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Ex parte Price

Supreme Court of Alabama

April 14, 2017

Ex parte Walter B. Price
Alabama One Credit Union and William A. Lunsford In re: Walter B. Price

         Tuscaloosa Circuit Court, CV-14-901523; Court of Civil Appeals, 2141012


          PER CURIAM

         This Court granted certiorari review to determine whether the Court of Civil Appeals applied the correct standard when reviewing the Tuscaloosa Circuit Court's order.

         Facts and Procedural History

         In 2004, Walter B. Price, Alan H. Goode, William A. Lunsford ("Lunsford"), and Cathy Lunsford (Lunsford's wife) formed Riverfront Development, LLC ("Riverfront"), with the goal of developing certain real estate located in Tuscaloosa ("the Riverwalk property"). Price and Goode each owned a one-third interest in the property, and Lunsford owned the remaining third. They took title to the Riverwalk property individually, not through Riverfront.

         Apparently, Price and Lunsford were involved in other real-estate ventures together. On August 1, 2005, Price loaned Lunsford one million dollars for "Summit, " a venture unrelated to the Riverwalk property. In October 2008, Lunsford was in default on the August 1, 2005, loan. Price made several proposals to Lunsford regarding curing Lunsford's default on the loan. On November 19, 2008, Lunsford wrote Price a letter agreeing with Price's proposal that Price would not have to pay his current capital contribution related to the Riverwalk property in exchange for his ameliorating part of Lunsford's debt to Price on the unrelated venture. Lunsford stated in the letter that he had first and second mortgages on all the property he owned and that, because the construction business had slowed, he had little cash with which to operate his construction business. Lunsford wrote that he thought his only alternative was to sell his interest the Riverwalk property. However, one month earlier, Lunsford had purchased Goode's one-third interest in the Riverwalk property.[1] Price states that he was unaware at that time that Lunsford had purchased Goode's interest.

         Riverfront obtained the building permits and environmental permits to construct condominiums and retail businesses on the Riverwalk property. In early 2009, Lunsford told Price that he was still having financial difficulties. In June 2009, Lunsford told Price that Danny Butler was interested in purchasing the Lunsfords' interests and Price's interests in the Riverwalk property and in Riverfront.

         On July 9, 2009, Lunsford sent Price an e-mail stating that Alabama One Credit Union ("Alabama One") had approved a loan for the purchase of the Riverwalk property and suggesting a closing on the property on Monday, July 13. On July 10, 2009, Lunsford sent Price another e-mail stating, in pertinent part:

"Wally thanks for returning my voice mail. I fully understand how you feel. I have spent a ton [of] time and expense on Summit and have not realized any personal profit from the deal and still have my neck stuck out on loans associated with it, but we had no way of knowing the market would turn on us. The only consolation is there is good equity still there although a far cry from what we expected. It has been very frustrating to have to continue to work to make sales just to keep the banks satisfied.
"I understand your frustration with projects that don't turn out like you plan. I have 4 subdivisions that I would just like for someone to take over the loans. I have to put $ in them every month because we have few lot sales and it's not fun. I desperately need the cash that my construction company has in Riverwalk to keep the banks satisfied on other projects and that's the main reason to close as soon as we can. I too want to come back in Riverwalk if I have enough cash left to do so. I'm taking Danny at his word that he will let me back in.
"Debbie [Nichols] said she has the closing papers ready for Monday so talk to Danny and he can let her know."

         On July 10, 2009, Price sent Lunsford an e-mail stating that he would not be able to close on Monday. Price stated that he was talking to "Danny [Butler] about [Price's] buying back in the deal at some percentage but that has not been resolved. Going to try to see him later today or this weekend. Danny [Butler] said you may come back in the Riverwalk project as well." On July 13, 2009, Lunsford sent Price an e-mail stating that he had talked to Butler and that Butler was ready to close and that if they did not close by Wednesday, July 15, 2009, then Butler was not interested. On July 13, 2009, Alabama One sent Price a proposed settlement statement that provided that the borrower was Riverfront and that the sellers were "Wm. Lunsford and Wally Price."

         On July 15, 2009, Price transferred all of his interest in Riverfront to the Lunsfords. That same day, Price signed a final settlement statement regarding the Riverwalk property, which listed Lunsford and Price as the sellers and Riverfront as the buyer. At the time Price signed as the seller, Lunsford had not signed the settlement statement. According to Price, Lunsford later signed the statement as a seller and as the manager and borrower for Riverfront. Price believed, based on representations made by Lunsford, Butler, and Alabama One, that Butler would be the borrower and agent for Riverfront after Butler purchased Riverfront from the Lunsfords. Price closed his part of the sale on July 15, 2009, by executing documents presented by Debra Nichols, a commercial loan officer for Alabama One. According to Price, the purpose of those documents was to convey all of Price's and Lunsford's interest in the Riverwalk property to Riverfront so Lunsford could then complete the sale of Riverfront to Butler with financing by Alabama One.

         On July 21, 2009, Lunsford and Price signed a deed conveying their interests in the Riverwalk property to Riverfront. Lunsford, as "manager/member" of Riverfront, borrowed money in 2010 and in November 2012 completed the condominiums and retail space on the Riverwalk property.

         On December 29, 2012, Price was told by Jerry Griffin that Butler was not the owner or a member of Riverfront. According to Griffin, Butler was promised a discounted condominium at the Riverwalk property in exchange for misrepresenting to Price his interest in purchasing Riverwalk.

         On December 28, 2014, Price sued Lunsford and Alabama One alleging fraudulent misrepresentation, fraudulent suppression, promissory fraud, breach of the duty of care, breach of the duty of loyalty, tortious interference with a business relationship, and civil conspiracy. Price attached 12 documents to his complaint: 1) the articles of organization of Riverfront; 2) the 2004 deed from the Tuscaloosa Department of Education to Lunsford, Goode, and Price for the Riverwalk property; 3) the August 1, 2005, security agreement/promissory note between Lunsford and Price regarding the Summit real-estate venture; 4) the November 19, 2008, letter from Lunsford to Price; 5) the 2008 property deed transferring Goode's interest in the Riverwalk property to Lunsford; 6) the July 9, 2009, e-mail from Lunsford to Price; 7) the July 10, 2009, email from Lunsford to Price; 8) the July 10, 2009, e-mail from Price to Lunsford along with the July 13, 2009, e-mail from Lunsford to Price; 9) the proposed settlement statement; 10) the July 15, 2009, settlement statement; 11) the July 21, 2009, property deed from Lunsford and Price to Riverfront; and 12) the July 21, 2009 mortgage agreement between Alabama One and Riverfront (signed by Lunsford as manager/member), along with an October 25, 2010, increase in mortgage-indebtedness agreement.

         On January 20, 2015, Alabama One filed a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss, arguing that all of Price's claims were barred by the applicable two-year statutes of limitations. Alabama One attached a copy of a July 16, 2013, complaint with attached exhibits Price had filed against Alabama One, Lunsford, and Butler, among others, involving the same facts as in the present case, which Price had voluntarily dismissed. In discussing the statutes of limitations, Alabama One stated that the differences between Price's July 16, 2013, complaint and attached exhibits and his December 28, 2014, complaint and attached exhibits highlight that the December 28, 2014, complaint should be dismissed. Alabama One also attached a copy of the assignment-of-interest agreement dated July 15, 2009, which transferred Price's interest in Riverfront to the Lunsfords.

         On January 27, 2015, Lunsford filed a Rule 12(b)(6) motion to dismiss, adopting all of Alabama One's arguments. Lunsford argued that Price failed to plead fraud with particularity, that Price failed to allege a basis for tolling the statutes of limitations regarding his fraud claims, and that Price's claims were barred by the Statute of Frauds because the final settlement statement and assignment-of-interest agreement made any prior oral representations irrelevant.

         On March 20, 2015, Price filed responses to both motions to dismiss. In the responses, Price noted that, if the trial court were to consider the materials submitted with Alabama One's motion that were external to Price's complaint, the motion would be converted into a motion for a summary judgment and the trial court would be required to treat the motion as having been filed pursuant to Rule 56, Ala. R. Civ. P.

         In response to the contention that his claims were time-barred, Price argued that the statutes of limitations were tolled as to his claims pursuant to § 6-2-3, Ala. Code 1975. Price alleged that he did not discover the fraudulent activities of Lunsford and/or Alabama One until his conversation with Griffin on December 29, 2012. Price submitted his affidavit and an affidavit from Griffin. Both testified that, during a conversation on December 29, 2012, Griffin informed Price that he understood that Butler had not purchased the Riverwalk property and that he did not hold any interest in Riverfront. Price further argued that he could not have discovered the allegedly fraudulent activities of Lunsford and Alabama One when he executed the documents for the closing of the sale of the Riverwalk property.

         On June 12, 2015, the trial court conducted a hearing in which it heard arguments from counsel of all parties on the motions filed by Alabama One and Lunsford. On June 29, 2015, the trial court entered a judgment, finding:

"1. [Price's] claims are barred by the statute[s] of limitations.
"2. Price has not [pleaded] facts in the Complaint showing that he is entitled to tolling pursuant to Ala. Code [1975, ] § 6-2-3, nor is tolling applicable. See DGB, LLC v. Hinds, 55 So.3d 218, 226 (Ala. 2010)."

         In the judgment, the trial court granted the motions to dismiss filed by Alabama One and Lunsford, and it dismissed Price's complaint with prejudice.

         On July 17, 2015, Price filed a Rule 59, Ala. R. Civ. P., motion to alter, amend, or vacate the judgment, arguing that his claims were not time-barred. He also argued that, because the trial court had not excluded materials outside the pleadings in reaching its judgment, the motions to dismiss had been converted into motions for a summary judgment, and, thus, he argued, he should have been permitted to conduct discovery. Along with the Rule 59 motion, Price filed a motion for leave to amend his complaint, attaching a proposed amended complaint. Alabama One and Lunsford both filed responses to Price's postjudgment motions. On August 19, 2015, the trial court denied Price's Rule 59 postjudgment motion. There is no ruling in the record on the postjudgment motion to amend the complaint.

         On August 31, 2015, Price filed a notice of appeal to this Court. This Court transferred the appeal to the Court of Civil Appeals pursuant to § 12-2-7(6), Ala. Code 1975. The Court of Civil Appeals held that the motions to dismiss should have been treated as summary-judgment motions because Alabama One attached to its motion the assignment-of-interest agreement between Price and the Lunsfords. The Court of Civil Appeals noted that Price, in his responses to the motions, recognized that Alabama One had submitted materials outside the pleadings. The Court of Civil Appeals further held that Price was not prejudiced by the conversion of the ...

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