rel:
09/28/2007
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 2290649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2007
____________________
1050183
____________________
Billy Barnes Enterprises, Inc.
v.
Herman Gerald Williams
Appeal from Wilcox Circuit Court
(CV-03-18)
SMITH, Justice.
Billy
Barnes
Enterprises,
Inc.
("Billy
Barnes"),
the
defendant below, appeals from the judgment of the trial court
enforcing a settlement agreement between Billy Barnes and the
plaintiff, Herman Gerald Williams, in this personal-injury
action stemming from a railroad accident.
remand.
We reverse and
1050183
Facts and Procedural History
Williams
worked
("Railserve"),
services.
a
as
company
a
"switchman"
that
provides
for
Railserve,
railroad
Inc.
switching
On April 12, 2001, Williams was riding on the rear
railcar of a train operating on the grounds of a lumber mill
owned by Weyerhaeuser Company ("Weyerhaeuser") and located in
Pine Hill.
The train was moving in reverse, and Williams was
providing directions over a radio to the engineer operating
the train's engine, Alex D. Young, who could not see the rear
of the train.
As the train neared a road crossing, a truck approached
the crossing at a high rate of speed and failed to yield to
the
train.
Williams
activated
an
emergency
brake
in
an
attempt to stop the train and avoid a collision with the
truck.
The emergency brake caused the train to jerk, and
Williams was thrown off the train and onto the tracks, where
the train rolled over one of his legs, causing significant
injury.
Williams radioed Young for help, and Young contacted
the guard shack at the lumber mill to send medical assistance.
Gladys Dobbs, a nurse employed by Weyerhaeuser, responded with
an ambulance.
Dobbs later completed an occupational-injury
2
1050183
report and recorded that the accident was reported at 8:05
p.m.
On February 13, 2003, Williams sued Billy Barnes.
In his
complaint, Williams alleged that the truck that failed to
yield and thereby contributed to the accident was owned and
operated
by
Billy
Barnes.
Thus,
Williams
alleged,
Billy
Barnes was liable for his injuries.
In
February
2004,
summary judgment.
Billy
Barnes
filed
a
motion
for
a
With its motion, Billy Barnes submitted
evidence from the computerized gate log at the lumber mill and
the scale receipts that demonstrated that three Billy Barnes
trucks had been at the lumber mill at various times on the day
of the accident, but that the last truck had left the facility
at 6:37 p.m., well before the accident was reported to Dobbs
at 8:05 p.m.
Thus, Billy Barnes argued that it was entitled
to a summary judgment because, it said, none of its trucks
were involved in the accident.
In
filed
response
an
to
affidavit
the
in
summary-judgment
which
he
stated
motion,
that
the
Williams
accident
occurred shortly after 6:00 p.m. and that he could clearly see
the words "Billy Barnes" written on the side of the truck.
3
1050183
Williams further stated that it took a substantial amount of
time for help to arrive after the accident occurred.
trial
court
subsequently
denied
the
motion
for
a
The
summary
judgment. 1
In April 2004, counsel for Billy Barnes sent a proposed
nonparty
subpoena
to
worker's
compensation
counsel
for
documents
Railserve,
relating
to
requesting
Williams's
accident including, among other things, any statement obtained
from Williams.
Railserve answered with an objection but also
produced numerous medical and worker's compensation documents.
The materials do not mention whether a statement was taken
from Williams.
In August
2004, counsel for Billy Barnes
requested additional information not found in the worker's
compensation documents, including whether anyone had obtained
a statement from Williams.
Billy Barnes asserts
that
in
response to this letter, Railserve's counsel indicated that no
statements
from
Williams
were
provided
by
the
workers'
compensation carrier.
Williams was deposed in December 2004, and he testified
that
he
had
given
no
statement
1
regarding
the
accident.
Billy Barnes later filed another summary-judgment motion,
which was also denied.
4
1050183
Williams gave a detailed description of the truck that failed
to yield at the crossing, stating that he was able to read the
words "Billy Barnes Trucking," which were written in white and
red letters.
Williams further testified that the accident
occurred sometime between 6:15 p.m. and 7:00 p.m.
Williams
stated that he could not immediately contact anyone on the
radio for help, and that a period of time passed before he
received any aid.
Williams further stated that he first told
someone that a Billy Barnes truck was involved when Rick
Delloma--a
Railserve
employee--and
an
"insurance
visited him at the hospital after the accident. 2
then
asked:
"Q:
...
Have
you
given
any
person"
Williams was
kind
of
verbal
statement to anybody, that was recorded to your knowledge,
about what happened?"
Williams answered: "No."
In May 2005, The Marmon Group, LLC ("Marmon"), the parent
corporation
of
Williams's
employer,
Railserve,
filed
a
complaint seeking to intervene in the case as a plaintiff.
Specifically, Marmon alleged that it had paid over $140,000 in
worker's compensation benefits in connection with Williams's
2
It appears from the record that another Railserve
employee, Tim Pulian, was also present during the hospital
visit.
5
1050183
injury
and
that
it
was
therefore
entitled
to
certain
subrogation rights to any award Williams would receive in his
action against Billy Barnes.
In June 2005, Railserve was served with subpoenas by
Billy Barnes to disclose any statements or reports concerning
the accident.
In a letter dated July 20, 2005, counsel for
Railserve responded to the subpoenas and indicated that he was
"not
aware
of
any
non-privileged
already been produced.
a
letter
indicating
materials
that
had
not
Billy Barnes's counsel responded with
that,
counsel
documents"
was
because
he
claiming
did
were
not
know
privileged
what
or
nondiscoverable, he requested a "privilege log" supporting any
claim
of
existed
privilege
and,
if
and
so,
voluntarily produced.
to
clarify
whether
whether
the
any
statements
a
could
be
Billy Barnes asserts that Railserve
refused to voluntarily provide a privilege log.
thus filed
statements
Billy Barnes
motion to compel, seeking production of the
privilege log.
The trial court held a hearing on the motion on August 8,
2005.
opinion
At the hearing, Billy Barnes's counsel expressed the
that
it
was
unusual
that
6
neither
Marmon
nor
its
1050183
subsidiary
Railserve
took
recorded
statements
from
any
witnesses in anticipation of a future worker's compensation
action by Williams.
Furthermore, Alex Young had stated in his
deposition that Rick Delloma had taken a statement from him,
but neither Railserve nor Marmon had produced such a statement
in response to the subpoenas.
Counsel representing both Marmon and Railserve stated in
open court that they were not aware of any such statements and
that they had been told that none existed.
Nevertheless, the
trial court explicitly ordered Marmon and Railserve's counsel
to turn over a privilege log and any recorded statements:
"If there are any recorded statements ... if there
are statements taken, if there is anything done ...
in the way of an investigation of this accident,
then I would require that those things be produced.
...
If
somebody
has
been
tape-recording
conversations, and I require that the tape-recorded
conversation be produced ...."
Billy Barnes received a privilege log from counsel for
Marmon and Railserve on August 9, 2005.
On August 11, Billy
Barnes filed two motions asking the trial court to compel
production of certain materials listed on the privilege log,
including a "Memo to the File" authored by Delloma regarding
his investigation of the accident.
7
Billy Barnes also filed a
1050183
general request to compel Marmon to produce any statements
relating to Williams's accident.
Trial was scheduled to start on August 29, 2005.
August 19, 2005, the parties held a mediation conference.
On
On
August 22, a conference call was held with the parties and the
trial
court,
during
motions to compel.
which
Billy
Barnes
again
argued
its
Regarding the August 22 conference call,
Billy Barnes's counsel stated in an affidavit: 3
"[The trial court] verbally ordered [Marmon and
Railserve's counsel] to produce the 'Memo to the
File' authored by Mr. Rick [Delloma], and further to
determine whether any worker's compensation carrier
or third party administrator was in possession of
any recorded statements.
If so, [counsel] was to
produce the statements."
Billy Barnes's counsel "received the Memo to the File via
facsimile at approximately 3:00 p.m. on August 22.
There was
no mention of any recorded statement having been taken from
Mr. Williams ...."
Later that day, Billy Barnes and Williams
agreed to a settlement in the amount of $500,000.
On August 23, 2005--the next day--counsel for Marmon and
Railserve
contacted
Billy
Barnes
and
indicated
that
two
audiotapes of recorded statements had been located and were
3
Counsel's affidavit was submitted in support of Billy
Barnes's motion to set aside the settlement agreement.
8
1050183
being transcribed, but that the identities of the persons
giving and taking the statements were unknown.
On August 25,
2005, Billy Barnes received transcripts of recorded statements
by Young and by Williams.
In Williams's statement, which was
apparently taken on April 18, 2001, several days after the
accident, Williams stated: (1) that he was aware that his
statement was being recorded and that it was being recorded
with his permission; (2) that the accident occurred "close to
8:30"; and (3) that when he looked at the truck that caused
the accident he "couldn't see a name" written on it.
On September 7, 2005, Billy Barnes filed a motion to set
aside the settlement agreement and to restore the case to the
trial docket.
In the motion, Billy Barnes argued that it had
"steadfastly maintained" that it did not have a truck present
at the lumber mill at the time of the accident and that the
only person who purportedly saw a Billy Barnes truck in the
lumber
mill
at
the
time
of
the
accident
was
Williams.
Williams, however, had testified that a Billy Barnes truck
caused the accident.
Additionally, Billy Barnes noted in the
motion that Williams's sworn testimony, procured after Billy
Barnes had produced evidence indicating that its last truck
9
1050183
had left the lumber mill at 6:37 p.m., specifically asserted
that the accident occurred between 6:15 p.m. and 7:00 p.m.,
despite
Dobbs's
record
reported at 8:05 p.m.
recorded
statement
indicating
that
the
accident
was
Billy Barnes noted that Williams's
directly
contradicted
testimony inculpating Billy Barnes.
his
later
sworn
Billy Barnes then argued
that it had agreed to settle the case based on Williams's
testimony that he had given no recorded statement.
Finally,
Billy Barnes argued in the motion that generally settlement
agreements
may
be
set
aside
because
of
fraud,
collusion,
accident, surprise, and similar grounds; that parties are
entitled to the rescission of a settlement agreement that was
entered
into
in
reliance
upon
a
misrepresentation
made
willfully, recklessly, negligently, or even innocently; that
the settlement agreement should be set aside based on evidence
of "intrinsic" fraud by the plaintiff; and that Williams had
obstructed discovery by falsely stating that he had not given
a recorded statement regarding the accident.
Billy Barnes's
motion was supported by the affidavit of its counsel, David
Wilson, and other documentary evidence.
10
1050183
Williams filed an opposition to the motion to set aside,
which moved the trial court both to enforce the settlement
agreement and to order sanctions against Billy Barnes and its
counsel.
The trial court held a hearing and on September 30, 2005,
denied the motion to set aside the settlement agreement.
On
October 7, 2005, the trial court granted Williams's motion to
enforce the settlement agreement, holding that Williams did
not commit fraud and that the settlement agreement was binding
and enforceable.
The trial court then entered a judgment in
favor of Williams in the amount of $500,000, the amount of the
settlement.
Billy Barnes appeals.
Standard of Review
No witnesses testified at the hearing on the motions to
set aside or to enforce the settlement agreement.
Because the
trial court did not receive ore tenus evidence and instead
considered only the documentary evidence, depositions, and
affidavits submitted by the parties, our review is de novo.
See Phillips v. Knight, 559 So. 2d 564, 567 (Ala. 1990); see
also McIver v. Bondy's Ford, Inc., 916 So. 2d 616, 619 (Ala.
Civ. App. 2005) ("Because the trial court did not receive ore
11
1050183
tenus evidence as to the alleged settlement agreement, we
review the judgment without a presumption of correctness.").
Discussion
On appeal, Billy Barnes argues that the trial court erred
in refusing to rescind the settlement agreement.
We agree.
"A validly executed settlement agreement is as binding on
the parties as any other contract."
So. 2d 146, 150 (Ala. 2002).
Grayson v. Hanson, 843
However, settlement agreements
may be reopened for reasons of fraud, accident, or mistake.
Nero v. Chastang, 358 So. 2d 740 (Ala. Civ. App. 1978); see
also Taylor v. Dorough, 547 So. 2d 536, 540 (Ala. 1989) ("A
release obtained by fraud is void."); Lowery v. Mutual Loan
Soc'y Inc., 202 Ala. 51, 53, 79 So. 389, 391 (1918) ("It is
elementary law that one who has been induced to enter into a
contract by the material misrepresentations of the other party
may, if he acts with reasonable promptness upon the discovery
of the fraud, rescind the contract in toto ...."); Burks v.
Parker, 192 Ala. 250, 68 So. 271 (1915) (noting that when a
settlement is obtained by fraud, the agreement may be set
aside in its entirety);
and Business Credit Leasing, Inc. v.
Money's Ford, Inc., 582 So. 2d 555, 557 (Ala. Civ. App. 1991)
12
1050183
("Moreover, a person induced to enter into a contract
by
reason of false representations has a right to rescind the
contract because of fraud.").
In determining whether a settlement agreement should be
rescinded or set aside because of fraud, the courts of this
state have applied the definition of legal fraud in Ala. Code
1975, § 6-5-101.
Warren,
574
So.
See, e.g., Burlington Northern R.R. v.
2d
758,
766-77
(Ala.
1990)
(plurality
opinion), and Coaker v. Washington County Bd. of Educ., 646
So. 2d 38, 42 (Ala.
provides:
Civ. App. 1993).
"Misrepresentations
of
a
That Code section
material
fact
made
willfully to deceive, or recklessly without knowledge, and
acted on by the opposite party, or if made by mistake and
innocently and acted on by the opposite party, constitute
legal fraud."
We have described these elements as follows:
"Regardless of whether the representation is made
willfully, recklessly, or mistakenly, a plaintiff
alleging fraud must prove four elements: (1) a false
representation; (2) that the false representation
concerned a material existing fact; (3) that the
plaintiff relied upon the false representation; and
(4) that the plaintiff was damaged as a proximate
result of the reliance."
George v. Associated Doctors Health & Life Ins. Co., 675 So.
2d
860,
862
(Ala.
1996).
Additionally,
13
"'[a]n
innocent
1050183
misrepresentation is as much a legal fraud as an intended
misrepresentation and the good faith of a party in making what
proves to be a material misrepresentation is immaterial as to
the question whether there was an actionable fraud if the
other party acted on the misrepresentation to his detriment.'"
Davis v. Sterne, Agee & Leach, Inc., [Ms. 1050478, January 12,
2007]
___
So.
2d
___,
___
(Ala.
2007)
(quoting
Smith
v.
Reynolds Metals Co., 497 So. 2d 93, 95 (Ala. 1986)).
Billy
Barnes's
motion
to
set
aside
the
settlement
agreement sought a rescission of the contract on the ground of
fraud.
Specifically, Williams's representation that he had
given no recorded statement regarding the accident, Billy
Barnes
alleged,
agreement
believed
with
that,
induced
Williams
without
it
to
enter
because
the
into
Billy
existence
of
the
settlement
Barnes's
a
counsel
statement
by
Williams to the contrary, the jury would believe testimony by
Williams that a Billy Barnes truck had caused the accident at
the time the truck was at the lumber mill. 4
On appeal, Billy
Barnes contends that it demonstrated the elements of fraud and
4
Billy Barnes also argued that Williams suppressed the
existence of the statement.
14
1050183
that, therefore, the trial court erred in not setting aside
the settlement agreement.
First, it is undisputed that Williams testified in his
deposition in response to a question that he had given no
"verbal
statement"
that
had
representation was not accurate.
been
recorded.
This
Williams argues on appeal
that there is "no evidence" indicating that he understood what
was meant by the phrase "verbal statement," and thus that his
negative answer should be considered only "facially imprecise"
and not "demonstrably false."
However, Williams's subjective
state of mind when he answered the question--i.e., whether he
believed he was answering the question correctly--does not
affect the accuracy of the answer.
At best, it would indicate
only whether his answer was made in good faith.
However, as
noted above, an innocent misrepresentation will nonetheless
support an allegation of legal fraud under Ala. Code 1975, §
6-5-101.
Davis, supra.
Second,
Billy
Barnes
argues
that
Williams's
representation that he had not given a recorded statement
following the accident concerned a material existing fact and
that Billy Barnes relied on the representation.
15
Specifically,
1050183
an affidavit by Billy Barnes's counsel, Wilson, presented in
support of the motion to set aside detailed how Williams's
representation affected Billy Barnes's decision to enter into
the settlement agreement:
"In evaluating this matter for the purposes of
settlement, and in order to properly advise my
client of the benefits versus risk of settling, or
not settling, I relied on Herman Williams'[s] sworn
testimony
that
he
had
not
given
a
recorded
statement, and that he had told Mr. [Delloma], Mr.
[Pulian] and the 'insurance person' that a Billy
Barnes truck was involved in this accident....
"....
"... The said offer of settlement had been made
on
my
assumption
that
there
were
no
prior
inconsistent statements made by Mr. Williams to
refute his testimony that he did not give a recorded
statement, that a Billy Barnes truck was involved,
and further that there was no inconsistent prior
statements concerning the time of the accident. I
had considerable concern that despite the strong
evidence I had developed on the issues of at what
hour the accident occurred and that no Billy Barnes
truck was present at Weyerhaeuser's property at the
time of the accident, a jury could simply accept Mr.
Williams'[s]
testimony
and
award
substantial
damages. In other words, while I felt we could prove
our case, I could not disprove what Mr. Williams
contended, relying on his sworn testimony that he
did not give a recorded statement, etc.
"....
"Had I known of the existence of, or been in
possession of this statement, prior to the mediation
and/or any offers of settlement being made, my
16
1050183
evaluation of the case and my advice to my client
concerning settlement issues, would have been
entirely different."
The trial court held that Billy Barnes had not reasonably
relied on Williams's deposition testimony.
Specifically, the
trial court stated that the evidence "clearly" proved that
Billy Barnes "doubted or rejected and indeed challenged the
veracity of Herman Williams's statement, that Herman had not
given a tape-recorded statement," and that Billy Barnes's
counsel
"was
actively
seeking
the
alleged
tape-recorded
statements of Herman Williams at the time of this settlement
...."
"An essential element of any fraud claim is that the
plaintiff
must
have
reasonably
relied
on
the
alleged
misrepresentation." Waddell & Reed, Inc. v. United Investors
Life Ins. Co., 875 So. 2d 1143, 1160 (Ala. 2003). "[F]or a
plaintiff
to
state
a
fraud
claim,
he
must
show
that
a
misrepresentation induced him to act in a way that he would
not otherwise have acted, that is, that he took a different
course of action because of the misrepresentation."
Petroleum
Corp.
v.
State,
901
So.
2d
1,
5
(Ala.
Hunt
2004).
However, "[w]here a party has reason to doubt the truth of the
17
1050183
representations or is informed of the truth before he acts, he
has no right to act thereon."
MJM, Inc. v. Casualty Indem.
Exch., 481 So. 2d 1136, 1141 (Ala. 1985).
It is true that, before the settlement agreement was
entered into, Billy Barnes's counsel expressed concerns that
it was unusual that neither Marmon nor Railserve had taken any
recorded
statements
from
Williams
following
the
accident.
However, in light of the sequence of events in this case and
the evidence produced by Billy Barnes, we hold that Billy
Barnes demonstrated that at the time it ultimately entered
into
the
settlement
agreement,
it
relied
on
Williams's
representation that he had given no recorded statement.
Williams
statement.
testified
under
oath
that
he
had
given
no
Marmon and Railserve's counsel stated in open
court that they had no statements from Williams.
At the
August 8 hearing on Billy Barnes's motion to compel, the trial
court ordered counsel for Marmon and Railserve to turn over
any statements Williams had given.
During the August 22
conference call, Marmon and Railserve's counsel was again
ordered to turn over any recorded statements, if they existed,
along with Delloma's memorandum.
18
Marmon responded to the
1050183
trial court's order and produced Delloma's memorandum, but did
not mention any statements by Williams.
The affidavit of Billy Barnes's counsel, the only direct
evidence found in the record before us on this issue, states
that when Billy Barnes finally entered into the settlement
agreement, it relied on Williams's representation that there
was no recorded statement.
The following requests in the
record
Barnes
indicate
that
Billy
had
been
seeking
any
possible recorded statements from Marmon and/or Railserve for
over 16 months:
1. A proposed nonparty subpoena to Railserve in
April 2004: Railserve responded but included no
statements.
2. A request in August 2004: Railserve's counsel
indicated that no statements from Williams had been
provided by the workers' compensation carrier.
3. Williams's deposition in December 2004:
Williams stated that he had given no statement.
4. Subpoenas in June 2005: In a letter dated
July 20, 2005, counsel for Railserve indicated that
he was "not aware of any non-privileged documents."
5. A request sent on July 20, 2005, seeking a
privilege log and an indication whether such a
statement could be voluntarily produced: Railserve
refused to produce a log.
6. A motion to compel: Counsel for Marmon and
Railserve stated in open court that they were not
19
1050183
aware of any statements and that they had been told
that there were none.
7. The trial court's order to produce a
privilege log and any statements taken regarding the
accident: A privilege log was produced but did not
indicate whether there were any statements by
Williams.
8. An August 11 motion to compel production of
Delloma's memorandum and any statements.
9. An August 22 order by the trial court to turn
over Delloma's memorandum and any statement in the
possession of Marmon, Railserve, or a "worker's
compensation carrier or third party administrator":
Delloma's
memorandum
was
delivered,
but
no
statement.
It is true that throughout the discovery process Billy
Barnes continued to seek from Marmon and/or Railserve the
production of any statement made by Williams.
However, at the
point in time at which the settlement agreement was ultimately
executed--in mediation on the eve of trial--Billy Barnes had
taken every measure to ensure that Marmon or Railserve would
produce
any
statement
that
either
possessed.
Indeed,
it
appears that no further legal process was available to Billy
Barnes to require Marmon or Railserve to comply with the trial
court's
direct
statement.
and
explicit
orders
to
produce
such
a
Billy Barnes had no cause to believe that Marmon
or Railserve failed to comply with the trial court's discovery
20
1050183
orders,
and
Billy
Barnes
possessed
no
other
source
of
information that could demonstrate that Williams had given a
statement.
The fact that no statement was produced, coupled
with Williams's testimony that he had given no statement,
supports Billy Barnes's argument that, at the time it entered
into
the
settlement
agreement,
it
reasonably
believed
Williams's representation that no statement existed.
Given the evidence presented by Billy Barnes, we hold
that
in light of the circumstances of this case dealing with
Billy Barnes's exhaustion of all reasonable steps calculated
to lead to discovery of Williams's prior statement, if it did
exist,
Billy
settlement
Barnes,
at
agreement,
the
reasonably
representation–-whether
intentionally
made--that
time
it
entered
relied
innocently,
he
had
given
on
into
Williams's
mistakenly,
no
prior
the
or
statement
regarding the accident.
Finally, we hold Billy Barnes was damaged by its reliance
on Williams's representation, which is demonstrated by the
affidavit of Billy Barnes's counsel stating that Billy Barnes
would not have agreed to the $500,000 settlement if it had
known of the recorded statement.
demonstrated
the
necessary
Therefore, Billy Barnes has
elements
establishing
settlement agreement was procured by fraud.
21
that
the
1050183
Conclusion
We conclude that the trial court erred in refusing to set
aside the settlement agreement.
due to be set aside.
The settlement agreement is
We reverse the judgment of the trial
court and remand the case for further proceedings consistent
with this opinion.
REVERSED AND REMANDED.
See, Lyons, Stuart, Bolin, and Parker, JJ., concur.
Woodall and Murdock, JJ., concur in the result.
Cobb, C.J., dissents.
22
1050183
MURDOCK, Justice (concurring in the result).
(1) Whether Billy Barnes actually believed William's
misrepresentations and whether Billy Barnes reasonably relied
on those misrepresentations.
Given the evidence presented, I conclude that Billy
Barnes did not subjectively believe either (a) Williams's
affidavit and deposition testimony as to the time of the
accident and indicating that he saw the name "Billy Barnes" on
the side of the truck that failed to yield at the crossing and
(b) Williams's representation that he had not previously given
a verbal or recorded statement about the accident.
I agree
with the result reached by the main opinion because, in my
view, the "reliance" that took place in this case was not
reliance in a volitional sense.
Given (i) the rules of
discovery that govern our civil justice system and by which
Billy
Barnes
was
bound,
(ii)
the
thoroughness
of
Billy
Barnes's attempts for approximately one and one-half years to
obtain truthful discovery responses and the fact that the
trial was set to begin in one week at the time Billy Barnes
agreed to settle the case, and (iii) the nature of the formal
and informal answers to discovery repeatedly given by or on
behalf of Railserve, Marmon, and Williams, Billy Barnes had no
23
1050183
alternative
but
to
"rely"
upon
the
discovery
responses
received by it as to the matters described in both clauses (a)
and (b) of the first sentence of this paragraph.
In essence,
Billy Barnes was forced to act upon the only information it
could obtain prior to trial as to these matters -- the only
information as to these matters that would be provided to a
fact-finder in the event of a trial.
Cf.
Kansas
1092
City,
("Regardless
64
F.
Supp.
whether
2d
1084,
defendants
Quinn v. City of
(D.
believed
Kan.
1999)
plaintiff's
testimony, the possibility that a jury would believe plaintiff
forced defendants to attach reasonable importance to his false
testimony in deciding whether to settle the case. Plaintiff's
misrepresentations were therefore material.").5
(2) Whether Williams engaged in intentional or innocent
fraud.
I see no need to reach the question whether the judgment
of
the
trial
court
should
be
misrepresentations were "innocent."
reversed
if
Williams's
In my view, this is a
case of intentional fraud.
5
We are not presented in this case with an argument by
Billy Barnes that this fraud constituted a "fraud upon the
court."
24
1050183
Williams argues to this Court that there is no evidence
indicating that he understood the meaning of the term "verbal
statement."
This argument is ill founded.
The term "verbal
statement" has a plain meaning; it is not ambiguous.
If
Williams seeks to argue that he did not understand it, the
burden was upon Williams to produce evidence that he did not,
not upon Billy Barnes to prove that he did.
There is no
evidence that Williams did not understand the meaning of the
term "verbal statement."
Moreover,
there
is
ample
evidence
affirmatively
indicating that Williams intended to deceive Billy Barnes not
only as to the existence of a prior recorded statement, but
also as to the circumstances surrounding the accident. In the
recorded statement that ultimately was produced, Williams
stated (1) that the accident occurred close to 8:30 p.m. and
that it was dark at the time and (2) that he could not see a
name on the truck that caused the accident.
recorded statement came to light,
Before this
Williams told a much
different "story" in his deposition and affidavit testimony,
namely (1) that the accident occurred between 6:15 p.m. and
7:00 p.m. (after Billy Barnes produced evidence indicating
25
1050183
that its last truck left Weyerhaeuser's facility at 6:37 p.m.)
and while it was still light outside and (2) that he clearly
saw the words "Billy Barnes" in red and white letters on the
truck that caused the accident.
This is the same deposition
in which Williams denied the existence of the prior recorded
statement that, as we now know, described a very different
version of events.6
I
can
draw
no
conclusion
other
than
that
Williams
committed intentional fraud.
6
I also note that Williams's coworker, Alex Young,
initially testified in an affidavit that the accident at issue
occurred at approximately 8:00 p.m.
In his June 30, 2005,
deposition, however, after Billy Barnes had presented evidence
that the last of its trucks left Weyerhaeuser's facility at
6:37 p.m., Young recanted his statement that the accident
occurred at approximately 8:00 p.m.
In his brief to this Court, Williams argues that he gave
his prior recorded statement while under stress and while
under the influence of pain medication.
He makes no such
argument as to Young's recanted affidavit testimony.
26
1050183
COBB, Chief Justice (dissenting).
I respectfully dissent.
claim, Billy Barnes
elements:
(1)
a
In order to establish a fraud
was required
false
to
representation
prove
(2)
each of four
of
a
material
existing fact, (3) reasonably relied on by the claimant, (4)
who
suffered
damage
misrepresentation.
as
a
proximate
consequence
of
the
United Land Co. v. Drummond Co., [Ms.
1041029, Dec. 1, 2006] ___ So. 2d ___ (Ala. 2006); Waddell &
Reed, Inc. v. United Investors Life Ins. Co., 875 So. 2d 1143
(Ala. 2003).
In this case, the trial court, sitting as the
trier of fact in the hearing on the motion to set aside the
settlement agreement, determined that Billy Barnes did not
reasonably rely on the deposition testimony given by Williams.
Specifically, Billy Barnes's lawyer stated before the trial
court that he was sure that Williams had given a recorded
statement or statements and that he was actively attempting to
obtain
discovery
of
the
statement
in
spite
of
Williams's
testimony that he did not recall giving any such statement.
Here the evidence as to whether Billy Barnes reasonably relied
on Williams's representations was in conflict, and the weight
of the evidence favored the trial court's determination that
27
1050183
Billy Barnes had not relied on Williams's representations.
See, e.g., Harold Allen's Mobile Home Factory Outlet, Inc. v.
Early, 776 So. 2d 777 (Ala. 2000); cf. Foremost Ins. Co. v.
Parham, 693 So. 2d 409 (Ala. 1997); and McIver v. Bondy's
Ford,
Inc.,
[Ms.
2050317,
(Ala.Civ.App. 2007).
March
9,
2007]
___
So.
2d
___
Appellate review in such a situation is
limited:
"'[W]hen the evidence in a case is in conflict, the
trier of fact has to resolve the conflicts in the
testimony, and it is not within the province of the
appellate court to reweigh the testimony and
substitute its own judgment for that of the trier of
fact.' Delbridge v. Civil Serv. Bd. of Tuscaloosa,
481 So. 2d 911, 913 (Ala. Civ. App. 1985). '[A]n
appellate court may not substitute its judgment for
that of the trial court. To do so would be to
reweigh the evidence, which Alabama law does not
allow.' Ex parte Foley, 864 So. 2d 1094, 1099 (Ala.
2003) (citations omitted)."
Ex parte R.E.C., 899 So. 2d 272, 279 (Ala. 2004).
28
