Phillips v. Randolph

828 So. 2d 269, 2002 WL 364652
CourtSupreme Court of Alabama
DecidedMarch 8, 2002
Docket1001992
StatusPublished
Cited by28 cases

This text of 828 So. 2d 269 (Phillips v. Randolph) 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
Phillips v. Randolph, 828 So. 2d 269, 2002 WL 364652 (Ala. 2002).

Opinion

This case presents the issue whether the trial court abused its discretion when it denied Walter Phillips's motion to set aside the default judgment entered in this case, which involved claims that Phillips had breached a fiduciary duty, had converted money belonging to Ophelia Randolph and had defrauded Randolph, and a claim alleging the tort of outrage. Because we conclude that the trial court did not abuse its discretion, we affirm.

Facts
At the time the trial court held a hearing in this case on March 5, 2001, Ophelia Randolph was a 73-year-old widow. Randolph's daughter, Aldean Austin, unexpectedly died on October 30, 1997, at the age of 26. At the time of Austin's death she was unmarried and had no children. Before her death, Austin had purchased various life insurance policies naming her mother as the beneficiary. She left her mother, including the life-insurance proceeds and other property, over $322,000.

Randolph testified at the hearing to determine damages after the default judgment had been entered, that her sister and her brother had asked Reverend Walter Phillips, Randolph's pastor, "to check on me and help me out," because they "knew I was upset and everything." She testified that Phillips "was supposed to help [her] see after [her daughter's] business, and if [she] had bills, to pay [her] bills," although *Page 271 she stated that she did not "have any bills." She further testified that Phillips agreed to help her and that she agreed to pay him for his services, although the amount of the actual compensation was never discussed. She also executed a general power of attorney in his favor, dated December 11, 1997.

The proceeds from the various life insurance policies and other assets were deposited into checking and savings accounts in the CBT Bank of Russell County. Those accounts bore the names of both Phillips and Randolph.

Randolph testified that she received no money from the proceeds in those accounts while Phillips was helping her; instead, she continued to live off her Social Security check. In June 1999, Randolph asked Phillips for money to buy a riding lawn mower. Phillips refused to buy the mower for Randolph, telling her that the size of her yard did not justify her purchasing a riding lawn mower. Randolph then bought a push mower, using money she received from Social Security. This incident aroused her curiosity, as well as the curiosity of her nephew, Jimmy Rowell, who had asked Phillips to allow Rowell's name to be placed on Randolph's bank accounts. According to Rowell, Phillips told him at that time that he had had Randolph declared incompetent. Randolph then executed a power of attorney in favor of Rowell and her niece, who promptly closed the accounts Randolph held jointly with Phillips and withdrew the remaining $75,857 from those accounts. Evidence admitted without objection at the damages hearing on the default judgment indicated that Phillips had used Randolph's money to obtain thousands of dollars worth of goods and services for himself.

On October 12, 2000, Randolph sued Phillips, alleging breach of fiduciary duty, fraud, conversion, conspiracy, and the tort of outrage. Phillips was served with the complaint by certified mail on October 23, 2000. Phillips did not file an answer and on December 21, 2000, Randolph moved for a default judgment. With her motion, she filed a supporting affidavit. The trial court entered a default judgment on January 5, 2001, and set a hearing for March 5, 2001, to determine damages.

At the hearing on March 5, 2001, Phillips appeared pro se. The trial court advised him that the purpose of the hearing was to determine damages, because a judgment had already been entered against him. Randolph testified as to the money she had received as a result of her daughter's death, the circumstances leading to Phillips's agreeing to help her, and her discovery that, although she had spent none of the proceeds she received as a result of her daughter's death, only $75,857 remained in the accounts she had held jointly with Phillips.

Randolph also testified as to various bank statements that were admitted into evidence and that showed, over a period of one and one-half years, various withdrawals totaling $205,266. Additionally, Randolph detailed and introduced documentary evidence showing payments made from the joint accounts by check and by debit card to a Sears Roebuck department store, a Red Lobster restaurant, Daniel Appliance Company, Suit Warehouse men's clothing store, and a hotel in Nashville, Tennessee. She also detailed a $17,000 loan she agreed to make to Phillips, which, she says, he had never repaid.

At the conclusion of the presentation of Randolph's evidence, the following discussion occurred:

"THE COURT: . . . The plaintiff has rested concerning evidence of damages. You have a right, Reverend Phillips, to offer any evidence you wish to offer in this hearing; however, I think it's *Page 272 incumbent upon me to inform you that what I have heard here, under the statutes of Alabama, would constitute a theft, and that anything you say, if you take the stand, it could be used against you.

"And if you take the stand and the attorney for the plaintiff, Mr. Cary, asks you questions, then as a matter of law, you must answer those questions if you take the stand and testify. I want you to understand that. And like I said what you say and what he asks, possibly, could be used in a criminal prosecution, those answers to his questions and your testimony. Like I said, you have the right to remain silent, and anything you say could be used against you if, indeed, the district attorney determines that a criminal prosecution should be made here.

"Like I said, I felt that it's only fair for me to inform you of that, but you do have the right to offer any evidence you wish to offer. I want you to understand that as well.

"Is there any evidence you wish to offer at this time?

"MR. PHILLIPS: Not without a lawyer."

Later, Phillips told the court that he had, "a power of attorney that was given unto me by Ms. Randolph to handle [her] affairs." The power of attorney was admitted into evidence as Defendant's Exhibit 1.

The trial court then awarded Randolph $244,000 in compensatory damages and $250,000 in punitive damages. Phillips then stated, "I do have cancelled checks [for] some of that money spent on Ms. Ophelia Randolph." Phillips was reminded that he had decided not to testify, but he was allowed to show the checks to Randolph's attorney.

The court filed the default judgment with the clerk's office on March 5, 2001. On April 4, 2001, Phillips, now represented by counsel, filed a motion to set aside the default judgment, or in the alternative, for a new trial. In his motion, Phillips alleged that he had a meritorious defense, which consisted in its entirety of the following:

"The Defendant avers that there exists a meritorious defense in that the Plaintiff testified, under oath, that she was not aware that the Defendant had expended monies on her behalf. Additionally, the Defendant avers that he did not present evidence regarding the money expended upon Plaintiff's behalf, under a valid power of attorney, due to the Court's warning regarding the possibility of criminal charges."

Phillips also alleged in his motion that Randolph would not be prejudiced if his motion was granted. This motion was not verified by Phillips, nor was there any accompanying affidavits or proof submitted to rebut the evidence offered and admitted by the court at the hearing on damages. The trial court denied the motion on April 24, 2001.1 On June 5, 2001, Phillips filed a notice of appeal.

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Cite This Page — Counsel Stack

Bluebook (online)
828 So. 2d 269, 2002 WL 364652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-v-randolph-ala-2002.