Charles H. Stephens v. First Commercial Bank

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REL: 03/12/2010 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 R e p o r t e r o f D e c i s i o n s , 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 ( ( 3 3 4 ) 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 OCTOBER TERM, 2009-2010 1080648 C h a r l e s H. S t e p h e n s v. First Appeal STUART, Jefferson Circuit (CV-08-902973) C o m m e r c i a l Bank Jefferson defaulted favor Bank Court Justice. First the from Commercial Circuit on a $648,118 o f FCB. The t r i a l ("FCB") s u e d C h a r l e s H. S t e p h e n s i n Court, alleging promissory court note entered that Stephens had he h a d e x e c u t e d i n a summary judgment i n 1080648 favor o f FCB a w a r d i n g i t $737,686, and Stephens appealed. We affirm. I. Beginning series of promissory approximately off a note At at notes some p o i n t 2 0 0 8 , FCB Stephens with On promissory issue in this on 2005, $650,000. previous default all i n January note case, promissory each N o v e m b e r 7, and the t h e r e a f t e r , FCB the FCB, signed 2007, On collateral the note and/or security for his provided for by note. to with comply On S e p t e m b e r 12, i t s request, action against Stephens seeking payment of in late attorney answer FCB's c o m p l a i n t , filed of fees, Stephens 2 and paid $648,118. was in August 26, of Stephens put up indebtedness, terms of two the failed breach-of-contract Jefferson the of r e m i t payment the a a promissory 2008, a f t e r Stephens the amount interest, to fees, the FCB Stephens Stephens that provide promissory amount approximately specifically remedies to under an the that demanded t h a t S t e p h e n s i m m e d i a t e l y sums owed FCB renewed o f w h i c h was adjudged note. in executed value and Circuit promissory court note, costs. acknowledged Court, plus In his t h a t he had 1080648 executed was $648,118 p r o m i s s o r y in default On FCB the November supported and on an the 7, that affidavit president a t FCB. note, but he denied that he note. 2008, FCB motion from moved with a copy Andrew In t h a t for a of Brown, affidavit, summary judgment. the promissory note an vice assistant Brown stated, in part: "I am authorized by [FCB] to make this affidavit. The b o o k s , r e c o r d s a n d a c c o u n t s o f [ F C B ] with regard to the contractual obligations of [ S t e p h e n s ] a r e k e p t and m a i n t a i n e d i n t h e ordinary course of [FCB]'s business under my joint s u p e r v i s i o n and c o n t r o l a l o n g w i t h o t h e r e m p l o y e e s of t h e company. Any information set f o r t h below with regard to s a i d records i s true, v a l i d and c o r r e c t as r e f l e c t e d upon [ F C B ] ' s b o o k s and r e c o r d s . I do c e r t i f y t h a t a l l c r e d i t s due t h e r e o n h a v e b e e n a p p l i e d , a n d t h a t t h e b a l a n c e c l a i m e d i s due and unpaid. I further state that I have personal knowledge of the matters set f o r t h h e r e i n . " Brown also defaulted on declared decision outlined On the f i n d i n g him d a m a g e s FCB D e c e m b e r 3, response; affidavit note on A u g u s t 2 6 , was and that stated Stephens that had the b a s i s 2008, d e t a i l i n g in default. instead, of Finally, Brown also claiming. S t e p h e n s s u b m i t t e d no he had Stephens 2008, Stephens f i l e d h i s r e s p o n s e summary-judgment m o t i o n . his the the p r o m i s s o r y been sent a l e t t e r FCB's in argued 3 that FCB t o FCB's evidence had failed with to 1080648 establish, through competent evidence, that d i s p u t e d issues of m a t e r i a l f a c t , because, there were he a l l e g e d , no Brown's a f f i d a v i t v i o l a t e d t h e b e s t - e v i d e n c e r u l e and c o n s i s t e d solely of i n the hearsay, event and the trial asked C i v . P., until he to the had filed records relating On rule court, 5, Stephens's The on F C B ' s to Stephens o r as court on time and Rule the to a motion Ala. motion discovery. summary a s k i n g FCB judgment, to produce formally pursuant i t s a s k i n g the to the best- hearsay. trial to conduct stated 56(f), conduct court 5 6 ( f ) request also judgment, summary-judgment Brown's a f f i d a v i t 2008, to Rule opposing inadmissible t o be a d m i s s i b l e summary pursuant w i t h h i s motion a l l o w the p a r t i e s 2009. burden a discovery request December granting 5, trial court to s t r i k e evidence i t s additional Stephens would meet to delay r u l i n g Contemporaneously trial Alternatively, 1 c o u r t deemed FCB's e v i d e n c e sufficient Stephens R. rendering i t inadmissible. and entered stating discovery through that i t would an order that i t January consider the 'The b e s t - e v i d e n c e r u l e i s a r t i c u l a t e d as f o l l o w s i n R u l e 1 0 0 2 , A l a . R. E v i d . : "To p r o v e t h e c o n t e n t o f a w r i t i n g , t h e o r i g i n a l w r i t i n g i s r e q u i r e d , e x c e p t as o t h e r w i s e p r o v i d e d by s t a t u t e , t h e s e r u l e s , or by o t h e r r u l e s a p p l i c a b l e i n t h e c o u r t s of t h i s s t a t e . " 4 1080648 p a r t i e s ' outstanding It i s not clear motions at a hearing from Stephens conducted however, he the FCB's entered a no that of that order including a principal $23,755, late fees of in discovery opposition the motion, setting $176, discovery 31-day hearing, amount i f any, the January summary-judgment written 6, 2 0 0 9 . what, evidence motion before conclusion granted record during submitted summary-judgment At the on J a n u a r y the i t damages attorney Stephens then t i m e l y f i l e d h i s n o t i c e of appeal orally subsequently at fees FCB's hearing. court of $648,118, a c c r u e d and to 6, 2 0 0 9 , trial and period; $737,686, interest of $65,637. to this Court. II. " T h i s C o u r t ' s r e v i e w o f a s u m m a r y j u d g m e n t i s de novo. W i l l i a m s v. S t a t e Farm Mut. A u t o . I n s . Co., 8 8 6 S o . 2 d 72 , 74 ( A l a . 2 0 0 3 ) . We a p p l y t h e same standard of review as t h e t r i a l court applied. S p e c i f i c a l l y , we m u s t d e t e r m i n e w h e t h e r t h e m o v a n t h a s made a p r i m a f a c i e s h o w i n g t h a t no g e n u i n e i s s u e of m a t e r i a l f a c t e x i s t s and t h a t t h e movant i s e n t i t l e d t o a j u d g m e n t as a m a t t e r o f l a w . R u l e 5 6 ( c ) , A l a . R. C i v . P.; B l u e C r o s s & B l u e S h i e l d o f Alabama v. H o d u r s k i , 899 S o . 2 d 9 4 9 , 9 5 2 - 5 3 ( A l a . 2004). In making such a d e t e r m i n a t i o n , we must r e v i e w t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e n o n m o v a n t . W i l s o n v . B r o w n , 496 S o . 2 d 7 5 6 , 758 (Ala. 1986). Once t h e m o v a n t m a k e s a p r i m a f a c i e s h o w i n g t h a t t h e r e i s no g e n u i n e i s s u e o f m a t e r i a l f a c t , t h e burden then s h i f t s t o t h e nonmovant t o p r o d u c e ' s u b s t a n t i a l e v i d e n c e ' as t o t h e e x i s t e n c e of a genuine issue of m a t e r i a l f a c t . Bass v. 5 of 1080648 S o u t h T r u s t B a n k o f B a l d w i n C o u n t y , 538 So. 2 d 7 9 4 , 797-98 ( A l a . 1 9 8 9 ) ; A l a . Code 1975, § 1 2 - 2 1 - 1 2 . " Dow v. (Ala. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 2004). III. On a p p e a l , Stephens by competent note or what The the hearsay in contained brief, he were evidence itself, that within i t [FCB's] Accordingly, C i v . P., requires s u b m i t t e d by and/or default was FCB other than notes, and Stephens the establish a was inadmissible repeats that to on t h e p r o m i s s o r y i f such was books failed defaulted Stephens alleges, "simply FCB even best-evidence rule p. 12. R. only note which, violated Ala. i t s damages promissory affidavit, that e v i d e n c e t h a t he h a d established. the argues rule Brown's because prohibiting statements records." and facts Stephens's argues, because a motion i t "Rule f o r summary 56, judgment be s u p p o r t e d b y f a c t s t h a t w o u l d be ' a d m i s s i b l e i n e v i d e n c e , ' " Aldridge v. 2 0 0 1 ) , FCB no D a i m l e r C h r y s l e r Corp., failed genuine j u d g m e n t was issue 809 t o make a p r i m a f a c i e of therefore material fact, inappropriate. 6 So. 2d showing and, he 785, 797 (Ala. that there says, was summary 1080648 Stephens hearsay i s correct that prohibition the would best-evidence render Brown's i n a d m i s s i b l e i f Brown were s i m p l y r e c i t i n g examining FCB's b o o k s and books and records would themselves asserted facts, "state" the facts at asserts that Brown has, statements he and overlooks that "I and knowledge, v. a apply." See Co., of the based from any document, Ex parte Walker, So. 2d 358 , 3 6 0 - 6 1 of based on records. ... with [the failure personal knowledge a p p e l l e e ' s ] books to attach the and and invoices a p p e l l e e ' s ] summary-judgment motion, 7 was at not least his forth his the 623 a l s o Rose Manor H e a l t h 60 8 affidavit set own 'best So. Care, (Ala. made t h e own the directly upon ("[The a p p e l l e e ' s a f f i a n t ] s t a t e d t h a t he his of Stephens in his matters testifies independent does not Mfg. affidavit, knowledge witness ( A l a . 1992). Barnhardt able to although t h a t Brown a l s o swore personal rule be However, his those records, fact in case, by f a c t s c o n t a i n e d w i t h i n FCB's b o o k s and personal 284 issue. a learned the best evidence they would themselves "[W]hen evidence' be affidavit f a c t s he such the repeated the have In or simply herein." 281, records. rule 2d Inc. 1992 ) statements familiarity Therefore, fatal i n the to the [the absence 1080648 of any response themselves if Brown crucial Manor that to the decision made Stephens i n the case."). b a s e d upon h i s p e r s o n a l not argues presented that only In previous cases, the best-evidence when personal e.g., to the t r i a l i t was Ex parte rule bookkeeper's records Head, we have rule readily Walker, where testimony 572 So. 2d held evident 623 i t was of the business "testimony was testimony that 2d clear based 1276, 1281 at 'from records the probate court," of the probate the witness exclusively on records was from 8 best- that books a and Ex p a r t e (holding among t h e no t o . See, the record knowledge' p. had (applying ( A l a . 1990) personal within p r o h i b i t i o n , but 284 from regarding the relationships that inadmissible and n o t p e r s o n a l knowledge); made of c o u r t was he o r s h e t e s t i f i e d So. purportedly copies knowledge and Stephens's b r i e f , or the hearsay knowledge of t h e f a c t s evidence Likewise, " i t i s apparent ' p e r s o n a l k n o w l e d g e ' o f Mr. Brown." under invoices hearsay. nevertheless none o f t h e e v i d e n c e 13. the r e p e a t i n g t h e c o n t e n t s of documents, h i s statements by d e f i n i t i o n the Rose i s testifying not merely are by that defendants, from the i n a d m i s s i b l e where "no which gained [the affiant] gained 1080648 her 'personal McMillian (holding v. that describing were knowledge' were p r o v i d e d Wallis, a doctor's that individual's Perpetual 1989) 2d 11 9 9 , hearsay history); (holding that the affidavit where nothing had any p e r s o n a l and Home Bank affidavit filed h e a r s a y where that that none h i s information So. of the assertions knowledge. who e x p r e s s l y "my stated review Unlike legal in records the record knowledge of the Guntersville by d e f e n d a n t ' s v. that attorney from the face of concerning or from these matters others"). i n the present case, i t i s made b y B r o w n was b a s e d he f o r m e d h i s e x p e r t of the records opinion based i n Ex p a r t e H e a d , who of the Probate stated Court County, Alabama, f o r the purpose of determining relationship of on o f t h e h o s p i t a l i z a t i o n , " 567 he h a d " ' e x a m i n e d t h e r e c o r d s Jefferson testimony the doctor-affiant i n McMillian, 2d a t 1204, and t h e a f f i a n t that of " [ i ] t appears H o w e v e r , we c a n n o t a g r e e t h a t , upon ( A l a . 1990 ) and d e p o s i t i o n h a v e come t o h i m f r o m h i s c l i e n t personal 1205 F e d . S a v . & L o a n A s s ' n , 547 S o . 2 d 8 4 0 , 8 4 1 - 4 2 ( A l a . inadmissible clear affidavit"); o f an i n d i v i d u a l ' s h o s p i t a l the doctor was must So. affidavit the contents inadmissible indicated 567 with [the] the parties 9 in [this] case of the as t h e 1080648 relationship 1277, i s disclosed i n those Brown u n e q u i v o c a l l y records,'" 572 S o . 2 d a t states i nhis affidavit that " I have personal knowledge of t h e matters s e t f o r t h h e r e i n . " Although Stephens disputes evidence that statement, that would i n d i c a t e that made i n bad affidavit on was f i l e d November delayed faith. 7, ruling with 6, 2 0 0 9 , i n o r d e r by deposition. based correctly neither hearsay upon that i n which i t was that Brown's f o r a summary judgment the t r i a l court to question elected i n d i c a t i n g that h i s personal the expressly until January discovery, Brown as t o t h e here. rule n o t t o do s o . nor In the Brown's a f f i d a v i t knowledge, affidavit the best-evidence i s applicable fact Stephens time t o conduct He a p p a r e n t l y considered no knowledge, e i t h e r by i n t e r r o g a t o r i e s o r absence o f any e v i d e n c e not the summary-judgment m o t i o n time source of his personal of FCB's m o t i o n to give Stephens had ample light and on t h a t submitted the statement i s f a l s e or that In 2008, he as the the trial evidence, rule was court because prohibiting 2 Had S t e p h e n s o b t a i n e d and s u b m i t t e d e v i d e n c e i n r e s p o n s e t o FCB's summary-judgment m o t i o n c a l l i n g i n t o q u e s t i o n t h e s o u r c e o f B r o w n ' s k n o w l e d g e , t h a t r e s p o n s e m i g h t h a v e "made [FCB's books and r e c o r d s ] c r u c i a l t o t h e d e c i s i o n i n t h e case." See Rose Manor H e a l t h C a r e , 608 S o . 2 d a t 3 6 0 - 6 1 ("[The a p p e l l e e ' s a f f i a n t ] s t a t e d t h a t h e made t h e s t a t e m e n t s 2 10 1080648 Stephens affidavit he also i s admissible, defaulted alleged the on the default. even there i s no promissory that Brown's undisputed note evidence or amount Stephens argues that of the although FCB that of the stated had and fact the promissory stated i n d i c a t e t h a t he stated in his terms 2007]," of Brown's the note, being that answer. note no submit Brown's of O c t o b e r 22, 2008, Stephens court costs does of and on November disputing evidence affidavit $175.53, attorney was accrued for fees." a 7, that disputing filed, is obligated amount o f $ 6 4 8 , 1 1 8 . 4 1 , p l u s $656,368.36, p l u s answer defaulted executed evidence Stephens fees dispute under time late His later the $8,074.42, did "Stephens at principal fact, Brown submitted did in i n d e f a u l t ; however, a f t e r [promissory Neither he, much i n h i s affidavit statement, "[a]s the denied Stephens assertion. as facts i t submitted in c o u r t w i t h i t s summary-judgment m o t i o n t h a t Stephens that that hold the on the i f we to defaulted of that, n a r r a t i v e summary o f u n d i s p u t e d trial in argues to FCB interest total Rule of 56(e) o f h i s own p e r s o n a l k n o w l e d g e a n d b a s e d on h i s familiarity w i t h [ t h e a p p e l l e e ' s ] b o o k s a n d r e c o r d s . ... Therefore, the failure to attach the invoices was not fatal to [the a p p e l l e e ' s ] summary-judgment m o t i o n , at l e a s t i n the absence of any response by Rose Manor that made the invoices themselves c r u c i a l to the d e c i s i o n i n the c a s e . " ) . 11 1080648 is clear that and supported not rest as a motion provided upon the party's was "[w]hen granting in this summary rule, mere a l l e g a t i o n s pleading undisputed, for " and The evidence trial the FCB's m o t i o n or i s made adverse party denials c o u r t was f o r a summary an judgment before of the the may adverse trial court accordingly correct in judgment. IV. FCB sued Stephens, promissory note. supporting Brown's affidavit. to the fact that to allow him FCB's the evidence motion for Stephens court a summary genuine submitted correctly judgment is court of had the defaulted promissory submitted granted time prepare no was he on a to such judgment no entered issue of evidence a a material to judgment affirmed. AFFIRMED. 12 the in in 56(f) request discovery response. adequately and notwithstanding h i s Rule conduct note evidence no summary-judgment m o t i o n , trial to a copy Stephens sufficient obtain that t h e r e a f t e r moved f o r a summary j u d g m e n t , i t s motion with opposition there FCB alleging and Because established fact and to FCB's that because contrary, the trial favor FCB; that of 1080648 Cobb, C . J . , and L y o n s and B o l i n , Murdock, J . , concurs i n the 13 J J . , concur. result. 1080648 MURDOCK, J u s t i c e I concur evidence in ( c o n c u r r i n g i n the the result result). because I believe the best- r u l e s i m p l y i s i n a p p o s i t e t o t h i s c a s e and t o Andrew Brown's t e s t i m o n y S t e p h e n s was in f a c t d e l i n q u e n t i n h i s payments on t h e p r o m i s s o r y n o t e he had executed The writing, as to whether C h a r l e s H. i n f a v o r o f F i r s t Commercial Bank best-evidence as s u c h , rule are at applies when ("FCB"). the terms of a issue. "When a p a r t y w i s h e s t o p r o v e t h e t e r m s o f a w r i t i n g , t h e o r i g i n a l i t s e l f must be i n t r o d u c e d i n t o evidence i f a v a i l a b l e . The o r i g i n a l i s s a i d t o be t h e b e s t e v i d e n c e o f i t s t e r m s and, c o n s e q u e n t l y , i s t o be d e s i r e d above s u c h s e c o n d a r y e v i d e n c e as a copy or o r a l t e s t i m o n y . A witness, therefore, cannot t e s t i f y t o the terms of a w r i t i n g u n l e s s the original of that writing is shown to be unavailable." I I C h a r l e s W. Gamble and R o b e r t Evidence § 212.01(1) emphasis (6th ed. J . Goodwin, M c E l r o y ' s 2009) (footnotes Alabama omitted; added). "The best evidence rule has as i t s basic j u s t i f i c a t i o n the p r e v e n t i o n of f r a u d . This i s based upon t h e p r e m i s e t h a t one a l l o w e d t o g i v e o r a l t e s t i m o n y as t o t h e c o n t e n t s o f a w r i t i n g may be l i k e l y to construe the p r o v i s i o n s i n f a v o r of h i s p o s i t i o n i n the case. A second j u s t i f i c a t i o n f o r the r u l e i s t h a t o r a l testimony, or other secondary e v i d e n c e , s i m p l y i s n o t as r e l i a b l e as t h e w r i t t e n w o r d . I f one i s a l l o w e d o r a l l y t o g i v e t h e d e t a i l s of a written document, for example, the 14 1080648 misapplication, misapprehension, omission, or a d d i t i o n o f a s i n g l e w o r d may o f t e n c h a n g e t h e c h a r a c t e r o f t h e w r i t t e n d e c l a r a t i o n and t h e meaning o f t h e p a r t y who made i t . " M c E l r o y ' s A l a b a m a E v i d e n c e § 212.02 ( f o o t n o t e s also, e . g . , Rose Manor H e a l t h Co. , 608 So. 2d 358, 360-61 Care, (Ala. omitted). See I n c . v. B a r n h a r d t M f g . 1992) ("[T]he failure to a t t a c h t h e i n v o i c e s was n o t f a t a l t o [ t h e a p p e l l e e ' s ] summary- judgment m o t i o n , a t l e a s t i n t h e absence o f any response by [the a p p e l l a n t ] the decision Unlike, t h a t made t h e i n v o i c e s i n the case." (emphasis f o r example, a c o n t r a c t themselves c r u c i a l t o added)). t h a t h a s been r e d u c e d t o w r i t i n g -- where i t m a t t e r s what t h a t p a r t i c u l a r document s a y s -the t h e c o n t e n t o f FCB's b o o k s a n d r e c o r d s t h e m s e l v e s i s n o t issue here. The i s s u e l a t e i n h i s payments. based on h i s " p e r s o n a l Tucker, 294 A l a . (upholding the i s w h e t h e r S t e p h e n s was i n f a c t As t o t h i s i s s u e , Brown gave t e s t i m o n y knowledge." See, e.g., Lipscomb v. 246, 255-56, 314 So. 2d 840, 847-48 admissibility of the (1975) personal-knowledge t e s t i m o n y o f a w i t n e s s as t o h i s m o r t g a g e - p a y m e n t h i s t o r y i n the face required of an objection that the "best-evidence instead the introduction of applicable 15 rule" records). 1080648 It that i s true the books ordinary course and control t h a t Brown and also t e s t i f i e d records of FCB o f FCB's b u s i n e s s and that "any are and in his affidavit maintained [those] b o o k s and information set records." forth Even i f the Brown's t e s t i m o n y were deemed t o d e p e n d upon t h e of these passages, below 1980) v. Thompson T r a c t o r Co., 379 So. with reflected viability of admissibility I f i n d t h e s e p a s s a g e s n o t t o be d i f f e r e n t t h a n t h o s e t o w h i c h a p p r o v a l was Inc. the under h i s s u p e r v i s i o n r e g a r d t o s a i d r e c o r d s i s t r u e , v a l i d and c o r r e c t as upon in materially given i n Real Coal, 2d 1249, 1250 (Ala. ( i n w h i c h t h e v i c e p r e s i d e n t o f a company t e s t i f i e d : " ' I have p e r s o n a l l y r e v i e w e d t h e b o o k s and r e c o r d s o f t h e company w i t h r e s p e c t to the o b l i g a t i o n s of the defendants to p l a i n t i f f and prepared have reflect caused the items the exhibits which comprised Ex p a r t e W a l k e r , 623 from the p r e s e n t attached So. 2d 281 case. 16 to be each a c c o u n t . ' " ) . I to find ( A l a . 1992), d i s t i n g u i s h a b l e

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