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Paint Rock Turf, LLC v. First Jackson Bank

Supreme Court of Alabama

November 26, 2014

Paint Rock Turf, LLC
v.
First Jackson Bank et al. First Jackson Bank
v.
Paint Rock Turf, LLC

Released for Publication July 22, 2015.

Appeals from Madison Circuit Court. (CV-10-900076). Karen K. Hall, Trial Judge.

For Paint Rock Turf, LLC, Appellant/Cross-Appellee: Algert S. Agricola, Jr., M. Andrew Donaldson, Ryals, Donaldson & Agricola, P.C., Montgomery.

For First Jackson Bank, Appellant/Cross Appellee: James T. Baxter, Ables, Baxter & Parker, P.C., Huntsville.

For Wayne A. Goodson and Christine Goodson, Appellees: Stuart M. Maples, M. Rebecca Hill, Maples Law Firm, P.C., Huntsville.

MOORE, Chief Justice. Main, J., concurs. Murdock, J., concurs specially. Bolin and Bryan, JJ., concur in the result.

OPINION

Page 991

MOORE, Chief Justice.

Paint Rock Turf, LLC (" Paint Rock" ), appeals from a judgment as a matter of law (" JML" ) entered by the Madison Circuit Court on its claim for emblements under § 35-9-2, Ala. Code 1975, against First Jackson Bank (" First Jackson" ) and Wayne A. Goodson and his wife Christian Goodson.[1] First Jackson cross-appeals from the trial court's denial of its postjudgment motion for a JML on Paint Rock's claim alleging conversion of pallets of sod.

I. Facts and Procedural History

On April 30, 2004, Paint Rock purchased a sod farm and related farm equipment from Eufala Corporation. The sod farm consisted of 1,171 acres of land upon which

Page 992

were grown 580 acres of Bermuda and Zoysia sod grasses. To partially finance the purchase, Paint Rock borrowed $1,706,250 from First Jackson. The loan was secured by a mortgage on the sod farm and a security interest in the equipment used on the farm.

By February 2009, reflecting in part a drop in demand for sod caused by the collapsing market for new homes, Paint Rock had defaulted on the loan. On February 11, 2009, Paint Rock filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Alabama. The filing of the petition operated as an automatic stay of " any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." 11 U.S.C. § 362(a)(3). The stay precluded First Jackson from foreclosing on the sod farm or retaking the equipment. The petition was dismissed August 12, 2009. On October 30, 2009, First Jackson published in the Madison County Record the first of three notices of a foreclosure sale on the property scheduled for noon on November 19, 2009. On the morning of November 19, 2009, Paint Rock filed a second bankruptcy petition, which stayed the scheduled November 19 sale, and which was dismissed on December 8, 2009, for failure to file the proper schedules and statements. On December 18, 2009, First Jackson published a notice that the foreclosure sale was rescheduled for December 30, 2009. On December 26, 2009, Paint Rock filed its third bankruptcy petition. Four days later, the bankruptcy court lifted the automatic stay, expressly finding that Paint Rock had misused " the bankruptcy process in an attempt to wrongfully hinder and delay [First Jackson's] efforts to foreclose its mortgage and security agreement." See Barclays-American Bus. Credit, Inc. v. Radio WBHP, Inc. (In re Dixie Broad., Inc.), 871 F.2d 1023, 1026 (11th Cir. 1989) (noting that " a petition filed in bad faith ... justifies relief from a stay" ).

The same day, December 30, 2009, immediately following the lifting of the stay by the bankruptcy court, First Jackson, as the high bidder, purchased the property at the foreclosure sale. On January 7, 2010, First Jackson sent Paint Rock a letter demanding possession of the sod farm within 10 days. Paint Rock claimed that it did not receive First Jackson's demand-of-possession letter until January 16, 2010. On January 14, 2010, Jimmy Blevins, president of First Jackson, arrived at the sod farm to take possession of the farm and the equipment on behalf of First Jackson. When Blevins arrived at the sod farm, Paint Rock employees were loading harvested sod onto a flatbed tractor-trailer for delivery to a customer. Blevins informed the Paint Rock employees that First Jackson now owned the sod farm, that the employees could not remove the harvested sod, and that the employees would be arrested for trespassing if they returned to the sod farm.

On January 21, 2010, First Jackson filed an ejectment action against Paint Rock. On the same day, Paint Rock by letter demanded access to the sod farm " to recover the emblements in the form of sod which is being grown on the real property recently foreclosed upon ...." [2] Paint Rock also requested the return of its equipment. First Jackson denied Paint Rock's request. Paint Rock, relying on a section of the Alabama Code that permits a tenant at will to harvest its crop,[3] counterclaimed for

Page 993

damages for harm suffered as the result of being unable to harvest the sod. As relevant to this appeal, Paint Rock also sought damages for conversion of " plats of sod" contained on the sod farm. On March 4, 2010, First Jackson sold the sod farm to Mrs. Goodson. The deed stated that the sale was subject to any claim Paint Rock may have to the emblements growing on the property. On October 12, 2010, Paint Rock and Gerald T. Jones, Jr., filed a joint third-party complaint against First Jackson and Mr. Goodson.[4] Paint Rock alleged conversion and detinue, as well as the emblements claim, against Goodson; Jones alleged conversion and detinue against both First Jackson and Goodson. The third-party complaint was later amended to add claims of wantonness and negligence against both First Jackson and the Goodsons.

After the trial court denied motions for a summary judgment filed by First Jackson, Mr. Goodson, and Mrs. Goodson, who had been added as a party, the case proceeded to trial. At the close of Paint Rock and Jones's case, the trial court granted a motion for a JML filed by First Jackson and the Goodsons on Paint Rock's counterclaim for emblements on the ground that Paint Rock was not an at-will tenant as required by ยง 35-9-2. After Paint Rock withdrew its detinue claims and the ...


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