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Ivey v. King

Supreme Court of Alabama

August 16, 2013

Garfield W. Ivey, Jr.
James C. King

Released for Publication August 5, 2014.

As Amended July 23, 2014.

Appeal from Walker Circuit Court. (CV-07-900131). D. Al Crowson, Trial Judge.

For Appellant: Lisa M. Ivey, Jasper.

For Appellee: David C. Skinner, Birmingham.

PARKER, Justice. Moore, C.J., and Stuart, Shaw, and Wise, JJ., concur.


Page 468

PARKER, Justice.

Garfield W. Ivey, Jr., appeals a judgment entered by the Walker Circuit Court (" the circuit court" ) in favor of James C. King. We affirm the circuit court's judgment.

Facts and Procedural History

The entirety of the facts and procedural history surrounding this case are lengthy and appear to be complex; however, the relevant facts and procedural history that form the basis of this appeal are relatively straightforward, as are the relevant legal issues. On June 8, 2007, King sued Dollar & Eads, P.C., Rhonda Dollar, and Phillip Eads[1] (hereinafter collectively referred to as " Dollar & Eads" ), Peggy G. Northcutt a/k/a Peggy G. Fannin (" Northcutt" ), who was employed by Dollar & Eads, P.C., and Al Northcutt (all hereinafter collectively referred to as " the defendants" ) asserting various claims related to the alleged embezzlement of funds belonging to dissolved entities in which King and Ivey were members. In a separate action (case number CV-05-197), Ivey sued the defendants based on the same alleged conduct. King filed a motion to consolidate his action against the defendants with Ivey's action against the defendants. The case-action summary indicates that King's motion to consolidate was " filed" and " docketed," but nothing in the record indicates that the circuit court actually granted King's motion or entered an order consolidating the actions. In some of the numerous orders entered by the circuit court it appears that the circuit court was perhaps operating under the assumption that King's action and Ivey's action had been consolidated. However, nothing in the record indicates

Page 469

that the circuit court ever consolidated the actions. Therefore, for proposes of this appeal, we conclude that King's action against the defendants and Ivey's action against the defendants were not consolidated, and only King's action is the subject of this appeal.

It is undisputed that King and Ivey entered into a settlement agreement with Dollar & Eads, which settled King's and Ivey's respective claims against Dollar & Eads for $627,684 (" the settlement" ). King set forth some of the relevant undisputed facts leading up to and following the settlement in a motion for a summary judgment filed by King, the legal arguments of which will be discussed below, as follows:

" 3. In November of 2007, King and Ivey attended a mediation with Northcutt's insurer[2] and agreed that the insurer would pay a lump sum of $627,684 to King and Ivey. King and Ivey further agreed that the settlement check would be deposited into Ivey's trust fund account and that they would divide the amount among themselves -- 10% to Warren [a third party who, along with King and Ivey, was also a member of one of the entities being dissolved] and 45% to each King and Ivey. ...
" 4. King and Ivey agreed to split the money according to the respective ownership interests of the dissolving entities. Restated, King would receive $302,606.50 and Ivey would receive $302,606.50 after Warren's 10% ownership interest in King, Ivey & Warren was deducted 'off the top' of the settlement funds. ...
" 5. King agreed to allow Ivey to deposit the $627,684 into Ivey's attorney trust account based on the representation made by Ivey that the funds would be properly distributed in accordance with the terms agreed to at the November 2007 mediation. Ivey agreed to deposit the money into his attorney trust account. ...
" 6. On November 21, 2007, Mr. Ivey received a check in the amount of $627,684 made payable to 'Ivey & Ragsdale, attorneys for ... Ivey and ... King.' ...
" 7. Again, the parties to the check are ... Ivey and ... King. Consequently, the only necessary parties to this [a]ction and this motion are ... Ivey and ... King.
" 8. Both King and Ivey endorsed the two party check so that it could be deposited into Ivey's trust account as agreed. ...
" 9. Since then, King and/or his agents have made numerous requests for his portion of the settlement monies. ...
" 10. Ivey has repeatedly refused to distribute any money to King, and now claims that King is only entitled to $269,370."

(Footnotes omitted.) As set forth above, King and Ivey agreed to divide the settlement amount of $627,684 between them based on their ownership interests in the various dissolved entities. Therefore, King and Ivey's disagreement over the amount of the settlement to which each one is entitled is based on a disagreement over King's and Ivey's respective ownership interests in the various dissolved entities that are the subject of the settlement. Ivey's claim that King is entitled to $269,370 is based on Ivey's computation of King's ownership interest in each of the

Page 470

dissolved entities; Ivey has never disputed that King is entitled to at least $269,370.

On October 6, 2008, Dollar & Eads filed a motion for " a pro tanto order of dismissal in accordance with settlement agreement," in which they requested to be dismissed from King's action against them based on the settlement. On October 21, 2008, King filed a response in opposition to Dollar & Eads's motion requesting that Dollar & Eads not be dismissed based on Ivey's refusal to pay King his portion of the settlement.

On October 30, 2008, King filed an amended complaint adding Ivey, " in his capacity as Attorney Trustee of certain trust funds," as a defendant and seeking to compel Ivey to pay King his portion of the settlement. In his amended complaint, King requested that the circuit court grant him relief, as follows:

" Wherefore, premises considered, Mr. King respectfully prays that this [c]ourt issue an order requiring Mr. Ivey ... to:

" Either:

" (a) Immediately pay Mr. King $313,842 (50% of the $627,684).[3]

" Or:

" (b) Immediately pay to Mr. King the undisputed amount of $269,370 and immediately pay into the [c]ourt the disputed amount of $358,472.[4] If Mr. Ivey selects 'option (b)', then Mr. Ivey is contending/admitting that there is a disputed portion. In such a case, Mr. King respectfully moves the [c]ourt to immediately (1) appoint a special Master with CPA credentials to (i) perform an accounting of Ivey's trust account (ii) perform an accounting of the $627,684 and (iii) prepare a distribution plan for the $358,472; all for the Court's review pursuant to Ala. Rule Civ. Proc. 53 and (2) appoint an attorney to serve as special fiduciary under the Ala. Code [1975,] § 19-3B-1001(b)(5)."

Ivey filed a motion to dismiss King's amended complaint based on King's alleged failure to add certain indispensable parties; Ivey did not specify which parties were indispensable, nor did he explain why he believed that any other parties needed to be added. King filed a response. Ivey's motion to dismiss was later denied, and Ivey filed an answer to King's amended complaint.

On February 24, 2009, King filed a motion he entitled a " [§ ] 6-6-740[, Ala. Code 1975,] Motion" in which he requested that the circuit court " enter a [s]ummary [o]rder" under § 6-6-740, Ala. Code 1975, on his claim against Ivey. Section 6-6-740 states:

" (a) Judgment may, in like manner, be summarily entered against any attorney-at-law in this state who fails to pay over money collected by him or deliver personal property recovered by him in that capacity, whether by ...

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