The Lem Harris Rainwater Family Tr. v. Rainwater

Decision Date30 September 2022
Docket Number1210106
PartiesThe Lem Harris Rainwater Family Trust, Charles Edward Rainwater, Jean Rainwater Loggins, and the Rainwater Marital Trust v. Lenn Rainwater
CourtAlabama Supreme Court

The Lem Harris Rainwater Family Trust, Charles Edward Rainwater, Jean Rainwater Loggins, and the Rainwater Marital Trust
v.
Lenn Rainwater

No. 1210106

Supreme Court of Alabama

September 30, 2022


Appeal from St. Clair Circuit Court (CV-18-900281)

PARKER, CHIEF JUSTICE

This case returns to this Court as an appeal in ongoing litigation among four siblings regarding family trusts. Charles Edward Rainwater,

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Jean Rainwater Loggins, The Lem Harris Rainwater Family Trust, and the Rainwater Marital Trust appeal a final judgment of the St. Clair Circuit Court enforcing a settlement agreement in the litigation. They challenge three aspects of the judgment: its enforcement of the settlement agreement, its denial of a motion to dissolve a prior order enforcing the settlement agreement, and its denial of a motion to quash a garnishment. Because the court failed to hold an evidentiary hearing on enforcement of the settlement agreement, because the prior enforcement order was improper, and because any award on which the garnishment could have been based is being reversed, we reverse the judgment as to all three aspects.

I. Facts

Lem Harris Rainwater ("Mr. Rainwater") and Jean Rainwater ("Mrs. Rainwater") had four children: Lenn Rainwater ("Lenn," a daughter), Charles Edward Rainwater ("Charles"), Jean Rainwater Loggins ("Jean"), and Mary Rainwater Breazeale ("Mary"). In 1995, Mr. and Mrs. Rainwater created The Lem Harris Rainwater Family Trust ("the Family Trust"). After Mrs. Rainwater died in 2007, the Family

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Trust was divided into two trusts -- the Rainwater Marital Trust ("the Marital Trust") and the Jean Rainwater Bypass Trust. Mr. Rainwater allegedly amended the Marital Trust to provide that, upon his death, Lenn would receive all rights to Victorian Village, a shopping center. All four children served as trustees of the Family Trust and the Marital Trust.

Mr. Rainwater died in 2015. In 2018, Lenn sued Charles, Jean, Mary, and the Family Trust, seeking a declaration of Lenn's rights. After court-ordered mediation, the parties signed a settlement agreement. In it, Charles, Jean, Mary, and the Family Trust agreed to pay Lenn a cash amount from Family Trust assets and to convey all interest in Victorian Village to her. In exchange, Lenn agreed to release all her claims and to resign as cotrustee. The settlement agreement contained a confidentiality clause.

In 2020, Charles, Jean, and Mary moved for clarification regarding the settlement agreement. They alleged that Lenn had breached the agreement by not executing a release of her claims and by not maintaining the confidentiality of the agreement. They argued that

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Lenn's breaches excused their performance of their duties under the agreement. After a hearing, the circuit court entered an order enforcing the settlement agreement ("the first enforcement order").

Lenn then moved to enforce the first enforcement order or to freeze cash assets. Lenn attached to her motion a copy of the settlement agreement. The court granted Lenn's motion, and Charles, Jean, and the Family Trust appealed, challenging the first enforcement order.

While that appeal was pending, Lenn filed a process of garnishment issued to Regions Bank regarding an account belonging to the Marital Trust. Charles, Jean, Mary, the Family Trust, and the Marital Trust moved to quash the garnishment. After a hearing, the circuit court denied the motion to quash. Charles, Jean, the Family Trust, and the Marital Trust appealed.

This Court dismissed both appeals, which had been consolidated. Lem Harris Rainwater Fam. Tr. v. Rainwater, [Ms. 1190951, June 30, 2021] ___So. 3d ___ (Ala. 2021) ("Rainwater"). We held that the first enforcement order was an interlocutory injunction, not a final judgment, and that the appeal of that order was untimely because the appeal was

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filed more than 14 days after the order was entered. We also held that the order denying the motion to quash the garnishment was not a final judgment, such that the appeal of that order was premature.

Thereafter, Charles and Jean moved to dissolve the first enforcement order and to quash the garnishment. Lenn moved to enforce the settlement agreement (and to enforce the first enforcement order, which had itself enforced the settlement agreement). Charles and Jean filed a response to Lenn's motion, alleging that Lenn had materially breached the settlement agreement and requesting an evidentiary hearing on the motion. Without holding an evidentiary hearing, the circuit court entered a final judgment enforcing the settlement agreement. The judgment also denied Charles and Jean's motions to dissolve the first enforcement order and to quash the garnishment. Charles, Jean, the Family Trust, and the Marital Trust ("the defendants") appeal.

II....

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