Lawson v. Harris Culinary Enterprises, LLC

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Justia Opinion Summary

Defendant Mitzi Lawson appealed a judgment in favor of Plaintiffs Harris Culinary Enterprises, LLC (HCE), John C. Harris III (Clinton), and John C. Harris, Jr. (John), (collectively "the Harrises"), on their fraud claims related to their purchase of a restaurant franchise. Mitzi was married to codefendant, Sims Lawson. Following his marriage to Mitzi, Sims formed SYM, Inc. for the purpose of operating a "Fox's Pizza Den" restaurant franchise in Killen. Sims purchased a building in which to operate the franchise; that building was titled solely in Mitzi's name. At some time before the events giving rise to their claims on appeal, John and Clinton formed HCE for the purpose of operating pizza-restaurant franchises. In March 2007, the Harrises entered into negotiations with Sims to purchase the Killen franchise. According to the Harrises, in an apparent attempt to secure a higher purchase price, Sims purportedly generated false financial reports evidencing higher gross sales and profits for the Killen franchise than were actually realized. The Harrises ultimately purchased the Killen franchise. As a condition of the sales agreement, the Harrises entered into a one-year lease agreement to continue operation of the Killen franchise in its then current location. The Harrisses initiated the underlying lawsuit alleging that as a result of the allegedly falsified financial reports, they were induced to purchase both the franchise and enter into the lease agreement. Mitzi moved to dismiss the claims against her, arguing that she made no actual representation to the Harrises. Plaintiffs won at trial, and Mitzi appealed. Upon review, the Supreme Court found that there was no evidence presented at trial from which the court could have reasonably determined that Mitzi made any misrepresentation to the Harrises. Accordingly, the Court reversed the trial court's judgment against her.

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REL:10/21/2011 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 Courts, 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 OCTOBER TERM, 2011-2012 1091751 Mitzi Lawson v. Harris Culinary Enterprises, Appeal LLC, e t a l . from L a u d e r d a l e C i r c u i t (CV-07-306) Court SHAW, J u s t i c e . Mitzi Lawson, a defendant below, appeals from a $500,000 judgment i n f a v o r of Harris Culinary Enterprises, L L C ("HCE"), John I I I ("Clinton"), Harris, J r . C. Harris and John C. ("John"), t h e p l a i n t i f f s below ( h e r e i n a f t e r sometimes r e f e r r e d 1091751 to c o l l e c t i v e l y as related reverse to their "the Harrises"), purchase and render a l l times underlying Lawson. Following is in Mitzi's At present claims, of of operating r i s e to the purchased franchise; that Sims S i m s , an a c c o u n t a n t , a ("the K i l l e n Sims time limited liability members We "Fox's underlying Pizza Den" franchise"). Sims a building building i n which was t i t l e d to solely name. some restaurant giving a codefendant i n the i nKillen o f SYM. operate the K i l l e n franchise. History his marriage to M i t z i , franchise president claims M i t z i was m a r r i e d t o h e r c o d e f e n d a n t , f o r the purpose restaurant fraud of M i t z i . to the events f o r m e d SYM, I n c . ("SYM"), a l s o action, their restaurant and P r o c e d u r a l pertinent action, a a judgment i n favor Facts At of on before John and Clinton giving formed rise HCE, to an company, f o r t h e purpose o f o p e r a t i n g franchises. HCE, the events Clinton Although was both John designated their Alabama pizza- and C l i n t o n as the are "managing member." In with March 2007, the Harrises Sims t o p u r c h a s e t h e K i l l e n 2 entered franchise. into negotiations According to the 1091751 Harrises, price, i n an a p p a r e n t Sims attempt purportedly evidencing higher sales gross false profits than were actually purported falsified and reports, Killen offer and, franchise. Harrises entered operation of i n May the 2007, i n t o a one-year Killen Killen review of the increased ultimately of the sales franchise reports f o r the Upon Harrises lease purchase financial realized. As a c o n d i t i o n the a higher generated franchise initial to secure their purchased the agreement, the agreement continue i t s then in to current location. In August action, 2007, alleging that, them o f f a l s i f i e d the Killen suffering SYM, and t o e n t e r and Mitzi Their under to pleading into the induced and, claims the K i l l e n subsequently, asserted for a 3 against summary charged of fraud, sued "as owner and franchise In response to the H a r r i s e s ' complaint, any to agreement, which theories i n d i c a t e d t h a t M i t z i was b e i n g dismiss underlying to purchase the lease complaint, several of the [ b u i l d i n g ] " i n which located. both they had been damage a s a r e s u l t . Sims, initiated as a r e s u l t o f S i m s ' s p r e s e n t a t i o n reports, franchise specifically lessor the Harrises Mitzi her judgment was moved in that i n her 1091751 favor on that had the there made was either) neither that evidence a to support false a bench SYM or (nor a John, employee the trial of a claim -- that otherwise, on and Mitzi to the from 13, Harrises' heard Mitzi, who July 2010, representative court SYM, allege motions. trial against the and -- not had and for claims. 1 ore tenus from David worked at the franchise. testified e x p e r i e n c e i n the and as franchise a the and Petersville Harrises o p e n e d an result of his the H a r r i s e s began opportunities. investigating opportunities P i z z a Den, franchise that, "pizza business," pizza-restaurant about nor defend Clinton former Clinton at Sims did denied both to proceeding, from Holcombe, complaint to court proceeded appeared During the evidence trial matter which that representation, The The Killen no any Harrises. at ground After available past looking learning with Fox's u l t i m a t e l y purchased a Fox's P i z z a initial location in Petersville f r a n c h i s e " ) . Because of the profitability of Den ("the that A t t h e t i m e o f t h e t r i a l , M i t z i was d i v o r c e d f r o m S i m s . S p e c i f i c a l l y , h e r t e s t i m o n y i n d i c a t e d t h a t t h e i r m a r r i a g e was terminated i n F e b r u a r y 2009. A d d i t i o n a l l y , i t appears that S i m s was u n a v a i l a b l e f o r t r i a l b e c a u s e , a t t h a t t i m e , he was i n c a r c e r a t e d on an u n r e l a t e d f e d e r a l t a x - e v a s i o n conviction. 1 4 1091751 initial location, the Pizza Den franchise, opened in Muscle the time the Harrises At according were Shoals ("the Harrises attending, possibility of subsequently to which Killen the Shoals Clinton indicated these the franchise. he Killen inspect received was that, a Clinton at franchise tour but that no stated that disappointing that "[s]he Mitzi was with his quiet." tour, the evidencing was he Killen the sales f r a n c h i s e t h r o u g h December 2006, w h i c h longer f r a n c h i s e because the Clinton of associated interested was franchise. explanation an of records Sims. in conclusion receiving the building the to he the indicated of that of they of from Killen and evidenced monthly average sales the operations, apprised numbers" r e c e i p t s f o r the K i l l e n on and franchise"). were the located activities "sales After Harrises to practices. during Killen Fox's purchased were e x p a n d i n g t h e i r the franchise present Sims another ultimately Muscle the went Clinton, business requested and purchasing According its they seeking t o C l i n t o n , John e n c o u n t e r e d Sims at a f u n e r a l both Clinton which began sales o n c e he sales $20,000, C l i n t o n figures purchasing "were t o o low the " relayed h i s d i s i n t e r e s t based numbers, 5 in indicated Sims contacted John and 1091751 further offer negotiation ensued, by t h e H a r r i s e s however, rejected negotiation agreement that which testified s a l e s numbers offer, ultimately to purchase that, immediately r e a c h e d by t h e p a r t i e s , the initial f o r the Harrises negotiations culminated to purchase the K i l l e n occurred, Clinton which Sims r e p r e s e n t e d f o r the K i l l e n t h e y were b e t t e r than the i n i t i a l been provided Harrises. Clinton, the additional in course purchase of the agreement to the Harrises sales numbers Specifically, an franchise. that f r a n c h i s e were i n c r e a s i n g that to and SYM, resulted the the initial franchise. the K i l l e n during preceding i n an and that had according to Sims " [ t o l d them] t h a t s i n c e b r i d g e c o n s t r u c t i o n [on t h e a d j a c e n t S h o a l s C r e e k B r i d g e ] had ended i n December o f 2 0 0 6 , ... [ t h e K i l l e n f r a n c h i s e ' s ] a v e r a g e s a l e s h a d i n c r e a s e d f r o m t h e t w e n t y t h o u s a n d a v e r a g e we were shown going through December 2006 to s t e a d i l y t o an a v e r a g e o f t h i r t y t h o u s a n d i n M a r c h of Clinton provided 2007." further "a s a l e s numbers Clinton stated printout" that the evidencing Harrises the were allegedly initially increasing f o r J a n u a r y 2007, F e b r u a r y 2007, and March testified t h a t d o c u m e n t a t i o n was p r o v i d e d 6 "by 2007. [Sims]" 1091751 and was was presented unable provided to "[o]n behalf identify to the Harrises that, during have indicated further supporting verified steadily Mitzi. to that, 2007, Clinton, Sims's claims upon the indicated that, based Harrises entered Killen final franchise. and w i t h 2006 on that they request for noted associated regard through sales-tax March provided that negotiations Clinton i n the n e g o t i a t i o n s franchise and that sales f o r the K i l l e n Clinton into 2007, information December involved been n e v e r made a s i n g l e the H a r r i s e s ' February from Killen had f u r t h e r acknowledged n o r a n s w e r e d any q u e s t i o n increased the He that d o c u m e n t a t i o n , Sims a l s o p r o v i d e d f o r January According by documentation Clinton 2 asked. Clinton records any the n e g o t i a t i o n period, M i t z i statement to the Harrises might of the c o r p o r a t i o n . " 2007. by Sims f r a n c h i s e had March 2007. information, the f o r the purchase of that only with the sale to the lease Sims was of the of the b u i l d i n g Specifically, at the time of the admission i n t o evidence of t h e r e p o r t s h o w i n g t h e p u r p o r t e d a c t u a l s a l e s numbers f o r t h e K i l l e n f r a n c h i s e , c o u n s e l f o r t h e H a r r i s e s s t i p u l a t e d on t h e r e c o r d t h a t t h e a l l e g e d f r a u d u l e n t i n f o r m a t i o n "came f r o m Sims." 2 7 1091751 where the franchise that the only Sims, sales was located. i n h i s capacity contract He 3 further as p r e s i d e n t t r a n s f e r r i n g the K i l l e n acknowledged o f SYM, signed franchise to the regard to the Harrises. However, Clinton lease, Sims a s s e r t e d behalf of M i t z i , actually the lease single that who, the sole negotiations, agreement instructed Clinton indicated confirmed further that her regarding the lease testified Killen the sale, to the Harrises, As w i t h Mitzi that, with was the sales signed a n d he n e v e r had a stated payments on apparently the lease Clinton t r a n s a c t i o n s , no m i s r e p r e s e n t a t i o n s Following the negotiations h i s presence, Nonetheless, t o make with of the b u i l d i n g . outside discussion with that, h e was h a n d l i n g Sims owner Clinton negotiated. indicated terms Sims h a d that directly regard to he to the was Mitzi. lease w e r e made t o t h e H a r r i s e s . the Harrises took possession of the f r a n c h i s e a n d M i t z i ' s b u i l d i n g o n May 1 4 , 2 0 0 7 . C l i n t o n indicated that, following the transfer, the K i l l e n franchise In fact, as C l i n t o n acknowledged during his trial t e s t i m o n y , h i s p r e v i o u s sworn r e s p o n s e s t o d i s c o v e r y , i n which he was a s k e d t o i d e n t i f y a l l p e r s o n s w i t h whom h e s p o k e regarding the value of the K i l l e n franchise, purposefully o m i t t e d M i t z i ' s name b e c a u s e he d i d n o t s p e a k w i t h h e r . 3 8 1091751 averaged $4,000 "were not i n keeping with Clinton noted, to $5,000 p e r the numbers p r o v i d e d sales numbers the had Killen $20,000 franchise deemed too to (those franchise in low stated ... A l t h o u g h the he the too a monthly that, had the accounting the Killen been card. software franchise numbers b e g i n n i n g fact, the initial 2006), the according sales provided the which purchase to figure at with "the the only access card provided computer-access In evidencing late justify i n accordance computers the said, of Clinton, for a pizza profitably. i n M i t z i ' s name, C l i n t o n t e s t i f i e d at to Specifically, low operate franchise, access Harrises be to the with Killen the he [Sims's] r e p r e s e n t a t i o n s . " to franchise. Clinton the for was numbers, numbers w e r e more i n l i n e sales Clinton week, w h i c h the card Killen of necessary to [franchise]." t h e H a r r i s e s was then had an still loaded on one to produce a report According of employee the of 4 issued t h a t Sims a c t u a l l y gave Clinton i n J a n u a r y 2007. purchase him use computers the sales to C l i n t o n , the The r e c o r d r e f l e c t s t h a t t h e r e were t h r e e computers at t h e K i l l e n f r a n c h i s e : two t h a t w e r e u s e d "up f r o n t " a n d w e r e associated with placing customer orders and a separate c o m p u t e r " i n t h e b a c k " t h a t was used to o b t a i n financial i n f o r m a t i o n a s s o c i a t e d w i t h running the business. 4 9 1091751 report sales generated average Clinton by that n e v e r went [the involvement fact the that access in the had been issued used Harrises became aware earnings versus the filed the underlying John's testimony. testimony John evidence her at actual no [the] earnings, as evidence documents pointed had noted the at computer- access in to payroll the franchise. discrepancy store indicating Mitzi's Clinton Mitzi the 5 for handling Killen the had e v i d e n c e d by name, the of as month." t o do w i t h franchise, that, in system to a "[t]hat Harrises responsible and computer the anything Killen franchise card that "had confirmed [$20,000] H a r r i s e s ] . " As Mitzi Killen over acknowledged i n d i c a t i n g that M i t z i Sims gave search the the Once 6 to the reported above, they action. was confirmed s u b s t a n t i a l l y s i m i l a r to that he incorporated HCE Clinton's for the I t a p p e a r s f r o m t h e r e c o r d t h a t SYM a c t u a l l y p a i d s a l e s t a x on t h e a l l e g e d l y i n f l a t e d s a l e s n u m b e r s S i m s h a d f u r n i s h e d to the H a r r i s e s . 5 C l i n t o n s p e c i f i c a l l y acknowledged during h i s testimony t h a t t h e a l l e g e d l y f a l s i f i e d r e p o r t s p r o v i d e d by Sims w o u l d h a v e h a d t o h a v e b e e n p r e p a r e d on a c o m p u t e r o t h e r t h a n t h e one used i n the Killen franchise and t r a n s f e r r e d to the H a r r i s e s at the time of the s a l e of the f r a n c h i s e , because the computer at the K i l l e n f r a n c h i s e r e t a i n e d the lower sales figures. 6 10 1091751 purpose that, the of operating a pizza franchise as a r e s u l t o f t h e s u c c e s s Harrises began looking in Petersville of that to initial expand that and enterprise, business. He f u r t h e r c o n f i r m e d t h a t he was a p p r o a c h e d b y S i m s , w i t h whom he was previously indicated that business. Clinton, John start-up Den acquainted, he was l o o k i n g John t e s t i f i e d who the K i l l e n confirmed that he loans associated with each the Harrises franchise by a n d was the he h a d p e r s o n a l l y in incurred association with $385,546. He further outstanding and housed that Fox's he Pizza expended to take his out a law of the franchises indicated that attempting franchises moneys t o u s e moneys franchise with that totaling t o keep t h e a f l o a t and, l a t e r , obligations associated loan practice. o b l i g a t i o n s and/or expended 11 to guaranteed the John's t e s t i m o n y i n d i c a t e d g e n e r a t e d by t h e p r o f i t a b l e P e t e r s v i l l e the his pizza information of the three forced the operation M u s c l e S h o a l s and K i l l e n Sims t o cover monthly expenses f o r that Documentation admitted during that personally ultimately building which franchise. operated savings during and t o s e l l he r e l a y e d also moneys f r o m h i s p e r s o n a l secured funeral, to retire that then v i s i t e d franchises each at a t h o s e two t o pay failing 1091751 franchises entire also John economic Harrises' As closed her working at initial visit. at her only contact was up John Petersville testimony of indicated franchise regarding that Mitzi Killen franchise counter. in on she Mitzi the the recalled also phone to date of her Although for specifically f r a n c h i s e and related to denied the his visit make was sure the input any Killen ever serving c o u l d not when [she] was [sic] franchise. as the According 12 In and that Sims business- fact, the Mitzi the even s i g n e d to M i t z i , Sims involvement i n manager of r e c a l l ever having i t s operation. him, making "extensive" that "when they saw was Clinton r e c a l l e d , however, she her r e l a t e d decisions, M i t z i denied of in Clinton's testified [them]." she seeing introduced operation December that [she] the the l e a d i n g to g e t t i n g a d e l i v e r y c o r r e c t l y [ s i c ] and asked that Mitzi's role confirmed with Clinton during using occasionally the franchise. Specifically, the front result, testimony, trial the no d o w n t u r n u l t i m a t e l y doomed f r a n c h i s e or the n e g o t i a t i o n s purchase In a the offered e i t h e r the K i l l e n standing an enterprise. Harrises 2009. during Killen a only check bank 1091751 deposits s h e was e v e r r e s p o n s i b l e f o r m a k i n g w e r e when s h e was assisting with Although pizza delivery. Mitzi acknowledged have a c c e p t e d customer counter, she s a i d for deposit for making three she she never and c o u l d n o t r e c a l l that performed stated computer a that deposit s h e was from a that the scheduling unable to program on a c o m p u t e r Mitzi, which issued recall the only Sims during properly customers. and ever time later gave tests to She She d i d , h o w e v e r , further enter confirm the In logged have been the a in relation s h e was According to the computer-access delivery a password-protected franchise. that fact, onto indicated that into used ever t o C l i n t o n , was when to during f r a n c h i s e , a j o b she says she at the K i l l e n She s p e c i f i c a l l y of spreadsheet time receipts responsible at her residence. logging she e v e r at or near the for payroll f r a n c h i s e would issue. occasionally ever h a v i n g been at night." computer at the K i l l e n standing responsible only she might t o t a l e d the day's y e a r s SYM o p e r a t e d t h e K i l l e n Mitzi to payments w h i l e any " f i n a l acknowledge that i t was the card addresses card, initially was working of d e n i e d ever h a v i n g seen repeat any type on t h e c o m p u t e r d u r i n g t h a t l i m i t e d u s e o r e v e r 13 1091751 having "worked with franchise. Mitzi the assembly numbers" also denied of i n the computer at the Killen ever l o o k i n g at or a s s i s t i n g monthly sales figures for the with Killen franchise. More s p e c i f i c a l l y , fraudulent According from records Sims to her testimony, Sims well." sales M i t z i denied was Mitzi an provided the only i n d i c a t i o n that also denied ever seeing that to the a l l e g e d l y the information "the she business Sims d i s c u s s e d Harrises. with received was doing h e r any o f his n e g o t i a t i o n s with the H a r r i s e s , i n c l u d i n g h i s statement to the Harrises that business had of nearby r o a d - c o n s t r u c t i o n Sims "didn't Mitzi the d i d admit, course Harrises discuss of were going that's fine." approached rental the the Harrises work. the pizza however, to rent According place that negotiations since with the to obtain much informed Harrises t h e b u i l d i n g and her approval that before acceptable to her. 14 she and at a l l . " her during that the she "said Sims never arriving f o r t h e b u i l d i n g , t h e r e n t a l amount was conclusion to M i t z i , very Sims the She f u r t h e r i n d i c a t e d t h a t , a l t h o u g h her figure improved he at a quoted 1091751 Holcombe the Killen around indicated that he worked franchise f o r approximately o r 2006. 2005 According promoted t o a s s i s t a n t manager, him to take total intake included (adding card purchases), tallying checks a t t h e t i m e he was assigned by M i t z i . " assumed that However, time at or he asked night deposits, which to arrive and s u b t r a c t i n g Holcombe t h a t d u t y , Sims at creditcash f o r indicated specifically h a d b e e n done i n t h e p a s t i n he s p e c i f i c a l l y responsibility, in testimony, t h e n s u b t r a c t i n g t h e $200 o p e r a t i n g informed him " t h a t those d e p o s i t s part months a l lreceipts and c a s h leader Sims the n e x t day and d e p o s i t i n g t h e r e m a i n d e r . that, shift five at which r e s p o n s i b i l i t y f o r the f i n a l said, a t o Holcombe's was Holcombe as " [ h e ] was n o t e d t h a t , once the only one he that d i d them." According for t o Holcombe, d u r i n g the n i g h t l y deposits, ranged from around night. Also according of Killen the associated with the daily $200 the intake on a slow responsible of the K i l l e n night t o $2,000 franchise on t o Holcombe, the computer i n the franchise "had the business, receipts t h e t i m e he was a l l the actual a busy office information" i n c l u d i n g a spreadsheet showing f o r the K i l l e n 15 franchise as reflected by 1091751 the nightly deposits. regard to the K i l l e n basically He Holcombe franchise noted that with church or school the delivery the close "directed against that and when large events M i t z i returning Mitzi's role follows: " I t was h e r j o b [the b i g g e r ] orders came customers." in associated was r e s p o n s i b l e the associated with f o r making payment to the franchise. At a as [ t o ] k e e p up r e l a t i o n s w i t h further Killen described of the Harrises' verdict" her alleged the Harrises 7 on grounds evidence, that misrepresentations had failed o r any f a i l u r e part. denied 8 The t r i a l thereafter, judgment Mitzi court both as a m a t t e r rested of material claims fact any e v i d e n c e and of a t o d i s c l o s e on M i t z i ' s M i t z i ' s motion. and renewed of law, again moved f o r the Harrises' to present single misrepresentation Mitzi arguing Immediately her motion that there for a was no " A d i r e c t e d v e r d i c t i s now r e f e r r e d t o a s a j u d g m e n t a s a m a t t e r o f l a w . S e e R u l e 5 0 , A l a . R. C i v . P." S k e r l i c k v. G a i n e y , 42 S o . 3 d 1 2 8 8 , 128 9 n.2 ( A l a . C i v . App. 2010). H o w e v e r , " [ i ] n an a c t i o n t r i e d u p o n t h e f a c t s w i t h o u t a j u r y , s u c h a m o t i o n i s p r o p e r l y c h a r a c t e r i z e d as a m o t i o n f o r a j u d g m e n t on p a r t i a l f i n d i n g s b y t h e t r i a l c o u r t . " Ex p a r t e Wood, [Ms. 1 0 9 0 8 7 7 , O c t , 2 9 , 2 0 1 0 ] So. 3d , n.3 (Ala. 2 0 1 0 ) ( c i t i n g R u l e 5 2 ( c ) , A l a . R. C i v . P . ) . 7 M i t z i i n c l u d e d t h i s l a s t argument d e s p i t e h e r c o n t e n t i o n t h a t t h e H a r r i s e s ' c o m p l a i n t f a i l e d t o a l l e g e t h a t she had and breached a duty to d i s c l o s e . 8 16 1091751 evidence of any building." although saying "wrongdoing The "the Harrises evidence anything to representations thing[, of the Following entered on $500,000, of factual findings filed, judgment on the and on have [Mitzi] with and the facts a of the trial, judgment the that directly regard to sort of that around defendants" represented a which to however, those Rule seeking grounds that to the e s t a b l i s h e d by 59(e), amend trial the in th[e trial favor the court of the amount of compensatory-damages award failed awards the "in a punitive-damages pursuant motion of acknowledging earnings a the order, the H a r r i s e s p r e s e n t e d for 2010, amount court's postjudgment motion lessor franchise]." against $380,000 trial to a Harrises the business 14, which law of as by doesn't conclusion July and timely either Killen the plaintiffs The responded ... about Mitzi] t h e e v i d e n c e ] p r o v e s t h a t s h e ' s a l l i n and operation award [by were Ala. the court evidence to of $120,000. include based. R. Mitzi Civ. trial the P., court's misapplied at a trial; the that i n s u f f i c i e n t evidence to defeat M i t z i ' s judgment on partial findings; that c o m p e n s a t o r y - d a m a g e s award had been i n c o r r e c t l y c a l c u l a t e d 17 the and 1091751 was not s u p p o r t e d by were not w a r r a n t e d excessive. The 9 entered August the and/or trial 16, evidence; that noted denial 2010. above, of her motion p r o p e r l y termed the trial applicable findings tenus ... by 908 So. 2d Robinson, 738 Grant Bullock v. 1508-09 P.)). (M.D. Under Mitzi award was indicating 9 filed See of So. Burkes 905, 2d close the 1268, County ore the "The trial Bd. of order evidence, findings standard of "[o]rdinarily ... (citing ( A l a . C i v . App. Educ., standard of by review partial the ore James-Pennington, 895 (review under Rule tenus was court's f o r a j u d g m e n t on ( A l a . 2004) 1270 b y an of a l l the Mech., I n c . v. F t . 910 A l a . 1995) from n o t e 7. is award 1 0 f o r a j u d g m e n t on p a r t i a l court" damages Review appeals at the supra trial standard." Inc., Mitzi appeals. t o r u l i n g s on m o t i o n s the punitive the punitive-damages Mitzi a motion court. that court denied M i t z i ' s motion Standard As and Loggins v. 1999), and F.Supp. 1506, Fed. Civ. 52, review, R. findings on supported her c o n t e n t i o n that the punitive-damages excessive with her own affidavit testimony t h a t " [ h e r ] n e t w o r t h i s $0 o r i s n e g a t i v e . " U p o n a p p l i c a t i o n t o t h e t r i a l c o u r t , M i t z i was g r a n t e d l e a v e t o p r o c e e d i n f o r m a p a u p e r i s on a p p e a l . See R u l e 2 4 ( a ) , A l a . R. A p p . P. 1 0 18 1091751 disputed facts are presumed j u d g m e n t b a s e d on t h o s e the judgment correct, findings w i l l i s palpably Cmty. Dev. C o r p . v. W h i t e , 2008). "'"'The evidence and presumption may be presented judgment.'"'" overcome to the 929 So. 2d ( A l a . 2007), 1083, 1086 (Ala. o f Montgomery, 1982) there court quoting v. Coker, sustain Retail Club, I n c . , 985 S o . v. R o w e l l , 408 So. 2d 510, 512-13 [attendant to ore is to sustain trial suit i t s judgment. I n such fails t o support i s based, the instances the trial where to the proof at t h e m a t e r i a l a l l e g a t i o n s on w h i c h t h e judgment i n a p p l i c a b l e 'where there court rendered cannot be upheld a p p e a l . " ) . A d d i t i o n a l l y , we n o t e t h a t " t h e o r e t e n u s is v. See a l s o F i r s t A l a b a m a be o v e r c o m e where presented 2d 913 Dennis t e n u s f i n d i n g s ] i s r e b u t t a b l e a n d may evidence i t s Developers i n turn ("The p r e s u m p t i o n o f c o r r e c t n e s s insufficient i s insufficient to (quoting ( A l a . 1985) ) . N.A. unjust. however, is i n t u r n Waltman ( A l a . 2005), unless manifestly correctness, trial quoting court's 10 S o . 3 d 9 9 0 , 991 ( A l a . Gadsden G o l f D o b b s , 474 S o . 2 d 7 7 , 79 Bank or where 10 S o . 3 d a t 9 9 1 - 9 2 o f Alabama, I n c . v. E a s t 924, of the t r i a l n o t be r e v e r s e d erroneous Southside rebuttable and the evidence 19 i s undisputed, on standard or where 1091751 the material evidence.' facts Salter are v. established Hamiter, 2004)." Burkes Mechanical, 908 887 So. appellate review is de novo. Ragsdale, 991 2d 770, 772 So. by So. the 230, 234 (Ala. In such 2d undisputed cases, 2d a t 910. Id. See also ( A l a . C i v . App. Ragsdale v. 2008). Discussion On appeal, presented she Mitzi insufficient made any any fact (Issues and II, Court). 1 2 evidence that she argues to support to misrepresentation suppressed I initially the was respectively, More s p e c i f i c a l l y , she that Harrises a conclusion Harrises duty-bound in the Mitzi's contends that or to that she disclose. brief the that to ore 1 1 this tenus C o n t r a r y to the H a r r i s e s ' a s s e r t i o n i n t h e i r b r i e f to this Court, M i t z i ' s a r g u m e n t p e r t a i n i n g t o any potential fraudulent-suppression claim does not concede that the H a r r i s e s a c t u a l l y presented such a c l a i m . M i t z i ' s b r i e f , at p. 2 5 . I n s t e a d , M i t z i m a k e s c l e a r t h a t , a l t h o u g h a f r a u d u l e n t s u p p r e s s i o n c l a i m was n o t i n c l u d e d i n t h e H a r r i s e s ' c o m p l a i n t , b a s e d on t h e a r g u m e n t s o f c o u n s e l f o r the H a r r i s e s during t r i a l and t h e a b s e n c e o f any s p e c i f i c f i n d i n g s by t h e trial c o u r t i n t h a t r e g a r d , t o t h e e x t e n t t h a t any s u c h c l a i m may have been t r i e d by t h e i m p l i e d c o n s e n t of t h e p a r t i e s , i t i s a l s o u n s u p p o r t e d by t h e evidence. 1 1 Because in her postjudgment motion Mitzi properly challenged the s u f f i c i e n c y of the evidence to s u s t a i n the trial c o u r t ' s judgment, which d i d not i n c l u d e f i n d i n g s of f a c t , she has p r o p e r l y p r e s e r v e d h e r c l a i m s f o r p u r p o s e s o f appeal. See New P r o p s . , L.L.C. v. S t e w a r t , 905 So. 2d 797, 801-02 ( A l a . 2004) ( " [ H ] o l d [ i n g ] t h a t , i n a nonjury case i n 1 2 20 1091751 evidence demonstrated neither on her part court's Mitzi amounting t o a c t i o n a b l e apparent argues that c o m m i t t e d by Sims The any a c t nor any f a i l u r e Harrises conclusion any fraud and t h a t to the contrary fraudulent acts was i n this toa c t the t r i a l erroneous. case were that she alone. counter Mitzi's p e r s o n a l l y made n o m i s r e p r e s e n t a t i o n contention by c i t i n g the following evidence: "Mitzi owned t h e b u i l d i n g i n Killen where t h e [Killen franchise] was l o c a t e d . She l e a s e d t h e building to the Harrises under an agreement negotiated i n her behalf by h e r husband, Sims L a w s o n . She r e c e i v e d l e a s e p a y m e n t s a n d a c t e d a s a c o m m u n i t y r e l a t i o n s l i a i s o n f o r t h e s t o r e . She h a d i n p u t i n t o how t h e b u s i n e s s was r u n a n d d i d t h e s t o r e p a y r o l l f o r t h r e e y e a r s . She p r e p a r e d r e p o r t s and n i g h t d e p o s i t s w h i c h r e q u i r e d t h e u s e o f t h e s t o r e computer c o n t a i n i n g a l l t h e s t o r e ' s f i n a n c i a l i n f o r m a t i o n . She h a d t h e c a r d w h i c h g a v e h e r a c c e s s t o t h e c o m p u t e r w i t h h e r name o n i t a n d no o n e e l s e ' s . She e v e n a d m i t t e d ( a l t h o u g h g r u d g i n g l y ) that she u s e d t h e c a r d t o l o g i n t o t h e c o m p u t e r . M i t z i was also present when Sims Lawson showed C l i n t o n H a r r i s around the store during n e g o t i a t i o n s f o r i t s sale." w h i c h t h e t r i a l c o u r t m a k e s no s p e c i f i c f i n d i n g s o f f a c t , a p a r t y m u s t move f o r a new t r i a l o r o t h e r w i s e p r o p e r l y r a i s e before the t r i a l court the question relating to the s u f f i c i e n c y or weight of the evidence i n order to preserve that question f o r appellate review."). 21 1091751 The Harrises' brief, at p. 15-16 (citations to record omitted). "To e s t a b l i s h a c a u s e o f a c t i o n f o r f r a u d u l e n t misrepresentation, t h e p l a i n t i f f m u s t s h o w 1) t h a t t h e d e f e n d a n t made a m i s r e p r e s e n t a t i o n ; 2) t h a t t h a t misrepresentation concerned a material existing fact; 3) that the plaintiff relied on the misrepresentation; a n d 4) t h a t t h e r e l i a n c e was to the plaintiff's detriment. Ala. Code 1975, § 6-5-101; C r o w d e r v. Memory H i l l G a r d e n s , I n c . , 516 So. 2 d 602 ( A l a . 1 9 8 7 ) . U n d e r [ A l a . Code 1975,] § 6-5-101, ' l e g a l f r a u d ' i n c l u d e s misrepresentations o f m a t e r i a l f a c t made 'by m i s t a k e o r i n n o c e n t l y , ' a s well as misrepresentations made 'willfully to d e c e i v e , o r r e c k l e s s l y w i t h o u t k n o w l e d g e . ' Young v. S e r r a V o l k s w a g e n , I n c . , 579 So. 2 d 1337 ( A l a . 1991) . "In order to e s t a b l i s h a cause of a c t i o n f o r fraudulent suppression, t h e p l a i n t i f f m u s t s h o w 1) t h a t the d e f e n d a n t had a d u t y t o d i s c l o s e m a t e r i a l f a c t s , 2) t h a t t h e d e f e n d a n t c o n c e a l e d o r f a i l e d t o d i s c l o s e t h o s e f a c t s , 3) t h a t t h e c o n c e a l m e n t o r f a i l u r e to d i s c l o s e induced the p l a i n t i f f to a c t ; a n d 4) t h a t t h e d e f e n d a n t ' s a c t i o n r e s u l t e d i n h a r m t o t h e p l a i n t i f f . I n t e r s t a t e T r u c k L e a s i n g , I n c . v. Bender, 608 So. 2d 716 (Ala. 1992). A duty to communicate can arise from a confidential relationship between the plaintiff and the defendant, from the p a r t i c u l a r circumstances of the case, or from a request f o r i n f o r m a t i o n , b u t mere s i l e n c e i n the absence of a duty to d i s c l o s e i s not fraudulent. Dodd v. Nelda Stephenson Chevrolet, I n c . , 626 So. 2 d 1288 ( A l a . 1 9 9 3 ) ; H a r d y v. Blue C r o s s & B l u e S h i e l d o f A l a b a m a , 585 So. 2 d 29 ( A l a . 1 9 9 1 ) ; K i n g v. N a t i o n a l F o u n d a t i o n L i f e I n s . Co., 541 So. 2 d 502 ( A l a . 1 9 8 9 ) ; S e e , McGowan v . C h r y s l e r C o r p . , 631 So. 2 d 842 ( A l a . 1 9 9 3 ) ; A l a . Code 1975, § 6-5-102." 22 1091751 J e w e l l v. Seaboard Indus., 1995). See 2d 604-05 (Ala. Therefore, to 602, Mitzi. the to renewed succeed a as 2d 653, 657-58 Gardens, Inc., on against their Mitzi, misrepresentation the Harrises motion close of a l l the to this Court, brief So. for a material acknowledged evidence, no a Harrises and as representation a as Mitzi was by to made b y (Ala. material fact to misrepresentation 2d 894 there a Ala. (5th "[t]he Cir. 1977) her Mitzi v. 618 must be some misrepresentation party Code may be 23 to Thyssen 615, (applying misrepresentation in 2d who 1975, relies 1983) upon B a l l v. V o g t n e r , §§ 6-5-100 ( e m p h a s i s a d d e d ) ) , a n d M a n n v . Adams R e a l t y Co., 296 at So. to h i s detriment. (Ala. 1978); law fraudulent-misrepresentation Mining 428 of argues Parker Inc., were fact a matter See fraud, So. response in c l a i m u n d e r § 6-5-101, A l a . Code 1975. constitute 516 fraudulent- the of judgment the H a r r i s e s t h a t would support Constr., (Ala. 1987). claim show However, Mitzi's 667 a l s o C r o w d e r v. Memory H i l l misrepresentation required Inc., Alabama law willful or and ("To of such 362 So. to 6-5-104." 556 F.2d 288, noting that i t m i g h t be 'made 1091751 by mistake event." and i n n o c e n t l y , ' (footnote Based on b u t i t must their their brief inability to this against Mitzi were Mitzi's mere proximity Killen franchise, sufficient "to 'made' i n any omitted)). to make demonstration under t h e f a c t s o f t h e i r in be Court, based by show the case, and as the Harrises' p r i m a r i l y on t h e i r t o and virtue occasional Mitzi explained fraud claims contention presence of her marriage that requisite that i n the t o Sims, participated i n was and/or s u p p r e s s e d t h e f r a u d u l e n t r e p r e s e n t a t i o n s made b y h e r h u s b a n d , Sims." The H a r r i s e s ' b r i e f , Specifically, a t p. 10. We disagree. even assuming, as Holcombe t e s t i f i e d , that M i t z i h a d , a t some t i m e b e f o r e 2005 o r 2006, o c c a s i o n a l l y b e e n responsible a n d f o r p a y r o l l , we s e e n o t h i n g associated for night deposits with have p l a c e d e i t h e r of those that would h e r i n a p o s i t i o n t o be aware o f t h e t o t a l sales numbers f o r t h e K i l l e n (especially given as testified also franchise i n the f i r s t that any quarter o f 2007 i n the nightly deposit the variance t o by Holcombe). undisputed responsibilities amounts Initially, payroll p e r f o r m e d were p e r f o r m e d u s i n g 24 we n o t e t h a t i t was responsibilities Mitzi h e r home computer and not t h e 1091751 computer on t h e p r e m i s e s at the K i l l e n even i f , as Holcombe a l s o t e s t i f i e d , information d a i l y sales receipts f o rthe K i l l e n the computer testimony at the K i l l e n indicated that franchise. regarding the f r a n c h i s e was a v a i l a b l e o n franchise, she Moreover, never Mitzi's or helped assemble t h o s e numbers. A d d i t i o n a l l y , by a l l a c c o u n t s , and as e v i d e n c e d by C l i n t o n ' s later on t h e o f f i c e at the K i l l e n the to computer actual sales explain them how, retrieval, i n t h e absence Mitzi could be provided have made M i t z i Moreover, Mitzi information provided to the Harrises, indicating to the Harrises c o m p l e t e when testified indicated that she any numbers fraudulent possessed of was a n y t h i n g the other into that, we 25 even to the actual as t o h e r l i m i t e d i n p u t fact by numbers Finally, a presented those i t was p r o v i d e d . business, fail t o o r was containing t o Sims's that The H a r r i s e s linked access a party i n fact, numbers g e n e r a t e d by Sims o r s h e was p r e s e n t when t h e r e p o r t would the f r a n c h i s e were, o f any e v i d e n c e aware o f t h e a l l e g e d l y f a l s i f i e d was at the figures available numbers f o r t h e b u s i n e s s . indicating that that looked undisputed find, no actions. personal information Sims than accurate we note that and Mitzi and p a r t i c i p a t i o n i n was supported by 1091751 Holcombe's disproved testimony, as without fraudulent-suppression the parties, their above, we deciding, was that 15(b), A l a . R. suppression also conclude claim against evidence creation of that concede, demonstrating there not report, failed not only to i n we conceal. that s h e was See Dodd f o r suppression 1989)); (Ala. 1993) that i n the absence as to the the alleged and t h e Harrises not make any t o the H a r r i s e s , but the evidence adduced a t be (Ala. and fraudulent- knowledge Mitzi I n c . , 626 S o . 2 d 1 2 8 8 , 1 2 9 2 knowledge." consent insufficient providing Chevrolet, liable was conclude, did to demonstrate fact Harrises' C i v . P., Specifically, participation that the f a v o r on a Mitzi's and misrepresentation material Mitzi. financial fraudulent trial was c o n s t r u c t i v e l y amended t o c o n f o r m t o t h e evidence t o support a judgment i n t h e i r any that c l a i m was t r i e d b y t h e i m p l i e d see Rule complaint evidence, of and by t h e H a r r i s e s . Assuming, of set out only of a even v. aware Welch Stephenson ( A l a . 1993) fact o f any ("One can one has of which ( c i t i n g C o r n e l i u s v . A u s t i n , 542 S o . 2 d 1 2 2 0 , 1 2 2 4 and McGarry v. F l o u r n o y , ("An a c t i o n f o r suppression 26 624 S o . 2 d 1 3 5 9 , 1 3 6 2 will l i e only i fthe 1091751 d e f e n d a n t a c t u a l l y knows t h e f a c t a l l e g e d t o be See a l s o B o a c k l e v. B e d w e l l C o n s t r . (Ala. 526 2000); Cherokee Farms, Inc. C o . , 770 S o . 2 d 1 0 7 6 , 1 0 8 0 v. F i r e m a n ' s Fund I n s . Co., S o . 2 d 8 7 1 , 8 7 5 ( A l a . 1 9 8 8 ) ; H a r r e l l v . D o d s o n , 398 S o . 2 d 272, 276 ( A l a . 1 9 8 1 ) ; M c I v e r v . B o n d y ' s F o r d , 136, 143 Funeral We suppressed."). (Ala. Servs., will C i v . App. 2007); Inc., n o t presume an element the Harrises' Moreover, and LaCoste 963 So. 2 d v. SCI Alabama 6 8 9 S o . 2 d 7 6 , 80 ( A l a . C i v . A p p . 1996) . t h e i r evidence admittedly to M i t z i , Inc., fails fraud to the extent of the Harrises' t o demonstrate. claims that must claim that Therefore, as argue an fail. the Harrises that agency r e l a t i o n s h i p e x i s t e d between Sims and M i t z i w i t h regard to the lease o f M i t z i ' s b u i l d i n g and that, therefore, M i t z i i s liable f o r Sims's a l l e g e d m i s r e p r e s e n t a t i o n s , even assuming, as t h e y c o n t e n d , t h a t a n a c t u a l a g e n c y r e l a t i o n s h i p a r o s e regard to that separate transaction, that argument with i s also unpersuasive i n l i g h t of Clinton's testimony t h a t S i m s made no misrepresentation Instead, with regard misrepresentations made by Sims franchise. to the lease. identified with Because regard Mitzi by t h e H a r r i s e s to was 27 the business neither an the only were a l l e g e d l y of the officer Killen nor a 1091751 shareholder Mitzi for i n SYM, w h i c h possessed which solely no i n t e r e s t Sims m i g h t have owned t h e K i l l e n with served regard to that i tcould have reasonably made a n y m i s r e p r e s e n t a t i o n knowledge of and misrepresentations after careful presented valid suppression Harrises Mitzi review of case against to the will misrepresentation Mitzi. that a l l of See C o k e r , the t r i a l court simply even assuming t h a t Mitzi's testimony to t h e H a r r i s e s ' e v i d e n c e was s t i l l demonstrate any f r a u d u l e n t court's judgment a c t by M i t z i against Therefore, we r e v e r s e t h e t r i a l and a judgment i n h e r f a v o r render claims. Mitzi fraudulent Simply stated, The j u d g m e n t a g a i n s t her. not support or supra. credibility, trial that from or that M i t z i had disclose by t h e H a r r i s e s n o t t o be c r e d i b l e , considered either court o f t h e r e c o r d , we h o l d t h a t t h e e v i d e n c e fraudulent contend determined S i m s made t o t h e H a r r i s e s . i n this claim the t r i a l to the Harrises failed transaction as h e r r e p r e s e n t a t i v e . I n sum, t h e r e w a s no e v i d e n c e b e f o r e which franchise, a fraudulent Although the may h a v e found the t r i a l court be lacking i n insufficient to or to sustain the See White, c o u r t ' s judgment a g a i n s t as t o t h e H a r r i s e s ' supra. Mitzi fraud SYM a n d S i m s w a s n o t a p p e a l e d , 28 1091751 is not properly by our u s , and, t h e r e f o r e , against of Mitzi, our reversal we p r e t e r m i t on a p p e a l b y M i t z i trial court's Store v. of the trial with regard Waldrop, 924 So. in light Woodall, judgment 2d 719, 723 See F a v o r i t e ( A l a . C i v . App. issues of the Market 2005) d i s c u s s i o n of f u r t h e r of the d i s p o s i t i v e nature of another i s s u e ) . JUDGMENT RENDERED. Stuart, B o l i n , Parker, Murdock, concur. Malone, court's to the p r o p r i e t y a c c o m p a n y i n g damages award. R E V E R S E D AND JJ., unaffected d i s c u s s i o n of the remaining ( s t a t i n g that t h i s Court would p r e t e r m i t issues remains decision. Because raised before C.J., concurs i n the 29 result. M a i n , and Wise,

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