Packaging Acquisition Corp. v. Hicks

893 So. 2d 299, 2004 Ala. LEXIS 116, 2004 WL 1009621
CourtSupreme Court of Alabama
DecidedMay 7, 2004
Docket1030148
StatusPublished
Cited by2 cases

This text of 893 So. 2d 299 (Packaging Acquisition Corp. v. Hicks) 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
Packaging Acquisition Corp. v. Hicks, 893 So. 2d 299, 2004 Ala. LEXIS 116, 2004 WL 1009621 (Ala. 2004).

Opinion

LYONS, Justice.

Packaging Acquisition Corporation (“PAC”) appeals from the trial court’s dismissal of its counterclaim against Dennis Hicks, Gus King, Roy Burchel, PacMas-ters, Inc., AMCOPAC, Inc., and Colormas-ters LLC (“the sellers”). We reverse and remand.

In May 2000, PAC, a Georgia corporation engaged in the business of flexible packaging, purchased the sellers’ business, AMPAC, Inc., also engaged in flexible packaging, and the assets of the business. The sellers and two acquisition companies, Printmasters Acquisition Corporation and AMPAC Acquisition Corporation, executed the purchase agreement. PAC was the sole shareholder in both acquisition companies. PAC was not a signatory to the purchase agreement; however, the indemnity clause in Article 14 of the agreement provided that the sellers would hold harmless the purchasers and its officers, directors, shareholders, employees, and agents from all losses. After the purchase was completed, PAC combined some of the assets of the sellers’ business with its own to form another business, PacOne, Inc. The acquisition companies eventually defaulted on their obligations to the sellers, and shortly after the default, the acquisition companies and PacOne filed a petition in bankruptcy.

The sellers sued PAC, alleging that PAC had committed several torts, including misrepresentation of material facts; interference with an existing business; breach of contract; and breach of fiduciary duties. PAC filed a counterclaim against the sellers alleging breach of a warranty as to the purchase agreement and a misrepresentation of material facts by the sellers to the acquisition companies. The sellers filed a motion to dismiss PAC’s counterclaim in which they argued that PAC did not have standing to assert the, -counterclaim because PAC no longer held shareholder status of the acquisition companies, which were bankrupt. PAC argued that it was not asserting its counterclaim by virtue of its status as a shareholder, but for its own personal losses as a third-party beneficiary under the purchase agreement between the sellers and the acquisition companies. The trial court dismissed PAC’s counterclaim, with prejudice, on the basis that PAC lacked standing to assert' it. The trial court reasoned that PAC’s status as a shareholder in the acquisition companies was extinguished through the bankruptcy proceedings.

I. Issues Before This Court

The trial court entered an order pursuant to Rule 54(b), Ala.R.Civ.P., certifying as final its order dismissing PAC’s counterclaim for lack of standing. PAC appeals. In addition to the issue of the propriety of the dismissal of the counterclaim, PAC also challenges the trial court’s ruling on the issue of the enforceability of the forum-selection clause contained in the purchase agreement. The - complaint as initially filed by the sellers remains pending in the trial court. In the trial court, PAC contended that the sellers’ complaint should have been filed in the United States District Court for the Northern District of Alabama because a forum-selection clause in the purchase agreement stated that all claims arising out of that agreement must be brought in that court. The sellers argued that they had to bring the case in state court because there was not complete diversity so as to satisfy federal jurisdictional requirements. .PAC argued that the sellers were using “artful pleading” to destroy diversity. PAC then argued that although it was not a signatory to the purchase agreement, it had a right to en[301]*301force the forum-selection clause against the sellers.

The trial court held that a forum-selection clause, like an arbitration clause, can be enforced by a nonparty if the nonparty played an integral part in the transaction evidenced by the contract containing the forum-selection clause. The court stated that PAC’s affidavits to the court did not indicate that it had played an integral role in the sale of the sellers’ business to the acquisition companies. Therefore, the trial court held that PAC could not enforce the forum-selection clause; it noted, however, that discovery may later reveal that a dismissal, a summary judgment, or severance, if necessary, for want of jurisdiction is proper. The trial court did not certify its ruling on the forum-selection-clause issue as final pursuant to Rule 54(b).

PAC relies upon the last sentence of Rule 4(a)(1), Ala.R.App.P., to argue that this Court should consider the trial court’s ruling on the forum-selection clause. That sentence reads: “On an appeal from a judgment or order a party shall be entitled to a review of any judgment, order, .or ruling of the trial court.” However, the trial court’s order certifying its judgment of dismissal of the counterclaim as final pursuant to Rule, 54(b) limits the issue before this Court to the dismissal of the counterclaim and any other order or ruling germane to that dismissal. Review of other interlocutory orders must await final judgment.

II. Standard of Review

In Smith v. National Security Insurance Co., 860 So.2d 343, 345 (Ala.2003), this Court restated the well-settled standard of review of an order of dismissal of a complaint:

“In Nance v. Matthews, 622 So.2d 297 (Ala.1993), this Court stated the standard of review applicable to a motion to dismiss:
“ ‘On appeal, a dismissal is not enti-tied to a presumption of correctness. The appropriate standard of review under Rule 12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of the complaint are viewed most strongly in the pleader’s favor, it appears that the pleader could prove any set of circumstances that would entitle [it] to relief. In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [it] may possibly prevail. We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.’

“Nance, 622 So.2d at 299 (citations omitted).”

Dealing specifically with the standard of review of a dismissal of a complaint for lack of standing, the Court of Civil Appeals in Medical Association of Alabama v. Shoemake, 656 So.2d 863, 865 (Ala.Civ. App.1995), held:

“On1 an appeal from a dismissal based on a lack of standing ..., we must view the allegations of the complaint in the light' most favorable to the plaintiff, resolve all doubts in the plaintiffs favor, and uphold the ruling of the trial court only if we determine that the plaintiff cannot establish a right to judicial review under any set of facts provable under, the allegations of the complaint. ■ Richards v. Department of Revenue & Finance, 454 N.W.2d 573, 574 (Iowa 1990). No presumption of correctness exists as to the trial court’s application of the law to the facts. Jayroe■ v. Hall, 624 So.2d 522 (Ala.1993). The issue of standing presents a pure question of law, and the trial court’s ruling on that issue is entitled to no deference on ap[302]*302peal. Richards v. Cullen, 152 Wis.2d 710, 712, 449 N.W.2d 318, 319 (Wis.App. 1989).”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
893 So. 2d 299, 2004 Ala. LEXIS 116, 2004 WL 1009621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/packaging-acquisition-corp-v-hicks-ala-2004.