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Ex parte McDaniel

Supreme Court of Alabama

May 24, 2019

EX PARTE David McDANIEL and Lisa McDaniel
v.
SouthFirst Bancshares, Inc., d/b/a SouthFirst Bank; Southern Craftsman Custom Homes, Inc.; Jeffrey A. Rusert; Larry M. Curry, Sr.; Mari G. Gunnels; and Danny Keeney In re: David McDaniel and Lisa McDaniel

Page 848

          (Shelby Circuit Court, CV-18-900702).

          PETITION FOR WRIT OF MANDAMUS

          Rachel J. Moore and L. Griffin Tyndall of Christian & Small LLP, Birmingham, for Petitioners.

          James S. Williams , R. Ryan Daugherty , Meghan A. Salvati , and Thomas A. Woodall of Sirote & Permutt, P.C., Birmingham, for Respondents SouthFirst Bancshares, Inc., d/b/a SouthFirst Bank, Mari Gunnels, and Danny Keeney.

          Brian J. Hurst of Hurst Law Firm, LLC, Birmingham, for Respondents Southern Craftsman Custom Homes, Inc., and Jeffrey Rusert.

Page 849

          Larry M. Curry, Sr., Respondent, pro se.

         SHAW, Justice.

         David McDaniel and Lisa McDaniel, plaintiffs in a civil action below, petition this Court for a writ of mandamus directing the Shelby Circuit Court to vacate its order staying the proceedings against the defendants—Southern Craftsman Custom Homes, Inc. ("SCCH"); Jeffrey A. Rusert; Larry M. Curry, Sr.; SouthFirst Bancshares, Inc., d/b/a SouthFirst Bank ("SouthFirst"); Mari G. Gunnels; and Danny Keeney—while one of those defendants, Rusert, awaits the outcome of a federal criminal investigation against him. For the reasons stated below, we grant the petition and issue the writ.

         Facts and Procedural History

         In 2017, the McDaniels contacted Rusert for the purpose of entering into an agreement with SCCH to build a house. According to the McDaniels, Rusert represented himself as the president of SCCH. At some point, Rusert recommended that the McDaniels speak with Gunnels, who worked for SouthFirst, to secure a loan to pay for the construction of the new house. In November 2017, with Gunnels's assistance, the McDaniels began the process of applying for a construction loan with SouthFirst.

         On November 4, 2017, the McDaniels and SCCH entered into a written agreement for the construction of the house. The total amount of the construction contract was $585,000. Pursuant to the terms of the contract, the McDaniels paid 10 percent of the contract amount—$58,500—as a down payment. The McDaniels contend that they made numerous inquiries with Gunnels concerning the status of the approval of their construction loan and questioned the delay in the closing of the loan. According to the McDaniels, Gunnels assured them that the delay in closing the loan was simply the result of certain signatories for SouthFirst being out of town that prevented SouthFirst from executing the appropriate documents. The McDaniels contend, however, that the delay in closing the loan was actually attributable to concerns allegedly raised by Keeney, also a SouthFirst employee, regarding Rusert's ability to perform the work designated in the construction contract.

         The delay in closing of the loan allegedly led Rusert to seek additional funds from the McDaniels to "hold 2017 material prices." In December 2017, the McDaniels paid Rusert an additional $15,000 to satisfy that request.

         At some point, the McDaniels learned that another person, Curry, had signed another copy of the construction contract between SCCH and the McDaniels to replace the construction contract previously executed by Rusert. SouthFirst indicated to them that Curry was the president of SCCH and that he, not Rusert, held the builder's license for the company. According to the McDaniels, Rusert's license to perform homebuilding services had been revoked, and SouthFirst had encountered prior issues with SCCH and Rusert's defaulting on other construction projects.

         The loan closing occurred on January 26, 2018. The McDaniels executed, among other agreements, a written construction-loan agreement, a promissory note, and a construction-loan disbursement agreement in the total amount of $589,500 for the construction of their house. In conjunction with the execution of those agreements, the McDaniels executed a mortgage on the property in favor of SouthFirst. At the loan closing, Rusert was given a "start-up draw" in the amount of $29,843.65. Subsequently, SouthFirst funded three additional draw requests from Rusert.

Page 850

          On March 5, 2018, the McDaniels met with Rusert at the property site to discuss some concerns they had with the ongoing construction. During that meeting, Rusert provided the McDaniels with a credit application from a local building-supply company and asked them to execute it so that, he said, he could use the McDaniels' credit to purchase building materials and supplies. The McDaniels contacted that local building-supply company and learned that it refused to do business with SCCH, Rusert, and Curry because all three had purportedly failed to pay significant amounts owed the company. The McDaniels immediately ...


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