Appeal from Jefferson Circuit Court. (CV-94-05629). Roger Monroe; Drayton James, TRIAL JUDGES.
Released for Publication September 28, 1995.
Kennedy, Justice. Almon, Houston, Ingram, and Cook, JJ., concur. Maddox, J., Dissents.
The opinion of the court was delivered by: Kennedy
The defendant/appellant, Leon C. Baker, has filed a motion in his pending appeal asking this Court to grant a stay of proceedings on appeal without requiring him to post a supersedeas bond. The case involves the plaintiffs' attempt to collect on a judgment.
The plaintiffs, J.R. and Laura Bennett, sued Baker, alleging fraud, negligence, and malpractice. Baker, a New York tax attorney, had created a tax shelter for the profits realized from the Bennetts' business. The IRS found the tax shelter to be abusive but did not charge penalties, because the Bennetts had relied on advice from Baker. The amount of the judgment against Baker was $440,025.
This Court affirmed the judgment in Baker v. Bennett, 603 So. 2d 928 (Ala. 1992). One of the issues on that appeal was whether the trial court had had personal jurisdiction over Baker. We held that the trial court had had personal jurisdiction over Baker, a resident of New York, because Baker had had such contacts with Alabama that maintenance of the action did not offend the traditional notions of fair play and substantial Justice. Baker was "transacting business" in Alabama (see Rule 4.2, A.R.Civ.P.); he had intentionally sent documents to this state to be executed by Alabama residents, he had obtained from Alabama residents promissory notes that were payable to Alabama banks, he had mailed numerous items to Alabama regarding this tax shelter, and he had accepted money from the tax shelter. 603 So. 2d at 934.
After this Court's affirmance, the Bennetts filed a garnishment proceeding in Alabama in order to enforce their judgment. They filed the proceeding against three national securities firms that had offices in Alabama, namely, Merrill Lynch; Prudential Bache; and Shearson Lehman. Baker had accounts with the three firms; however, he never had an account in Alabama and the actual securities in Baker's accounts were located in New York and Boston.
The trial court dismissed the garnishment proceeding. This Court affirmed the dismissal, holding that the trial court did not have jurisdiction over Baker's securities even though the court had personal jurisdiction over these securities firms. Baker v. Bennett, 644 So. 2d 901 (Ala. 1994).
The Bennetts then filed an equitable proceeding pursuant to § 6-6-180 et seq., Ala. Code 1975, seeking discovery of assets and an order directing Baker to transfer property to satisfy the judgment. After several evidentiary hearings, the trial court found that the funds located in Baker's personal account could be attached by garnishment. Baker appealed.
The trial court entered an order directing Baker to post a supersedeas bond by October 26, 1994, and, if such bond was not posted, ordering Merrill Lynch to transfer to the Bennetts' attorneys title to enough of Baker's securities to equal the amount of the judgment. Baker refused to comply with the court's order. The trial court then ordered Merrill Lynch to transfer the securities to an account for the Bennetts' attorneys. The trial court gave Baker sufficient time to post a supersedeas bond in order to stay execution of the order pending the appeal. Baker refused to post the bond. Thereafter, Merrill Lynch complied with the order of the court, placing the money in an account in the name of the Bennetts' attorneys.
Baker then filed a motion with this Court for a stay while his appeal from the garnishment order was pending with this Court. Baker did not post a supersedeas bond. This Court granted the motion to stay the trial court's orders, conditioned upon Baker's posting a supersedeas bond or paying the judgment amount to the Circuit Court of Jefferson County.
Baker then attempted to order Merrill Lynch to transfer $750,000 from the account of Leon Baker, P.C., to the circuit court, stating, "For this purpose you should use, as part of the $750,000, the $724,353.33, you previously transferred to the account of the attorneys for [the Bennetts]." The Bennetts objected to this transfer. Merrill Lynch filed a motion to interplead the $750,000, seeking to use as part of that money the $724,353.33. The trial court denied the motion to interplead and would not permit Merrill Lynch to deposit the $750,000. Additionally, the trial court found that Baker had not complied with the order of this Court and further noted that Merrill Lynch was not liable to Leon Baker or Leon Baker, P.C., as a result of its complying with the order not to deposit the $750,000 from the account of Leon Baker, P.C. Thus, Baker failed to post a supersedeas bond as ordered by this Court.
On November 22, 1994, Baker filed a motion to extend this Court's conditional stay. However, Baker's "motion to extend the stay" is really a second motion to stay, because our original stay was conditioned upon Baker's posting a supersedeas ...