from Jefferson Circuit Court (CV-15-904654)
Gerstenecker appeals a judgment entered by the Jefferson
Circuit Court ("the trial court") in favor of
and Procedural History
September 2014, Julie, who at that time was married to Adam
Gerstenecker, Janice's son, owed approximately $78, 000
on two student loans she had borrowed to fund her education.
Janice testified that Julie "was upset about"
"the amount of interest that she owed on her student
loans" and that Janice "decided that [she] would
offer [Julie] an interest-free loan to pay off those student
loans." Janice testified that she had a discussion with
Julie and Adam about the possibility of lending Julie the
money to repay her student loans. According to Janice, Janice
agreed to repay Julie's student loans and Julie agreed to
repay Janice by "pay[ing] [Janice] $700 a month until
[Julie and Adam's child] turned one. And then the
payments would rise to $1, 000." Janice testified that
the terms of the agreement between her and Julie were not
reduced to writing. Adam also testified at trial; his
testimony supports the events as testified to by Janice.
testified that she had never borrowed money from Janice and
that she does not recall Janice telling her that Janice would
lend her money to repay her student loans.
September 15, 2014, Julie sent Janice an e-mail informing
Janice of Julie's student-loan lenders and the amount of
indebtedness she owed each of them. Julie's e-mail
indicated that Julie owed Department of Education FedLoan
Servicing ("FedLoan Servicing") $72, 124.04 and
that she owed Sallie Mae $6, 319.98. On September 16, 2014,
Janice mailed checks in the amount of Julie's
indebtedness to FedLoan Servicing and Sallie Mae.
testified that, after she repaid Julie's student loans,
she received four payments from Julie on the interest-free
loan Janice alleges she made to Julie. Janice testified that,
on October 6, 2014, Adam gave her a check in the amount of
$700 "for loan repayment." Janice testified that,
on October 31, 2014, Julie gave her a check in the amount of
$530. Janice explained that the amount of the October 31,
2014, check was $530, instead of $700, because Julie and Adam
had bought Janice and her husband a sound bar for their
television. The cost of the sound bar was deducted from the
$700, leaving $530. Julie testified that she had no
recollection or explanation as to why she wrote the October
31, 2014, check to Janice. Janice testified that, on November
22, 2014, she received a check in the amount of $700
"for Julie's repayment of the loan." Janice
testified that Julie gave her a check on December 29, 2014,
in the amount of $227. Janice explained that the amount of
the December 29, 2014, check was $227, instead of $700,
because Janice reimbursed Julie for items Julie had purchased
on Janice's behalf in the amount of $473. Julie testified
that she had no recollection or explanation as to why she
wrote the December 29, 2014, check to Janice. Adam testified
that each of the checks were given to Janice for repayment of
the loan Janice made to Julie. Janice testified that, since
receiving the December 29, 2014, check, she has not received
any further payments on the loan from Julie.
January 7, 2015, Julie sent Adam an e-mail discussing the
terms of their pending divorce. In their e-mail exchange,
Adam indicated that the monthly repayment amount under the
agreement between Janice and Julie would be decreased from
$700 to $500.
December 3, 2015, Janice sued Julie alleging that Julie had
breached their agreement and requesting $78, 444 in damages,
an amount that Janice alleged was equal to the amount of the
outstanding debt Julie allegedly owed Janice. On December 17,
2015, Julie filed an answer; Julie did not assert any
affirmative defenses. On September 5, 2016, at 11:27 p.m.,
Julie filed an amended answer asserting the Statute of Frauds
as an affirmative defense. On the next day, September 6,
2016, the trial court conducted a bench trial.
September 13, 2016, the trial court entered an order in favor
of Janice. The trial court essentially held that Julie had
waived the Statute of Frauds affirmative defense by failing
to plead it in her initial response. The trial court also
held that, even if Julie had not waived the Statute of Frauds
affirmative defense, the Statute of Frauds was not applicable
"because the evidence submitted at trial showed that,
without dispute, the contract made the subject of this
lawsuit was no longer executory because [Janice] had fully
performed her part of the bargain." The trial court
further held that Janice had "proven her case, "
and it entered a judgment against Julie "in the amount
of $75, 644.00 (the outstanding balance testified to without
the trial court heard ore tenus evidence during the bench
trial, the ore tenus standard of review applies. Our ore
tenus standard of review is well settled. '"When a
judge in a nonjury case hears oral testimony, a judgment
based on findings of fact based on that testimony will be
presumed correct and will not be disturbed on appeal except
for a plain and palpable error."' Smith v.
Muchia, 854 So.2d 85, 92 (Ala. 2003) (quoting
Allstate Ins. Co. v. Skelton, 675 So.2d 377, 379
"'"The ore tenus rule is grounded upon
the principle that when the trial court hears oral testimony
it has an opportunity to evaluate the demeanor and
credibility of witnesses." Hall v. Mazzone, 486
So.2d 408, 410 (Ala. 1986). The rule applies to
"disputed issues of fact, " whether the dispute is
based entirely upon oral testimony or upon a combination of
oral testimony and documentary evidence. Born v.
Clark, 662 So.2d 669, 672 (Ala. 1995). The ore
tenus standard of review, succinctly stated, is as
"'"[W]here the evidence has been [presented]
ore tenus, a presumption of correctness attends the trial
court's conclusion on issues of fact, and this Court will
not disturb the trial court's conclusion unless it is
clearly erroneous and against the great weight of the
evidence, but will affirm the judgment if, under any
reasonable aspect, it is supported by credible
"Reed v. Board of Trs. for Alabama State Univ.,
778 So.2d 791, 795 (Ala. 2000) (quoting Raidt v.
Crane, 342 So.2d 358, 360 (Ala. 1977)). However,
'that presumption [of correctness] has no application
when the trial court is shown to have improperly applied the
law to the facts.' Ex parte Board of Zoning
Adjustment of Mobile, 636 So.2d 415, 417 (Ala.
Kennedy v. Boles Invs., Inc., 53 So.3d 60, 67-68
Julie argues that the trial court exceeded its discretion in
holding that she waived the affirmative defense of the
Statute of Frauds. Julie does not dispute that she failed to
raise the Statute of Frauds as an affirmative defense until
the eve of trial, literally at the 11th hour. Julie argues,
however, that the issue of the Statute of Frauds was tried by
the implied consent of the parties and that her answer was,
thus, effectively amended under Rule 15(b), Ala. R. Civ. P.,
to assert that affirmative defense.
Adams v. Tractor & Equipment Co., 180 So.3d 860,
867 (Ala. 2015), this Court set forth the following
concerning the waiver of the affirmative defense of the
Statute of Frauds:
"The Statute of Frauds is included in the list of
affirmative defenses in Rule 8(c), Ala. R. Civ. P., and that
rule requires that such a defense be specially pleaded.
See Wallace v. Alabama Ass'n of Classified Sch.
Emps., 463 So.2d 135, 136 (Ala. 1984). However, although
it is generally true that a party's failure to assert an
affirmative defense in its answer works as a waiver of that
defense, that rule is subject to certain exceptions."
Tounzen v. Southern United Fire Insurance Co., 701
So.2d 1148, 1150 (Ala. Civ. App. 1997), the Court of Civil
Appeals stated that "Rule 15(b)[, Ala. R. Civ. P., ] is
an exception to the rule that an affirmative defense is
waived if it is not specifically pleaded. Mid-South
Credit Collection v.McCleskey, 587 ...