author: MAXWELL, J.,

text:
    RESTAURANT OF HATTIESBURG, LLC, Jim Schafer and Courtney Brick, Appellants v. HOTEL & RESTAURANT SUPPLY, INC., Appellee.
    No. 2010-CA-01843-COA.
    Court of Appeals of Mississippi.
    March 6, 2012.

      L. Clark Hicks Jr., Hattiesburg, R. Lane Dossett, attorneys for appellants.
    Stephen B. Jackson, attorney for appel-lee.
    Before GRIFFIS, P.J., MAXWELL and RUSSELL, JJ.
   MAXWELL, J.,

for the Court:

¶ 1. The question we must decide is under what circumstances a creditor may circumvent the legal fiction of limited liability and hold LLC members and/or a separate commonly owned LLC responsible for the LLC’s debt. We find the three-prong test for piercing the veil of corporations, established in Gray v. Edgewater Landing, Inc., 541 So.2d 1044, 1047 (Miss.1989), is also the appropriate test for piercing the veil of LLCs. And because Hotel and Restaurant Supply, Inc. (HRS) failed to establish all three prongs were indisputably met, we find the circuit court erred by granting HRS summary judgment in its action to pierce the veil of Restaurant of Jackson LLC (Restaurant of Jackson) and SouthEastern Restaurant LLC (SouthEastern) and hold LLC members Jim Schafer and Courtney Brick, along with sister LLC, Restaurant of Hattiesburg LLC (Restaurant of Hattiesburg), liable for Restaurant of Jackson and SouthEastern’s debt to HRS.

¶ 2. Because we find nothing procedurally impermissible with HRS’s action, we affirm the denial of Restaurant of Hatties-burg, Schafer, and Brick’s motion for summary judgment, which raised procedural issues only. We reverse the grant of summary judgment in HRS’s favor and remand this case to the circuit court for further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 3. In 2005, Schafer and Brick opened multiple restaurants operating as Copeland’s franchises, based on A1 Copeland’s original restaurant in New Orleans. Schafer and Brick formed three separate LLCs: (1) Restaurant of Hattiesburg to operate a Copeland’s in Hattiesburg, (2) Restaurant of Jackson to operate a Copeland’s in Jackson, and (3) SouthEastern to manage the accounting and payroll of both restaurants. Restaurant of Jackson was unsuccessful. It closed the Jackson Copeland’s in the spring of 2006, owing HRS $29,000 plus thousands in service charges. Some time later, Restaurant of Hatties-burg ceased operating a Copeland’s franchise and re-opened under a different name.

I. HRS’s First Suit

¶ 4. In fall 2005, an HRS sales representative contacted the managers of the Jackson Copeland’s. During the initial sales call, a manager allegedly told the sales rep the Jackson Copeland’s was associated with the Hattiesburg Copeland’s. But the sales rep. did not meet with Schafer or Brick, and he later testified he did not even know who Schafer and Brick were until HRS tried to collect past-due payments. The sales rep. also testified, while HRS may have already had an account with the Hattiesburg Copeland’s, he opened a new, separate account, first titled “Copeland’s Franchise” and then later “Restaurant of Jackson, LLC.”

¶ 5. From September 2005 to March 2006, HRS delivered, restaurant supplies to the Jackson Copeland’s. SouthEastern paid HRS on behalf of Restaurant of Jackson. But the payments stopped when the Jackson Copeland’s closed.

¶ 6. In September 2006, HRS sued Restaurant of Jackson, SouthEastern, and “John Does 1 though 10.” In October 2007, the Lamar County Circuit Court granted HRS summary judgment based on the undisputed purchase orders. The circuit court found Restaurant of Jackson and SouthEastern jointly liable to HRS for the $36,816.64 debt.

II. HRS’s Post-judgment Debt-collection Efforts

¶ 7. To collect the debt, HRS obtained a writ of garnishment on SouthEastern’s bank account — only to discover the account contained $36 and change, with no additional income flowing into the account. HRS initiated post-judgment discovery, available to judgment creditors through Mississippi Code Annotated section 13 — 1— 261 (Rev.2002).

¶ 8. HRS propounded interrogatories, which went unanswered. It then filed a motion to compel, which the circuit court granted and ordered the judgment debtors pay $750 to HRS for the costs of filing the motion. Finally, HRS scheduled a judgment-debtor exam, requesting specific financial records be brought to the. exam. See Miss.Code Ann. § 13-1-265 (Rev.2002) (authorizing judgment-debtor exam and production of documents). On September 11, 2008, Brick appeared on behalf of Restaurant of Jackson and SouthEastern but did not bring any financial documents.

¶ 9. Brick testified SouthEastern managed the accounting and payroll for both Restaurant of Jackson and Restaurant of Hattiesburg. Both companies deposited their incomes in SouthEastern’s single bank account. SouthEastern kept track of the separate incomes and expenses of both restaurants. SouthEastern also paid both restaurants’ payroll and bills. But records show that in 2006 SouthEastern claimed the income from both companies on its tax returns.

¶ 10. After the Jackson Copeland’s closed, Restaurant of Hattiesburg continued to deposit its proceeds from the Hat-tiesburg Copeland’s, which varied from $160,000 to $260,000 per month, into SouthEastern’s bank account. But in December 2007 — around the same time the circuit court denied SouthEastern’s motion to reconsider the judgment against it— Restaurant of Hattiesburg opened its own bank account. HRS believed the timing of the opening of this new account was highly suspect. But Brick claimed, because there were no longer multiple restaurants to operate, SouthEastern’s consolidated services were not needed.

¶ 11. Bank records show SouthEastern had issued Brick a $9,000 check in November 2007. Brick testified this was a repayment of a loan to Restaurant of Hatties-burg. SouthEastern had also written Schafer’s realty company an $800 cheek, which Brick claimed was for reimbursement for printing restaurant menus.

¶ 12. After Brick’s deposition, HRS moved to reopen its lawsuit against Restaurant of Jackson and SouthEastern to add Restaurant of Hattiesburg, Schafer, and Brick as parties. The circuit court denied the motion because the judgment in that case was final.

III. HRS’s Second Suit

¶ 18. In November 2008, HRS sued Restaurant of Hattiesburg, Schafer, and Brick. HRS requested the court “pierce the veil” of SouthEastern and Restaurant of Jackson and hold the three new defendants jointly and severally liable for the judgment debt.

¶ 14. In January 2010, HRS moved for summary judgment, arguing Restaurant of Jackson and SouthEastern did not observe corporate formalities and commingled assets. HRS relied on Brick’s failure to produce sufficient financial documents at the judgment-debtor exam and failure to comply with post-judgment discovery. HRS also highlighted Brick’s inability to specifically account for the $9,000 payment by SouthEastern to himself and the $800 payment to Schafer’s company.

¶ 15. Restaurant of Hattiesburg, Schafer, and Brick responded that HRS’s allegations and evidence failed to meet the three-prong test for corporate-veil piercing under Gray v. Edgewater Landing, Inc., 541 So.2d 1044, 1047 (Miss.1989). They specifically claimed HRS could not show the first prong, frustration of contractual expectations, because HRS “knew from the outset that it was dealing with a corporate entity” and “chose not to pursue a personal guarantee or collateralization for its credit.” They filed their own motion for summary judgment, arguing HRS was violating procedural rules by retrying the same claim against different parties. They also argued HRS’s action was barred by the three-year statute of limitations for breach of contract.

¶ 16. After a hearing in October 2010, the circuit court denied Restaurant of Hat-tiesburg, Schafer, and Brick’s motion for summary judgment but granted summary judgment in favor of HRS. The circuit court found the three prongs of Gray had been met. And it held that Restaurant of Hattiesburg, Schafer, and Brick were jointly and severally liable for:

(1) the $750 granted for reasonable expenses for compelling post-judgment discovery in the first suit,
(2) the $86,816.64 judgment against Restaurant Jackson and SouthEastern,
(3) $8,500 in attorney’s fees, plus
(4) eight percent interest from the date of the judgment in the first suit.

Restaurant of Hattiesburg, Schafer, and Brick timely appealed.

STANDARD OF REVIEW

¶ 17. Mississippi Civil Procedure Rule 56 directs a trial court to render judgment “forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” M.R.C.P. 56(c). We review a grant of summary judgment de novo, applying the same standard as the circuit court. Harrison v. Chandler-Sampson Ins., Inc., 891 So.2d 224, 228 (¶ 11) (Miss.2005). We view the evidence in the light most favorable to the party against whom the motion has been made. Id. If any triable issues of fact exist, we must reverse. Id. As the comment to Rule 56(c) advises, “summary judgment is not a substitute for the trial of disputed fact issues.” M.R.C.P. 56 cmt. The purpose of summary judgment is to determine whether a triable issue exists but not to resolve that issue. Id.

DISCUSSION

I. Was Summary Judgment Properly Granted to HRS?

¶ 18. We first address why factual disputes concerning HRS’s claim require we reverse the grant of summary judgment in its favor. According to Rule 56, the circuit court could only grant HRS summary judgment if (1) there were no material disputed factual issues and (2) those undisputed facts showed HRS was entitled to judgment as a matter of law. M.R.C.P. 56(c). Our de novo review reveals not only disputed facts but also insufficient proof HRS was entitled to judgment as a matter of law. In particular, we find HRS did not indisputably demonstrate its contractual expectations were frustrated because it had looked to Restaurant of Hattiesburg, Schafer, and Brick for performance of the UCC sales contract.

A. Piercing the Veil of an LLC

¶ 19. Before we discuss why HRS is not entitled to summary judgment under the three-prong test from Gray, we address why this test, which was originally applied to a corporation, applies to claims seeking to pierce the limited liability of an LLC.

¶ 20. Both parties assert traditional corporate-veil-piercing law controls. And the circuit court applied the three-prong test from Gray to pierce the veils of the two LLCs, Restaurant of Jackson and SouthEastern. Under Gray, for a court to disregard the corporate entity and expose shareholders to liability, the complaining party must show:

(a) some frustration of contractual expectations regarding the party to whom he looked for performance;
(b) the flagrant disregard of corporate formalities by the defendant corporation and its principals; [and]
(c) a demonstration of fraud or other ■ equivalent misfeasance on the part of the corporate shareholder.

Gray, 541 So.2d at 1047 (“To present a jury issue on a demand that the corporate veil be pierced, a party must present some credible evidence on each of these points.”)

¶ 21. While an LLC is a different type of legal entity than a corporation, commentators “agree that for purposes of piercing the corporate veil, an LLC would be treated like a corporation.” Hollowell v. Orleans Reg’l Hosp. LLC, 217 F.3d 379, 385 n. 7 (5th Cir.2000) (citing Eric Fox, Piercing the Veil of Limited Liability Companies, 62 Geo. Wash. L.Rev. 1143, 1167-68 (1994), which notes most commentators assume the doctrine of piercing the corporate veil applies to LLCs). Like a corporation, an LLC is purely a creature of statute. And the Mississippi Limited Liability Company Act is clear that an LLC member cannot be individually liable for an LLC’s debt “by reason of being a member[.]” Miss.Code Ann. § 37-29-305(1) (Rev.2009). See Grand Legacy, LLP v. Gant, 66 So.3d 137, 146-47 (¶¶ 29-35) (Miss.2011) (noting the trial court properly held an LLC member was not personally liable solely based on his membership because there was no evidence the member participated in fraud); see also In re Broadstripe, LLC, 444 B.R. 51, 102 (Bankr.D.Del.2010) (quoting Geyer v. Ingersoll Publ’ns Co., 621 A.2d 784, 793 (Del.Ch.1992) (“Delaware law permits a court to pierce the corporate veil of a company ‘where there is fraud or where it is in fact a mere instrumentality or alter ego of its owner.’ ”).

¶ 22. We find the circuit court correctly cited Gray as the proper standard for what a plaintiff must show in addition to LLC membership to hold an LLC member liable for the LLC’s debt. When faced with other approaches for determining when limited liability should be disregarded, the Mississippi Supreme Court reiterated Gray is the test Mississippi courts must apply. Buchanan v. Ameristar Casino Vicksburg, Inc., 957 So.2d 969, 976-77 (¶¶ 25-26) (Miss.2007) (expressly rejecting the federal ten-factor approach applied in Gammill v. Lincoln Life & Annuity Dis-tribs., 200 F.Supp.2d 632, 634-35 (S.D.Miss.2001)). Thus, we hold to pierce the veil of an LLC the complaining party must prove LLC membership as well as (a) some frustration of contractual expectations, (b) flagrant disregard of LLC formalities by the LLC members, and (c) fraud or misfeasance by the LLC member. Gray, 541 So.2d at 1047.

¶ 23. Our supreme court has held it “will not rigidly maintain the distinct corporate identity [of the LLC’s more formal ancestor, the corporation,] where ... to do so would subvert the ends of justice.” Highway Dev. Co. v. Miss. State Highway Comm’n, 343 So.2d 477, 480 (Miss.1977). We recognize there are situations justifying piercing the veil of an LLC. But as with piercing a corporate veil, piercing the veil of an LLC should be reserved “for factual circumstances which are clearly extraordinary — where to do otherwise would ‘subvert the ends of justice.’” Gray, 541 So.2d at 1046 (quoting Johnson & Higgins of Miss., Inc. v. Comm’r of Ins., 321 So.2d 281, 284 (Miss.1975)). Mississippi has a strong public policy “favorfing] maintaining corporate entities and avoiding attempts to pierce the corporate veil[,]” and we find this policy extends to maintaining LLCs as well. Buchanan, 957 So.2d at 977 (¶ 27) (citing Gray, 541 So.2d at 1047).

B. Material Factual Disputes

¶ 24. A successful veil-piercing claim must show each of the three Gray prongs. Gray, 541 So.2d at 1047; see Foamex v. Superior Prods. Sales, Inc., 361 F.Supp.2d 576, 577-78 (N.D.Miss.2005) (granting defendant summary judgment because plaintiff, while presenting evidence on first two Gray factors, failed to create jury issue on third factor). Because HRS did not undis-putably show the first prong, frustration of contractual expectations, the grant of summary judgment to HRS must be reversed and remanded.

1. Some Frustration of Contractual Expectations Regarding the Party to Whom HRS Looked for Performance

¶ 25. The first Gray prong addresses which person or business entity HRS expected to pay for the restaurant supplies. In Gray, the Mississippi Supreme Court found Morris Gray failed to establish this prong because he “had no doubt that he was contracting with a corporate party, not Billy Stegall or Tom Bradley personally. As a businessman himself, Gray appreciated this distinction.” Gray, 541 So.2d at 1047. Similarly, in Rosson v. McFarland, the supreme court found it “clear that [Mark] McFarland did not contract with Rosson individually for performance or require Rosson to guarantee the performance of [Rosson’s corporation]. Thus, McFarland fails to satisfy the first prong required by Gray to pierce the corporate veil.” Rosson v. McFarland, 962 So.2d 1279, 1286 (¶ 28) (Miss.2007). Our inquiry under this prong focuses on whether HRS knew it was contracting with a particular LLC, Restaurant of Jackson, rather than Schafer and Brick as individuals or Restaurant of Hattiesburg.

¶ 26. The circuit court found HRS “did not know who the real parties at interest were until after they had formed a contract within the parameters of the Uniform Commercial Code.” It is true, under the UCC, a binding contract is not formed until tender of deliver to the buyer. Miss. Code Ann. § 75-2-507(1) (Rev.2002). But merely because the UCC governs when the contract was formed does not mean a UCC seller can circumvent the limited liability of the entity to which it tendered the goods. As an incorporated business, HRS could appreciate the distinction between an individual and an LLC. See Gray, 541 So.2d at 1047. And like Gray and Rosson, there is no evidence HRS believed it was selling restaurant goods to Schafer and Brick as individuals.

¶ 27. The circuit court relied on Thames & Co. v. Eicher, 373 So.2d 1033 (Miss.1979) to find HRS was confused about the real party purchasing the supplies. But in Thames, the house purchasers dealt only with Mrs. L.T. Rogers, an individual. And Rogers did not reveal the house was being sold by her corporation until the day of the closing. Thames, 373 So.2d at 1035. Unlike Thames, HRS’s own representative testified HRS did not even deal with Schafer until after HRS tried to collect on past due invoices. And frustration with the performance of the LLC is not the type of frustration warranting disregarding an LLC’s separate identity. Rosson, 962 So.2d at 1286 (¶ 27) (holding “negligent performance of contractual duties does not justify the disregard of the corporate entity”); see also Trevino v. Merscorp, Inc., 583 F.Supp.2d 521, 530 (D.Del.2008) (holding, under Delaware law, “the possibility that a plaintiff may have difficulty enforcing a judgment is not an injustice warranting piercing the corporate veil”).

¶28. While the evidence showed HRS did list “Copeland’s Franchise” on its initial invoices, Restaurant of Jackson requested HRS change the name of the account to “Restaurant of Jackson, LLC.” So any initial confusion about the limited liability of the account holder was cleared up with this change. At this point, HRS, without seeking a personal guarantee from Schafer or Brick, continued to tender goods to Restaurant of Jackson, which it knew to be an LLC. See Richardson v. Jenkins Builders, Inc., 737 So.2d 1030, 1032 (¶ 9) (Miss.Ct.App.1999) (finding “no arguable basis to conclude that Richardson either actually believed or was justified in believing that Jenkins was personally guaranteeing the contract’s performance”); cf. Gen. Motors Acceptance Corp. v. Bates, 954 F.2d 1081, 1085 (5th Cir.1992) (finding plaintiff presented sufficient proof of frustration because the corporation’s “true persona was purposefully concealed”).

¶ 29. HRS did present evidence that a manager of the Jackson Copeland’s told HRS the restaurant was connected to the Hattiesburg Copeland’s, potentially creating the expectation that both restaurants were jointly responsible for the other’s debts. Further, SouthEastern, which managed the proceeds from both accounts, wrote checks to HRS for Restaurant of Jackson’s invoices. But the evidence is certainly not undisputed. The HRS representative testified he thought the Hatties-burg Copeland’s already had an account with HRS. Yet he chose to create a separate account for Restaurant of Jackson.

¶ 30. We further point out, HRS did not name Restaurant of Hattiesburg, Schafer, and Brick in the first suit, which the three defendants claim is a procedural error barring the second suit. While not a bar, the failure to name Restaurant of Hattiesburg, Schafer, and Brick in the initial suit to collect the debt tends to undercut HRS’s argument that it expected these parties would be responsible for paying the debt. Schafer and Brick, as the two LLC members, were known or knowable when the first suit was filed. However, Restaurant of Hattiesburg is in a slightly different posture because of its relationship to SouthEastern, who was named in the first suit and, until the time of the first judgment, claimed all of Restaurant of Hatties-burg’s proceeds.

¶ 31. In remanding this matter, we emphasize “the fact that the [members] of the two [LLCs] are the same is not of itself sufficient to treat the two [LLCs] as one.” Johnson & Higgins, 321 So.2d at 285 (quoting 1 W. Fletcher, Cyclopedia of the Law of Private Corporations § 43, at 210 (Perm. Ed.1974)); see also Buchanan 957 So.2d at 978 (¶ 30) (rejecting employee’s attempt to pierce the corporate veil of a subsidiary to reach a parent corporation that wholly owned the subsidiary). Therefore, the fact Schafer and Brick owned Restaurant of Jackson, SouthEastern, and Restaurant of Hattiesburg is not enough in itself to treat the three LLCs as one.

¶ 32. Further, Mississippi has never adopted the “single business enterprise” theory to hold affiliated LLCs jointly liable for each other’s debts. In holding HRS was unable to identify the party to whom it looked for performance, the circuit court relied on the unpublished opinion, W. Oil & Gas JV, Inc. v. Castlerock Oil Co., 91 Fed.Appx. 901 (5th Cir.2003). In Castlerock, the United States Court of Appeals for the Fifth Circuit applied Texas’s “single business enterprise” theory of liability: “This doctrine provides that ‘when corporations are not operated as separate entities, but integrate their resources to achieve a common business purpose, each constituent corporation may be held liable for the debts incurred in pursuit of that business purpose.’ ” Id. at 904 (quoting Gardemal v. Westin Hotel Co., 186 F.3d 588, 594 (5th Cir.1999)). But in 2009, the Supreme Court of Texas expressly abrogated this theory as “fundamentally inconsistent” with the Texas Business Corporation Act. SSP Partners v. Gladstrong Investments (USA) Corp., 275 S.W.3d 444, 454-56 (Tex.2008). The Texas court held “[t]here is nothing abusive or unjust ... in the abstract” with corporations sharing “offices, accounting, employees, services, and finances.” Id. at 454. On remand, to hold Restaurant of Hattiesburg liable for Restaurant of Jackson and SouthEastern’s debt, HRS has to show actual frustration of identity due to the shared bank account. The existence of the shared bank account, alone, is not sufficient to meet this prong.

¶ 33. Because the circuit court erred in finding HRS undisputably showed its contractual expectations were frustrated, we reverse summary judgment in its favor and remand its claim for further proceedings.

2. The Flagrant Disregard of Corporate Formalities by the Defendant Corporation and its Principals

¶ 34. Failure to show that undisputed facts establish the first Gray prong is reason alone to reverse summary judgment. Still, we briefly address the factual issues surrounding the remaining two requirements.

¶ 35. Analyzing the second prong of Gray is more difficult with an LLC than a corporation because an LLC imposes much less formalities on its members than a corporation. The traditional lack of formalities — failure to conduct regular meetings, failure to appoint officers and directors, etc.—does not necessarily signal LLC abuse. See Gen. Motors, 954 F.2d at 1085 (example of failure to observe corporate formalities).

¶ 36. The circuit court held the LLC form had been flagrantly disregarded by Schafer and Brick based on two findings: (1) the three LLCs did not maintain separate checking accounts, and (2) Brick failed to produce documents at the judgment-debtor exam showing the observance of corporate formalities.

¶ 37. Regarding the shared bank account, it is undisputed both Restaurant of Jackson and Restaurant of Hattiesburg sent their proceeds to SouthEastern’s bank account. And SouthEastern claimed the income from both companies on its tax return. But at the summary-judgment hearing, Restaurant of Hattiesburg produced documents showing SouthEastern kept the income and expenses of both restaurants separate. We find this evidence of separate accounting sufficient to create a factual dispute over whether the common bank account shows flagrant disregard for the LLCs’ formalities. Like Texas, we decline to adopt a rule that LLCs sharing a bank account is per se an abusive practice. See SSP Partners, 275 S.W.3d at 455 (“We have never held corporations liable for each other’s obligations merely because of centralized control, mutual purposes, and shared finances.”).

¶ 38. Concerning the failure to produce documents, we note Brick’s defense — the documents were in possession of his accountant — echos the successful defenses in both Rosson and Richardson. Rosson, 962 So.2d at 1287 (¶ 34) (failure to produce tax documents in possession of attorney); Richardson, 737 So.2d at 1031 (¶ 8) (failure to produce corporate records in possession of attorney). In Rosson, the supreme court found failure to produce tax documents did not prove the “books or tax returns did not exist.” Rosson, 962 So.2d at 1287 (¶ 34). And putting forth the lack of documents as “evidence ... Rosson did not adhere to corporate formalities was ‘at best, extremely weak.’ ” Id. (quoting Richardson, 737 So.2d at 1032). Thus, we find the circuit court erred in holding Brick’s failure to produce financial records at the judgment-debtor hearing undisput-ably proved a flagrant failure to keep LLC records.

3. A Demonstration of Fraud or Other Equivalent Misfeasance on the Part of the Corporate Shareholder

¶ 39. Restaurant of Hatties-burg, Schafer, and Brick argue the failure to pay a debt, even after a judgment is obtained, does not rise to the level of fraud. And they are right. Some bad action other than the underlying claim itself (here, an outstanding debt) must be shown. Penn Nat’l Gaming v. Ratliff, 954 So.2d 427, 432 (¶ 10) (Miss.2007). In Penn National, the Mississippi Supreme Court “recognize[d] that the corporate veil will not be pierced, in either contract or tort claims, except where there is some abuse of the corporate form itself.” Id.; see also Trevino, 583 F.Supp.2d at 530 (holding, under Delaware law, the type of fraud or injustice required under “must be found in the defendants’ use of the corporate form”).

¶ 40. In Richardson, this court held:

As to the third consideration, Richardson presented no evidence that Jenkins, from the beginning, was intent on obtaining Richardson’s money for his own personal use with no intention of performing on the contract and that he used a shell corporation to shield himself from personal liability on the day of reckoning that was inevitably to come.

Richardson, 737 So.2d at 1032 (¶ 10). HRS did not produce evidence that Schafer and Brick committed fraud by trying to use a dummy or shell corporation to shield themselves from personal liability. There is no evidence they contracted with HRS for supplies to be used for their personal use with no intention to pay HRS. Instead, evidence shows they tried to operate a Copeland’s in Jackson that failed. While during the time of the first suit, SouthEastern did make payments to Schafer and Brick, Brick testified these payments were legitimate reimbursements for company expenses.

¶41. But Schafer and Brick set up multiple LLCs for its restaurant operations. While it is not fraudulent to limit the liabilities of each restaurant to its own debts, SouthEastern did conveniently claim the income of Restaurant of Hatties-burg until it was popped with a $36,000 judgment.

¶ 42. This prong ultimately comes down to Restaurant of Hattiesburg’s opening its own bank account, which occurred the same month the circuit court denied its motion to reconsider the judgment against it. The circuit court held Restaurant of Hattiesburg’s opening of this account was “a volitional act to divert funds” from HRS. We find this holding to be based solely on a factual conclusion. Thus, it is inappropriate for summary judgment. Brick testified Restaurant of Hattiesburg opened its own bank account because, without multiple restaurants, there was no need for consolidated accounting services. While we certainly understand the circuit court’s skepticism, Brick’s explanation does create a factual issue on this prong.

II. Is HRS’s Second Suit Procedurally Permissible?

¶ 43. Restaurant of Hattiesburg, Schafer, and Brick ask we reverse the denial of their motion and render summary judgment in their favor for three reasons: (1) the bars of res judicata and collateral es-toppel, (2) the bars of the statute of limitations and laches, and (3) HRS’s failure to join Restaurant of Jackson and SouthEastern as defendants in the second suit. These procedural objections boil down to the questions: Does Mississippi permit a second, subsequent veil-piercing action? And if so, when must the second suit be filed and who must be named as defendants?

¶ 44. In almost all the corporate-veil-piecing cases in Mississippi, the plaintiff brought the underlying contract or tort claim in the same action as the veil-piercing claim. E.g., Penn Nat’l Gaming, 954 So.2d at 431-32 (¶¶ 7-10) (naming parent company in tort action against subsidiary). But Mississippi law has not required a plaintiff to do so. See Buchanan, 957 So.2d at 971-72, 980 (¶¶ 3-6, 42) (addressing merits of veil-piercing claim against parent company of employer in second suit for bad faith refusal to pay workers’ compensation benefits); Stanley v. Mississippi State Pilots Gulfport, Inc., 951 So.2d 535 (Miss.2007) (allowing bankruptcy trustee to pierce the corporate veil of bankrupt corporation to recovery judgment debt obtained against corporation in prior suit). Thus, we hold: (1) a second suit is permissible; (2) once an underlying judgment is obtained against the corporation or LLC, the judgment debtor corporation or LLC does not have to be named in the second suit; and (3) the statute of limitations for the second suit begins to run from the date the judgment is rendered in the first suit.

A. Res Judicata and Collateral Estoppel

¶ 45. Restaurant of Hattiesburg, Schafer, and Brick argue the doctrines of res judicata and collateral estoppel bar a second suit. They contend, because the veil-piercing claim could have been brought in the first suit, HRS is now barred from asserting the claim in the second suit. See Hill v. Carroll County, 17 So.3d 1081, 1085 (¶ 10) (Miss.2009) (citation omitted) (holding, when the four identities of res judicata are established, “any claims that could have been brought in the prior action are barred”).

¶ 46. In a factual scenario similar to this one — where a successful judgment creditor who later learned the judgment debtor corporation transferred all of its assets to its sole shareholder — the Alabama Supreme Court rejected the shareholder’s res judicata argument. Backus v. Watson, 619 So.2d 1342, 1344-45 (Ala.1993). Mississippi’s res judicata doctrine is similar to Alabama’s, which bars not only claims that were litigated but also those that “could have been litigated in the former suit.” Id. at 1344 (quoting McGruder v. B & L Constr. Co., 331 So.2d 257, 259 (Ala.1976)). Like HRS, Mary Backus claimed it was not until she tried to collect her judgment that she learned the corporate owner was ignoring the separate corporate existence. Id. The Alabama court held:

Backus’s present action against [the shareholder] Watson was based on a cause of action entirely different from the one on which her action against the club was based, and in the present action she sought to litigate an issue that was not litigated, and could not have been litigated, under the pleadings in her action against the club, even though Watson appeared at the trial of that action and apparently participated in the club’s defense. The litigation of the central issue presented in this action— whether the club was operated as Watson’s alter ego and, therefore, whether the “corporate veil” should be pierced— has not been foreclosed by a previous judgment binding as between these parties. Therefore, the trial court could not have properly relied on the doctrine of res judicata as a basis for its judgment.

Backus, 619 So.2d at 1344-45 (internal citations omitted).

¶ 47. Mississippi law confirms, as in Backus, res judicata does not bar HRS’s veil-piercing claim. “[T]he doctrine of res judicata requires four identities to be present before it applies: (1) identity of the subject matter of the action; (2) identity of the cause of action; (3) identity of the parties to the cause of action; and (4) identity of the quality or character of a person against whom the claim is made.” Hill, 17 So.3d at 1085 (¶ 10). And “the absence of any one of the elements is fatal to the defense of res judicata.” Id. (quoting Estate of Anderson v. Deposit Guar. Nat’l Bank, 674 So.2d 1254, 1256 (Miss.1996)).

¶ 48. Here, we find no identity of the cause of action, which is “the underlying facts and circumstances upon which a claim has been brought.” Id. at 1085 (¶ 13) (citing Black v. City of Tupelo, 853 So.2d 1221, 1225 (¶ 11) (Miss.2003)). The facts and circumstances HRS asserted to support its claim for payment in the first suit are not the same as those asserted in support of its veil-piercing claim. Section I of this opinion discusses the factual disputes surrounding the second suit — the effect of sharing SouthEastern’s bank account, Schafer and Brick’s maintenance of corporate records, and the relationship of the three LLCs. The first suit was not based on any of these facts but instead was limited to HRS’s undisputed delivery of restaurant supplies and non-payment by Restaurant of Jackson and/or SouthEastern. In fact, a circumstance key to HRS’s fraud claim — Restaurant of Hattiesburg’s opening a separate bank account — did not occur until after the first suit was filed. With no identity of the cause of action, the second suit is not barred by res judicata. Id. at 1085 (¶ 10).

¶ 49. “Collateral estoppel precludes parties from relitigating issues that are actually litigated, determined by, and essential to the judgment in a former action, even though a different cause of action is the subject of the subsequent action.” Richardson v. Audubon Ins. Co., 948 So.2d 445, 449-50 (¶ 14) (Miss.Ct.App.2006) (citing Hollis v. Hollis, 650 So.2d 1371, 1377 (Miss.1995)). The only issue actually litigated in the first suit was Restaurant of Jackson and SouthEastern’s liability for the entire amount of HRS’s invoices plus services charges. Collateral estoppel, as applied in the second suit, merely prevents Restaurant of Hattiesburg, Schafer, and Brick from denying Restaurant of Jackson and SouthEastern are liable for the underlying judgment debt. It does not impact the issue of whether Restaurant of Hattiesburg, Schafer, and Brick should be also be held liable for this judgment debt under a veil-piercing theory because this issue was not litigated in the first suit.

B. Statute of Limitations and Laches

¶ 50. Restaurant of Hattiesburg, Schafer, and Brick argue the three-year statute of limitations for open accounts applies in this case. Miss.Code Ann. § 15-1-29 (Rev.2003) (requiring an action on an open account must be filed within three years after the cause of action accrued). And because the cause of action on Restaurant of Jackson’s account accrued by February 2006, they argue HRS’s second suit to recover from them for the open account, filed in November 2009, is barred. They also assert laches, arguing HRS had the right to discovery in the first suit and could have asserted a veil-piercing claim in that action. See Cannada v. Marlar, 185 So.2d 649, 651 (Miss.1966) (defining laches as the “omission to assert a right for an unreasonable and unexplained length of time, under circumstances prejudicial to adverse party”) (quotations and citation omitted).

¶ 51. HRS emphasizes the need to pierce the corporate veils of Restaurant of Jackson and SouthEastern did not arise until after it obtained that judgment in October 2007. Because its second suit was to collect the judgment from the first suit, HRS argues the seven-year statute of limitations for actions “founded on any judgment” applies. Miss.Code Ann. § 15 — 1—43 (Rev.2003) (requiring an action “founded on any judgment or decree rendered by any court of record in this state” must be brought within seven years next after the judgment or decree is rendered or last renewed).

¶ 52. We find HRS’s view to be correct one:

In order to determine whether the corporation veil should be pierced, the corporation must first be assumed liable. An attempt to pierce the corporate veil is not itself a cause of action but rather is a means of imposing liability on an underlying cause of action, such as a tort or breach of contract.

1 Fletcher, Cyclopedia of the Law of Corporations § 41.28, at 166-67 (Rev.2006). Here, HRS’s veil-piercing claim was not a direct action to recover on the open account but instead a derivative action based on the judgment against Restaurant of Jackson and SouthEastern. Because the purpose of HRS’s subsequent veil-piercing action is to collect the judgment debt, the seven-year statute of limitations applies and does not bar HRS’s 2009 suit. Miss. Code Ann. § 15-1-43; see Backus, 619 So.2d at 1343-44 (applying statute of limitations for collecting a judgment).

¶ 53. Regarding HRS’s laches argument, we agree discovery in the first case could have led to HRS naming Schafer, Brick, or Restaurant of Hattiesburg as one of the “John Does 1-10” in their complaint. But we decline to hold HRS should have used discovery in the first suit to learn how Schafer and Brick handled the finances of the three LLCs and its failure to do so adversely prejudices Restaurant of Hattiesburg, Schafer, and Brick. If anything, waiting to investigate its debtors post-judgment created a practical problem for HRS, which has to prove its contractual expectations were frustrated because it expected at the time it sold the supplies to Restaurant of Jackson that the family of LLCs and their owners would be liable for the debt. But this is an issue of proof to be determined by the trier of fact on remand and not a procedural bar.

C. Necessary Parties

¶ 54. Finally, Restaurant of Hat-tiesburg, Schafer, and Brick argue Restaurant of Jackson and SouthEastern were “necessary and indispensable parties” in the second suit and HRS’s failure to name them as defendants is fatal to its claim. See M.R.C.P. 19 (joinder of necessary parties); M.R.C.P. 21 (misjoinder and non-joinder). Specifically, they claim for HRS to succeed, it has to show the three Gray prongs “are present as to companies, i.e., that Restaurant of Jackson, LLC and SouthEastern Restaurants, LLC confused contractual expectations, disregarded corporate formalities, and committed fraud.” But a plain reading of Gray shows it is the actions of Restaurant of Hattiesburg, Schafer, and Brick that the circuit court must scrutinize to determine if they should be held liable for Restaurant of Jackson and SouthEastern’s judgment debt. Gray, 541 So.2d at 1047-48 (finding no evidence Gray looked to corporate owners for performance and no evidence corporate owners committed fraud). Restaurant of Jackson and SouthEastern already have a final judgment against them for the debt. This issue was not appealed. So even if they had been named in the second suit, they would be estopped from denying their liability. Because the issue in the second suit is Restaurant of Hattiesburg, Schafer, and Brick’s liability for the judgment debt, we find HRS included all necessary parties in its veil-piercing action. M.R.C.P. 19(a).

CONCLUSION

¶ 55. While there is no procedural barrier to HRS’s suit to pierce the veil of its judgment creditors, we find HRS was not entitled to summary judgment under Rule 56(c). Thus, we reverse the summary judgment awarded in HRS’s favor and remand this case for further proceedings consistent with this opinion. We affirm the denial of summary judgment in Restaurant of Hattiesburg, Schafer, and Brick’s favor.

¶ 56. THE JUDGMENT OF THE LAMAR COUNTY CIRCUIT COURT IS AFFIRMED IN PART AND REVERSED AND REMANDED IN PART FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLEE.

LEE, C.J., GRIFFIS, P.J., ISHEE, ROBERTS AND FAIR, JJ., CONCUR.

IRVING, P.J., BARNES AND RUSSELL, JJ., CONCUR IN PART AND IN THE RESULT.

CARLTON, J., CONCURS IN RESULT ONLY.

      . On January 1, 2011, the Revised Mississippi Limited Liability Company Act went into effect. The Revised LLC Act, which was not in place during this action, was adopted to provide greater clarity of existing LLC statutory requirements, to set up more default rules for LLCs without operating agreements, and to incorporate language from Delaware’s LLC Act to enable Mississippi courts to look to Delaware law when interpreting the Mississippi’s Revised LLC Act. See Miss.Code Ann. §§ 79-29-101 to -1317 (Supp.2011). Mississippi Code Annotated section 79-29-305(1) (Rev.2009) was amended and re-codified as Mississippi Code Annotated section 79-29-311(1) (Supp.2011). The new code section provides a member cannot be personally liable for an LLC debt "solely by reason of being a member[.]" Miss.Code Ann. § 79-29-311(1) (Supp.2011) (emphasis added).

      . Further, we note in Thames the Mississippi Supreme Court did not pierce the corporate veil under Gray but instead found Rogers personally liable as the agent of an undisclosed principal. Thames, 373 So.2d at 1035.

      . See Sections II.A and II.B, infra.

      . Though the evidence does not support a veil-piercing claim against Schafer and Brick, we do not render summary judgment in their favor. Rule 56 states summary judgment shall be granted if the evidence "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” M.R.C.P. 56(c) (emphasis added). Schafer and Brick were not the “moving party” for summary judgment based on the evidence. Instead, they merely opposed HRS’s motion for summary judgment, arguing the facts supporting HRS's veil-piercing claim were disputed. This court cannot sua sponte grant summary judgment on a basis not raised by the moving party. Peavey Electronics Corp. v. Baan U.S.A., Inc., 10 So.3d 945, 956-57 (¶¶ 25-27) (Miss.Ct.App.2009).

      . Restaurant of Hattiesburg, Schafer, and Brick urge us to view the circuit court’s ruling in the second suit as an improper sanction for failure to produce financial records at the judgment-debtor exam for the first suit. But we find the circuit court merely considered this circumstance in his Gray analysis, and this record withholding is insufficient in itself to prove disregard of LLC formalities.


source: Caselaw Access Project

author: SMITH, Justice.

license: Public Domain

text:
    Ex parte Jackie COLLINS. (In re Jackie Collins v. Alabama Department of Corrections).
    1091310.
    Supreme Court of Alabama.
    Nov. 24, 2010.
    Jackie Collins, pro se.
    Kim T. Thomas, gen. counsel, and Bart Harmon, asst. gen. counsel, Alabama Department of Corrections-Legal Division, for respondent.
   SMITH, Justice.

Jackie Collins petitioned this Court for a writ of certiorari to review whether the Court of Criminal Appeals erred in affirming the trial court’s dismissal of his petition for a writ of certiorari filed in the Montgomery Circuit Court. We granted certiorari review. For the reasons discussed below, we reverse the judgment of the Court of Criminal Appeals.

I.Facts and Procedural History

In June 2009, Collins, an inmate at the Limestone Correctional Facility, filed a petition for a writ of certiorari with the Montgomery Circuit Court challenging his custody reclassification by the Alabama Department of Corrections (“the DOC”). Collins specifically alleged that in altering his classification status the DOC denied him his due-process rights. In response, the DOC filed a “motion to dismiss, or in the alternative, motion for summary judgment,” contending that the petition was due to be dismissed because, it said, Collins did not have a liberty interest in a particular custody classification. The circuit court granted the DOC’s motion stating in its order that “[a]n inmate does not have a liberty interest in a particular classification” and that “[Collins’s] classification is appropriate according to [the DOC’s] rules and regulations.”

Collins then appealed that judgment to the Court of Criminal Appeals. That court affirmed the circuit court’s judgment, by an unpublished opinion. See Collins v. Alabama Dep’t of Corr., (No. CR-09-0529, May 7, 2010) 77 So.3d 631 (Ala.Crim.App.2010) (table). Collins petitioned this Court for a writ of certiorari to review the Court of Criminal Appeals’ affirmance of the judgment of the circuit court. We granted Collins’s petition to address whether the decision of the Court of Criminal Appeals conflicts with Smith v. State, 918 So.2d 141, 147 (Ala.Crim.App.2005).

II.Standard of Review

“ ‘This Court reviews pure questions of law in criminal cases de novo.’ ” Ex parte Morrow, 915 So.2d 539, 541 (Ala.2004) (quoting Ex parte Key, 890 So.2d 1056, 1059 (Ala.2003)).

III.Discussion

In affirming the circuit court’s dismissal of Collins’s petition, the Court of Criminal Appeals, in its unpublished memorandum, stated: “Because [Collins’s] petition for a writ of certiorari was not verified, his case was not properly commenced, and there is not anything before this court for our review. See, e.g., Ex parte Ackles, 840 So.2d 145 (Ala.2002). Accordingly, we affirm the circuit court’s judgment.” This conclusion is based upon § 6-6-640(a), Ala.Code 1975, which provides:

“All applications for mandamus, prohibition, certiorari, or other remedial writ of a supervisory nature shall be commenced by a petition, verified by affidavit, in which the facts shall be stated as briefly and succinctly as the case will admit of, and any defendant may answer as to all such matters as may be necessary to his defense; any of the pleadings in such proceedings may be amended as often as occasion may require to attain the ends of justice and by striking out parties and adding new parties; and upon the issues thus presented, the court shall award the relief, if any, to which the petitioner is entitled.”

Further, the Court of Criminal Appeals in its memorandum cites Ex parte Ackles, 840 So.2d 145 (Ala.2002), in which this Court denied a petition seeking a writ of mandamus instructing a circuit court to vacate its dismissal of a petition for a writ of mandamus “on the ground that the petition for a writ of mandamus filed in the ... Circuit Court was not verified by affidavit as required by § 6-6-640(a), Ala. Code 1975.” 840 So.2d at 146.

The Court of Criminal Appeals sua sponte raised the issue whether Collins had verified his petition for a writ of cer-tiorari filed in the circuit court; the DOC did not raise this issue in the circuit court. Therefore, the Court of Criminal Appeals implicitly treated the verification requirement in § 6-6-640(a), Ala.Code 1975, as a jurisdictional requirement that could be raised at any time. See generally Ex parte V.S., 918 So.2d 908, 912 (Ala.2005) (“It is well settled that lack of subject-matter jurisdiction can be raised at any time by the parties or by the court ex mero motu.”); Waite v. Waite, 959 So.2d 610, 612-13 (Ala.2006) (holding that affirmative defenses that are not jurisdictional in nature may not be raised sua sponte by an appellate court). In sum, the Court of Criminal Appeals affirmed the circuit court’s dismissal of Collins’s petition on the ground that Collins’s failure to verify his petition for a remedial writ in accordance with § 6-6-640(a), Ala.Code 1975, deprived the circuit court of subject-matter jurisdiction to entertain the petition.

Collins contends that the Court of Criminal Appeals’ implicit holding that the verification requirement in § 6-6-640(a), Ala. Code 1975, is a jurisdictional requirement conflicts with that court’s decision in Smith v. State, 918 So.2d 141 (Ala.Crim.App.2005). In Smith, the Court of Criminal Appeals addressed whether a petitioner’s failure to verify a Rule 32, Ala. R.Crim. P., petition for postconviction relief constitutes a jurisdictional defect. In language similar to § 6-6-640(a), Rule 32.6(a), Ala. R.Crim. P., states, in part:

“A proceeding under [Rule 32, Ala. R.Crim. P.,] is commenced by filing a petition, verified by the petitioner or the petitioner’s attorney, with the clerk of the court. A petition may be filed at any time after entry of judgment and sentence (subject to the provisions of Rule 32.2(c)). The petition should be filed by using or following the form accompanying this rule. If that form is not used or followed, the court shall return the petition to the petitioner to be amended to comply with the form.... ”

In Smith the Court of Criminal Appeals held that “proper verification of a Rule 32 petition, although required by Rule 32.6(a), is not a jurisdictional prerequisite to the filing of the petition and, accordingly, that the lack of proper verification does not deprive the circuit court of subject-matter jurisdiction of a Rule 32 petition.” 918 So.2d at 154. That court explained that “the verification requirement is more appropriately a matter of form, the omission or inadequacy of which amounts to an irregularity that is subject to cure by a proper and timely amendment, and may be waived by the State if not properly raised.” Smith, 918 So.2d at 153. In reaching this conclusion, the Court of Criminals Appeals considered Alabama caselaw holding that the verification requirement for a petition for a writ of habe-as corpus set out in § 15-21-4, Ala.Code 1975, is not a jurisdictional prerequisite. See Smith, 918 So.2d at 146 (citing 29 Ala. Digest 2d Habeas Corpus § 673 (2002)). Further, the Court of Criminal Appeals noted in Smith that “[i]t appears to be the general rule ... that, even when verification of a civil pleading is required by law, in the absence of a clear indication to the contrary, it is not treated as an indispensable part of the pleading so that the lack of verification must be deemed to vitiate a court’s subject-matter jurisdiction.” 918 So.2d at 147 (quoting 61B Am.Jur.2d Pleading § 888 (1999) for the proposition that “Verification of a pleading is not a jurisdictional requirement, and want of verification is not a jurisdictional defect”).

The DOC contends that the decision of the Court of Criminal Appeals to affirm the circuit court’s dismissal of Collins’s petition does not conflict with Smith because, it says, “the language requiring verification in Alabama Code [1975,] § 6-6-640, construed in Ackles, is stronger than the language in Rule 32.6, [Ala. R.Crim. P.,] which was construed in Smith.” The DOC’s brief, at p. 9 (emphasis original). Specifically, the DOC contends that § 6-6-640(a) “connotes a more stringent requirement,” because, it reasons, § 6-6-640(a) includes the mandatory language that remedial writs “shall be commenced by a petition, verified by affidavit,” whereas Rule 32.6, Ala. R.Crim. P., states that “[a] proceeding under [Rule 32, Ala. R.Crim. P.,] is commenced by filing a petition, verified by the petitioner or the petitioner’s attorney.” (Emphasis added.) We see no merit to the DOC’s contentions that the difference between the language of § 6-6-640(a) and Rule 32.6(a), Ala. R.Crim. P., renders the general holding in Smith— that the requirement that a pleading be verified is not jurisdictional in nature— inapplicable to the present case.

Additionally, in Ex parte Ackles this Court did not specifically discuss the issue whether proper verification of a petition for a remedial writ under § 6-6-640(a), Ala.Code 1975, is a jurisdictional prerequisite. In that case, an inmate petitioned this Court for a writ of mandamus directing the circuit court to vacate its dismissal of the inmate’s petition for a writ of mandamus filed in the circuit court. 840 So.2d at 146. As stated earlier, this Court denied the inmate’s petition “on the ground that the petition for a writ of mandamus filed in the ... Circuit Court was not verified by affidavit as required by § 6-6-640(a), Ala.Code 1975.” Ex parte Ackles, 840 So.2d at 146. This Court’s decision in Ex parte Ackles does not state whether, in the circuit court, the respondent party challenged the inmate’s petition on the basis that it was not verified by affidavit. Therefore, we do not know whether this Court sua sponte raised the lack of verification as a jurisdictional prerequisite. Nevertheless, the DOC contends that “to the extent that Smith, a Court of Criminal Appeals opinion, is in conflict with this Court’s opinion in Ackles, it is Smith that must [be] overruled and not Ackles.” The DOC’s brief, at p. 10.

After this Court’s decision in Ex parte Ackles and the Court of Criminal Appeals’ decision in Smith, this Court, in Ex parte Seymour, 946 So.2d 536 (Ala.2006), held that a conviction based upon an indictment that omitted an element of offense was not void for lack of subject-matter jurisdiction. See Ex parte Sey mour, 946 So.2d at 538. In so holding, this Court explained that “[s]ubject-matter jurisdiction concerns a court’s power to decide certain types of cases.” Ex parte Seymour, 946 So.2d at 538. Further, “[a court’s] power is derived from the Alabama Constitution and the Alabama Code.” Id. (citing United States v. Cotton, 535 U.S. 625, 630-31, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002)). Therefore, whether a circuit court has subject-matter jurisdiction over a case is determined by inquiring as to whether the circuit court has the requisite constitutional or statutory authority over the case. See id.'

The Alabama Constitution provides that the circuit court has original jurisdiction over all cases, except as limited by the legislature.

“In December 1973, the citizens of this state ratified a constitutional amendment revising the entire Judicial Article (Article VI) of the Alabama Constitution of 1901. See Annotations to Ala. Const. amend. 328. This amendment ‘mandated a unified [judicial] system,’ Cowin Equipment Co. v. Robison Mining Co., 342 So.2d 910, 912 (Ala.1977), ‘consisting] of a supreme court, a court of criminal appeals, a court of civil appeals, a trial court of general jurisdiction known as the circuit court, a trial court of limited jurisdiction known as the district court, a probate court and such municipal courts as may be provided by law.’ Ala. Const. amend. 328, § 6.01(a) (emphasis added).”

Henderson v. State, 616 So.2d 406, 407-08 (Ala.Crim.App.1993). Article VI, § 142, Ala. Const, of 1901 (Off.Recomp.) (formerly § 6.04, Amend. No. 328), further sets out the basic jurisdiction of the circuit court, as follows:

“The circuit court shall exercise general jurisdiction in all cases except as may otherwise be provided by law. The circuit court may be authorized to review decisions of state administrative agencies and decisions of inferior courts. It shall have authority to issue such writs as may be necessary or appropriate to effectuate its powers, and shall have such other powers as may be provided by law.”

(Emphasis added.) The legislature, in § 41-22-20, Ala.Code 1975, utilized this section of the Alabama Constitution to authorize judicial review by the circuit court of final decisions of administrative agencies. Specifically, § 41-22-20, Ala.Code 1975, provides that “[a] person who has exhausted all administrative remedies available within the agency” may seek judicial review of a administrative decision by filing a petition for a writ of certiorari

“in the Circuit Court of Montgomery County or in the circuit court of the county in which the agency maintains its headquarters, or unless otherwise specifically provided by statute, in the circuit court of the county where a party[,] other than an intervenor, resides or if a party, other than an intervenor, is a corporation, domestic or foreign, having a registered office or business office in this state, then in the county of the registered office or principal place of business within this state.”

§ 41-22-20(a) and (b), Ala.Code 1975. Section 41-22-20(h), Ala.Code 1975, further provides:

“The petition for review shall name the agency as respondent and shall contain a concise statement of:
“(1) The nature of the agency action which is the subject of the petition;
“(2) The particular agency action appealed from;
“(3) The facts and law on which jurisdiction and venue are based;
“(4) The grounds on which relief is sought; and
“(5) The relief sought.”

Notably, the requirement that the petition for the writ of certiorari filed in the circuit court be verified by affidavit is found in § 6-6-640, not § 41-22-20.

We hold that the verification requirement in § 6-6-640(a), Ala.Code 1975, for petitions for writs of mandamus, prohibition, certiorari, or other remedial writs is purely a procedural requirement, not a jurisdictional requirement, because the verification of the petition does not limit the power of the circuit court to adjudicate the petition. If the respondent to the petition properly raises the verification requirement in the circuit court, the petition “may be amended as often as occasion may require to attain the ends of justice....” § 6-6-640(a), Ala.Code 1975. However, if the respondent does not properly raise the verification requirement in the circuit court, that issue is waived.

Here, Collins’s petition for a writ of certiorari was properly within the subject-matter jurisdiction of the circuit court, and Collins’s failure to verify the petition by affidavit could not deprive the circuit court or the Court of Criminal Appeals of the power to adjudicate the case. See Ex parte Seymour, 946 So.2d at 538. Accordingly, the Court of Criminal Appeals erred in concluding that, because Collins had not verified his petition for certiorari review, “his case was not properly commenced, and there is not anything before this court for our review.” To the extent that Ex parte Ackles is inconsistent with our holding today, that case is hereby overruled.

Conclusion

For these reasons, we reverse the judgment of the Court of Criminal Appeals and remand this cause for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

COBB, C.J., and LYONS, WOODALL, STUART, BOLIN, PARKER, MURDOCK, and SHAW, JJ., concur.

      . Notably, although § 6-6-640, Ala.Code 1975, is not listed in Appendix II to the Alabama Rules of Appellate Procedure among the statutes superseded by the Alabama Rules of Appellate Procedure, this Court has held that a petition for a writ of mandamus filed in an appellate court need not be verified. See Ex parte Johnson, 485 So.2d 1098, 1106 (Ala.1986) ("[W]e hold that the verification requirement of § 6-6-640 does not apply as to mandamus petitions governed by the Alabama Rules of Appellate Procedure....").

      . Section 15-21-4, Ala.Code 1975, provides:
      "Application for a writ of habeas corpus must be made by petition, signed either by the party himself for whose benefit it is intended or by some other person on his behalf, must be verified by the oath of the applicant to the effect that the statements therein contained are true to the best of his knowledge, information and belief and must state, in substance, the name of the person on whose behalf the application is made, that he is imprisoned or restrained of his liberty in the county, the place of such imprisonment, if known, the name of the officer or person by whom he is so imprisoned and the cause or pretense of such imprisonment; and, if the imprisonment is by virtue of any warrant, writ or other process, a copy thereof must be annexed to the petition or the petition must allege that a copy thereof has been demanded and refused or must show some sufficient excuse for the failure to demand a copy.”

       Note from the reporter of decisions: On August 19, 2011, on remand from the Alabama Supreme Court, the Court of Criminal Appeals affirmed, without opinion (CR-09-0529). On September 9, 2011, that court denied rehearing, without opinion. On November 10, 2011, the Supreme Court denied certiorari review, without opinion (1101533).


author: PER CURIAM.

text:
    Ex parte TELLABS OPERATIONS, INC. (In re Tellabs Operations, Inc. v. City of Bessemer).
    1100393.
    Supreme Court of Alabama.
    Aug. 12, 2011.
    Rehearing Denied Nov. 10, 2011.

      Blake A. Madison and David E. Rains of Rosen Harwood, P.A., Tuscaloosa, for petitioner.
    J. Bentley Owens III and Benjamin T. Presley of Starnes Davis Florie, LLP, Birmingham, for respondent.
   PER CURIAM.

Tellabs Operations, Inc. (“Tellabs”), petitions this Court for a writ of mandamus directing the Montgomery Circuit Court to vacate its order transferring the underlying appeal of an administrative agency’s decision in a taxpayer’s refund action to the Jefferson Circuit Court. We grant the petition and issue the writ.

I. Facts and Procedural History

Tellabs is a global provider of communications equipment and services that has conducted business in Alabama by making sales to customers in Alabama, including customers located in Bessemer. It is undisputed that Tellabs is a foreign corporation with no principal place of business in Alabama. In the course of doing business with customers in Bessemer, Tellabs paid sales taxes to the City of Bessemer (“Bessemer”). Tellabs alleges that it overpaid sales taxes to Bessemer for a period between January 2004 and June 2004, totaling $235,790, including accrued interest.

On September 18, 2007, Tellabs petitioned for a refund of the allegedly overpaid sales taxes. Tellabs’s petition was denied on July 9, 2008. Following an administrative appeal and hearing, that decision was upheld on September 16, 2010.

On October 18, 2010, Tellabs appealed from the denial of its refund petition to the Montgomery Circuit Court pursuant to the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, § 40-2A-1 et seq., Ala.Code 1975, also known as the Taxpayers’ Bill of Rights (“the TBOR”). In its complaint to the Montgomery Circuit Court, Tellabs invoked the jurisdiction of the court based on § 40-2A-9(g)(l)a., Ala.Code 1975.

On November 15, 2010, Bessemer filed a motion to dismiss or, in the alternative, for a change of venue, in which it argued that venue was improper in Montgomery County pursuant to § 6-3-11, Ala.Code 1975, that venue was proper in Jefferson County, and that the case should be transferred to Jefferson County. Without holding a hearing on the motion, the Montgomery Circuit Court, on November 30, 2010, entered an order transferring the appeal to the Birmingham Division of the Jefferson Circuit Court.

On December 8, 2010, Tellabs filed with the Montgomery Circuit Court a motion to reconsider the order transferring the appeal. In a telephone conference with counsel for the parties on December 16, 2010, Circuit Judge William Shashy informed the parties that he believed he had erred in transferring the appeal, but that the Montgomery Circuit Court had lost jurisdiction of the case, and therefore Tel-labs’s only remedy was to petition this Court for a writ of mandamus. Accordingly, on December 30, 2010, Tellabs filed the present petition.

II. Standard of Review

We first note that Judge Shashy was correct in stating that, upon his transfer of the case to the Jefferson Circuit Court, the Montgomery Circuit Court lost jurisdiction of it. As this Court explained in Ex parte Chapman Nursing Home, Inc., 903 So.2d 813, 815 (Ala.2004):

“ ‘Once the transferor court has granted the motion to transfer the case and the file has been sent to, and docketed by, the transferee court, the transferor court cannot then change its mind and vacate or set aside its transfer order or order the case returned.’ Ex parte MedPartners, Inc., 820 So.2d 815, 821 (Ala.2001). The transferee court, likewise, cannot ‘retransfer’ the case to the county in which it was originally filed. Ex parte Tidwell Indus., Inc., 480 So.2d 1201 (Ala.1985). ‘The aggrieved party’s sole remedy in such a case is a petition for writ of mandamus directed to the transferor court.’ MedPartners, 820 So.2d at 821.”

As to the standard for this Court’s consideration of the mandamus petition, we have stated:

“ ‘A petition for a writ of mandamus is the proper means for challenging an order transferring an action to another county.’ Ex parte Miller, Hamilton, Snider & Odom, LLC, 978 So.2d 12, 13-14 (Ala.2007) (citing Ex parte Wilson, 854 So.2d 1106, 1109 (Ala.2002)). “‘Mandamus is an extraordinary remedy and will be granted only when there is ‘(1) a clear legal right in the petitioner to the order sought, (2) an imperative duty on the respondent to perform, accompanied by a refusal to do so, (3) the lack of another adequate remedy, and (4) properly invoked jurisdiction of the court.’ ” ’ Ex parte Flowers, 991 So.2d 218, 220 (Ala.2008) (quoting Ex parte Dillard Dep’t Stores, Inc., 879 So.2d 1134, 1136 (Ala.2003), quoting in turn Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala.1991)).”

Ex parte AIG Baker Orange Beach Wharf, L.L.C., 12 So.3d 1204, 1207 (Ala.2009) (footnote omitted).

III. Analysis

In General Motors Acceptance Corp. v. City of Red Bay, 894 So.2d 650 (Ala.2004), this Court concluded that, although “[t]he requirements of the TBOR were directed initially to the [Alabama] Department [of Revenue],” “the Local Tax Simplification Act of 1998, Act No. 98-192, Ala. Acts 1988 (‘the LTSA’), made the TBOR equally applicable to tax assessments and tax-collection procedures by local taxing authorities.” 894 So.2d at 653. See also Russell Petroleum, Inc. v. City of Wetumpka, 976 So.2d 428, 437 (Ala.2007) (noting that, “[considering the TBOR (including a 1998 amendment thereto now codified at § 40-2A-13) and the LTSA in their entirety,” the Red Bay Court held that “ ‘[the LTSA] made the TBOR equally applicable to tax assessments and tax-collection procedures by local taxing authorities such as [municipalities and counties]’ ” (quoting Red Bay, 894 So.2d at 653)); Pittsburg & Midway Coal Mining Co. v. Tuscaloosa County, 994 So.2d 250, 258 (Ala.2008) (observing that “[t]his Court in Red Bay held that the LTSA made the administrative-appeal procedures in the TBOR ‘equally applicable to tax assessments and tax-collection procedures by local taxing authorities’”). In this case, Bessemer concedes the applicability of the TBOR, and Tellabs purported to appeal the decision denying its request for a refund pursuant to § 40-2A-9(g)(1)a., Ala.Code 1975, part of the TBOR. We address the mandamus petition before us accordingly.

Section 40-2A-9(g)(l)a. provides:
“(g) Appeals to circuit court.
“(l)a. Either the taxpayer or the department may appeal to circuit court from a final order issued by the administrative law judge by filing a notice of appeal with the Administrative Law Division and with the circuit court within BO days from the date of entry of the final order. Any appeal by the department shall be filed with the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama. If the taxpayer neither resides in Alabama nor has a principal place of business in Alabama, the appeal may be made to the Circuit Court of Montgomery County, Alabama. Any appeal by the taxpayer may be taken to the Circuit Court of Montgomery County, Alabama, or to the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama.”

Before we address Tellabs’s argument concerning the proper venue for its appeal to the circuit court, it is necessary to examine a threshold issue of subject-matter jurisdiction raised by Bessemer for the first time in this Court. Bessemer notes that § 40-2A-9(g)(l)a. requires that a notice of appeal must be filed “with the Administrative Law Division and with the circuit court within 30 days from the date of entry of the final order.” Bessemer contends that Tellabs failed to appeal in a timely manner and cites several Alabama cases holding that failure to comply with the requirements of § 40-2A-9(g)(l)a. constitutes a jurisdictional defect that de-prives the circuit court of jurisdiction to hear the appeal in question. See, e.g., Alabama Dep’t of Revenue v. Morton, 892 So.2d 940, 943 (Ala.Civ.App.2004) (concluding that “[bjecause the taxpayers ‘failed to comply with the requirements of § 40-2A-9(g)(1), the trial court lacked jurisdiction over [their] appeal, and its judgment is void.’” (quoting State Dep’t of Revenue v. Garner, 812 So.2d 380, 385 (Ala.Civ.App.2001))).

Tellabs filed notice of its appeal to the Montgomery Circuit Court on October 18, 2010, 32 days after the entry of the final order. Tellabs notes that the 30th day following the entry of the final order was a Saturday and that the circuit court’s offices were closed until the next business day, Monday, October 18, 2010. Tellabs argues that under § 1-1-4, Ala.Code 1975, its appeal was timely. We agree.

Section 1-1-4 provides, in pertinent part:

“Time within which any act is provided by law to be done must be computed by excluding the first day and including the last. However, if the last day is Sunday, or a legal holiday ..., or a day on which the office in which the act must be done shall close as permitted by any law of this state, the last day also must be excluded, and the next succeeding secular or working day shall be counted as the last day within which the act may be done.”

Alabama courts previously have held that filing deadlines provided by statute are to be read in pari materia with § 1-1-4, Ala.Code 1975.

“The appellate courts of this state have already held that this statutory method [provided in § 1-1-4] for computing time applies to a number of statutory periods for filing pleadings or other documents.
“In Ex parte United States Hoffman Machinery Co., 270 Ala. 337, 341, 118 So.2d 914, 918 (1960), the Alabama Supreme Court relied upon the predecessor to § 1-1-4 in holding that, where the last day of the thirty-day period for filing a motion for new trial fell on Saturday and the office of the clerk was closed that day, the motion ‘was filed within due time when it was filed the following Monday....’
“More recently, this court has held that § 1-1-4 applies to and must be read in pan materia with the ten-day statute of limitations for filing a complaint in the circuit court claiming unemployment compensation benefits. Taylor v. Department of Industrial Relations, 409 So.2d 447 (Ala.Civ.App.1982). Thus, where the last day of the ten-day period fell on a legal holiday, the claimant was allowed to file her complaint the next day.
“We find that § 1-1-4 is equally applicable to the one-year statute of limitations for filing a workmen’s compensation complaint in the circuit court. Under the method for computing time set forth in § 1-1-4, the one-year period was extended to Monday, March 11, 1985, because Saturday, March 9, 1985, was ‘a day on which the office in which the act must be done’ (the filing of the complaint) was closed, and March 11, 1985, was the ‘next succeeding secular or working day.’ See § 1-1-4.”

Young v. Michael Dwain Mfg., Inc., 504 So.2d 287, 288-89 (Ala.Civ.App.1986). We see no reason not to read § 1-1-4 in pari materia with § 40-2A-9(g)(l)a. Therefore, because Tellabs could not have filed its appeal on the 30th day due to the offices of the circuit court being closed, its appeal, filed on the next business day, was timely.

We now address the issue of the proper venue for Tellabs’s appeal to the circuit court. Tellabs contends that § 40-2A-9(g)(l)a. governs venue of its appeal and that under that statute the Montgomery Circuit Court is the only proper venue because Tellabs is a foreign corporation that does not have a principal place of business in Alabama. Bessemer counters that § 6-3-11, Ala.Code 1975, establishes the proper venue for Tellabs’s appeal and that, under that statute, the Jefferson Circuit Court is the only proper venue because Bessemer is located in Jefferson County. Section 6-3-11 provides:

“The venue for all civil actions for damages for personal injury, death, or property damage filed against a county or against a municipality shall be in the county or in the county within which the municipality is located or in the county in which the act or omission complained of occurred.”

Bessemer contends that § 6-3-11, rather than § 40-2A-9(g)(l)a., governs based on the authority of Ex parte City of Pelham, 712 So.2d 336 (Ala.1998).

In City of Pelham, Alabama Power Company (“Alabama Power”) appealed to the Jefferson Circuit Court an assessment by the City of Pelham (“Pelham”) of a use tax against Alabama Power. Pelham filed a motion to transfer the action to the Shelby Circuit Court based on § 6-3-11, arguing that the proper venue for the appeal was the county in which the municipality — Pelham—was located. The Jefferson Circuit Court denied the motion. Pelham petitioned this Court for a writ of mandamus to direct the Jefferson Circuit Court to transfer the action to the Shelby Circuit Court. This Court granted the petition, reasoning, in pertinent part, as follows:

“The sole question before us is whether the trial court erred in denying the City’s motion to transfer. The court held that the City has incorporated the ‘Uniform Revenue Procedures Act’ into its municipal tax code. Chapter 2A of Title 40, entitled the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, §§ 40-2A-1 through -11, contains a venue provision allowing the taxpayer to appeal from any final assessment either to the Circuit Court of Montgomery County (‘or to the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama.)’ § 40-2A-7(b)(5)b. Judge Wynn concluded that because of this venue provision, Alabama Power could bring its appeal in Jefferson County.
“The City argues that the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, by the terms of § 40-2A-2, does not apply. The Act states that the ‘legislative intent’ behind the Act was to provide procedures for taxpayers to follow when dealing with the Alabama Department of Revenue. § 40-2A-2(l). We agree that the venue provisions of the Act do not apply here.
“No provision in the Code of Alabama 1975 specifically provides for the proper venue of an appeal of a municipal use tax assessment....
“... This lawsuit is closely analogous to an action for damages against a city. We agree that under the authority of ... § 6-3-11 the proper venue is Shelby County.”

712 So.2d at 337-38 (footnote omitted).

Tellabs argues that City of Pelham no longer constitutes good authority for questions of venue in tax appeals such as this one because subsequent to the release of that decision the legislature enacted the Local Tax Simplification Act, which this Court has held made the provisions of the TBOR applicable to local taxing authorities such as Bessemer. We agree.

City of Pelham was decided March 13, 1998. The Local Tax Simplification Act was signed by the governor on March 18, 1998, and became effective July 1, 1998. This Court first held in Red Bay, decided on June 25, 2004, that the Local Tax Simplification Act made the provisions of the TBOR applicable to local taxing authorities. In so deciding, Red Bay implicitly overruled the holding in City of Pelham that “the venue provisions of the [TBOR] do not apply” to taxpayer appeals to the circuit court of decisions by local taxing authorities. City of Pelham, 712 So.2d at 337. Accordingly, the venue provisions of the TBOR do apply in this case. Therefore, under § 40-2A-9(g)(l)a., the only proper venue for Tellabs’s appeal as a foreign corporation with no principal place of business in Alabama is the Montgomery Circuit Court.

Based on the foregoing, we conclude that the Montgomery Circuit Court erred in transferring this appeal to the Jefferson Circuit Court. We grant the petition for a writ of mandamus and direct the Montgomery Circuit Court to vacate its order of November 30, 2010, transferring this appeal to the Jefferson Circuit Court.

PETITION GRANTED; WRIT ISSUED.

WOODALL, BOLIN, MURDOCK, SHAW, and MAIN, JJ., concur.

      . The petition was submitted to a private, commercial entity known as Revenue Discovery Systems ("RDS”) that had contracted with the City of Bessemer to provide administrative services with respect to tax matters such as those at issue here. This case involves the application of the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, § 40-2A-1 et seq., Ala.Code 1975, to a dispute concerning a tax levied by a municipality. No question is raised and we do not have before us any issue as to whether the applicability of that Act to such disputes, including the mechanisms or time limits pertaining to certain "filings” and other procedures contemplated by that Act, is affected by the fact that a municipality purports to act through a private entity such as RDS rather than through a department or officials or employees of the municipality itself. In fact, both parties take the position that the Act governs this case. Accordingly, for purposes of this opinion, we will treat actions taken by RDS under its contract with the City of Bessemer and related submissions by the parties to RDS to be actions and submissions of and to the City of Bessemer.

      . In addition to filing a notice of appeal with the circuit court, Tellabs "filed” a notice of appeal with the mayor of Bessemer, the acting city clerk of Bessemer, and RDS.

      . Judge Shashy has filed a letter brief with this Court expressing his view that "Montgomery Circuit Court is the only proper venue for Tellabs's appeal of its tax refund denial by the City of Bessemer” and that therefore "it would be appropriate for the Supreme Court to issue the writ and that the Order of November 30, 2010, transferring [the appeal] to Jefferson County should be vacated.”

      . See Ex parte Tuscaloosa Cnty. Special Tax Bd., 963 So.2d 610, 612 n. 1 (Ala.2007) ("To be sure, the TBOR defines 'the department’ as the ‘Alabama Department of Revenue.’ § 40-2A-3(7)[, Ala.Code 1975]. However, the [Tuscaloosa County Special Tax] Board concedes that the TBOR is applicable — and available— as a vehicle ‘to dispute Fayette County’s refund denial.’ ... Thus, for purposes of this mandamus proceeding, we will assume that the TBOR affords a mechanism through which to challenge Fayette County’s refusal to refund use taxes alleged to have been erroneously paid.”).

      . As previously noted, in addition to filing a notice of appeal with the circuit court, Tellabs "filed” a notice of appeal with the mayor of Bessemer, the acting city clerk of Bessemer, and RDS. See supra note 2.