Dzwonkowski v. Sonitrol of Mobile, Inc.

• Decision Date: 16 August 2002
• Citation: 854 So.2d 598
• Parties: Joseph DZWONKOWSKI, Sr. v. SONITROL OF MOBILE, INC., et al.
• Court: Alabama Court of Civil Appeals

854 So.2d 598

Joseph DZWONKOWSKI, Sr. v. SONITROL OF MOBILE, INC., et al.

2010101.

Court of Civil Appeals of Alabama.

August 16, 2002.

Rehearing Applications Denied October 4, 2002.

Certiorari Petitions Denied February 21, 2003.

William W. Watts III of Hudson & Watts, L.L.P., Mobile, for appellant.

Joseph C. Sullivan, Jr., and Brian Thomas Pugh of Hamilton, Butler, Riddick, Tarlton & Sullivan, P.C., Mobile, for appellees Sonitrol of Mobile, Inc., and Joseph Dzwonkowski, Jr.

Alan C. Christian of Johnstone, Adams, Bailey, Gordon & Harris, L.L.C., Mobile, for appellee Robert Dzwonkowski.

Alabama Supreme Court 1020173 and 1020176.

CRAWLEY, Judge.

This appeal concerns an intrafamily dispute between Joseph Dzwonkowski, Sr. ("Joe Sr.," or "the father"), and two of his sons, Robert Dzwonkowski and Joseph Dzwonkowski, Jr. ("Joe Jr.," or collectively "the sons"), as to the ownership and control of Sonitrol of Mobile, Inc., a closely held corporation doing business in Mobile County. The parties are shareholders and directors of Sonitrol.

The father has been president of the Sonitrol franchise in Mobile since 1977. Before 1990, all shares of the corporation were held in a voting trust controlled by the father. In 1990, nine shares of stock were issued, as follows: one share to Joe Sr.; four shares to Robert; and four shares to Joe Jr. At the same time, the parties executed a buy-sell agreement that gave the corporation or the remaining shareholders the option to purchase the shares of a shareholder whose employment with the corporation had ceased.

In 1994, Joe Jr. transferred his four shares of Sonitrol stock to Joe Sr., in exchange for his father's paying certain debts and paying for Joe Jr.'s treatment for gambling addiction. The record contains a certificate of shares, with an issue date of February 16, 1990, endorsed by Joe Jr. and delivered to Joe Sr. on July 13, 1994. Joe Sr. never reendorsed the certificate to Joe Jr.; the certificate remained in Joe Sr.'s possession until it was admitted in evidence in the instant case. Joe Jr. alleged that his father had promised to return the four shares of stock to him once he "got his life in order." Joe Jr. also alleged that his father's conduct since 1994 has evinced an intent to retransfer the stock to him.

In November 1999, the father, acting as the president of Sonitrol, terminated the sons as employees of the corporation and demanded that the sons offer their shares of stock back to the corporation pursuant to the 1990 buy-sell agreement. The sons responded by calling a special meeting of the board of directors for the purpose of removing the father as president of the corporation.

On December 3, 1999, the father filed a declaratory-judgment action, seeking a determination of the ownership of stock in the corporation and a temporary restraining order ("TRO") to prevent the sons from holding a special meeting of Sonitrol's board of directors or from otherwise acting as directors and officers of Sonitrol. The sons counterclaimed, alleging that the father had interfered with the business operations of Sonitrol and had wrongfully diverted funds belonging to Sonitrol. They sought, among other things, a TRO to prohibit the father from acting in any representative capacity on behalf of Sonitrol.

Following a hearing, the circuit court determined, on December 13, 1999, that Sonitrol's board of directors consisted of Joe Sr., Robert, and Joe Jr. and that the directors' meeting called by the sons was authorized by Sonitrol's bylaws. Immediately following that determination, a meeting of the Sonitrol board of directors took place. The sons attended the meeting; the father did not attend. By a majority vote of the directors, the father was removed as an officer, discharged from employment, and asked to surrender his stock for resale to the corporation. The following officers were then elected at the meeting: Joe Jr., president; and Robert, vicepresident, secretary, and treasurer.

The court set a hearing date of March 1, 2000, to determine the ownership of four shares of stock originally issued to Joe Jr., later transferred to Joe Sr., and then claimed by Joe Jr. On January 17, 2000, however, the court notified the parties that the trial on the disputed stock-ownership issue would be heard by an advisory jury on January 19. After a two-day trial, the jury rendered an advisory verdict finding that the father owned five shares, Robert owned four shares, and Joe Jr. owned no shares.

Four days later, on January 24, the sons moved to amend their pleadings to add a defense that, they claimed, was previously unknown to them and that, they contended, entitled them to a judgment as a matter of law on the issue of the stock ownership. The trial court granted the motion to amend and, on January 26, 2000, held another hearing on the stock-ownership issue. At that hearing, the sons presented evidence, which they alleged was newly discovered, indicating that the father had previously testified, in a February 1999 deposition in connection with a Florida divorce proceeding involving the father's second wife, that the father owned only one share of Sonitrol stock and that Robert and Joe Jr. each owned four shares of stock. The sons argued that the father was barred by the doctrine of judicial estoppel from claiming, in an Alabama court proceeding, ownership of more than one share of Sonitrol stock when he had previously declared, in a Florida court proceeding, that he owned only one share. The trial court agreed with the sons' estoppel argument; on February 4, 2000, the court entered an interlocutory order determining that Joe Sr. was estopped from asserting ownership of more than one share of Sonitrol stock. The court found that the ownership of the nine outstanding shares of Sonitrol stock was as follows: Joe Sr.— one share; Robert—four shares; Joe Jr.— four shares.

On September 27, 2000, Joe Sr. moved the court to reconsider its order of February 4, 2000. He alleged that his deposition testimony in the Florida divorce was not newly discovered evidence; that the deposition had been in existence at the time of the hearing before the advisory jury; that, with due diligence, the sons could have produced his deposition at the earlier hearing; and that the sons had thereby waived the defense of judicial estoppel.

On December 22, 2000, the sons moved for a partial summary judgment on the issue of the stock ownership. On February 7, 2001, the trial court entered an order denying Joe Sr.'s motion to reconsider its interlocutory order of February 4, 2000, and certified that order as one suitable for a permissive appeal to the Alabama Supreme Court pursuant to Rule 5, Ala. R.App. P. On March 5, 2001, Joe Sr. filed a notice of appeal; the appeal was dismissed as untimely on May 9, 2001.¹

On August 20, 2001, the trial court entered an order granting the sons' motion for a partial summary judgment and certified that order as final pursuant to Rule 54(b), Ala. R. Civ. P. From the August 20, 2001, partial summary judgment in favor of the sons, Joe Sr. appealed to the Alabama Supreme Court. The supreme court transferred the appeal to this court pursuant to § 12-2-7(6), Ala.Code 1975.

I. The Sons' Motion to Dismiss the Father's Appeal

The sons argue that the father's appeal should be dismissed insofar as it raises issues that were made the basis of the interlocutory orders of February 4, 2000, and February 7, 2001. The sons maintain that the father's failure to file a timely petition pursuant to Rule 5, Ala. R.App. P., for a permissive appeal from the interlocutory orders constitutes a waiver of the father's right to assert that the basis for the interlocutory orders was erroneous. We disagree.

Citing Thompson Properties v. Birmingham Hide & Tallow Co., [Ms. 1000215, November 2, 2001] ___ So.2d ___ (Ala.2001),² and Conseco Finance Corp. v. Sharman, 828 So.2d 890 (Ala. 2001), the sons contend that the father is entitled to only "one bite at the appellate apple." Thompson Properties and Conseco Finance, however, are inapplicable. Those decisions hold that a party who fails to seek or to obtain permission to appeal from the denial of a summary judgment or from the denial of a motion to dismiss (both of which are interlocutory orders) may not seek review of those interlocutory orders upon a later appeal from a final judgment. Here, Joe Sr. is not seeking review of interlocutory orders; he is seeking review of a final judgment, namely: the partial summary judgment entered in favor of Robert and Joe Jr. and certified as final pursuant to Rule 54(b), Ala. R. Civ. P. This court must affirm that judgment if it can be upheld on any ground, see Ex parte Ramsay, 829 So.2d 146 (Ala.2002)

; Ex parte Ryals, 773 So.2d 1011 (Ala.2000); Smith v. Equifax Servs., Inc., 537 So.2d 463 (Ala.1988), including the ground stated in the interlocutory orders of February 4, 2000, and February 7, 2001—that principles of judicial estoppel barred Joe Sr. from claiming ownership of more than one share of stock.

Having determined that the father's appeal is not due to be dismissed, we must now determine the propriety of the partial summary judgment. The principles of law applicable to a motion for a summary judgment are well settled. To grant the motion, the trial court must determine that the evidence does not disclose a genuine issue of material fact and that the movant is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. If the movant makes a prima facie showing that those two conditions are satisfied, then the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989); § 12-21-12(d), Ala. Code 1975. Evidence is "substantial" if it is of "such weight and quality that fairminded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought...