Christopher Klinger v. Sean Ros and Al Ros

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REL: 10/2/09 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter o f Decisions, A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS SPECIAL TERM, 2009 2080285 Christopher Klinger v. Sean Ros and A l Ros Appeal from Baldwin C i r c u i t (CV-07-900003) Court THOMAS, J u d g e . C h r i s t o p h e r K l i n g e r , Sean R o s , a n d A l Ros f o r m e d , a n d a r e the sole shareholders Check Recovery, president, and board I n c . ("ACR"). of directors Sean o f , Automated Ros became a n d he o v e r s a w t h e d a y - t o - d a y o p e r a t i o n s ACR's o f ACR. 2080285 ACR d i d not prove p r o f i t a b l e , i t s main a s s e t and i t s customer t h e Roses list sale On December 1 5 , t h a t K l i n g e r d i d not a t t e n d , of K l i n g e r , however, w i t h t h e s a l e and t h e p r o p o s e d d i s t r i b u t i o n o f t h e proceeds of the s a l e . meeting sell -- and p r o p o s e d a method of d i s b u r s i n g the proceeds from t h a t s a l e . disagreed desired to the customer list to 2006, a t a the Roses another corporate approved company the and the under the d i s t r i b u t i o n of the proceeds from the s a l e . In January Declaratory against the partnership trial court 2007, Klinger filed an action Judgments A c t , A l a . Code 1975, § 6-6-220 e t s e q . , Roses, by seeking a declaration that ACR was i m p l i c a t i o n or, i n the a l t e r n a t i v e , that determine the rights p a r t i e s i n and t o t h e a s s e t s o f ACR; and liabilities i n h i s complaint, seeking damages Accountability Act 12-19-270 e t s e q . pursuant ("ALAA"), to and a l s o f i l e d a the Alabama the of the Klinger a l l e g e d t h a t Sean Ros h a d f a i l e d i n h i s f i d u c i a r y d u t y t o The R o s e s a n s w e r e d t h e c o m p l a i n t a ACR. counterclaim Litigation c o d i f i e d a t A l a . Code 1975, § The R o s e s moved f o r a summary j u d g m e n t on December 12, 2007, and K l i n g e r r e s p o n d e d on J a n u a r y 25, 2008. On J a n u a r y 3 0 , 2008, t h e t r i a l c o u r t e n t e r e d 2 a p a r t i a l summary 2080285 judgment i n f a v o r that the t r i a l After o f t h e Roses o n l y court further declare ACR a discovery, as t o K l i n g e r ' s request partnership. the Roses, on A p r i l 10, 2008, a g a i n moved f o r a summary j u d g m e n t on K l i n g e r ' s s e c o n d claim, which sought a d e c l a r a t i o n o f t h e r i g h t s and l i a b i l i t i e s t h e p a r t i e s t o ACR's a s s e t s and a l l e g e d a b r e a c h o f f i d u c i a r y d u t y b y Sean R o s . trial court K l i n g e r r e s p o n d e d on A p r i l entered the f o l l o w i n g 18, 2008. of The j u d g m e n t on May 27, 2008: "MOTION FOR SUMMARY JUDGMENT PURSUANT TO RULE 5 6 ... i s h e r e b y GRANTED." The for (Capitalization i n original.) f o l l o w i n g d a y , May 28, 2008, t h e R o s e s f i l e d a m o t i o n a hearing postjudgment judgment, not motion because amend, a l t e r , did on t h e i r jurisdiction directed T h a t m o t i o n was n o t a toward i t d i d not request or vacate include ALAA c l a i m . a that May 27, 2008, the t r i a l court i t s summary-judgment o r d e r ; request to consider the that the t r i a l court t h e R o s e s ' ALAA c l a i m . c o u r t g r a n t e d t h e R o s e s ' m o t i o n , and i t s e t a h e a r i n g 29, 2008, on t h e ALAA c l a i m . reserve The trial for July A f t e r an a g r e e d - u p o n c o n t i n u a n c e o f t h e J u l y 29, 2008, h e a r i n g , and i t also the t r i a l court took testimony h e a r d a r g u m e n t s on t h e ALAA c l a i m on S e p t e m b e r 4, 2008. 3 2080285 The t r i a l c o u r t e n t e r e d a j u d g m e n t a g a i n s t K l i n g e r on R o s e s ' ALAA c l a i m on O c t o b e r 10, 2008; h o w e v e r , t h e f a i l e d t o s p e c i f y an amount o f t h e with the ALAA. requesting award that under The 1 the the Roses trial ALAA, court which a postjudgment s p e c i f y the the judgment award or o t h e r w i s e filed trial comply motion, amount court the of the granted; on November 18, 2008, t h e t r i a l c o u r t e n t e r e d a j u d g m e n t a w a r d i n g t h e R o s e s $21,665.18 p u r s u a n t t o t h e ALAA. n o t i c e of appeal Although on December 22, neither court's j u r i s d i c t i o n party been stated, m a g n i t u d e t h a t we e v e n ex mero motu." 1987). Our over t h i s the Nunn v. B a k e r , 518 issue of this first consider a p p e a l b e c a u s e , as matters n o t i c e o f them a t any So. are of t i m e and 2d 711, has such do so 712 (Ala. h e l d t h a t , when a t r i a l supreme c o u r t has e n t e r s an o t h e r w i s e raised "jurisdictional take his 2008. o v e r t h i s a p p e a l , we w i l l w h e t h e r we have j u r i s d i c t i o n often has Klinger filed court f i n a l j u d g m e n t on t h e m e r i t s o f a c a s e but The ALAA r e q u i r e s t h a t an o r d e r a w a r d i n g a t t o r n e y f e e s u n d e r t h e ALAA c o n t a i n s p e c i f i c f i n d i n g s t h a t t h e u n d e r l y i n g a c t i o n was b r o u g h t w i t h o u t s u b s t a n t i a l j u s t i f i c a t i o n , and t h e o r d e r must e n u m e r a t e t h e g r o u n d s and e v i d e n t i a r y s u p p o r t f o r such a f i n d i n g . See P a c i f i c E n t e r s . O i l Co. (USA) v. H o w e l l P e t r o l e u m C o r p . , 614 So. 2d 409, 418 ( A l a . 1 9 9 3 ) . 1 4 2080285 fails to address jurisdiction implicitly LLC a to later denied pending claim or to reserve c o n s i d e r t h a t c l a i m , t h e ALAA c l a i m i s b y t h e j u d g m e n t on t h e m e r i t s . Gonzalez, v . D i V i n c e n t i , 844 So. 2d 1196, 1202 ( A l a . 2 0 0 2 ) . e x p l a i n e d i n Casey v. M c C o n n e l l , Civ. ALAA As we 975 So. 2d 384, 388-89 ( A l a . App. 2 0 0 7 ) : "The ALAA p r o v i d e s t h a t t h e c o u r t must a w a r d a t t o r n e y f e e s a n d c o s t s as a p a r t o f i t s j u d g m e n t on t h e m e r i t s o f t h e c a s e ; i t does n o t c r e a t e a new o r s e p a r a t e c a u s e o f a c t i o n t h a t c a n be b r o u g h t a f t e r a case i s l i t i g a t e d and g i v e n a f i n a l a d j u d i c a t i o n on the merits. A l a . Code 1975, § 12-19-270; G o n z a l e z , LLC v . D i V i n c e n t i , 844 So. 2d 1196, 1201 ( A l a . 2002) . The l a n g u a g e o f t h e ALAA a l l o w s t h e t r i a l c o u r t t o c o n s i d e r t h e outcome o f p r o c e e d i n g s when m a k i n g i t s d e t e r m i n a t i o n as t o w h e t h e r a party's action was without substantial justification. A l a . Code 1975, § 1 2 - 1 9 - 2 7 3 ( 7 ) ; Gonzalez, 844 So. 2d a t 1201; a n d Meek v. D i v e r s i f i e d P r o d s . C o r p . , 575 So. 2d 1100, 1103 (Ala. 1 9 9 1 ) . Thus, t h e t r i a l c o u r t can h o l d a s e p a r a t e h e a r i n g on an ALAA c l a i m a f t e r t h e e n t r y o f a f i n a l j u d g m e n t on t h e m e r i t s p r o v i d e d t h a t t h e t r i a l court s p e c i f i c a l l y reserves j u r i s d i c t i o n to h e a r t h e ALAA c l a i m . G o n z a l e z , 844 So. 2d a t 1201. Otherwise, a judgment that does not reserve j u r i s d i c t i o n t o h e a r t h e ALAA c l a i m a t a l a t e r d a t e p u t s an e n d t o a l l c o n t r o v e r s i e s a t i s s u e , i n c l u d i n g t h e ALAA c l a i m . G o n z a l e z , 844 So. 2d a t 1201-02; s e e a l s o B a k e r v. W i l l i a m s B r o s . , I n c . , 601 So. 2d 110, 112 ( A l a . C i v . App. 1 9 9 2 ) . " To p r e v e n t timely f i l e t h e i m p l i e d d e n i a l o f an ALAA c l a i m , a p a r t y may a p o s t j u d g m e n t m o t i o n d i r e c t e d t o t h e j u d g m e n t on 5 2080285 the m e r i t s seeking t h e r e s e r v a t i o n o f j u r i s d i c t i o n t o hear the ALAA claim; reserves i f that motion i s granted jurisdiction over amended j u d g m e n t , t h e c l a i m t h e ALAA and t h e t r i a l claim survives. pursuant court to the C a s e y , 975 So. 2d a t 389. The t r i a l c o u r t ' s May 27, 2008, summary j u d g m e n t i n f a v o r of t h e R o s e s does n o t s p e c i f i c a l l y rule on t h e R o s e s ' ALAA claim. reserve jurisdiction The R o s e s ' May m o t i o n d i d n o t s e e k an amendment t o , an a l t e r a t i o n vacation 28, to 2008, of, or a o f t h e May 27, 2008, j u d g m e n t ; h o w e v e r , e v e n i f i t c o u l d be i m p l i e d t h a t t h e m o t i o n h a d s o u g h t a r e s e r v a t i o n o f jurisdiction aside o v e r t h e ALAA c l a i m , t h e t r i a l i t s May 27, 2008, j u d g m e n t o r e n t e r reserving jurisdiction the filing of that court d i d not s e t an amended j u d g m e n t o v e r t h e ALAA c l a i m w i t h i n 90 d a y s o f m o t i o n and, t h u s , b e e n deemed d e n i e d b y o p e r a t i o n t h e m o t i o n w o u l d have of law. See R u l e 5 9 . 1 , A l a . R. C i v . P.; L i b e r t y Mut. I n s . Co. v . Greenway E n t e r s . , I n c . , [Ms. 2070393, M a r c h 13, 2009] So. 3d , App. 2009) ( s t a t i n g t h a t "even i f ... a r e q u e s t summary-judgment o r d e r to reserve ALAA implied, claim] could be 6 jurisdiction that request (Ala. Civ. [ t o amend t h e t o a d d r e s s and was denied by 2080285 o p e r a t i o n o f l a w by t h e t r i a l motion within days November court's 90 18, $21, 665.18 parte pursuant Citizens from court's f a i l u r e t o r u l e on t h e i t s filing"). 2008, judgment Thus, the awarding the Roses t o t h e ALAA i s a v o i d j u d g m e n t , Bank, 879 So. 2d 535, trial 540 see (Ala. Ex 2003) ( d e c l a r i n g v o i d a j u d g m e n t a w a r d i n g a t t o r n e y f e e s b a s e d on an ALAA claim when the trial court had entered an earlier j u d g m e n t on t h e m e r i t s w i t h o u t r e s e r v i n g j u r i s d i c t i o n o v e r t h e ALAA c l a i m ) , and a v o i d j u d g m e n t w i l l M a l o n e v. M a l o n e , 854 (dismissing attorney an fees not support So. 2d 109, 113 appeal from pursuant to a appeal. ( A l a . C i v . App. judgment t h e ALAA an purporting that was 2003) to award entered five months a f t e r t h e e n t r y o f a summary j u d g m e n t b e c a u s e t h e t r i a l c o u r t h a d f a i l e d t o r e s e r v e j u r i s d i c t i o n t o c o n s i d e r t h e ALAA c l a i m i n t h e summary-judgment Klinger's order). a r g u m e n t s on a p p e a l in favor of c o n c e r n t h e May summary judgment the Roses However, b e c a u s e t h e summary j u d g m e n t was on 27, his a final 2008, claims. judgment when i t was e n t e r e d on May 27, 2008, d e s p i t e t h e f a c t t h a t t h e trial c o u r t d i d n o t a d d r e s s t h e ALAA c l a i m , see McGough v. G & I n c . , 999 A, So. 2d 898, 7 903 ( A l a . C i v . App. 2007), 2080285 K l i n g e r ' s December 22, 2008, n o t i c e o f a p p e a l , six months judgment, after i s untimely. (prescribing dismiss v. the entry a o f t h e May See R u l e 42-day p e r i o d 2008, A l a . R. an 363 So. 2d 760, 762 ( A l a . 1978) of the n o t i c e of appeal i s j u r i s d i c t i o n a l , be a p p l i e d f o r an u n t i m e l y Roses' request filing f o r an being summary App. appeal). K l i n g e r ' s a p p e a l on t h a t g r o u n d as w e l l . Powell, The 27, 4(a)(1), for taking f i l e d more t h a n P. We See Holmes ("A t i m e l y filing ... t h e s a n c t i o n t o dismissal."). attorney f e e on appeal i s denied. APPEAL DISMISSED. Thompson, P . J . , and Pittman, concur. 8 Bryan, and Moore, J J . ,

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