Dzwonkowski v. Sonitrol of Mobile, Inc.

• Decision Date: 23 April 2004
• Citation: 892 So.2d 354
• Parties: Joseph DZWONKOWSKI, Sr. v. SONITROL OF MOBILE, INC., Robert Dzwonkowski, and Joseph Dzwonkowski, Jr.
• Court: Alabama Supreme Court

892 So.2d 354

Joseph DZWONKOWSKI, Sr. v. SONITROL OF MOBILE, INC., Robert Dzwonkowski, and Joseph Dzwonkowski, Jr.

1030285.

Supreme Court of Alabama.

April 23, 2004.

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.

WOODALL, Justice.

In this action by Joseph Dzwonkowski, Sr. ("Joe Sr."), against Sonitrol of Mobile, Inc. ("Sonitrol"), Robert Dzwonkowski ("Robert"), and Joseph Dzwonkowski, Jr. ("Joe Jr."), Joe Sr. appeals from a "judgment" of involuntary dismissal and default of his claims, and of the defendants' counterclaims, respectively. We dismiss the appeal.

This case is yet another appeal in "an intrafamily dispute between [Joe Sr.] and two of his sons, [Joe Jr. and Robert], as to the ownership and control of [Sonitrol], a closely held corporation doing business in Mobile County." Dzwonkowski v. Sonitrol of Mobile, Inc., 854 So.2d 598, 599 (Ala.Civ.App.2002) ("Dzwonkowski I"). The action is based on a 4-count complaint filed by Joe Sr. against Sonitrol, Robert, and Joe Jr., and a 35-count counter-complaint filed by those defendants. The complaint, as last amended, contained claims alleging "misappropriation of funds and corporate waste" and breach of fiduciary duty, and seeking specific performance and an accounting.

As last amended, the counter-complaint against Joe Sr. contained lengthy factual averments of malfeasance. It alleged, among other things, that Joe Sr. was wrongfully refusing to tender his stock to Sonitrol, pursuant to provisions of a "Buy-Sell Agreement" executed on February 16, 1990, by Sonitrol, Joe Sr., Robert, and Joe Jr. It alleged that Joe Sr. had engaged in unauthorized self-dealing with Sonitrol Corporation, a Delaware corporation headquartered in Alexandria, Virginia, in acquiring from Sonitrol Corporation a franchise to operate security businesses in Birmingham, using a trademark owned by Sonitrol Corporation. The counter-complaint further alleged that Joe Sr. caused a financial loss to Sonitrol when he conveyed by quitclaim deed certain property to Sonitrol to cover personal expenses he had incurred in connection with the property. It alleged that Joe Sr. "illegally and fraudulently" sought to satisfy alimony obligations to a former wife by representing her as an employee of Sonitrol and by paying the former wife alimony from Sonitrol accounts in the form of "wages." The counter-complaint also alleged that Joe Sr. fraudulently filed a "Voluntary Petition under Chapter 11 of the Bankruptcy Code," in order to thwart the enforcement of court orders in this litigation.

The counter-complaint contained the following counterclaims: (1) "Specific Performance for Sonitrol — Buy-Sell Agreement for Stock of Joseph Dzwonkowski, Sr.," (2) "Declaratory Judgment — Buy-Sell Agreement for Stock of Joseph Dzwonkowski, Sr.," (3) "Injunctive Relief — Buy-Sell Agreement for Stock of Joseph Dzwonkowski, Sr. and Other Certificates," (4) "Breach of Contract — Direct Shareholder Loan," (5) "Breach of Constructive Contract — Alimony Payments," (6) "Breach of Implied Contract in Fact — Alimony Payments," (7) "Waste of Corporate Assets — Alimony Payments," (8) "Unjust Enrichment and Restitution — Alimony Payments," (9) "Breach of Fiduciary Duty — Alimony Payments," (10) "Conversion — Customer Checks," (11) Breach of Fiduciary Duty — Customer Checks," (12) "Waste of Corporate Assets — Customer Checks," (13) "Unjust Enrichment and Restitution — Customer Checks," (14) "Invasion of Privacy — Other Shareholders," (15) "Usurpation of Corporate Opportunity — Injunctive Relief," (16) "Breach of Fiduciary Duty — Post Office," (17) "Intentional Interference with Contractual Relations — Post Office," (18) "Breach of Fiduciary Duty — Fraudulent Bankruptcy," (19) "Intentional Interference with Contractual Relations — Fraudulent Bankruptcy," (20) "Breach of Fiduciary Duty — Line of Credit," (21) "Intentional Interference with Contractual Relations — Line of Credit," (22) "Breach of Fiduciary Duty — Involuntary Bankruptcy," (23) "Intentional Interference with Contractual Relations — Involuntary Bankruptcy," (24) "Misappropriation of Funds," (25) "Depreciation of Stock Value," (26) "Breach of Officer Standard of Conduct," (27) "Declaratory Judgment — Transfer Agreement," (28) "Equitable Estoppel — Transfer Agreement," (29) "Breach of Fiduciary Duty — Quitclaim Deed," (30) "Waste of Corporate Assets — Quitclaim Deed," (31) "Unjust Enrichment and Restitution — Quitclaim Deed," (32) "Breach of Fiduciary Duty — CCM Debenture," (33) "Waste of Corporate Assets — CCM Debenture," (34) "Unjust Enrichment and Restitution — CCM Debenture," and (35) "Fraud — CCM Debenture." Compensatory and punitive damages were sought under counterclaims (7), (9), (10), (11), (12), (14), (16), (17), (18), (19), (20), (21), (22), (23), (24), (25), (26), (29), (30), (31), (32), (33), (34), and (35). Compensatory damages were sought under counterclaims (4), (5), and (6). Restitution damages were sought under counterclaims (8) and (13).

Sonitrol, Robert, and Joe Jr. moved for a summary judgment on counterclaims 27 and 28. Those counterclaims sought a judgment declaring that Joe Sr., who claimed ownership of five of the nine shares of outstanding Sonitrol stock, owned only one share of stock, and that four of the shares to which Joe Sr. claimed ownership belonged to Joe Jr. The trial court granted the motion, and Joe Sr. appealed. His appeal was the subject of Dzwonkowski I, in which the Court of Civil Appeals decided that there were genuine issues of material fact regarding ownership of the four disputed shares, so that a summary judgment was inappropriate. That court reversed the summary judgment and remanded the case for further proceedings.

On June 9, 2003, the trial court empaneled an advisory jury to try the factual questions regarding stock ownership. However, on June 12, 2003, the trial court, ruling from the bench, entered a default judgment against Joe Sr. on the counterclaims and dismissed his claims against Sonitrol, Robert, and Joe Jr. The trial court set forth its reasoning in a "final order and judgment" entered on June 20, 2003. That order stated, in pertinent part:

"This matter came before the court for trial on the issue of the ownership of four (4) shares of stock in [Sonitrol], the rights to which are claimed by [Joe Sr.] and [Joe Jr.]....

"....

"As the opening statements unfolded on June 9, 2003, this litigation quickly became a question of whether Joe Sr. had committed perjury in Florida on at least two (2) occasions or was committing perjury in this Alabama litigation on the stock ownership issue. Evidence adduced at trial by Joe Sr., himself, and by [Sonitrol, Robert, and Joe Jr.] confirmed that Joe Sr. had, indeed, testified under oath in his Florida divorce deposition taken on February 16, 1999, that he did not, in fact, own the four (4) shares of stock [he now claims], but that Joe Jr. did own that stock since 1982. Additionally, in sworn testimony before the State of Florida Electrical Contractors' Licensing Board (`Florida Board') on May 14, 1998, Joe Sr., in his own voice and words, testified that he did not own the stock in question, but that Joe Jr. did own that stock since 1982.

"Joe Sr. testified that he did not tell the truth on those and several other occasions regarding the stock ownership, but that he was remorseful over the Florida divorce deposition testimony and instructed his Florida lawyer to straighten it out. Yet, on February 22, 1999, Joe Sr. submitted a loan application on behalf of Sonitrol to Merrill Lynch Lending and Cash Management Services [`Merrill Lynch'] in which he set forth in his own handwriting that Joe Jr. owned the four (4) shares of stock in question. Joe Sr. testified he called Merrill Lynch and told them verbally that he owned five (5) shares of Sonitrol and that Robert owned four (4) shares.

"The court has made no findings of fact from this testimony at this time, but summarizes the testimony only as it relates to the abusive litigation of Joe Sr. leading to this Final Order and Judgment.

"This Final Order and Judgment is prepared without the opportunity to review the official reporter's transcript, which will take several weeks to complete. However, the abuses of the judicial system by Joe Sr. during the course of the trial were so pervasive and continuing that even a casual observer of the trial would have been appalled.

"During both direct and cross-examination, Joe Sr. frequently raised his voice to a near scream. Whenever his veracity, recollection or business judgment was questioned during cross-examination, he would raise his voice and use derogatory terms in denigrating Joe Jr. and Robert, as well as their lawyers. Rather than answer the questions propounded on cross-examination, Joe Sr. used the opportunity to engage in character assassination, often after warning and instruction from the court to simply answer the question propounded.

"In spite of repeated warnings by the court to keep his voice down, this conduct of Joe Sr. continued. The court was advised by the official reporter that she was having trouble reporting due to the loudness of Joe Sr.'s voice and the threatening manner in which he leaned over her during cross-examination by Mr. Sullivan.

"One example of Joe Sr.'s flagrant disregard of the orders of this court during the trial came during his testimony on direct examination that Joe Jr. had allegedly been involved in gambling in conjunction with some of the most prominent citizens in Mobile. Joe Sr.'s own lawyer instructed him not to mention those persons by name. This court specifically instructed Joe Sr.: `Don't mention any names, I am not

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