We are committed to sharing decisions and providing legal updates that may be beneficial to you and your teams. Included below are summaries of cases recently released by Alabama Appellate Courts. Please reach out to any member of our
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Alabama Appellate Opinions Released
April 5, 2019
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Court Emphasizes the Need to Clarify that an Order Is Final Under Rule 54(b)
In re William T. Harrington
On December 23, 2016, the Plaintiff, Harrington, sued Big Sky Environmental, LLC, Gabriel Kim, and Clayton "Lanny" Young alleging breach of contract, negligence, wantonness, fraud, suppression, and deceit. On March 10, 2017, Big Sky and Kim filed a motion to dismiss pursuant to Rule 12(b)(6) of the Alabama Rules of Civil Procedure. On April 5, 2017, Harrington filed an amended complaint and added Exoro Global, LLC ("Exoro Global"), and Exoro Global Capital, LLC ("Exoro Capital") as Defendants. Big Sky and Kim filed a motion to dismiss the amended complaint pursuant to Rule 12(b)(6). On September 28, 2017, the trial court entered an order dismissing the claims against Big Sky and Kim with prejudice on the grounds that there was no valid employment contract.
Harrington filed a motion to amend, alter or vacate the order. The trial court denied Harrington’s motion and entered an order dismissing all claims against the Defendants without prejudice. After Harrington filed a notice of appeal, the case was transferred to the Court of Civil Appeals who entered an order requesting that the parties file letter briefs to address whether there was a final judgment and whether the appeal was timely. The Court of Civil Appeals dismissed Harrington’s appeal as untimely. Harrington petitioned the Alabama Supreme Court for certiorari review of the Court of Civil Appeal’s decision.
The issue before the Alabama Supreme Court was whether the trial court’s judgment was final. The Court noted that a trial court’s September 28, 2017, order did not indicate an intent to certify that order as final. The Court explained that without sufficient clarity, the trial court’s purported certification under Rule 54(b) was invalid; and thus, the September order was not final. Ultimately, the Court agreed with the Court of Civil Appeals that the appeal was to be dismissed. However, the Court found the appeal was due to be dismissed as being from a nonfinal judgment, not because the appeal was untimely. Thus, the Court reversed the judgment of the Court of Civil Appeals and instructed that court to dismiss the appeal.
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Court Holds That Coverage-Opinion Letter Is Protected From Disclosure Due to Attorney-Client Privilege
Ex parte Alfa Ins. Corp. et al.
In
Ex parte Alfa Ins. Corp.
, a threshold issue before the Alabama Supreme Court was whether a coverage-opinion letter between Alfa Insurance Corporation (“Alfa”) and its counsel, regarding coverage of two former insurance agents (the “Plaintiffs”) under errors and omissions policies, was attorney-client privileged. The Plaintiffs filed a Complaint against Alfa in the Montgomery Circuit Court after their employment was terminated due to accusations of selling competing products in contravention of their agency agreements. The Plaintiffs alleged breach of contract, bad faith, abuse of process, the tort of outrage, and conspiracy. The Plaintiffs also alleged that Alfa breached the errors and omissions policies by refusing to provide them defense and/or indemnity coverage based on counterclaims that Alfa asserted against them.
Along with the Plaintiffs’ Complaint, they propounded discovery requests, which included requests for admission and requests for production of documents. Over the course of three years, the Plaintiffs filed two motions to compel Alfa to respond to its discovery requests. In response to these motions, Alfa filed motions for a protective order. Alfa argued that the communications between it and its counsel, which included the coverage-opinion letter, were protected by attorney-client privilege and that it had not waived its privilege by asserting the defense of advice-of-counsel to the Plaintiffs’ claims. However, the Plaintiffs argued that the attorney-client privilege did not apply to the communications between Alfa and its counsel because the materials fell within purported exceptions to the privilege. Ultimately, the trial court denied both of Alfa’s motions and ordered the production of materials that Alfa contended were protected by attorney-client privilege. Alfa filed a petition for a writ of mandamus with the Alabama Supreme Court.
In its petition, Alfa argued that the trial court exceeded its discretion by compelling the production of materials protected by attorney-client privilege. The Plaintiffs maintained that the attorney-client privilege protects only the contents of a confidential communication between an attorney and the attorney’s client, and not the facts that underlie the communication. According to the Plaintiffs, the coverage-opinion letter was factual information that Alfa provided to its counsel and thus it was discoverable. The Alabama Supreme Court disagreed with the Plaintiffs. Because the coverage letter represented communication from Alfa’s counsel to Alfa and Alfa did not waive the attorney-client privilege by asserting the defense of advice-of-counsel to the Plaintiffs’ claims, the Court held that the coverage-opinion letter was not discoverable. Thus, the Court granted Alfa’s petition and directed the trial court to vacate its order.
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Alabama Court of Civil Appeals
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