Dzwonkowski v. Sonitrol of Mobile, Inc.
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This appeal was the latest "in a decade-long dispute" between Joseph Dzwonkowski, Sr. (Joe Sr.) and two of his sons, Robert and Joseph Jr. (Joe Jr.) regarding the ownership and control of Sonitrol of Mobile, Inc., a closely-held corporation that provided commercial-security services in the greater Mobile area. Ten years prior, Joe Jr. sold his shares in the company to his father in order to settle some of his personal debts. Possession of the stock certificates was the central issue in the case. Joe Sr. fired his sons and offered to purchase their shares, but Joe Jr. demanded his former shares back from his father. Joe Sr. then filed suit for a declaratory judgment to determine who rightfully owned the stock and to uphold his decision to fire his sons. The trial court ruled against Joe Sr. In 2004, the Supreme Court dismissed Joe Sr.'s appeal of that judgment, holding that an appeal was premature because the damages to be awarded to Sonitrol had not yet been set. Those damages were eventually set in 2011, awarding Sonitrol $764,359 and Joe Jr. $1. Joe Sr. appealed. On appeal, Joe Sr. argued whether the trial court should have immediately entered an order declaring him owner of the disputed shares of Sonitrol stock. The Supreme Court found that the trial court did not act contrary to the appellate court's mandate on remand. Accordingly the trial court's judgment was affirmed.
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REL: 11/18/2011 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 , 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, 2011-2012 1100929 J o s e p h Dzwonkowski, S r . v. Sonitrol o f M o b i l e , I n c . , J o s e p h Dzwonkowski, J r . , R o b e r t Dzwonkowski Appeal STUART, and Court Justice. This between from M o b i l e C i r c u i t (CV-99-003842.51) and appeal Joseph i s the latest i n a decade-long dispute D z w o n k o w s k i , S r . ("Joe S r . " o r " t h e f a t h e r " ) , two o f h i s sons, R o b e r t Dzwonkowski ( " R o b e r t " ) and J o s e p h 1100929 Dzwonkowski, Jr. collectively control as ("Joe "the of S o n i t r o l Jr.") sons"), (hereinafter referred to the ownership and ("Sonitrol"), a regarding of M o b i l e , Inc. held corporation providing commercial-security greater Mobile Joe area. Sr.'s appeal trial of I n a 2004 o p i n i o n , t h i s a entered court, h o l d i n g that the appeal damages to connection be awarded with ( A l a . 2004) Court dismissed him by the was p r e m a t u r e b e c a u s e t h e Robert, judgment had of Mobile, ("Dzwonkowski s e r v i c e s i n the against Sonitrol, that Dzwonkowski v. S o n i t r o l 63 judgment closely II"). and not I n c . , 892 I n a May Joe. yet Jr. in been set. So. 2d 354, 5, 2011, 361¬ order, the t r i a l c o u r t f i n a l i z e d t h e damages a w a r d , a w a r d i n g S o n i t r o l $764,359 and Joe J r . $ 1 . 1 Joe S r . appeals. We affirm. I. The of 854 origins of t h i s Civil Appeals i n Dzwonkowski So. I"), 2d 598, 599-600 dispute were v. described Sonitrol ( A l a . C i v . App. by the Court of Mobile, Inc., 2002) ("Dzwonkowski as f o l l o w s : In the intervening period between the release of Dzwonkowski I I and t h e t r i a l c o u r t ' s May 5, 2 0 1 1 , order, R o b e r t a d v i s e d t h e t r i a l c o u r t t h a t he no l o n g e r w i s h e d t o p u r s u e m o n e t a r y damages a g a i n s t J o e S r . , and J o e J r . s t a t e d t h a t he s o u g h t o n l y n o m i n a l d a m a g e s . 1 2 1100929 "The f a t h e r has been p r e s i d e n t of the S o n i t r o l franchise i n Mobile s i n c e 1977. Before 1990, a l l s h a r e s of the c o r p o r a t i o n were h e l d i n a v o t i n g trust c o n t r o l l e d by the father. In 1990, nine s h a r e s o f s t o c k w e r e i s s u e d , as f o l l o w s : one share t o Joe S r . ; f o u r s h a r e s t o R o b e r t ; and f o u r s h a r e s t o Joe J r . A t t h e same t i m e , t h e p a r t i e s e x e c u t e d a b u y - s e l l agreement t h a t gave the c o r p o r a t i o n or the remaining shareholders the o p t i o n to purchase the s h a r e s of a s h a r e h o l d e r whose employment w i t h the c o r p o r a t i o n had c e a s e d . " I n 1994, Joe J r . t r a n s f e r r e d h i s f o u r s h a r e s o f Sonitrol stock t o Joe Sr., i n exchange f o r h i s father's paying c e r t a i n d e b t s and p a y i n g for Joe Jr.'s treatment for gambling a d d i c t i o n . The record c o n t a i n s a c e r t i f i c a t e o f s h a r e s , w i t h an i s s u e d a t e of February 16, 1990, e n d o r s e d by Joe Jr. and d e l i v e r e d t o Joe S r . on J u l y 13, 1994. Joe Sr. never reendorsed the c e r t i f i c a t e t o Joe J r . ; the c e r t i f i c a t e r e m a i n e d i n Joe S r . ' s p o s s e s s i o n until i t was admitted i n evidence i n the i n s t a n t case. Joe J r . a l l e g e d t h a t h i s f a t h e r had promised to r e t u r n t h e f o u r s h a r e s o f s t o c k t o h i m o n c e he 'got his l i f e i n order.' Joe J r . a l s o a l l e g e d t h a t h i s f a t h e r ' s c o n d u c t s i n c e 1994 h a s e v i n c e d an i n t e n t t o r e t r a n s f e r the s t o c k t o him. " I n November 1999, t h e f a t h e r , a c t i n g as the president of Sonitrol, terminated the sons as e m p l o y e e s of t h e c o r p o r a t i o n and demanded t h a t t h e sons offer their shares of stock back to the c o r p o r a t i o n p u r s u a n t t o t h e 1990 b u y - s e l l a g r e e m e n t . The s o n s r e s p o n d e d b y c a l l i n g a s p e c i a l m e e t i n g o f the b o a r d of d i r e c t o r s f o r the p u r p o s e of r e m o v i n g t h e f a t h e r as p r e s i d e n t o f t h e c o r p o r a t i o n . "On December 3, 1999, the father filed a declaratory-judgment action, seeking a determination o f t h e o w n e r s h i p o f s t o c k i n t h e c o r p o r a t i o n and a temporary r e s t r a i n i n g order ('TRO') t o p r e v e n t t h e sons from h o l d i n g a s p e c i a l m e e t i n g of S o n i t r o l ' s 3 1100929 board of d i r e c t o r s or from otherwise acting as directors and officers of Sonitrol. The sons counterclaimed, alleging that the father had i n t e r f e r e d w i t h the b u s i n e s s o p e r a t i o n s of S o n i t r o l and had wrongfully diverted funds belonging to Sonitrol. T h e y s o u g h t , a m o n g o t h e r t h i n g s , a TRO to prohibit the father from acting in any r e p r e s e n t a t i v e c a p a c i t y on b e h a l f o f S o n i t r o l . "Following a hearing, the circuit court d e t e r m i n e d , on D e c e m b e r 13, 1999, that Sonitrol's b o a r d o f d i r e c t o r s c o n s i s t e d of Joe S r . , R o b e r t , and Joe J r . and t h a t t h e d i r e c t o r s ' m e e t i n g c a l l e d by the sons was authorized by Sonitrol's bylaws. Immediately f o l l o w i n g that determination, a meeting of the S o n i t r o l b o a r d of d i r e c t o r s took p l a c e . The sons attended the m e e t i n g ; the father did not attend. By a m a j o r i t y v o t e of t h e d i r e c t o r s , t h e f a t h e r was r e m o v e d as an o f f i c e r , d i s c h a r g e d from e m p l o y m e n t , and asked to surrender his stock for r e s a l e to the c o r p o r a t i o n . The following officers were then elected at the meeting: Joe Jr., p r e s i d e n t ; and R o b e r t , v i c e - p r e s i d e n t , secretary, and t r e a s u r e r . " After the an t h o s e a c t i o n s had parties that advisory two-day that Joe the j u r y on trial, Sr. the taken place, the stock-ownership January 19, advisory owned f i v e issue 2000. jury shares of trial At court w o u l d be the returned a verdict S o n i t r o l stock, and t h a t Joe shares. the sons court to hold Sonitrol days later, t h a t Joe stock in however, J r . was dispute the on the 4 of a Robert J r . owned four the of by finding that moved owner of t h e basis heard conclusion owned f o u r s h a r e s o f S o n i t r o l s t o c k , Four notified the no trial shares of doctrine of 1100929 judicial estoppel; at a subsequent evidence indicating that Joe S r . had t e s t i f i e d 1999 deposition given i n connection then underway i n F l o r i d a he owned o n l y Joe J r . each trial court ownership The owned four shares. an o r d e r o f more t h a n moved submitted in a divorce stock On February proceedings that and t h a t R o b e r t and February estopping one s h a r e subsequently with they him and h i s then w i f e one s h a r e o f S o n i t r o l entered sons involving hearing, 4, 2000, Joe S r . from of S o n i t r o l the claiming stock. the t r i a l court to enter a partial s u m m a r y j u d g m e n t i n t h e i r f a v o r on t h e s t o c k - o w n e r s h i p issue, submitting that that, they alleged, Joe S r . had t r a n s f e r r e d the four and arguing the four disputed their pursuant to Rule appealed that Civil Appeals holding there shares. 54(b), judgment established back t o Joe J r . estopped from claiming On A u g u s t 2 0 , 2 0 0 1 , t h e t r i a l motion, certifying i t s judgment A l a . R. C i v . P. the i t could transferred judgment of n o t be a f f i r m e d the were m a t e r i a l four questions 5 court as final Joe S r . subsequently and, i n Dzwonkowski reversed (1) t h a t S r . had because shares t h a t J o e S r . was j u d i c i a l l y granted Joe evidence shares I, the Court the trial court, on t h e b a s i s back of fact to of that Joe J r . concerning Joe 1100929 Sr.'s donative affirmed on i n t e n t and the b a s i s (2) t h a t of the d o c t r i n e because a l l the elements necessary not at present -- s p e c i f i c a l l y 607-09. the case On jury The Court for further remand, of C i v i l trial court stock. the of the against Sonitrol, contumacious issue, Joe Sr. Robert, behavior trial and due Sonitrol, Nevertheless, 854 were So. 2d remanded another questions regarding entered a l l of and J o e J r . as a r e s u l t during the a judgment Joe the t r i a l court also the into default claims of Joe S r . ' s 2 In a c o u r t d e c l a r e d Joe J r . the setting and a his proceedings. of S o n i t r o l Robert, advisory s e v e r a l days court dismissed owner o f t h e f o u r d i s p u t e d s h a r e s i t would enter be estoppel accordingly However, subsequent w r i t t e n order, the t r i a l that not the d o c t r i n e empaneled factual of the S o n i t r o l against judicial and r e l i a n c e . Appeals ownership judgment could proceedings. the that of to apply privity to t r y the outstanding trial the judgment Jr. s t o c k and s t a t e d the monetary at certified a later damages date. i t s judgment as We q u o t e d f r o m t h e t r i a l c o u r t ' s J u n e 2 0 , 2 0 0 3 , o r d e r d e s c r i b i n g J o e S r . ' s i n - c o u r t b e h a v i o r i n D z w o n k o w s k i I I , 892 So. 2d a t 3 5 7 - 6 1 . 2 6 1100929 final the pursuant to Rule 54(b). trial On court to September motion was parte in estoppel 12, pending, First 2003), alter, which should 2003, be applied r e l i a n c e elements and Joe Joe Sr. was disputed the shares trial request by appeal that the of trial estopped and, an and granting motion order was the default subject judgment court j u d g m e n t and i f there exceeded the had failed of of Robert, to by supplement i t s again holding d i s m i s s a l and (2) the four October 14, 2003, on denying Joe Joe and 7 the sons' I I , arguing him and the (1) the process and violation, the in entering the Sr.'s Sr. then f i l e d against that that claiming due-process i t s discretion judicial Sonitrol, Dzwonkowski no (Ala. privity t o c o m p o r t w i t h due been Ex the Sonitrol entered in 1244-4 6 removing from stock, postjudgment 1236, court favor moved judgment. doctrine supplementing i t s judgment. even trial the entered d i s m i s s a l of h i s c l a i m s that, 2d Sr. i t s opinion consideration. Sonitrol court postjudgment that how in their judicially that Sr.'s i n Alabama, from judgment Joe So. J r . p r o m p t l y moved t h e entering 2003, Joe released 883 restated and order while Court Bank, we J u l y 18, amend, o r v a c a t e this Alabama On trial the default court erred 1100929 in holding ownership also that of he the because judicially four shares that of As claimed. dismissed was supra, stated appeal damages estopped had as not Sonitrol being yet been claiming stock that this from from a Court Joe ultimately nonfinal determined. Jr. judgment 892 So. to 2d the at 363. Thus, in April 2004, this case returned trial c o u r t , p r e s u m a b l y s o t h a t d a m a g e s c o u l d be a w a r d e d a n d a judgment e n t e r e d . completed, Robert, Joe District request Joe Sr. initiated J r . , and Court of However, b e f o r e t h o s e p r o c e e d i n g s their f o r the Sonitrol an attorneys Southern and the action f u r t h e r c o n s i d e r a t i o n of t h i s matter t h a t new the time, filed litigation. in District sons, against the the defending by Joe S r . f o r t h e n e x t the U n i t e d S t a t e s D i s t r i c t Sonitrol, United court themselves and Circuit, the At the delayed from the sons new at claims s e v e r a l y e a r s -- n o t o n l y b e f o r e Court f o r the Southern District Alabama, but b e f o r e the U n i t e d S t a t e s Court of Appeals Eleventh States so t h a t t h e y c o u l d d e f e n d Unbeknownst to S o n i t r o l t h e y w o u l d be c o u l d be of Alabama. trial final Jefferson 8 Circuit Court, the of f o r the United 1100929 States Bankruptcy Court f o r the Northern D i s t r i c t and as this Court, However, aside impressive ultimately after well from amount had Joe of little order Sr.'s Joe in this effect. S r . moved case so affidavits on t h e i s s u e j u d g m e n t on May J r . $1 on t h e i r being trial he with file the o f damages, pay 18, 2010, these p a r t i e s an enter a to were final appeal. opportunity the t r i a l an proceedings on A u g u s t to 3 Appeals. to those court could Civil ordered involving After submit court entered a 5, 2 0 1 1 , a w a r d i n g S o n i t r o l $764,359 and c l a i m s a g a i n s t Joe S r . and d i s m i s s i n g a l l Joe S r . ' s c l a i m s a g a i n s t S o n i t r o l 2011, of fees, Finally, the that a l l parties final Court attorney providing of the a l l the other proceedings completed, Joe as of Alabama, Joe S r . f i l e d this and t h e sons. On May 13, appeal. II. In for this rest his brief Court's to this review; on e s s e n t i a l l y Court, however, t h e same c a s e was r e m a n d e d t o t h e t r i a l Joe Sr. l i s t s a l l three inquiry -- three issues of those issues whether, after this court f o l l o w i n g the d e c i s i o n of J o e S r . had attempted t o i n i t i a t e b a n k r u p t c y p r o c e e d i n g s on b e h a l f o f S o n i t r o l i n t h e U n i t e d S t a t e s B a n k r u p t c y C o u r t f o r t h e N o r t h e r n D i s t r i c t o f F l o r i d a as w e l l i n F e b r u a r y 2000. 3 9 1100929 the Court of C i v i l Appeals s h o u l d have i m m e d i a t e l y owner i n Dzwonkowski entered of the four disputed I, the t r i a l court an o r d e r d e c l a r i n g J o e S r . t h e shares of S o n i t r o l stock. We have stated: "In Ex p a r t e E d w a r d s , [ 7 2 7 S o . 2 d 7 92 ( A l a . 1 9 9 8 ) , ] t h i s C o u r t h e l d t h a t when a n a p p e l l a t e c o u r t remands a c a s e , t h e t r i a l c o u r t does n o t have t h e d i s c r e t i o n t o c o n d u c t a new t r i a l o r a n e v i d e n t i a r y hearing. 727 S o . 2 d a t 7 9 4 - 9 5 . Instead, after a c a s e i s r e m a n d e d , t h e t r i a l c o u r t may e n t e r '"'[n]o judgment o t h e r than t h a t d i r e c t e d o r p e r m i t t e d by the reviewing court .... The a p p e l l a t e court's decision is final as t o a l l m a t t e r s before i t , b e c o m e s t h e l a w o f t h e c a s e , a n d m u s t be executed a c c o r d i n g t o t h e mandate, w i t h o u t g r a n t i n g a new t r i a l or t a k i n g a d d i t i o n a l evidence.'"' I d . a t 794 ( q u o t i n g E x p a r t e A l a b a m a P o w e r C o . , 431 S o . 2 d 151 (Ala. 1983), q u o t i n g i n t u r n 5 Am.Jur.2d A p p e a l & E r r o r § 991 (1962))." Ex p a r t e Queen, we must determine on r e m a n d Court 959 S o . 2 d 620 , 621 by i f the t r i a l failing of C i v i l ( A l a . 200 6 ) . court exceeded Accordingly, i t s discretion to f o l l o w the i n s t r u c t i o n s Appeals i n Dzwonkowski given by t h e I. III. Joe Sr. argues that the t r i a l c o u r t was required to enter a j u d g m e n t d e c l a r i n g h i m t h e owner o f t h e f o u r d i s p u t e d of Sonitrol stock after the Court Dzwonkowski I r e v e r s e d the p a r t i a l 10 of Civil shares Appeals in summary j u d g m e n t e n t e r e d i n 1100929 favor I, of S o n i t r o l Sonitrol judgment shares and and h i s sons. the declaring sons We disagree. argued that Joe J r . t h e owner because a of Joe S r . had denied separate court owning proceeding, shares 602-07. genuine Sr. issues elements accordingly, stating: the 610. The C o u r t of C i v i l court's the four disputed of m a t e r i a l of a n d he i t reversed "The j u d g m e n t while was that regard Thus, the Court estoppel the judgment of the c i r c u i t of Civil 854 S o . there were to whether were of the t r i a l court Appeals not present; court, i s reversed and 854 S o . 2 d a t d i d not issue a I n Dzwonkowski I I , t h i s Court summarized the h o l d i n g of C o u r t o f C i v i l A p p e a l s i n Dzwonkowski I as f o l l o w s : 4 the Joe t o Joe J r . and t h a t a l l cause i s remanded f o r f u r t h e r p r o c e e d i n g s . " 4 oath judicially proceeding. with back under thus held fact judicial back to Joe J r . or Appeals had t r a n s f e r r e d the shares the trial the stock estopped from c l a i m i n g ownership i n t h i s 2d the o f S o n i t r o l s t o c k s h o u l d be a f f i r m e d e i t h e r b e c a u s e J o e Sr. had a l l e g e d l y t r a n s f e r r e d those in In Dzwonkowski " [ J o e S r . ' s ] a p p e a l was t h e s u b j e c t o f D z w o n k o w s k i I, i n which the Court of C i v i l Appeals decided that t h e r e were g e n u i n e i s s u e s o f m a t e r i a l f a c t r e g a r d i n g ownership of the four disputed shares, so t h a t a s u m m a r y j u d g m e n t was i n a p p r o p r i a t e . That court r e v e r s e d t h e summary j u d g m e n t a n d r e m a n d e d t h e c a s e for further proceedings." 11 1100929 mandate t o t h e t r i a l Sr. court on r e m a n d ; r a t h e r , to enter i theld that inappropriate not only because estoppel n o t met, but also were m a t e r i a l f a c t remained. In l i g h t it would have been e q u a l l y to enter a judgment Ala. i n favor exists C i v . P. (summary "no g e n u i n e moving p a r t y issue i s entitled of the Court proceedings" remaining those result 892 to enter of h i s unruly genuine issues of issues, f o r the t r i a l the court. court remand See R u l e i s appropriate court because Appeals judgment of law"). with the to conduct "further jury the t r i a l against and h i s f a i l u r e 12 there a n d ... t h e to t r y the stock ownership. however, So. 2d a t 357. when complied an a d v i s o r y regarding be d e c i d e d , fact 56(c)(3), as a m a t t e r accordingly of C i v i l behavior judicial outstanding as t o any m a t e r i a l a default of was o n l y when t h e r e a r e n o g e n u i n e i t empaneled could of those judgment factual questions issues compelled when elements because t o a judgment On r e m a n d , t h e t r i a l direction the o f J o e S r . on of material fact before R. t h e summary j u d g m e n t inappropriate summary j u d g m e n t i s a p p r o p r i a t e issues a judgment i n f a v o r of Joe Before court was J o e S r . as a to abide by t h e 1100929 instructions were of pending elements First of the in the judicial to also argues doctrine Civil that and judicial convinced has Queen, Clearly, the law in an 39 Joe doctrine decision 3d 1023, parte First regarding the a separate court then was case, in I mandate applying fails be was change clearly i n the (Ala. law 2009) parte estopped stock. Joe law-of-the-case of the to recognize disregarded Ex the supplemented i t s the the motions restated judicially violated to 1038 Court shares of S o n i t r o l court may this Sr. h o w e v e r , he intervening So. Ex that Dzwonkowski i t s prior been trial contrary estoppel; law-of-the-case the trial acted Appeals in four disputed the While postjudgment 5 court, estoppel hold from c l a i m i n g the court. trial A l a b a m a Bank, and judgment Sr. trial the Court of doctrine of that i f the erroneous "[t]he court or there Belcher (emphasis of judicial estoppel, v. added). Alabama Bank c o n s t i t u t e d a change doctrine is and in the I n Dzwonkowski I I , Joe S r . r a i s e d the i s s u e w h e t h e r the t r i a l c o u r t had v i o l a t e d h i s d u e - p r o c e s s r i g h t s and e x c e e d e d i t s d i s c r e t i o n i n e n t e r i n g the d e f a u l t judgment a g a i n s t him; h o w e v e r , b e c a u s e t h a t a p p e a l was d i s m i s s e d as b e i n g f r o m a n o n f i n a l j u d g m e n t , t h e i s s u e was n o t a d d r e s s e d a t t h a t t i m e . 892 So. 2d a t 3 6 1 . Joe S r . has not r a i s e d t h a t i s s u e i n t h i s appeal. 5 13 1100929 trial court recognizing accordingly that violated no legal principle by change. IV. Thus, although court has given by enter any judgment court, a strict an duty appellate Appeals reversed a against him material fact, was than that that i t has the basis and by there Rather, that were had of-the-case mandate, doctrine court to our caselaw or the d u t i e s court of Civil that court been court entered issues to d i d not act contrary of a t r i a l forth court on of conduct those issues setting to reviewing genuine further proceedings necessary to resolve specific mandate authority the Court i t i n s t r u c t e d the t r i a l The t r i a l trial because the t r i a l judgment that no a the d i r e c t e d by t h e not d i r e c t e d summary to conclude the case. that and a judgment i n h i s f a v o r . partial on court to argue that to comply w i t h ultimately fails h i s case to enter on r e m a n d other h i s argument considering the Joe S r . i s c o r r e c t and to the lawremand, or t o Joe S r . ' s d u e - p r o c e s s r i g h t s by t a k i n g t h e a c t i o n i t d i d when the case Accordingly, was remanded the judgment to i t after Dzwonkowski of the t r i a l court i s affirmed. AFFIRMED. 14 I. 1100929 Malone, C . J . , and Parker, Shaw, a n d W i s e , 15 J J . , concur.
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