R & G, LLC v. RCH IV-WB, LLC

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Justia Opinion Summary

Appellants R & G, LLC, George D. Copelan, Sr., Gilman Hackel, and Robert Yarbrough appealed a $1.3 million circuit court judgment entered against them and in favor of RCH IV-WB, LLC ("RCH"). In July 2005, Wolf Bay Partners, L.L.C., executed a promissory note with Wachovia Bank in the original principal amount of $2.5 million. That note was secured by a mortgage on two parcels of property in Baldwin County and guaranteed by each of the appellants, as well as by Defendants GDG Properties, LLC, David W. Mobley, and George D. Gordon. By written agreement of the parties, the amount of the indebtedness was subsequently increased to $2.9 million. Wachovia Bank thereafter assigned its interest in the note and mortgage to RCH Mortgage Fund IV, LLC. Wolf Bay Partners subsequently defaulted on its payment obligations under the terms of the promissory note, and RCH Mortgage Fund IV accordingly commenced foreclosure proceedings on the property secured by the mortgage. In early 2009, RCH, a newly created affiliate of RCH Mortgage Fund IV, purchased the property at a foreclosure sale for $2 million and RCH Mortgage Fund IV thereafter assigned RCH all of its rights under the loan. In June 2009, RCH sued the defendants, seeking to recover $1.1 million allegedly still due on the promissory note, plus interest after the proceeds of the foreclosure sale were applied to the debt. A bench trial was held, at which the defendants challenged the evidence put forth by RCH indicating that the foreclosed-upon mortgage had been properly assigned to RCH Mortgage Fund IV by Wachovia Bank. The defendants also argued that it was improper for RCH Mortgage Fund IV to sell the foreclosed property as a single unit instead of as two separate parcels and that RCH Mortgage Fund IV accepted an allegedly unconscionably low purchase price at the foreclosure sale. The trial court ultimately excluded the evidence put forth by RCH indicating that the mortgage had been assigned to RCH Mortgage Fund IV and set aside the foreclosure and sale because, for all that appeared, the wrong party had conducted the foreclosure and sale. The trial court made no ruling on the defendants' other arguments because it found that RCH Mortgage Fund IV was the wrong party to conduct the foreclosure and sale. RCH appealed the trial court's judgment to the Supreme Court, which held that RCH's evidence of mortgage assignment should have been considered by the trial court. On remand, RCH in light of the Supreme Court's reversal, all that was left for the trial court but to enter a final judgment in RCH's favor. RCH's brief was served on all defendants; however none filed a response. The trial court entered judgment in favor of RCH. Defendants Hackel and Yabrough moved the trial court to alter, amend or vacate its judgment in favor of RCH. Unsuccessful, they appealed. Upon review, the Supreme Court concurred with the trial court's new judgment in favor of RCH, and affirmed.

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REL: 03/22/2013 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, 2012-2013 1111433 R & G, LLC, e t a l . v. RCH IV-WB, LLC Appeal from Baldwin C i r c u i t Court (CV-09-900753.80) STUART, Justice. R & G, L L C , G e o r g e D. C o p e l a n , S r . , Gilman Hackel, and R o b e r t Y a r b r o u g h ( h e r e i n a f t e r r e f e r r e d t o c o l l e c t i v e l y as " t h e appellants") appeal t h e $1,350,296 j u d g m e n t e n t e r e d against 1111433 them and i n f a v o r o f RCH IV-WB, LLC C i r c u i t Court. We ("RCH"), by t h e B a l d w i n affirm. I. In July 2005, Wolf Bay Partners, L.L.C., executed p r o m i s s o r y n o t e w i t h W a c h o v i a Bank i n t h e o r i g i n a l amount o f $2,550,000. each of the a p p e l l a n t s , as w e l l C o u n t y and g u a r a n t e e d as by GDG D a v i d W. M o b l e y , and G e o r g e D. Gordon written indebtedness was of the LLC, "the d e f e n d a n t s " ) . parties, subsequently Properties, by (hereinafter referred to w i t h t h e a p p e l l a n t s as agreement principal T h a t n o t e was s e c u r e d b y a m o r t g a g e on two p a r c e l s o f p r o p e r t y i n B a l d w i n collectively a the increased amount to By of the $2,933,718. W a c h o v i a Bank t h e r e a f t e r a s s i g n e d i t s i n t e r e s t i n t h e n o t e and m o r t g a g e t o RCH M o r t g a g e F u n d I V , LLC. W o l f B a y P a r t n e r s s u b s e q u e n t l y d e f a u l t e d on i t s payment obligations under the terms of the p r o m i s s o r y note, and RCH M o r t g a g e F u n d IV a c c o r d i n g l y commenced f o r e c l o s u r e p r o c e e d i n g s on t h e p r o p e r t y s e c u r e d b y t h e m o r t g a g e . On A p r i l 14, RCH, Mortgage Fund a newly purchased and RCH created affiliate of RCH 2009, IV, t h e p r o p e r t y a t a f o r e c l o s u r e s a l e f o r $2,000,000, M o r t g a g e F u n d IV t h e r e a f t e r 2 a s s i g n e d RCH a l l of i t s 1111433 r i g h t s under the l o a n . seeking to recover I n June 2009, RCH s u e d t h e d e f e n d a n t s , $1,046,572 promissory note, plus per day, after allegedly interest accruing the proceeds of still due at a rate of on the $305.25 the foreclosure sale were at which defendants a p p l i e d t o the debt. A bench challenged trial was held, t h e e v i d e n c e p u t f o r t h b y RCH foreclosed-upon mortgage h a d been M o r t g a g e F u n d IV by W a c h o v i a Bank. that i t was foreclosed separate improper property parcels f o r RCH as a and t h a t the i n d i c a t i n g that the properly assigned RCH RCH The d e f e n d a n t s a l s o a r g u e d Mortgage Fund single to unit IV t o s e l l instead Mortgage Fund of the as two IV a c c e p t e d an a l l e g e d l y u n c o n s c i o n a b l y low purchase p r i c e a t the f o r e c l o s u r e sale. The trial court u l t i m a t e l y excluded the evidence put f o r t h by RCH i n d i c a t i n g t h a t t h e m o r t g a g e h a d b e e n a s s i g n e d RCH M o r t g a g e F u n d IV and s e t a s i d e because, f o r a l l that appeared, the f o r e c l o s u r e the wrong M o r t g a g e Fund I V as o p p o s e d t o W a c h o v i a Bank the f o r e c l o s u r e and s a l e . the defendants' other Mortgage Fund IV The t r i a l party and sale RCH had conducted c o u r t made no r u l i n g arguments because i t s f i n d i n g t h a t was the wrong 3 party to to conduct on RCH the 1111433 f o r e c l o s u r e a n d s a l e made d o i n g the t r i a l so u n n e c e s s a r y . c o u r t ' s judgment t o t h i s C o u r t , RCH a p p e a l e d a n d , on A u g u s t 12, 2011, i n RCH IV-WB, LLC v . W o l f B a y P a r t n e r s , L.L.C., 3d 395, 399 ( A l a . 2011), we held that RCH's m o r t g a g e a s s i g n m e n t s h o u l d have b e e n c o n s i d e r e d court. A c c o r d i n g l y , we " r e v e r s e [ d ] It of by t h e t r i a l c o n s i s t e n t w i t h [our] Id. appears conference that, following our remand, a status was h e l d on December 19, 2 0 1 1 ; h o w e v e r , t h e r e c o r d contains 2012, evidence t h e t r i a l c o u r t ' s judgment and remand[ed] t h e c a s e f o r p r o c e e d i n g s opinion." 78 So. no t r a n s c r i p t i o n RCH filed of that hearing. a post-remand b r i e f with On January the t r i a l 6, court, arguing that, i n l i g h t of t h i s Court's d e c i s i o n i n RCH IV-WB, t h e r e was n o t h i n g t o do b u t c o n f i r m t h e f o r the t r i a l amount o f t h e f i n a l court j u d g m e n t t o be e n t e r e d i n f a v o r o f RCH. RCH f u r t h e r a r g u e d t h a t t h e a r g u m e n t s made b y t h e d e f e n d a n t s in t h e i r pleadings Fund IV had a c t e d property and a t t h e bench t r i a l improperly t h a t RCH M o r t g a g e 1) b y s e l l i n g the foreclosed as a s i n g l e u n i t i n s t e a d o f as s e p a r a t e 2) b y a c c e p t i n g an a l l e g e d l y u n c o n s c i o n a b l y were u n s u p p o r t e d b y A l a b a m a l a w . 4 p a r c e l s and low purchase p r i c e 1111433 RCH's J a n u a r y 6 b r i e f was s e r v e d on a l l t h e h o w e v e r , none o f them f i l e d a r e s p o n s e . M a r c h 5, 2012, f a v o r o f RCH, the t r i a l Two defendants; months l a t e r , court entered i t s f i n a l on judgment i n stating: " T h i s c a s e i s on remand f r o m t h e A l a b a m a Supreme Court. "On t h e e v i d e n c e p r e s e n t e d , t h e c o u r t f i n d s t h a t t h e s a l e o f t h e 2 d i s t i n c t p r o p e r t i e s en masse i m p a i r e d t h e a b i l i t y o f t h e d e b t o r ( s ) t o redeem t h e p r o p e r t y b e c a u s e d e b t o r was u n a b l e t o redeem one p r o p e r t y w i t h o u t redeeming b o t h p r o p e r t i e s . "However, b o t h p r o p e r t i e s were e n c u m b e r e d u n d e r one m o r t g a g e . T h a t m o r t g a g e i n c l u d e d an i n d e p e n d e n t c l a u s e t h a t p r o v i d e d the mortgagee w i t h the s o l e d i s c r e t i o n t o s e l l a l l e n c u m b e r e d p r o p e r t y e i t h e r as an e n t i r e t y o r i n s e p a r a t e p a r c e l s . The m o r t g a g e e c h o s e t o s e l l i n one p a r c e l . "Judgment f o r t h e p l a i n t i f f and a g a i n s t t h e d e f e n d a n t s i n t h e amount o f $1,046,572.31, p l u s i n t e r e s t o f $303,723.75." On A p r i l to alter, 4, 2012, amend, 5 9 ( e ) , A l a . R. leave H a c k e l and Y a r b r o u g h or vacate C i v . P., to submit and a response i t s judgment also denied that appellants f i l e d motion, asked pursuant the t r i a l t o RCH's J a n u a r y s t a y e x e c u t i o n of the judgment. court moved t h e t r i a l and, On June 12, on July 24, t h e i r n o t i c e of appeal to t h i s 5 to Rule court for 6 brief 2012, court and the 2012, Court. to trial the 1111433 II. The t r i a l c o u r t o r i g i n a l l y e n t e r e d a judgment a bench t r i a l ; t h a t j u d g m e n t was r e v e r s e d on a p p e a l , remand, t h e t r i a l standard following c o u r t e n t e r e d a new j u d g m e n t . of review generally applies a n d , on The o r e t e n u s t o judgments entered f o l l o w i n g a bench t r i a l . See, e . g . , B o a r d o f S c h . Comm'rs o f Mobile 99 So. 3d 1210, 1216 Cnty. v. Weaver, ("Because t h e t r i a l bench trial, and c o u r t heard ore tenus evidence t h e o r e tenus However, i n t h i s appeal, standard t h e a p p e l l a n t s ' argument r a i s e s So. 3d 114, 134 of review the relevant facts We r e v i e w q u e s t i o n s o f l a w de n o v o . 97 ( A l a . 2012) ( A l a . 2012) applies."). are undisputed, only a question of law. Ruttenberg ("Although v. F r i e d m a n , the ore standard of review i s a p p l i c a b l e here, presents a question o f l a w a n d does n o t c o n c e r n issue of fact, o u r r e v i e w i s de during the because this tenus issue a disputed novo."). III. Before we consider a r g u m e n t s , we f i r s t is untimely the merits of the appellants' c o n s i d e r RCH's argument t h a t t h i s and s h o u l d therefore be d i s m i s s e d . appeal When RCH i n i t i a t e d t h i s a c t i o n b y f i l i n g a c o m p l a i n t i n June 2009, t h e 6 1111433 c a s e was d o c k e t e d as c a s e number CV-2009-900753.00 added). Following this Court's opinion court's judgment remanding proceedings, and the t r i a l (emphasis reversing the case the for trial further c o u r t a p p a r e n t l y a s s i g n e d the case a new s u f f i x , CV-2009-900753.80. (emphasis a d d e d ) . N e v e r t h e l e s s , when RCH was filed i t s post-remand s t a m p e d as b e i n g f i l e d On A p r i l 4, 2012 c o u r t ' s M a r c h 5, 2012, Yarbrough filed brief on J a n u a r y 2012, i t i n c a s e number CV-2009-900753.00. 30 days a f t e r the e n t r y of the j u d g m e n t i n f a v o r o f RCH a motion 6, a s k i n g the trial trial H a c k e l and court to alter, amend, o r v a c a t e i t s j u d g m e n t p u r s u a n t t o R u l e 5 9 ( e ) . m o t i o n , h o w e v e r , was filed The 5, next day, April That i n c a s e number CV-2009-900753.00. 2012, Hackel and Yarbrough refiled t h e i r R u l e 59(e) m o t i o n i n c a s e number CV-2009-900753. 80. now argues motion that that A p r i l to a l t e r , 5 motion was (30) days a f t e r and H a c k e l and Y a r b r o u g h ' s April e n t r y of the 5 m o t i o n was number CV-2009-900753.80 on t h e 3 1 s t day was entered. u n t i m e l y because amend, o r v a c a t e a j u d g m e n t must be "not l a t e r than t h i r t y Rule 59(e). Accordingly, RCH after RCH a filed judgment," filed i n case the judgment argues, that u n t i m e l y R u l e 59(e) m o t i o n d i d n o t t o l l t h e 42-day p e r i o d f o r 7 1111433 filing the a n o t i c e of appeal, appellants court's on March July 5 Props., LLC (holding v. that 24, judgment necessary for t h i s the 2012 n o t i c e of appeal f i l e d 141 was 95 untimely So. days a f t e r untimely, Court to dismiss Green, an and the thus trial making jurisdiction appeal. See Miller 850, 2d 851-52 (Ala. 2006) p o s t j u d g m e n t m o t i o n does n o t We it a g r e e w i t h RCH been the only insufficient However, we April docket o v e r an u n t i m e l y 4. 59(e) to t o l l the recognize Following number, 900753.00. filed toll motion CV-2009-900753.80 all original the record as which supplement April the has also record 4 motion f i l e d granted in opposed reveals that, continued d o c k e t number that appears, those f i l i n g s court, had untimely and appeal. case proceeded under a p a r t i e s on b o t h s i d e s n e v e r t h e l e s s under the was 5, g i v e e f f e c t to the motion f i l e d remand, t h i s However, filed, on A p r i l time f o r f i l i n g a n o t i c e of and i n CV-2009-900753.00. On new post-remand, by appellants' to on CV-2009- filings CV-2009-900753.00. CV-2009-900753.80 8 to t o make were c o n s i d e r e d the has appeal). t h a t the motion f i l e d Rule i t the t h e t i m e f o r f i l i n g a n o t i c e o f a p p e a l and t h a t t h i s C o u r t no by the For trial motion include the basis to the of 1111433 all these facts, we consider timely filed filing the a p p e l l a n t s ' appeal because the A p r i l 4 motion t o l l e d t o be the time f o r the n o t i c e of appeal. The t i m e l i n e s s o f t h e a p p e a l h a v i n g b e e n e s t a b l i s h e d , we must n e x t c o n s i d e r t h e m e r i t s o f t h e a p p e a l . The a p p e l l a n t s ' only court argument on appeal i s that the t r i a l violated e s t a b l i s h e d r u l e s o f p r o c e d u r e and f u n d a m e n t a l n o t i o n s o f due process by e n t e r i n g a j u d g m e n t f o l l o w i n g t h i s C o u r t ' s without holding a new trial. E d w a r d s , 727 So. 2d 792, 794 We begin by n o t i n g Ex remand parte ( A l a . 1 9 9 8 ) , i n w h i c h we s t a t e d : "'"It i s the duty of the t r i a l c o u r t , on remand, t o c o m p l y s t r i c t l y w i t h t h e mandate o f t h e appellate court according to i t s true intent and meaning, as determined by the d i r e c t i o n s g i v e n by t h e r e v i e w i n g c o u r t . No 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 t h e r e v i e w i n g c o u r t may be e n t e r e d The appellate court's decision i s f i n a l as t o a l l m a t t e r s before i t , becomes t h e l a w o f t h e c a s e , and must be e x e c u t e d 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 o r t a k i n g a d d i t i o n a l evidence "'" ( Q u o t i n g Ex p a r t e A l a b a m a Power Co., 431 So. 2d 151, 155 ( A l a . 1983), quoting i n turn 5 Am.Jur.2d 9 Appeal & Error § 991 1111433 (1962).) I n RCH IV-WB, we c l o s e d by the t r i a l c o u r t ' s j u d g m e n t and remand t h e c a s e f o r consistent with this opinion." state, as d i d the Court of stating: 78 So. Civil "[W]e 3d a t 399. Appeals reverse proceedings We did i n Matthews Bros. C o n s t r u c t i o n Co. v. S t o n e b r o o k D e v e l o p m e n t , L.L.C., 854 573, 583 entered trial ( A l a . C i v . App. 2 0 0 1 ) , when i t r e v e r s e d f o l l o w i n g a bench t r i a l , court trial." i s reversed, Thus, the and trial that the court "the cause d i d not with both our So. remanded ignore for a any trial, 2d judgment judgment of i n s t r u c t i o n s f r o m t h i s C o u r t t o c o n d u c t a new f u r t h e r review, a not the new specific and, upon i t s a c t i o n s f o l l o w i n g remand were c o n s i s t e n t opinion in RCH IV-WB and principles of due are n o t i c e and process. "The 'the hallmarks opportunity of p r o c e d u r a l t o be m e a n i n g f u l manner."'" 893 So. 2d 337, 319, 333 (1976), 545, 552 (1965)). 344 due process h e a r d " a t a m e a n i n g f u l t i m e and Alabama R e p u b l i c a n ( q u o t i n g Mathews v. quoting P a r t y v. McGinley, 424 U.S. i n t u r n A r m s t r o n g v. Manzo, 380 U.S. T h e r e i s no allegation Eldridge, i n t h i s case t h e a p p e l l a n t s were n o t g i v e n p r o p e r n o t i c e o f t h e f i r s t trial in a that bench a n d / o r an o p p o r t u n i t y t o f u l l y a r g u e t h e i r c a s e a t t h a t 10 1111433 trial. on a n y a r g u m e n t s made b y t h e d e f e n d a n t s other the A l t h o u g h t h e t r i a l c o u r t deemed i t u n n e c e s s a r y t o r u l e a t t h e bench trial than the mortgage-assignment i s s u e , i t i s evident record presented IV-WB and argued, improper property i n RCH that including f o r RCH M o r t g a g e Fund other arguments were t h e arguments IV t o s e l l that from fully i t was the foreclosed as a s i n g l e u n i t i n s t e a d o f as s e p a r a t e p a r c e l s a n d t h a t RCH M o r t g a g e Fund I V a c c e p t e d an a l l e g e d l y u n c o n s c i o n a b l y low p u r c h a s e p r i c e a t t h e f o r e c l o s u r e s a l e . Henderson, 73 So. 3d 1282, 1284 n. 3 See H e n d e r s o n v. (Ala. Civ. App. 2011) ( s t a t i n g t h a t t h e Court o f C i v i l Appeals "would take notice of the records i n the previous these p a r t i e s t o the extent involved Hackel, i n this filed In fact, i n RCH adopted the statement of f a c t s Properties evidence i n their was brief, offered at involving that they p e r t a i n e d t o the issues appeal"). and Yarbrough proceedings judicial IV-WB, set forth i n which the i n the b r i e f they bench they Copelan, expressly b y Gordon a n d GDG acknowledged trial "as that to the i n s u f f i c i e n c y o f t h e s a l e s p r i c e a t t h e f o r e c l o s u r e s a l e and that the property s h o u l d have b e e n s o l d i n p a r c e l s , i n s t e a d o f 11 1111433 en masse." Brief o f G o r d o n a n d GDG P r o p e r t i e s i n RCH IV-WB, p. 14. Moreover, not only were the appellants given o p p o r t u n i t y t o argue t h e i r case a t t h e bench t r i a l , had ample Notably, opportunity this judgment the three trial case where t h e t r i a l following and o n e - h a l f our they a l s o post-remand. court entered a remand; rather, months went b y a f t e r court held a status conference. RCH f i l e d remand b r i e f . nothing maintained entered a Rule and s e r v e d during this f o r another i t s judgment. 59(e) the t r i a l upon time, this course two months until After submitted one more their motion t o a l t e r , due p r o c e s s t h e r e a f t e r denying the appellants of action the t r i a l month Under t h i s court filing, t h e judgment set of facts, c o u r t i n a n y way d e n i e d t h e by e n t e r i n g i t s post-remand the a p p e l l a n t s ' Rule 12 they elapsed, the f i r s t post-remand amend, o r v a c a t e c o u r t e n t e r e d on remand. weeks the appellants i t s post- a we c a n n o t a g r e e t h a t t h e t r i a l appellants Some t h r e e However, f o r a l l t h a t a p p e a r s , appellants f i n a l l y and their full i s s u e d i t s c e r t i f i c a t e o f j u d g m e n t i n RCH IV-WB b e f o r e later, did argue i s n o t a case immediately approximately Court to a judgment 59 m o t i o n . The 1111433 a p p e l l a n t s had motion; o v e r s i x months t o f i l e a p o s t - r e m a n d b r i e f however, fact that they t o o k no action [the a p p e l l a n t s ] d i d not a v a i l opportunity [to argue their case] were] n o t g i v e n t h e o p p o r t u n i t y . " Ford, Inc., We Ex (Ala. 425 541 So. further appellants both that [themselves] of does n o t this show t h a t D i l l a r d v. S o u t h e r n [they States ( A l a . 1989). i n s u p p o r t of t h e i r argument i s i n a p p l i c a b l e . In 2d note 485 "The the Plumbline C i v . App. Appeals 2d 483, regard. by parte So. i n that or 489 the Construction, 2 0 0 8 ) , and C o k e r v. (Ala. Civ. reversed the caselaw App. judgments Inc., 992 So. 2d 746 Farmers Mutual Exchange, 1983), of submitted the the Court Civil courts trial of after t r i a l s were c o n d u c t e d w i t h o u t p r o v i d i n g t h e n o t i c e r e q u i r e d by R u l e 40, A l a . R. allegation R u l e 40; As In t h i s c a s e , however, t h e r e t h a t t h e b e n c h t r i a l was is no conducted i n v i o l a t i o n of r a t h e r , t h e a p p e l l a n t s d e s i r e a new explained either C i v . P. our supra, opinion h o w e v e r , a new r e v e r s i n g the c a s e o r by p r i n c i p l e s o f due trial not judgment and process. 13 was trial on remand. required remanding by the 1111433 IV. RCH s u e d t h e a p p e l l a n t s s e e k i n g a d e f i c i e n c y b a l a n c e owed after a foreclosure sale. issues, the t r i a l appellants; judgment six court however, i n RCH F o l l o w i n g a f u l l b e n c h t r i a l on t h e entered this Court a judgment i n favor subsequently IV-WB and remanded reversed the case. a new judgment i n f a v o r o f RCH. f o r t h h e r e i n , t h a t judgment i s h e r e b y that Approximately months a f t e r t h e c a s e was remanded t o i t , t h e t r i a l entered of the court For the reasons s e t affirmed. AFFIRMED. Moore, C . J . , and P a r k e r , M u r d o c k , and W i s e , J J . , c o n c u r . 14

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