Wrongful-death action and automobile accident

Alabama Case Law

HUNDLEY v. J.F. SPANN TIMBER, 1051421 (Ala. 1-12-2007)
Margaret Melinda Hundley v. J.F. Spann Timber, Inc., and
Jody Frank Spann. No. 1051421. Supreme Court of Alabama.
Decided January 12, 2007.

Appeal from Geneva Circuit Court (CV-04-75).

NABERS, Chief Justice.

Margaret Melinda Hundley appeals the summary judgment
entered in favor of J.F. Spann Timber, Inc. (“Spann
Timber”), and Jody Frank Spann in a wrongful-death action
she initiated against them following the death of her
husband, James Edward Hundley, in an automobile accident. We
affirm.

I.

On January 30, 2002, a vehicle driven by James Hundley
collided with a logging truck on State Highway 52 in Geneva
County. The logging truck was owned by Spann Forestry,
Inc., and, at the time of the accident, was being driven by
Anthony D. Bradley, an employee of Spann Forestry. Spann
Forestry is a sole proprietorship owned by John Wiley Spann,
Jody Spann’s brother. James Hundley was severely injured in
the accident; he died on March 29, 2002, as a result of the
injuries he suffered in the accident.

Before his death, James Hundley and his wife, Margaret
Melinda Hundley, sued Spann Forestry in the Houston Circuit
Court. The parties reached a settlement in that action,
and, on October 22, 2002, the Houston Circuit Court entered
an order stating that “[u]pon consideration and agreement
of the parties, the above-styled action is hereby dismissed
with prejudice as to Spann Forestry, Inc., and each party
shall bear their own costs of court.”

On January 30, 2004, Margaret Hundley filed a
wrongful-death action in the Houston Circuit Court based on
her husband’s death. Among the defendants named in this
action were Spann Timber and its owner Jody Frank Spann. In
her wrongful-death action, Hundley alleged:

“16. At all times material hereto, and prior to January
30, 2002, and on January 30, 2002, a relationship existed
between Jody Frank Spann and/or J.F. Spann Timber, Inc.,
and John Wiley Spann and/or Spann Forestry, Inc., wherein
each business owned and operated by Jody Frank Spann and
John Wiley Spann, respectively, were intertwined, related
and compatible with each other, with the operation of each
business being profitable and to the financial benefit of
each of the aforesaid individuals and each aforesaid
corporation, including the individual defendant, Jody
Frank Spann, and the defendant corporation, J.F. Spann
Timber, Inc.

“17. Defendant, Jody Frank Spann and defendant, J.F.
Spann Timber, Inc., exercised dominion, control, and
authority as such principal over John Wiley Spann and
Spann Forestry, Inc., so as to create and cause to exist,
a principal-agency and/or master-servant relationship
between defendant Jody Frank Spann and/or the defendant,
J.F. Spann Timber, Inc., and John Wiley Spann and/or Spann
Forestry, Inc., with Jody Frank Spann and his corporation
being the principal and John Wiley Spann and his
corporation being the servant or agent accordingly.

“18.Defendant, Jody Frank Spann and/or defendant J.F.
Spann Timber, Inc., exercised such dominion and control,
including financial dominion and control, over John Wiley
Spann and Spann Forestry, Inc., for the financial gain of
defendant, Jody Frank Spann, and the defendant J.F. Spann
Timber, Inc. Jody Frank Spann and/or J.F. Spann Timber,
Inc., provided financial support, services, direction,
authority, control and direction for John Wiley Spann
and/or Spann Forestry, Inc. (owners of the log truck and
trailer), in multiple and various ways. . . .”

On the motion of Jody Spann and Spann Timber, the case was
subsequently transferred to the Geneva Circuit Court. On
December 13, 2004, they filed their answer to the
complaint, in which they denied that there was “any
employer/employee or principal/agent or master/servant or
joint venture relationship existing between John Wiley
Spann and/or Spann Forestry, Inc., with Jody Frank Spann
and/or J.F. Spann Timber, Inc.” On December 28, 2004, Jody
Spann and Spann Timber moved for a summary judgment on this
same basis. After being granted more time in which to
conduct discovery, Hundley filed her response opposing Jody
Spann and Spann Timber’s motion for a summary judgment on
September 2, 2005. In that motion, she argued that the
nature of the business relationship between Spann Forestry
and Spann Timber was a question of fact for a jury.
Following a hearing, the trial court denied the motion for
a summary judgment.

On October 21, 2005, Jody Spann and Spann Timber filed a
motion to reconsider and a renewed motion for a summary
judgment. In those motions, they again denied any
principal-agent or master-servant relationship with Spann
Forestry and raised for the first time the additional
argument that they were entitled to a summary judgment
because the Hundleys’ earlier action against Spann Forestry
had been dismissed with prejudice, and, they claimed,
“[t]he dismissal of the `agent/servant,’ Spann Forestry,
Inc., operates to exonerate the `principal/master’ Jody F.
Spann and J.F. Spann Timber, Inc.” In conjunction with
their motion, Jody Spann and Spann Timber submitted a copy
of the order of the Houston Circuit Court dismissing with
prejudice the Hundleys’ claims against Spann Forestry.

On January 12, 2006, the trial court entered a summary
judgment in favor of Jody Spann and Spann Timber stating
that, although it had previously denied their motion on the
basis that a question of fact existed as to whether a
principal-agent relationship existed, it was now granting
the motion based on Jody Spann and Spann Timber’s new
argument that the dismissal with prejudice of Spann
Forestry in the Hundleys’ first action precluded a later
finding of liability against Jody Spann and Spann Timber on
the basis of respondeat superior.Hundley promptly moved the
trial court to reconsider; however, on April 12, 2006, the
trial court denied Hundley’s motion and entered its final
order, succinctly stating:

“The court previously denied a motion for summary
judgment filed by [Jody Spann and Spann Timber] and held
that there was a jury question as to right of control.

“If the case is tried to a jury and the jury found no
right of control or no agency, etc., [Jody Spann and Spann
Timber] win[].

“If the jury finds right of control, agency, etc., [Jody
Spann and Spann Timber] still win[] as a result of the
dismissal of the Houston County case with prejudice.

“Therefore, the motion for reconsideration is hereby
denied.”

Hundley appeals.

II.

The pertinent law governing our review of a summary
judgment is as follows:

“This Court’s review of a summary judgment is de novo.
Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72,
74 (Ala. 2003). We apply the same standard of review as
the trial court applied. Specifically, we must determine
whether the movant has made a prima facie showing that no
genuine issue of material fact exists and that the movant
is entitled to a judgment as a matter of law. Rule 56(c),
Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v.
Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making
such a determination, we must review the evidence in the
light most favorable to the nonmovant. Wilson v. Brown,
496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a
prima facie showing that there is no genuine issue of
material fact, the burden then shifts to the nonmovant to
produce `substantial evidence’ as to the existence of a
genuine issue of material fact. Bass v. SouthTrust Bank of
Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989); Ala.
Code 1975, § 12-21-12. `[S]ubstantial evidence is
evidence of such weight and quality that fair-minded
persons in the exercise of impartial judgment can
reasonably infer the existence of the fact sought to be
proved.’ West v. Founders Life Assur. Co. of Fla., 547 So.
2d 870, 871 (Ala. 1989).”

Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39
(Ala. 2004). Moreover:

“A trial court decides a motion for summary judgment upon
a consideration of whatever materials are submitted in
support of or in opposition to the motion. Ex parte City
of Montgomery, 758 So. 2d 565 (Ala. 1999), and Moore v.
Glover, 501 So. 2d 1187 (Ala. 1986). The trial court
cannot consider any facts not of judicial notice except
those facts evidenced by materials contained in the trial
court record upon submission of the motion for summary
judgment. See Moore, supra. Likewise, the trial court
cannot be reversed on any ground or argument not presented
for or against the motion. MetFuel, Inc. v. Louisiana Well
Service Co., 628 So. 2d 601 (Ala. 1993), and Bevill v.
Owen, 364 So. 2d 1201 (Ala. 1979).

“An appellate court can consider a fact to support or to
undermine a summary judgment only to the extent that the
record on appeal contains materials from the record before
the trial court evidencing that fact at the time of
submission of the motion for summary judgment. Dynasty
Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala. 1991).
Likewise, the appellate court can consider an argument
against the validity of a summary judgment only to the
extent that the record on appeal contains material from
the trial court record presenting that argument to the
trial court before or at the time of submission of the
motion for summary judgment. Andrews v. Merritt Oil Co.,
612 So. 2d 409 (Ala. 1992). On the other hand, an
appellate court can affirm a summary judgment on any valid
argument, regardless of whether the argument was
presented to, considered by, or even rejected by the
trial court. Ex parte Wiginton, 743 So. 2d 1071 (Ala.
1999), and Smith v. Equifax Services, Inc., 537 So. 2d 463
(Ala. 1988).”

Ex parte Ryals, 773 So. 2d 1011, 1013 (Ala. 2000).

III.

Alfa Life Insurance Corp. v. Jackson, 906 So. 2d 143 (Ala.
2005), was the only case cited by Jody Spann and Spann
Timber in support of their argument that the dismissal of
Spann Forestry (the agent) with prejudice in the Hundleys’
first action served to exonerate them (the principal) of
any future liability. In Jackson, this Court considered
whether the dismissal with prejudice of tort claims against
Rickey English, an insurance agent with Alfa Life Insurance
Corporation, exonerated Alfa from vicarious liability for
those same torts. We concluded:

“The dismissal with prejudice of the claims alleged
against English — the torts of fraud and negligent
or wanton failure to procure insurance §
constituted an adjudication on the merits to the effect
that English was not guilty of committing either of those
torts. Therefore, Alfa could hardly be guilty of
committing those same torts by and through the agency of
English and thus could not be vicariously liable for
those torts under the doctrine of respondeat superior. .
. .

“The plaintiffs cite Big B, Inc. v. Cottingham, 634 So.
2d 999 (Ala. 1993), USA Petroleum Corp. v. Hines, 770 So.
2d 589 (Ala. 1999), Daugherty v. M-Earth of Alabama,
Inc., 519 So. 2d 467 (Ala. 1987), and Salter v. A. Fraser
Pattillo, Jr., Inc., 519 So. 2d 930 (Ala. 1988), for the
proposition that the dismissal with prejudice of the tort
claims against the agent English did not exonerate the
principal Alfa from vicarious liability for those alleged
torts. These four precedents, however, are distinguishable
from the case now before us.

“While in each of Cottingham and Hines the trial court,
on the plaintiff’s motion, dismissed one or more tort
claims against the agent and allowed the plaintiff to
proceed against the principal, neither case states that
the dismissal was with prejudice. For all that appears in
either case, the trial court dismissed the tort claim or
claims against the agent without prejudice, while in the
case now before us the trial court dismissed the tort
claims against the agent with prejudice. Although a
dismissal without prejudice does not constitute an
adjudication on the merits, Smith v. Union Bank & Trust
Co., 653 So. 2d 933, 935 (Ala. 1995), a dismissal with
prejudice does, Hammermill Paper Co. v. Day, 336 So. 2d
166, 168 (Ala. 1976).

“In Daugherty and Salter the pertinent issue was whether
a pro tanto release of an agent from tort claims
exonerated the principal from vicarious liability for
those alleged torts. Each release expressly reserved the
tort claims against the principal. In each case this
Court held that it was bound by § 12-21-109, Ala.
Code 1975,[fn1] to honor the express reservation of the
tort claims against the principal. Because the plaintiffs
in the case now before us did not, in any release governed
by § 12-21-109, expressly reserve their tort claims
against Alfa, those tort claims are not preserved by the
holding of Daugherty and Salter, and likewise those two
precedents are not affected by the holding exonerating
Alfa from the tort claims in the case now before us.

“Thus, we conclude that the dismissal with prejudice of
the tort claims against the agent English exonerated the
principal Alfa from vicarious liability for those alleged
torts and entitled Alfa to a [judgement as a matter of
law] on the tort claims.”

Jackson, 906 So. 2d at 154-55. Jackson, therefore,
establishes that if all tort claims against an agent are
dismissed with prejudice, then a subsequent tort claim
based on the same facts will not lie against the agent’s
principal unless in conjunction with the dismissal with
prejudice the parties entered into a settlement agreement
that expresslyreserved the claimant’s right to pursue
claims against the principal.

The order of dismissal in the Hundleys’ first action
clearly stated that Spann Forestry was being dismissed with
prejudice. Therefore, the operative inquiry is whether, in
the settlement agreement that precipitated that dismissal,
Hundley expressly reserved the right to pursue tort claims
against other parties, i.e., Jody Spann and Spann Timber.
This Court cannot conclude that such a reservation was made
because the settlement agreement was never made a part of
the official court record. Neither is there any affidavit
or other admissible evidence describing the terms of the
settlement agreement. Hundley’s attorney states that the
settlement agreement expressly reserved the right to pursue
tort claims against other parties; however, as we have
stated many times, arguments of counsel are not evidence.
See, e.g., Ex parte Coleman, 861 So. 2d 1080, 1084 (Ala.
2003). Hundley further argues that the failure to submit
the written agreement into the record is of no consequence
because the terms of the settlement agreement were
“assumed, presumed, and admitted in the trial court for
purpose of argument.” However, as we stated in Ryals, 773
So. 2d at 1013, “[a]n appellate court can consider a fact
to support or to undermine a summary judgment only to the
extent that the record on appeal contains materials from
the record before the trial court evidencing that fact at
the time of submission of the motion for summary judgment”
(some emphasis added).

In the present case, there was no admissible evidence
before the trial court, nor was there a stipulation or
agreement entered on the record, that would indicate that
in the settlement agreement Hundley reserved a right to
pursue the same claims against Jody Spann and Spann Timber.
Accordingly, under Ryals, we cannot “undermine” the summary
judgment entered by the trial court based on that unproven
fact. Based on the evidence in the record, the summary
judgment entered by the trial court was correct and must be
affirmed.[fn2]

IV.

Hundley’s wrongful-death claim against Jody Spann and Spann
Timber was premised on their vicarious liability for the
tort allegedly committed by Spann Forestry. However, Jody
Spann and Spann Timber have made a prima facie showing that
Spann Forestry was dismissed with prejudice from a separate
action based on the same set of facts. Accordingly, they
argue, they cannot be vicariously liable for Spann
Forestry’s actions under the doctrine of respondeat
superior. Hundley has failed to rebut the prima facie
showing made by Jody Spann and Spann Timber with
substantial evidence indicating that her claims against them
survived the dismissal with prejudice of Spann Forestry.
Accordingly, Jody Spann and Spann Timber were entitled to a
judgment as a matter of law, and the summary judgment
entered by the trial court was proper.

AFFIRMED.

See, Harwood, Stuart, and Bolin, JJ., concur.

[fn1] Section 12-21-109, Ala. Code 1975, states that “[a]ll
receipts, releases and discharges in writing, whether of a
debt of record, a contract under seal or otherwise, and all
judgments entered pursuant to pro tanto settlements, must
have effect according to their terms and the intentions of
the parties thereto.”

[fn2] After Jody Spann and Spann Timber filed their motion
to reconsider and their renewed motion for a summary
judgment based on the authority of Jackson, Hundley could
have filed a response accompanied by evidence establishing
that she did, in the settlement agreement releasing Spann
Forestry from liability on her claim against it, reserve the
right to pursue claims against other parties. She did not
do so. Neither did she submit such evidence in the motion
for reconsideration she filed after the trial court granted
Jody Spann and Spann Timber’s motion for a summary
judgment.