Reynolds v. Colonial Bank
Decision Date | 20 June 2003 |
Citation | 874 So.2d 497 |
Parties | Thomas E. REYNOLDS et al. v. COLONIAL BANK et al. |
Court | Alabama Supreme Court |
Michael C. Skotnicki of Haskell Slaughter Young & Rediker, LLC, Birmingham, for appellants.
Richard A. Wright and Kirkland E. Reid of Miller, Hamilton, Snider & Odom, L.L.C., Mobile for appellee Colonial Bank.
Jeffrey E. Friedman, P. Thomas Dazzio, Jr., and Lee T. Patterson of Friedman, Leak & Bloom, P.C., Birmingham; Edward R. Jackson of Tweedy, Jackson, Beech & Fikes, P.C., Jasper; and Donald M. Wright of Sirote & Permutt, Birmingham, for appellees Friedman, Leak & Bloom, P.C., and Tweedy, Jackson, Beech & Fikes, P.C.
Thomas E. Reynolds, the interim Chapter 7 bankruptcy trustee for Jefferson Screening, Inc.; Laguna Resources, Inc.; and Black Creek Land and Minerals, Inc. (hereinafter referred to collectively as "the debtors"), appeals from the trial court's orders of condemnation of interpleaded funds and its award of attorney fees and expenses in favor of the garnishment liens of Colonial Bank; Komatsu Financial, L.P.; General Electric Capital Business Asset Funding Corporation; Brad Regan, Inc.; the law firm of Friedman, Leak & Bloom, P.C. ("Friedman"); and the law firm of Tweedy, Jackson, Beech and Fikes, P.C. ("Tweedy"). Derrell Chamblee and Scott Chamblee, former employees of Jefferson Screening, are also named as appellees.
The debtors were the plaintiffs in a fraud action against Seminole Electric Cooperative, Inc. On May 3, 2000, after the commencement of the debtors' action, Colonial Bank sued both the debtors and Seminole, claiming that the debtors had defaulted on their loans with Colonial Bank because of Seminole's alleged failure to honor its contracts to purchase coal from the debtors. Colonial Bank's action was consolidated with the debtors' action against Seminole.
On October 12, 2000, the trial court entered a summary judgment in favor of Colonial Bank for its claims against the debtors in the amount of $7,446,363.16. The judgment was made final pursuant to Rule 54(b), Ala. R. Civ. P. The debtors did not appeal the summary judgment against them. The debtors assigned to Colonial Bank any potential recovery in their fraud action against Seminole, and, in return, Colonial Bank agreed to seek recovery of the debtors' indebtedness only from the proceeds recovered, if any, in the debtors' fraud action against Seminole. The trial court entered an order of attachment in favor of Colonial Bank charging with payment of Colonial Bank's judgment any monetary judgment recovered by the debtors against Seminole, subject to any liens held by the debtors' attorneys. Colonial Bank dismissed its action against Seminole.
The debtors' remaining claims against Seminole were tried before a jury. On June 26, 2001, the jury returned a verdict in favor of the debtors against Seminole in the amount of $22,196,899.69. Colonial Bank, along with Komatsu, General Electric, and Brad Regan, other creditors of the debtors, served their writs of garnishment on Seminole. Friedman and Tweedy also asserted their claims for attorney fees related to the services they provided for one of the debtors, Jefferson Screening.
Seminole subsequently appealed the trial court's judgment for the debtors on their fraud claim. On September 9, 2002, while that appeal was pending before this Court, the debtors and Seminole executed a "Release and Settlement Agreement"1 settling the debtors' judgment against Seminole for $6,900,000. To protect itself from competing claimants, Seminole filed a complaint for interpleader of the funds pursuant to § 6-6-463, Ala.Code 1975, and Rule 22, Ala. R. Civ. P. Seminole paid the interpleaded funds to the trial court so the trial court could determine the proper distribution of the funds among the competing claimants. The debtors answered the interpleader complaint and disclaimed any entitlement to the proceeds of the interpleaded funds.
On September 11, 2002, again while the appeal was still pending before this Court, the trial court conducted a hearing at which the debtors, Seminole, and Colonial Bank were present. The trial court entered an order condemning the $6,900,000 settlement amount; that order stated:
The trial court also approved the payment of attorney fees and litigation expenses pursuant to the employment contract Friedman and Tweedy had with Jefferson Screening.2 The trial court stated:
The trial court also entered an order sealing the record in the case.
On September 11, 2002, the same date the trial court entered its orders, the parties filed a joint motion with this Court asking us to remand Seminole's appeal of the underlying fraud action. Not until two days later, on September 13, 2002, did this Court remand Seminole's case for proceedings consistent with the release and settlement agreement. Consequently, the trial court's hearing took place and its orders were entered while Seminole's appeal was pending before this Court.
On September 13, 2002, the same date this Court remanded Seminole's case, General Electric, Cumberland Casualty and Surety Company, and Regions Bank4 filed petitions of involuntary bankruptcy against the debtors. Reynolds was appointed as interim bankruptcy trustee.5 On September 26, 2002, approximately 15 days after the trial court entered its orders, this Court dismissed the appeal on Seminole's motion.
On October 23, 2002, Reynolds appealed the trial court's condemnation order and its award of attorney fees and expenses. The named appellees are Colonial Bank, Komatsu, General Electric, Brad Regan, Friedman, Tweedy, Derrell Chamblee, and Scott Chamblee.6
Reynolds's appeal focuses on the application of the law to the facts. Reynolds claims that the facts are uncontested; Colonial Bank, Friedman, and Tweedy claim that Reynolds omits pertinent facts and that he mischaracterizes the record. We find that the facts applicable to the issues presented are undisputed, and that, therefore, "no presumption of correctness is accorded to the trial court's judgment" and "we review de novo the application of the law to the facts of this case." Allstate Ins. Co. v. Skelton, 675 So.2d 377, 379 (Ala.1996); Beavers v. County of Walker, 645 So.2d 1365, 1372 (Ala.1994). Because we find that the trial court lacked jurisdiction to enter its condemnation order and to award attorney fees and expenses, we pretermit a discussion of Reynolds's claim that the interpleader notices to the creditors were insufficient.
Reynolds argues that the trial court could not recognize or enforce the parties' settlement agreement without the consent of this Court because, he argues, the trial court was divested of its jurisdiction while Seminole's appeal was pending before this Court. According to Reynolds, only "collateral" matters remained within the jurisdiction of the trial court. See Foster v. Greer & Sons, Inc., 446 So.2d 605, 608 (Ala.1984) (...
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...to the issue presented are undisputed, our review of the application of the law to the facts of this case is de novo. Reynolds v. Colonial Bank, 874 So.2d 497 (Ala.2003).” Greene v. Town of Cedar Bluff, 965 So.2d 773, 779 (Ala.2007). Although this matter involves an award of attorney fees, ......
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