Cadence Bank N.A. v. Goodall-Brown Associates, L.P.

178 So. 3d 814, 2014 WL 4723471
CourtSupreme Court of Alabama
DecidedSeptember 19, 2014
Docket1111422, 1111449, 1111526, 1121455, and 1130054
StatusPublished
Cited by3 cases

This text of 178 So. 3d 814 (Cadence Bank N.A. v. Goodall-Brown Associates, L.P.) 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
Cadence Bank N.A. v. Goodall-Brown Associates, L.P., 178 So. 3d 814, 2014 WL 4723471 (Ala. 2014).

Opinions

SHAW, Justice.

These consolidated appeals and petition for a writ of mandamus arise out of litigation pending in the Jefferson Circuit Court stemming from the alleged breach of a lease agreement, which litigation was originally initiated by Goodall-Brown Associates, L.P. (“Goodall-Brown”), the lessor. Following the entry of an order compelling the- matter to.arbitration, the. defendants below, Sloss Real Estate Group, ■ Inc. (“SREG”), the lessee; Sloss Goodall-Brown, LLC (“Sloss Goodall”), the assign-ee of SREG; Cadence Bank, N.A. (“Cadence”), and Second Avenue Holdings, LLC (“Second Avenue”), the successors in interest to Goodall-Brown’s original mortgage lender; and Leigh Ferguson, Catherine S. Crenshaw, Jack Peterson, A. Page Sloss, Jr., Ronald J. Capello, and Vicki H. Bolton (hereinafter collectively referred to as “the individual defendants”), and Sloss Real Estate Company (“SREC”), the alleged alter ego of the individual defendants in conjunction with SREG and Sloss Goodall (the individual defendants, SREG, SREC, and Sloss Goodall are sometimes hereinafter collectively referred to as “the Sloss defendants”), unsuccessfully sought dismissal of Goodall-Brown’s claims based on the trial court’s alleged lack of subject-matter jurisdiction to order the matter to arbitration because, they argued, Goodall-Brown lacked standing to assert the claims.

In case no. 1111422, Cadence appeals from the .trial court’s order effectively compelling it to arbitration. In case no. 1111449, the Sloss defendants renew their contention that the trial court lacked the requisite subject-matter jurisdiction to compel the parties to arbitration. Alternatively, in case no. 1111526, the Sloss defendants • petition this Court for a writ of mandamus directing the trial court to void its order compelling the matter to arbitration and to dismiss the underlying action based on Goodall-Brown’s alleged lack of standing and that court’s resulting lack of subject-matter jurisdiction. In case no. 1121455 and case no. 1130054, Second Avenue appeals from the trial court’s denial of [817]*817its request to enjoin discovery in the arbitration proceeding ordered by that court as to Second Avenue, pending resolution of the above-captioned appeals and petition. At the request of the parties, we have consolidated these matters for the purpose of writing one opinion,1 For the reasons stated below, in case no. 1111422, we affirm; in case no. 1111526, we deny :the petition; and we dismiss the appeals in cases nos. 1111449, 1121455, and 1130054.

Facts and Procedural History

Goodall-Brown is an Alabama limited partnership; it owns a parcel of real property located in downtown Birmingham, which is commonly referred to as the “Goodall-Brown Building.” In 2001, Goodall-Brown obtained from a lender called “The Bank” a $2,975,000 construction loan, evidenced by a note, to finance planned renovations to the Goodall-Brown Building, In connection with that loan?< Goodall-Brown executed a “Future Advance Mortgage, Assignment of Rents and Leases and Security Agreement” assigning to The Bank as security, among other collateral, the Goodall-Brown Building, all fur ture rents and revenues from the Goodall-Brown Building, and “all leases, subleases, and lease guaranties” relating to the Goodall-Brown Building. The loan documents were executed oh Goodall-Brown’s behalf by Roy Thomas Latimer, Jr., the managing member of Goodall-Brown Management, L.L.C. (“GBM”), an Alabama limited-liability company that was a general partner in Goodall-Brown. Additionally, Latimer personally guaranteed repayment of the note;2

In October 2005, SREG entered into a “Master Léase” agreement (“the lease”) with Goodall-Brown pursuant to which SREG leased from Goodall-Brown space in the Goodall-Brown Building. The leáse specifically provided that future disputes among the parties would be submitted to arbitration.3 As permitted by the terms of the lease, and with Goodall-Brown’s consent, in December 2005, SREG purported to assign its rights under the lease to Sloss Goodall,4 which was wholly owned by SREG.

Thé' Bank’s interest’' in the Goodall-Brown note and mortgage was later assigned by the Federal'Deposit Insurance Corporation (“the FDIC”), as'receiver of [818]*818antilegal successor to The Bank, to Superior Bank (“Superior”). . In 2006, Superior and SREG entered into a “Subordination, Non-Disturbance and Attornment Agreement” (“the attornment agreement”)5 pursuant to which they agreed, among other things, that SREG would not be added as a party to any foreclosure proceedinp that Superior might. initiate against Goodall-Brown; that, in the event Superior should succeed Goodall-Brown as owner of the Goodall-Brown Building, the .lease would remain in effect; and that Superior was entitled to exercise the same remedies,in relation to a breach as were afforded Goodall-Brown under the lease.

The record further reflects that, in July 2010, Goodall-Brown provided notice to Sloss Goodall via certified mail that it was terminating, the lease as a result of the alleged continuing default of Sloss Goodall.6 In August 2010, Superior and Goodall-Brown executed an agreement called the “Eighth Amendment to Loan Documents - And Forbearance Agreement.” This agreement, among other, things, acknowledged that there had been a default under the lease.

In September 2010, Goodall-Brown sued SREG and Sloss Goodall in the trial court asserting various claims and seeking to terminate, the lease and. requesting damages .related to Sloss Goodall’s alleged breach (case no. CV-10-903160). In response, both SREG and Sloss Goodall moved to dismiss casé no. CV-10-903160 or to compel arbitration of the claims asserted therein, pursuant to the lease.

In the interim, Latimer filed for Chapter 11 bankruptcy protection in January 2011; his case was later converted to a proceeding under Chapter 7 of the Bankruptcy Code. According to the pleadings from the bankruptcy court, Latimer was identified in that proceeding as the sole debtor.

In April 2011, the FDIC seized Superior and transferred its assets to a bank of the same name, i.e., Superior Bank, N.A. (“Superior II”). After the addition of other parties and claims in case no. CV-10-903160,7 and upon the agreement of all parties, the trial court, on June 24, 2011, entered an order jointly proposed by the parties staying the action as to certain parties but requiring that the claims between Goodall-Brown and SREG and Sloss Goodall proceed to arbitration, where they remain pending. No party appealed from that order.

In July 2011, Superior II notified Goodall-Brown of Goodall-Brown’s- default on the note secured by the Goodall-Brown Building. Thereafter, as a result of Goodall-Brown’s continued default, Superior II accelerated the indebtedness, undertook efforts to seize rents due from tenants of the Goodall-Brown Building, and initiated foreclosure proceedings on the Goodall-Brown Building. In October 2011, however, before completing the scheduled foreclosure, Superior II sold the note and as[819]*819signed all of its interest therein to Second Avenue.8 In November 2011, Superior II entered receivership, at which time Cadence purchased Superior II from the FDIC, as its receiver. . Superior was thus acquired by and merged with Cadence.

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178 So. 3d 814, 2014 WL 4723471, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cadence-bank-na-v-goodall-brown-associates-lp-ala-2014.