Equity Trust Co. v. BrelandAnnotate this Case
Charles Breland was a developer of real property, with properties in Alabama and Florida. In 2002, Breland hired David Hudgens to provide legal services for him and his companies. According to Hudgens, Breland informed him early during their professional relationship that he "was suffering significant cash flow problems." As a result, Hudgens says, the various law firms with which Hudgens worked while providing Breland and his companies with legal services delayed billing "a significant portion of the attorneys' fees and costs" for those services. Breland disputed that, claiming that he and/or his companies paid Hudgens more than $2.7 million for Hudgens's legal services between 2004 and 2010. In 2009, Breland filed a Chapter 11 bankruptcy petition. Breland filed the required schedules, required disclosure statement, and a proposed plan of reorganization that identified Hudgens & Associates, LLC ("H&A") as an unsecured creditor holding a $1 million claim and identified ETC as an unsecured creditor holding a $390,000 claim. Hudgens filed a proof of claim in the Breland bankruptcy on behalf of H&A for "legal fees" in the amount of $2,334,987.08 and filed proofs of claim on behalf of ETC for "guaranty of note" in the amounts of $879,929.55. Breland did not make payments according to the bankruptcy reorganization plan. Breland conveyed property to Gulf Beach Investment Company of Perdido, LLC which Hudgens alleged was in violation of the reorganization plan. Hudgens filed suit against Breland and Gulf Beach seeking enforcement of the plan, monies owed under the plan, and to void transfer of the property to Gulf Beach. The trial court entered a judgment on the parties' motions for a partial summary judgment, noting that it was not addressing the plaintiffs' "mortgage claim" because it had denied that claim in a September 2015 order. After setting forth extensive findings of fact and conclusions of law, the trial court awarded the plaintiffs $2,189,342.96 (consisting of $1.5 million in principal, plus interest); "denied and dismissed" the defendants' fraud, breach-of-contract, and slander-of-title claims; and certified the judgment as final pursuant to Rule 54(b). The trial court denied the defendants' postjudgment motion, and the defendants appealed. That case was assigned case no. 1150876, and the Alabama Supreme Court consolidated case nos. 1150302 and 1150876 for the purpose of writing one opinion. After review, the Court dismissed both appeals, finding the trial court exceeded its discretion in certifying as final the underlying appeals.