author: STUART, Justice.

text:
    Mark HEISZ and Aegis Strategic Investment Corporation v. GALT INDUSTRIES, INC., et al.
    1100193.
    Supreme Court of Alabama.
    Jan. 6, 2012.
    Rehearing Denied April 13, 2012.

      John G. Dana and Jason E. Gilmore of Gordon, Dana, Knight & Gilmore, LLC, Birmingham, for appellants.
    William H. Webster and William T. Ashley III of Webster, Henry, Lyons, White, Bradwell & Black, P.C., Montgomery, for appellees Galt Industries, Inc., and Jerry Plath.
   STUART, Justice.

Galt Industries, Inc. (“Galt”), a now defunct manufacturer of molded plastic parts located in Lee County, its president Jerry Plath (“Plath”), his wife and former Galt employee Danette Plath (“Danette”), and The Genesis Group, L.L.C. (“Genesis”), a company that markets and represents small and medium-sized businesses, sued Aegis Strategic Investment Corporation (“Aegis”), its sole shareholder, Mark Heisz, assorted other companies allegedly controlled by Heisz, including Stratford Plastic Components Alabama, Inc. (“SPC-Alabama”), and various employees of those companies in the Lee Circuit Court after SPC-Alabama acquired Galt by way of an asset-purchase agreement and then, approximately nine months later, ceased manufacturing operations and failed to fulfill certain terms of the asset-purchase agreement. Following a jury trial, the trial court entered a judgment awarding the plaintiffs in excess of $824,000 and holding the defendants remaining in the action jointly and severally liable for those damages. Heisz and Aegis now appeal. We reverse and remand.

I.

In approximately November 2007, Plath decided to explore selling Galt after rising petroleum costs began eroding the company’s profitability. Toward that end, he contacted Genesis to see if it could procure a buyer. Genesis began marketing the company and thereafter received an inquiry from Aegis, a Canadian corporation. Aegis’s president, Heisz, was also the president of Stratford Plastic Components, LLC, an Ohio corporation (“SPC-Ohio”), and Stratford Plastic Components Corp., a Canadian corporation (“SPC-Ontario”), both of which manufactured plastic parts for automotive manufacturers in Ohio and Ontario, respectively. Heisz was interested in pursuing opportunities in Alabama based on Alabama’s growing presence in the automotive-manufacturing industry. However, after Aegis indicated that it viewed the fair market value of Galt as being approximately $3,000,000, well short of the $5,000,000 asking price, negotiations were terminated.

In approximately July 2008, Plath decided that the need to sell Galt was more urgent because rising supply costs were now threatening not only Galt’s profitability but also its viability. Plath discussed with Genesis his need to sell Galt and Genesis then reinitiated contact with Aegis to determine if it was still interested in purchasing Galt. On August 19, 2008, Aegis made an nonbinding proposal to have it or one of its subsidiaries or affiliates purchase certain Galt assets at a price to be finalized after an examination of Galt’s financial condition; Plath accepted the offer on behalf of Galt the next day. The proposal contemplated a 10-day period in which Aegis could conduct a due-diligence investigation; however, at the expiration of that period no firm agreement had been reached, and Aegis continued its review of Galt while Gait’s financial status continued to deteriorate.

By early September 2008, Galt was out of money and could not continue operations. On September 11, 2008, in order to prevent Galt from losing its customers, employees, and any remaining value, Galt and SPC-Alabama, which was formed that day, entered into an interim agreement setting forth the basic parameters of a future asset sale and providing that SPC-Alabama would immediately begin providing the raw materials Galt would use to manufacture finished products and to fulfill orders it already had and that SPC-Alabama would receive all revenues from the sale of those products. In return, the interim agreement provided that “[SPC-Alabama] shall pay a license fee to [Galt] for the use of the premises in the amount of $12,000 plus applicable taxes weekly, in arrears on the Monday following a complete week after proper invoice from [Galt] and subject to setoff ....” Heisz signed the interim agreement in his capacity as president of SPC-Alabama.

In the interval between the signing of the interim agreement on September 11, 2008, and the signing of the final asset-purchase agreement on January 16, 2009, Galt continued its operations, manufacturing products on behalf of SPC-Alabama, while SPC-Alabama continued its due-diligence review and negotiated with lenders and Galt’s creditors. One of those creditors included Galt’s landlord, and, after the parties were unable to resolve a dispute concerning past rent, SPC-Alabama instead expended approximately $500,000 to prepare and then move the operations to a new facility in Auburn. It appears that SPC-Ohio provided funds and operational support for the Galt/SPC-Alabama operations during this time, and revenue received from the sale of products manufactured and sold pursuant to the interim agreement was also steered to SPC-Ohio. SPC-Ohio paid Galt a total of $20,000 in license fees during this period, the only-license fees Galt would receive.

In mid-January 2009, as Galt and SPC-Alabama neared an agreement on the final terms of the asset sale, a dispute arose regarding the amount of license fees Galt was owed. The parties had operated under the interim agreement for 17 weeks, and Galt claimed that it was still owed approximately $117,000 in license fees, while SPC-Alabama claimed that it had expended so much money paying Galt’s expenses and debts during those 17 weeks that no more money was owed. Galt evinced a willingness to settle for approximately $50,000; however, SPC-Alabama was unwilling to negotiate on the issue. On January 15, 2009, Heisz sent Plath the following e-mail message:

“I have reached my limit. [SPC-Alabama] has met and exceeded its obligations under the interim agreement. I am not paying your lawyer or accountants — I have agreed to pay reasonable legal [fee]s [stemming from Galt’s dispute with its landlord].
“[SPC-Alabama] has lost a lot of money in order to retain some value with customers who were universally pissed and were all owed tools by [Galt] which could not be satisfied by [Galt].
“I have been very flexible in trying to help [Galt] and the current shareholders to realize some value. I will loan [Galt] money to wrap up but it is not a condition or part of this transaction. When we have closed with [Galt’s] lenders and you have a budget we will assist as discussed and add to the note.
“I cannot spend more time and money on this process. If you want the deal then you need to sign and close by tomorrow. After that we will start over.”

Plath ultimately acquiesced and, on January 16, 2009, after resolving some other minor issues, sent Heisz an e-mail message saying “Let’s get this done.”

On January 16, 2009, Galt and SPC-Alabama executed the final asset-purchase agreement whereby SPC-Alabama purchased substantially all of Galt’s assets. As consideration, SPC-Alabama paid Galt $10, agreed to pay Plath a commission based on sales for a limited period following the transaction, and agreed to assume certain liabilities owed by Galt. SPC-Alabama also agreed to indemnify Galt for the debt obligations it was assuming and to indemnify Plath and Danette for certain personal guarantees executed by them in connection with Galt’s debt. Finally, SPC-Alabama also agreed to employ Plath and Danette post-closing and to pay Genesis a $50,000 brokerage fee for its role in facilitating the asset-purchase transaction. Section 1.3 of the asset-purchase agreement also contained a merger clause and a release that provided, in pertinent part:

“This agreement, including any schedules hereto together with any agreements and other documents to be delivered under this agreement constitute the entire agreement between the parties pertaining to the subject matter of this agreement and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter of this agreement except as specifically set forth in this agreement.... Each of the parties hereto hereby remise and release the other and their respective officers, directors, shareholders, employees and agents from any claims or causes of action that they or their respective officers, directors, shareholders, employees or agents may have against the other for any actions or failures to act as of the closing date; provided that the foregoing release in no way releases obligations under a separate bailment agreement between the parties, nor does it release any party from representations and warranties that are contemplated or given in this agreement or from any future actions of either party. ...”

The asset-purchase agreement was signed by Plath in his capacity as president of Galt and by Heisz in his capacity as president of SPC-Alabama. Plath also agreed to sell SPC-Alabama an air compressor that he personally owned for $15,000; this transaction was not covered by the asset-purchase agreement.

Following the close of the transaction, SPC-Alabama failed to generate sufficient revenue to cover its expenses, and SPC-Ohio continued to provide funds and support services for its operations. Poor economic conditions throughout the summer of 2009, including especially a slowdown in manufacturing by its automotive customers, resulted in a decrease in orders and an approximate 50% drop in revenue from the previous year, while changes in the credit market also made it difficult for SPC-Alabama to refinance equipment leases. In July 2009, the first of a series of creditors began filing lawsuits against Galt and its shareholders; however, SPC-Alabama was either unwilling or unable to provide the indemnity it had agreed to provide in the asset-purchase agreement. In September 2009, SPC-Alabama shut down its manufacturing operations in Alabama, and on September 11, 2009, Plath’s employment was terminated; Danette’s employment had previously been terminated at the conclusion of the 13 weeks SPC-Alabama had agreed to employ her. When Plath subsequently requested commissions, reimbursements, and severance and vacation pay he claimed he was owed, Heisz informed him that SPC-Alabama would be unable to meet any of those obligations. SPC-Alabama likewise failed to pay Plath for the air compressor it had purchased or to pay Genesis the $50,000 brokerage fee it claimed.

On October 6, 2009, Galt, Plath, Danette, and Genesis filed this action alleging that Heisz, Aegis, SPC-Alabama, SPC-Ohio, SPC-Ontario, and two other related companies, Stratford Plastics Corporation and Stratford Plastics U.S. Holding Corp., both Alabama corporations (with the exception of Aegis and SPC-Ontario, which was dismissed from the case before trial after filing for bankruptcy in Canada, all of these companies are hereinafter referred to collectively as “the Stratford companies”), as well as other individuals affiliated with the Stratford companies and/or Aegis were liable for breach of contract and fraud and seeking a judgment declaring (1) that the defendants were obligated to indemnify Galt, Plath, and Danette as set forth in the asset-purchase agreement and (2) that the plaintiffs were entitled to pierce SPC-Alabama’s corporate veil and to hold the other defendants liable for any damages awards entered against it.

The case ultimately proceeded to trial on August 9, 2010. At trial, none of the Stratford companies disputed the plaintiffs’ breach-of-contract claims, and the jury was accordingly charged simply with determining what damages should be assessed against them. Genesis, which had not alleged a fraud claim, was awarded $54,684 on its breach-of-contract claim. Before calculating damages to be awarded Galt, Plath, and Danette, however, the verdict form agreed to by the parties required the jury to first determine if it was reasonably satisfied that the Stratford companies were liable on the plaintiffs’ fraud claims. The jury noted on the verdict form that it did find the Stratford companies liable for fraud; however, it declined to award any punitive damages, awarding Galt $720,678 and Plath $48,893 in compensatory damages on their respective fraud and breach-of-contract claims. Danette was awarded nothing on her claims. The jury was also separately charged with making a finding as to whether Heisz and/or Aegis had fraudulently represented to the plaintiffs that SPC-Alabama and/or the Stratford companies intended to fulfill the terms of the asset-purchase agreement when in fact they had no intention of doing so; the jury also answered this inquiry in the affirmative. The trial court entered judgment on the jury’s verdict on August 19, 2010, ordering SPC-Alabama to pay Genesis $54,684, Galt $720,678, and Plath $48,893.

Thereafter, the plaintiffs, as well as Heisz and Aegis, filed postjudgment motions pursuant to Rule 59, Ala. R. Civ. P. The Stratford companies did not join in the motion filed by Heisz and Aegis. In their motion, the plaintiffs urged the trial court to amend its judgment to make it consistent with the jury’s verdict; specifically, to make all the defendants jointly and severally liable for the jury’s damages awards — not just SPC-Alabama — because the other Stratford companies had not contested the plaintiffs’ claims and because the jury had also found that Heisz and Aegis were liable for fraud. The plaintiffs also asked the trial court to declare that Plath, Danette, and Genesis were third-party beneficiaries of the asset-purchase agreement and to pierce the corporate veil of SPC-Alabama. In their motion, Heisz and Aegis moved the trial court to vacate the judgment entered on the jury’s verdict and to enter a judgment as a matter of law in their favor because, they alleged, for a variety of reasons the jury’s verdict was not supported by the substantial evidence.

On September 28, 2010, the trial court conducted a hearing on the parties’ post-judgment motions, and, on September 29, 2010, it entered an amended judgment holding (1) that all the defendants were jointly and severally liable for the damages awards entered in favor of Genesis, Galt, and Plath; (2) that Galt, Plath, and Dan-ette were entitled to the indemnity set forth in the asset-purchase agreement; and (3) that the plaintiffs were entitled to pierce the corporate veil of the defendant corporate entities. On November 10, 2010, Heisz and Aegis filed their notice of appeal to this Court.

II.

On appeal, Heisz and Aegis argue that each damages award entered by the trial court — $54,684 for Genesis, $720,678 for Galt, and $48,893 for Plath — should be reversed insofar as those awards were entered against them as opposed to the Stratford companies. Heisz and Aegis’s liability for the damages award made to Genesis is based on the trial court’s finding that the corporate veils of the Stratford companies should be pierced; there was no evidence indicating that Heisz or Aegis individually breached a contract with Genesis. However, Heisz and Aegis’s liability for the damages awards made to Galt and Plath is based not only on piercing the corporate veils of the Stratford companies, but also on the specific findings of the jury that Heisz and Aegis had each made fraudulent misrepresentations to Galt and Plath. Heisz and Aegis now argue, among other things, that the plaintiffs failed to adduce substantial evidence at trial indicating that Heisz and Aegis were liable for fraud and that the trial court erred by ordering that the corporate veils of the Stratford companies be pierced. We accordingly consider these arguments in turn.

Heisz and Aegis moved for a judgment as a matter of law at the close of the plaintiffs’ case and at the close of all the evidence, arguing that the plaintiffs had failed to submit evidence showing that Heisz and/or Aegis had committed fraud. Both times the trial court denied their motion, and they argue on appeal that the trial court erred to reversal by doing so. We have stated:

“When reviewing a ruling on a motion for a [judgment as a matter of law], this Court uses the same standard the trial court used initially in deciding whether to grant or deny the motion for a [judgment as a matter of law]. Palm Harbor Homes, Inc. v. Crawford, 689 So.2d 3 (Ala.1997). Regarding questions of fact, the ultimate question is whether the nonmovant has presented sufficient evidence to allow the case to be submitted to the jury for a factual resolution. Carter v. Henderson, 598 So.2d 1350 (Ala.1992). The nonmovant must have presented substantial evidence in order to withstand a motion for a [judgment as a matter of law]. See § 12-21-12, Ala. Code 1975; West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). A reviewing court must determine whether the party who bears the burden of proof has produced substantial evidence creating a factual dispute requiring resolution by the jury. Carter, 598 So.2d at 1353. In reviewing a ruling on a motion for a [judgment as a matter of law], this Court views the evidence in the light most favorable to the nonmovant and entertains such reasonable inferences as the jury would have been free to draw. Id.”

Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So.2d 1143, 1152 (Ala.2003). The species of fraud Galt and Plath allege Heisz and Aegis committed is the type of fraud known as “promissory fraud”; specifically, Galt and Plath allege that Heisz and Aegis promised that SPC-Alabama would fulfill its obligations under the asset-purchase agreement when they knew that it had no intention of doing so. We described promissory fraud as follows in Southland Bank v. A & A Drywall Supply Co., 21 So.3d 1196,1210 (Ala.2008):

“ ‘A claim of promissory fraud is “one based upon a promise to act or not to act in the future.” ’ Ex parte Michelin North America, Inc., 795 So.2d 674, 678 (Ala.2001) (quoting Padgett v. Hughes, 535 So.2d 140,142 (Ala.1988)).
“ ‘ “The elements of fraud are (1) a false representation (2) of a material existing fact (3) reasonably relied upon by the plaintiff (4) who suffered damage as a proximate consequence of the misrepresentation. To prevail on a promissory fraud claim ..., two additional elements must be satisfied: (5) proof that at the time of the misrepresentation, the defendant had the intention not to perform the act promised, and (6) proof that the defendant had an intent to deceive.” ’
“Michelin North America, 795 So.2d at 678-79 (quoting Padgett, 535 So.2d at 142).”

Heisz and Aegis argue that the plaintiffs failed to put forth substantial evidence at trial of the fifth element of a promissory-fraud claim: that Heisz and Aegis knew that SPC-Alabama would not fulfill its obligations under the asset-purchase agreement at the same time they were representing that it would in fact do so. For the reasons that follow, we agree.

The interrogatories submitted to the jury asked whether Heisz and/or Aegis had represented to the plaintiffs that SPC-Alabama or the other Stratford companies would “fulfill [SPC-Alabama’s] future obligations under the asset-purchase agreement” while knowing that SPC-Alabama intended not to fulfill those obligations. The plaintiffs argue that Heisz also made misrepresentations in the interim agreement and that Aegis employees made misrepresentations regarding Aegis’s financial capabilities in November 2007 when Aegis first began discussing purchasing Galt’s assets; however, those misrepresentations do not relate to the promissory-fraud claim submitted to the jury — whether Heisz and Aegis knowingly misrepresented that SPC-Alabama would fulfill its obligations under the asset-purchase agreement. Thus, the only alleged misrepresentations identified at trial that would support the promissory-fraud claim submitted to the jury are those made in the asset-purchase agreement itself, which was signed by Heisz.

Although it is undisputed that SPC-Alabama did not fulfill its obligations under the asset-purchase agreement, that fact alone is insufficient to demonstrate that it never intended to do so. “[F]ailure to perform alone is not sufficient evidence to show a present intent not to perform. If it were, then every breach of contract would be ‘tantamount to fraud.’ ” Gadsden Paper & Supply Co. v. Washburn, 554 So.2d 983, 987 (Ala.1989) (citing and quoting Purcell Co. v. Spriggs Enters., Inc., 431 So.2d 515, 519 (Ala.1983)). Rather, there must be some evidence that would indicate a present intent not to perform, even if that evidence is only circumstantial. See Byrd v. Lamar, 846 So.2d 334, 347 (Ala.2002) (“Circumstantial evidence is appropriate proof of a present intent not to perform in a promissory-fraud case.”), and Harrison v. Gibson, 534 So.2d 257, 259 (Ala.1988) (“Intent to deceive and intent not to perform at the time a promise is made can seldom be proven directly....”). However, the parties in the present case dispute what circumstantial evidence may be offered as proof of Heisz’s intent. Citing Vance v. Huff, 568 So.2d 745, 750 (Ala.1990), which provides that “[t]he defendant’s intent to deceive can be established through circumstantial evidence that relates to events that occurred after the alleged misrepi’esentations were made,” Heisz and Aegis argue that the plaintiffs can rely only on circumstantial evidence relating to events after the alleged representation to prove their fraud claim. The plaintiffs, however, argue that “can be” is not tantamount to “must be” and that circumstantial evidence relating to events predating the alleged misrepresentation may also be considered when determining whether there is substantial evidence showing that there was an intent not to perform at the time an obligation was incurred.

This Court has cited the above-quoted excerpt from Vance on multiple occasions but has not considered the question presented in this case. See, e.g., Southland Bank, 21 So.3d at 1212, and Byrd v. Lamar, 846 So.2d 334, 343 (Ala.2002). However, in Zielke v. AmSouth Bank, N.A., 703 So.2d 354 (Ala.Civ.App.1996), the Court of Civil Appeals did address this issue and held that the trial court properly excluded certain evidence meant to establish that the defendant had had the present intent to deceive when making a misrepresentation because the excluded evidence related to an event occurring before the alleged misrepresentation. Thus, Zielke appears to support the position now taken by Heisz and Aegis. However, in subsequent cases in which this Court has cited the at-issue principle from Vance, we have recognized that other types of circumstantial evidence can be probative in promissory-fraud cases. For example, in Southland Bank we stated:

“Evidence of consistent, but unfulfilled, promises can in some cases amount to substantial evidence of an intent to deceive. Goodyear Tire [& Rubber Co. v. Washington], 719 So.2d [774,] 777 [ (Ala.1998) ]; Campbell v. Naman’s Catering, Inc., 842 So.2d 654, 659 (Ala.2002). Additionally, ‘[a] defendant’s intent to deceive can be established through circumstantial evidence that relates to events that occurred after the alleged misrepresentations were made.’ Byrd v. Lamar, 846 So.2d 334, 343 (Ala.2002).”

21 So.3d at 1212. The term “additionally” preceding the statement that “ ‘[a] defendant’s intent to deceive can be established through circumstantial evidence that relates to events that occurred after the alleged misrepresentations were made’ ” is an explicit recognition that something other than that evidence can be used to establish the defendant’s intent to deceive. Thus, we agree with the plaintiffs that circumstantial evidence relevant to whether an individual had the present intent to deceive when making a misrepresentation need not be limited to events occurring after the alleged misrepresentation. To the extent Zielke states otherwise, it is overruled.

The plaintiffs argue that the following circumstantial evidence was presented at trial to indicate that Heisz misrepresented that SPC-Alabama would fulfill its obligations under the asset-purchase agreement:

(1) Heisz never provided SPC-Alabama, before or after the execution of the asset-purchase agreement, with the financial capital to fulfill its obligations;
(2) After SPC-Alabama became involved in Galt’s operations subsequent to the signing of the interim agreement, Heisz indicated that he would not pay certain Galt creditors unless it was essential to continue the business relationship with them;
(3) After Plath requested a license-fee payment in October 2008, Heisz told an Aegis employee in an e-mail that “we need to get this figured out as [Plath] thinks that we are going to pay him way more than we are”;
(4) Heisz testified that SPC-Alabama was selective about which of Galt’s debts it would pay;
(5) Plath’s internal e-mail address was shown to be “oldandgone@spcc. com” on an e-mail he sent to a co-employee on January 29, 2009; and
(6) SPC-Alabama did not pay Genesis the brokerage fee that was due at closing under the terms of the asset-purchase agreement.

We disagree that these items constitute substantial evidence that Heisz intended for SPC-Alabama to breach the asset-purchase agreement even as he was signing it. Although SPC-Alabama was apparently not highly capitalized at its incorporation, it is undisputed that the other Stratford companies consistently transferred money to it or directly paid expenses on its behalf totaling in excess of $2 million. That sum includes at least one commission payment to Plath, salaries paid him and Danette according to their employment contracts, and some payments to lenders on equipment leases for which SPC-Alabama had agreed to indemnify the plaintiffs in the asset-purchase agreement. Moreover, although business was bad for Galt when Plath began trying to sell it in 2008, it apparently worsened after the asset sale, because the undisputed evidence at trial indicated that revenues decreased another 50% from 2008 to 2009 after SPC-Alabama purchased Galt’s assets and took over its operations. While the plasties-manufac-turing business was worsening, the credit markets were also tightening and Plath himself recognized in an e-mail sent to Heisz shortly after the asset-purchase agreement was executed that “every bank in North America is a pain to work with in the current environment.” It is undisputed that the credit financing Heisz expected SPC-Alabama to receive from outside lenders did not develop and SPC-Alabama was unable to refinance obligations or to obtain further funds for its operations. Eventually, SPC-Alabama closed its operations, followed later by both SPC-Ohio and SPC-Ontario.

This undisputed evidence is consistent with Heisz and Aegis’s assertion that SPC-Alabama breached its obligations under the asset-purchase agreement for financial reasons, not as part of a fraudulent scheme. The circumstantial evidence cited by Galt and Plath is insufficient as substantial evidence to the contrary. With regard to the specific circumstantial evidence advanced by Galt and Plath in support of their argument, the fact that Heisz indicated he did not want to pay some of Galt’s creditors during the period they were operating under the interim agreement has no bearing on the fraud claim submitted to the jury. SPC-Alabama had no obligation to pay Galt’s debts at that time, and SPC-Alabama presumably structured its deal with Galt as an asset purchase, as opposed to a simple merger or stock purchase, in order to avoid obligating itself to pay Galt’s debts, other than those specifically enumerated in the asset-purchase agreement. Heisz and SPC-Alabama’s unwillingness to pay those debts does not indicate that SPC-Alabama never intended to fulfill its obligations under the asset-purchase agreement.

Likewise, the e-mail Heisz sent to a subordinate at Aegis indicating that they needed to figure things out because Plath thought he was entitled to more under the interim agreement than the defendants believed he was entitled to does not indicate a scheme to defraud Plath or Galt. Rather, it recognizes that the parties had different understandings of the interim agreement, a fact no one disputes and that was the subject of much discussion up to the time the asset-purchase agreement was finally executed.

With regard to SPC-Alabama’s financing, it is undisputed that SPC-Alabama was never profitable. It did produce some revenue, and the other Stratford companies provided it funds as well, but its revenues never covered its expenses. In light of its poor financial condition, the fact it was selective with regard to which debts to pay first cannot be taken as evidence that it never intended to fulfill its obligations under the asset-purchase agreement. To the contrary, it is undisputed that it did attempt to fulfill some of those obligations because it made some payments on equipment leases and even paid Plath’s salary up until September 2009, when it ceased manufacturing operations. Because Plath was paid for approximately eight months up until that time, one similarly cannot infer that SPC-Alabama never intended to fulfill its obligation to Plath merely because he was assigned the e-mail address “oldandgone@spcc.com.”

Finally, the fact that SPC-Alabama did not pay Genesis the brokerage fee it was owed under the asset-purchase agreement is not substantial evidence of fraud. As quoted supra, “failure to perform alone is not sufficient evidence to show a present intent not to perform.” Gadsden Paper & Supply Co., 554 So.2d at 987.

The law places a heavier burden upon the plaintiff in promissory-fraud cases than in ordinary fraud cases. National Sec. Ins. Co. v. Donaldson, 664 So.2d 871, 876 (Ala.1995). In this case, it is undisputed that Heisz, Aegis, and the Stratford companies invested a significant sum into the transaction with Galt — in excess of $2 million — and spent approximately $500,000 to move the manufacturing operations to a new facility in Auburn. It is also undisputed that SPC-Alabama’s revenues were cut in half during this time frame and that the prevailing economic conditions were such that it was unable to obtain further financing for its operations from outside sources. Moreover, after purchasing Galt’s assets, SPC-Alabama undisputedly made some payments to lenders on equipment leases for which SPC-Alabama had agreed to indemnify the plaintiffs, it fulfilled its employment obligations to Danette, and it paid Plath as agreed until it closed in September 2009. Considering all the evidence submitted at trial in the light most favorable to Galt and Plath, we cannot agree that “fair-minded persons in the exercise of impartial judgment” could reasonably conclude that SPC-Alabama failed to fulfill its obligations under the asset-purchase agreement as part of a fraudulent scheme as opposed to out of economic necessity. West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). See also Webb Wheel Prods., Inc. v. Hanvey, 922 So.2d 865, 875 (Ala.2005) (“Although we are to consider the evidence in the light most favorable to [Galt and Plath], as the nonmovant[s] for the [judgment as a matter of law], that fact does not require us to consider only the evidence most favorable to [Galt and Plath] while excluding undisputed evidence favorable to [Heisz and Aegis].”). Accordingly, the trial court erred by submitting Galt and Plath’s fraud claims to the jury.

III.

However, notwithstanding the fact that there was insufficient evidence to submit Galt and Plath’s fraud claims to the jury, Heisz and Aegis would nevertheless be liable for the damages awards entered in favor of Galt and Plath, as well as the damages award entered in favor of Genesis, if the trial court’s ruling that the corporate veil of the Stratford companies should be pierced is upheld, because the Stratford companies have not disputed the judgments entered against them. Whether the corporate veil of a business entity should be pierced is a matter of equity, properly decided by a judge after a jury has resolved the accompanying legal issues. Stephens v. Fines Recycling, Inc., 84 So.3d 867, 877 (Ala.2011); Ex parte Thorn, 788 So.2d 140 (Ala.2000). We accordingly review a trial court’s determination in this regard under the ore tenus standard of review, which dictates that the trial court’s judgment based on ore tenus evidence “ ‘is presumed correct and should be reversed only if the judgment is found to be plainly and palpably wrong, after consideration of all the evidence and after drawing all inferences that can logically be drawn from that evidence.’ ” Thomas v. Neal, 600 So.2d 1000, 1001 (Ala.1992) (quoting Sundance Marina, Inc. v. Reach, 567 So.2d 1322,1324-25 (Ala.1990)).

As an initial matter, Galt and Plath dispute whether Heisz and Aegis can even challenge the trial court’s conclusion that the corporate veils of the Stratford companies should be pierced. They argue that Heisz and Aegis failed to submit a post-judgment motion raising this issue after the trial court entered its September 29, 2010, amended judgment and that the issue accordingly has been waived. Heisz and Aegis, however, argue that no such motion was required because the trial court entered written findings of fact on the issue. We discussed this same question in Ex parte Vaughn, 495 So.2d 83, 87 (Ala.1986), and stated:

“Rule 52(b)[, Ala. R. Civ. P.,] provides an exemption from the requirement of invoking a ruling by the trial court on the issue of evidentiary insufficiency when written findings of fact are made. The trial court’s ruling on the sufficiency of the evidence is implicit in a decree in which the trial judge is the trier of the facts. Moreover, by making written findings of fact, the trial judge has had the additional opportunity to reconsider the evidence and discover and correct any error in judgment which he or she may have made upon initial review. Thus, when written findings of fact are made, they serve the same useful purpose as does an objection to the trial court’s findings, a motion to amend them, a motion for a new trial, and a motion to dismiss under Rule 41(b), [Ala. R. Civ. P.] — to permit the trial judge an opportunity to carefully review the evidence and to perfect the issues for review on appeal.”

Thus, for the reasons set forth in Ex parte Vaughn, we hold that Heisz and Aegis have not waived the issue whether the evidence was sufficient to merit piercing the corporate veils of the Stratford companies.

In Messick v. Moring, 514 So.2d 892, 894 (Ala.1987), this Court set forth three theories under which a party might seek to pierce the veil of a corporate defendant: (1) inadequacy of capital; (2) fraudulent purpose in conception or operation of the business; and (3) operation of the corporation as an instrumentality or alter ego. However, we have since stated that “[t]he fact that a corporation is under-capitalized is not alone sufficient to establish personal liability.” Simmons v. Clark Equip. Credit Corp., 554 So.2d 398, 400 (Ala.1989) (citing Co-Ex Plastics, Inc. v. AlaPak, Inc., 536 So.2d 37 (Ala.1988), and East End Mem’l Ass’n v. Egerman, 514 So.2d 38 (Ala.1987)). We also held in this case, as explained supra, that there is insufficient evidence to establish that SPC-Alabama was conceived and operated as part of a fraudulent scheme; accordingly, we must determine whether the trial court’s conclusion that the veils of the Stratford companies should be pierced is supported under the alter ego theory of liability.

In Messick, we enunciated the standard to be applied to determine whether to disregard the corporate entity under an alter ego theory of liability:

“In an attempt to circumvent some of the difficulties in applying conelusory terms such as ‘instrumentality,’ ‘alter ego’ and ‘adjunct,’ we announced, in Kwick Set Components, Inc. v. Davidson Ind., Inc., 411 So.2d 134 (Ala.1982), a standard to be applied in order to determine whether the corporate entity should be disregarded when excessive control is the ground. While acknowledging that the dominating party may be an individual or another corporation, we stated the elements essential for imposition of liability on the dominant party as follows:
“1) The dominant party must have complete control and domination of the subservient corporation’s finances, policy and business practices so that at the time of the attacked transaction the subservient corporation had no separate mind, will, or existence of its own;
“2) The control must have been misused by the dominant party. Although fraud or the violation of a statutory or other positive legal duty is misuse of control, when it is necessary to prevent injustice or inequitable circumstances, misuse of control will be presumed;
“3) The misuse of this control must proximately cause the harm or unjust loss complained of.
“Lowendahl v. Baltimore & 0. Ry., 247 A.D. 144, 287 N.Y.S. 62 (1936).”

514 So.2d at 894-95. There was sufficient evidence introduced at trial from which the trial court could conclude that Heisz exercised complete control and domination over the Stratford companies and Aegis. However, there still must be evidence that that control was misused before the corporate veil can be pierced. See Simmons, 554 So.2d at 400 (“[MJere domination cannot be enough for piercing the corporate veil. There must be the added elements of misuse of control and harm or loss resulting from it.”). Heisz and Aegis argue that any evidence of misuse is lacking. However, Galt and Plath argue that such evidence was in fact presented at trial:

“Plaintiffs presented evidence that both Aegis and Heisz misused the control they enjoyed. The trial court’s findings that Aegis was compensated for performing business functions for the various corporate defendants under terms negotiated solely by Heisz belies the misuse of control exerted by Heisz over all of his companies. Evidence was presented to the trial court that Heisz wrote checks to Aegis from his other companies, and those cheeks totaled $52,000. Heisz also testified that a vast majority of the banking records he produced were illegible, and that there could be more checks made out to Aegis that at trial he was unable to read. From this evidence it is reasonable for the trial court to infer that additional payments were authorized by Heisz to Aegis, and that Heisz used his control over the finances of the various Strat-ford entities to benefit Aegis at his other companies’ expense.
“Furthermore, Heisz misused his control over the finances and policies of [SPC-Alabama]. In this regard, the trial court made a finding that Heisz directed proceeds from [SPC-Alabama’s] manufacturing operations be remitted to other companies under his control. This kept revenues from flowing directly into [SPC-Alabama], Instead of allowing [SPC-Alabama] to obtain the financial benefit of the products it produced, [SPC-Alabama] was kept cash poor. Instead of being a self-sufficient corporation able to meet its obligations as they became due, Heisz’s misuse of his control over [SPC-Alabama] rendered it unable to manage its liabilities. [SPC-Alabama] only received funds when Heisz authorized transfers into [SPC-Alabama]. Thus, the trial court’s findings that Heisz’s direction of production proceeds out of [SPC-Alabama] and into other corporations he controlled warrants deference.”

(Galt and Plath’s brief, pp. 67-68.) We disagree that the cited evidence indicates that Heisz misused his control over the Stratford companies and Aegis. The facts that Heisz negotiated the terms of transactions between Aegis and the Stratford companies and that he directed transfers between the companies is not itself evidence of misuse; rather, that evidence relates to the first element of the alter ego analysis — whether Heisz controlled the companies. We agree that there was evidence indicating that he did, but, again, “mere domination cannot be enough for piercing the corporate veil.” Simmons, 554 So.2d at 400. There must be some evidence indicating that those transactions were somehow unfair, fraudulent, or otherwise not legitimate. The $52,000 in payments identified by Galt and Plath as being made to Aegis by SPC-Ohio was, Heisz testified, paid as compensation for consulting services performed by Aegis. There is no evidence in the record indicating that those services were not, in fact, performed or that they were billed at an excessive rate. Any conclusions that these, or some other transactions of which there is no evidence, are illegitimate would accordingly be the product of mere speculation, and speculation is an insufficient basis upon which to support a judgment. Systrends, Inc. v. Group 8760, LLC, 959 So.2d 1052,1074 (Ala.2006).

Moreover, the evidence does not support the conclusion that revenue was improperly drained out of or redirected from SPC-Alabama into other Stratford companies or Aegis. Although Galt and Plath are correct that the revenue received from the products SPC-Alabama sold was routed to SPC-Ohio, they fail to acknowledge the undisputed evidence indicating that SPC-Ohio had also injected significant sums into SPC-Alabama to fund its operations and that the revenue received from those operations never exceeded those sums. Thus, although Heisz may have exercised control over and dominated the Stratford companies and Aegis, there was no evidence to indicate that he misused that control. Accordingly, the trial court’s judgment holding that the corporate veils of the Stratford companies and/or Aegis should be pierced was unsupported by the evidence and is due to be reversed.

IV.

Galt, Plath, Danette, and Genesis sued Heisz, Aegis, SPC-Alabama, and other associated companies and individuals, alleging breach of contract and fraud, after SPC-Alabama purchased substantially all of Galt’s assets but then ceased operations before it was able to fulfill all the terms of the asset-purchase agreement. Following a jury trial in which SPC-Alabama and the other Stratford companies conceded liability on the breach-of-contract claims, the jury returned a verdict finding the defendants liable for fraud as well and awarding Genesis $54,684 on its breach-of-contract claim, Galt $720,678 on its fraud and breach-of-contract claims, and Plath $48,893 on his fraud and breach-of-contract claims. The trial court then ordered that the corporate veils of the Stratford companies should be pierced and that all the defendants should be jointly and severally liable for those awards and entered judgment accordingly. Heisz and Aegis appealed, and we now reverse the judgment entered as it relates to them because there was insufficient evidence to indicate that they were liable for promissory fraud or to support piercing the corporate veils of the Stratford companies. We remand the cause for proceedings consistent with this opinion.

REVERSED AND REMANDED.

MALONE, C.J., and WOODALL, BOLIN, SHAW, MAIN, and WISE, JJ., concur.

PARKER, J., concurs in the result.

MURDOCK, J., dissents.

      . Following the shutdown of operations in Alabama, SPC-Ohio commenced servicing some former Galt/SPC-Alabama customers from its base in Ohio; however, SPC-Ohio subsequently liquidated its assets in bankruptcy, and SPC-Ontario would eventually seek bankruptcy protection in Canada as well.

      . SPC-Ontario was not named in the initial complaint but was substituted for a fictitiously named defendant in a subsequent amendment.

      . All the individual defendants other than Heisz were dismissed from the case before trial.

      . None of the Stratford companies appealed the trial court's judgment, and, accordingly, none of them are represented in these appellate proceedings.

      . Heisz and Aegis also argue to this Court that the damages awards in favor of Galt and Plath should be reversed because, Heisz and Aegis argue, the release clause in the asset-purchase agreement encompassed at least some of the claims pursued by Galt and Plath at trial, e.g., whether additional license fees were still owed. Galt and Plath, however, argue that the release should not be given effect because it was procured by fraud or coercion. Because an analysis of whether the release should have barred some of Galt's and Plath's claims would therefore also require us to review the fraud issue, we have elected to address the fraud issue directly instead. Our conclusions in that regard make it unnecessary to further consider the issue whether the release should have been given effect.

      . Heisz and Aegis argue on appeal that they made no representations in the asset-purchase agreement that could support a fraud claim because Heisz executed the agreement only in his capacity as the president of SPC-Alabama. The plaintiffs, however, argue (1) that Heisz and Aegis waived this specific argument because it was not presented to the trial court in a posttrial motion and (2) that Heisz would be liable for the alleged fraud regardless of the capacity in which he executed the asset-purchase agreement. However, because we conclude that there is not substantial evidence of at least one other element of a promissory-fraud claim, it is unnecessary to consider these arguments.

      . Heisz and Aegis argue that the plaintiffs were also required to show that Heisz and/or Aegis had ownership interests in the Stratford companies before the corporate veils could be pierced and that no such evidence was presented at trial. Galt and Plath, however, argue that evidence of an ownership interest is not required to establish control and domination. Because we conclude that there was insufficient evidence to merit piercing the corporate veils of the Stratford companies for other reasons, we need not address this issue.

      . Heisz and Aegis note that the $52,000 in consulting fees paid to Aegis by SPC-Ohio is roughly equal to the $50,000 claimed by Genesis for its work on the Galt-SPC-Alabama transaction.


source: Caselaw Access Project

author: MAIN, Justice.

license: Public Domain

text:
    CITY OF BIRMINGHAM et al. v. ORBITZ, LLC, et al.
    1100874.
    Supreme Court of Alabama.
    April 18, 2012.

      Henry I Frohsin, James F. Barger, Jr., J. Elliott Walthall, and Ronald R. Brunson of Frohsin & Barger, LLC, Birmingham; S. Dagnal Rowe of Wilmer & Lee, P.A., Huntsville; and Phillip E. Adams, Jr., of Adams, Umbach, Davidson & White, Opeli-ka, for appellants.
    Bruce F. Rogers of Bainbridge, Mims, Rogers & Smith, LLP, Birmingham, for appellees Orbitz, LLC; Internetwork Publishing Corp. (d/b/a Lodging.com); Trip Network, Inc. (d/b/a CheapTickets); Tra-velocity.com LP.; Site59.com, LLC; Hotels.com, L.P.; Hotels.com GP, LLC; Hotwire, Inc.; TravelNow.com, Inc.; and Expedia, Inc.
    Matthew H. Lembke and Michael D. McKibben of Bradley Arant Boult Cummings LLP, Birmingham; Darrel J. Hie-ber of Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California, for appellees priceline.com Incorporated; Lowestfare.com, Incorporated (n/k/a Low-estfare.com LLC); and Travelweb LLC.
    Jeffrey A. Rossman of McDermont, Will & Emery LLP, Chicago, Illinois, for appel-lees Orbitz, LLC; Internetwork Publishing Corp. (d/b/a Lodging.com) and Trip Network, Inc. (d/b/a CheapTickets).
   MAIN, Justice.

The appellants, 9 Alabama municipalities (hereinafter referred to as “the municipal plaintiffs”) and the Birmingham-Jefferson Civic Center Authority (hereinafter collectively referred to with the municipal plaintiffs as “the municipalities”), appeal from a summary judgment entered in favor of the appellees, 16 online travel service companies and related entities (hereinafter collectively referred to as “the OTCs”). The issue presented by this case is whether the OTCs are liable for the payment to the municipalities of a lodgings tax under the local lodgings-tax ordinances of the respective municipal plaintiffs.

The trial court entered the following judgment:

“FINAL SUMMARY JUDGMENT
“This action for declaratory judgment under Ala.Code 1975, § 6-6-220 et seq., came on to be heard on a joint motion for summary judgment filed by the [OTCs]. The court heard oral arguments on February 25, 2011, and the parties have filed post-hearing submissions.
“The plaintiffs are nine Alabama municipalities: Birmingham, Huntsville, Decatur, Auburn, Madison, Anniston, Opelika, Fairhope, and Gulf Shores, along with the Birmingham-Jefferson Civic Center Authority. The defendants are 16 online travel service companies (OTCs), such as Orbitz, Inc., Travelocity.com, Inc., and include most of the nation’s major online travel reservation companies/[]
“In their complaint, which was filed on December 11, 2009, the [municipalities] allege that [the municipal plaintiffs] have enacted ordinances which impose a lodgings tax on hotels located within their city limits. This municipal lodgings tax is in addition to a State lodgings tax. The tax is calculated as a percentage of the amount charged by such hotels for the use of a room.
“The [municipalities] seek a declaration from the court that the OTCs are engaged in the business of renting rooms or lodgings or furnishing accommodations to transients and that they are subject to and liable for the lodgings tax for any rooms that they rent. The [OTCs] deny that they are subject to the tax.
“The [OTCs] filed a Rule 12(b)(6) motion to dismiss for failure to state a claim and, after hearing oral arguments, the court denied the motion. The parties were given time to engage in discovery and, after several delays, the case is under submission on the [OTCs’] motion for summary judgment.
“THE UNDISPUTED FACTS
“These facts are not disputed. The defendants are OTCs that collect and publish travel-related information on the Internet. They make reservations for airline travel, car rentals and hotel rooms. The [municipalities] object to the use of the word ‘facilitate’ in defining the [OTCs’] activities, but the undisputed facts show that that is what they do. They facilitate, or make easier, the making of such reservations. Before these online services were available, customers used their own resources, or a travel agent, to make hotel reservations. Now the customer may go online and obtain the comparative information about lodgings in the area to which he is traveling and the OTC assists the customer in booking a room reservation at the hotel of his/her choice.
“When a customer makes a room reservation through the [OTCs’] online service, the customer is charged an amount for the occupancy of the hotel room, a lodgings tax recovery charge, and an additional amount which the [OTCs] retain as compensation for their services. The online travel company remits the room rental charge and the tax recovery charge to the hotel, and the hotel then pays the lodgings taxes to the State of Alabama and to the appropriate municipality.
“In this action the [municipalities] seek a declaration that the lodgings tax should be imposed, not only on the hotels for the amount they charge as rent for the occupancy of their hotel rooms, but also on the amount the [OTCs] charge the customer for their online services.
“THE APPLICABLE LAW
“In 1955, the State of Alabama imposed a state lodgings tax, now codified at Ala.Code 1975, § 40-26-1 et seq. ‘There is levied and imposed, in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person, firm or corporation engaging in the business of renting or furnishing any room or rooms, lodgings, or accommodations are regularly furnished to transients for a consideration,’ as calculated as a percentage ‘of the charge for such room, rooms, lodgings, or accommodations, including the charge for use or rental of personal property and services furnished in such room.’
“In 1969 the Alabama Legislature authorized municipalities to impose a similar tax. Of course, under Alabama’s outdated 1901 Constitutional scheme, municipalities do not have the power to tax on their own authority, but only if the power to tax has been granted by the State. City of Mobile v. GSF Properties, Inc., 531 So.2d 833, 836 (Ala.1988). ‘The governing body of any municipality within the State of Alabama may provide by ordinance for the levy and assessment of a privilege or license tax in the nature of a lodgings tax, parallel to the state levy .... ’ Ala. Code 1975, § 11-51-202(b).
“Thereafter, each of the [municipal plaintiffs] enacted such a lodgings tax ordinance. For example, Birmingham’s ordinance imposes the tax on ‘each person ... engaging ... in the business of renting or furnishing any room ... in any hotel.’ The Birmingham tax is imposed on ‘the charge of such room, rooms, lodgings or accommodations, including the charge for use or rental of personal property and services furnished in such rooms.’
“The Alabama Department of Revenue (‘DOR’) has ruled in Alabama Administrative Code, Rule 810-6-5-.13(5), that only ‘persons who operate [a] hotel’ are persons who rent or furnish rooms. The Rule states that the lodgings tax is imposed only on ‘charges made for the use of rooms ... by every person who is engaged in the business of renting rooms or lodgings or furnishing accommodations to transients.’ Rule 810-6-5-.13(4).
“The DOR has also determined that online travel service providers are not engaged in the business of renting or furnishing hotel rooms. Therefore, they are not hotel operators and are not obligated to collect and remit the lodgings tax on what they charge for their online services. While the opinion of the DOR is not binding on this court, it is persuasive.
“The question of law is whether the tax sought by the municipalities is authorized by these statutes, ordinances and rulings.
“ ‘In DeKalb County LP Gas Co. v. Suburban Gas, Inc., 729 So.2d 270, 275-76 (Ala.1998), we explained the process of statutory construction:
“ ‘ “In determining the meaning of a statute, this Court looks to the plain meaning of the words as written by the legislature. As we have said:
“ ‘ “ ‘Words used in a statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says. If the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect.’
“‘Blue Cross & Blue Shield v. Nielsen, 714 So.2d 293, 296 (Ala.1998) (quoting IMED Corp. v. Systems Eng’g Assocs. Corp., 602 So.2d 344, 346 (Ala.1992))_ It is true that when looking at a statute we might sometimes think that the ramifications of the words are inefficient or unusual. However, it is our job to say what the law is, not to say what it should be. Therefore, only if there is no rational way to interpret the words as stated will we look beyond those words to determine legislative intent. To apply a different policy would turn this Court into a legislative body, and doing that, of course, would be utterly inconsistent with the doctrine of separation of powers. See Ex parte T.B., 698 So.2d 127,130 (Ala.1997).’
“Ex parte [National] Western Life Insurance Co., 899 So.2d 218 (Ala.2004).
“CONCLUSIONS
“The plain meaning of the statute and the ordinances is not hidden and the statute is not ambiguous. The lodgings tax is imposed on every person 'engaging in the business of renting or furnishing any rooms, in any hotel.’ The tax is fixed as a percentage of ‘the charge for such room, ... including the charge of use or rent of personal property and services furnished in such room.’ As required by the statute, the relevant ordinances must contain the same language as in the statute. The ordinance is, as it must be, parallel to the statute.
“The plain language of the statute and the [municipal plaintiffs’] ordinances compels the court to the conclusion that the [OTCs] are not engaged in the business of renting or furnishing any room or rooms in any hotel. The DOR has promulgated a rule affirming that only persons who operate a hotel are persons who rent or furnish rooms. These [OTCs] are not hoteliers. These [OTCs] do not operate a hotel in any of the cities involved in this litigation. They provide a service to the public for which they are compensated by their customers. This compensation is not subject to the lodgings tax.
“Alabama law is clear that (1) the legislative intent governs statutory construction; (2) to determine such intent, courts must look to the plain and ordinary meaning of the statute; and (3) the court must look to what the law says, not what either party thinks it should say. In addition, if there were any ambiguity, tax laws must be construed against the taxing authority and in favor of the taxpayer.
“It is not a proper function of the courts to rewrite the law, even though it is clear that the State of Alabama and its cities are in desperate need of any revenue they can find. If the Alabama Legislature intends to impose a tax on the service rendered by the OTCs, and if it intends to allow the [municipal plaintiffs] to impose such a tax, it may do so by appropriate legislation. The court is convinced by the undisputed facts that current law does not allow such taxation.
“Both sides of this dispute have submitted opinions and orders from various courts around the country, and the court has read many of those decisions. Some courts have ruled that the charges for the services rendered by the [online travel service providers] were subject to taxation and others have ruled that they were not. The court has not weighed one stack of cases against the other. While some of the courts simply disagree on the outcome, the various rulings seem to the court to turn on the specific language of the relevant statutes and ordinances. The specific language of the statutes or ordinances controls the outcome.
“The [municipalities] argue that if all else fails, there is a genuine issue of material fact as to whether the [OTCs] have an agency relationship with the hotel operators and/or with the transient guests. The court agrees with [the municipalities] that the question of agency may be a question of fact for a jury, but here there is no evidence before the court to support such an allegation of agency.
“Upon consideration of the legal and evidentiary submissions, the court finds that there is no genuine issue of material fact and the [OTCs] are entitled to judgment as a matter of law.
“It is therefore ordered and adjudged that the [OTCs’] motion for summary judgment is granted. It is hereby declared that the [OTCs] are not engaged in the business of renting rooms or lodgings or furnish[ing] accommodations to transients and are therefore not subject to payment of the [municipal plaintiffs’] lodgings tax.
“This constitutes a final judgment in this case. Costs are taxed to the [municipalities].”

After considering the record in this case, the briefs of the parties, and the trial court’s order, we agree with the views expressed by Judge Vowell in his thorough and well reasoned summary-judgment order. We therefore affirm the judgment in favor of the OTCs, and we adopt Judge Vowell’s order in its entirety as the opinion of this Court. Because we affirm the summary-judgment order, we pretermit consideration of other arguments raised by the parties.

AFFIRMED.

MALONE, C.J., and WOODALL, BOLIN, and MURDOCK, JJ., concur.

      . The OTCs include Orbitz, LLC; price-line.com Incorporated; Expedia, Inc.; Site 59.com, LLC; Travelocity.com LP; Hotels.com, L.P.; Hotwire, Inc.; Trip Network, Inc., d/b/a Cheaptickets.com; Internetwork Publishing Corp., d/b/a Lodging.com; Low-estfare.com Incorporated, n/k/a Lowest-fare.com LLC; Travelweb, LLC; and Travel-Now.com, Inc. Also named in the complaint as defendants are entities affiliated with certain of the OTCs but that do not provide online travel-related services. Those entities are Travelocity.com, Inc.; Hotels.com GP, LLC; and Lowestfare.com Inc., n/k/a Lowest-fare.com LLC. In addition, the complaint named "Maupintour Holding, LLC,” an entity that is seldom mentioned after the initial pleadings, but that apparently has remained a defendant. Three entities named in the complaint — Orbitz, Inc.; Travelport, Inc., f/k/a Cendant Travel Distribution Services Group, Inc.; and OneTravel, Inc. — were voluntarily dismissed without prejudice.

      . The Birmingham-Jefferson Civic Center Authority does not have the power to levy a lodgings tax; it is a recipient of revenue generated by the tax imposed by the City of Birmingham.


author: BOLIN, Justice.

text:
    Ex parte Wal-Mart Stores, Inc. (In re Gloria Renee WOLFE and Thomas Eugene Wolfe v. WAL-MART STORES, INC., et al.).
    1110252.
    Supreme Court of Alabama.
    April 13, 2012.

      W. Pemble DeLashmet and Chad C. Marchand of DeLashmet & Marchand, P.C., Mobile, for petitioner.
    Charles R. Godwin and Timothy J. God-win, Atmore, for respondents.
   BOLIN, Justice.

Wal-Mart Stores, Inc., a defendant in a civil case pending in the Escambia Circuit Court, petitions for a writ of mandamus directing the trial court to dismiss the case on the ground that venue in Escambia County is improper or, in the alternative, on the ground oí forum non conveniens. We deny the petition.

I. Facts and Procedural History

Gloria Renee Wolfe, a resident of Es-cambia County, alleges that on October 11, 2010, while shopping with her sister at a Wal-Mart store in Franklin, North Carolina, she was injured when a bolt of cloth fell from a display shelf and struck her upper body, including her neck and shoulder, exacerbating a preexisting condition in her cervical spine and also causing additional injuries. Upon returning home to Alabama, Gloria sought medical treatment from doctors in Mobile County, Escambia County, and Jacksonville, Florida. On November 9, 2010, Gloria and her husband, Thomas Eugene, sued Wal-Mart Stores, Inc., and fictitiously named defendants. Gloria asserted claims of negligence and wantonness; her husband asserted a claim of loss of consortium.

On November 24, 2010, Wal-Mart Stores East, L.P. (“Wal-Mart East”), filed a motion to dismiss pursuant to Rule 12(b)(3), Ala. R. Civ. P., alleging (1) that Wal-Mart East had been incorrectly named in the complaint as Wal-Mart Stores, Inc.; (2) that Wal-Mart East owns the store in North Carolina where the incident allegedly occurred; (3) that Wal-Mart East is a limited partnership organized under the laws of Delaware with its principal place of business in Arkansas; and (4) that Ala.Code 1975, § 6-3-2, governs venue for actions against partnerships. Wal-Mart East asserted in its motion to dismiss that pursuant to § 6-3-2 venue for an action against a partnership would be proper in either the county in which a partner resided or the place in which the act complained of occurred. Wal-Mart East further asserted in its motion that because neither of its partners resided in Alabama and because Gloria’s alleged injuries occurred in North Carolina, venue in Escambia County was improper. A hearing was set for Wal-Mart East’s motion to dismiss on December 21, 2010.

On December 18, 2010, the Wolfes moved to strike Wal-Mart East’s motion to dismiss, arguing that they had specifically sued Wal-Mart Stores, Inc., and not Wal-Mart East. The Wolfes asserted that, after performing research in the office of the Secretary of State of Alabama, they deliberately selected Wal-Mart Stores, Inc., which does business by agent in Es-cambia County, Alabama, as the defendant. In the alternative, the Wolfes requested that Wal-Mart East’s motion to dismiss be converted to a motion for a summary judgment and that the trial court “direct [Wal-Mart Stores, Inc., and Wal-Mart East] to produce their corporate doe-uments .... ” The Wolfes’ motion was also set for the December 21, 2010, hearing.

Wal-Mart East thereafter filed a response in opposition to the Wolfes’ motion to strike, attaching the affidavit of Geoffrey W. Edwards, senior associate general counsel with Mal-Mart Stores, Inc., and assistant secretary for Wal-Mart Stores, Inc., who testified regarding the corporate structures of the various entities constituting the network of Wal-Mart stores. Edwards testified in his affidavit that the Wal-Mart store where Gloria was allegedly injured was operated by Wal-Mart East, “a limited partnership whose sole limited partner is WSE Investment, LLC and whose sole general partner is WSE Management, LLC. [Wal-Mart East] is organized under the laws of the State of Delaware and maintains its principal place of business .in Bentonville, Arkansas.”

On December 15, 2010, Wal-Mart Stores, Inc., filed an additional motion to dismiss, arguing that the doctrine of forum non conveniens, codified in Ala.Code 1975, § 6-5-430, required the trial court to dismiss the action. Wal-Mart Stores, Inc., asserted in its motion that taking into account the location where the alleged injury occurred, the convenience of the parties and witnesses, and the interests of justice, North Carolina was the more appropriate forum for litigation of the Wolfes’ action. This motion was also docketed for the December 21, 2010, hearing.

On December 21, 2010, the trial court conducted oral argument regarding the motions to dismiss and the motions to strike. At this hearing, the trial court directed the parties to conduct venue-related discovery; it granted the Wolfes’ request for additional time in which to conduct discovery on the issues presented by Wal-Mart East and Wal-Mart Stores, Inc., in their motions to dismiss; and it entered an order, continuing the hearing on the pending motions until April 5, 2011. Wal-Mart East thereafter propounded venue-related discovery to the Wolfes. The Wolfes moved to strike the discovery because it was issued by Wal-Mart East and not by Wal-Mart Stores, Inc.

On March 15, 2011, Wal-Mart East moved to compel the venue-related discovery. The motions to strike and the motion to compel were also set for the April 5, 2011, hearing. On April 5, 2011, the trial court granted Wal-Mart East’s motion to compel; it afforded the Wolfes an additional 30 days to respond to the venue-related discovery. The trial court, thereafter, continued the hearing on the pending motions to dismiss and the motions to strike until May 17, 2011. On May 17, 2011, the parties appeared before the trial court. The trial court, however, entered an order, stating that “[t]he pending [mjotions in this case are hereby continued generally.”

On August 19, 2011, the Wolfes served Wal-Mart Stores, Inc., with a notice of deposition for one of Gloria’s treating physicians, Dr. Francis Delaine Salter. The notice of deposition indicated that Dr. Salter would produce “[a]ny and all medical records, photographs, bills, x-rays, x-ray reports, correspondence, memoranda and any and all other documents in his files pertaining to Gloria Renee Wolfe.” In a letter, dated August 24, 2011, the attorney for the Wal-Mart entities notified the attorney for the Wolfes of his objection to proceeding with any liability and/or damages-related discovery while the motions to dismiss were pending. In a letter dated August 29, 2011, the attorney for the Wolfes insisted on proceeding with the deposition, explaining that “[ajlthough [Dr. Salter’s] testimony will concern mainly the medical condition of [Gloria], thát condition is relevant to her ability/inability to travel to North Carolina to conduct the litigation there.”

On September 20, 2011, the Wal-Mart entities filed an objection to Dr. Salter’s deposition and a motion for a protective order pursuant to Rule 26(c), Ala. R. Civ. P., to prohibit the Wolfes from conducting liability and damages-related discovery while the Wal-Mart entities’ motions to dismiss remained pending.

On November 8, 2011, the trial court held a hearing on the Wal-Mart entities’ objection to Dr. Salter’s deposition and motion for a protective order. A transcript of that hearing is not before this Court. However, the trial court entered an order overruling the Wal-Mart entities’ objection and denying their motion for a protective order. Wal-Mart Stores, Inc., then petitioned this Court for a writ of mandamus.

II. Standard of Review

“ ‘Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon 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 Integon Corp., 672 So.2d 497, 499 (Ala.1995).”

Ex parte Perfection Siding, Inc., 882 So.2d 307, 309-10 (Ala.2003).

III. Discussion

At the outset we note that Wal-Mart Stores, Inc., seeks a writ of mandamus challenging the trial court’s November 8, 2011, order overruling the Wal-Mart entities’ objection to Dr. Salter’s deposition and denying their motion for a protective order. In its petition, Wal-Mart Stores, Inc., presents the following issue for our review:

“Whether the trial court abrogated its duty in refusing to dismiss this action on the grounds that Escambia County, Alabama, is an improper venue and a non convenien forum for a falling merchandise case that occurred in Franklin, North Carolina, and instead, ordered merits discovery to commence?”

(Emphasis added.)

In other words, although Wal-Mart Stores, Inc., seeks a writ of mandamus challenging the discovery order, it nevertheless does not request an order from this Court directing the trial court to take any specific action regarding the discovery. Instead, Wal-Mart Stores, Inc., seeks an order from this Court “directing the Honorable Bert W. Rice, Circuit Court of Es-cambia County, Alabama, to dismiss [the Wolfes’] action against both Wal-Mart entities for improper venue and forum non conveniens.”

Wal-Mart Stores, Inc., has not shown a clear legal right to the order sought, i.e., an order directing the trial court to dismiss the Wolfes’ action on the ground that venue is improper in Escambia County and/or on the ground of forum non conve-niens. Specifically, Wal-Mart Stores, Inc., fails to meet the second requirement for a writ of mandamus — an imperative duty upon the respondent judge to perform, accompanied by a refusal to do so. The trial court in the instant case has neither granted nor denied the Wal-Mart entities’ pending motions to dismiss for improper venue and/or for forum non con-veniens. As previously noted, the trial court continued the April 5, 2011, hearing until May 17, 2011, in order for the Wolfes to properly reply to the venue-related discovery propounded by the Wal-Mart entities. On May 17, 2011, however, the trial court entered an order stating that “[t]he pending Motions in this case are hereby continued generally.” Accordingly, the trial court has made no ruling on the Wal-Mart entities’ motions to dismiss. See Ex parte Windom, 763 So.2d 946, 949 (Ala.2000)(“This Court will not, on a mandamus petition, direct a trial court to take some action it has not refused to take.”). In Ex parte Windom, this Court denied Windom’s petition for a writ of mandamus because Windom had not “shown the second requirement for a writ of mandamus— an imperative duty upon the respondent judge to perform, accompanied by a refusal to do so — because the trial judge has not refused to transfer the action.” 763 So.2d at 949. As can be seen from the procedural history of this case, the issue of proper venue hinges largely on the resolution of the identity of the true defendant, i.e., Wal-Mart East or Wal-Mart Stores, Inc. It does not appear from the materials submitted by Wal-Mart Stores, Inc., that the trial court has denied the Wal-Mart entities’ requested relief of dismissal on any of the grounds asserted or that it has refused to hold a hearing to address those grounds.

IV. Conclusion

Based on the foregoing, Wal-Mart Stores, Inc., has not shown a clear legal right to the order sought. Accordingly, its petition for the writ of mandamus is denied.

PETITION DENIED.

MALONE, C.J., and WOODALL, MURDOCK, and MAIN, JJ„ concur.

      . The Wal-Mart store at which Gloria alleges she was injured is specifically identified as Wal-Mart Store # 1217, located at 305 Holly Springs Plaza, Franklin, North Carolina.

      . Wal-Mart East noted that § 6-3-2, Ala. Code 1975, which governs venue for actions against individuals, also governs venue for actions against partnerships. See Ex parte Burr & Forman, LLP, 5 So.3d 557, 565 (Ala.2008) ("The statute governing venue for individuals, § 6-3-2, Ala.Code 1975, also governs venue for partnerships. For purposes of venue, a partnership is deemed to reside where its partners reside. See Ex parte Miller, Hamilton, Snider & Odom, LLC, [942 So.2d 334 (Ala.2006) ].”).
      Additionally, § 6-3-2(a) states, in pertinent part:

        'll) All other personal actions, if the defendant or one of the defendants has within the state a permanent residence, may be commenced in the county of such residence or in the county in which the act or omission complained of may have been done or may have occurred."

      (Emphasis added.)

      . Wal-Mart Stores, Inc., states in its petition that it filed the subsequent motion to dismiss out of an abundance of caution, i.e., apparently in case the trial court determined that Wal-Mart Stores, Inc., and not Wal-Mart East was the proper defendant.
      Section 6-5-430, Ala.Code 1975, which requires a trial court to determine whether to accept or to decline jurisdiction of an action based upon a claim arising outside the state, provides as follows, in pertinent part:
      "Whenever, either by common law or the statutes of another state or of the United States, a claim, either upon contract or in tort has arisen outside this state against any person or corporation, such claim may be enforceable in the courts of this state in any county in which jurisdiction of the defendant can be legally obtained in the same manner in which jurisdiction could have been obtained if the claim had arisen in this state; provided, however, the courts of this state shall apply the doctrine of forum non conveniens in determining whether to accept or decline to take jurisdiction of an action based upon such claim originating outside this state; and provided further that, if upon motion of any defendant it is shown that there exists a more appropriate forum outside this state, taking into account the location where the acts giving rise to the action occurred, the convenience of the parties and witnesses, and the interests of justice, the court must dismiss the action without prejudice. Such dismissal may be conditioned upon the defendant or defendants filing with the court a consent (i) to submit to jurisdiction in the identified forum, or (ii) to waive any defense based upon a statute of limitations if an action on the same cause of action is commenced in the identified forum within 60 days of the dismissal.”

      . Wal-Mart Stores, Inc., appears to imply that the trial court ordered all merit-based discovery to proceed in this case. However, the only discovery the trial court approved was the deposition of Dr. Salter. As previously noted, Dr. Salter's testimony apparently would relate to Gloria’s medical condition as well as to her ability or inability to travel to North Carolina to pursue the litigation there.


author: PER CURIAM.

text:
    Marla D. HOOIE v. Jerry R. BARKSDALE.
    2100924.
    Court of Civil Appeals of Alabama.
    March 16, 2012.
    Rehearing Denied April 27, 2012.

      Thomas S. McDorman, Birmingham, for appellant.
    Jerry R. Barksdale, pro se.
   PER CURIAM.

Marla D. Hooie appeals from the Limestone Circuit Court’s denial of her motion seeking relief from a default judgment entered against her. We affirm the judgment.

In February 1997, Jerry R. Barksdale filed a complaint in the Limestone Circuit Court (“the trial court”) against Hooie, alleging that Hooie owed him $20,548.70 for legal services that Barksdale had performed. After Hooie failed to answer or otherwise respond to the complaint, Barks-dale obtained a default judgment against her in April 1997. The default judgment was not executed within 10 years of its entry. In November 2010, Barksdale filed a motion to revive the default judgment, pursuant to § 6-9-192, Ala.Code 1975, which provides, in pertinent part, that “[n]o execution shall issue on a judgment ... on which an execution has not been sued out within 10 years of its entry until the [judgment] has been revived.” In December 2010, the trial court granted the motion to revive the default judgment. In January 2011, Hooie was served with a writ of execution on the default judgment.

In April 2011, Hooie filed a Rule 60(b), Ala. R. Civ. P., motion seeking relief from the default judgment. In that motion, Hooie asserted that she had never been served with the complaint and, thus, that the trial court had never obtained personal jurisdiction over her and that the default judgment based on the complaint was therefore void. See Wright v. Rogers, 435 So.2d 90 (Ala.Civ.App.1983) (holding that failure of proper service results in a lack of personal jurisdiction and renders any subsequent default judgment void). Hooie labeled her motion as a Rule 60(b)(6) motion. However, because Hooie’s motion asserted that the default judgment is void, her motion was actually made pursuant to Rule 60(b)(4). See Ex parte R.S.C., 853 So.2d 228, 233 (Ala.Civ.App.2002). In support of her Rule 60(b)(4) motion, Hooie submitted, among other things, her affidavit in which she testified that she had not been served with process. At the hearing on Hooie’s motion, Hooie testified that she did not remember being served with process by the sheriff in March 1997, as Barksdale asserted. The trial court subsequently denied Hooie’s Rule 60(b)(4) motion, and Hooie appealed.

“The standard of review on appeal from an order granting [or denying] relief under Rule 60(b)(4), Ala. R. Civ. P. (‘the judgment is void’), is not whether the trial court has exceeded its discretion. When the decision to grant or to deny relief turns on the validity of the judgment, discretion has no field of operation. Cassioppi v. Damico, 536 So.2d 938, 940 (Ala.1988). ‘If the judgment is void, it is to be set aside; if it is valid, it must stand.... A judgment is void only if the court which rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process.’ Seventh Wonder v. Southbound Records, Inc., 364 So.2d 1173, 1174 (Ala.1978) (emphasis added).”

Ex parte Full Circle Distrib., L.L.C., 883 So.2d 638, 641 (Ala.2003). A motion brought under Rule 60(b)(4) is not subject to the reasonable-time requirement of Rule 60(b) and may be brought at any time. 883 So.2d at 643 (“As a nullity, a void judgment has no effect and is subject to attack at any time.”).

On appeal, as she did below, Hooie contests whether she was served with process. In circuit-court cases in which service is contested, the burden of proof falls on the party asserting proper service to prove that service was performed in accordance with the Alabama Rules of Civil Procedure. Horizons 2000, Inc. v. Smith, 620 So.2d 606, 607 (Ala.1993). The version of the rules applicable in 1997, when the complaint was allegedly served on Hooie, provided that an individual defendant could be served

“by serving the individual or by leaving a copy of the summons and the complaint at the individual’s dwelling house or usual place of abode with some person of suitable age and discretion then residing therein or by delivering a copy of the summons and the complaint to an agent authorized by appointment or by law to receive service of process.”

Former Rule 4(c)(1), Ala. R. Civ. P. Barksdale maintained that he obtained personal service on Hooie through the Limestone County Sheriffs office on March 3, 1997. At that time, as they do today, the rules authorized sheriffs to personally serve process on individuals residing within the state. Former Rule 4.1 and current Rule 4(i)(1)(A), Ala. R. Civ. P. Personal service would have been perfected by locating the individual and delivering a copy of the process and accompanying documents to that person. Former Rule 4.1(b)(3), Ala. R. Civ. P. “Strict compliance with the Rules of Civil Procedure regarding service of process is required.” Wright, 435 So.2d at 91. Thus, the burden rested on Barksdale to show that Hooie was personally served as provided by the operative rules.

The record reflects that, on February 26, 1997, the clerk of the trial court instructed the sheriff to serve process on Hooie at her home address in Athens. The case-action-summary sheet contains a handwritten entry indicating that Hooie was served on March 3, 1997. The record also contains an exhibit, which was part of the clerk’s record, dated March 5, 1997, in which the clerk of the court signed a statement asserting that service had been made on Hooie on March 3, 1997. However, the record does not contain a completed return of service signed by a process server showing a date of service on Hooie. The version of Rule 4.1(b)(3) in effect at the pertinent time provided that a duly executed return of service constituted prima facie evidence of service of process. In her brief to this court, Hooie argues that, “[w]ith no signed [s]heriffs return, there is no [p]rima facie evidence of perfected service and the [a]ppellant does not have the burden to show by clear and convincing evidence that she was not served.” Hooie’s reasoning suggests that strict adherence to the rules regarding service of process required a completed return of service and that, without one, a party could not present a prima facie case of service. We disagree.

As stated above, pursuant to former Rule 4.1(b)(3), service would have been perfected once an authorized process server located the person to be served and personally delivered process to that person. The completion and filing of a return of service merely provided prima facie evidence of that service. “Prima facie evidence” is “evidence which suffices for proof of a particular fact until the fact is contradicted by other evidence.” Lavett v. Lavett, 414 So.2d 907, 911-12 (Ala.1982), overruled on other grounds by McBride v. McBride, 548 So.2d 155, 157 (Ala.1989). The presence of a signed return of service is “prima facie evidence” of the fact of service, but the converse is not also true. That is, the lack of a signed return of service does not compel the conclusion that service was not properly effected and does not require a trial court to ignore other evidence tending to prove the fact of service.

In Welch v. Walker, 4 Port. 120 (Ala.1836), the supreme court held that, in the absence of a sheriffs return of service, sufficient other proof must be obtained to show actual service on the defendant in order to sustain a default judgment. Likewise, in Norwood v. Riddle, 9 Port. 425 (Ala.1839), the supreme court held that a defective return of service did not provide satisfactory evidence of service so that, “[i]n the absence of proof, the [default] judgment was unauthorised.” 9 Port, at 427. In both cases, the supreme court did not hold that a lack of a proper return of service automatically deprived the trial court of jurisdiction; rather, it merely held that jurisdiction was lacking in the absence of other satisfactory proof of service. Nothing suggests that Alabama departed from that reasoning when it adopted court-made rules of civil procedure. By declaring that a valid return constitutes prima facie evidence of service, the rules did not intend, and did not provide, that no other proof of service would suffice.

That said, the burden still remained on Barksdale to present sufficient evidence indicating that Hooie had been personally served, which Hooie argues he did not accomplish. At the hearing on the motion to set aside the default judgment, Barksdale did not offer any positive evidence indicating that Hooie had been personally served. However, at the outset of the hearing, the trial court indicated that it would take judicial notice of several documents in the clerk’s record indicating that Hooie had been served on March 3, 1997, including the documents mentioned above, as well as an entry of the default judgment signed by the clerk. The trial court stated that those documents indicated that the clerk must have received sufficient information that Hooie had been properly served because the clerk would not have otherwise entered the default judgment against • Hooie. In other words, the trial court accepted as prima facie evidence of service the records of the clerk. See Block v. Tosun, 77 So.3d 871 (Fla.Dist.Ct.App.2012) (holding that a prima facie case of proper service had been established in similar circumstances).

The trial court found that Hooie had not presented any credible evidence indicating that she had not been served. Hooie denied that she had been served and additionally presented excerpts from her personal diary that did not reflect any mention of service on March 3, 1997. The trial court specifically stated in open court that it found those excerpts to be self-serving and to lack credibility. See Flint Constr. Co. v. Hall, 904 So.2d 236, 250 (Ala.2004) (“It is axiomatic that it is the [fact-finder’s] province to resolve conflicts in testimony ... and to judge the credibility of witnesses.”). Hooie also presented the testimony of her present husband; however, he testified that his recollection of the events of March 3, 1997, came entirely from Hooie’s diary excerpts. Thus, Hooie did not satisfy the trial court that she had not been properly served. Based on our standard of review, see Allsopp v. Bolding, 86 So.3d 952, 958-59 (Ala.2011) (applying ore tenus standard of review to factual findings made in ruling on Rule 60(b)(4) motion), we find no basis for overturning that factual determination. See Dale Cnty. Dep’t of Pensions & Sec. v. Robles, 368 So.2d 39, 42 (Ala.Civ.App.1979) (“Where, as here, the case is heard ore tenus and there is legal evidence to support the decree, this court will not substitute its judgment for that of the trial court.”).

The trial court did not err in finding that Hooie had been properly served, despite the lack of an executed return of service. The evidence from the clerk’s record was sufficient to present a prima facie case of service, and Hooie did not rebut that evidence. The trial court properly denied the motion to set aside the default judgment, and its judgment is affirmed.

AFFIRMED.

THOMPSON, P.J., and PITTMAN, THOMAS, and MOORE, JJ., concur.

BRYAN, J., concurs in the result, without writing.

      . In her brief to this court, Hooie takes issue with the trial court’s having taken judicial notice of those documents, but she did not make that objection to the trial court, having made, at best, a hearsay objection and arguing to the trial court only that the documents did not effectively prove service. " 'When the grounds for an objection are stated, this impliedly waives all other grounds for the objection to the evidence, and the objecting party cannot predicate error upon a ground not stated in the trial court but raised for the first time on appeal.' ” Hall v. Duster, 727 So.2d 834, 837 (Ala.Civ.App.1999) (quoting Nichols v. Southeast Prop. Mgmt., Inc., 576 So.2d 660, 662 (Ala.1991)); see also Dougherty v. City of Moundville, 949 So.2d 188 (Ala.Crim.App.2006) (where party failed to object when informed that trial court would take judicial notice of certain operative facts, party could not raise issue for first time on appeal). Hence, in reviewing the sufficiency of the evidence, we likewise consider the contents of the clerk’s record and the case-action-summary sheet.


author: MOORE, Judge. THOMAS, Judge,

text:
    D.B. v. A.K.
    2110180.
    Court of Civil Appeals of Alabama.
    April 13, 2012.

      D.B., pro se.
    Ta’Kisha L. Guster, Decatur, for appel-lee.
   MOORE, Judge.

D.B. appeals from a judgment of the Morgan Juvenile Court (“the juvenile court”) dismissing his petition to establish the paternity of A.L.K. (“the child”). We reverse.

Procedural History

On September 19, 2011, D.B. filed in the juvenile court a petition to establish the paternity of the child, whose date of birth is December 21, 2007. D.B. asserted that he is the biological father of the child; that the child’s mother, A.K. (“the mother”), had been married to J.K. at the time the child was born; and that J.K. had been serving with the United States military in Iraq at the time of the child’s conception. D.B. further alleged that, on January 24, 2008, the mother had filed in the Morgan Circuit Court a complaint seeking a divorce from J.K. in which she had stated, in pertinent part: “There has been one (1) minor child, namely [C.K.], whose date of birth is December 22, 2005, born of the marriage of the parties hereto. No other children are expected.” D.B. also alleged that J.K. had “signed an Answer and Waiver wherein he admitted] that there were no children other than [C.K.] born to the parties”; that the mother and J.K. had signed a settlement agreement addressing issues related to only one child, C.K.; and that, on June 16, 2008, the mother and J.K. were divorced by a judgment of the Morgan Circuit Court and that that judgment had incorporated the mother and J.K.’s settlement agreement. The child was not mentioned in the documents relating to the divorce proceedings.

D.B. further asserted that, on February 4, 2009, the juvenile court had entered a default judgment adjudging him to be the father of the child, ordering that the child’s birth certificate be amended to reflect D.'B.’s paternity, and awarding D.B. visitation with the child. He alleged that the mother had filed a motion to alter, amend, or vacate the default judgment, in which she stated that she had been married to J.K. at the time of the child’s conception and that he was listed as the father on the child’s birth certificate; the juvenile court subsequently entered an order setting aside the default judgment as void, stating that J.K. is the child’s legal father, making J.K. a party to the case, ordering the mother to provide J.K.’s address, and ordering the parties to appear for genetic testing. D.B. asserted that he did not receive notice to appear for that testing and that, after neither D.B. nor J.K. appeared for the genetic testing, the juvenile court entered an order on May 26, 2009, stating that, at the time the child was conceived, the mother was married to J.K., that J.K. was named as the father on the child’s birth certifícate, and that J.K. had not renounced his presumption of paternity of the child.

D.B. asserted that he had subsequently filed a petition seeking joint custody of the child and that the mother had moved to dismiss that petition on the ground that D.B. lacked standing. In support of her motion to dismiss, the mother attached an affidavit of J.K. signed on October 4, 2010, in which he stated:

“I understand that I am the legal father of [the child] under Alabama law. I do not wish to have a genetic test in this matter. [The child] is not mentioned in my Decree of Divorce. However, I wish to assert my parental rights with regard to [the child]. I am asking this Court to enter a specific finding of paternity with regard to [the child]. I am the father of [the child].”

Finally, D.B. alleged that he had visited with the child and had paid child support for the child. D.B. attached documentation supporting his allegations. He requested that the juvenile court order a paternity test to establish that he is the father of the child.

On November 1, 2011, the juvenile court entered a judgment holding that D.B.’s paternity claim was barred by the doctrine of res judicata and that he lacked standing to bring the paternity petition because J.K., the child’s legal father, had chosen not to disavow his parental rights to the child as evidenced by his October 4, 2010, affidavit. On November 14, 2011, D.B. filed his notice of appeal to this court.

Discussion

On appeal, D.B. argues that the juvenile court erred in dismissing his petition based on a lack of standing. We agree.

Pursuant to the Alabama Uniform Parentage Act (“the AUPA”), Ala.Code 1975, § 26-17-101 et seq., J.K. is the presumed father of the child because the child was conceived and born during the mother’s marriage to J.K. Ala.Code 1975, § 26-17-204(a)(1) & (2). “If the presumed father persists in his status as the legal father of a child, neither the mother nor any other individual may maintain an action to disprove paternity.” Ala.Code 1975, § 26-17-607(a). This court has held, however, that “a man seeking to establish paternity of a child born during the mother’s marriage to another man must be given the opportunity to establish standing in an evi-dentiary hearing where he and others may present evidence bearing on whether the presumed father ... had persisted in his presumption of paternity.” W.D.R. v. H.M., 897 So.2d 327, 331 (Ala.Civ.App.2004) (stating that, because it could not be determined as a matter of law that the presumed father had persisted in his presumption of paternity, the juvenile court must hold a hearing on that issue); see also R.D.B. v. A.C., 27 So.3d 1283,1287-88 (Ala.Civ.App.2009) (holding that, because the biological father’s “allegations ... call[ed] into question whether the legal father persisted] in his presumption of paternity,” the juvenile court “should permit the biological father and others to present evidence regarding whether the legal father persists in his presumption of paternity”); and J.O.J. v. R.R., 895 So.2d 336 (Ala.Civ.App.2004) (holding that evi-dentiary hearing must be held to determine whether the biological father had standing when there was no evidence regarding whether the child’s legal father had persisted in his presumption of paternity).

In the present case, based on D.B.’s allegations in his petition and the attachments thereto, D.B. presented the trial court with a controversy as to whether J.K. had persisted in his presumption of paternity, and, thus, the juvenile court should not have determined that issue on a motion to dismiss. Accordingly, we conclude that the juvenile court erred in dismissing D.B.’s petition without holding an evidentiary hearing to determine whether J.K. has persisted in his presumption of paternity. We therefore reverse the juvenile court’s judgment and remand this cause for the juvenile court to hold an evidentiary hearing in accordance with this opinion.

REVERSED AND REMANDED WITH INSTRUCTIONS.

THOMPSON, P.J., and PITTMAN and BRYAN, JJ., concur.

THOMAS, J., concurs in the result, with writing.

THOMAS, Judge,

concurring in the result.

I concur in the result because, although I do not agree with the rationale expressed in footnote 3 of the main opinion and would ordinarily consider both bases advanced by the juvenile court for its dismissal of D.B.’s petition, especially when, as in this case, the appellant fails to raise an argument on appeal regarding one of the grounds expressly relied on by the trial court, Campton v. Miller, 19 So.3d 245, 250 (Ala.Civ.App.2000), I do not believe the juvenile court was free to dismiss D.B.’s petition sua sponte on the ground of res judicata. Ex parte Beck, 988 So.2d 950, 955 (Ala.2007) (quoting Waite v. Waite, 891 So.2d 341, 343-44 (Ala.Civ.App.2004)) (concluding that a trial court may not dismiss an action sua sponte on a ground that would constitute an affirmative defense that may be waived if not asserted by the opposing party).

      . The mother had filed the petition that had resulted in that judgment.

      . D.B. did not state in which court he had filed his custody petition, the case number that was assigned to the petition, or the outcome of that action; however, it can be inferred from the record that he filed his custody petition in the Morgan Circuit Court, that the action was assigned case no. DR-10-624, and that the case was ultimately dismissed on October 20, 2010.

      . We note that, because the juvenile court determined that D.B. lacked standing to bring his action, the juvenile court lacked subject-matter jurisdiction to further determine that the doctrine of res judicata barred his action. See, e.g., Cadle Co. v. Shabani, 4 So.3d 460, 463 (Ala.2008) ("When the absence of subject-matter jurisdiction is noticed by, or pointed out to, the trial court, that court has no jurisdiction to entertain further motions or pleadings in the case. It can do nothing but dismiss the action forthwith.”); and State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1028 (Ala.1999) ("When a party without standing purports to commence an action, the trial court acquires no subject-matter jurisdiction.”). Therefore, that portion of the trial court’s judgment dismissing the case on the ground of res judicata is void, and we need not consider it further. However, we agree with the principle set forth in Judge Thomas’s special writing that a trial court may not dismiss a complaint sua sponte on the ground of res judicata. 93 So.3d at 949 (Thomas, J., concurring in the result).