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Nettles v. Rumberger, Kirk & Caldwell, P.C.

Supreme Court of Alabama

August 31, 2018

Bert S. Nettles
v.
Rumberger, Kirk & Caldwell, P.C., et al.

          Appeal from Jefferson Circuit Court (CV-15-904514)

          MAIN, Justice.

         Bert S. Nettles appeals from a summary judgment entered in favor of Rumberger, Kirk & Caldwell, P.C. ("Rumberger"), Jesse P. Evans III, Meredith J. Lees, J. Michael Rediker, and Michael B. Odom (Evans, Lees, Rediker, and Odom are hereinafter referred to collectively as the "individual defendants") in an action he filed against them. Because Nettles's action violated § 6-5-440, Ala. Code 1975, we conclude that the judgment of the trial court is due to be affirmed.

         I. Facts and Procedural History

         This case arises from the demise of the law firm of Haskell Slaughter Young & Rediker, LLC ("Haskell Slaughter"). Nettles and the individual defendants are all former members of Haskell Slaughter. It is undisputed that, in the fall of 2013, Haskell Slaughter was in financial distress, and members of the firm were in discussions as to what, if anything, could be done to save the firm. In December 2013, 10 lawyers, including the individual defendants, left Haskell Slaughter and joined Rumberger. Haskell Slaughter permanently closed in February 2014.

         On April 8, 2015, Bluebird Holdings, LLC ("Bluebird"), filed a complaint in the Jefferson Circuit Court against Nettles and three other former members of Haskell Slaughter, seeking to collect on personal guarantee agreements executed by the former members. The case was assigned case number CV-15-901420 ("the Bluebird action"). On September 11, 2015, Nettles filed a third-party complaint in the Bluebird action against Rumberger and the individual defendants. Nettles sought damages from Rumberger and the individual defendants for alleged breach of fiduciary duty, fraud, conspiracy, and tortious interference with a contract. Nettles alleged that the individual defendants, in violation of fiduciary duties owed Nettles and Haskell Slaughter, conspired with each other and with Rumberger to orchestrate Rumberger's acquisition of two of Haskell Slaughter's most profitable practice groups. Nettles alleged that the loss of those practice groups "was the psychological and financial death blow to Haskell Slaughter" in that it thwarted plans for a potential firm-saving reorganization, caused the remaining members of the firm to leave, and resulted in the liquidation of Haskell Slaughter and ultimately the Bluebird action. Nettles alleged that the demise of Haskell Slaughter caused it to default on bank debt for which he was a guarantor. He also alleged that it caused him to lose his capital contribution to the firm and caused him to suffer decreased earning ability. Nettles claimed that he suffered direct personal harm, financial injury, emotional distress, and mental anguish. He sought compensatory and punitive damages from Rumberger and the individual defendants.

         Rumberger and the individual defendants filed a motion to dismiss Nettles's third-party complaint, arguing, among other things, that certain of Nettles's damages claims were not permissible under Rule 14, Ala. R. Civ. P. The trial court agreed and ruled that Nettles could recover only money that he may be required to pay as a result the personal guarantee agreement made the basis of the Bluebird action. The trial court ruled that "Nettles['s] claim of damages for the loss of his capital contribution to the Haskell Firm [and] his suffering a decreased earning capacity are not cognizable within the context of a Third Party Complaint."

         In response to that ruling, on November 20, 2015, Nettles filed a new lawsuit against Rumberger and the individual defendants in the Jefferson Circuit Court. The case, given case number CV-15-904514, was assigned to a different circuit judge. Nettles described the action as a "supplemental lawsuit" (case no. CV-15-904514 is hereinafter referred to as "the supplemental action"), and the complaint expressly incorporated the facts and allegations alleged in his third-party complaint filed in the Bluebird action, which was attached as "Exhibit A" to the complaint. In his complaint, Nettles explained that the supplemental action was necessary because of the trial court's ruling in the Bluebird action limiting Nettles's potential recovery in that action to money he might be required to pay under the personal guarantee agreement: "[I]t is hence necessary and appropriate that this supplemental action be brought and consolidated with the ... Third-Party Complaint in the Bluebird Action for Nettles to obtain compensation for all the damages proximately caused him by the wrongful conduct of ... Rumberger and [the individual defendants]." Nettles filed a contemporaneous motion to consolidate the supplemental action with the Bluebird action.

         Between December 7, 2015, and February 18, 2016, Rumberger and the individual defendants each separately moved to dismiss the supplemental action on the ground that it was barred by Alabama's abatement statute, § 6-5-440, which prohibits a plaintiff from prosecuting two actions at the same time for the same cause of action against the same parties. The court did not immediately rule on the motions to dismiss.

         On July 29, 2016, the parties jointly moved in the supplemental action to consolidate that action with the Bluebird action. The trial court granted the motion to consolidate, stating that the joint motion was not a waiver of any defenses raised in the still pending motions to dismiss, and the consolidated cases were assigned to the circuit judge presiding over the Bluebird action.

         On September 29, 2016, the trial court entered a summary judgment in favor of Rumberger and the individual defendants as to all claims asserted against them in the third-party complaint in the Bluebird action. The trial court, however, did not certify that order as final pursuant to Rule 54(b), Ala. R. Civ. P.

         On February 27, 2017, the trial court denied Rumberger's and the individual defendants' motions to dismiss Nettles's supplemental action. The trial court reasoned that § 6-5-440 did not require dismissal of the supplemental action because the earlier filed third-party action had been dismissed by the summary-judgment order of September 29, 2016. The trial court concluded that "since September 29, 2016, there have not been two actions pending in the state between the same parties with regard to the same cause."

         In April 2017, the individual defendants moved for a summary judgment as to all the claims asserted against them in the supplemental action. On May 23, 2017, the trial court entered a summary judgment for the individual defendants, concluding that the arguments and evidence were the same as addressed in its September 29, 2016, order entering a summary judgment in the Bluebird action.

         On September 9, 2017, Rumberger moved for a summary judgment as to all claims asserted against it in the supplemental action. On September 26, 2017, the trial court entered a summary judgment in favor of Rumberger, resolving all claims as to all parties in the supplemental action. Nettles then filed this appeal.

         II. Analysis

         A. Finality

         Before considering the merits of the appeal we address the appealability of the judgment. Although that issue was not an issue raised by the parties, "jurisdictional matters, such as whether an order is final so as to support an appeal, are of such importance that an appellate court may take notice of them ex mero motu." Fuller v. Birmingham-Jefferson Cty. Transit Auth., 147 So.3d 907, 911 (Ala. 2013). This Court has stated:

"An appeal will not lie from a nonfinal judgment. Robinson v. Computer Servicenters, Inc., 360 So.2d 299, 302 (Ala. 1978). 'A ruling that disposes of fewer than all claims or relates to fewer than all parties in an action is generally not final as to any of the parties or any of the claims. See Rule 54(b), Ala. R. Civ. P.' Wilson v. Wilson, 736 So.2d 633, 634 (Ala. Civ. App. 1999). When an action involves multiple claims or parties, Rule 54(b), Ala. R. Civ. P., gives the trial court the discretion to 'direct the entry of a final judgment as to one or more but fewer than all of the claims or parties.' If a trial court certifies a judgment as final pursuant to Rule 54(b), an appeal will generally lie from that judgment."

Hanner v. Metro Bank & Prot. Life Ins. Co., 952 So.2d 1056, 1060 (Ala. 2006)

         The present appeal is taken only from the judgment in the "supplemental action." As to that action, the judgment resolved all claims as to all parties. The supplemental action, however, was consolidated with the Bluebird action pursuant to Rule 42(a), Ala. R. Civ. P., and that action remains pending. Although the trial court entered a summary judgment for Rumberger and the individual defendants on the claims asserted against them in Nettles's third-party complaint in the Bluebird action, no Rule 54(b) certification has been entered. We must therefore consider whether the judgment in this matter is a final, appealable judgment in light of the fact that the matter was consolidated with a factually and legally intertwined companion case that has not been fully resolved. Did the consolidation effectively merge the cases for purposes of determining whether there is a final judgment for the purpose of an appeal, or may Nettles take an immediate appeal from the judgment in the supplemental action?

         The appellate courts of this State have oft repeated the axiom that cases consolidated under Rule 42(a), Ala. R. App. P., retain their separate identity. See, e.g., League v. McDonald, 355 So.2d 695, 697 (Ala. 1978) ("Where several actions are ordered to be consolidated for trial, each action retains its separate identity ...."); Ex parte Glassmeyer, 204 So.3d 906, 908 (Ala. Civ. App. 2016)("It is well settled that consolidated actions retain their separate identity."). Likewise, we have held that consolidated actions require the entry of separate judgments. See League, 355 So.2d at 697. In Hanner, however, this Court held that "a trial court must certify a judgment as final pursuant to Rule 54(b), Ala. R. Civ. P., before a judgment on fewer than all the claims in a consolidated action can be appealed." A straightforward application of Hanner, thus, dictates that this case be remanded for a Rule 54(b) certification or that it be dismissed. See also Hossley v. Hossley, [Ms. 2160979, May 18, 2018] ____ So.3d ___, ___ (Ala. Civ. App. 2018) (citing Hanner, and dismissing appeal as being from a nonfinal judgment on ground that judgment had not been entered in consolidated action). Nevertheless, in light of a recent decision by the United States Supreme Court, we conclude that it is necessary to reexamine our decision in Hanner.

         In Hanner we relied upon decisions from several federal ...


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