DWOC, LLC v. TRX Alliance, Inc.

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Rel: 06/29/2012 Notice: This 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 OCTOBER TERM, 2011-2012 2110418 DWOC, LLC v. TRX A l l i a n c e , Inc. Appeal from Montgomery C i r c u i t (CV-11-900316) THOMPSON, P r e s i d i n g DWOC, LLC Court Judge. ("DWOC"), filed a complaint against TRX A l l i a n c e , I n c . ("TRX"), a l l e g i n g c l a i m s o f b r e a c h o f c o n t r a c t , fraud, and intentional interference with negligence. In i t s complaint, contractual relations, DWOC a l l e g e d t h a t i t i s a 2110418 t a x - p r e p a r a t i o n b u s i n e s s ; t h a t i t p u r c h a s e d and u t i l i z e d t a x preparation s o f t w a r e from licensing agreement" remitted taxfilings forwarded ("IRS"). the those TRX; and t h a t , "pursuant for the tax-preparation i t had prepared filings to the Internal t h e refunds from the the software, i t t o TRX, w h i c h DWOC a l l e g e d t h a t TRX was s u p p o s e d IRS d e p o s i t to Revenue then Service t o request that tax f i l i n g s DWOC h a d p r e p a r e d i n t o a b a n k i n g a c c o u n t i d e n t i f i e d b y DWOC, t h a t DWOC w o u l d d e d u c t i t s t a x - p r e p a r a t i o n f e e s f r o m t h o s e IRS r e f u n d s , and t h a t DWOC w o u l d t h e n r e m i t t h e r e m a i n d e r o f t h e r e f u n d s t o the a p p r o p r i a t e c l i e n t t a x p a y e r s . However, a c c o r d i n g t o DWOC, TRX f a i l e d t o l i s t DWOC's b a n k a c c o u n t i n t h e f i l i n g s i t made w i t h t h e IRS, and t h e IRS s e n t t h e c l i e n t s ' r e f u n d s to theclients, fees t o which which d e p r i v e d DWOC o f t h e t a x - p r e p a r a t i o n i t was e n t i t l e d behalf of those c l i e n t s . and p u n i t i v e In directly f o r w o r k i t h a d p e r f o r m e d on DWOC s o u g h t an a w a r d o f compensatory damages. response t o DWOC's c o m p l a i n t , TRX f i l e d a m o t i o n t o d i s m i s s b a s e d on i m p r o p e r v e n u e . d i s m i s s t h a t the l i c e n s i n g TRX a r g u e d i n i t s m o t i o n t o agreement f o r the tax-preparation s o f t w a r e p u r c h a s e d b y DWOC c o n t a i n e d a p r o v i s i o n 2 specifying 2110418 t h a t T e n n e s s e e l a w a p p l i e d t o any dispute a r i s i n g between p a r t i e s as a r e s u l t o f the p u r c h a s e o f the that agreement requiring also any l e g a l contained action TRX s u b m i t t e d t i t l e d "TRX referred that clause i n "the courts In s u p p o r t of i t s motion t o a s an e x h i b i t a c o p y Pro1040 End-User L i c e n s e e t o as "the forum-selection t o be b r o u g h t l o c a t e d i n N a s h v i l l e , Tennessee." dismiss, a s o f t w a r e and the o f a document Agreement" software-licensing (hereinafter agreement"). The s o f t w a r e - l i c e n s i n g a g r e e m e n t s p e c i f i e s t h a t i t i s "a l e g a l l y binding contract ('Licensor') between a n d you." TRX S o f t w a r e The t e r m Development, I n c . "you" i n the software- l i c e n s i n g a g r e e m e n t TRX s u b m i t t e d i n s u p p o r t o f i t s m o t i o n t o dismiss i s not s p e c i f i c a l l y defined DWOC f i l e d dismiss a motion and a motion i n that i n opposition to strike document. t o TRX's m o t i o n t o the licensing-software a g r e e m e n t s u b m i t t e d i n s u p p o r t o f TRX's m o t i o n t o d i s m i s s , i n w h i c h , DWOC a l l e g e d , i n p e r t i n e n t p a r t , t h a t TRX had properly which authenticate i t had based scheduled the r e c o r d i s not the software-licensing i t s motion matter for to dismiss. a hearing on June failed to a g r e e m e n t upon The t r i a l court 29, 2011. The c l e a r a s t o w h e t h e r t h a t h e a r i n g was c o n d u c t e d . 3 2110418 On J u l y 20, 2011, motion to dismiss, submission TRX f i l e d a brief i n support and i t supplemented to include an a f f i d a v i t its of Dustin of i t s evidentiary Hughes, t h e g e n e r a l manager f o r T R X . I n t h a t a f f i d a v i t , Hughes a t t e m p t e d to authenticate stated, the software-licensing among o t h e r preparation things, software from that agreement, t h epurchase a n d he of the tax- TRX was c o n d i t i o n e d upon t h e p u r c h a s e r ' s agreement t o t h e s o f t w a r e - l i c e n s i n g agreement. On A u g u s t 5, 2011, selection clause the t r i a l required Tennessee, and i t e n t e r e d without it, prejudice. among Hughes's should other things, affidavit. moved the t r i a l DWOC a r g u e d that court Hughes's i t contended, to strike affidavit t h e a f f i d a v i t was The p o s t j u d g m e n t m o t i o n was d e n i e d b y o f l a w p u r s u a n t t o R u l e 59.1, court be l i t i g a t e d i n a j u d g m e n t d i s m i s s i n g DWOC's c l a i m s be s t r i c k e n b e c a u s e , operation the claims forum- DWOC f i l e d a p o s t j u d g m e n t m o t i o n i n w h i c h not p r o p e r l y n o t a r i z e d . trial that c o u r t found t h a t the d i dnot rule A l a . R. C i v . P.; t h e on t h e m o t i o n to strike. 1 DWOC DWOC h a s a r g u e d on a p p e a l t h a t t h e t r i a l c o u r t e r r e d i n f a i l i n g t o s t r i k e Hughes's a f f i d a v i t . However, b e c a u s e t h t t r i a l c o u r t d i d n o t r u l e on e i t h e r o f DWOC's m o t i o n s to s t r i k e , t h e r e i s no a d v e r s e r u l i n g on t h a t i s s u e f o r t h i s c o u r t t o r e v i e w on a p p e a l . J a r r e t t v. F e d e r a l N a t ' l Mortg. 1 t h e 4 2110418 t i m e l y a p p e a l e d , and o u r supreme c o u r t t r a n s f e r r e d t h e a p p e a l to this c o u r t p u r s u a n t t o § 1 2 - 2 - 7 ( 6 ) , A l a . Code Initially, we note that 1975. TRX's s u b m i s s i o n t o t h e trial c o u r t o f t h e s o f t w a r e - l i c e n s i n g a g r e e m e n t and, l a t e r , H u g h e s ' s affidavit operate a t t e m p t i n g t o a u t h e n t i c a t e t h a t agreement, d i d not to convert judgment m o t i o n . a motion dismiss asserting for failure the motion to dismiss into See R u l e 1 2 ( b ) , A l a . R. the defense of a C i v . P. summary( " I f , on numbered [ R u l e 1 2 ( b ) ] ( 6 ) the p l e a d i n g to s t a t e a claim to upon w h i c h r e l i e f can be g r a n t e d , m a t t e r s o u t s i d e t h e p l e a d i n g a r e p r e s e n t e d t o and n o t e x c l u d e d by t h e c o u r t , t h e m o t i o n be treated as one f o r summary j u d g m e n t provided i n Rule 56."). was In t h i s and disposed of case, the motion n o t made p u r s u a n t t o R u l e 1 2 ( b ) ( 6 ) ; r a t h e r , pursuant to Rule 12(b)(3). Our shall as to dismiss i t was filed supreme c o u r t has h e l d , r e g a r d t o m o t i o n s t o d i s m i s s b a s e d on v e n u e , t h a t "a p a r t y with may submit e v i d e n t i a r y matters to support a motion to d i s m i s s t h a t A s s ' n , 72 So. 3d 682, 685-86 ( A l a . C i v . App. 2 0 1 1 ) ; A t t o r n e y s I n s . Mut. o f A l a b a m a , I n c . v. A l a b a m a Dep't o f I n s . , 64 So. 3d 1, 22 ( A l a . C i v . App. 2 0 1 0 ) ; and O l s o n v. S t a t e , 975 So. 2d 357, 359 ( A l a . C i v . App. 2 0 0 7 ) . 5 2110418 a t t a c k s venue." 370, 372 Ex p a r t e D.M. ( A l a . 2001). White Constr. Accordingly, we Co., 806 d e c l i n e to So. 2d construe TRX's m o t i o n t o d i s m i s s as a m o t i o n f o r a summary j u d g m e n t . On appeal, DWOC c o n t e n d s t h a t the trial court erred to r e v e r s a l i n f a i l i n g t o c o n d u c t t h e h e a r i n g i t r e q u e s t e d on i t s postjudgment motion. that a t r i a l if such Enters, The a hearing v. only is Id. not C i v . P., 2d 1220, "'injuriously motion. 1221 requires Flagstar ( A l a . 2000). h e a r i n g on a p o s t j u d g m e n t such e r r o r " i s r e v e r s i b l e injuriously affected substantial K i t c h e n s v. Maye, 623 ( q u o t i n g G r e e n e v. Thompson, 554 (Ala. 1989)). parties,'" So. that However, any i f i t 'probably ( A l a . 1993) 380-81 779 in to conduct a requested r i g h t s of the p a r t i e s . ' " 1088 A l a . R. requested Foster, motion i s e r r o r . error 59(g), c o u r t c o n d u c t a h e a r i n g on a p o s t j u d g m e n t m o t i o n Inc. failure Rule So. So. 2d 1082, 2d 376, I f the f a i l u r e to conduct a h e a r i n g d i d affect[] that f a i l u r e , [the] substantial rights w h i l e e r r o r , was harmless. of Id. "'Harmless e r r o r o c c u r s , w i t h i n the c o n t e x t of a R u l e 59(g) m o t i o n , where t h e r e i s e i t h e r no p r o b a b l e m e r i t i n the grounds a s s e r t e d i n the motion, or where t h e appellate court r e s o l v e s the issues p r e s e n t e d t h e r e i n , as a m a t t e r o f l a w , a d v e r s e l y t o t h e movant, by a p p l i c a t i o n o f t h e same o b j e c t i v e s t a n d a r d o f r e v i e w as t h a t a p p l i e d i n t h e trial court.'" 6 the 2110418 Kitchens v . Maye, Thompson, 554 So. 623 So. 2 d a t 1088-89 (quoting 2d a t 381). Thus, we must d e t e r m i n e w h e t h e r t h e t r i a l to conduct a hearing harmless e r r o r . Greene v. on DWOC's court's postjudgment DWOC c o n t e n d s t h a t t h e t r i a l p r o p e r l y r e l y on Hughes's a f f i d a v i t failure motion was court could not t o support the motion t o dismiss. We n o t e t h a t TRX c o n t e n d s , h o w e v e r , t h a t DWOC f a i l e d t o properly object renew i t s m o t i o n t o Hughes's a f f i d a v i t to strike, or f i l e t h a t a d d r e s s e d Hughes's a f f i d a v i t judgment o f d i s m i s s a l . was required TRX DWOC d i d n o t a new m o t i o n prior t o the e n t r y to strike, r e l i e s on a r e c e n t supreme c o u r t c a s e , E x p a r t e (Ala. involved 2012). affidavits of the or f i l e the a l l e g e d l y i m p r o p e r l y executed of Veterans A f f a i r s , to strike, I n s u p p o r t o f i t s a r g u m e n t t h a t DWOC t o renew i t s m o t i o n motion t o s t r i k e because [Ms. That 1101171, Feb. case, that affidavit, Secretary 10. 2012] and t h e cases o u r supreme So. 3 d i t discusses, court held i n a d m i s s i b l e u n d e r R u l e 5 6 ( e ) , A l a . R. C i v . P., i n t h e o f summary-judgment m o t i o n s . a new were context TRX does n o t c i t e , n o r has this c o u r t d i s c o v e r e d , a u t h o r i t y e x t e n d i n g the requirements of Rule 7 2110418 56(e) i n the Rule 12(b), to strike context o f motions t o dismiss A l a . R. C i v . P. Hughes's motion f i l e d in this Further, affidavit case. DWOC d i d f i l e as p a r t Thus, t h e f i l e d pursuant t o a motion o f i t s postjudgment trial c o u r t was g i v e n t h e o p p o r t u n i t y t o c o n s i d e r DWOC's a r g u m e n t . Given the f a c t s o f t h i s c a s e , we d e c l i n e t o h o l d t h a t DWOC f a i l e d t o its challenge t o Hughes's a f f i d a v i t for appellate preserve review. DWOC c o n t e n d s t h a t Hughes's a f f i d a v i t may n o t be u s e d t o authenticate the software-licensing agreement because t h e a f f i d a v i t does n o t c o m p l y w i t h § 12-21-4, A l a . Code 1975. section That provides: "Affidavits r e q u i r e d i n t h e commencement o r p r o g r e s s o f a n y a c t i o n o r j u d i c i a l p r o c e e d i n g s may be t a k e n w i t h o u t t h i s s t a t e b e f o r e a n y c o m m i s s i o n e r a p p o i n t e d b y the Governor o f t h i s s t a t e , any judge or c l e r k o f a f e d e r a l c o u r t , any judge o r c l e r k o f any c o u r t o f r e c o r d o r any n o t a r y p u b l i c , who s h a l l c e r t i f y u n d e r t h e i r hands a n d s e a l s o f o f f i c e , i f any." I n M u r r a y v. T i m b e r l a k e , supreme court held that 564 So. 2 d 885 an a f f i d a v i t ( A l a . 1990), o u r signed by a South C a r o l i n a n o t a r y d i d not comply w i t h the r e q u i r e m e n t s o f § 12¬ 21-4, A l a . Code 1975, because the South C a r o l i n a n o t a r y h a d f a i l e d to a f f i x her s e a l t o the a f f i d a v i t . I n t h a t case, t h e supreme c o u r t a t i s s u e was n o t concluded t h a t the 8 affidavit 2110418 timely f i l e d , but i t determined t h a t the "noncompliance [§ 12-21-4's] mandatory directive, couched i n p l a i n with language t h a t r e q u i r e s no s p e c i a l i n t e r p r e t a t i o n , w o u l d most c e r t a i n l y have r e n d e r e d t h e a f f i d a v i t v o i d i f i t h a d b e e n t i m e l y filed." M u r r y v. T i m b e r l a k e , 564 So. 2 d a t 890. In Civ. H a s t o n v. G e n e r a l M o t o r s C o r p . , 678 So. 2 d 1164 ( A l a . App. 1 9 9 6 ) , the notary's seal was n o t a f f i x e d t o an a f f i d a v i t f i l e d i n s u p p o r t o f G e n e r a l M o t o r s ' summary-judgment motion. comply This c o u r t h e l d t h a t , because with § 12-21-4, theaffidavit the a f f i d a v i t d i d not was v o i d . Haston v. G e n e r a l M o t o r s C o r p . , 678 So. 2 d a t 1166. Thus, we must a g r e e w i t h DWOC t h a t Hughes's a f f i d a v i t d i d not comply with § 12-21-4, A l a . Code 1975, and, therefore, t h a t i t was v o i d and n o t a d m i s s i b l e t o s u p p o r t TRX's m o t i o n t o dismiss. General M u r r y v . T i m b e r l a k e , 564 So. 2 d a t 890; Motors Corp., 678 So. 2 d a t 1166. s u p p o r t f o r t h e m o t i o n t o d i s m i s s was t h e agreement, other than which TRX. specifies We note that The r e m a i n i n g software-licensing the licensor that, Haston v. i s an e n t i t y i n i t s c o m p l a i n t , DWOC s p e c i f i e d t h a t i t had a c o n t r a c t o r l i c e n s i n g agreement TRX, with b u t t h e r e i s n o t h i n g i n t h e r e c o r d on a p p e a l t o e x p l a i n 9 2110418 the r e l a t i o n s h i p , i f any, between t h e l i c e n s o r i d e n t i f i e d i n t h e s o f t w a r e - l i c e n s i n g a g r e e m e n t a n d TRX, t h e d e f e n d a n t named in DWOC's a c t i o n . Given t h e foregoing, we must h o l d "that thet r i a l court e r r e d i n a l l o w i n g [DWOC's p o s t j u d g m e n t ] m o t i o n t o be d e n i e d b y operation and we of law without further b e c a u s e we f i n d [DWOC's] b e i n g h e a r d on t h a t m o t i o n , conclude that this error was n o t h a r m l e s s ' p r o b a b l e m e r i t ' i n " DWOC's argument t h a t t h e materials submitted b y TRX were n o t a d m i s s i b l e motion t o dismiss. Flagstar Enters., 2d a t 1222. A c c o r d i n g l y , the cause t o t h e t r i a l we r e v e r s e court t o support i t s I n c . v. F o s t e r , 779 So. t h e j u d g m e n t a n d remand for further proceedings. REVERSED AND REMANDED. Pittman, Thomas, a n d Moore, J J . , c o n c u r . Bryan, J . , concurs i n t h e r e s u l t , without w r i t i n g . 10

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