannot be based solely on an arbitrary percentage of that value. The fee
must bear a reasonable relationship to the time expended on the case, in
light of the hourly rate of attorneys practicing in the community."
Carver, 928 So. 2d at 1026-27.
Here, it appears that the trial court disregarded the evidence
presented concerning a reasonable attorney's fee and, instead, based the
fee solely on an arbitrary percentage of the amount of the debt.
Therefore, we reverse the trial court's determination of the attorney's fee
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and remand this cause for the trial court to reconsider its attorney-fee
award in light of the 12 factors set forth in Carver.
C. Determination of the Judgment Debtor
Sumblin also argues that the trial court erred in entering a
judgment against a corporation named Ward Lawn Care, Inc.,5 when
Sumblin did not sue Ward Lawn Care, Inc., but, instead, sued Ward.
Sumblin points out that he presented evidence that he had conducted
business with Ward, doing business as Ward Lawn Care. Multiple checks
written to Sumblin indicated that they were drawn on the account of
Ward, doing business as Ward Lawn Care. Sumblin correctly asserts
that the Estate presented no evidence that Ward ever represented to
Sumblin that he was an agent of a corporate entity called Ward Lawn
Care, Inc.
This court has explained:
"Agency is a question of fact and is, therefore, subject to the ore tenus rule, which gives a presumption of correctness to the trial court's findings of fact. Crews v. Herman Maisel & Co., 524 So. 2d 980 (Ala. 1988). We will not disturb a judgment based on those findings unless they are palpably wrong,
5Although the trial court stated the judgment was entered against
"Ward's Lawn Care," not "Ward's Lawn Care, Inc.," considering the entirety of the judgment, it is clear that the judgment was entered against Ward's Lawn Care, Inc. 18 CL-2023-0197
unsupported by credible evidence, or manifestly unjust. Crews, supra.
"The general rule relative to an agency relationship is that when an agent, acting within his or her real or apparent authority, enters a contract on behalf of his or her principal, only the principal is bound by the contract and subject to suit thereon. Knox v. Moore, 475 So. 2d 1199 (Ala. Civ. App. 1985); Davis v. Childers, 381 So. 2d 200 (Ala. Civ. App. 1979). An exception to that rule which is also well settled, however, is that an agent who enters a contract on behalf of an undisclosed principal is liable on the contract if he or she fails to disclose the identity of the principal at the time of making the contract. Knox v. Moore, supra; B & M Homes, Inc. v. Hogan, 376 So. 2d 667 (Ala. 1979).
"The critical inquiry in determining whether the principal … was disclosed for the purpose of avoiding personal liability of the purported agent … was whether, at the time of the agreement, [the other party to the contract] had such notice of the corporation's existence and of its identity that he knew, would have had reason to know, or should have known that [the purported agent] was not contracting as an individual. Hilburn v. Fletcher Oil Co., 495 So. 2d 613 (Ala. 1986)."
Pate v. T-Square, Inc., 545 So. 2d 70, 71 (Ala. Civ. App. 1989).
In Pate, this court affirmed the DeKalb Circuit Court's finding that
the plaintiff had no notice that Pate, a purported agent of D & R Coal Co.,
Inc., was acting as an agent for that corporation. This court noted that
the plaintiff "testified that he made an agreement with [the purported
agent], not a corporation." Moreover, "Pate [did] not contend that he told
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[the plaintiff] that he was acting as the president of D & R Coal Co., Inc.,
but insists that [the plaintiff's] knowledge that he did business as 'D & R
Coal Company' was sufficient to deem his principal disclosed." Id. This
court rejected the purported agent's argument, stating: "The mere fact
that an individual operates a business under a trade name carries no
implication of agency." Id.
In this case, Sumblin presented evidence that he had conducted
business with Ward, doing business as Ward Lawn Care. Multiple checks
written to Sumblin indicated that they were drawn on the account of
Ward, doing business as Ward Lawn Care. Zachary Ward, the
administrator of the Estate, admitted that he had seen no checks
presented that indicated that they were drawn on a corporate account.
There was no evidence indicating that Sumblin ever contracted with
Ward Lawn Care, Inc. Instead, the entirety of the evidence indicated
that Sumblin contracted with Ward, doing business as Ward Lawn Care.
As stated, "[t]he mere fact that an individual operates a business under
a trade name carries no implication of agency." Pate, 545 So. 2d at 71.
Because the undisputed evidence indicated that Ward never represented
to Sumblin that he was an agent of Ward Lawn Care, Inc., the trial court
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erred in declining to hold the Estate liable for the debts accrued by Ward
individually.
Conclusion
Based on the foregoing, we reverse the trial court's judgment and
remand this cause for the trial court to enter a judgment in accordance
with this opinion.
REVERSED AND REMANDED WITH INSTRUCTIONS.
Moore, P.J., and Hanson and Fridy, JJ., concur.
Edwards, J., concurs in the result in part and dissents in part, with
opinion.
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EDWARDS, Judge, concurring in the result in part and dissenting in part.
Although I do not agree with all of the statements in the main
opinion, I generally agree with the conclusions reached by that opinion
regarding the propriety of the April 6, 2022, order entered by the Coffee
Circuit Court ("the trial court") setting aside that court's September 12,
2019, judgment against Keith Ward d/b/a Ward's Lawn Care ("Ward")
pursuant to Rule 60(b)(4), Ala. R. Civ. P., based on Ward's incompetency
at the time the judgment was entered, see Rule 55(b)(2), Ala. R. Civ. P.
("[B]ut no judgment by default shall be entered (A) against a minor or (B)
against an incompetent person, unless the minor or the incompetent
person is represented in the action by a general guardian or other
representative as provided in Rule 17(c)[, Ala. R. Civ. P.,] who has
appeared therein."); regarding the trial court's erroneously entering a
judgment against the formerly incorporated entity, Ward's Lawn Care,
Inc., instead of against Ward's estate; and regarding the trial court's
award of an attorney's fee to Andy Sumblin based on a percentage of the
debt recovered instead of determining a reasonable fee, see, e.g., Lolley
v. Citizens Bank, 494 So. 2d 19, 19 (Ala. 1986) (explaining that, when a
contract provides for the recovery of a reasonable attorney's fee, a trial
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court should consider evidence relating to a reasonable attorney fee and
not award a percentage of the contract recovery). Thus, I concur in the
result of those aspects of the main opinion.
I cannot, however, agree with the conclusion reached by the main
opinion that Sumblin is precluded from arguing that the trial court erred
by failing to award him 18% interest per annum on the debt owed
pursuant to the terms of the contracts between him and Ward, and I
dissent as to that aspect of the opinion. Sumblin had argued to the trial
court that the invoices evidencing the sale of sod to Ward, which were
contracts between him and Ward, entitled him to 18% interest per annum
on past-due amounts as reflected in his trial exhibit. The trial court
awarded Sumblin the interest that he contended had accrued through
December 2017 based on the trial court's determination that Ward should
not be required to pay interest after the date he became incompetent. On
appeal, Sumblin challenges the trial court's decision to remit the interest
due under the contract based on Ward's incompetency.
The main opinion declines to entertain Sumblin's argument that
the trial court should not have remitted the amount of interest provided
for in the contract on the basis that his argument "is a legal argument
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that was not raised to the trial court." ___ So. 3d at ___. However, the
rule requiring the preservation of error prevents this court from
" 'put[ting] a trial court in error for failing to consider a matter which,
according to the record, was not presented to, nor decided by it.' " Nichols
v. Pate, 54 So. 3d 398, 403 (Ala. Civ. App. 2010) (quoting Rodriguez-
Ramos v. J. Thomas Williams, Jr., M.D., P.C., 580 So. 2d 1326, 1328 (Ala.
1991)) (emphasis added). In my opinion, the issue of Sumblin's
entitlement to 18% per annum in interest per the contract was squarely
presented to and decided by the trial court when the trial court
specifically rejected Sumblin's request that, pursuant to the contract, he
be awarded 18% interest on the past-due amounts and, instead, awarded
him the requested amount of interest only through December 2017.
Sumblin was not required to reargue the legal point of his entitlement to
18% interest per annum under the contract to the trial court in order to
preserve error.
Rule 4(a)(3), Ala. R. App. P., provides that "[a]ny error or ground of
reversal or modification of a judgment or order which was asserted in the
trial court may be asserted on appeal without regard to whether such
error or ground has been raised by motion in the trial court under Rule
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52(b) or Rule 59 of the [Alabama Rules of Civil Procedure]." The
Committee Comments to Rule 4 state that
"The provision of subdivision (a)(3) in the last sentence permitting assertion in the appellate court of any matter raised or asserted in the trial court whether such matter was raised by motion for new trial under [Ala. R. Civ. P.,] Rule 59[,] or for motion of amendment of findings of fact under [Ala. R. Civ. P.,] Rule 52(b)[,] is a departure from existing Alabama practice. The rule does not, however, extend the right to raise for the first time on appeal new matter not presented to the trial court or upon which the trial court had no opportunity to pass.
"The requirement retains the practice that matters raised on appeal must have been presented to the trial court at some stage. Thus matters which can only be raised by post- trial motion must be so asserted. The provision is intended to avoid the necessity of repeated assertions of the same point below. Once ruled on by the trial court in some form, the point is preserved for review on appeal."
(Emphasis added.) See also Robertson v. Gaddy Elec. & Plumbing, LLC,
53 So. 3d 75, 80 (Ala. 2012) (overruling Carter v. Treadway Trucking,
Inc., 611 So. 2d 1024 (Ala. 1992), and explaining that Carter was based
on "the false premise that the trial court cannot be held in error for a
matter not presented to it when the trial court there, in granting a
directed verdict, did decide the issue" (emphasis added)); Kirya v. Bulls,
404 So. 2d 58 (Ala. Civ. App. 1981) (explaining that the appellant could
challenge the striking of her affirmative defense to the appellee's
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counterclaim on appeal despite the fact that he had not raised that issue
in a postjudgment motion).
Unlike the main opinion, I do not believe that the sub-issue of
whether the trial court had a legal basis for suspending the accrual of
interest must have been specifically argued by Sumblin in a
postjudgment motion. That sub-issue was injected into the proceeding
by the trial court itself, and the issue whether the accrual of interest
could be suspended because of Ward's incompetency was clearly decided
against Sumblin, who had already argued that he was entitled to the
entire amount of interest that had accrued. See Robertson, 53 So. 3d at
80. Moreover, it seems hyper technical and illogical to me that, in cases
tried without a jury, an appellant is not required to file a postjudgment
motion to preserve an issue regarding the sufficiency of the evidence if
the trial court makes written findings of fact, see New Props., L.L.C. v.
Stewart, 905 So. 2d 797, 800 (Ala. 2004) (explaining Rule 52(b), Ala. R.
Civ. P.), but is required to file one to preserve an error of law even if the
trial court states its legal conclusions in its judgment. 6 To insist that
6In Ex parte Vaughn, 495 So. 2d 83, 87 (Ala. 1986), our supreme
court explained the rationale behind the rule that a postjudgment motion 26 CL-2023-0197
Sumblin file a postjudgment motion to argue to the trial court again that
he was entitled to 18% per annum per the contract under the applicable
law -- which is the only argument that he could have made, because no
exception of the type the trial court appears to have imposed exists --
violates the principles espoused in the Committee Comments to Rule 4.
Furthermore, it appears to frustrate the purpose of the Alabama Rules of
Appellate Procedure, which, according to Rule 1, is to "assure the just,
is not required to preserve an argument regarding the sufficiency of the evidence when a trial court makes written findings of fact, stating:
"[B]y making written findings of fact, the trial judge has had the additional opportunity to reconsider the evidence and discover and correct any error in judgment which he or she may have made upon initial review. Thus, when written findings of fact are made, they serve the same useful purpose as does an objection to the trial court's findings, a motion to amend them, a motion for a new trial, and a motion to dismiss under Rule 41(b)[, Ala. R. Civ. P.] -- to permit the trial judge an opportunity to carefully review the evidence and to perfect the issues for review on appeal."
I do not see why the trial court's determination that Ward became incompetent in late 2017 and the apparent legal conclusion flowing from that finding -- that his incompetency permitted the trial court to remit the interest accrued after the date of Ward's becoming incompetent -- would require Sumblin to point out that incompetency of a debtor is not relevant to the calculation of interest due under the contract, to which Sumblin had established his entitlement.
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speedy, and inexpensive determination of every appellate proceeding on
its merits."
As Sumblin contends, he is entitled to the interest set out in the
contract that the trial court found to have existed between Sumblin and
Ward. See Arnold v. Hyundai Motor Mfg. Alabama, LLC, 292 So. 3d
1042, 1053-54 (Ala. 2019) (reversing a judgment that failed to award,
among other things, prejudgment interest and requiring that the trial
court, on remand, award, among other things, the prejudgment interest
to which the plaintiff was entitled pursuant to the contract between the
plaintiff and the defendant); Knight v. Hired Hand Green, Inc., 775 So.
2d 218 (Ala. Civ. App. 1999) ("Because the trial court correctly found in
favor of Hired Hand [Green, Inc.,] on its contract claim, Hired Hand was
necessarily entitled to an award of interest on the past-due balance …
pursuant to the clear terms of the contract."). The trial court did not
provide authority, and I am unaware of any, for the proposition that
interest on a past-due amount as provided for in a contract may be
remitted based on the later-occurring incompetency of a party to that
contract. Thus, I would also reverse the judgment of the trial court
insofar as it remitted the interest that Sumblin is due under the contract.