Montgomery Circuit Court, CV-18-901327
On
Application for Rehearing
PETITION FOR WRIT OF MANDAMUS
STEWART, JUSTICE.
This
Court's opinion of July 12, 2019, is withdrawn, and the
following is substituted therefor.
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 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. Bentbrooke 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).
Discussion
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 owners' 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 owners, 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 their subrogation rights against Tiffin and had
notified Tiffin only of the potential for a claim against it.
Tiffin responded that the insurance companies had stated that
they would pursue litigation unless Tiffin agreed to
settlement terms offered by the insurance companies.
In
addition to determining that no justiciable controversy
existed, this Court stated:
"[D]eclaratory-judgment actions are not intended to be a
vehicle for potential tort defendants to obtain a declaration
of nonliability. The 'plaintiff [has a] right to choose a
forum.' Ex parte Integon Corp., 672 So.2d 497,
500 (Ala. 1995). Using declaratory relief in the manner
employed by Tiffin in these cases deprives tort plaintiffs of
this right. It also deprives such plaintiffs, within the
confines of the applicable statute of limitations, of the
ability to elect the timing for bringing such an action,
which may affect a plaintiff's preparation for
litigation. Further, such use of declaratory relief
'reverse[s] the roles of the parties' in a way that
'would jeopardize those procedures which the law has
traditionally provided to injured parties by which to ...