Woods v. Commercial Contractors, Inc.

• Decision Date: 20 June 1980
• Citation: 384 So.2d 1076
• Parties: Frederick C. WOODS, etc. v. COMMERCIAL CONTRACTORS, INC., et al. 79-218.
• Court: Alabama Supreme Court

Page 1076

384 So.2d 1076

Frederick C. WOODS, etc. v. COMMERCIAL CONTRACTORS, INC., et al.

79-218.

Supreme Court of Alabama.

June 20, 1980.

Richard A. Lawrence of Fuller & Lawrence, Montgomery, for appellant.

No brief for appellee.

FAULKNER, Justice.

This is an appeal from a summary judgment for defendants, made final by a determination and entry pursuant to Rule 54(b) of the Alabama Rules of Civil Procedure. We reverse.

The case arose as a suit for breach of contract. Plaintiff, Frederick Woods entered into a contract to provide architectural services in the development of a condominium project in Sarasota, Florida, with Commercial Properties, Inc. (CPI). The contract was signed by James Folmar on January 2, 1973.

The initial complaint was filed on November 4, 1976, and named as defendants CPI, Folmar, Commercial Contractors, Inc. (CCI) and Airedale Holding Corporation, Inc. (AHCI). Subsequent amended complaints added as defendants Meadow Corporation (MC) and Lido Beach Development Co., Inc. (Lido). According to the affidavits and depositions before the Court, at the time the contract was made MC was the parent corporation for 15-25 wholly-owned subsidiaries including CPI, CCI, AHCI, Lido, Ft Myers South Plaza, Inc. (FMSPI) and others. The stock of MC was held by James Folmar, his wife Mary Folmar and his brother Emory Folmar. James Folmar and Emory Folmar served as directors and officers of all the corporations. CPI was merged into AHCI subsequent to the time of the contract. Since this litigation began the Folmars have sold MC and all their interest therein. Lido was eventually sold to Radix Corporation, a venture in which the Folmars had no interest.

The option to purchase the Florida land for the condominium was taken by FMSPI, which assigned its option to Lido which in turn purchased the land, its purpose being to develop the land.

The general purpose of CPI in this organizational plan was to obtain options to purchase real estate for the purpose of developing the land for commercial use. Then CPI would assign the option to a developing corporation. Defendants Folmar and AHCI admitted that at the time of construction CPI had no financial interest in the project. At the time of the agreement of January 2, 1973, the developing company, Lido, had not been incorporated. The contract was, however, entered into by CPI for the benefit of the entity which would develop the project, i. e., Lido.

CCI was a development corporation operating as a general contractor. It did not participate in development of the Florida condominiums although CCI did the construction of other projects for Folmar.

Although CCI did not participate in the project which is the subject of this litigation, the payment checks the plaintiff received for the part of the contract on which payment was made were from CCI. Also, the defendant Mr. Folmar mailed the contract to the plaintiff with the cover letter bearing CCI letterhead. There were at least two such letters to the plaintiff from CCI.

According to the files of the defendant Mr. Folmar's accountant, Mr. Folmar and his brother Emory Folmar drew their salaries only from CCI and MC. According to the accountant's documents, monies were readily transferred from one corporation to another corporation via the parent corporation, MC. Some of these transfers were in the form of loans.

The plaintiff sued CPI, Folmar, CCI, and AHCI for breach of contract in Mobile County in November, 1976. On motion of the defendants, the case was transferred to Montgomery County in October, 1977. In May, 1978, Folmar and CCI moved for summary judgment asserting that the only party charged in the contract was CPI. The plaintiff opposed this motion on the grounds that there were material issues of fact and amended the complaint to allege that Folmar was the alter ego of CPI, CCI and/or AHCI. The complaint was further amended in October, 1978, to allege that CPI had no direct interest in the building project, that CPI and Lido were mere arms or divisions of MC, and that Folmar and/or CPI were acting as agents for MC with regard to the January 2, 1973, contract. The complaint was amended again in November, 1978, to allege that Folmar and/or CPI acted as agents for Lido with regard to the contract and that they assigned their interest in the contract to Lido with Lido assuming the obligations and liabilities of the contract.

The defendants Folmar, CCI and MC renewed the motion for summary judgment in December, 1978. Extensive discovery followed, and again the complaint was amended to add Lido as a defendant. Ten months after the defendants Folmar, CCI, and MC moved for summary judgment, the trial court granted the motion and entered it as a final judgment. Plaintiff appealed.

The issue presented for our consideration is whether the trial court properly awarded summary judgment for the defendants. Plaintiff asserts on this appeal that sufficient evidence was presented to the trial court supporting its theory or theories of liability to defeat summary judgment.

The standard set out in ARCP 56(c), is that summary judgment may be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." The moving party must clearly show that the other party could not recover under "any discernible set of circumstances." Chiniche v. Smith, 374 So.2d 872 (Ala.1979); Folmar v. Montgomery Fair Company, Inc., 293 Ala. 686, 309 So.2d 818 (1975). This rule must be considered in the context of the scintilla evidence rule applicable in Alabama. Campbell v....