State of Alabama Banking Department v. Gwyn Ellis Taylor and Net Axcess, LLC

Annotate this Case

Download PDF

Rel 09/25/2009 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 . SUPREME COURT OF ALABAMA SPECIAL TERM, 2009 1061640 S t a t e o f Alabama B a n k i n g D e p a r t m e n t v. Gwyn E l l i s Appeal T a y l o r and N e t A x c e s s , LLC from Coffee C i r c u i t (CV-05-126) Court PER C U R I A M . The State of Department") appeals Alabama Department ("the f r o m a d e c l a r a t o r y j u d g m e n t i n an a c t i o n i n s t i t u t e d b y Gwyn E l l i s LLC, Banking T a y l o r , t h e s o l e owner o f N e t A x c e s s , and Net A x c e s s , LLC ( h e r e i n a f t e r r e f e r r e d t o c o l l e c t i v e l y 1061640 as "Net A x c e s s " ) , a g a i n s t the Department. court's and judgment On a May 12, 2005, judgment dismiss declaring the We Net A x c e s s sued the Department, that the Alabama Deferred A c t , § 5-18A-1 e t s e q . , A l a . Code did apply Department Net t o Net had no Axcess's Axcess's business jurisdiction complaint also Department's alleged wantonness," "intentional "fraud or Department action, ("the thus, over that Net interference On for "negligence with June the that defendant Axcess that, failed other The "the as business," and 17, the 2005, to i t s declaratory-judgment to exhaust i t s administrative claims State i n any filed supervisor the and/or were barred by the claim, remedies doctrine s o v e r e i g n i m m u n i t y u n d e r A r t . I , § 14, A l a . C o n s t . 1 9 0 1 , states the Axcess. compensation taking," Act"), moved t o d i s m i s s Net A x c e s s ' s d e c l a r a t o r y - j u d g m e n t arguing that and, seeking Presentment 1975 control sought misrepresentation." Net A x c e s s had and or "unlawful trial appeal. Services not vacate the of an court Alabama complaint Department's filed shall of law or e q u i t y . " amended the Department of a Bureau motion 2 adding to never be of which made a S u b s e q u e n t l y , Net Scott of Loans, dismiss Corscadden, as the a party. amended 1061640 complaint, original court to the asserting motion entered the to an the dismiss. order Department's a bench trial that subject r e g u l a t i o n by Department the the to is concerns Net 2006, Axcess dismiss on June Axcess was the the had a l l the 7, 2007, not Department of not the sovereign beyond the subject-matter which i s reviewable by an parte V.S., 2d 713, 17 except trial in under a the court business Act. did 898 So. not argue should immunity, scope The (Ala. consequences 2007) of ("Good of our review of court (Ala. suing Hope"), a State Axcess's consideration jurisdiction 714 Net have been b a r r e d a appellate that the ex under of because trial i t Ex 2004). this Court 978 So. addressed the agency: " T h i s C o u r t has l o n g h e l d t h a t ' " ' t h e circuit court i s without j u r i s d i c t i o n to e n t e r t a i n a s u i t against the State because of Sec. 14 of the Constitution.'"' L a r k i n s v. D e p a r t m e n t o f M e n t a l 3 that court, mero motu. I n Ex p a r t e A l a b a m a D e p a r t m e n t o f T r a n s p o r t a t i o n , 2d trial consented claims the engaged Department for declaratory relief doctrine issue that 23, in i t s appealed. Although request October i t advanced claim. determined to On motion Net arguments stating declaratory-judgment After same 1061640 H e a l t h & M e n t a l R e t a r d a t i o n , 8 0 6 So. 2d 358 , 364 (Ala. 2001) ( q u o t i n g Alabama S t a t e Docks Terminal Ry. v. L y l e s , 7 97 So. 2d 432, 435 (Ala. 2001), q u o t i n g i n t u r n A l a n d v . G r a h a m , 287 A l a . 2 2 6 , 229, 250 So. 2 d 677, 678 (1971)). '[A]n a c t i o n c o n t r a r y t o t h e S t a t e ' s i m m u n i t y i s an a c t i o n o v e r w h i c h t h e courts of this State lack subject-matter jurisdiction.' " T h i s C o u r t h a s r e p e a t e d l y h e l d t h a t § 14, A l a . C o n s t . 1901, ' a f f o r d s t h e S t a t e and i t s a g e n c i e s an " a b s o l u t e " i m m u n i t y f r o m s u i t i n any c o u r t . ' Haley v . B a r b o u r C o u n t y , 885 So. 2d 7 8 3 , 788 (Ala. 2004); s e e a l s o Ex p a r t e M o b i l e C o u n t y D e p ' t o f Human R e s . , 815 So. 2 d 5 2 7 , 530 ( A l a . 2001) ( ' P u r s u a n t t o § 14, Ala. C o n s t . of 1901, t h e S t a t e o f A l a b a m a and i t s agencies have a b s o l u t e immunity from s u i t in any c o u r t . ' ) ; Ex p a r t e T u s c a l o o s a C o u n t y , 796 So. 2d 1 1 0 0 , 1103 ( A l a . 2 0 0 0 ) ('Under A l a . C o n s t . o f 1901, § 14, t h e S t a t e o f A l a b a m a h a s a b s o l u t e immunity from l a w s u i t s . This absolute immunity extends to arms o r a g e n c i e s o f t h e s t a t e ')." 978 So. 2d at 21-22. a plaintiff's agency i n Good Hope, t h i s a t t e m p t t o amend a c o m p l a i n t i n order establish Also to add subject-matter the proper party, Court addressed naming o n l y a thereby seeking jurisdiction: " [ I ] n Ex p a r t e B l a n k e n s h i p , 893 So. 2 d 3 0 3 , 306-07 (Ala. 2004), t h i s Court h e l d t h a t , i f a t r i a l court l a c k s s u b j e c t - m a t t e r j u r i s d i c t i o n , i t h a s no p o w e r to take any action other than to dismiss the complaint. A trial court lacks subject-matter jurisdiction i f t h e d e f e n d a n t i s immune u n d e r t h e doctrine of sovereign immunity. Larkins [v. Department of Mental H e a l t h & Mental R e t a r d a t i o n ] , 806 So. 2 d [ 3 5 8 , ] 364 [ ( A l a . 2001)] ( ' " A r t i c l e I, § 4 State to 1061640 14, o f t h e A l a b a m a C o n s t i t u t i o n o f 1 9 0 1 t h u s r e m o v e s s u b j e c t - m a t t e r j u r i s d i c t i o n f r o m t h e c o u r t s when a n a c t i o n i s d e t e r m i n e d t o be one a g a i n s t t h e S t a t e . " ' (quoting [Alabama State Docks Terminal Ry. v.] L y l e s , 797 S o . 2 d [ 4 3 2 , ] 4 3 5 [ ( A l a . 2 0 0 1 ) ] ) ) . T h u s , t h i s Court cannot order t h e t r i a l court t o a l l o w [ t h e p l a i n t i f f ] t o amend i t s c o m p l a i n t b e c a u s e t h e t r i a l court lacks subject-matter jurisdiction." 978 So. 2d a t 26. In Ex p a r t e Alabama 3d 1126 ( A l a . 2008) the above-quoted Petroleum, a Petroleum"), from sued ("ADOT") 6 So. 3d a t 1126. to dismiss o f ADOT amended c o m p l a i n t applied Hope. In Russell [the ADOT moved Subsequently, ("the d i r e c t o r " ) of f o r ADOT's corporation's] to dismiss the b y § 14 o f t h e filed a and t o s u b s t i t u t e t h e as t h e d e f e n d a n t The c o r p o r a t i o n naming t h e d i r e c t o r , also i nthe filed an a s w e l l a s ADOT, i n t h e I d . a t 1127. and t h e d i r e c t o r again t h a t , based Department the corporation ADOT a s a d e f e n d a n t of the case. ADOT arguing Court "compensation of 6 So. this t h e Alabama condemnation' 6 So. 3d a t 1126-27. styling Good seeking Constitution. director case. of Transportation, on t h e g r o u n d t h a t t h e a c t i o n was b a r r e d Alabama motion principles 'inverse property." action ("Russell corporation Transportation alleged Department moved to dismiss on t h e a b o v e - q u o t e d p r i n c i p l e s 5 t h e case, from Good 1061640 Hope, the circuit jurisdiction director's over court them. argument, did This not Court have subject-matter summarized ADOT a n d t h e as f o l l o w s : " I n t h e i r b r i e f i n s u p p o r t o f t h a t m o t i o n , ADOT a n d t h e d i r e c t o r a r g u e d t h a t t h e a m e n d e d c o m p l a i n t was a n u l l i t y a n d t h a t t h e c o u r t h a d no a l t e r n a t i v e b u t t o d i s m i s s t h e a c t i o n . T h i s was s o , b e c a u s e , they argued, the o r i g i n a l complaint f a i l e d t o invoke the subject-matter jurisdiction of the t r i a l court, h a v i n g named o n l y ADOT, w h i c h i s a b s o l u t e l y immune from suit, a n d t h e amended complaint, which purported t o amend an a c t i o n t h a t was v o i d a b i n i t i o , was a n u l l i t y ; t h e r e f o r e , no j u r i s d i c t i o n a t t a c h e d as a r e s u l t o f t h e p u r p o r t e d amendment." 6 So. 3d a t 1127. director's motion petitioned this The c i r c u i t to dismiss, Court court to vacate dismiss and t o d i s m i s s Before reliance initial t h i s Court, on Good complaint the circuit any amendment. and held, Hope denying the action with their motion t o f o r lack of Id. ADOT a n d t h e d i r e c t o r m a i n t a i n e d and argued and, thus, This and t h e directing the prejudice that the a g a i n s t ADOT d i d n o t c o n f e r court ADOT and t h e d i r e c t o r o f mandamus i t s order jurisdiction. denied a n d ADOT f o ra writ circuit subject-matter court Court could not serve agreed with on t h e a u t h o r i t y o f Good 6 their corporation's j u r i s d i c t i o n on as t h e b a s i s f o r ADOT a n d t h e d i r e c t o r Hope, that the c i r c u i t 1061640 court d i d not because of the jurisdiction, to amend ADOT have circuit this and the the c i r c u i t case. Just Department, 1975. on in Russell properly the judgment claim On hold State, i s presented Petroleum, the t r i a l the entertain Department Net lacked Axcess's and, thus, lacked and denying their i n the Axcess present sued the See § 5-2A-1, A l a . Code a motion to dismiss rest the State court Net as a p a r t y . of Net Although Net based to trial claims declaratorytrial. and R u s s e l l P e t r o l e u m , subject-matter original complaint subject-matter 7 the Axcess's Axcess's to proceed t h e a u t h o r i t y o f G o o d Hope that writ i m m u n i t y , N e t A x c e s s amended i t s i t allowed against the granted 6 So. 3d a t 1128. of the State. dismissed and the action with prejudice f o r situation t o add Corscadden against to i t s order jurisdiction. an a g e n c y party to vacate the doctrine of sovereign court Further, subject-matter issuing Upon t h e D e p a r t m e n t ' s f i l i n g complaint of petition, and t o d i s m i s s identical as lack t o add t h e p r o p e r court of subject-matter A nearly court's director's motion to dismiss jurisdiction. Court also refused to allow the corporation i t s complaint ordering lack subject-matter we jurisdiction against jurisdiction the to 1061640 entertain adding be 2d trial this 485, as Faith therefore, a Props., ( A l a . 2008). JJ., Woodall, the void LLC v. i t s original trial will and not must support C o m m e r c i a l Bank, 988 an So. i s dismissed. DISMISSED. Stuart, Smith, Murdock, J., Bolin, concur. Cobb, C . J . , jurisdiction c o u r t ' s judgment judgment First complaint action. Therefore, the appeal JUDGMENT V A C A T E D ; A P P E A L Lyons, to a p a r t y to the Further 492 amendment c o u r t d i d not have s u b j e c t - m a t t e r action; vacated. appeal. Axcess's Corscadden The over Net 8 dissent. P a r k e r , and Shaw, 1061640 MURDOCK, J u s t i c e For Co. the reasons explained v. Shabani, dissenting), dissenting), So. and Ex parte , Alabama v. Ogles, dissent. ( A l a . 200 9) 194 ( A l a . 2 0 0 8 ) Cobb, C.J., (Murdock,J . , Alabama 9 J., Dep't J a n . 16, 2009] and C o u n t y Comm'n, 11 S o . 3 d (Murdock, J . , d i s s e n t i n g ) . concurs. of (Murdock, (Murdock, J . , d i s s e n t i n g ) , Alabama Dep't o f C o r r . v. Montgomery 189, See a l s o [Ms. 1 0 6 1 5 3 9 , i n Cadle Department 6 So. 3d 1126, 1128 ( A l a . 2008) I respectfully Pub. S a f e t y 3d i n my s p e c i a l w r i t i n g s 4 So. 3d 4 6 0 , 463 ( A l a . 2008) Transportation, of (dissenting).

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.