McCormack v. AmSouth Bank, NA

759 So. 2d 538, 1999 WL 130265
CourtSupreme Court of Alabama
DecidedJuly 2, 1999
Docket1971025
StatusPublished
Cited by12 cases

This text of 759 So. 2d 538 (McCormack v. AmSouth Bank, NA) 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
McCormack v. AmSouth Bank, NA, 759 So. 2d 538, 1999 WL 130265 (Ala. 1999).

Opinion

759 So.2d 538 (1999)

Carr McCORMACK III
v.
AmSOUTH BANK, N.A.

1971025.

Supreme Court of Alabama.

March 12, 1999.
Rehearing Overruled July 2, 1999.

W. Lewis Garrison, Jr., of Jackson, Garrison & Sumrall, P.C., Birmingham, for appellant.

*539 Larry B. Childs, Julia Boaz-Cooper, and Randall D. Quarles of Walston, Wells, Anderson & Bains, L.L.P., Birmingham, for appellee.

MADDOX, Justice.

This case arises out of a dispute between AmSouth Bank, N.A., and Carr McCormack III; these parties are, respectively, the trustee and the beneficiary of a trust. McCormack sued AmSouth, seeking damages based on several claims relating to AmSouth's alleged mismanagement of trust affairs. The trial court entered a summary judgment for AmSouth. McCormack appealed. For the reasons discussed below, we affirm.

AmSouth Bank was trustee of a trust (the "McCormack Trust"), established by Carr McCormack, Sr., the corpus of which included 4,000 shares of stock in Alabama By-Products Corporation ("ABC"). According to the terms of the trust, Carr McCormack III, the settlor's grandson (the plaintiff in this present action) was to receive the corpus of the McCormack Trust upon his father's death, which occurred on February 14, 1992. It appears undisputed that the trust terminated at that time. Four days later, the plaintiff placed the assets of the terminated trust into a revocable trust (the "Revocable Trust"), which also was to be managed by AmSouth.

The dispute giving rise to this appeal has its roots in the mid-1980s. In January 1985, in response to a tender offer, AmSouth tendered the shares of ABC under its control to Drummond Coal Company, Inc., for $75 per share. During the same period, a class action was filed in Delaware on behalf of all owners of ABC common stock as of December 4, 1984. That action, Hynson v. Drummond Corp., Civ. A. 7904, Del.Ch.1990 (not reported), was settled in early 1990.

In December 1985, yet another action was filed regarding Drummond's tender offer for ABC shares. The plaintiffs in that action sought a determination of the value of the shares at the time of the tender offer. The Delaware court that resolved that case determined that the shares had been worth $180.67 per share. Neal v. Alabama By-Products Corp., [Civ. A. 8282, Aug. 1, 1990] (Del. Ch.1990)(not reported in A.2d), aff'd, 588 A.2d 255 (Del. 1991).

After the Neal decision was released, AmSouth filed an action in Alabama, which this Court considered on appeal in Martin v. Drummond Co., 663 So.2d 937 (Ala. 1995). The Martin trial court entered a summary judgment in favor of Drummond. This Court held, in an opinion released on July 7, 1995, that the same claims had previously been brought in Hynson. AmSouth, as trustee, was a member of the Hynson class,[1] and it did not object to or opt-out of the settlement in that case. 663 So.2d at 940. Thus, this Court held, the Martin plaintiffs, including AmSouth, as trustee of the McCormack Trust, were bound to the Hynson settlement by the doctrine of res judicata. 663 So.2d at 948.

It is undisputed that the transaction whereby AmSouth tendered the ABC stock under its control to Drummond occurred in January 1985. The Delaware Chancery Court conducted a fairness hearing on the proposed settlement in Hynson in February 1990 and approved the settlement. AmSouth subsequently filed its complaint in the Martin action in May 1991. All of those events occurred during the life of the McCormack Trust. Following the termination of the McCormack Trust, AmSouth continued to represent the plaintiff in the Martin litigation, as authorized under the Revocable Trust.

*540 Carr McCormack III filed this present action against AmSouth on July 11, 1995. He alleged several causes of action related to AmSouth's failure to opt-out of the Delaware settlement. McCormack moved for certification of this case as a class action, but the trial court denied it. AmSouth subsequently filed a motion for, summary judgment, which the trial court granted.

I.

McCormack argues that the trial court erred in denying the class certification. AmSouth argues, on the other hand, that any appeal of that question is untimely, because, it argues, the order denying class certification was a "final" order and McCormack did not file a notice of appeal from that order within the 42 days allowed for an appeal from a final judgment. See Rule 4(a)(1), Ala. R.App. P.

In Butler v. Audio/Video Affiliates, Inc., 611 So.2d 330, 331 (Ala.1992), this Court addressed the character of an order denying class certification:

"Although we recognize that [an order denying class certification under Rule 23, Ala. R. Civ. P., is] an interlocutory order and as such does not fit within the formal rules of finality, we note that a denial of class certification effectively terminates the litigation as to all members of the class other than the original plaintiff; this is because it has a `death knell' effect of making further proceedings in the action impractical and because it finally determines a claim of right separate from and collateral to the rights asserted in the cause of action. Therefore, we hold that an order denying class certification is an appealable `final' order."

(Emphasis in original; footnote omitted.)

McCormack argues, in essence, that this Court's holding in Butler is either incorrect or should not be extended to apply in a situation such as is presented here. He argues that a class certification order is, "by [its] nature, not final." (Brief of appellant at 45.) He argues that such an order is "always subject to being reviewed by the trial court." Id. (Emphasis omitted.)

In arguing as he does, McCormack points to this Court's decision in First Alabama Bank of Montgomery, N.A. v. Martin, 381 So.2d 32 (Ala.1980). In First Alabama Bank, this Court was presented with an appeal from an order granting a class certification. On the question whether this Court had jurisdiction to hear an appeal from that order, this Court held that it did not, because, it held, such an order was not a "final" order. That is, it did not "put[] an end to all matters litigated or which ought to have been litigated with respect to a particular controversy." 381 So.2d at 33. As part of the rationale expressed by the Court in reaching that determination, the Court noted that the order certifying the class was not "final" because it was subject to modification. 381 So.2d at 33-34. McCormack argues that the same reasoning should apply with regard to orders denying certification of a class.

McCormack's theory that orders denying class certification should not be treated as "final" orders, because they are subject to modification, finds support in Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978). In that case, the United States Supreme Court held that, under the Federal counterpart to our Rule 23, Ala. R. Civ. P., an order denying class certification in a federal court did not give rise to a right to appeal. This Court is aware of the rule adopted by the United States Supreme Court; nevertheless, in Butler, this Court expressly rejected the rationale and rule applied in the federal courts. Butler, 611 So.2d at 331, n. 1.

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Bluebook (online)
759 So. 2d 538, 1999 WL 130265, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormack-v-amsouth-bank-na-ala-1999.