Ex parte Dial Kennels of Alabama, Inc.

• Decision Date: 17 December 1999
• Citation: 771 So.2d 419
• Parties: Ex parte DIAL KENNELS OF ALABAMA, INC., d/b/a Alabama Kennels; et al. Re Dial Kennels of Alabama, Inc., d/b/a Alabama Kennels; et al. v. Macon County Greyhound Park, Inc., et al.
• Court: Alabama Supreme Court

771 So.2d 419

Ex parte DIAL KENNELS OF ALABAMA, INC., d/b/a Alabama Kennels; et al.

Re Dial Kennels of Alabama, Inc., d/b/a Alabama Kennels; et al. v.Macon County Greyhound Park, Inc., et al.

1970873.

Supreme Court of Alabama.

December 17, 1999.

Rehearing Denied March 10, 2000.

Jock M. Smith, Tuskegee; Gregory L. Davis, Montgomery; and Robert D. Segall of Copeland, Franco, Screws & Gill, Montgomery, for petitioners.

Fred D. Gray and Stanley F. Gray of Gray, Langford, Sapp, McGowan, Gray & Nathanson, Tuskegee, for respondentMacon County Greyhound Park, Inc.

Deborah Hill Biggers, Tuskegee, for respondentMacon County Racing Commission.

PER CURIAM.

Dial Kennels of Alabama, Inc., d/b/a Alabama Kennels, and others (all referred to hereinafter as "Alabama Kennels"), sued Macon County Greyhound Park, Inc., and the Macon County Racing Commission, alleging misrepresentation, suppression, and breach of contract.Alabama Kennels alleges that the defendants failed to randomly conduct the draw process for determining post positions for races at the Macon County Greyhound Park(hereinafter "Greyhound Park").The trial court entered a summary judgment in favor of the defendants.The Court of Civil Appeals, on December 19, 1997, affirmed, without an opinion.Dial Kennels of Alabama, Inc. v. Macon County Greyhound Park, Inc.,736 So.2d 685(Ala.Civ.App.1997)(table).We granted Alabama Kennels' petition for certiorari review.We affirm in part, reverse in part, and remand.

We must determine whether the evidence before the trial court created a genuine issue of material fact and, if not, whether the defendants were entitled to a judgment as a matter of law.Rule 56(c), Ala. R. Civ. P.;Ex parte Brislin,719 So.2d 185(Ala.1998).In determining whether a summary judgment was properly entered, this Court must review the evidence in a light most favorable to the nonmoving party and must resolve all reasonable doubts against the movant.Wilma Corp. v. Fleming Foods of Alabama, Inc.,613 So.2d 359(Ala.1993).This action was filed after June 11, 1987; therefore, the "substantial-evidence rule" of § 12-21-12,Ala.Code 1975, applies.SeeBass v. SouthTrust Bank of Baldwin County,538 So.2d 794, 797-98(Ala.1989).Under the substantial-evidence rule, once the movant makes a prima facie showing that there is no genuine issue of material fact, the nonmovant must rebut that showing by presenting "substantial evidence" that creates a genuine issue of material fact."Substantial evidence" is defined as "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved."West v. Founders Life Assurance Co.,547 So.2d 870, 871(Ala.1989).

Viewed in the light most favorable to the nonmovant, Alabama Kennels, the evidence indicates the following: In 1984, Alabama Kennels and Macon County Greyhound Park, Inc., entered into a yearly renewable "Greyhound Booking Agreement" and "Kennel Lease Agreement"; by those agreements, Alabama Kennels was to supply greyhounds for races at the Greyhound Park.The last contract between Alabama Kennels and Macon County Greyhound Park was executed in 1992.Macon County Greyhound Park did not renew Alabama Kennels' contract for the 1993 season.

The method by which the draw for post positions for races at the Greyhound Park is to be conducted is governed by the "Macon County Racing Commission Greyhound Racing Rules and Pari-Mutuel Regulations."Section 2-1420 of those rules and regulations states:

"2-1420.Prior to the first race of a performance, the Racing Secretary, under the supervision of a Commission Judge, shall draw all entries for all races and insure that the races have been filled in their entirety.Following the drawing, each entry will be assigned a post position through a random process.The completed listing of entries and post positions shall be submitted to the Commission Judge, posted in the Racing Secretary's office and the location designated to inform kennel owners and trainers.The Racing Secretary may draw post positions any time prior to the first race of any performance, provided it is no less than twenty-four (24) hours before the performance the greyhounds are to race.The time of drawing of entries and post positions shall be consistent throughout the meet.The Racing Secretary may also draw substitutions for any race card and use them as conditions necessitate."

(R.T. 631-32.)(Emphasis added.)

I.Fraud

A.Suppression

The elements of a claim of fraudulent suppression are: (1) the suppression of a material fact (2) that the defendant has a duty to communicate (3) because of a confidential relationship between the parties or because of the circumstances of the case and (4) injury resulting as a proximate consequence of the suppression.Hines v. Riverside Chevrolet-Olds, Inc.,655 So.2d 909(Ala.1994).A "material fact" is a fact that will induce action or inaction by the other party.Bank of Red Bay v. King,482 So.2d 274(Ala.1985).In this case, as in most suppression cases, whether the matter alleged to have been suppressed was a "material fact" is a question for the jury.SeeLiberty Nat'l Life Ins. Co. v. McAllister,675 So.2d 1292(Ala.1995).

Certain evidence (to be discussed later) suggested that the process for drawing post positions might, in fact, not be conducted randomly.A duty to disclose that fact could arise from a request for information.Hines,supra.The testimony of Walter Pope, Alabama Kennels' manager and kennel trainer, indicates that he expressed to employees of the Greyhound Park and to Commission officials a concern that the draw process for races at the Greyhound Park might not be conducted on a random basis.He said that, in response, James Baker, director of racing for the Greyhound Park, told him that the process was random.Pope's expression of concern is fairly to be taken as an inquiry as to whether the post positions were randomly drawn.Because one who responds to an inquiry has a duty to speak the entire truth, the evidence regarding Pope's inquiry about the draw process is sufficient to support a finding that a proper answer to that inquiry was a "material fact" insofar as Alabama Kennels was concerned.SeeRoberts v. C & S Sovran Credit Corp.,621 So.2d 1294(Ala.1993).A jury could infer that the defendants had a duty to disclose the potential that the draw process was not being conducted randomly.

Arthur Nienow, the owner of Alabama Kennels, testified by deposition that had he known that the draw process would not be conducted on a random basis, he would not have entered into the lease agreement or the booking agreement with the Greyhound Park in 1991.In an affidavit, Walter Pope stated that had he known that the draw process was not random, he would not have allowed Alabama Kennels' dogs to race at the Greyhound Park.Pope stated by affidavit:

"Without a random draw process, the Macon County Greyhound Park gives an unfair advantage to certain participants in the race and really exercises control over the outcome of each race.A nonrandom draw, especially a draw which severely limited the number of one and eight boxes Alabama Kennels was receiving, caused Alabama Kennels damages....Post positions are important in greyhound racing, as greyhounds tend to have their own personality and behavior when racing.Certain greyhounds may tend to run to the outside of the racetrack while others may prefer to run on the inside of the track.Trainers generally prefer the # 1 box and the # 8 box over the other six post positions."

(Emphasis added.)

In his deposition, Milton McGregor, president and CEO of Macon County Greyhound Park, testified as follows:

"Q: Is he[the kennel owner] told anything concerning the Macon County Racing Commission Greyhound Racing Rules and Regulations?

"A: Well, if he's any kind of kennel owner at all, he knows.

". . . .

"Q: Prior to 1993, was it the Macon County Greyhound Park's policy to follow all the rules and regulations of the Macon County Racing Commission?

"A: Yes, sir.

"Q: And was that also disclosed to kennel owners prior to 1993?

"A: Sure."

(R.T. 904, 914-15.)

The evidence presented created a genuine issue of material fact as to Alabama Kennels' claim of fraudulent suppression.Accordingly, the judgment of the Court of Civil Appeals affirming the summary judgment in favor of Macon County Greyhound Park and the Macon County Racing Commission is due to be reversed insofar as it relates to the fraudulent-suppression claim.

B.Misrepresentation

Fraudulent misrepresentation is different from fraudulent suppression.A plaintiff alleging fraudulent misrepresentation must prove that the defendant made a false statement regarding a material fact and that the plaintiff relied on it to his detriment.Reeves Cedarhurst Dev. Corp. v. First Am. Fed. Sav. & Loan Ass'n,607 So.2d 180(Ala.1992).A fraud claim has at its heart an alleged misrepresentation concerning a material fact, made either by an affirmative statement or act, or by a concealment or suppression of a material fact.Reynolds v. Mitchell,529 So.2d 227(Ala.1988).

The evidence indicates that Alabama Kennels drew 113 number 1 post positions and 127 number 8 post positions, out of a total of 2,093 draws.Those two positions are 25% of the positions available (8).Thus, during that period it drew number 1 and number 8 positions in approximately 11.5% of the draws.In 1992, Dr. Kermit Miller, a mathematician, conducted a preliminary statistical analysis of the possibility of getting 113 number 1 box draws out of 2,093 draws and 127 number 8 box draws out of the same 2,093 draws.Dr. Miller stated that "there is less than one chance in three trillion of finding a sample proportion[ ] as low as .115 when the true population portion is .25 for a sample size of 2,093."Dr. Miller concluded:

"[I]t is extremely unlikely that the draws scenario could

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