Pate v. Rollison Logging Equipment, Inc.

• Decision Date: 06 August 1993
• Citation: 628 So.2d 337
• Parties: Alton M. PATE v. ROLLISON LOGGING EQUIPMENT, INC., et al. 1911153.
• Court: Alabama Supreme Court

Page 337

628 So.2d 337

Alton M. PATE v. ROLLISON LOGGING EQUIPMENT, INC., et al.

1911153.

Supreme Court of Alabama.

Aug. 6, 1993.

Rehearing Denied Oct. 8, 1993.

Edward F. Morgan, Tuscaloosa, for appellant.

John A. Owens of Phelps, Owens, Jenkins, Gibson & Fowler, Tuscaloosa, and William D. King, Carrollton, for Rollison Logging Equipment, Inc., Rollison Logging Equipment of Alabama, Inc. and Laverne Rollison.

William D. Hairston, Jr. of Engel, Hairston & Johanson, P.C., Birmingham, for Associates Commercial Corp.

Thomas R. Jones, Jr. of Rosen, Cook, Sledge, Davis, Carroll & Jones, P.A., Tuscaloosa, for Les Sanderson.

R. Dale Wallace, Jr., Albert L. Jordan and G. Glenn Murdock of Wallace, Jordan, Ratliff, Byers & Brandt, Birmingham, for Independent Life and Acc. Ins. Co.

William J. Donald III of Donald, Randall, Donald & Hamner, Tuscaloosa, for Roosevelt Nat. Life Ins. Co. of America.

MADDOX, Justice.

One of the basic issues presented by this appeal concerns the duties and obligations of the parties in view of the fact that the plaintiff bought credit disability insurance when he financed the purchase of logging equipment that was later repossessed when he failed to make timely payments after becoming disabled. The plaintiff, Alton M. Pate, sued seven defendants, variously alleging breach of contract, negligence, fraud, and conversion. The legal issues vary according to the respective defendants, but the resolution of each centers on whether Pate presented substantial evidence that he is entitled to recover against any of the defendants and whether the trial court properly entered the summary judgments in favor of each of the seven defendants without specifically setting a hearing and before the plaintiff had deposed two defendants. We affirm in part; reverse in part; and remand.

Facts

The facts, viewed most favorably to Pate, are as follows:

Pate owned and operated a logging business. In 1984, he bought a loader from the defendant Randy Rollison, of Rollison Logging Equipment, Inc., and later that year he bought a skidder, executing conditional sales contracts naming Rollison Logging Equipment as the secured party. Rollison arranged financing through the defendant Associates Commercial Corporation, a finance company, and assigned the security interests to Associates.

Along with each sale, Pate bought credit life and accident and health insurance to pay his installments if he became disabled. The premiums for the insurance were included in his payments. Rollison arranged the purchase of the insurance through the defendant Les Anderson, d/b/a Anderson Insurance Agency, a broker. To ensure adequate coverage, Anderson placed seven policies with six different insurers, including the defendants Roosevelt National Life Insurance Company of America and Independent Life and Accident Insurance Company.

In January 1985, Pate became disabled with esophagitis and failed to make his payments as required by the contracts. He notified Randy Rollison, who told Laverne Rollison, the company president, who then notified Anderson by letter that Pate was ill and asked that claim forms be sent to Pate. Laverne Rollison also wrote a letter to Pate explaining that there were seven policies and that forms would have to be sent to each insurer each month; he offered to forward Pate's completed forms to the insurers.

Many of the payments from the insurers were late; consequently, Associates added late charges to Pate's account. Pate claims that he did not regularly receive the forms, but that when he did receive them, he completed them and promptly sent them to the insurers. Letters from Anderson to Pate indicate that the payments were late because of Pate's delays in returning the completed forms, improperly completed forms, physician changes, or disputes over whether Pate was totally disabled.

In May 1987, Laverne Rollison notified Pate and Randy Rollison that Associates had given him two options: either repossess the equipment or rewrite the sales contracts. Randy Rollison discussed the options with Pate and proposed executing a new financing arrangement that would combine the two existing contracts. Although Pate expressed concern about entering into a new agreement, he wanted to keep the equipment and, after consulting a lawyer, he signed the new contract.

In January 1989, Laverne Rollison notified Pate that all the insurance policies had expired and that Pate would be responsible for the remaining payments. When Pate had made no payments by July 1989, Rollison, as instructed by Associates, repossessed the loader, along with the trailer to which it was attached. After notifying Pate, Rollison sold the loader.

In February 1990, Pate sued Rollison Logging Equipment, Inc., Rollison Logging Equipment of Alabama, Inc., Associates, and various fictitiously named defendants, for damages based on fraud, conversion, breach of contract, and negligent performance of contractual duties. Through a series of amendments, Pate added Laverne Rollison as a defendant; substituted Anderson, Independent, and Roosevelt for certain fictitiously named defendants with respect to the negligent performance claim and added a claim against those same defendants for breach of contract; ¹ and added a claim against Associates for damages based on negligence. The defendants filed separate motions for summary judgment. After a pre-trial conference in February 1992, but without having set a hearing on the summary judgment motions, the trial court entered summary judgments for all defendants on all claims. Pate appeals.

Standard of Review

A summary judgment is proper upon a showing "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Ala.R.Civ.P. Initially, the burden is upon the moving party to make a showing, but if the moving party makes a prima facie showing of entitlement to a summary judgment, then the burden shifts to the nonmoving party. Maharry v. City of Gadsden, 587 So.2d 966, 968 (Ala.1991). Because this action was not pending on June 11, 1987, the nonmoving party must offer "substantial evidence" to overcome the prima facie showing. Ala.Code 1975, § 12-21-12. "Substantial evidence" is "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. of Florida, 547 So.2d 870, 871 (Ala.1989). Our standard of review is de novo, Maharry, 587 So.2d at 968, but we examine the evidence in a light most favorable to the nonmoving party. Moore v. Spiller Associated Furniture, Inc., 598 So.2d 835, 836 (Ala.1992).

I. Notice

Before addressing whether the summary judgments were substantively proper, we first address Pate's argument that the trial court violated Rule 56(c), Ala.R.Civ.P., by ruling on the motions for summary judgment without first setting a hearing on those motions. Pate argues that he was surprised when the trial court ruled on the motions at the pre-trial conference.

Before the August 1992 amendment, Rule 56(c) provided in part that "[t]he motion shall be served at least 10 days before the time fixed for the hearing," but "this Court [had] construed Rule 56(c) as providing for a ten-day notice of hearing on a motion for summary judgment." Kelly v. Harrison, 547 So.2d 443, 445 (Ala.1989) (citations omitted). The rule does not require a special hearing, however, because the trial court has a range of discretion in applying Rule 56(c). Id.

Pate had due notice of the pre-trial conference set for February 13, 1992, by which time the motions for summary judgment had been pending for several months. Two days before the pre-trial conference, Pate filed responses, including his own affidavit, to all the motions for summary judgment except Roosevelt National's, to which he had previously responded. In view of these facts, we cannot say that the trial court abused its discretion in not setting a specific hearing on the motions.

II. Judicial Disqualification

Citing Nash v. Cosby, 597 So.2d 209, 211 (Ala.1992) (Houston, J., concurring specially) ("[t]he Court must provide a level playing field"), Pate argues that the trial judge's comments and actions at the pre-trial conference indicated bias against him. Pate cites what he contends are disparaging remarks, such as a statement by the trial judge that he did not want to hear a response from Pate's counsel to a particular argument, and he cites the refusal of the trial judge to allow him a seventh amendment of his complaint.

A judge is presumed not to be prejudiced, and the moving party has the burden of proving that a judge is biased. Banks v. Corte, 521 So.2d 960, 962 (Ala.1988). "A mere accusation of bias, unsupported by substantial fact, does not require disqualification of a judge." Id.; see also Cribbs v. Shotts, 599 So.2d 17, 19 (Ala.1992).

Our review of the transcript of the pre-trial conference shows that Pate failed to meet his heavy burden of showing bias. We view the trial judge's remarks as nothing more than attempts to encapsulate Pate's position according to characterizations made by Pate's own counsel. Even though the trial judge said that he did not want to hear Pate's response to a particular point, he nevertheless allowed Pate's counsel to respond fully. As discussed infra, the trial judge did not abuse his discretion in not allowing Pate to amend his complaint. In connection with Pate's claim of judicial bias, we note that Pate did not file a motion asking the judge to disqualify himself; consequently, Pate has failed to show prejudicial error on this point.

III. The Claims Against the Rollison Defendants

Pate claims fraud, conversion, and negligent performance of contract against the two Rollison companies and Laverne Rollison. These three defendants will sometimes be referred to as "Rollison."

A. Fraud

Regarding the fraud claim, Pate...