author: ADAMS, Justice.

text:
    KENNEDY ELECTRIC COMPANY, INC., a Corporation and Insurance Company of North America v. MOORE-HANDLEY, INC., a Corporation; and Westinghouse Electric Corporation, a Corporation.
    81-285.
    Supreme Court of Alabama.
    July 8, 1983.
    Rehearing Denied Sept. 16, 1983.

      Robert P. Denniston of Gallalee, Denni-ston & Cherniak, Mobile, for appellants.
    Donald F. Pierce and W. Alexander Moseley of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, for appellees.
   ADAMS, Justice.

This appeal involves an action based upon an alleged breach of contract, breach of good faith, and a claim of misrepresentation. The case was tried before a jury in the Circuit Court for Mobile County. A jury verdict and judgment in behalf of the plaintiff Kennedy Electric Company, Inc. (Kennedy) against defendants Moore-Hand-ley, Inc. (Moore-Handley) and Westinghouse Electric Corporation (Westinghouse) for $1271.64, and a verdict and judgment for the defendants on a counterclaim against Kennedy and counterdefendant Insurance Company of North America (INA) for $64,437.00 were entered, with a resulting net judgment in favor of defendants Moore-Handley and Westinghouse and against Kennedy and INA for $63,165.36. Both Kennedy and INA have appealed.

Six issues are presented for our consideration by this appeal. They are:

1. Did the trial court err to reversal in granting Westinghouse a directed verdict on the fourth cause of action of fraud?
2. Did the trial court err in excluding Kennedy’s evidence as to extended overhead, additional expense or other delay damage, and estimated costs of repair or replacement of certain items?
3. Did the trial court err in granting the defendant’s motion to dismiss the second cause of action (based on breach of a good faith obligation)?
4. Did the trial court err in excluding plaintiff’s exhibit No. 9, consisting of a schedule of projected contract completion dates prepared by Kennedy’s superintendent?
5. Did the trial court err in instructing the jury to disregard any evidence which might have gone to the interpretation of the contract?
6.Did the trial court err in excluding proposed testimony of a witness as to personal knowledge of malfunction of circuit breakers involved in the litigation?

We answer the questions posed by these issues in the negative, and we affirm the judgment of the trial court.

Kennedy’s original complaint stated three causes of action. The first was for a breach of contract to supply certain electrical equipment, the second sought punitive damages for breach of an alleged duty to act in good faith, and the third cause was specifically for breach of contract for failure to provide a “VAR” meter. Subsequently, the complaint was amended to add two new causes of action. The fourth cause was against both defendants for fraud. The fifth cause was against both defendants for failure to install certain “bus bars” under the contract. On defendants’ motion, the trial court dismissed the second cause. The defendants then answered the final complaint with various defenses and a counterclaim alleging that a portion of their bill remained unpaid, and on motion were allowed by the trial court to add INA as a counterdefendant under its payment bond. The fourth cause of action was ultimately amended to eliminate Moore-Handley as a defendant in that cause. At the close of the case, the defendant Westinghouse was granted a directed verdict as to the fraud count in cause number four. Causes of action one, three, and five were considered by the jury.

The suit arose from the following facts:

In 1976 the Alabama State Docks Department (Docks) employed Owen S. Posey and Associates (Posey) to design a new 23-kilo-volt electrical distribution system for the Docks property in Mobile. Initially the system was designed so that it did not include any isolation switches in series with the air circuit breakers at the substations. An isolation switch was defined by the National Electric Code as “a switch intended for isolating an electrical circuit from the source of power,” and the Code added, “It has no interrupting rating, and it is intended to be operated only after the circuit has been opened by some other means.” The isolation switches were considered by Posey to be unnecessary. After operational personnel at the Docks complained, however, Posey changed its design to include isolation switches. The design drawings were altered at one place to show reference to a “load break” switch; at all other places on the drawings, the reference was to an isolation switch or simply “switch.” The testimony revealed that the load-break switch had interrupter capabilities that the isolation switch did not have. The testimony also revealed that, at the time, different types and models .of both switches were available for use. Ultimately, a set of specifications, prepared by Posey, was issued by the State Docks. The specifications referred specifically to isolation switches. The testimony of the Docks engineer revealed, however, that where the specifications required four isolation switches, the Docks had really wanted load-break type switches or load-interrupter switches.

On January 5, 1977, Kennedy executed a contract with the Docks to construct the substations. Thereafter, Kennedy obtained a quotation from defendant Moore-Hand-ley, a distributor for Westinghouse products, to provide various electrical equipment called for by the specifications designed by Posey. Kennedy negotiated with Moore-Handley as to its price, achieved a reduction in the quoted price, and then issued a purchase order to Moore-Handley on January 18, 1977. This purchase order called for Moore-Handley to provide equipment “per the attached bill of materials,” and the attached bill of materials was a complete copy of the Moore-Handley quotation. On the back of the first page of the quotation sent with the purchase order were certain provisions, printed in red, limiting Moore-Hand-ley’s liability for consequential and delay damages.

Moore-Handley ordered the Westinghouse equipment, which it had agreed to supply from Westinghouse’s local sales engineer, John Cox. The testimony revealed that Cox contacted the Westinghouse engineers and ordered what he considered to be the appropriate AWP (brand) isolating switch. Subsequently, Cox was told by the engineers that another type of isolating switch would have to be used to meet the specification requirements. The type of switch ordered did not have the load-breaker, interrupter switch capabilities. Throughout this time period, Cox corresponded frequently with Kennedy and the Docks and assured them that the switches ordered would meet the specifications.

The isolation switches and certain other equipment were received in Mobile by early November, 1977, and shortly thereafter were installed on the Docks property. The “VAR METER” and the “Bus Bars,” however, were not delivered at that time. In early 1978, Arnold Schwartz, an electrical engineer working for Posey, carried out an inspection of the substation equipment, which included the isolation switches. Schwartz reported that the isolation switches were not “load-break” as specified, but, were, in fact, isolation switches. Following this discovery, a series of efforts was made by Westinghouse to satisfy the Docks. Two of the isolating switches were fitted with arc chutes and flicker blades that gave them load-break capabilities. Ultimately, Posey recommended, and the Docks accepted, a proposed resolution of the problem, which required, from Westinghouse, three things: installation of two more sets of arc chutes and flicker blades, certification that the modified switches were load-break and fully warranted, and complete drawings and parts lists. Cox agreed to provide what was requested.

The issues presented by the appellants are now considered separately.

I. Directed Verdict on Fraud Cause of Action

Kennedy contends that the trial court erred to reversal by directing a verdict in favor of the defendant Westinghouse on the fourth cause of action of fraud. The basis of plaintiff’s contention is that the defendant promised to supply four isolating switches as described in the plaintiff’s purchase order and in the Moore-Handley customer’s acknowledgement sent after the order. The switches were to meet the State Docks’ specifications. The specifications said:

b. The isolating switches shall be rated at 1200 amperes continuous current and designed to withstand a momentary fault condition of 60,000 Amps at a nominal system voltage of 4160 volts. The switch shall be a Westinghouse type AWP or approved equal in a cabinet matching the circuit breaker.

The plaintiff argues that there was more than a scintilla of evidence that the agent for Westinghouse, Cox, knew that the plaintiff needed load-break interrupter switches, and, yet, delivered simple isolation switches. Generally, under the scintilla rule, the entire evidence must be viewed in a light favorable to the opponent of the motion, in this case the plaintiff, and a question must go to the jury if the evidence, or any reasonable inference arising therefrom, furnishes the smallest trace of support for the opponent’s theory. Great Southwest Fire Insurance Co. v. Stone, 402 So.2d 899 (Ala.1981). This is the standard that must be applied by the trial court and is the standard we must apply upon review. Turner v. Peoples Bank, 378 So.2d 706 (Ala.1979). In judging whether a scintilla of evidence exists suggesting fraud, we must first look to see what constitutes the tort of misrepresentation in Alabama. To establish a cause of action for fraud, a plaintiff must prove that the defendant knowingly made a false representation of a material, existing fact on which the plaintiff relied to his detriment. Parker v. Thyssen Mining Construction, Inc., 428 So.2d 615 (Ala.1983). Woodard v. Woodard, 413 So.2d 1060 (Ala.1982). In cases of misrepresentation of existing facts, a reckless misrepresentation might constitute fraud. The rule is different where the alleged representation relates to some future event, such as the promises which Westinghouse allegedly made.. In such a situation, the law requires, in addition to the normal elements of falsity, reliance and damage, proof that, at the time the statement or promise about the future was made, there was an actual fraudulent intent not to perform the act promised and an intent to deceive the plaintiff. Birmingham Broadcasting Co. v. Bell, 259 Ala. 656, 68 So.2d 314 (1953); accord, Robinson v. Allstate Insurance Company, 399 So.2d 288 (Ala.1981).

Kennedy relies on the fact that the Westinghouse catalog available to the public at the time the contract was made showed only an AWP interrupter switch and not the AWP-6 ordered by Cox. Plaintiff contends that because of that fact, Cox should have known that Kennedy wanted the AWP and not the newer AWP-6, even though the specifications were not clear (calling for an isolation switch-AWP and not for an AWP interrupter). We disagree. We do not see a scintilla of evidence that suggests or reasonably implies that the defendant Westinghouse, through its agent Cox, intentionally misrepresented the switches that were to be ordered and delivered. A scintilla of evidence will not be inferred by the mere speculation that Cox should have known what the plaintiff wanted. Speculation is not a proper basis for a verdict. Alabama Power Company v. Smith, 409 So.2d 760 (Ala.1981). Furthermore, there is no evidence that Kennedy was ever told by Cox that the switches would be load-break interrupter switches. Cox consistently told Kennedy that the switches would be isolating AWP-6 switches, which they ultimately were. There is not a scintilla of evidence suggesting any misrepresentation by Cox to Kennedy, and damages alone will not support an action for fraud. Parker v. Thyssen Mining Construction, Inc., supra.

II. Exclusion of Overhead and Other Damages

Kennedy contends that the trial court erred by excluding the evidence as to extended overhead, additional expenses, delay damages, and the estimated costs of repair or replacement of certain items. The basis of Kennedy’s contention is that the court should not have found the limiting conditions on the back of the front page of the quotation to be a part of the overall contract. The plaintiff argues that whether the conditions were part of the contract, or were unconscionable, was at least a question for the jury to decide. We disagree. The construction of a written document is a function of the court. Wheeler v. First Alabama Bank of Birmingham, 364 So.2d 1190 (Ala.1978). We agree that the conditions, printed in red, on the back of the quotation were a part of the contract and work to limit the defendants’ liability for consequential and delay damages. The important terms of the quotation are as follows:

4. An acceptance of our quotation by order or otherwise cannot be revoked or cancelled without our consent.
5. In no event will we be liable for any indirect, special or consequential damages.
8. Where date of delivery is given, we will endeavor to complete as near that date as possible, but we shall not be liable for loss caused by delay in delivery.

The sales contract between Kennedy and Moore-Handley (and later Westinghouse by assumption) is governed by the Uniform Commercial Code. The main dispute arises as to when the contract was finalized. We find that the Moore-Handley quotation constituted an offer which was accepted by the Kennedy purchase order containing the limiting conditions. Wisconsin Electric Co. v. Zallea Brothers, Inc., 443 F.Supp. 946 (E.D. Wis.1978). Far from objecting to the terms of the quotation, the plaintiff placed its purchase order “per” the quotation, with the same quotation attached. The plaintiff argues that the purchase order was the “original” offer and that Moore-Handley’s acceptance came with the customer ac-knowledgement form. Even assuming that the purchase order constituted the original offer, since it incorporated the quotation terms and no other terms were mentioned by Kennedy, the quotation would, again, have become a part of the contract when Moore-Handley accepted. The plaintiff further contends that the limiting conditions are unconscionable. We disagree. Alabama law clearly permits a seller to limit or exclude by contract any liability for consequential damages. Code 1975, § 7 — 2-719. Such agreements are valid and enforceable. Burbic Contracting Co., Inc. v. Cement Asbestos Products Company, 409 So.2d 1 (Ala.1982). Each party to the contract had a meaningful choice. The plaintiff had complete freedom to negotiate on equal footing with the defendant Moore-Handley on every aspect of the contract, including the limiting conditions. Therefore, we find that the trial court was correct in including in the contract, as a matter of law, the limiting conditions.

III. Dismissal of Bad Faith Claim

The plaintiff’s next contention is that the court erred to reversal by dismissing the second cause of action (based on a breach of a good faith obligation). The plaintiff argues that this court should extend to the area of general contract law the tort of bad faith that has already been recognized in the context of insurance policy cases. Prudential Insurance Co. of America v. Coleman, 428 So.2d 593 (Ala.1983); Chavers v. National Security Fire and Casualty Co., 405 So.2d 1 (Ala.1981). Although every contract does imply good faith and fair dealing (see § 7-1—203, Code 1975), it does not carry with it the duty imposed by law which we have found in the context of insurance cases. We are not prepared to extend the tort of bad faith beyond the area of insurance policy cases at this time. See Brown-Marx Associates, Ltd. v. Emigrant Savings Bank, 527 F.Supp. 277 (N.D.Ala.1981).

IV. Exclusion of Exhibit No. 9; Schedule of Completion Dates

The exclusion of Exhibit No. 9, if error, was harmless error, since the same evidence was admitted at another time in another form. Jemison v. Belcher, 368 So.2d 849 (Ala.1979). Alternatively, the exhibit was irrelevant because it was to be used to show the damages due to delay in delivery. These damages were limited by the conditions of the contract and were not to be considered by the jury.

V. Court’s Instructions to the Jury

The plaintiff contends that the trial court erred when it instructed the jury not to consider any opinion evidence which interpreted the contract for them. We disagree. Expert testimony is not to be admitted unless “it is clear that the jurors themselves are not capable, from want of experience or knowledge of the subject, to draw correct conclusions from the facts proved.” Louisville & Nashville Railroad Co. v. Vickery, 288 Ala. 555, 263 So.2d 656 (1972). Kennedy had the opportunity to, and did, present experts that were allowed to help the jury understand the contract by defining technological scientific terms. The jury was allowed to consider this testimony. It was for the jury to decide the meaning of the contract, and if the trial court excluded opinions that would have invaded the province of the jury in that regard, such action was entirely correct. See Alabama Power Co. v. Williams, 222 Ala. 75, 130 So. 788 (1930).

VI. Exclusion of Witness Testimony

Plaintiff finally contends that the trial court erred to reversal in refusing to allow its witness to rebut the testimony of defendants’ witness that “the breaker and its cubicle are as idiot proof as they can be built.” Plaintiff argues that its witness should have been allowed to answer the questions (1) whether he had any personal knowledge of a malfunction occurring with respect to the energizing of a circuit breaker and (2) whether he had an opinion as to any manner in which a malfunction of the circuit breakers could occur. We disagree. Plaintiff offers no argument to show that these areas of inquiry were relevant, nor does he answer the obvious defect in his argument that it was plaintiff’s counsel himself who elicited the testimony that he later sought to rebut. Generally, if a witness, on cross-examination, is interrogated as to a matter wholly immaterial to any issue in the case, the party calling for such evidence is concluded by the answer and cannot impeach the witness by contradicting the answer. Clancey Lumber Co. v. Howell, 260 Ala. 243, 70 So.2d 239 (1954).

For all of the foregoing reasons, we find no reversible error, and we affirm the judgment of the trial court.

AFFIRMED.

TORBERT, C.J., and MADDOX, FAULKNER, JONES, ALMON, SHORES, EMBRY and BEATTY, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    ROSS NEELY EXPRESS, INC. v. ALABAMA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT.
    No. 81-1017.
    Supreme Court of Alabama.
    July 8, 1983.
    Rehearing Denied Sept. 16, 1983.

      George M. Boles of Boles & Davis, Birmingham, for appellant.
    Kerry J. Allen, Asst. Atty. Gen., for ap-pellee.
   ADAMS, Justice.

This is an appeal from a judgment of the Circuit Court of Montgomery County, enjoining Ross Neely Express, Inc. (RNE) from violating certain rules and regulations of the Alabama Department of Environmental Management (ADEM). In issuing the injunction, the trial court found that RNE was in violation, and that the rules violated were not unconstitutional. The pertinent portions of the rules allegedly vio - lated are as follows:

4.2.1 No person shall cause, suffer, allow, or permit ... a road to be used . .. without taking reasonable precautions to prevent particulate matter from becoming airborne. Such reasonable precautions shall include, but not be limited to, the following:
(b) Application of asphalt, oil, water, or suitable chemicals on dirt roads, materials stock piles, and other surfaces which create airborne dust problems;
4.2.2 Visible Emissions Restrictions Beyond Lot Line. No person shall cause or permit the discharge of visible fugitive dust emissions beyond the lot line of the property on which the emissions originate.

The case was tried on an “agreed statement of facts,” here printed in its entirety:

1. Ross Neely Express, Inc., an Alabama corporation, operating in intrastate and interstate commerce pursuant to authority from the Alabama Public Service Commission and the Interstate Commerce Commission, leases a facility and operates a truck terminal located at 3370 Birmingham Highway (Alabama Highway 3 and U.S. Highways 31 and 82), in Montgomery County.

2. Leading to such facility is a 33-ft. long access road (including a 70-ft. long portion that belongs to the State of Alabama and is part of the State’s right of way). At the time of the construction of the above facility in 1974, approximately 50 to 60 truckloads of slag were used in the construction of such access road; since that time, on at least four occasions, additional slag along with red chert has been added to the road surface. Between the construction of the facility and road in 1974 and 1979, on at least three occasions, oil was applied to the road’s surface; however, use of oil on the road’s surface was suspended because of the oil’s splashing on vehicles and because oil was tracked onto the adjacent highway, creating slippery conditions.

3. The above-described access road is used by Ross Neely’s trucks (and other trucking company trucks), both inbound and outbound. Such use of the road (and allowance of such use) has resulted in the observations as to dust conditions by the Alabama Air Pollution Control Commission as shown on the attached Department of Public Health Memorandums on the dates shown (11/14/80, 12/22/80, 1/12/81, 1/14/81, 1/26/81, 4/20/81, 5/12/81, 5/14/81, and 5/18/81).

4. Written notice of violation of the Alabama Air Pollution Control Commission’s regulations was mailed to the above-described Montgomery terminal, addressed to the Terminal Manager; the return receipt for certified mail was postmarked in Montgomery on November 18, 1980, with the delivery date the same, and signed for by the Terminal Manager (copy of such violation and receipt attached).

5. The Alabama Air Pollution Control Commission is an agency of the State of Alabama created pursuant to the Alabama Air Pollution Control Act of 1971 (Act No. 769, Regular Session, 1971), § 22-28-1, et seq., Code of Alabama 1975, as amended, and is designated thereby as the State agency responsible for the prevention, abatement and control of air pollution in the State of Alabama.

6.Sections 4.2.1 and 4.2.2 of the Alabama Air Pollution Control Commission’s Rules and Regulations were adopted pursuant to §§ 22-28-14 and 22-28-15, Code of Alabama 1975, as amended.

The issues presented on appeal are:

1. Do the above facts show RNE to be in violation of § 4.2.1 and/or § 4.2.2 of the Alabama Department of Environmental Management’s Rules and Regulations?
2. Did the trial court err in finding that §§ 4.2.1 and 4.2.2 are constitutional?

Because we answer the second question affirmatively, and reverse on that issue, we find it unnecessary to address the first issue.

The right to due process is guaranteed to the citizens of Alabama under the Alabama Constitution of 1901, Article 1, Sections 6 and 13. This constitutional right to due process applies in civil actions as well as criminal proceedings. Pike v. Southern Bell Telephone and Telegraph Co., 263 Ala. 59, 81 So.2d 254 (1955). The courts have found that this right is violated when a statute or regulation is unduly vague, unreasonable, or overbroad. In Kahalley v. State, 254 Ala. 482, 48 So.2d 794 (1950), this court found a criminal misdemeanor statute to be unconstitutionally vague. There the court stated:

[Legislation may run afoul of the due process clause because of a failure to set up any sufficient guidance to those who would be law-abiding, or to advise a defendant of the nature and cause of an accusation he is called on to answer, or to guide the courts in the law’s enforcement.

In reviewing a regulation of a county Board of Health, this court held that the central issue was reasonableness. Baldwin County Board of Health v. Baldwin County Electric Membership Corporation, 355 So.2d 708 (Ala.1978). In City of Russellville v. Vulcan Materials Co., 382 So.2d 525 (Ala.1980), this court said:

The validity of a police power regulation ... primarily depends on whether, under all the existing circumstances, the regulation is reasonable, and whether it is really designed to accomplish a purpose properly falling within the scope of the police power. Crabtree v. City of Birmingham, 292 Ala. 684, 299 So.2d 282 (1974).... Otherwise expressed, the police power may not be employed to prevent evils of a remote or highly problematical character. Nor may its exercise be justified when the restraint imposed upon the exercise of a private right is disproportionate to the amount of evil that will be corrected. Bolin v. State, 266 Ala. 256, 96 So.2d 582, conformed to in 39 Ala.App. 161, 96 So.2d 592 (1957).

Statutes and regulations are void for overbreadth if their object is achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms. See Zwickler v. Koota, 389 U.S. 241, 88 S.Ct. 391, 19 L.Ed.2d 444 (1967); Keyishian v. Board of Regents, 385 U.S. 589, 87 S.Ct. 675, 17 L.Ed.2d 629 (1967).

In applying the above cited principles to the regulations challenged in the case before us, we find that both 4.2.1 and 4.2.2 are constitutionally defective. Regulation 4.2.1 requires that RNE not allow its road to be used without taking “reasonable” precautions to prevent particulate matter from becoming airborne, and lists certain precautions which shall be included. While “reasonableness” has been upheld as a legal standard in some cases, the fact remains that the regulation before us is so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application. See Connally v. General Construction Co., 269 U.S. 385, 46 S.Ct. 126, 70 L.Ed. 322 (1926). How often should RNE have taken “reasonable” precautions? Must it take all of the suggested precautions, as well as others? If the precautions taken fail to eliminate airborne particulate matter completely, has RNE failed to take reasonable precautions per se?

The stipulated facts show that RNE used 50 to 60 truckloads of slag in the construction of the road in 1974. Since that time, on at least four occasions, slag and chert had been added to the road surface. On three occasions oil was applied to the surface. (We note that this was one of the suggested “reasonable precautions” contained in the regulation itself.) But in 1981, ADEM alleged that RNE was in violation of § 4.2.1 because dust had been observed rising from the road, and the trial court agreed. This appears to be a classic example of a case where men of common intelligence must necessarily guess as to the requirements of the regulation. See Connally v. General Construction Co., supra.

Regulation 4.2.2 is unconstitutionally restrictive. Visible fugitive dust emissions may not be permitted to float beyond the lot line of the property on which the emissions originate. Thus, the Department of Public Health memorandum of May 12, 1981, noted in the agreed statement of facts, showed a violation when it stated, “This writer observed fugitive dust which was created when a pickup truck drove to the plant. The fugitive dust went onto a vacant lot in front of A Liquid Air Inc. The wind was out of the southwest.” Such a regulation is clearly overbroad, encompassing every situation in which visible fugitive dust emissions move across a lot line, without regard to damage, injury, or inconvenience caused, reasonable attempts at control, etc. This invades the area of protected freedom, severely restricting the use of property, and creates a situation where discriminatory enforcement is almost inevitable.

We find both of the regulations under consideration to be unreasonable. ADEM argues that they are a proper exercise of the police power of the State of Alabama, going to the protection of health, public convenience, public welfare, protection of property, and the maintenance of good order. See James v. Todd, 267 Ala. 495, 103 So.2d 19 (1958); Alosi v. Jones, 234 Ala. 391, 174 So. 774 (1937). While the above matters are clearly subject to the police power, and while the control of air pollution is greatly to be desired, we find that the restraint imposed by the two regulations before us, as written, imposes a restraint upon the use of private property that is disproportionate to the amount of evil that will be corrected. Thus, they fail the test of constitutionality under City of Russellville v. Vulcan Materials Co., supra.

For all of the above reasons, the judgment of the trial court is due to be, and hereby is, reversed, and the case is remanded.

REVERSED AND REMANDED.

TORBERT, C.J., and MADDOX, FAULKNER, JONES, ALMON, SHORES, EMBRY and BEATTY, JJ., concur.


author: TORBERT, Chief Justice.

text:
    Gary H. McLAUGHLIN d/b/a McLaughlin’s IGA Foodliner v. ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, a Corporation.
    82-368.
    Supreme Court of Alabama.
    July 22, 1983.
    Rehearing Denied Sept. 2, 1983.

      Billy C. Bedsole of Stockman & Bedsole, Mobile, for appellant.
    Bert S. Nettles and J. Harley McDonald, Jr., of Nettles, Barker & Janecky, Mobile, for appellee.
   TORBERT, Chief Justice.

Appellant, Gary McLaughlin appeals from a partial summary judgment in favor of Alabama Farm Bureau Mutual Casualty Insurance Co., Inc. (Farm Bureau). This dispute arose because of the denial of coverage by Farm Bureau under a fire insurance policy on McLaughlin’s business. The first claim was for breach of contract by Farm Bureau; the trial court denied summary judgment on this claim. The trial court granted summary judgment as to the second claim for intentional misrepresentation and the third claim for bad faith refusal to pay. Pursuant to A.R.Civ,P. 54(b) the trial court directed entry of final judgment as to these two claims which are now before us on this appeal.

McLaughlin owned and operated McLaughlin’s I.G.A. Foodliner in Theodore, Alabama. On October 8, 1980, Farm Bureau issued a fire insurance policy on McLaughlin’s grocery store. On November 18,1980, at some time after 6:45 p.m., a fire at the store caused approximately $120,-000.00 in damages to the building and its contents. On January 13,1981, after investigating the fire, Farm Bureau denied payment on the policy. One of the bases for the denial was that McLaughlin had provided false information in the application to Farm Bureau for coverage. The policy has a provision stating:

“This policy is void if any insured has intentionally concealed or misrepresented any material fact or circumstance relating to this insurance.”

Farm Bureau took this position because McLaughlin had answered “No” to a question on the application asking whether McLaughlin had ever been sued or sued anyone, when, in fact, he had been involved in litigation. McLaughlin stated in his deposition that he specifically told Terry Barnes, the agent for Farm Bureau who filled out the application, that he had been sued by a lady who fell in the store. He also testified that Barnes indicated he would not even bother putting it down and that Barnes proceeded to check “no” on the application.

In his original complaint, McLaughlin set forth the following allegations of misrepresentation by Farm Bureau:

“The Plaintiff avers that he paid the premiums on said policy of fire insurance to the Defendant, ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, INC., based on the representations made by the defendant, ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, INC., to him, that it would pay all proceeds due under the insurance policy, No. SMP01273, when and if the Plaintiff did suffer loss of personal property and income due to a fire.
“The Plaintiff further avers that these representations made by the Defendant, ALABAMA FARM BUREAU MUTUAL CASUALTY INSURANCE COMPANY, INC., were false and were fraudulently made and the said Defendant had no intention of paying the said fire insurance proceeds on the said policy since he specifically told them on his application that he had one prior lawsuit filed against his place of business but that the said agent failed to note this on the application and therefore have denied the Plaintiff’s claim based on the fact that the application contains false information when on the contrary the Plaintiff did state to the said Defendant or its agent, the correct information but that the Defendant purposely listed the false information so that if any claim were made it could use this false statement as a basis for its denial of said claim.”

The defendant, Farm Bureau, thereafter filed a motion for summary judgment. Before it was ruled upon by the court, the plaintiff amended his complaint “in its entirety” to read as follows:

“The Plaintiff avers that heretofore and on, to-wit, October 8, 1980, the Defendant, ALABAMA FARM-BUREAU MUTUAL CASUALTY INSURANCE COMPANY, INC., a corporation, issued a policy of fire insurance, Policy Number SMP01273, covering personal property and contents of refrigerators and freezers located in his grocery store.
“The Plaintiff avers that he complied with the provisions of the above mentioned policies of fire insurance based on the representations made by the Defendants to him that they would pay all proceeds due under the insurance policies when and if the Plaintiff suffered a loss of personal property and income due to fire.
“The Plaintiff further avers that these representations made by the Defendants were false and were fraudulently made and the said Defendants had no intention of paying the fire insurance proceeds on the said policies and wilfully and wantonly failed to pay the Plaintiff’s loss under the said policies and that the said Defendants issued the said policies with the present intention not to honor valid claims filed thereunder.
“The Plaintiff avers that the said fire, set out above, occurred while the said insurance policies were in full force and effect and that he made demand on the said Defendants to pay the proceeds under said policies, but that the said Defendants refused to pay said proceeds and they had no intention whatsoever of paying the proceeds when they issued the policies and have failed and refused to pay the said proceeds due under the policies up to the present time.
“WHEREFORE, Plaintiff demands judgment against the Defendants for the fraud and misrepresentations set out above in the amount of ONE MILLION AND NO/100 ($1,000,000.00) DOLLARS, for compensatory and punitive damages.”

Thereafter, the trial court denied Farm Bureau’s motion for summary judgment. Farm Bureau then filed a motion for reconsideration of the denial. The motion for reconsideration was subsequently granted, and upon reconsidering the trial court granted the motion for summary judgment. The order granting summary judgment was later amended so that the motion for summary judgment on the breach of contract claim was denied, but the summary judgment on fraud or misrepresentation and bad faith was granted.

At the outset we must determine whether appellant’s amended pleading was sufficient under A.R.Civ.P. 9(b). Farm Bureau maintains that the amended complaint, which superseded the prior complaint “in its entirety,” Zeigler v. Baker, 344 So.2d 761 (Ala.1977), failed to allege fraud with sufficient particularity. Farm Bureau states the complaint fails to set forth the time, place or circumstances of the fraud.

We need not reach this issue because we are of the opinion that if there was error, the defendant failed to preserve it for our review by calling the defect in the complaint to the attention of the trial court. The only motion which might arguably have raised this issue was the motion for summary judgment. That motion, however, was based upon the defendant’s allegations that there was “no genuine issue as to any material fact.” This court in Almon v. Byrd, 336 So.2d 183 (Ala.1976), allowed a challenge under Rule 9(b) where the defendant had made a motion to dismiss under A.R.Civ.P. 12(b)(6) for failure to state a claim. In doing so, the Court commented:

“Defendants and the trial court assume that the appropriate method for enforcing Rule 9(b) is a motion to dismiss under Rule 12(b)(6). This assumption would appear to be based on the practice of using a demurrer to test the sufficiency of allegations of fraud prior to the adoption of the Alabama Rules of Civil Procedure. For purposes of deciding this case, we do not question this assumption, but we refer the reader to Wright & Miller, Federal Practice and Procedure: Civil § 1300, for a discussion of the problem.”

336 So.2d at 185, n. 1. Wright and Miller suggest the use of F.R.Civ.P. 12(e) where the “allegation of fraud or mistake is in a pleading to which a responsive pleading is permitted.” 5 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1300 (1969). Wright and Miller refer to the “multiplicity of viewpoints as to the method of enforcing the particularity requirement” for a fraud action.

In the case before us, we are of the opinion that a motion for summary judgment, based merely upon allegations that there were no genuine issues of material fact, was insufficient to call to the trial court’s attention a lack of particularity in the averments of fraud, especially in light of the fact that the motion was made before the complaint was amended, it being the amended complaint that defendant on appeal alleges was insufficient.

The second issue in relation to the grant of summary judgment is whether the trial court erred in granting Farm Bureau’s motion on the fraudulent misrepresentation claim. It is well settled law that summary judgment should not be granted, “if the evidence or any reasonable inference therefrom contains the merest gleam, glimmer, spark, the least particle or the smallest trace in support of the theory of the complaint.” Ex parte Bagby Elevator & Electric Co., 383 So.2d 173, 176 (Ala.1980).

We are of the opinion that the depositions and affidavits presented a genuine issue of material fact on this claim. There was testimony from McLaughlin and his son, who was present when the application was filled out, that Barnes intentionally falsified the application. That falsification was one of the reasons Farm Bureau later denied coverage under the policy.

In Village Toyota Co. v. Stewart, 433 So.2d 1150 (Ala.1983), this Court stated:

“The elements of fraudulent misrepresentation under this Code provision [§ 6-5-101] are: (1) a false representation, (2) concerning a material existing fact, (3) which is relied upon by the plaintiff, and (4) damage to the plaintiff as a result of the false representation.”

433 So.2d at 1153. On reviewing the evidence in the case before us, we are of the opinion that there was at least a scintilla of evidence (1) that Farm Bureau had falsely represented that it would pay on the policy; (2) that it did so knowing that its agent had falsified the application; (3) that plaintiff signed the application in reliance on the agent’s misrepresentation concerning the effect of the false answer; and (4) that plaintiff’s claim was denied (thus producing a loss of $120,000.00) as a result of this misrepresentation. The facts of this case are strikingly similar to the fraud action maintained in National Security Insurance Co. v. Beasley, 406 So.2d 923 (Ala.Civ.App. 1981), cert. denied, 406 So.2d 926 (Ala.1981). Thus, we are of the opinion that the trial court erred in granting summary judgment on the claim.

The appellant also urges this Court to reverse the grant of summary judgment on the claim for bad faith refusal to pay with knowledge that there is no lawful basis for the refusal.

In Chavers v. National Security Fire & Casualty Co., 405 So.2d 1 (Ala.1981), this Court initially set out the parameters of a first-party claim of bad faith refusal to pay. In that case we held that there was implied by law a duty of good faith and fair dealing in contractual relationships. Bad faith was defined as “the intentional failure by the insurer to perform this duty implied in law.” 405 So.2d at 5. We also went on to state:

“[A]n actionable tort arises for an insurer’s intentional refusal to settle a direct claim where there is either ‘(1) no lawful basis for the refusal coupled with actual knowledge of that fact or (2) intentional failure to determine whether or not there was any lawful basis for such refusal.’ ”

405 So.2d at 7. We have further stated, in National Security Fire & Casualty Co. v. Bowen, 417 So.2d 179, 183 (Ala.1982):

“No lawful basis [for refusal to pay] ‘means that the insurer lacks a legitimate or arguable reason for failing to pay the claim.’ Gulf Atlantic Life Ins. Co. v. Barnes, Ala., 405 So.2d 916 (1981). When a claim is ‘fairly debatable,’ the insurer is entitled to debate it, whether the debate concerns a matter of fact or law. Ibid.”

We have summarized the required showing in a bad faith case as follows:

“(a) an insurance contract between the parties and a breach thereof by the defendant;
“(b) an intentional refusal to pay the insured’s claim;
“(c) the absence of any reasonably legitimate or arguable reason for that refusal (the absence of a debatable reason);
“(d) the insurer’s actual knowledge of the absence of any legitimate or arguable reason;
“(e) if the intentional failure to determine the existence of a lawful basis is relied upon, the plaintiff must prove the insurer’s intentional failure to determine whether there is a legitimate or arguable reason to refuse to pay the claim.
“In short, plaintiff must go beyond a mere showing of nonpayment and prove a bad faith nonpayment, a nonpayment without any reasonable ground for dispute. Or, stated differently, the plaintiff must show that the insurance company had no legal or factual defense to the insurance claim.
“The ‘debatable reason’ under (c) above means an arguable reason, one that is open to dispute or question. Webster’s Third New International Dictionary (1931) at 116. See Chavers at 10; see also Embry, J., concurring on rehearing in Aspinwall v. Gowens, Ala., 405 So.2d 134 (1981).”

417 So.2d at 183. Finally, in National Savings Life Insurance Co. v. Dutton, 419 So.2d 1357, 1362 (Ala.1982), this Court held:

“In the normal case in order for a plaintiff to make out a prima facie case of bad faith refusal to pay an insurance claim, the proof offered must show that the plaintiff is entitled to a directed verdict on the contract claim and, thus, entitled to recover on the contract claim as a matter of law. Ordinarily, if the evidence produced by either side creates a fact issue with regard to the validity of the claim and, thus, the legitimacy of the denial thereof, the tort claim must fail and should not be submitted to the jury.”

A review of the pleadings, depositions, affidavits, and interrogatories before the trial court convinces us that it was not erroneous to grant the motion for summary judgment on this claim.

There is no dispute as to the existence of an insurance contract between the parties on the date of the fire. It is also undisputed that Farm Bureau intentionally refused to pay the claim. Thus, we are left to determine whether there was a legitimate or arguable reason to refuse to pay the claim.

Hilton Godwin, the adjuster for Farm Bureau, stated in his deposition that coverage was denied for the following reasons: (1) accelerants were found in the store in the area of the fire; (2) certain items listed on McLaughlin’s inventory of lost items had been returned for credit after the fire; (3) McLaughlin had misrepresented his financial position to Farm Bureau; and (4) McLaughlin stated on his application for insurance that he had not been involved in prior litigation and this statement was a misrepresentation. We have reviewed each of these reasons for denial and are of the opinion that Farm Bureau’s reasons for its refusal to pay were at least “arguable” and therefore its actions do not fall within the parameters of “bad faith” refusal to pay.

Jack Kiser, the fire inspector for the City of Mobile, in a report dated January 8,1981, stated the following:

“Pursuant to your request, an investigation was made of the fire loss that occurred on November 18, 1980, at McLaughlin’s IGA Store, 2008 Rear Hwy. 90 West, Theodore, Alabama.

“The investigation was begun on December 6,1980, and concluded on January 5, 1981, and the following was determined:

“1. The fire was of incendiary origin. “2. The fire originated in the stock room-office area.
“3. An accelerant was used.
“4. An accidental source of ignition was negated.
“5. A fraud was perpetrated in reference to disposing of perishables.
“6. Discrepancies were noted in the statements taken by this investigator and the statement of the insured which was taken by another adjuster.

“The engineer for the other insurance company, Owen Posey, was contacted and the contents of his samples also indicated the presence of a petroleum distillate. According to the statements secured from employees and the insured, there was not any flammables on the premises other than two cans of oil base paints. The toxicologist report indicated the distillate and paint were not similar. Owen Posey stated that he picked up the remains of the coffee maker and his examination revealed the fire did not originate from this appliance. Therefore, it is the conclusion of this investigator’s physical examination that there was no accidental or natural cause for the fire.

“Herbert Cumbaa stated that he sold bread products to McLaughlin and that he also lived adjacent to the store property. He said that he picked up over $100.00 worth of bake goods after the fire and had given McLaughlin credit for them. He also stated that McLaughlin did not talk to him on the phone when he reported the fire and that he arrived on the scene some thirty minutes later.

“All of the these statements are in contradiction to the statements made to adjusters Fred Davis and Hilton Godwin. This indicates a fraud was perpetrated in the disposing of the perishables, and J.T. Schoefer, postal inspector, was contacted and she indicated they would prosecute on mail fraud.

“SUMMARY

“The fire was [of] incendiary origin and an accelerant was used. A fraud was perpetrated by the insured when he apparently returned perishable[s] for credit and then made a claim to the insurance companies for these items.”

If any one of the reasons for denial of coverage is at least “arguable,” this Court need not look any further. We are of the opinion that the plaintiff was not entitled to a directed verdict on the contract claim, as required by National Savings Life Insurance Co. v. Dutton, supra, because there was conflicting information before the trial court on each of the reasons for denial of coverage. Specifically, there was conflicting information about the cause of the fire, the inventory listing submitted, and the misrepresentation in the application. For example, while McLaughlin and his son maintain that they told agent Terry Barnes about the prior lawsuit, Albert E. Hatfield, the state fire claims supervisor for Farm Bureau, indicated that Barnes had told him that the application was filled out in accordance with the responses given by McLaughlin. Thus, there was a genuine dispute about information on the application, and that dispute provided an arguable reason for denying coverage. The parties have argued both sides vehemently; however, we are in accord with the trial court in being unable to say there was no arguable reason for denial of coverage. The validity of the reasons will be tested in the breach of contract action still pending in this case.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

JONES, ALMON, SHORES and BEAT-TY, JJ., concur.


text:
    Daisy Parmer GREEN, et al. v. Charles VANLANDINGHAM, et al.
    82-501.
    Supreme Court of Alabama.
    July 22, 1983.
    Rehearing Denied Sept. 2, 1983.
    J. Milton Coxwell, Jr. of Coxwell & Cox-well, Monroeville, for appellants.
    James E. Hart, Jr., Brewton, for appel-lees.
   TORBERT, Chief Justice.

The contestants to the will of Robert L. Seale appeal from a summary judgment in favor of the proponents in a will contest alleging lack of proper execution and lack of testamentary capacity. The original complaint also alleged undue influence in the execution of the will; however, the contestants do not appeal from the grant of summary judgment on this claim.

The will in question was executed in December of 1976 by Robert L. Seale. The property owned by the testator was left to his niece’s husband and her three sons: Charles, Frank, A.H., and John A. Vanland-ingham. The contestants are two nieces and a nephew of the testator: Daisy Parmer Green, Frances McMillan, and Joseph Parmer.

As has been stated repeatedly in our cases, a motion for summary judgment is properly granted only if there is no genuine issue as to any material fact. Butler v. Michigan Mutual Ins. Co., 402 So.2d 949 (Ala.1981). Under this rule, “no summary judgment can be granted if a scintilla of evidence exists to support the non-movant’s position.” Payne v. Alabama Cemetery Ass’n, Inc., 413 So.2d 1067, 1071 (Ala.1982). Further, we have held:

“Rule 56(e), Alabama Rules of Civil Procedure, however, provides that once a motion for summary judgment has been made and supported as required by the rule, the motion is to be granted unless the adverse party makes an evidentiary or factual showing in opposition to show that there is a genuine issue of fact for trial.”

Butler, supra at 951.

In the case before us, the proponents of the will offered copies of the will and affidavits of both witnesses to the will. These affidavits stated that the will was properly executed by the testator and that in their opinion he was of sound mind at the time the will was executed. The witnesses were Everette A. Price, the attorney who prepared the will, and his secretary, Frances S. Johnson. The proponents also produced the depositions of Charles, Frank and John Vanlandingham, which supported their contention that Robert L. Seale was of sound mind at the time the will was executed.

In opposition to the motion for summary judgment by the proponents, the contestants offered affidavits and depositions of various parties.

First, an affidavit by Dr. W.W. Eddins was offered which stated in part “it is possible that this condition [generalized ar-teriosclerotic changes with cerebral ische-mia] could have affected Seale’s mental faculties.” This is the only information offered by Dr. Eddins in his affidavit which is relevant to any of the claims. In his deposition, Dr. Eddins went on to state that he had no independent knowledge of the condition of the testator, that he had based his conclusions in the affidavit on a review of hospital records, that he had never met the testator or spoken with him, and that he could not give a medical opinion as to his mental condition at the time the will was executed.

Second, the affidavit and deposition of Daisy Parmer Green were offered. Green was of the opinion that an attorney could not sign as a witness to a will, and, therefore, that the will was improperly executed. She also stated that the signature on the will did not look like Seale’s signature, although she had not seen him sign anything since approximately 1966. She also stated that she had no other evidence to indicate that Seale had not signed the will. In her affidavit, Green indicated that an erroneous reference in the will to Seale’s great-niece rather than his niece would not have been made “if he had had a sound mind.”

Finally, the depositions of Joseph Parmer and Frances McMillan were offered. After reviewing these depositions, we are of the opinion that neither of these witnesses offered any evidence relevant to any of the grounds of the will contest.

After reviewing the depositions and affidavits presented, we agree with the trial court that the contestants failed to produce a scintilla of evidence to support their claims.

The contestants have argued at length on appeal two additional points which they say indicate this is not the will of Robert L. Seale. First, they point to a conflict between the date of the will, December 10, 1976, and the date of a memo in the attorney’s files concerning the execution of the will, December 2, 1976. We are of the opinion that this conflict does not constitute evidence supporting the contestants’ claims.

Second, in her deposition, one of the witnesses to the will, Frances Johnson, was somewhat confused about whether Robert L. Seale was a black man or a white man. The attorney and Frances Johnson, his secretary, went to Milton, Florida, to deliver the will to Mr. Seale and to obtain his signature on the document. The secretary had also witnessed another will at the home of another party. She stated, “I might have the two mixed up.” Again, we are of the opinion that this did not constitute a scintilla of evidence that the signature was not Robert L. Seale’s signature.

The judgment of the trial court is hereby affirmed.

AFFIRMED.

MADDOX, JONES, SHORES and BEAT-TY, JJ., concur.


text:
    Evelyn TREADWAY v. Barbara Ross BRANTLEY and Jerry A. Brantley.
    81-722.
    Supreme Court of Alabama.
    July 29, 1983.
    Rehearing Denied Aug. 26, 1983.

      Wilson M. Hawkins, Jr., Mobile, for appellant.
    Fred W. Killion, Jr. and Patricia K. Olney of Reams, Wood, Vollmer, Philips, Killion & Brooks, Mobile, for appellees.
   ADAMS, Justice.

This is an appeal from the Mobile County Circuit Court from a jury verdict awarding damages to the appellees for personal injuries sustained in an automobile collision with appellant.

The appellant argues that the trial court erred in: (1) allowing the reading of a deposition taken out of state before a court reporter and Alabama notary public for the state-at-large; (2) refusing to admit into evidence certain admissions made by appel-lee, Jerry A. Brantley; (3) incorrectly instructing the jury on the theory of subsequent negligence; and (4) allowing the jury to consider the wantonness count.

Finding that the trial court did not commit reversible error, we affirm.

The case arose as follows: Barbara Brantley (Brantley) brought an action for damages against Evelyn Treadway (Tread-way) and her husband Louis Treadway for personal injuries sustained in an automobile collision. The complaint included a count on behalf of her husband, Jerry Brantley, for loss of society and consortium. Louis Treadway was subsequently removed from the action as a party by summary judgment. A suit was instituted by Treadway and her minor daughter against Brantley for personal injuries occurring in the same collision. A count for loss of society and consortium by Mr. Treadway was included. The cases were consolidated for trial.

The Brantleys’ action was presented to the jury on separate counts alleging simple negligence and wantonness. The jury returned a verdict in favor of Mrs. Brantley in the amount of $25,000.00 and for Mr. Brantley in the amount of $10,000.00. Verdicts in favor of Brantley were returned in the Treadways’ action against her.

Treadway appeals from the award of damages against her. No appeal was taken from the judgment in the Treadways’ suit against Brantley.

The collision occurred on July 9, 1977, at Padgett Switch Road in Mobile, Alabama. Mrs. Brantley had left her home in Grand Bay, Alabama, to play golf in Mobile. She was alone in her car traveling behind a car in which her husband and son were passengers.

Brantley testified that she first saw Treadway’s car proceeding toward her after rounding a curve into a straightaway. The two cars were between 150 and 200 feet apart and were both traveling about 40 miles per hour. About one-third of Tread-way’s car was on Brantley’s side of the road. Brantley swerved to her right to avoid a collision and went onto the shoulder of the road, which was about a six-inch drop-off from the pavement. Brantley lost control of the car. As she tried to get back on the pavement, her car crossed the center line and struck the appellant’s car which had returned to its proper lane of travel.

Treadway testified that Brantley’s car was over the center line when she first noticed it. There were two other cars on the road; both were in Brantley’s lane of travel. Brantley’s car returned to its lane of travel and traffic proceeded normally until Brantley’s ear suddenly began spinning in the middle of the road. Treadway could not avoid the collision.

The evidence is undisputed that following the collision the Brantley car was sitting in the middle of the road about half way across the center line. Treadway’s car was in the proper lane closer to the right edge of the road than to the center line. The cars were about six feet apart. Brantley’s car sustained damage to the front end while the Treadway car had damage to the left front fender.

Brantley suffered a broken neck, broken shoulder and other injuries. Treadway and her daughter were also injured in the accident.

Treadway argues that it was error to allow the deposition of Brantley’s treating physician, Dr. Daniel Enger, to be read at trial. Among other things, Dr. Enger testified to his treatment of Brantley and to the reasonableness of his charges and other medical expenses she incurred. The deposition was taken two days prior to trial in Pascagoula, Mississippi, where Dr. Enger maintains his practice. The deposition was recorded by a court reporter who was also an Alabama notary public for the state-at-large and who administered the oath to Dr. Enger.

Treadway urges that the trial court should not have allowed the reading of the deposition at trial because the oath was not administered by a person empowered to give oaths by the state of Mississippi and the deposition amounts to unsworn testimony. She raised no objection before or at the time of the taking of the deposition, but raised her objection for the first time at trial.

Rule 28(a) Alabama Rules of Civil Procedure, states:

The depositions provided for herein shall be taken before an officer authorized to administer oaths by the laws of the United States, or of the state of Alabama, or of the state or other place where the examination is held, or before a person appointed by the court in which the action is pending. A person so appointed has the power to administer oaths and take testimony.

The main purpose of this rule is to identify persons before whom a deposition may be taken and is part of the series of rules establishing the procedure for taking depositions. The rule itself does not empower or disqualify any person or group from taking depositions. It serves only to identify those persons before whom a deposition may be taken.

The witness was put under oath and sworn to tell the truth by an officer authorized to administer oaths under the laws of this state. Code 1975, § 36-20-30. The testimony was taken for use in an Alabama proceeding.

Whether testimony given in a deposition taken outside this state before a person authorized to administer oaths in Alabama is admissible in a proceeding in this state is an issue of first impression in this state. It is not necessary for us to decide this issue in reaching the result that we do, and, therefore, we decline to do so.

We find that the appellant’s objection to the qualifications of the officer to administer oaths was not timely made. The appellant waived any objection she may have had to the qualifications of the officer by not interposing the objection at or prior to the time of the taking of the deposition.

We find authority for our holding in Rule 32(d)(2), Alabama Rules of Civil Procedure, which states:

Objection to taking a deposition because of disqualification of the officer before whom it is to be taken is waived unless made before the taking of the deposition begins or as soon thereafter as the disqualification becomes known or could be discovered with reasonable diligence.

The rule contemplates objecting to the qualifications of the officer prior to the time for taking the deposition. Allowing the appellant to raise the objection for the first time at trial, after putting the appellee to the expense necessarily incurred in taking the deposition, is inconsistent with the mandate of A.R.C.P. Rule 1(c), that these rules are to be construed to secure the just, speedy and inexpensive determination of every action. We hold that objections to the qualifications of the officer before whom a deposition is to be taken must be raised prior to assembling for the deposition if the grounds for disqualification are known or could reasonably have been discovered prior to that time. See Lee v. Kimura, 2 Haw.App. 538, 634 P.2d 1043 (1981); Wright and Miller, Federal Practice and Procedure: Civil 2156 (1975).

Treadway next assigns as error the refusal of the trial court to admit into evidence certain statements of Brantley’s husband, made while completing the accident report form required by the Director of Public Safety.

Code 1975, § 32-7-12, states:
Neither the report required by section 32-7-5, the action taken by the director pursuant to this chapter, the findings, if any, of the director upon which such action is based nor the security filed as provided in this chapter shall be referred to in any way, nor be evidence of the negligence or due care of either party, at the trial of any actions to recover damages.

The purpose of the report required by § 32-7-5 is to enable the Director of Public Safety to determine the financial responsibility of the operator of every motor vehicle involved in an accident in this state. Mooradian v. Canal Insurance Co., 272 Ala. 373, 130 So.2d 915 (1961). The plain language of the statute makes it clear that this report is not to be used for any other purpose. The trial court committed no error in refusing to allow these statements into evidence. Allowing the admission of the substance of such a report would thwart the public policy behind the Alabama Safety Responsibility Act.

Treadway next assigns as error the charge of the trial court as to subsequent negligence. She argues that the trial court failed to adequately apprise the jury of the elements necessary to invoke the doctrine of subsequent negligence.

The elements of subsequent negligence are: (1) that the plaintiff was in a perilous position, (2) of which the defendant had actual knowledge, (3) that armed with such knowledge the defendant failed to use reasonable and ordinary care in avoiding the accident, (4) that the use of reasonable and ordinary care would have avoided the accident, and (5) that the plaintiff was injured as a result. Scotch Lumber Co. v. Baugh, 288 Ala. 34, 256 So.2d 869 (1972); Brooks v. Cox, 285 Ala. 267, 231 So.2d 302 (1970).

The trial court’s charge to the jury adequately discussed each of these elements. In determining the propriety of a charge, we consider it as a whole, and if it states the law correctly, there is no error. Hughes v. Southern Haulers, Inc., 379 So.2d 601 (Ala.Civ.App.1980); Wren v. Blackburn, 293 Ala. 393, 304 So.2d 187 (1974). We find that the trial court correctly charged the jury as to the law of subsequent negligence.

Treadway’s final argument is that it was error for the wantonness count to be submitted to the jury.

This court has defined wantonness as follows:

Wantonness is the conscious doing of some act or omission of some duty under knowledge of existing conditions and conscious that from the doing of such act or omission of such duty injury will likely or probably result.

Sparks v. Milligan, 295 Ala. 358, 330 So.2d 417 (1976); Griffin Lumber Co. v. Harper, 247 Ala. 616, 25 So.2d 505 (1946).

We cannot say from a review of the record that the trial court erred in submitting the wantonness count to the jury. Viewing the evidence in the light most favorable to the appellee, the jury could have found that the appellant crossed over into the appellee’s lane of travel with knowledge that the appellee was approaching and with knowledge of the condition of the road. It could reasonably be inferred that the actions of the appellant were done consciously and with knowledge that injury would likely or probably result. Gladwell v. Scarbrough, 47 Ala.App. 208, 252 So.2d 325 (1971).

The jury could have concluded from the evidence that Treadway created an emergency and was aware of the peril to Brant-ley, but failed to exercise reasonable care to avoid the collision. Riddle v. Franklin, 291 Ala. 671, 286 So.2d 841 (1973).

The case was submitted to the jury on a count of simple negligence, in which the doctrine of subsequent negligence was argued, and on a count of wantonness. The jury returned a general verdict in favor of Brantley without reference to either count. There was ample evidence on which the jury could have concluded that Treadway’s negligence or wantonness was the sole proximate cause of the injury to appellee.

The judgment of the trial court is hereby affirmed.

AFFIRMED.

TORBERT, C.J., and FAULKNER, AL-MON and EMBRY, JJ., concur.


author: FAULKNER, Justice.

text:
    Frances Walden SHAFFER, et al. v. Hugh REED, Jr., et al.
    82-375.
    Supreme Court of Alabama.
    July 29, 1983.
    Rehearing Denied Sept. 2, 1983.
    James M. Edwards of Copeland, Franco, Screws & Gill and M.R. Nachman, Jr., of Steiner, Crum & Baker, Montgomery, for appellants.
    Bert Latham and Hugh Reed, Jr., Centre, for appellees.
   FAULKNER, Justice.

This is an appeal from a judgment holding that options, given under a will, to purchase shares of capital stock could be exercised within a reasonable time after the death of the testatrix, and therefore, did not violate the rule against perpetuities. We reverse.

Tevis Smith Burke died January 25, 1982, leaving a last will and testament executed on September 13, 1974. The will was admitted to probate on March 1, 1982. Item 6 of the will provided as follows:

“I am now the present owner of Two Thousand Four Hundred Ten (2,410) shares of common stock in Cherokee County Bank, and I do hereby give, devise, bequeath and grant unto my cousin, Hugh Reed, Jr., his heirs, executors or assigns, the irrevocable option to purchase one-half (½) of all the remainder of my stock in Cherokee County Bank after satisfying the foregoing devises, at and for the sum of Two Hundred Fifty and no/100 ($250.00) Dollars, per share, or, the actual book value, whichever may be less, at the time of my death. It being my intent that should Hugh Reed, Jr., predecease me, this option shall not lapse, but shall be an asset of his estate.”

Item 7 of the will is identical except that the named legatee is Thomas Money.

On August 10, 1982, the residuary legatees under the Burke will filed a complaint for declaratory relief. The pertinent part of the complaint asked the court to enter judgment declaring that Items 6 and 7 of the will violated the rule against perpetuiti-es.

Before suit was filed, Hugh Reed, Jr. had already exercised his option, and under the court’s order, Thomas Money was given the right to exercise his option within a reasonable time after trial.

The trial court’s judgment held that Items 6 and 7 of the Burke will did not violate the rule against perpetuities. Therefore, both Reed and Money could, according to the trial court without violating the rule exercise their options and buy the stock if they did so within a reasonable time after Burke’s death.

The common law rule against perpe-tuities provides that no interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest. J. Gray, The Rule Against Perpetuities § 201 (4th Ed. 1952). The common law rule applies in Alabama. Section 35-4-4, Code 1975.

The principal issue in this appeal is whether the grant of the options to purchase the stock created a vested interest and thereby avoided the rule. We say no.

An option to purchase property is a mere right given by the owner to the op-tionee, and does not constitute the optionee a purchaser of the property, and does not give him any right to or interest in the property until he accepts the privilege by exercising his right of option within the time specified. Cf. McGuire v. Andre, 259 Ala. 109, 65 So.2d 185 (1953). McGuire distinguishes between a contract to purchase and an option to purchase. A contract to purchase creates an obligation to buy, whereas an option to purchase is a mere right to purchase within a limited time without any obligation of the optionee to purchase. An option to purchase becomes a contract to purchase only when exercised according to its terms.

Accordingly, it follows that Reed and Money could have no interest in the stock until they exercised their options to purchase. The next question is, how much time did Reed and Money have to exercise their options? The answer is not given by Items 6 and 7 of the will. The option is not limited in duration. If Reed and Money do not exercise their options during their lifetimes, then their heirs, executors, or assigns have the right to exercise the options. So, even if Reed and Money are considered lives in being at the death of Burke, the options are still capable of being exercised more than 21 years after their deaths. The rule requires that an option be exercised, if at all, within the time fixed by the rule. United Virginia Bank/Citizens & Marine v. linion Oil Company of California, 214 Va. 48, 197 S.E.2d 174 (1973).

We opine that the options are not personal, and therefore are not exercisable within a “reasonable time” by Reed and Money, and that the rule against perpetuiti-es applies. Burke’s intention is quite clear-—the options are given to Reed and Money, their heirs, executors, and assigns.

We hold that the options granted under the Burke will created interests which were subject to being vested at a future date, and are therefore subject to the rule against perpetuities. For a future interest to be valid, it must vest within the period of the rule. Probability of vesting is not sufficient. First Alabama Bank v. Adams, 382 So.2d 1104 (Ala.1980). The certainty of vesting must have existed at the time of Burke’s death. That certainty of vesting does not appear here.

We can look back and see that yes, Reed has exercised his option, and no, Money has not but will within a reasonable time.

To Reed and Money, the rule must seem awfully harsh, but the rule against perpetu-ities is a rule that invalidates interests which vest too remotely. See Leach, Perpe-tuities in a Nutshell, 51 Harv.L.Rev. 638 (1937). We have the rule in this jurisdiction, and as long as we have it, we must follow it.

REVERSED AND REMANDED.

TORBERT, C.J., and EMBRY, BEATTY and ADAMS, JJ., concur.


text:
    Voncile KITTLE and B.C. Kittle v. The SAND MOUNTAIN BANK.
    81-604.
    Supreme Court of Alabama.
    July 29, 1983.
    Rehearing Denied Aug. 26, 1983.
    T.J. Carnes of Carnes & Carnes, Albert-ville, for appellants.
    F.J. Allen, II, Boaz, for appellee.
   FAULKNER, Justice.

Voncile Kittle and B.C. Kittle, husband and wife, filed a suit against Sand Mountain Bank, alleging that they were the owners of certain real estate that had been mortgaged to the bank on February 12, 1976. The Kittles’ complaint stated that Voneille Kittle was not indebted to the bank and that B.C. Kittle might have been indebted in some amount, but that any indebtedness had been discharged in bankruptcy. The Kittles asked for a declaration of rights, including a declaration that the foreclosure on the interest of Voncile Kittle was wrongful, null, and void.

Briefly, the facts leading to this suit are as follows: B.C. Kittle operated a business of buying and selling used automobiles for approximately twenty-five years. During this time he dealt specifically with Sand Mountain Bank, repeatedly borrowing and paying. He kept no significant business records but relied on the bank to keep the records of his transactions and standing with it.

At trial, the bank produced approximately thirty-three notes which represented the debt which Mr. Kittle owed the bank. The notes of most concern to us in this appeal are as follows: A note dated October 17, 1975, for $10,000.00 and a note dated January 20, 1976, for $40,000.00.

On February 12, 1976, Mr. and Mrs. Kit-tle executed a mortgage on their home to the bank. The mortgage recited that Mr. and Mrs. Kittle, as “mortgagors,” were indebted to the bank in the principal sum of $50,000.00 and that this obligation was “evidenced by a promissory note or notes, as follows: on demand, with interest from date at the rate of 9% per annum.”

After a non-jury trial, the court rendered judgment on February 10, 1982, denying any relief to the Kittles, except a ruling that Voncile Kittle had the right to redeem her interest by paying to the bank the sum of $25,000.00. On February 12, 1982, the Kittles filed an amendment to conform the pleadings to the evidence, alleging that as to plaintiff Voncile Kittle the mortgage was void for want of consideration. The court in effect allowed and considered the amendment, although it did not render an order on it.

The Kittles now appeal the trial court’s final judgment, stating that the court erred in failing to hold that the mortgage of February 12,1976, was “nudum pactum” as to Voncile Kittle and that the court erred in failing to remove such mortgage as a cloud on her title. Sand Mountain Bank states, however, that the question of lack of consideration is not properly before the court and therefore should not be considered.

This court opines that the question of lack of consideration is properly before the court. ARCP Rule 15(b) states in pertinent part:

“When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues.” (Emphasis added.)

The record shows that Mr. Kittle bought the subject property on October 12, 1971. He gave his wife, Voncile Kittle, a one-half interest in the property on May 31, 1974. Even though Mrs. Kittle signed the February 12, 1976, mortgage to the bank, we do not find in the record that she signed the notes that represented the indebtedness of her husband. (We note that some of the notes in the record are blurred, and some are illegible.) But, she testified that she did not receive any of the loan proceeds from the bank.

Since Mrs. Kittle did not sign the notes and did not receive any of the loan proceeds, the mortgage of February 12, 1976, as to her, was null and void for lack of consideration. This court held in Bynum Mercantile Co. v. First National Bank of Anniston, 187 Ala. 281, 65 So. 815 (1914), that a mortgage given as security for a pre-existing debt of the mortgagor is valid and binding upon that consideration, but where the mortgagor is a stranger to the debt, and there is no other consideration, it is void for want of consideration.

The original opinion is withdrawn and the application for rehearing is granted.

ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; APPLICATION FOR REHEARING GRANTED.

REVERSED AND REMANDED.

TORBERT, C.J., and ALMON, EMBRY and ADAMS, JJ., concur.


author: EMBRY, Justice.

text:
    UNITED STEELWORKERS OF AMERICA AFL-CIO-CLC, an Unincorporated Association v. Michael D. O’NEAL.
    81-600.
    Supreme Court of Alabama.
    Aug. 5, 1983.
    Rehearing Denied Sept. 16, 1983.

      Bernard Kleiman, Gen. Counsel, Chicago, Ill., Carl B. Prankel, Assoc. Gen. Counsel, United Steelworkers of America, Pittsburgh, Pa., Robert M. Weinberg and Jeremiah A. Collins of Bredhoff & Kaiser, Washington, D.C., Jerome A. Cooper of Cooper, Mitch & Crawford, Birmingham, and Kenneth Cooper, Bay Minette, for appellant.
    Paul D. Myrick and Joseph F. Danner of Darby & Myrick, Mobile and Robert A. Wills, Bay Minette, for appellee.
   EMBRY, Justice.

United Steelworkers of America appeals from a judgment entered in favor of Michael D. O’Neal awarding $25,000 compensatory and $55,000 punitive damages. We reverse.

The sole issue to be considered is whether the evidence of record, based on any theory, supports a judgment against United Steelworkers of America while simultaneously absolving the codefendant and alleged agent, Jerry Steele, of any wrongdoing.

The following facts are relevant to our consideration: In August of 1977, the United Steelworkers of America met with representatives of Den-Tal-Ez Manufacturing Company in an attempt to negotiate a collective bargaining agreement. The union had been certified by the National Labor Relations Board as the production and maintenance employees’ representative. Wiley Welborn acted as the union’s spokesman during negotiations.

The talks broke down and on 3 February 1978 union members initiated a strike. They picketed the Del-Tal-Ez plant continuously until June 1978.

The plaintiff, Michael O’Neal, was not a member of the union, nor did he participate in the strike. Consequently, O’Neal was forced to cross the picket line at least twice daily. O’Neal claims that upon crossing the picket lines he was the subject of violence and threats of violence.

One evening, during the course of the strike, O’Neal’s car was burned while parked outside his home. It is undisputed that Paul Kelsey, who was neither a union member nor a Den-Tal-Ez employee, burned the car. Kelsey testified, however, that he did so at the direction of Jerry Steele. Steele is a union member and was an active participant in the strike. Steele denied giving Kelsey any instructions regarding the car.

O’Neal filed suit in the Circuit Court of Baldwin County seeking monetary damages. Steele and the United Steelworkers of America were named as defendants. O’Neal’s complaint was based upon two theories: First, that Steele acted as an agent of the union in soliciting the destruction of O’Neal’s car and under the doctrine of re-spondeat superior, both Steele and the union were liable; and second, that the union and union members entered into a conspiracy for the purpose of destroying O’Neal’s vehicle. The jury returned a verdict against the United Steelworkers, but found in favor of Steele.

In a joint action in tort for misfeasance or malfeasance against an agent and his principal, where respondeat superior is the sole basis of recovery, a verdict in favor of the agent works an automatic acquittal of the principal so that a verdict against him must be set aside. See Larry Terry Contractors, Inc. v. Bogle, 404 So.2d 613, 614 (Ala.1981). O’Neal contends, however, that two other theories would support the verdict in the instant case.

First, O’Neal asserts that the jury could have attributed the acts of other non-joined parties to United Steelworkers under the doctrine of respondeat superior. To buttress this argument, O’Neal asserts that the union’s failure to repudiate acts of violence, in addition to providing legal counsel for those charged with strike related misconduct, served as a ratification of the violence. We cannot agree.

For O’Neal to recover under such a theory he must show the union authorized or ratified acts of violence. N.A.A.C.P. v. Claiborne Hardware Co., 458 U.S. 886, 102 S.Ct. 3409, 3434, 73 L.Ed.2d 1215 (1982). After a careful review of the entire record we must conclude that it is devoid of any evidence indicating the union authorized any violent acts. In fact, the record is replete with instances of union staff representative Wiley Welborn attempting to maintain an orderly strike.

Furthermore, the Supreme Court recently rejected the notion that providing legal representation for members of an association constitutes ratification of their actions. Id., at 102 S.Ct. 3435 n. 78. Lastly, “[a] legal duty to ‘repudiate’—to disassociate oneself from the acts of another—cannot arise unless, absent the repudiation, an individual could be found liable for those acts.” Id., at 3432 n. 69. Under the facts of this case, clearly, United Steelworkers had no legal duty to repudiate the strike, nor the violent acts of,Paul Kelsey.

O’Neal contends the jury could have found a conspiracy between the union and non-joined union members to “enforce” the strike through violence. There is no evidence of record, however, showing the union and union members agreed to use unlawful means to carry out their objective. Id., at 3437.

We hold the verdict against the United Steelworkers of America is inconsistent with a verdict in favor of Steele, and cannot stand. Accordingly, the judgment entered by the trial court is due to be and is hereby reversed and this case remanded for entry of judgment consistent with this opinion.

REVERSED AND REMANDED WITH DIRECTIONS

TORBERT, C.J., and MADDOX, FAULKNER, JONES, ALMON, SHORES, BEATTY and ADAMS, JJ., concur.