Voyager Life Ins. Co., Inc. v. Whitson
| Decision Date | 19 September 1997 |
| Parties | VOYAGER LIFE INSURANCE COMPANY, INC., et al. v. Jackie E. WHITSON, et al. 1960041. |
| Court | Alabama Supreme Court |
William B. Hairston, Jr., and Nathan R. Norris of Engel, Hairston and Johanson, P.C., Birmingham, for appellants.
Betty C. Love of Love & Love, P.C., Talladega; Harvey B. Campbell, Jr., of Campbell & Campbell, P.C., Talladega; and Huel M. Love, Jr., Talladega, for Jackie E. Whitson. On Application for Rehearing
The opinion of May 30, 1997, is withdrawn and the following is substituted therefor.
Jackie E. Whitson, as a class-representative plaintiff ("plaintiff"), filed this class action against Central Finance, Inc., and Royal Finance, Inc. ("defendants"), claiming that the defendants' loans to the plaintiff class were void because the forms used to document the loans included a provision requiring payment in excess of that authorized by Ala.Code 1975, § 5-18-15(j). 1 The note and security agreement in question were attached to the complaint as exhibits. The defendants filed a general denial and filed a third-party complaint against Voyager Life Insurance Company, Voyager Guaranty Insurance Company, Voyager Indemnity Company, Voyager Life and Health Insurance Company, and Voyager Property Insurance Company (all hereinafter referred to as "Voyager"), claiming that Voyager had supplied the defendants with the loan forms used to document the loans to the plaintiff class and that the defendants were entitled to recover from Voyager any damages recovered by the plaintiff class from the defendants. Voyager answered. Upon motion by the plaintiff, the trial court certified a class composed of:
On the same day it certified the class, the trial court granted the plaintiff's motion for a summary judgment, holding that the language on the back of "Alabama Small Loan Form No. CR3010-F(AL) Stock # 841" constituted a charge contracted for by the plaintiff class that violated § 5-18-15(j) and declaring the loans made on that form by the defendants void.
After a hearing to determine the amount of damages and attorney fees to be awarded to the plaintiff class, the trial court rendered a judgment in favor of the plaintiff class and against defendant Central for $650,430.43 plus attorney fees equal to 50% of the "common fund" ($328,815.21); and against defendant Royal for $456,751.29 plus attorney fees equal to 50% of the "common fund" ($228,375.64).
The defendants did not appeal, but Voyager did. The plaintiff moved to dismiss Voyager's appeal, arguing that the judgment appealed from does not adjudicate any rights or liabilities of Voyager; that Voyager is not a party to the "action" between the plaintiff class and the defendants; that the plaintiff is not a party to the "action" between the defendants and Voyager; and, therefore, that Voyager has "no standing to prosecute an appeal from a judgment entered between the plaintiff and the defendants in this case."
The plaintiff relies on Sho-Me Motor Lodges, Inc. v. Jehle-Slauson Construction Co., 466 So.2d 83 (Ala.1985). In Sho-Me, the plaintiff appealed from a summary judgment entered in favor of Southern Roof Deck Applicators, Inc., in Jehle-Slauson's third-party action against Southern Roof. (This would be equivalent to the plaintiff, in this case, appealing from a summary judgment entered in favor of Voyager, if the trial court had entered a summary judgment for Voyager on the defendants' third-party claim against it.) In Sho-Me, this Court wrote the following:
466 So.2d at 88. (Citations omitted.)
In this case, Voyager was a party to the action. Sho-Me. Voyager, in its answer to the defendants' third-party claim for indemnity from Voyager for any judgment rendered against the defendants in the plaintiff's favor, asserted, as a defense, that the third-party complaint, to which a copy of the plaintiff's complaint was attached as an exhibit, failed to state a claim on which relief could be granted.
Voyager filed a memorandum in opposition to the plaintiff's motion for summary judgment against the defendants. Royal went out of business in June 1994, over two years before the summary judgment was entered against it. Central was in the process of liquidating before the summary judgment was entered against it. Clearly, Voyager is a party aggrieved by the summary judgment for the plaintiff class against the defendants, which assessed damages and fees of $1,664,372.57.
Rule 14, A.R.Civ.P., provides, in part:
"The third-party defendant may assert against the plaintiff any defenses which the third-party plaintiff has to the plaintiff's claim."
The defendants were licensees under the Alabama Small Loan Act ("the Act") (Acts of Alabama 1959, No. 374, which is codified as Ala.Code 1975, §§ 5-18-1 thru 5-18-23), and they made loans under the Act. The Act provides that only those charges provided for in the Act can be contracted for or received by any licensee. Section 5-18-15(j) provides that beginning six months after the due date of the final installment of principal or interest, interest may be charged at a rate not to exceed eight percent per annum. The undisputed evidence is that the defendants have not received any charges in excess of those authorized by § 5-18-15(j). Therefore, the issue presented is whether the evidence presented on the summary judgment motion showed that the defendants and the plaintiff class contracted for charges in excess of those allowed by § 5-18-15(j). On the first page of the "Disclosure Statement, Note, and Security Agreement" (the "Agreement"), the following appears:
"After maturity, interest will be charged at the highest lawful contract rate, unless the balance remains unpaid 6 months after the final installment date, then interest will be calculated at 8% per annum."
Hereinafter, this quoted statement is referred to as "the first provision."
The term "Annual Percentage Rate" appears twice on the first page of the agreement. In one place it is defined as "the cost of your credit as a yearly rate." In the other place, the term "Annual Percentage Rate" appears with an arrow pointing to a blank space, which was filled in with a number in excess of 8%.
On the second page of the Agreement, the following appears:
"If Borrower is in default, the full amount Borrower owes, less unearned charges computed as set out in the prepayment section of the Note, will become due at Lender's option without advising Borrower; thereafter, Borrower shall pay interest on the unpaid balance at the stated Annual Percentage Rate until said note is paid in full."
(Emphasis added.) Hereinafter, this statement is referred to as "the second provision."
"Stated" is defined in Black's Law Dictionary 1407 (6th ed. 199), as "[d]etermined, fixed, or settled." In The American Heritage Dictionary of the English Language 1259 (1969), "state" is defined as "[t]o set forth in words; declare." In determining what the plaintiff and the defendants contracted for, we have to determine whether the "stated Annual Percentage Rate" was to be "the cost of [ ] credit as a yearly rate," which would include the cost of the credit before the maturity of the note, the highest lawful contract rate from maturity until 6 months after the final installment date, and 8% per annum from 6 months after the final installment date until the debt was paid in full; or whether the "stated Annual Percentage Rate" was to be the amount that would be written in the space beside the words "Annual Percentage Rate":
____________________________
: ANNUAL
: PERCENTAGE
: ____________________________ RATE
If the stated "Annual Percentage Rate" is the former, it does not violate the Alabama Small Loan Act; if it is the latter, it violates that Act and the contract is void.
"[A] document is unambiguous if only one reasonable meaning emerges." Wayne J. Griffin Electric, Inc. v. Dunn Construction Co., 622 So.2d 314, 317 (Ala.1993). When any aspect of a contract is capable of more than one meaning, it is ambiguous. Griffin Electric, supra...
To continue reading
Request your trial
-
In re Knepp
...clause is ambiguous: when an agreement is reasonably susceptible to more than one meaning, an ambiguity exists. Voyager Life Ins. Co. v. Whitson, 703 So.2d 944, 948 (Ala.1997). Whether a contract is ambiguous is a matter of law to be decided by the court. Coastal Ford, Inc. v. Kidder, 694 S......
-
Halbert v. Credit Suisse AG
...the court has a duty to accept the construction that will uphold, rather than destroy, the contract." Voyager Life Ins. Co. v. Whitson , 703 So. 2d 944, 948 (Ala. 1997). Therefore, the court finds that the Halberts have sufficiently plead mutuality of obligation and the existence of a contr......
-
Porter Capital Corp. v. Thomas
...will presume that the parties intended what they stated and will enforce the contract as written. See id. at 36;Voyager Life Ins. Co. v. Whitson, 703 So.2d 944, 948 (Ala.1997). On the other hand, if the court determines that the terms are ambiguous (susceptible of more than one reasonable m......
-
Adtrav Corp. v. Duluth Travel, Inc.
...the court has a duty to accept the construction that will uphold, rather than destroy, the contract." Voyager Life Ins. Co. v. Whitson, 703 So. 2d 944, 948 (Ala. 1997). The goal is to give effect and meaning to all of the terms of the contract. Once Upon a Time, LLC v. Chappelle Properties,......