Bethel v. Thorn

• Decision Date: 29 October 1999
• Citation: 757 So.2d 1154
• Parties: Raymond Victor BETHEL v. Rex THORN.
• Court: Alabama Supreme Court

757 So.2d 1154

Raymond Victor BETHEL v. Rex THORN.

1972267.

Supreme Court of Alabama.

October 29, 1999.

Rehearing Denied January 28, 2000.

Michael K. Wright and Geoffrey S. Bald of Starnes & Atchison, L.L.P., Birmingham, for appellant.

Richard A. Lawrence, Montgomery, for appellee.

SEE, Justice.

Raymond Victor Bethel appeals from the trial court's order dismissing his claims against Rex Thorn for failure to state a claim upon which relief can be granted. We hold that while certain of Bethel's stated claims were claims upon which relief could not be granted against Thorn, certain others were claims upon which relief could be granted. Therefore, we affirm in part, reverse in part, and remand.

I.

In April 1998, Bethel sued Diesel "Repower", Inc. ("Diesel"), and its president, Thorn, alleging breach of contract (Counts I and II), fraud (Counts III through VI), fraudulent suppression (Count VII), and negligence (Count VIII) against Diesel and against Thorn individually. Bethel's allegations arise out of two contracts between him and Diesel. The first contract was for Bethel's purchase of a marine engine and transmission. The second contract was for Bethel's purchase of three generators. Because of the posture of this case, we must rely on the "Statement of Facts" appearing in Bethel's complaint:¹

"5. Beginning in July of 1996, the Plaintiff, Mr. Bethel, entered into negotiations with the Defendants [Thorn and Diesel] for the purchase of a marine engine and transmission.

"6. During those negotiations, Mr. Bethel specifically explained to Mr. Thorn, the president of Diesel Repower, that the timely acquisition of an engine and transmission was critical, in order to make necessary repairs to a commercial shipping vessel, the `Manor Park.' Mr. Bethel further explained that the Manor Park had developed significant engine problems that would render the ship unfit for service as a commercial shipping vessel until a replacement engine and transmission could be delivered and installed. Mr. Thorn repeatedly represented that Diesel Repower could supply a suitable marine engine and transmission within thirty (30) days of an order. Mr. Thorn also represented that, although the transmissions were otherwise in very limited supply, the Defendants had a suitable transmission available for immediate delivery from their distributer [sic]. In addition, Mr. Thorn represented that Mr. Bethel was required to prepay the purchase price of the engine and transmission as a condition of the contract. During those negotiations, the parties also discussed the purchase of three generators from the Defendants.

"7. On August 15, 1996, Mr. Bethel entered into a written contract with the Defendants for the purchase of a marine engine and transmission. On that same date, in reliance on the representations of Mr. Thorn, Mr. Bethel finalized a transfer of $93,975.00, reflecting the total purchase price of the engine and transmission, to the Defendants.

"8. The Defendants failed and refused to ship the transmission and engine as represented by Mr. Thorn.

"9. Subsequently, Mr. Bethel made repeated inquiries to the Defendants regarding the status of the engine and transmission. The Defendants repeatedly represented that they anticipated shipping the engine and transmission in early October. Thereafter, the Defendants continued to represent that the engine and transmission would be shipped in the very near future, and that they would contact Mr. Bethel at the time of the shipment. Mr. Bethel continued to rely on these representations by the Defendants.

"10. On February 10, 1997, Mr. Bethel entered into a second contract with the Defendants for the purchase of three generators. The purchase price for the generators was $9,000.00 per generator. The Defendants represented that the generators would be shipped promptly after payment of the full purchase price. In reliance on these representations, Mr. Bethel prepaid the entire purchase price of the three generators, $27,000.00, as required by the Defendants.

"11. On April 5, 1997, Mr. Bethel wrote to Mr. Thorn and Diesel Repower, and informed them that the `Manor Park' was scheduled to be back in service at the beginning of May as part of a charter contract. Mr. Bethel requested that Mr. Thorn and Diesel Repower update him on the status of the engine and transmission. The Defendants responded on May 3, 1997, and represented that despite previous delays, the `bottom line' was that Mr. Bethel's order would be completed within two weeks.

"12. In May or June of 1997, two of three generators ordered on February 10, 1997 were shipped to and received by Mr. Bethel. Also, in June or July of 1997 the Defendants represented to Mr. Bethel that the engine and transmission had been shipped. However, Mr. Bethel never received either the engine or the transmission, and was informed by the shipping company that no such arrangements had been made by the Defendants. Despite repeated efforts, Mr. Bethel was unable to contact the Defendants after July of 1997.

"13. To date, Mr. Bethel has never received the engine or transmission that he purchased and paid for in full on August 15, 1996. Mr. Bethel also has never received one of the generators that he purchased and paid for in full on February 10, 1997."

Thorn and Diesel each moved, pursuant to Rule 12(b)(6), Ala. R. Civ. P., to dismiss Bethel's complaint for failure to state a claim upon which relief can be granted. After a hearing, the trial court granted Thorn's motion to dismiss, but denied Diesel's motion to dismiss.² Bethel moved the trial court to "reconsider" its order granting Thorn's motion to dismiss. Thorn responded by moving the trial court for entry of a final judgment pursuant to Rule 54(b), Ala. R. Civ. P. The trial court denied Bethel's motion to reconsider and entered a final judgment in favor of Thorn, pursuant to Rule 54(b). Bethel appeals from the judgment of dismissal, but only insofar as it related to his fraud and fraudulent-suppression claims, Counts III through VII.

II.

When reviewing a trial court's dismissal of a complaint for failure to state a claim upon which relief can be granted, this Court, in determining the sufficiency of the complaint, construes the plaintiff's allegations in favor of the plaintiff and resolves all doubts concerning the sufficiency of the complaint in favor of the plaintiff. See Boswell v. Liberty Nat'l Life Ins. Co., 643 So.2d 580, 581 (Ala.1994). "`"In so doing, this Court does not consider whether the plaintiff will ultimately prevail, only whether he has stated a claim under which he may possibly prevail."'" Id. (quoting Grant v. Butler, 590 So.2d 254, 255 (Ala.1991) (quoting Greene County Bd. of Educ. v. Bailey, 586 So.2d 893 (Ala.1991))) (emphasis added in Grant). Thus, "`"a dismissal for failure to state a claim is properly granted only when it appears beyond a doubt that the plaintiff can prove no set of facts entitling him to relief."'" Id. Under Rule 8, Ala. R. Civ. P., a complaint is sufficient if it puts the defendant on notice of the claims against him. See Phillips Colleges of Alabama, Inc. v. Lester, 622 So.2d 308, 311 (Ala.1993) ("under modern rules of civil practice the pleadings generally need only to put the defending party on notice of the claims against him"). However, the rule of generalized notice pleading is qualified by Rule 9(b), Ala. R. Civ. P., where the plaintiff pleads fraud. Rule 9(b) provides in pertinent part that "[i]n all averments of fraud ..., the circumstances constituting fraud ... shall be stated with particularity." But, as the Committee Comments to Rule 9(b) explain:

"[T]his special requirement as to fraud... does not require every element in such actions to be stated with particularity. It simply commands the pleader to use more than generalized or conclusory statements to set out the fraud complained of. The pleading must show time, place and the contents or substance of the false representations, the fact misrepresented, and an identification of what has been obtained. But knowledge by the defendant of the falsity of the representation and reliance on the representation by the plaintiff can still be generally alleged.... Thus[,] it should be expected that the courts will strive to find the details necessary for the sufficiency of such a complaint, if the pleading gives fair notice to the opposing party whereas heretofore the same pleading would have been held insufficient.

"Rule 9(b) also provides that conditions of the mind, such as malice, intent or knowledge, may be averred generally since further specification in such cases is possible only by pleading the evidence."

(Citations omitted.) Thus, under Rule 9, for a pleading to state a claim of fraud, "`"[t]he pleading must show [the] time, [the] place, and the contents or substance of the false representations, the facts misrepresented, and an identification of what has been obtained."'" Lester, 622 So.2d at 311 (quoting Miller v. Mobile County Board of Health, 409 So.2d 420, 422 (Ala. 1981) (quoting the Committee Comments to Rule 9(b))) (alterations in Lester); see also Robinson v. Allstate Ins. Co., 399 So.2d 288, 290 (Ala.1981) ("The pleader must state the time, the place, the contents or substance of the false representations, the fact misrepresented, and an identification of what has been obtained."). Where the alleged fraud is "predicated upon a promise, it is essential that the [pleader allege that the] promisor intended not to perform at the time of making the promise." Robinson, 399 So.2d at 290.

Bethel argues that Thorn, as president of Diesel, can be held individually liable for the fraudulent acts or omissions he personally committed in his capacity as a corporate officer. We agree that this is a correct statement of law. See Ex parte Charles Bell Pontiac-Buick-Cadillac-GMC, Inc., 496 So.2d 774, 775 (Ala.1986) ("In Alabama, the general rule is that officers or employees of a corporation are liable...