Wright v. Robinson
| Decision Date | 08 February 1985 |
| Citation | 468 So.2d 94 |
| Parties | Emil F. WRIGHT, Jr. v. John A. ROBINSON III. 83-715. |
| Court | Alabama Supreme Court |
S. Dagnal Rowe of Cleary, Lee, Morris, Evans & Rowe, Huntsville, for appellant.
David H. Meginniss of Hornsby, Blankenship, Robinson & Meginniss, Huntsville, for appellee.
This is an appeal from a summary judgment entered against Dr. Emil Wright, Jr., and in favor of John A. Robinson III.
Defendant Robinson, along with Ben H. Walker and James M. Dunn, Jr., was a principal stockholder and officer of RoBen, Inc. They planned a mobile home development in Auburn, Alabama, and formed a limited partnership to finance the development of the trailer park. Several investors, including the plaintiff, Dr. Wright, were sold interests in a limited partnership known as Stonegate Development, of which RoBen, Inc. was the general partner.
Dr. Wright invested $45,000.00 in Phase I of the development and received ten percent of the shares in the limited partnership. In Phase II of the development, Dr. Wright invested $5,000.00 and a letter of credit for $67,500.00. Phase II was never developed as planned, and thereafter Dr. Wright filed suit in the United States District Court for the Middle District of Alabama against RoBen, Inc. and the principal stockholders, including Robinson.
While the federal suit was pending, the parties entered into a settlement agreement. The agreement, signed on June 8, 1978, provided, inter alia, that the federal lawsuit would be dismissed, without prejudice, and, in return, RoBen and its shareholders, individually, would purchase the limited partners' interests in Phase II of Stonegate Park Ltd. (including Dr. Wright's). Paragraph 9 of the agreement also provided:
"Upon the sale of the interest of Emil Wright, Jr. in connection with Phase II of Stonegate of Auburn, but no later than November 27, 1979, parties of the second part agree to repay the said Emil Wright, Jr. the said $5,000.00 plus interest at 8% from this date, and further to cancel and return the said letter of credit for $67,500.00 described in paragraph (f) of the Whereas Clause, or upon failure of parties of the second part to pay the said $5,000.00 with interest and return said letter of credit parties of the second part agree for the Consent Judgment, attached hereto as Exhibit F, to be entered against them...."
The consent judgment, Exhibit F, is set forth in pertinent part as follows:
Approximately two and one-half years after the settlement agreement was entered into, the RoBen shareholders notified Dr. Wright that the mortgage on the mobile home park was in arrears and that foreclosure was imminent. To prevent foreclosure, RoBen and its individual shareholders, including Robinson, agreed to relinquish their rights in the limited partnership (Phase I, Stonegate Park), if Dr. Wright and the other limited partners would bail them out of the financial crisis. Accordingly, on February 14, 1981, the parties entered into another agreement, whereby the limited partners (including Dr. Wright) would release RoBen and the general partners individually from all claims against them, in exchange for title to the land formerly held by RoBen, Inc. The release agreement expressly excepted the claim underlying Exhibit F, the consent judgment, as follows:
Dr. Wright was never repaid his $5,000.00 and the letter of credit was never returned and was ultimately called by the bank. Dr. Wright then instituted the instant suit in the Circuit Court of Madison County, Alabama, against RoBen, Inc., and the principals and officers individually. He alleged that the defendants had defaulted on paragraph 9 of the 1978 "Settlement Agreement" and asked the court to enter judgment in his favor as set forth in the consent judgment. The complaint was later amended to also include a breach of contract claim. Defendants Walker and Dunn thereafter filed a suggestion of bankruptcy, leaving Robinson as the only viable defendant.
Robinson moved for summary judgment based upon the alleged illegality of the consent judgment. The trial court found that Exhibit F, the consent judgment, was in reality a confession of judgment and accordingly held:
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