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Ex parte Valley National Bank

Supreme Court of Alabama

July 12, 2019

Ex parte Valley National Bank
Valley National Bank f/k/a Aliant Bank In re: Jesse Blount, Wilson Blount, and William Blount

          Montgomery Circuit Court, CV-18-901327.


          Stewart, Justice.

         Valley National Bank ("VNB")[1] petitions this Court for a writ of mandamus directing the Montgomery Circuit Court ("the trial court") to dismiss a declaratory-judgment action filed against VNB by Jesse Blount, Wilson Blount, and William Blount. We grant the petition in part and deny it in part.

         Facts and Procedural History

         According to the materials submitted by the parties, William owned a 33% interest in Alabama Utility Services, LLC ("AUS").[2] William also served as the president of WWJ Corporation, Inc. ("WWJ"), and WWJ managed AUS. Wilson and Jesse, William's sons, owned all the stock of WWJ. In May 2013, William transferred his 33% interest in AUS to WWJ, and WWJ then owned all of the interest in AUS.

         In July 2015, VNB obtained a $905, 599.90 judgment against William in an action separate from the underlying action. On August 31, 2015, Asset Management Professionals, LLC, purchased from WWJ all the assets of AUS for $1, 600, 000.

         On July 17, 2018, the Blounts filed a declaratory-judgment action in the trial court seeking a judgment declaring

"that a) William's transfer of his interest in AUS to WWJ was not fraudulent as to [VNB], b) William was not the alter ego of AUS or WWJ, c) the sale of AUS did not result in a constructive trust in favor of [VNB], and d) the [Blounts] did not engage in a civil conspiracy."

         VNB responded by filing a motion to dismiss pursuant to Rule 12(b)(1) and (b)(6), Ala. R. Civ. P., asserting the lack of subject-matter jurisdiction and the lack of a justiciable controversy. The parties were referred to mediation, which was unsuccessful.

         On September 7, 2018, VNB filed an action in the Jefferson Circuit Court under the Alabama Uniform Fraudulent Transfer Act, § 8-9A-1 et seq., Ala. Code 1975 ("the AUFTA"), against the Blounts and others in which it asserted that William had fraudulently transferred assets and sought to pierce the corporate veil of WWJ.

         On October 4, 2018, the trial court denied VNB's motion to dismiss. VNB timely filed its petition for the writ of mandamus in this Court. According to the parties, the litigation in both the trial court and in the Jefferson Circuit Court was stayed by agreement pending the resolution of this mandamus petition.

         Standard of Review

"A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So.2d 297, 299 (Ala. 1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbroooke Housing, L.L.C., 828 So.2d 285, 288 (Ala. 2002). ...
"For a declaratory-judgment action to withstand a motion to dismiss there must be a bona fide justiciable controversy that should be settled. Anonymous v. Anonymous, 472 So.2d 640, 641 (Ala. Civ. App. 1984); Smith v. Alabama Dry Dock & Shipbuilding Co., 293 Ala. 644, 309 So.2d 424, 427 (1975). The test for the sufficiency of a complaint seeking a declaratory judgment is whether the pleader is entitled to a declaration of rights at all, not whether the pleader will prevail in the declaratory-judgment action. Anonymous, 472 So.2d at 641."

Harper v. Brown, Stagner, Richardson, Inc., 873 So.2d 220, 223 (Ala. 2003).

"A writ of mandamus is an extraordinary remedy which requires a showing of (a) a clear legal right in the petitioner to the order sought, (b) an imperative duty on the respondent to perform, accompanied by a refusal to do so, (c) the lack of another adequate remedy, and (d) the properly invoked jurisdiction of the court. Ex parte Bruner, 749 So.2d 437, 439 (Ala. 1999)."

Ex parte McInnis, 820 So.2d 795, 798 (Ala. 2001). "This Court has held that a writ of mandamus is an appropriate means by which to review the following: subject-matter jurisdiction, Ex parte Johnson, 715 So.2d 783 (Ala. 1998)[, ] ... [and] nonjusticiability as a component of subject-matter jurisdiction, Ex parte Valloze, 142 So.3d 504 (Ala. 2013). ..." Ex parte U.S. Bank Nat'l Ass'n, 148 So.3d 1060, 1064 (Ala. 2014).


         At the outset, we must address a motion filed by VNB in this Court seeking to strike certain exhibits that are attached to the Blounts' response to VNB's mandamus petition. Exhibits 2, 3, 4, and 5 to the Blounts' responses appear to include documentation related to William's transfer of his ownership interest in AUS to WWJ and a valuation of shares in AUS. VNB asserts that those documents are not part of the trial-court record and that, therefore, they should be stricken. Exhibits 15 and 16 appear to be correspondence related to settlement negotiations between the parties and, likewise, are not part of the trial-court record. The Blounts did not respond to VNB's motion to strike. Because this Court does not review materials that were not considered by the trial court, see, e.g., Ex parte Alabama Med. Ctr., 109 So.3d 1114, 1116 (Ala. 2012), and because the Blounts have not opposed VNB's motion, we grant VNB's motion to strike.

         VNB challenges the trial court's exercise of subject-matter jurisdiction over the declaratory-judgment action. VNB argues that a claim under the AUFTA, under which the Blounts could be liable, is a tort claim and that a declaratory-judgment action is not available to a potential tort defendant to establish nonliability for a tort.

         In support of its arguments, VNB relies on Ex parte Valloze, 142 So.3d 504 (Ala. 2013). In Valloze, which involved petitions relating to two separate underlying actions, the defendants' motor homes were destroyed by a fire, and their insurance companies declared each motor home to be a total loss. The insurance companies advised Tiffin Motor Homes, Inc., the manufacturer of the motor homes, of the potential for a claim against it based on an alleged defect in the motor homes. Tiffin brought a declaratory-judgment action against the defendants, the insurance companies, and other entities involved in the manufacturing process, alleging a justiciable controversy existed as to the origin of the fire, the fault and liability for the fire and the resulting loss, and the amount of damages. The defendants filed motions to dismiss the actions, which were denied. The insurance companies, among other defendants, petitioned this Court for a writ of mandamus, asserting that no justiciable controversy existed because they had not decided whether to pursue ...

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