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Alabama Appellate Opinions Released
May 10, 2019
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Court Rules on Trial Court’s Decision to Deny Motion to Set Aside Default Judgment Pursuant to ARCP Rule 55(c)
Putnam County Memorial Hospital v. TruBridge, LLC, and Evident, LLC
This suit against Putnam County Memorial Hospital (“Putnam”) arises from agreements that Putnam executed with TruBridge, LLC, (“TruBridge”) and Evident, LLC (“Evident”) for managing their hospital services. Putnam had allegedly begun to use a different system for managing these services than the ones that Tru Bridge and Evident had originally provided in their respective agreements. As a result, new patient information decreased in TruBridge and Evident’s computer systems and they both allegedly experienced a significant reduction in payments for their services. When questioned about the reasons for using a different system, Putnam’s CEO allegedly provided a deliberately false statement.
TruBridge and Evident sued Putman in Mobile Circuit Court alleging breach of contract and fraud. After Putnam failed to appear, the circuit court entered a default judgment against it. Putman filed a motion to set aside the default judgment pursuant to Rule 55(c) of the ARCP, but the circuit court denied its motion. Putman appealed.
Because circuit court’s have broad discretion in determining whether to grant or deny motions to set aside a default judgment, the threshold issue before the Alabama Supreme Court in
Putnam
was whether the circuit court exceeded its discretion. The Court noted that it had established in
Kirtland v. Fort Morgan Auth. Sewer Serv., Inc.
, 524 So. 2d 600 (Ala. 1988), that a trial court’s authority to decide on a motion to set aside a default judgment could not be exercised without considering three factors (the “
Kirtland
factors”): (1) the merits of the defendant’s defense; (2) the potential for unfair prejudice to the plaintiff after setting aside the default judgment; and (3) the defendant’s conduct. However, to trigger this mandatory requirement, the Court also emphasized that the party filing a motion to set aside a default judgment must “allege and provide arguments and evidence regarding all three
Kirtland
factors.”
Putnam argued on appeal that the circuit court’s decision should be reversed because it did not consider the
Kirtland
factors. TruBridge and Evident contended that the denial of a motion to set aside default judgment, which does not consider the
Kirtland
factors, should not be treated differently from a Rule 59.1 motion, which is reviewed
de novo
. The Court rejected this argument and held that Putman met the pleading and evidentiary threshold for triggering the mandatory requirement of considering the
Kirtland
factors. Therefore, the Court reversed and remanded.
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Court Rules on Dram Shop Action
Katerial Wiggins, individually and as administrator of the estate of Dominic G. Turner, deceased, and as next friend of Dominic Turner, Jr., a minor v. Mobile Greyhound Park, LLP, and Mobile Greyhound Racing, LLP
On June 6, 2015, while driving on Interstate 10 in Mobile County, Willie McMillian (“McMillian”) struck Katerial Wiggins’ (“Wiggins”) vehicle, killing her fiancé and injuring their child. Evidence indicated that McMillian was under the influence of alcohol at the time of the accident and McMillian plead guilty to reckless murder. In February of 2016, Wiggins, in her individual capacity and on behalf of her son and her fiancés estate, sued McMillian, Mobile Greyhound Park, LLP (“MPG”), and Mobile Greyhound Racing, LLP (“MGR”). Wiggins alleged that MGR and MGP operated a dog-racing track and that, on the day of the accident, MGR and MGP sold alcohol to McMillian at the dog-racing track while he was visibly intoxicated. Wiggins requested compensatory damages and punitive damages pursuant to § 6-5-71, Ala. Code 1975 ("the Dram Shop Act"). Further, Wiggins sought to consolidate the dram-shop action with an interpleader action initiated in 2015 by Alfa Mutual Insurance Company ("Alfa"), McMillian, and Lutenia Campbell, owner of the vehicle McMillian was driving.
MGR moved for summary judgment on the dram shop action and argued that Wiggins failed to present sufficient evidence indicating that McMillian had appeared visibly intoxicated while purchasing alcohol at the dog racing track. MGR also argued that this same issue had already been litigated in the interpleader action and that, therefore, the issue was precluded by the doctrine of res judicata. The circuit court entered an order that, among others, granted MGR’s summary judgment motion. Wiggins appealed.
The Alabama Supreme Court addressed Wiggins’ assertion regarding whether the “totality of the circumstances” should be evaluated in considering her dram shop claim. The Court noted that, in accordance with the requirements imposed on ABC Board on-premises licensees by Reg. 20-X-6-.02(4), the totality of the circumstances should be considered when evaluating a claim that an ABC Board on-premises licensee, its employee, or agent has unlawfully sold alcohol directly to someone appearing visibly intoxicated. Ultimately, the Alabama Supreme Court concluded that Wiggins presented substantial evidence creating a genuine issue of material fact regarding whether McMillian appeared visibly intoxicated while purchasing alcohol from MGR. The Court also held that MGR failed to prove that there was no genuine issue of material fact regarding whether collateral estoppel precluded Wiggins from litigating the factual issue of McMillian's visible intoxication in the dram shop action. Therefore, the Court could not affirm the circuit court's judgment on that basis. Ultimately, the Alabama Supreme Court reversed in part and remanded the case for further proceedings.
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Alabama Court of Civil Appeals
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