Ex parte WMS, LLC

170 So. 3d 645, 2014 WL 7008613
CourtSupreme Court of Alabama
DecidedDecember 12, 2014
Docket1131216
StatusPublished
Cited by4 cases

This text of 170 So. 3d 645 (Ex parte WMS, LLC) 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
Ex parte WMS, LLC, 170 So. 3d 645, 2014 WL 7008613 (Ala. 2014).

Opinion

MOORE, Chief Justice.

William Mudd, John Whitaker, Phillip Luke, and David Wells, and the law firm in which they were members, Whitaker, Mudd, Simms, Luke, & Wells, LLC (“WMSLW”) (hereinafter referred to collectively as “the defendants”), 1 petition this Court for a writ of mandamus directing the Chambers Circuit Court either to dismiss this case for lack of subject-matter jurisdiction and improper venue or to transfer the case from Chambers County to Jefferson County based on venue being *647 improper in Chambers County or on the doctrine of forum non conveniens. We grant the petition and direct the Chambers Circuit Court to transfer the case to the Jefferson Circuit Court because, for the reasons discussed below, venue is not proper in Chambers County. Because of our disposition of this petition, we preter-mit a discussion of the subject-matter-jurisdiction argument and the' forum non conveniens argument.

Facts and Procedural History

Keri Donald Simms is a resident of Jefferson County and a practicing attorney in Birmingham, where all the law firms named as petitioners either have been located or were created. Effective. May 10, 2012, Simms either resigned from WMSLW or his membership in the limited-liability company was terminated by the other members of WMSLW. 2 Before Simms’s departure, WMSLW had been suffering financial troubles. Some of the members of WMSLW had been arguing over their respective capital accounts and discussing a possible merger with another law firm. Simms alleges that, at unspecified times before his departure, the individual defendants had been making secret payments to themselves, above the amounts they were due under their membership arrangement. He alleges that the defendants prepared faulty income statements, concealed from him the true liabilities and debts of WMSLW, concealed from him the details of the proposed merger, 3 and refused to provide him with copies of WMSLW’s state and federal tax returns.

After Simms’s departure from the firm, in letters dated May 10, 2012, WMSLW offered Simms’s clients the option to remain with WMSLW or to continue with Simms as their attorney at his new place of employment, Webster, Henry, Lyons, White, Bradwell & Black, P.C. (“WHLWBB”), another Alabama law firm. Simms alleges that his relationship with the defendants began to deteriorate when an unspecified number of his clients informed WMSLW of their intent to remain clients of Simms and not of WMSLW. He says that he enlisted the services of the Alabama State Bar to force the defendants to release his clients’ case files to him. According to Simms, between May 14, 2012, and May 17, 2012, WMSLW 4 mailed to him the fiies of his clients who opted to stay with him.

One of Simms’s clients is his cousin, Angie Smith of Georgia, who had suffered . burn injuries in an accident in Georgia on July 23, 2011; Smith’s injuries were the subject of litigation in Georgia pending at the time of Simms’s departure from WMSLW. Smith had been consulting with Simms since her accident and became a client of WMSLW, by contract, on- September 7, 2011. Simms was her attorney at WMSLW. In July 2011, Simms discussed Smith’s case with his friend Claud E. “Skip” McCoy, Jr., while the two men were at a wedding in Chambers County, Alabama. McCoy, a resident of Chambers County who is licensed to practice law in both Georgia and Alabama, agreed to assist Simms with the case as cocounsel. McCoy helped Simms retain the Georgia *648 law firm of Pope, McGlamry, Kilpatrick, Morrison & Norwood, P.C. (“PMKMN”), with which McCoy and Simms (on behalf of WMSLW) entered into a fee-sharing agreement.

Simms was working with McCoy and PMKMN on Smith’s litigation at the time of his departure from WMSLW. He alleges that WMSLW never mailed Smith the May 10, 2012, letter informing her of her option to remain with WMSLW or to continue with Simms at WHLWBB. Smith and her husband Charles Smith claim in an affidavit that, “[h]ad we been provided an ethical client notification letter or communication from anyone associated with [WMSLW], including Defendant Wells, we would have immediately terminated that entity” as Smith’s legal counsel. Smith’s file was one of those turned over to Simms between May 14, 2012, and May 17, 2012.

WMSLW operated as a limited-liability company in which each member contributed income based on the operating agreement of WMSLW. Each member of WMSLW not only received draws, which were based on the revenue he or she generated for WMSLW, but also served as a guarantor on a line of credit financed by ServisFirst Bank and available to WMSLW. Simms’s departure involved a dispute over $146,834, a figure representing the negative balance in Simms’s capital account with WMSLW. 5 On May 11, 2012, Wells e-mailed Simms to say that “we [the individual defendants] have no objection to your guarantee being released and we will work with the bank on this.” By May 25, 2012, however, Wells had reversed course, stating that WMSLW was not willing to release Simms from his guarantee on the line of credit with ServisFirst Bank until he made a financial contribution toward the line of credit in an amount roughly equal to $146,834, the negative balance of his capital account. The defendants allegedly informed Simms that, in exchange for this contribution, they would release him as a guarantor on the line of credit with ServisFirst Bank. In an e-mail dated July 27, 2012, Wells averred that the defendants had initially been amenable to releasing Simms as a guarantor until they discovered some unspecified deception on Simms’s part regarding fees owed to WMSLW.

The individual defendants and Simms discussed a variety of payment-plan options for Simms, who, according to the defendants, agreed that he and WHLWBB would transfer to WMSLW a percentage of the contingency fee Simms earned from the litigation involving Smith. 6 The defendants allege that, despite entering into this agreement with them, Simms instructed PMKMN to pay the contingency fee from the Smith litigation directly to Simms rather than to WMSLW and that Simms, once he received the Smith contingency fee, refused to transfer that fee to WMSLW. Simms alleges that, in fact, WMSLW was not entitled to any of the Smith contingency fee because, he argues, WMSLW had, by contract, discharged the Smith case to Simms or, alternatively, WMSLW had abandoned the file when it turned it over to Simms between May 14, 2012, and May 17, 2012. It is undisputed that the amount of the Smith contingency *649 fee is $54,000, the result of a $600,000 settlement of a portion of Smith’s litigation in Georgia. The defendants became aware of the Smith contingency fee when McCoy and attorneys at PMKMN inadvertently emailed Simms at his former WMSLW email address regarding the $600,000 settlement.

After receiving this inadvertent e-mail from McCoy and attorneys at PMKMN, the defendants contacted PMKMN by telephone in June 2012 regarding the Smith contingency fee.

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170 So. 3d 645, 2014 WL 7008613, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ex-parte-wms-llc-ala-2014.