Rel: January 12, 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 printed in Southern Reporter.
SUPREME COURT OF ALABAMA OCTOBER TERM, 2023-2024
_________________________
SC-2023-0397 _________________________
Construction Services, LLC, d/b/a MCA Construction, Inc.
v.
RAM-Robertsdale Subdivision Partners, LLC, Retail Specialists, LLC, and Rodney Barstein
Appeal from Baldwin Circuit Court (CV-22-900285)
MITCHELL, Justice.
RAM-Robertsdale Subdivision Partners, LLC, hired Construction
Services LLC, d/b/a MCA Construction, Inc. ("MCA"), to build the SC-2023-0397
infrastructure for a proposed housing subdivision in Robertsdale. After
the relationship between the two soured, RAM-Robertsdale sued MCA in
the Baldwin Circuit Court. MCA countersued and also asserted third-
party claims against one of RAM-Robertsdale's members, Retail
Specialists, LLC, and Rodney Barstein, a corporate officer for Retail
Specialists and RAM-Robertsdale. 1 RAM-Robertsdale, Retail Specialists,
and Barstein ("the RAM defendants") filed a motion for summary
judgment on MCA's counterclaims and third-party claims, and the circuit
court granted that motion and later certified its summary judgment as
final under Rule 54(b), Ala. R. Civ. P. Because the circuit court exceeded
its discretion in certifying its judgment as final, we set aside the Rule
54(b) certification and dismiss the appeal.
Facts and Procedural History
In February 2021, MCA entered into an approximately $1 million
contract with RAM-Robertsdale to work on, among other things, grading,
1MCA styled all of its claims as "counterclaims" and referred to those parties it brought claims against as "counterclaim defendants." The circuit court and the other parties followed this nomenclature, even though Retail Specialists and Barstein were "not [parties] to the action" before MCA filed its answer and counterclaim. Retail Specialists and Barstein are therefore properly viewed as third-party defendants. See Rule 14, Ala. R. Civ. P. 2 SC-2023-0397
roads, and utilities for a new housing subdivision in Robertsdale. Over
the next several months, the parties' relationship broke down and MCA
eventually ceased work on the project.
RAM-Robertsdale sued MCA for breach of statutory duty, breach of
contract, indemnity, negligence, and negligent misrepresentation, and to
quiet title, alleging that MCA had done subpar work and had not paid its
subcontractors or suppliers. MCA answered and asserted counterclaims
against RAM-Robertsdale. MCA also brought third-party claims against
Retail Specialists and Barstein for breach of contract, fraud, unjust
enrichment, and the enforcement of MCA's lien on the subdivision
property and a third-party defamation claim against Barstein alone.
MCA alleged that RAM-Robertsdale had failed to pay for MCA's work
and that Retail Specialists should be liable as well because it allegedly
dominated and controlled RAM-Robertsdale. MCA further alleged that
Barstein controlled RAM-Robertsdale's conduct at the time and should
be held responsible for its failure to pay.
The RAM defendants moved for summary judgment on all of MCA's
claims, arguing that the contract between RAM-Robertsdale and MCA
was void for public policy because, the RAM defendants said, MCA was
3 SC-2023-0397
not properly licensed when it signed the contract. See, e.g., Hawkins v.
League, 398 So. 2d 232, 235 (Ala. 1981) (noting that "express or implied
contracts" with improperly licensed contractors are void for public policy).
The RAM defendants acknowledged that MCA had a valid general
contractor's license under § 34-8-1 et seq., Ala. Code 1975, but they said
that the license contained the incorrect classification. In particular, MCA
had only a "building construction" classification on its license even
though it needed a "municipal and utility" classification to do the
contracted-for work. See r. 230-X-1-.27(2), (5), Ala. Admin. Code (State
Licensing Bd. for Gen. Contractors). MCA opposed the RAM defendants'
motion, arguing that it held the proper license at the time the contract
was formed and that, if it did not, it corrected any licensure problems
before they became relevant. MCA also argued that RAM-Robertsdale
knew of any defects in MCA's licensure at the time the contract was
formed.
The circuit court granted the RAM defendants' motion and entered
summary judgment in their favor on all of MCA's claims.2 As a result,
2While the summary-judgment order did not detail the circuit court's reasoning, the circuit court's Rule 54(b) certification stated that the summary judgment disposed of all of MCA's counterclaims based 4 SC-2023-0397
only RAM-Robertsdale's claims remained pending in the circuit court.
With the consent of the parties, the circuit court then certified its
summary judgment as final under Rule 54(b). MCA appealed.
Standard of Review
When reviewing a Rule 54(b) certification, we must determine if the
circuit court exceeded its discretion. See Alabama Ins. Underwriting
Ass'n v. Skinner, 352 So. 3d 688, 690 (Ala. 2021).
Analysis
Before we can address the merits of this appeal, we must establish
that we have jurisdiction to do so. Because "[a] nonfinal judgment will
not support an appeal," we must decide whether the circuit court's Rule
54(b) order certifying as final its summary judgment on MCA's claims
was proper. Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363
(Ala. 2004). This Court will "scrutinize the propriety of Rule 54(b)
certifications" even though neither party has raised that issue on appeal,
solely on a legal determination that MCA could not bring counterclaims against the RAM defendants. That certification also stated that "MCA is not entitled to recover on any of the asserted claims." As noted in footnote 1, the circuit court referred to MCA's third-party claims as counterclaims, so the summary judgment disposed of all of MCA's claims, including those against Retail Specialists and Barstein. 5 SC-2023-0397
because it is a " 'fundamental issue.' " Alabama Ins. Underwriting Ass'n,
352 So. 3d at 690 (quoting Summerlin v. Summerlin, 962 So. 2d 170, 172
(Ala. 2007)). In short, we have a duty to guard the jurisdiction of this
Court no matter what the parties may think.
Rule 54(b) states that, when there are multiple claims in a suit, "the
court may direct the entry of a final judgment as to one or more but fewer
than all of the claims or parties only upon an express determination that
there is no just reason for delay and upon an express direction for the
entry of judgment." Rule 54(b) certifications should be cabined to
exceptional cases because of "this Court's stated policy disfavoring
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Rel: January 12, 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 printed in Southern Reporter.
SUPREME COURT OF ALABAMA OCTOBER TERM, 2023-2024
_________________________
SC-2023-0397 _________________________
Construction Services, LLC, d/b/a MCA Construction, Inc.
v.
RAM-Robertsdale Subdivision Partners, LLC, Retail Specialists, LLC, and Rodney Barstein
Appeal from Baldwin Circuit Court (CV-22-900285)
MITCHELL, Justice.
RAM-Robertsdale Subdivision Partners, LLC, hired Construction
Services LLC, d/b/a MCA Construction, Inc. ("MCA"), to build the SC-2023-0397
infrastructure for a proposed housing subdivision in Robertsdale. After
the relationship between the two soured, RAM-Robertsdale sued MCA in
the Baldwin Circuit Court. MCA countersued and also asserted third-
party claims against one of RAM-Robertsdale's members, Retail
Specialists, LLC, and Rodney Barstein, a corporate officer for Retail
Specialists and RAM-Robertsdale. 1 RAM-Robertsdale, Retail Specialists,
and Barstein ("the RAM defendants") filed a motion for summary
judgment on MCA's counterclaims and third-party claims, and the circuit
court granted that motion and later certified its summary judgment as
final under Rule 54(b), Ala. R. Civ. P. Because the circuit court exceeded
its discretion in certifying its judgment as final, we set aside the Rule
54(b) certification and dismiss the appeal.
Facts and Procedural History
In February 2021, MCA entered into an approximately $1 million
contract with RAM-Robertsdale to work on, among other things, grading,
1MCA styled all of its claims as "counterclaims" and referred to those parties it brought claims against as "counterclaim defendants." The circuit court and the other parties followed this nomenclature, even though Retail Specialists and Barstein were "not [parties] to the action" before MCA filed its answer and counterclaim. Retail Specialists and Barstein are therefore properly viewed as third-party defendants. See Rule 14, Ala. R. Civ. P. 2 SC-2023-0397
roads, and utilities for a new housing subdivision in Robertsdale. Over
the next several months, the parties' relationship broke down and MCA
eventually ceased work on the project.
RAM-Robertsdale sued MCA for breach of statutory duty, breach of
contract, indemnity, negligence, and negligent misrepresentation, and to
quiet title, alleging that MCA had done subpar work and had not paid its
subcontractors or suppliers. MCA answered and asserted counterclaims
against RAM-Robertsdale. MCA also brought third-party claims against
Retail Specialists and Barstein for breach of contract, fraud, unjust
enrichment, and the enforcement of MCA's lien on the subdivision
property and a third-party defamation claim against Barstein alone.
MCA alleged that RAM-Robertsdale had failed to pay for MCA's work
and that Retail Specialists should be liable as well because it allegedly
dominated and controlled RAM-Robertsdale. MCA further alleged that
Barstein controlled RAM-Robertsdale's conduct at the time and should
be held responsible for its failure to pay.
The RAM defendants moved for summary judgment on all of MCA's
claims, arguing that the contract between RAM-Robertsdale and MCA
was void for public policy because, the RAM defendants said, MCA was
3 SC-2023-0397
not properly licensed when it signed the contract. See, e.g., Hawkins v.
League, 398 So. 2d 232, 235 (Ala. 1981) (noting that "express or implied
contracts" with improperly licensed contractors are void for public policy).
The RAM defendants acknowledged that MCA had a valid general
contractor's license under § 34-8-1 et seq., Ala. Code 1975, but they said
that the license contained the incorrect classification. In particular, MCA
had only a "building construction" classification on its license even
though it needed a "municipal and utility" classification to do the
contracted-for work. See r. 230-X-1-.27(2), (5), Ala. Admin. Code (State
Licensing Bd. for Gen. Contractors). MCA opposed the RAM defendants'
motion, arguing that it held the proper license at the time the contract
was formed and that, if it did not, it corrected any licensure problems
before they became relevant. MCA also argued that RAM-Robertsdale
knew of any defects in MCA's licensure at the time the contract was
formed.
The circuit court granted the RAM defendants' motion and entered
summary judgment in their favor on all of MCA's claims.2 As a result,
2While the summary-judgment order did not detail the circuit court's reasoning, the circuit court's Rule 54(b) certification stated that the summary judgment disposed of all of MCA's counterclaims based 4 SC-2023-0397
only RAM-Robertsdale's claims remained pending in the circuit court.
With the consent of the parties, the circuit court then certified its
summary judgment as final under Rule 54(b). MCA appealed.
Standard of Review
When reviewing a Rule 54(b) certification, we must determine if the
circuit court exceeded its discretion. See Alabama Ins. Underwriting
Ass'n v. Skinner, 352 So. 3d 688, 690 (Ala. 2021).
Analysis
Before we can address the merits of this appeal, we must establish
that we have jurisdiction to do so. Because "[a] nonfinal judgment will
not support an appeal," we must decide whether the circuit court's Rule
54(b) order certifying as final its summary judgment on MCA's claims
was proper. Dzwonkowski v. Sonitrol of Mobile, Inc., 892 So. 2d 354, 363
(Ala. 2004). This Court will "scrutinize the propriety of Rule 54(b)
certifications" even though neither party has raised that issue on appeal,
solely on a legal determination that MCA could not bring counterclaims against the RAM defendants. That certification also stated that "MCA is not entitled to recover on any of the asserted claims." As noted in footnote 1, the circuit court referred to MCA's third-party claims as counterclaims, so the summary judgment disposed of all of MCA's claims, including those against Retail Specialists and Barstein. 5 SC-2023-0397
because it is a " 'fundamental issue.' " Alabama Ins. Underwriting Ass'n,
352 So. 3d at 690 (quoting Summerlin v. Summerlin, 962 So. 2d 170, 172
(Ala. 2007)). In short, we have a duty to guard the jurisdiction of this
Court no matter what the parties may think.
Rule 54(b) states that, when there are multiple claims in a suit, "the
court may direct the entry of a final judgment as to one or more but fewer
than all of the claims or parties only upon an express determination that
there is no just reason for delay and upon an express direction for the
entry of judgment." Rule 54(b) certifications should be cabined to
exceptional cases because of "this Court's stated policy disfavoring
appellate review in a piecemeal fashion." Smith v. Slack Alost Dev.
Servs. of Alabama, LLC, 32 So. 3d 556, 562-63 (Ala. 2009).
Rule 54(b) certification is improper when the claims pending below
and those on appeal "are so closely intertwined that separate
adjudication would pose an unreasonable risk of inconsistent results."
Branch v. SouthTrust Bank of Dothan, N.A., 514 So. 2d 1373, 1374 (Ala.
1987). We have explained that claims are "intertwined" when "[t]he
factual underpinnings of the adjudicated claims are the same as those of
6 SC-2023-0397
the unadjudicated [claims] of [the other party]." Fuller v. Birmingham-
Jefferson Cnty. Transit Auth., 147 So. 3d 907, 913 (Ala. 2013).
Here, all the claims arise from the same transaction -- the contract
between RAM-Robertsdale and MCA to build subdivision infrastructure
and the parties' performance under that contract. The RAM defendants
argued in their summary-judgment motion that MCA was not properly
licensed and could not recover on the contract because, they said, that
contract violated public policy. The circuit court agreed. But if the
contract is void for public policy, then neither party would be able to
enforce it -- void means void for all parties involved. See White-Spunner
Constr., Inc. v. Construction Completion Co., LLC, 103 So. 3d 781, 787
(Ala. 2012) (noting that it is a "well settled principle of law that ' "a party
to an illegal contract cannot come into a court of law and ask to have his
illegal objects carried out ...." ' " (citations omitted)); Dream, Inc. v.
Samuels, [Ms. SC-2022-0808, June 23, 2023] ___ So. 3d ___, ___ (Ala.
2023) ("Alabama courts … will not enforce a void or illegal contract.").
And while this Court has held that an exception to the void-for-public-
policy rule may exist if one of the parties was induced by fraud to execute
a contract, see Youngblood v. Bailey, 459 So. 2d 855, 860 (Ala. 1984),
7 SC-2023-0397
MCA has argued that RAM-Robertsdale knew that MCA did not have a
"municipal and utility" classification at the time the contract was formed.
If that is true, RAM-Robertsdale could have unclean hands in the
transaction, which may limit RAM-Robertsdale's recovery on the claims
still pending below. See § 34-8-6(a), Ala. Code 1975 (proscribing both
general contracting without a proper license and considering bids "from
anyone not properly licensed").
The upshot here is that the claims pending below and those on
appeal have significant "factual overlap." Clarke-Mobile Cntys. Gas Dist.
v. Prior Energy Corp., 834 So. 2d 88, 95 (Ala. 2002). The questions before
us -- whether MCA was properly licensed and whether it can enforce the
contract -- bear on RAM-Robertsdale's claims pending below. And
deciding those issues now would create an intolerable risk of inconsistent
results. For that reason, the circuit court exceeded its discretion by
certifying its summary judgment on MCA's claims against the RAM
defendants as final. Accordingly, we do not have jurisdiction to resolve
the merits of this appeal.
8 SC-2023-0397
Conclusion
Because the circuit court's summary judgment was improperly
certified as final, we dismiss this appeal for lack of jurisdiction.
APPEAL DISMISSED.
Parker, C.J., and Shaw, Wise, Bryan, Stewart, and Cook, JJ.,
concur.
Sellers and Mendheim, JJ., concur in the result.