Wood v. Phillips
| Decision Date | 21 December 2001 |
| Citation | 823 So.2d 648 |
| Parties | Barry D. WOOD and Baldwin Broadcasting Company v. William H. PHILLIPS. |
| Court | Alabama Supreme Court |
Barry D. Wood, pro se.
Thomas Troy Zieman, Jr., Anthony M. Hoffman, and Robin B. Taylor of Zieman, Speegle, Jackson & Hoffman, L.L.C., Mobile, for appellee.
This case concerns the propriety of the trial court's appointment of a receiver. We affirm.
From 1987 to 1997, William H. Phillips was a 50% owner of Faulkner-Phillips Media, Inc., the licensee of an FM radio station in Bay Minette, Alabama. In June 1988, Phillips learned that the Federal Communications Commission ("FCC") had published a notice, inviting applications for a permit for a new FM radio station frequency in Bay Minette, Alabama. Upon learning this, Phillips telephoned the attorney who handled FCC matters for him, Washington, D.C., lawyer Barry D. Wood, for advice on the appropriate way to apply for a license for that frequency. Phillips alleges that he and Wood discussed pursuing the application for the frequency together as full partners, but that Wood advised him that Wood alone should apply for the license, and conceal the existence of the partnership from the FCC. Wood disputes this and contends that, because Phillips owned a license to another frequency in south Alabama, FCC regulations prohibited Phillips from applying for, or owning, any interest in the new frequency. Therefore, Wood asserts, Phillips encouraged him to apply for the license for the new frequency. Wood maintains that the two men did not discuss a role for Phillips in the new station, much less any ownership interest.
The "filing window" for the new frequency closed in July 1988. Because the filing window closed without attracting a single application, the FCC's rules provided that the first application from a qualified candidate would receive the permit for the frequency. Wood applied for the permit under the name Baldwin Broadcasting Company, and the FCC granted a broadcast-construction permit to the Baldwin Broadcasting Company on March 15, 1990. On May 16, 1990, Wood submitted a required initial-ownership report to the FCC. In that report he certified that he was the sole owner of the Baldwin Broadcasting Company and that the company had no contracts, agreements, or other legal instruments reflecting that additional persons had any ownership rights in the company.
Although the two men dispute Phillips's role at the new station, it appears undisputed that Phillips located a studio site, hired the contractor to build the studio and the office, rented tower space for the transmission antenna, and installed the transmitter for the station. Phillips also managed the new station, hired disc jockeys and sales staff, selected a music format, and conducted initial marketing. Phillips alleges that he invested more than $130,000 in the station during his six years of managing the station. The station began broadcasting on May 15, 1993.
Wood argues that Phillips was not a partner in Baldwin Broadcasting Company; rather, he contends that Phillips was simply an employee of Baldwin Broadcasting Company. Phillips, however, alleges that he repeatedly asked Wood to formalize what he says was their partnership. It is undisputed that Wood and Phillips negotiated an employment agreement pursuant to which Phillips could receive additional compensation if the new station generated cash flow for Wood or if the new station was sold for a profit during the period of the agreement.
In the spring of 1997, AGM Nevada, LLC, offered to purchase the new station for $4,000,000. Wood alleges that, at this time, Phillips began complaining that the bonus he would receive from the sale of the station would be subject to ordinary income tax, and that, as a favor to Phillips, Wood requested a taxpayer-identification number for a partnership and submitted a federal partnership tax return showing him and Phillips as partners. On that return Wood attributed much of the station's revenue to the partnership, which he says did not exist as an entity. In his version of the events that took place during this period, Phillips contends that in 1997 he was finally able to convince Wood to formally recognize their partnership and that Wood filed, under penalty of perjury, a tax return for the partnership, Baldwin Broadcasting Company, that same year. The sale of the station to AGM Nevada was never completed; however, AGM Nevada sold one of its radio stations to Baldwin Broadcasting Company.
In 1999, Cumulus Broadcasting Company approached Phillips about purchasing the two radio stations in Bay Minette owned by Baldwin Broadcasting Company for $6,000,000. As the result of negotiations, Phillips was able to increase the purchase price to $8,075,000, and a letter of intent was drafted. The letter of intent was signed by Phillips as the operating partner, by Wood as president of Baldwin Broadcasting Company, and by Cumulus as the prospective purchaser.
Phillips contends that Wood first began denying the existence of the partnership and began trying to force Phillips out of the business after the letter of intent for the sale of the stations to Cumulus Broadcasting Company was signed. However, Wood contends that in late 1998 he learned that Phillips had written himself extra paychecks and had effectively given himself an unauthorized $3,000 per month raise.
Wood states that he first received notice that Phillips was claiming that the two men had formed a partnership in mid-May 1999, when he received a letter from Phillips's attorney. Wood says that upon receiving this letter, he attended a meeting with Phillips and his attorneys in Mobile, at which Wood indicated he was terminating Phillips's employment for cause. However, Wood says, Phillips convinced him to "suspend" the termination while the two men attempted to resolve their differences. Wood says that after that meeting he increased his scrutiny of Phillips's activities. After discovering that Phillips had held himself out as an owner of the station, had made certain unauthorized personnel changes, and had changed the program format without Wood's approval, Wood terminated Phillips's employment on September 13, 1999.
On September 16, 1999, Phillips filed a complaint in the Circuit Court of Mobile County. Phillips's complaint alleged that he held an ownership interest in the stations and that Wood, doing business as Baldwin Broadcasting Company, had breached the oral partnership agreement between the two men, had misrepresented the actual nature of their relationship, and had breached his fiduciary duty to Phillips, as a partner.
After terminating Phillips's employment, Wood assumed the managerial role of the two stations. After Wood took over, the stations' advertising revenues significantly decreased. Because the value of the stations was declining under Wood's management, Phillips petitioned the trial court to appoint a receiver on September 11, 2000. Following a five-day hearing in which ore tenus evidence was presented, the trial court granted Phillips's motion and appointed a receiver on November 1, 2000. Only two days later, on November 3, 2000, Wood filed a petition in bankruptcy in the United States District Court for the Eastern District of Virginia. Although Phillips states that Wood filed the bankruptcy petition to avoid the appointment of a receiver, the bankruptcy petition is not included in the record. As a result of the pending bankruptcy proceeding in Virginia, the circuit court's decision to appoint a receiver was automatically stayed until the Virginia court lifted the stay in mid-December 2000.
On December 13, 2000, Wood moved the trial court to reconsider its order appointing a receiver, or, in the alternative, to enter an order requiring the receiver to post bond in the amount of $6,000,000. Although the trial court denied Wood's motion for reconsideration, it ordered the receiver to post a bond of $25,000 and Phillips to post a bond of $100,000. The trial court also directed the receiver to file an application with the FCC for consent to the assignment of the license before he assumed control of the stations. Wood submitted to the FCC an objection to the assignment on January 12, 2001. Following the trial court's denial of his motion for reconsideration, Wood appealed the trial court's ruling. Although this appeal was pending, on March 2, 2001, the trial court purported to terminate the receivership.1
The trial court appointed a receiver after hearing ore tenus evidence over a five-day period. Thus, "`[o]ur standard of review under the ore tenus rule is to affirm the trial court's judgment where it is supported by the evidence or inferences that can logically be drawn from the evidence, and to reverse only if the judgment is plainly and palpably wrong.'" McCluney v. Zap Prof'l Photography, Inc., 663 So.2d 922, 924 (Ala.1995)(quoting Davis v. Hester, 582 So.2d 538, 540 (Ala.1991)).
Section 6-6-620, Ala.Code 1975, recognizes a court's power to appoint a receiver in a pending action.2 Carter v. State ex rel. Bullock County, 393 So.2d 1368, 1371 (Ala.1981). "`"The appointment of a receiver rests in the sound discretion of the trial judge, subject to review for an abuse of...
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PHILLIPS v. DICKEY
...Wood contended that Phillips was an employee of Baldwin. This Court has considered that case on two occasions. See Wood v. Phillips, 823 So.2d 648 (Ala.2001) (“ Wood I ”), and Wood v. Phillips, 849 So.2d 951 (Ala.2002) (“ Wood II ”). The facts surrounding the dispute are fully set forth in ......
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Wood v. Phillips
...in December 1992, between Wood and Phillips. This is the second time this case has been before this Court. See Wood v. Phillips, 823 So.2d 648 (Ala. 2001) ("Wood I"), where this Court affirmed an order of the trial judge appointing a receiver. Because we find that there was insufficient evi......