Green Tree Acceptance, Inc. v. Blalock

• Decision Date: 29 April 1988
• Parties: GREEN TREE ACCEPTANCE, INC. v. Harvey D. BLALOCK and Sandra J. Blalock. 86-941.
• Court: Alabama Supreme Court

Page 1366

525 So.2d 1366

GREEN TREE ACCEPTANCE, INC. v. Harvey D. BLALOCK and Sandra J. Blalock.

86-941.

Supreme Court of Alabama.

April 29, 1988.

William McCollum Halcomb and Dan E. Schmaeling of Wood & Parnell, Montgomery, for appellant.

Steven D. Caley of Legal Services Corp. of Ala., Dothan, for appellees.

ADAMS, Justice.

This case involves a contract for the sale of a mobile home by Furr Mobile Home Sales, Inc. (hereinafter "Furr"), a corporation that was not qualified to do business in Alabama, to Harvey and Sandra Blalock. The Blalocks signed a retail installment sales contract, and Green Tree Acceptance, Inc. (hereinafter "Green Tree"), purchased that contract from Furr. When the Blalocks failed to make the payments on the mobile home, Green Tree sued to recover the mobile home or the reasonable value thereof. The trial court granted a summary judgment in favor of the Blalocks, presumably on the ground that the contract was void because Furr had not qualified to do business in Alabama. We affirm.

The Blalocks, who are residents of Black, Alabama, went to Furr's lot in Bonifay, Florida, and placed an order for a new mobile home. About May 13, 1985, an agent of Furr went to the Blalocks' home in Black, Alabama, with a contract for the sale of a "new" 1984 Thomasville Constellation mobile home. It was at the Blalocks' home that the parties entered into a contract for the sale of the "new" mobile home. However, because of the defective condition of the mobile home, Furr agreed to do substantial repair work, in addition to delivering and setting up the mobile home. The work included repairing a leaky roof, damaged and broken windows, broken cabinets and doors, a defective chandelier, rusty appliances, and the bathroom tub. Furr also agreed to replace faulty wiring, carpet, wall paneling, baseboard moldings, and four defective wheels and tires. Furr also agreed to construct proper floor supports and build outside steps. The estimated cost of these repairs was $2,778.94. Furr also included in the contract a "1 [year] warranty."

Furr delivered and set up the trailer in Black, Alabama, and proceeded to do some of the repair work. The Blalocks began making monthly payments. Eventually, Furr quit making repairs, leaving a substantial portion of the work unfinished.

Green Tree, a general financing company that is qualified to do business in Alabama, had an agreement with Furr to purchase financing statements and installment sales contracts on mobile homes. After approving the Blalocks' application, Green Tree purchased the installment sales contract between Furr and the Blalocks. Furr has since filed for bankruptcy and has gone out of business. Green Tree claimed that it was not responsible for finishing any of the repair work pursuant to the agreement between Furr and the Blalocks. When the Blalocks quit making payments because the repairs on the mobile home remained unfinished, Green Tree sued to recover the mobile home or the reasonable value thereof.

The Blalocks filed a motion for a summary judgment. The motion was supported by an affidavit from Harvey Blalock; an affidavit from the Alabama Secretary of State, stating that Furr was a foreign corporation that was not qualified to do business in Alabama; and a memorandum brief arguing that Furr was not qualified to do business in Alabama and that, as an assignee of Furr, Green Tree was subject to that defense. See Ala.Code 1975, § 5-19-8.

Green Tree also filed a motion for summary judgment in its favor, supported by an affidavit from Ernest B. Johnson, a representative of Green Tree, and a memorandum brief arguing that Green Tree was a holder in due course having no privity with the Blalocks and therefore that it was not subject to the defenses the Blalocks had against Furr. There being no response to the Blalocks' contention that Furr was not qualified to do business in Alabama, the trial court gave Green Tree leave to file a response to that contention. Green Tree filed a second brief that reasserted the arguments in its first memorandum, but made no argument about whether Furr had qualified to do business in Alabama.

After all the briefs on both motions had been filed, the trial court granted a summary judgment in favor of the Blalocks, presumably because Furr was a foreign corporation that had not qualified to do business in Alabama. Pursuant to Ala.Code 1975, § 10-2A-247(a), the contract between Furr and the Blalocks was held to be void and unenforceable. Thus, Green Tree's motion for a summary judgment was denied.

Green Tree filed a post-judgment motion entitled "Motion for Reconsideration, Rehearing and/or Modification," along with a supporting memorandum brief. The memorandum asserted arguments not previously raised by its pleadings, motions, or memorandums. One argument was that Furr was engaged in interstate, rather than intrastate, commerce and therefore that Furr was not subject to the Alabama qualification statute. The motion was denied, and this appeal followed.

The issues on appeal are:

1. Whether the claim that Furr was involved in interstate, rather than intrastate, commerce was raised in a timely fashion prior to appeal.

2. Whether there is any evidence creating a genuine issue of material fact that Furr was in the business of interstate, rather than intrastate, commerce.

3. If Furr is determined to be a non-qualified foreign corporation engaging in intrastate commerce, whether it is nevertheless entitled to a benefit under the equitable language in the foreign corporation statute.

I.

In their brief on motion for summary judgment, the Blalocks met their burden of proving a prima facie case that Furr was a foreign corporation that had not qualified to do business in Alabama. Although the Blalocks never specifically argued that Furr was engaged in intrastate commerce, that argument was not necessary to establish a prima facie case; rather, Green Tree had the burden of proving that it was exempt from the statute. Green Tree made several arguments in its memorandum in response to the defendants' motion for summary judgment and in its memorandum in support of its own motion for summary judgment. However, Green Tree did not raise the argument that Furr was engaged solely in interstate activity and was therefore immune from the qualifying statute, until it filed a post-judgment motion.

The question of whether a new legal argument in a post-judgment motion is timely, is a question of first impression in this State. Other jurisdictions considering the question presented by this case have concluded that new legal arguments in a post-judgment motion are untimely. See Excavators & Erectors, Inc. v. Bullard Engineers, Inc., 489 F.2d 318, 320 (5th Cir.1973); Fehlhaber v. Fehlhaber, 681 F.2d 1015, 1030 (5th Cir.1982); Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 404 (7th Cir.1986); Grumman Aircraft Eng'g Corp. v. Renegotiation Bd., 482 F.2d 710, 721 (D.C.Cir.1973), rev'd on other grounds, 421 U.S. 168, 95 S.Ct. 1491, 44 L.Ed.2d 57 (1975).

However, this Court recently decided a case analogous to the instant case involving the introduction of new evidence in a post-judgment motion. Moore v. Glover, 501 So.2d 1187 (Ala.1986). In that case the Court held that when new--as opposed to newly discovered--evidence was first introduced in a post-judgment motion and no reason or justification was given for failing to present the evidence while the summary judgment motion was pending, the trial judge could not consider the new evidence. Moore, 501 So.2d at 1189. Nevertheless, if the plaintiff had "offered a proper explanation for his failure to offer that additional evidence in response to defendant's motion for summary judgment, the trial court could have considered it in deciding whether to amend or vacate its entry of summary judgment." Id. (emphasis supplied). Furthermore, "[a]ny reasonable explanation of the party's failure to offer evidence in response to a motion for summary judgment [would] suffice, but this does not mean that under the guise of a Rule 59(e) motion a party [could] belatedly submit available evidence in opposition to a motion for summary judgment." Moore, 501 So.2d at 1191 (Torbert, C.J., concurring specially).

Given the analogous situations in Moore and the instant case, we conclude that a trial court has the discretion to consider a new legal argument in a post-judgment motion, but is not required to do so. We will reverse only if the trial court abuses that discretion.

Based on the record before this Court on appeal, we conclude that there was no justification given by Green Tree for failing to raise the argument prior to its post-judgment motion. Therefore, the trial court correctly refused to alter, amend, or vacate its order granting a summary judgment in favor of the Blalocks.

For the foregoing reasons, the judgment is due to be affirmed. Nevertheless, we will address the substantive issue raised on appeal.

II.

The second issue is whether the trial court properly granted a summary judgment on the ground that Furr was a foreign corporation that was not qualified to do business in Alabama. Alabama's "door-closing statute" states:

(a) All contracts or agreements made or entered into in this state by foreign corporations which have not obtained a certificate of authority to transact business in this state shall be held void at the action of such foreign corporation or any person claiming through or under such foreign corporation by virtue of said void contract or agreement; but nothing in this section shall abrogate the equitable rule that he who seeks equity must do equity....

Ala.Code 1975, § 10-2A-247(a). The purpose of this section is to provide some power for the State to protect Alabama residents from possible abuse by uncontrolled foreign corporations. This section of the Code is part of a statutory scheme that requires foreign corporations to receive a certificate of authority to do business in...