REL:
07/15/2011
Notice: T h i s o p i n i o n i s s u b j e c t t o formal 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 R e p o r t e r o f D e c i s i o n s ,
Alabama 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, 2011
2100418
Donald Moore and Sandra Moore
v.
HSBC Mortgage
Services
Appeal from Etowah C i r c u i t Court
(CV-07-74)
THOMPSON,
Presiding
Donald
Moore
Judge.
and Sandra
summary j u d g m e n t e n t e r e d
of
HSBC
HSBC.
Services
Because t h i s
court
the appeal.
appeal
by t h e Etowah C i r c u i t
Mortgage
we d i s m i s s
Moore
("HSBC")
lacks
on t h e i r
jurisdiction
from
a
Court
partial
i n favor
claim
i n this
against
matter,
2100418
The
Moores
filed
Construction, Inc.
complaint,
an
action
Alabama
("Home C o n s t r u c t i o n " ) , a n d H S B C .
t h e Moores
alleged
that
contract
with
Home C o n s t r u c t i o n
house.
They
alleged
house, they
against
began
that,
they
In their
had entered
into
for the construction
as soon
to experience
as t h e y
Home
a
o f a new
into the
problems
numerous
moved
with the
house, i n c l u d i n g plumbing l e a k s , problems with
d r y w a l l , and a
severe
that
spent
that
mold
infestation.
a s u b s t a n t i a l amount
Sandra
Moore
infestation.
implied
With
The Moores
complaint
financing
that
to
Home
related
subject
against
HSBC,
to repair
as a
the
lender
Home
they had
t h e house and
o f t h e mold
of breach
breach
of
of the
contract,
Construction.
Moores
alleged
had
i n
arranged
their
f o r the
o f t h e house f o r t h e Moores and
that
had held
to the construction
the note
result
claims
Construction
note and mortgage t o HSBC.
purchased
claimed
habitability,
of the construction
the original
mortgage
of
i l l
asserted
and wantonness
regard
o f money
h a d become
warranty
negligence,
that
The Moores
t h e Moores' note and
o f t h e house
The Moores a s s e r t e d
and mortgage
to a l l of the defenses
2
from
sold the
that
HSBC h a d
the original
t h e Moores
had against
lender
Home
2100418
Construction.
The Moores a s s e r t e d
the
note
had
built
f o r t h e m was d e f e c t i v e
its
value
was s u b s t a n t i a l l y
credit
the
based
on t h e f a c t
on t h e b a l a n c e
a stay
impaired.
The Moores
evidenced
i t s a n s w e r , HSBC
Moores' claim
were
against
had
the note
purchased
had d e f a u l t e d
i t was b a r r e d
t h e Moores
They a l s o
because
d i dnot excuse
asserted
i n question,
that i t
that the
HSBC was a
theMoores' claims
their
default
t h e Moores a r e a s o n a b l e
time
d e f a u l t ; and,should
t h e Moores f a i l
default,
order
t h e note
"accelerating
3
holder
against
on t h e n o t e .
to cure t h e i r
an
that
i t was a
HSBC a l s o
on t h e n o t e , a n d t h a t
allowing
claims
things,
HSBC s o u g h t a d e c l a r a t i o n t h a t t h e M o o r e s h a d d e f a u l t e d
n o t e ; an o r d e r
sought
their
i nwhich i t claimed
and mortgage
i n due c o u r s e o f t h e n o t e s u c h t h a t
Home C o n s t r u c t i o n
a
Construction
among o t h e r
i n due c o u r s e o f t h e n o t e a t i s s u e .
a counterclaim
sought
resolved.
asserted,
against
that
by t h e note f o r
o f a l l l o a n p a y m e n t s d u e on t h e n o t e u n t i l
In
Moores
Construction
and i n such a c o n d i t i o n
condition of thehouse.
Home C o n s t r u c t i o n
holder
Home
was owed t o t h e m b y Home
against
the
they had a defense t o
t h e house
of the loan
amount t h e y a s s e r t e d
due t o t h e d e f e c t i v e
that
that
and
on t h e
i n which
to cure the
determining
2100418
amounts
order
due t h e r e u n d e r , "
f o r e c l o s i n g the mortgage.
HSBC's
counterclaim
counterclaim
in
a judgment
due
was w i t h o u t
course
subject
in
of the note
to defenses
The Moores
which
merit
f o r that
they
arising
from
filed
a n d an
a reply to
asserted
because
a n d , as
amount,
that
HSBC was n o t a
a
result,
their
claims
that
the
holder
i t was
against
Home
Construction.
HSBC f i l e d
the
Moores'
holder
a motion
claim
fora partial
against
i t .
of that
contention.
summary j u d g m e n t i n i t s f a v o r
Moores.
In
their
judgment motion,
was
arguing,
"the
I t asserted
that
i n due c o u r s e o f t h e n o t e , a n d i t s u b m i t t e d
support
HSBC
summary j u d g m e n t as t o
not a
they
holder
FTC H o l d e r
to
argued,
i n due
HSBC's
evidence i n
against the
partial-summary-
among o t h e r
course
things,
of the note.
on 1 6 C . F . R . § 4 3 3 . 2 , w h i c h
that
I n so
i s known as
Rule."
"The
FTC H o l d e r R u l e ,
16 C.F.R. § 4 3 3 . 2
(2002),
p r o v i d e s i n p a r t t h a t i n c o n n e c t i o n w i t h any s a l e o f
c o n s u m e r g o o d s o r s e r v i c e s , i t i s an u n f a i r o r
d e c e p t i v e a c t t o take o r r e c e i v e a consumer c r e d i t
contract
that
fails
to contain
the following
provision i n at least ten point, bold face,
type:
4
a
HSBC d i d n o t s e e k a
on i t s c o u n t e r c l a i m
opposition
t h e Moores
relied
Importantly,
i t was
2100418
"'NOTICE
"'ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS
SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR
COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES
OBTAINED PURSUANT
HERETO OR WITH
THE PROCEEDS
HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT
EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.'
" I n a d o p t i n g t h i s r u l e , t h e FTC a b r o g a t e d t h e
holder
i n due c o u r s e
rule
i n consumer
credit
t r a n s a c t i o n s , thus p r e s e r v i n g t h e consumer's c l a i m s
and d e f e n s e s a g a i n s t t h e c r e d i t o r - a s s i g n e e . "
Jaramillo
(N.M.
holder
At the hearing
f o r t h e Moores
i n due c o u r s e
also
because
asserted
560
on t h e m o t i o n , t h e
that
HSBC
HSBC h a d n o t t a k e n
was n o t a
t h e note i n
faith.
On
and
132 N.M. 4 5 9 , 4 6 5 , 50 P . 3 d 5 5 4 ,
C t . App. 2002).
attorney
good
v. Gonzales,
June
entered
Moores'
partial
54(b),
16, 2010, t h e t r i a l
a partial
claim
i t .
The t r i a l
summary j u d g m e n t a s a f i n a l
A l a . R. C i v . P.
court denied.
transferred
The M o o r e s
the p a r t i a l
HSBC's
court
the appeal
court
motion
as t o t h e
c e r t i f i e d the
judgment p u r s u a n t t o Rule
filed
a motion
to alter,
summary j u d g m e n t , w h i c h t h e t r i a l
The M o o r e s f i l e d
this
granted
summary j u d g m e n t i n i t s f a v o r
against
amend, o r v a c a t e
Because
court
a t i m e l y appeal
lacked
appellate
t o o u r supreme
5
to this
court.
jurisdiction,
court.
we
The supreme
2100418
court
t r a n s f e r r e d the appeal
court pursuant
to §
The M o o r e s r a i s e m u l t i p l e i s s u e s on a p p e a l ; h o w e v e r ,
this
12-2-7(6),
court's
we
review
lack
neither
this
1975.
of those
appellate
issues
i s precluded
jurisdiction
in
this
by the fact
matter.
that
Although
t h e M o o r e s n o r HSBC h a s r a i s e d a n i s s u e w i t h r e g a r d
court's
required
v.
A l a . Code
back to this
jurisdiction
to consider
Jays
Mfg.
Co.,
1997).
In
BB&S
General
Associates,
Inc.,
979
2007),
court
to
fewer than
to
Rule
54(b),
the
i t sjurisdiction
Tee
this
over
689
So.
So.
a l l the claims
Civ.
2d
210,
121,
the entry
this
court
ex mero motu.
Contractors,
discussed
A l a . R.
2d
appeal,
211
Inc.
123-25
is
Wallace
( A l a . C i v . App.
v.
Thornton
&
( A l a . C i v . App.
of a f i n a l
judgment
o r p a r t i e s i n an a c t i o n
" R u l e 5 4 ( b ) , A l a . R. C i v . P., a l l o w s a t r i a l c o u r t ,
in appropriate instances, to ' d i r e c t the entry of a
f i n a l j u d g m e n t as t o one o r more b u t f e w e r t h a n a l l
of
the
claims
or
parties.'
With
regard
to
subsection
( b ) , the Committee
Comments o n
1973
A d o p t i o n [ o f ] R u l e 54 p r o v i d e , i n p e r t i n e n t p a r t :
"'This s u b d i v i s i o n regulates the r e l a t i o n
of that j o i n d e r to the usual
requirement,
i n Alabama as e l s e w h e r e , t h a t a p p e a l
must
be o n l y f r o m a f i n a l j u d g m e n t , s a v e i n
unusual circumstances.
See Code o f A l a . ,
T i t . 7, § 7 5 4 .
In general the r u l e adopts
e q u i t y p r a c t i c e o f a " s p l i t j u d g m e n t . " See
as
pursuant
P.:
6
to
2100418
E q u i t y R u l e 69.
The r u l e p r o v i d e s t h a t , i n
the absence o f a f f i r m a t i v e a c t i o n by
the
judge,
no
decision is final
until
the
e n t i r e c a s e has been a d j u d i c a t e d .
The
one
exception
i s t h a t where
the
court
has
c o m p l e t e l y d i s p o s e d o f one o f a n u m b e r o f
c l a i m s , o r one o f m u l t i p l e p a r t i e s , a n d h a s
made an e x p r e s s d e t e r m i n a t i o n t h a t t h e r e i s
no j u s t r e a s o n f o r d e l a y , t h e c o u r t
may
d i r e c t t h e e n t r y o f j u d g m e n t on t h a t c l a i m
o r as t o t h a t p a r t y .
The
judgment
so
entered
is
a
final
judgment
in a l l
r e s p e c t s , a n d may b e a p p e a l e d
'
" I n some i n s t a n c e s , a R u l e 5 4 ( b )
certification
n o t be a p p r o p r i a t e .
When p e n d i n g c l a i m s ' " a r e
may
so c l o s e l y i n t e r t w i n e d t h a t s e p a r a t e a d j u d i c a t i o n
w o u l d p o s e an
unreasonable r i s k
of inconsistent
r e s u l t s , " ' o u r c o u r t s may
determine a Rule
54(b)
c e r t i f i c a t i o n t o be i n v a l i d .
G r a y v. C e n t r a l Bank
o f T u s c a l o o s a , N.A.,
519 So. 2 d 4 7 7 , 479 ( A l a . 1987)
( q u o t i n g B r a n c h v. S o u t h T r u s t Bank o f D o t h a n ,
N.A.,
514
So.
2d
1373,
1374
(Ala. 1987)).
See
also
Clarke-Mobile Counties
Gas
D i s t . v. P r i o r
Energy
C o r p . , 834 S o . 2 d 88
( A l a . 2002) ( s e t t i n g a s i d e a
R u l e 54(b)
c e r t i f i c a t i o n and d i s m i s s i n g t h e
appeal
as b e i n g f r o m a n o n f i n a l j u d g m e n t when t h e
trial
court considered breach-of-contract claims
without
c o n s i d e r i n g the c o u n t e r c l a i m a l l e g i n g f r a u d ) .
The
m e r e f a c t t h a t c l a i m s 'may
have a r i s e n out of the
same s e t o f f a c t s d o e s n o t p r e v e n t t h e m f r o m b e i n g
multiple c l a i m s P a t e
v. M e r c h a n t s N a t ' l Bank o f
Mobile,
409
So.
2d 797,
799
( A l a . 1982)
(citing
C a t e s v . B u s h , 293 A l a . 5 3 5 , 307 So. 2 d 6 ( 1 9 7 5 ) ) .
"
"In Winecoff
v . C o m p a s s B a n k , 854 So. 2 d
611
(Ala.
C i v . App.
2003), the Winecoffs
redeemed
two
s a v i n g s bonds a t a bank, and t h e bank o v e r p a i d t h e
a m o u n t a c t u a l l y due on t h o s e b o n d s .
The b a n k t h e n
'set
off,'
or
deducted,
an
amount
from
the
7
2100418
W i n e c o f f s ' c h e c k i n g a c c o u n t as p a r t i a l repayment o f
t h e o v e r p a y m e n t on t h e b o n d s .
854 S o . 2 d a t 6 1 2 .
The W i n e c o f f s
sued t h e bank,
alleging
that
the
s e t o f f was i m p r o p e r , a n d t h e b a n k
counterclaimed,
a l l e g i n g t h a t t h e s e t o f f was p r o p e r a n d s e e k i n g t h e
remainder
of
the
amount
i t had
overpaid
the
Winecoffs.
The
trial
court
entered
a
summary
j u d g m e n t i n f a v o r o f t h e b a n k on t h e
Winecoffs'
claims,
and, a l t h o u g h
i t noted
t h a t the bank's
counterclaim
was
still
pending,
the t r i a l
court
c e r t i f i e d i t s o r d e r as f i n a l p u r s u a n t t o R u l e 54(b) .
This
court
determined that
'the c l a i m s
and t h e
c o u n t e r c l a i m e a c h r e s t e d on t h e i s s u e w h e t h e r [ t h e
bank]
could v a l i d l y effect a setoff against
the
Winecoffs'
j o i n t checking
account.'
W i n e c o f f v.
C o m p a s s B a n k , 854 S o . 2 d a t 6 1 4 .
Therefore,
this
c o u r t h e l d t h a t t h e c l a i m s and t h e c o u n t e r c l a i m were
too c l o s e l y i n t e r t w i n e d t o render
t h e Rule 54(b)
certification valid.
Accordingly, this court set
a s i d e t h e Rule 54(b) c e r t i f i c a t i o n and d i s m i s s e d the
appeal
as
having
been
taken
from
a
nonfinal
judgment. I d . "
BB&S G e n e r a l
In
against
the
Contractors,
present
HSBC, w h i c h
not
a holder
the
M o o r e s ' house
those
the
I n c . , 979
case,
the
basis
i s presently
i n due c o u r s e
and,
So.
2d a t
of
before
the
us,
123-25.
Moores'
i s that
HSBC i s
o f t h e n o t e and mortgage r e l a t e d t o
as
a result,
that
to c e r t a i n
HSBC's
claim
instruments
i s subject
Moores' claims
against
Home C o n s t r u c t i o n .
against
the Moores, which the t r i a l
HSBC's c o u n t e r c l a i m
claim
under
defenses a r i s i n g
The
from
basis
of
court
h a s n o t y e t r e s o l v e d , i s t h a t , b e c a u s e HSBC i s a h o l d e r
i n due
course
i t the
of
the
note,
the
Moores
8
are
required
t o pay
2100418
amount
due
defenses
on
the note
that
Because
counterclaim,
a
by
which
those
adjudication
judgment as a f i n a l
court's
which
this
a
result,
the
closely
claims
poses
As a r e s u l t ,
and
same
the appeal
i s due t o be
intertwined
an
we
i s no f i n a l
conclude
9
that
summary
Without the
judgment
over
j u r i s d i c t i o n , and, as
and i s hereby
Thomas, a n d M o o r e ,
that
S e e BB&S
dismissed.
APPEAL DISMISSED.
Bryan,
we
unreasonable
See i d .
Pittman,
court,
issues,
I n c . , 979 S o . 2 d a t 1 2 3 - 2 5 .
appellate
which
HSBC's
trial
i t c e r t i f i e d the p a r t i a l
can e x e r c i s e
their
the Moores' claim,
i n the
c e r t i f i c a t i o n , there
court
include
judgment p u r s u a n t t o Rule 54(b).
General Contractors,
trial
when
The
judgment,
a r e so
results.
erred
house.
of t h e i r
pending
of those
with
i n due c o u r s e o f t h e n o t e .
virtually
claims
of inconsistent
court
of
t o any
dispute
summary
i s still
consideration
on t h e i r
counterclaim
the p a r t i a l
separate
trial
HSBC's
HSBC i s n o t a h o l d e r
that
the
the construction
to
conclude
risk
i t i s not subject
the r e s o l u t i o n of both
resolved
require
over
defenses
assertion
was
that
t h e M o o r e s may h a v e h a d b a s e d
Home C o n s t r u c t i o n
Moores'
and
J J . , concur.
