author: WOODALL, Justice.

text:
    Howard ROSS v. Shauli ROSEN-RAGER and Rene Rosen-Rager.
    1080721.
    Supreme Court of Alabama.
    Aug. 27, 2010.
    As Modified on Denial of Rehearing Nov. 24, 2010.

      William E. Shreve, Jr., of Lyons, Pipes & Cook, P.C., Mobile; and Patrick Jones, Huntsville, for appellant.
    Richard L. Morris of Sirote & Permutt, P.C., Huntsville, for appellees.
   WOODALL, Justice.

Howard Ross appeals from a partial summary judgment awarding Shauli Ro-sen-Rager and Rene Rosen-Rager $13,343.47 in compensatory damages and from a judgment entered on a jury verdict awarding the Rosen-Ragers $350,000 in punitive damages in the Rosen-Ragers’ action against Ross and others alleging, among other things, trespass and ejectment. We affirm in part and affirm conditionally in part.

I. Factual and Procedural Background

On May 9, 2003, property owned by Margie Campbell in Huntsville was sold by the tax collector of Madison County for the collection of ad valorem taxes, which remained delinquent from the previous year. Ross, the winning bidder, paid $750 for the property, for which he received a “certifí-cate of land sold for taxes.” Ross purchased insurance on the property, paying a total of $1,178 in premiums. He also made improvements totaling $1,195.

At the time Ross purchased the property, there was a mortgage on the property held by Mortgage Electronic Registration Systems, Inc. (“MERS”). Campbell defaulted on the debt secured by the mortgage, and, on July 3, 2003, MERS purchased the property at a foreclosure sale, for which it received a foreclosure deed. On September 28, 2004, MERS paid into the Madison County Probate Court $1,612.93 to redeem the property, pursuant to Ala.Code 1975, § 40-10-120 et seq. The payment included Ross’s original tax-purchase price of $750, plus subsequent taxes paid by Ross, and interest calculated at 12%. In return, the probate court issued MERS a “certifícate of redemption,” pursuant to Ala.Code 1975, § 40-10-127. MERS’s payment did not include any amount for the insurance Ross had purchased or for the improvements he had made to the property.

The certificate of redemption was duly recorded in the probate office, and, for all that appears, Ross was provided with notice of the issuance of the certificate of redemption as required by Ala.Code 1975, § 40-10-128, which provides:

“If the lands redeemed were bid in by any person other than the state, the redemption money must be deposited by-the judge of probate in the county treasury and there kept separate and apart from the general funds of the county, and the judge of probate shall notify the purchaser of such deposit by mailing notice to the residence or place of business of such purchaser; or to such address as the purchaser may furnish the judge of probate at the time he secures his certificate of purchase; and, upon the demand of the purchaser, his legal representative or assignee and the surrender of the certifícate of purchase, the judge of probate must give him an order on the treasury for the same.”

(Emphasis added.)

Ross does not assert that he was not notified of the issuance of the certificate of redemption. In fact, on December 22, 2004, Ross caused to be recorded a “verified statement of a lien” on the property for “materials, repair, and improvements to the dwelling for the title holder of the property,” namely, MERS. Ross declined to collect the $1,612.93 that MERS had paid into the probate court.

On February 7, 2005, Ross leased the property to Ron Fletcher, who went into possession. On May 13, 2005, MERS, incorrectly believing Campbell was residing on the property, filed in the Madison Circuit Court a “complaint for ejectment” against Campbell. MERS v. Campbell, CV-05-917. As soon as MERS learned the identity of Ross’s tenant, it amended its complaint to add Fletcher as a defendant. Still later, on December 9, 2005, MERS again amended its complaint to add Ross as a defendant.

Meanwhile, on November 5, 2005, Ross sued Fletcher in the Madison District Court for unlawful detainer. Ross v. Fletcher, DV-05-2689. On December 14, 2005, the district court dismissed the action, stating: “[Ross] does not own clear title to the property that is the subject of this law suit, and therefore, has no standing to bring this action.”

MERS was unable to effect service of process on Ross. Its unserved civil summons was returned with the notation: “Avoiding Service.” In February 2006, however, Ross and MERS exchanged correspondence regarding payment for the insurance and improvements and about the ongoing litigation. For example, on February 4, 2006, Ross addressed the following letter to MERS’s attorney:

“Re: Redemption of — S. Westdale Court, Huntsville Alabama 35805
“Tenants have informed me that you plan to redeem the above reference[d] property. If so, the following is a statement of additional lawful charges that must be paid to me under the provisions of Code of Alabama § 40-10-122(b)-(e) in order to effect the redemption:
“1. Paint Interior $ 700.00
“2. Carpet 2 bedrooms $ 165.00
“3. Dishwasher Repair $ 30.00
“4. Remove Trash and Clean $ 150.00
“5. Clean and mow yard $ 50.00
“6. Section and remove fallen tree $ 100.00
“7. State Farm Insurance $1,178.00
“TOTAL $2,373.00”

On February 13, 2006, MERS’s attorney sent Ross the following response:

“Thank you for your letter of February 4, 2006. As I’m sure you are aware, the court set this for a hearing February 2006, and, reviewing your itemization costs, in light of § 40-10-122, it would appear that the reasonable and necessary expenses would be limited to $1,195. If you are willing to accept this without a hearing, we will notify the court that the case can be settled without a hearing. Please advise me if this will be acceptable.”

(Emphasis added.)

Ross’s response to that information was another letter to MERS’s counsel on April 28, 2006. That letter stated:

“This letter is to notify you that you have yet to complete the redemption of the above referenced property. I have not received payment in the amount of two thousand three hundred and seventy three dollars ($2,373.00) for preservation improvements which I have made, and my rights to the property have not been terminated.”

(Emphasis added.)

Meanwhile, on March 14, 2006, the trial court in CV-05-917 entered a summary judgment in favor of MERS, thereby ejecting Ross from the property. The same day, the court issued a “writ of possession” in favor of MERS and against Ross, Campbell, and Fletcher. On July 24, 2006, MERS sent Ross a letter apprising him of, among other things, the fact that the court had given it the right to take possession of the property. Two days later, on July 26, 2006, MERS executed a “special warranty deed” conveying the property to the Ro-sen-Ragers.

On August 1, 2006, the Rosen-Ragers entered into an agreement with RPM Realty, Inc. (“RPM”), whereby RPM agreed to manage the property for the Rosen-Ragers to produce rental income. RPM contracted with other entities, including Carpet Crafters, Inc., to clean the residence and to install new carpet. While RPM was thus engaged, Ross leased the property to Charles Hurt and Sharon Baxter. When Carpet Crafters arrived to install the carpet, its workers discovered Hurt and Baxter in the residence. Carpet Crafters immediately notified RPM, which dispatched its manager Suzanne Tomlin-son to investigate. An altercation ensued, prompting an appearance by the Huntsville Police Department, with Baxter defending her right to possession as Ross’s tenant.

Subsequently, Tomlinson posted on the property a notice of termination of a pos-sessory interest and a “notice to vacate” on September 19, 2006, and October 5, 2006, respectively, which Hurt and Baxter ignored. During this time, according to Baxter, Ross told Baxter simply “to disregard papers that anybody was bringing [her].”

On October 24, 2006, the Rosen-Ragers sued Hurt, Baxter, and Ross in the Madison Circuit Court. The complaint alleged, among other things, that Ross had trespassed on the property by “wantonly inducing” Hurt and Baxter to “enter into possession of the property” under “circumstances of insult and contumely.” It alleged that the defendants had “maliciously, willfully, oppressively, and/or wantonly interfered with the Rosen-Ragers’ exclusive possession of the property.” The complaint also contained a claim of intentional interference with business or contractual relations and a claim for ejectment, by which the Rosen-Ragers sought a judgment ordering the defendants “to vacate the property.” In April 2007, the circuit court entered a default judgment against Hurt and Baxter for $18,402.52 in compensatory damages and $26,805.04 in punitive damages. This appeal involves no issue as to the correctness of that judgment.

On October 29, 2007, the Rosen-Ragers moved for a partial summary judgment against Ross on the issues of liability and compensatory damages. Ross filed a cross-motion for a partial summary judgment, contending that MERS’s purported redemption did not comply with § 40-10-122 and was therefore legally ineffective to divest Ross of his possessory interest in the property. On December 19, 2007, the circuit court entered a partial summary judgment in favor of the Rosen-Ragers on their claims, including (1) trespass, (2) wantonness, (3) interference with business or contractual relations, and (4) ejectment. It awarded the Rosen-Ragers $13,843.47 in compensatory damages, but it reserved for a jury trial the issue of Ross’s liability for punitive damages.

The essential issue at trial was whether Ross’s conduct warranted the imposition of punitive damages. Ross took the position that his conduct was justified by MERS’s failure to pay the amount of money he had expended for improvements and insurance premiums. More specifically, Ross testified that the statutory scheme allowed him to remain in possession until he had received payment for those expenditures. However, the circuit court would not allow Ross to read from the statutes or to introduce them into evidence. At the close of the trial, the court instructed the jury on the law of wantonness but did not instruct the jury on the relevance, if any, of the statutes on which Ross purported to rely. The jury awarded $350,000 in punitive damages.

The circuit court entered a final judgment on the damages awards on October 24, 2008. That same day, the circuit court scheduled a hearing for review of the punitive-damages award in accordance with this Court’s decisions in Hammond v. City of Gadsden, 493 So.2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala.1989) (hereinafter referred to as “the Hammond hearing”).

On November 18, 2008, Ross filed a motion for a new trial, which was denied. In a separate order, the circuit court also declined to remit the punitive-damages award. Ross appealed. The issues on appeal involve (1) whether the partial summary judgment was proper, (2) whether the trial was infected with evidentiary errors, and (3) whether the punitive-damages verdict was excessive.

II. Discussion

A. Partial Summary Judgment

“To prevail on [their] claims,” says Ross, “the Rosen-Ragers had to show that they and not Ross owned and had the right to possess the property. Otherwise, Ross committed no trespass, much less a wanton trespass, and the Rosen-Ragers were not entitled to ejectment....” Ross’s brief, at 23. We agree.

“‘“[T]he manner in which the [summary-judgment] movant’s burden of production is met depends upon which party has the burden of proof ... at trial.” ’ ” Denmark v. Mercantile Stores Co., 844 So.2d 1189, 1195 (Ala.2002) (quoting Ex parte General Motors Corp., 769 So.2d 903, 909 (Ala.1999), quoting in turn Berner v. Caldwell, 543 So.2d 686, 691 (Ala.1989) (Houston, J., concurring specially)). If the movant is the plaintiff with the ultimate burden of proof, his “ ‘proof must be such that he would be entitled to a directed verdict [now referred to as a judgment as a matter of law, see Rule 50, Ala. R. Civ. P.] if this evidence was not controverted at trial.’” Ex parte General Motors, 769 So.2d at 909 (quoting Berner, 543 So.2d at 688).

“The first prerequisite for [a summary judgment] in favor of a movant who asserts a claim ... is that the claim ... be valid in legal theory, if its validity be challenged. See Driver v. National Sec. Fire & Cas. Co., 658 So.2d 390 (Ala.1995). The second prerequisite for [a summary judgment] in favor of such a movant, who necessarily bears the burden of proof, American Furniture Galleries v. McWane, Inc., 477 So.2d 369 (Ala.1985), McKerley v. Etowah-DeKalb-Cherokee Mental Health Board, Inc., 686 So.2d 1194 (Ala.Civ.App.1996), and Oliver v. Hayes International Corp., 456 So.2d 802 (Ala.Civ.App.1984), is that each contested element of the claim ... be supported by substantial evidence. See Driver, supra, and McKerley, supra. The third prerequisite for [a summary judgment] in favor of such a movant is that the record be devoid of substantial evidence rebutting the movant’s evidence on any essential element of the claim.... See Driver, supra, and First Fin. Ins. Co. v. Tillery, 626 So.2d 1252 (Ala.1993). Substantial rebutting evidence would create an issue of fact to be tried by the finder of fact and therefore would preclude [a summary judgment]. See Driver, supra, and First Financial, supra. [Summary judgment] in favor of the party who asserts the claim ... is not appropriate unless all three of these prerequisites coexist. See Driver, supra, and First Financial, supra, McKerley, supra, and Oliver, supra.

Ex parte Helms, 873 So.2d 1139, 1143 (Ala.2003).

The circuit court essentially held, as a matter of law, that Ross had wantonly trespassed on the Rosen-Ragers’ property. “Wantonness in a trespass action is established by the mere knowledge on the part of the defendant of his invasion of the plaintiffs rights.” Cummans v. Dobbins, 575 So.2d 81, 82 (Ala.1991); Calvert & Marsh Coal Co. v. Pass, 393 So.2d 955, 957 (Ala.1980). Although good faith is not a defense to a claim of trespass, a showing of good faith may “refute the charge of ... wantonness.” Ramos v. Fell, 272 Ala. 53, 58, 128 So.2d 481, 484-85 (1961). Thus, the dispositive question is whether there was substantial evidence that when Ross induced Hurt and Baxter to enter into possession of the property, the Rosen-Ragers had lawful possession of the property, and, if they did, whether there was substantial evidence that Ross placed Hurt and Baxter on the property with a good-faith belief that he had the right of possession.

Ross’s arguments are based on Ala. Code 1975, § 40-10-74 (tax purchaser’s right of possession) and § 40-10-122 (process for redemption of land from tax sale). Section 40-10-74 provides, in pertinent part:

“Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector; and, if possession is not surrendered within six months after demand therefor is made by said purchaser or his assignee, the said purchaser or his assignee may maintain an action in ejectment or a statutory real action in the nature of ejectment, or other proper remedy for the recovery of the possession of the lands purchased at such sales and shall be entitled to hold the possession thereof on recovery, subject, however, to all rights of redemption provided for in this title.”

(Emphasis added.) At the time of the events made the basis of this action, § 40-10-122 provided, in pertinent part:

“(a) In order to obtain the redemption of land from tax sales where the same has been sold to one other than the state, the party desiring to make such redemption shall deposit with the judge of probate of the county in which the land is situated the amount of money for which the lands were sold, with interest payable at the rate of 12 percent per annum from date of sale, and, on the portion of any excess bid that is less than or equal to 15 percent of the market value as established by the county board of equalization, together with the amount of all taxes which have been paid by the purchaser, which fact shall be ascertained by consulting the records in the office of the tax collector, or other tax collecting official, with interest on said payment at 12 percent per annum. If any taxes on said land have been assessed to the purchaser and have not been paid, and if said taxes are due which may be ascertained by consulting the tax collector or other tax collecting official of the county, the probate judge shall also require the party desiring to redeem said land to pay the tax collector or other tax collecting official the taxes due on said lands which have not been paid by the purchaser before he or she is entitled to redeem the same. In all redemptions of land from tax sales, the party securing the redemption shall pay all costs and fees as herein provided for due to officers and a fee of $.50 to the judge of probate for his or her services in the matter of redemption. This application and payment may be executed by an on-line transaction via the Internet or other on-line provision.
“(c) With respect to property which contains a residential structure at the time of the sale regardless of its location, the proposed redemptioner must pay to the purchaser or his or her transferee, in addition to any other requirements set forth in this section, the amounts set forth below:
“(1) All insurance premiums paid or owed by the purchaser for casualty loss coverage on the residential structure with interest on the payments at 12 percent per annum.
“(2) The value of all preservation improvements made on the property determined in accordance with this section with interest on the value at 12 percent per annum.”

(Emphasis added.)

According to Ross, redemption does not occur until the redemptioner complies fully with § 40-10-122(a) and (c)(1)-(2), more specifically, until the tax-sale purchaser receives not only the amounts set forth in subsection (a), but also the amounts set forth in subsection (c)(l)-(2), namely, the “insurance premiums” and the “value of all preservation improvements” made on the property at the statutory rate of interest. Ross insists that he acquired the right of possession as the tax-sale purchaser, which right, he argues, continues until the property is redeemed in conformity with § 40-10-122. Ross contends that, because he was never paid for improvements and insurance, § 40-10-122 was never triggered, the property was never actually redeemed, and he never lost the right of possession.

In response, the Rosen-Ragers state:

“[The payments set forth in § 40-10-122(c) ] are in addition to those payments required ‘in order to obtain the redemption’ by subsection (a). Nothing in the plain language of the statute indicates that the requirements of [subsection (c) ] extend to the tax sale purchaser an ongoing ability to possess the redeemed property or interfere with the legal owner’s possession. Rather, they create a right of monetary relief which the tax sale purchaser may pursue. Ross’s pursuit of any right to monetary relief from MERS does not concern the [Rosen-Ragers].... Whether or not Ross is entitled to additional payment from MERS is simply not a title issue.”

Rosen-Ragers’ brief, at 50-51 (some emphasis added).

Moreover, they state that Ross’s “argument must fail as a statutory Certificate of Redemption, evidencing redemption, was issued by the Madison County Judge of Probate on September 28, 2004.” Rosen-Ragers’ brief, at 47-48. We need not decide whether the failure of the redemption-er to make the payments set forth in subsection (c), standing alone, affects the tax-sale purchaser’s right to possession, because, in any case, a tax-sale purchaser may not simply ignore a certificate of redemption as Ross did in this case.

Ross concedes, as he must, that a certificate of redemption is prima facie evidence of redemption. Ross’s brief, at 34. See AIa.Code 1975, § 40-10-81 (“the books and records belonging to the office of the judge of probate ... shall be prima facie evidence of the facts stated therein”); § 40-10-127 (to be evidence of redemption, the certificate must be signed); see also Ala.Code 1975, § 12-13-l(c) (“All orders, judgments and decrees of probate courts shall be accorded the same validity and presumptions which are accorded to judgments and orders of other courts of general jurisdiction.”).

The certificate of redemption was not void on its face. If it was issued erroneously, Ross should have challenged the certificate judicially. Ross does not allege that there was no vehicle by which to challenge the correctness of the certificate of redemption. Indeed, this Court has said:

“In Alabama, circuit courts have ‘a general superintendence’ over the probate courts. Ala.Code 1975, § 12-11-30(4). Encompassed in this superintendence is the power to review certain judgments and orders of the probate court, either through direct appeal or by-petition for an extraordinary writ. See Helms v. McCollum, 447 So.2d 687 (Ala.1984). Sections 12-22-2 and 12-22-20, Ala.Code 1975, authorize appeals from final judgments of a probate court to either the circuit court or the Supreme Court.
“The appellate jurisdiction of the circuit court can also be invoked by a petition for an extraordinary writ. Ala. Const. of 1901, [§ 142](b). Orders as to which no statute grants appellate jurisdiction are reviewed on petitions for writ of certiorari, mandamus, or prohibition. Town of Flat Creek v. Alabama By-Products Corp., 245 Ala. 528, 17 So.2d 771 (1944).”

Franks v. Norfolk Southern Ry., 679 So.2d 214, 216 (Ala.1996). See Boyd v. Holt, 62 Ala. 296 (1878) (refusal of the probate judge to issue a certificate of redemption for land sold for taxes was reviewable in the circuit court by a petition for a writ of mandamus).

Redemption divests the tax-sale purchaser of a possessory interest in the property. Washington v. ORIX Credit Alliance, Inc., 825 So.2d 828 (Ala.Civ.App.2001). Here, the unchallenged certificate of redemption, issued in September 2004, divested Ross of his possessory interest in the property. Nevertheless, Ross thereafter leased the property, first to Fletcher, then to Hurt and Baxter. Thus, Ross caused, as a matter of law, his tenants to trespass on the property.

On the issue of wantonness, it is undisputed that, rather than mount a judicial challenge to the certificate of redemption, Ross simply ignored it and treated the property as though he still had a possessory interest. Although Ross was not formally served with process in MERS v. Campbell, CV-05-917, which involved his interest in the property, there was evidence indicating that he knew that that litigation was pending, at least as early as February 13, 2006, that is, before the March 14, 2006, judgment éntered in that case, but chose to ignore that litigation and also instructed his tenants not to respond to notices involving the property.

“If the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity.” Kihl v. Pfeffer, 94 N.Y.2d 118, 123, 722 N.E.2d 55, 58, 700 N.Y.S.2d 87, 90 (1999). “A party ignores a valid order of court at its own peril.” United Servs. Auto. Ass’n v. Strasser, 492 So.2d 399, 402 n. 1 (Fla.Dist.Ct.App.1986).

Regardless of the whether the provisions of § 40-10-122 were properly applied, Ross was not excused or justified in ignoring the judicial orders and processes involving this property. From September 2004 until the commencement of this action on October 24, 2006, at the least, Ross sought to occupy the property by proxy without any justifiable claim of right. There was substantial evidence that Ross induced Hurt and Baxter to enter into possession of the property with knowledge that he had no right of possession, and there was not substantial evidence that Ross acted in good faith or with any justification in so doing. Indeed, Ross’s interpretation of the applicable statutes is so wholly lacking in any foundation in law as to admit of no other conclusion than that he acted with a state of mind consistent with wantonness as a matter of law.

Ross also argues that the Rosen-Ragers were not bona fide purchasers of the property. Specifically, he states:

“As a result of MERS’s failure to redeem, and because the Rosen-Ragers were not bona fide purchasers, they acquired the property subject to Ross’s interest.... As a result, Ross continued to have the right to possess and rent the property. Therefore, the Rosen-Ragers failed to prove elements essential to all of their claims, and they were not entitled to summary judgment on any claim.”

Ross’s brief, at 44-45 (emphasis in original). In response, the Rosen-Ragers contend that their “status as bona fide purchasers is irrelevant, as Ross possessed no claim in the property against which [they] must assert their status as bona fide purchasers.” Rosen-Ragers’ brief, at 55 (emphasis added). We agree with the Rosen-Ragers.

Ross lost his interest in the property when he failed timely to challenge the certificate of redemption. The loss foreclosed Ross’s defenses against any trespass claim that might have been brought by MERS, as well as his defenses against the Rosen-Ragers, regardless of whether they were bona fide purchasers of MERS’s interest. Consequently, the circuit court did not err in entering a summary judgment for the Rosen-Ragers on their claim of wanton trespass.

B. Evidentiary Issues at Trial

Ross raises two issues relating to the admissibility of evidence during the trial of the case, which errors are reviewed to determine whether the circuit court exceeded its discretion. Bowers v. Wal-Mart Stores, Inc., 827 So.2d 63, 71 (Ala.2001). According to Ross, some evidence was improperly admitted, while some evidence was improperly excluded. “A trial court’s ruling on the admission or exclusion of evidence will be reversed only if it is shown that the trial court exceeded its discretion in so ruling.” Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So.2d 1, 7 (Ala.2007).

1. Admission of Evidence of Defendant’s Wealth

First, Ross contends that the circuit court improperly allowed the Rosen-Ragers to place before the jury evidence of Ross’s financial condition. Specifically, the Rosen-Ragers presented evidence indicating that, including the $1,612.93 MERS had paid to redeem the property — which money Ross refused to collect — the Madison County Probate Court was holding approximately $150,000 that Ross was refusing to collect in other such cases for similar reasons. According to Ross, he “had acquired a number of tax-sale properties” for which he had not been reimbursed for insurance and improvements, and he was refusing payment as in this case, “because he was concerned that accepting the probate money might be construed as ratification of an incomplete redemption.” Ross’s brief, at 53.

The Rosen-Ragers contend that the evidence that Ross was refusing to collect money held for him by the probate court was admissible to show that Ross’s refusal to relinquish possession of the property in this case was part of a systematic scheme or practice calculated to deny the rights of “legal title holders to peacefully possess their property,” Rosen-Ragers’ brief, at 61, and that, in any case, Ross did not properly object to the evidence when proffered. In connection with the non-preservation argument, the following colloquy occurred at trial during the testimony of Jan Dismuke, an accountant clerk at the Madison County Probate Office:

“Q. [By the Rosen-Ragers’ counsel:] Did Mr. Ross ever come and pick that money up?
“A. [By Dismuke:] No, sir.
“Q. How much redemption money are you holding for Howard Ross that he has not come and picked up?
“[By Ross’s counsel:] Objection, Judge, that’s irrelevant.
“[The court:] Overruled.
“Q. [By the Rosen-Ragers’ counsel:] You may answer.
“A. One hundred and forty-nine thousand, two hundred and thirty-seven dollars and fifty-nine cents.
“Q. No more questions.”

(Emphasis added.)

It is well settled that a “specific objection is a condition precedent to appellate review while a general objection is a waiver of appellate review.... A general objection to evidence is one which does not definitely and specifically state the ground upon which it is based so that the court may intelligently rule on it.” II Charles W. Gamble & Robert J. Goodwin, McElroy’s Alabama Evidence § 426.01(7), at 2125 (6th ed.2009) (hereinafter referred to as “McElroy ”). This rule applies “unless the evidence is patently illegal and cannot be made legal for any purpose.” Harris v. Martin, 271 Ala. 52, 53, 122 So.2d 116, 118 (1960). An objection on the ground that the proffered evidence is “irrelevant” is a general objection. Few v. State, 518 So.2d 835, 837 (Ala.Crim.App.1987); Manson v. State, 349 So.2d 67, 81 (Ala.Crim.App.1977). “The party who lodges a general objection at trial may not expand the objection on appeal by including specific grounds.” McElroy, supra, at 2125.

Dismuke’s testimony was not patently inadmissible and illegal for every purpose. It bore a logical relationship to the ultimate question — whether Ross had consciously or deliberately engaged in oppression or wantonness with regard to the Rosen-Ragers. Evidence is relevant if it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Rule 401, Ala. R. Evid. Indeed, Ross essentially concedes that evidence of multiple, similar instances of ignoring certificates of redemption would have been admissible for that purpose. In this Court, Ross states: “The Rosen-Ragers could have made their point simply by asking the probate clerk how many other tax-sale properties Ross owned as to which he had not picked up funds deposited for redemption. The amount of funds deposited was ... inadmissible evidence of Ross’s financial condition.” Ross’s reply brief, at 27-28 (emphasis in original). This is an argument that should have been made to the circuit court at the time of the proffer, not for the first time in this Court. Because Ross did not properly object to Dismuke’s testimony, he is not entitled to a reversal based on its allegedly improper admission.

2. Exclusion of the Tax-Sale and Redemption Statutes

During the trial, Ross attempted to read to the jury, or otherwise to place in evidence, portions of the redemption and tax-sale statutes, which, he alleged, gave him the right to place tenants on the property after, and despite, the issuance of the certificate of redemption. After an objection by the Rosen-Ragers’ counsel, Ross’s counsel stated to the circuit court:

“If we can read certain aspects of the statute.... That gives us an opportunity to show our primary defense of justification. If we are not able to discuss the specific statute and what it states and his understanding of it at all, then I think that entirely eliminates our ... defense.
“... If there is no degree that Mr. Ross would have any justification, then, obviously, the [punitive] damages could be higher. If there is complete justification for the actions that he has done, even though you determined they’re wrong previously, there would be no damages, conceivably.”

(Emphasis added.)

The circuit court disallowed Ross’s proffer. Ultimately, it charged the jury solely on wantonness as a basis for punitive damages. Ross objected to the charge on the ground that it did not contain an instruction on reliance on the statutes as “justification.” That objection was overruled. Ross now argues that the judgment entered on the jury’s verdict must be reversed, because, he says, “[e]xcluding the statutes deprived the jury of information vital to assessing [his] conduct and determining whether and what punishment was appropriate.” Ross’s brief, at 57.

We disagree with this argument. The partial summary judgment finding Ross liable for wantonness being proper as discussed above, Ross’s alleged understanding of the statutes was irrelevant. The admission of the statutes into evidence would merely have invited the jury to nullify the partial summary judgment, which had correctly resolved in the Rosen-Rag-ers’ favor the issue whether, as a matter of law, Ross was justified to any degree. Consequently, the circuit court did not exceed its discretion in shielding the jury from the text of the statutes.

C. Review of the Punitive-Damages Award

Finally, Ross contends that the punitive-damages award is excessive, and he seeks a substantial remittitur. This Court has a duty to conduct a de novo review of a punitive-damages award. Acceptance Ins. Co. v. Brown, 832 So.2d 1 (Ala.2001). According to Ross, the amount of the jury’s verdict “far exceeds” the amount that, as stated in Green Oil Co. v. Hornsby, 539 So.2d at 222, “ ‘will accomplish society’s goals of punishment and deterrence.’ ” Ross’s brief, at 60.

In reviewing a punitive-damages award, we apply the factors set forth in Green Oil, within the framework of the “guideposts” set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), and restated in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). See AutoZone, Inc. v. Leonard, 812 So.2d 1179, 1187 (Ala.2001) (Green Oil factors remain valid after Gore).

The Gore guideposts are: “(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” Campbell, 538 U.S. at 418, 123 S.Ct. 1513. The Green Oil factors, which are similar, and auxiliary in many respects, to the Gore guideposts, are:

“(1) the reprehensibility of [the defendant’s] conduct; (2) the relationship of the punitive-damages award to the harm that actually occurred, or is likely to occur, from [the defendant’s] conduct; (3) [the defendant’s] profit from [his] misconduct; (4) [the defendant’s] financial position; (5) the cost to [the plaintiff] of the litigation; (6) whether [the defendant] has been subject to criminal sanctions for similar conduct; and (7) other civil actions [the defendant] has been involved in arising out of similar conduct.”

Shiv-Ram, Inc. v. McCaleb, 892 So.2d 299, 317 (Ala.2003) (paraphrasing the Green Oil factors).

1. Gore Reprehensibility Guidepost and Green Oil Factors (1), (2), (5), and (7)

“Perhaps the most important in-dicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” Gore, 517 U.S. at 575. The circuit court’s Hammond order is instructive on this point; it states, in pertinent part:

“Ross is an anathema upon the court system and the public. He has engaged in a pattern and practice of ignoring and actively avoiding the authority of the courts himself, while using hyper-technical or distorted interpretations of the law that suit him against others. The harm Ross causes in the process is substantial, not only to the private parties directly involved, but also to the integrity of the law and the integrity of society.
“In this case, Ross purchased the tax interest in the property at issue. [MERS], holding a pre-existing mortgage on the property, foreclosed upon and then redeemed the property from the tax sale by payment to the Madison County Judge of Probate, receiving a Certificate of Redemption. Ross began negotiation with [MERS] for further payment to him for purported improvements he made to the property. Simultaneously, [MERS] instituted Court proceedings to remove Ross’s tenants from the property. Ross’s knowledge of and involvement with those proceedings is evident, as is his avoidance of legitimately having his entitlement to any payments finally determined through such proper channels. Ross made considerable effort to keep his right to additional payments a live issue, giving him, in his mind, a colorable claim to possess the property, while actively avoiding any action he might be required to admit resolved the issue. Ross also, during the relevant time, unsuccessfully sued [Fletcher] for failing to pay him rent on the involved property and received a judgment indicating he was not entitled to collect rent from tenants on that property [Ross v. Fletcher, DV-05-2689].
“Despite ... court rulings that provided Ross ample notice of his tenuous position, Ross persisted in possessing the property and renting it to tenants. [MERS], having received a final order of the Madison County Circuit Court ejecting Ross’s tenants, informed Ross of that Court action and conveyed the property to the [Rosen-Ragers]....
“Ross’s conduct in this case cannot be viewed in isolation. This Court previously adjudicated the case of Cindy L. Schrock v. Howard Ross, CV 06-900. In that case, Ross also purchased the tax interest in a property. That property was redeemed by a mortgage company after foreclosing on the property. That property was sold to an innocent third party, Cindy Schrock. Ms. Schrock entered into her new property and evidenced her possession. When Ms. Schrock was away from her property on vacation, Ross moved tenants in and fought to keep them in the property. This Court, after a full trial, restored possession to Ms. Schrock and ordered Ross to pay damages of $16,639.
“The scope of Ross’s enterprise, as well as his general way of doing business, is further evidenced by the fact that the Madison County Judge of Probate holds approximately $150,000 for Ross. When the property at issue in this case was redeemed by a payment of approximately $1,600 to the Probate Judge, Ross did not collect the redemption money, to which he was entitled, as the tax sale purchaser. According to Ross’s testimony, he purposely failed to collect the funds for concern that his claims to possession of the property would thereby be diminished. Similar evidence was presented in Ms. Schrock’s case. Ross’s approach to these funds is further evidence of the reprehensible gamesmanship he applies to his enterprise. The accumulation of these funds to approximately $150,000 evidences the vastness of his scheme. Finally, that Ross would deny himself possession of such a sum to further his scheme is evidence of its profitability and Ross’s resources.
“Any citizen owning one of the numerous properties represented by the $150,000 in redemption proceeds held for Ross by the Probate Judge must beware. Ross avoids collecting those funds to aid his articulation of an excuse for possession of those properties. Ross has demonstrated that, if he can find those properties vacant due to an owner’s holiday vacation, renovation or otherwise, he will lease them. He will lease them after a court rules his tenants cannot possess them. He will lease them after a court rules he is not entitled to collect rent on them. Every month he can lease them equals another rental payment received. He will not prosecute a resolution of his articulated excuses for possessing the properties or collect redemption payments due him, because to do so would alleviate excuses for possession and collecting further rent.
“Ross’s tactics are of great concern. Each time Ross places tenants in a home belonging to another (whether the homeowner be on vacation or absent for other reasons), he places tenants and homeowners at great risk for dangerous confrontation. Each time he displays to a homeowner his ability to, in fact, place tenants in their home and collect rent in the face of deeds, certificates of redemption, court orders and other protections in which our society vests faith, he erodes confidence in our society and encourages the worst of behavior. Ross challenges those in his path to navigate the Court system and laws (with which he is quite experienced) and stop him if they can.
“The purpose of a punitive damages award is to deter conduct. Many court rulings should have deterred Ross before the punitive damages award in this case. Ross, however, is persistent.”

The circuit court correctly noted that this case cannot be considered in a vacuum. Although it is unrefuted that service of process was never formally effected upon Ross in MERS v. Campbell, CV-05-917, in which he could have resolved the precise issue regarding his possessory interest in this property, he had actual notice of ongoing litigation as early as February 13, 2006, when MERS informed him of an imminent hearing involving his claim to the itemized expenses. Also, as the trial court’s Hammond order reveals, Schrock v. Ross, CV-06-900, was another civil action involving similar conduct in which an identical substantive issue was litigated to a conclusion adverse to Ross. (Green Oil factor (7).) Ross appealed the judgment entered in that case, and this Court affirmed the judgment without an opinion on December 7, 2007. Ross v. Schrock, 25 So.3d 1204 (Ala.2007) (table). Although the trial court’s final judgment in Schrock was not entered until December 22, 2006, that is, approximately two months after the Rosen-Ragers sued Ross, Schrock is still evidence of similar conduct, though not necessarily of Ross’s knowledge of wrongdoing.

With regard to the cost of litigation (Green Oil factor (5)), the Rosen-Ragers submitted the affidavit of their attorney, which stated that the Rosen-Ragers had already paid attorney fees totaling $9,880.41 and had incurred other expenses totaling $6,247.21. In lieu of the further payment of attorney fees on an hourly basis, the Rosen-Ragers agreed to pay their counsel an undisclosed percentage of any sums ultimately collected from Ross. Notwithstanding this contingency-fee arrangement, the Rosen-Ragers’ counsel computed the hours expended by the legal professionals employed as if billed at the regular hourly rates and arrived at $82,000 as the value of costs, expenses, and legal fees attributable to the prosecution of this case.

To be weighed against these observations is the fact that the purchasing of tax-sale property is, in itself, a laudable practice, one to be encouraged, rather than discouraged. Hence, “[t]he Alabama legislature ... has enacted statutes favoring the sale of land to secure payment of delinquent taxes.” William R. Justice, Redemption of Real Property Following Tax Sales in Alabama, 11 Cumb. L.Rev. 331, 331 (1980) (emphasis added). Ross testified that if the punitive-damages verdict is upheld, it will “effectively put [him] out of business regarding properties that [he] could afford to buy at tax sales,” and he will simply stop purchasing tax-sale properties. Because such a result would be counterproductive, the goal must be not to discourage Ross from engaging in the practice per se, but essentially to dissuade him from ignoring probate court orders and certificates. He has already been required to pay $16,639 in the Schrock case.

2. Civil-Penalties Guidepost in Gore

The parties do not discuss this guidepost or direct us to any evidence or authority related to its application.

3. Gore Guidepost of Disparity Between the Damage and the Award and Green Oil Factors (3) and ft)

The final Gore guidepost we will consider is “the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award.” Campbell, 538 U.S. at 418. The Rosen-Ragers’ complaint does not include claims based on personal injury. There is only the potential for personal injury each time Ross’s practice of deliberately ignoring certificates of redemption brings competing claimants for the same property into direct physical contact.

Also, “ ‘[i]f the wrongful conduct was profitable to the defendant, the punitive damages should remove the profit and should be in excess of the profit, so that the defendant recognizes a loss.... The financial position of the defendant [is also] relevant.’” Green Oil, 539 So.2d at 223 (quoting Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala.1987) (Houston, J., concurring specially) (factor (3))). Ross profits from this scheme by keeping tenants on properties until they are evicted by judicial action, in some cases, long after the issuance of the certificates of redemption. In this case, Hurt and Baxter paid Ross approximately $1,000 in rent.

Although Ross values his assets at $1,167,000, his testimony at the Hammond, hearing regarding his financial condition was confusing, at best, and failed to establish anything definitive regarding his status. (Green Oil factor (4).) In that connection, the circuit court stated: “Ross has not provided this court credible evidence upon which to fully judge his financial condition.” Indeed, the evidence he did offer as to his financial condition was referable only to the time of trial and later, rather than to the “time of the occurrence made the basis of the suit,” as required by Ala.Code 1975, § 6—11—21(c), to establish the specific damages limitations provided in § 6-ll-21(b) for “a small business.”

Viewing these factors in toto, including the limited objective to be achieved and the absence of any actual personal injury, we conclude that a $120,000 punitive-damages award is sufficient to punish Ross and to deter further conduct similar to that evidenced in this case, without compromising his due-process rights.

III. Conclusion

In conclusion, the partial summary judgment is affirmed. The judgment entered on the jury’s punitive-damages verdict is affirmed, on the condition that the Rosen-Ragers file with this Court, within 21 days, a remittitur of the punitive-damages award to $120,000; otherwise, the judgment will be reversed and the cause remanded for a new trial on the issue of punitive damages.

AFFIRMED IN PART AND AFFIRMED CONDITIONALLY IN PART.

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

      . Although Fletcher eventually vacated the premises, the time and circumstances of his departure are unclear and, in any case, are irrelevant to this appeal.

      . In a separate action commenced by the Rosen-Ragers in the Madison District Court against Hurt and Baxter (DV-06-2950), the court entered an "unlawful detainer judgment” against Hurt and Baxter and in favor of the Rosen-Ragers.

      . Section 40-10-122 was most recently amended in 2009.

      . Subsection (c) is relatively new. It was added in 2002 by Act No. 2002-426, Ala. Acts 2002.


source: Caselaw Access Project

author: STUART, Justice. MURDOCK, Justice

license: Public Domain

text:
    Ex parte REGIONS FINANCIAL CORPORATION, Morgan Asset Management, Inc., and James C. Kelsoe. (In re Grantland Rice II et al. v. Regions Financial Corporation, Morgan Asset Management, Inc., and James C. Kelsoe).
    1090425.
    Supreme Court of Alabama.
    Sept. 30, 2010.
    Rehearing Denied Jan. 14, 2011.

      Peter S. Fruin, Scott S. Brown, and Kathryn J. Bushby of Maynard, Cooper & Gale, P.C., Birmingham, for petitioners.
    Andrew P. Campbell, Caroline S. Gidi-ere, and M. Clayborn Williams of Leitman Siegal Payne & Campbell, P.C., Birmingham, for respondents.
   STUART, Justice.

Grantland Rice II, Joseph Robinson, Richard Robinson, Marvin E. Bruce, Michael S. Starnes, Laura M. Starnes, J.N. Raines, Julie Raines, the Michael S. Starnes Charitable Remainder Unitrust, Fischer Lime & Cement Co., TCX, Inc., the Bryce Family Limited Partnership, the Hope Christian Community Foundation, the Urban Child Institute, the Mayer & Morris Kaplan Foundation, Daniel R. Lewis, Jan R. Lewis, RJKB Investments, LLLP, and DJMD, LP (hereinafter referred to collectively as “the shareholders”), sued Regions Financial Corporation (“RFC”), the RFC subsidiary Morgan Asset Management, Inc. (“MAM”), and MAM employee James C. Kelsoe (hereinafter referred to collectively as “the defendants”), in the Jefferson Circuit Court, asserting multiple counts of securities fraud stemming from the collapse of six Regions Morgan Keegan investment funds (“the RMK funds”). The defendants moved to dismiss the complaint, arguing, among other things, that the claims asserted by the shareholders were derivative claims that belonged to the RMK funds themselves— not to the individual investors in those funds — and that the claims could therefore be asserted only by a shareholder derivatively and in compliance with Rule 28.1, Ala. R. Civ. P., with which it is undisputed the shareholders have not complied. The trial court denied the defendants’ motion to dismiss, and the defendants now petition this Court for a writ of mandamus directing the trial court to vacate its order denying their motion to dismiss and to enter an order granting the motion. We grant the petition and issue the writ.

I.

The shareholders described the basic facts underlying their claims as follows in their second amended complaint:

“14. [Shareholders] are investors who were seeking a high-yield bond fund as either a component to their investment portfolio or were specifically seeking an income-producing investment.
“15. Between December 2002 and July 2007, [the shareholders] were fraudulently induced to invest in one of the six RMK funds advised, managed, and/or controlled by [the defendants]. Though marketed as different funds, the six RMK funds were actually the same fund and their performance is almost identical. In making their investment decisions, [the shareholders] relied upon the representations and omissions of MAM and Kelsoe in both the written materials and the direct presentations made by MAM and Kelsoe.
“16. By December 2007, all six of the RMK funds collapsed, causing [the shareholders] to lose most if not all of their investment. The six RMK funds lost $2 billion between March 31, 2007, and March 31, 2008. As set forth below, the losses in the funds were not the result of a flight-to-quality or a decline in value of high-yield, mortgage-backed or asset-backed debt as represented by [the defendants]. The losses were the result of over-concentration of investments in the highest-risk mortgage- or asset-backed debt investment, an investment strategy that was fraudulently concealed from investors until well after losses were incurred. Upon' information and belief, the RMK funds never were the high-yield, low-risk, stable, diversified bond funds MAM and Kelsoe represented. This misrepresentation and concealment caused [the shareholders] to buy, sell and/or hold certain interests in the RMK funds at various times under the false impression that the losses were due to other innocent factors, i.e., factors unrelated to the defendants’ malfeasance and serial disregard for applicable investing standards.”

Since the collapse of the RMK funds, more than 20 lawsuits — including class actions, derivative suits, and individual actions — have been filed against RFC, MAM, Kelsoe, and other affiliated companies and individuals, similarly alleging that MAM had mismanaged and misrepresented the nature of the RMK funds, had failed to properly value the assets held by the RMK funds, and had failed to follow the guidelines of the RMK funds with regard to liquidity and asset concentration. Many of the lawsuits have been consolidated in federal court in the United States District Court for the Western District of Tennessee by the Judicial Panel on Multidistrict Litigation pursuant to 28 U.S.C. § 1407. The defendants have twice attempted to remove the underlying action to federal court; however, the United States District Court for the Northern District of Alabama has remanded the action to the Jefferson Circuit Court on both occasions, holding that the federal court did not have subject-matter jurisdiction over the claims asserted by the shareholders. The shareholders have also all pursued claims against their investment broker — Morgan Keegan & Company, Inc. (“Morgan Kee-gan”), another RFC-affiliated company — in arbitration proceedings pending before the Financial Industry Regulatory Authority (“FINRA”), and the United States Securities and Exchange Commission, FINRA, and regulators from Alabama, Kentucky, Mississippi, and South Carolina have all initiated administrative proceedings against MAM, Morgan Keegan, and/or Kelsoe.

As was the case when the defendants attempted to remove this action to federal court, the issue now before this Court is one of subject-matter jurisdiction. Specifically, the defendants argue that the shareholders’ ownership interests in' the RMK funds subject them to the requirements of Rule 23.1, Ala. R. Civ. P., which mandate that they make demand upon the “directors or comparable authority” of the RMK funds before initiating a derivative action — which, the defendants argue, this action in fact is regardless of the label the shareholders have attached to it — and that the shareholders accordingly lack standing because they failed to comply with Rule 23.1 by making such demand. See Baldwin County Elec. Membership Corp. v. Catrett, 942 So.2d 337, 344 n. 9 (Ala.2006) (“Rule 23.1 states that to maintain a derivative action, the plaintiff must ‘allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority....’ ... There is no evidence in the record indicating that the plaintiffs made a demand upon the board of trustees before filing this action. In addition, the plaintiffs did not allege in their complaint that they had made a demand upon the cooperative’s board of trustees. If the plaintiffs should have brought this action derivatively, as [the defendants] contend[ ], then the plaintiffs lack standing to maintain the action because no evidence was presented indicating that they met the director-demand requirement.”). We have further stated:

“Mandamus review is available where the petitioner challenges the subject-matter jurisdiction of the trial court based on the plaintiffs alleged lack of standing to bring the lawsuit.
“ ““ “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). The question of subject-matter jurisdiction is reviewable by a petition for a writ of mandamus. Ex parte Flint Constr. Co., 775 So.2d 805 (Ala.2000).’
“ ‘ “Ex parte Liberty Nat’l Life Ins. Co., 888 So.2d 478, 480 (Ala.2003) (emphasis added). ‘When a party without standing purports to commence an action, the trial court acquires no subject-matter jurisdiction.’ State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1028 (Ala.1999). Under such a circumstance, the trial court has ‘no alternative but to dismiss the action.’ 740 So.2d at 1029.” ’
“Ex parte Richardson, 957 So.2d 1119, 1124 (Ala.2006) (quoting Ex parte Chemical Waste Mgmt., Inc., 929 So.2d 1007, 1010 (Ala.2005)).”

Ex parte HealthSouth Corp., 974 So.2d 288, 292 (Ala.2007). A trial court has no discretion to preside- over an action when subject-matter jurisdiction is lacking; accordingly, we review de novo whether the shareholders’ claims are derivative or direct claims in order to determine whether the trial court erred by denying the defendants’ motion to dismiss. See Jones v. Regions Bank, 25 So.3d 427, 434 (Ala.2009) (citing BT Sec. Corp. v. W.R. Huff Asset Mgmt. Co., 891 So.2d 310, 312 (Ala.2004)) (“Questions of law are reviewed de novo.”).

II.

We first note that the RMK funds are incorporated in Maryland and that the determination whether the shareholders’ claims are derivative or direct must accordingly be made in accordance with Maryland law. Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 108-09, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991); and Massey v. Disc Mfg., Inc., 601 So.2d 449, 454-55 (Ala.1992). In Strougo v. Bassini, 282 F.3d 162, 169-71 (2d Cir.2002), the United States Court of Appeals for the Second Circuit summarized the relevant Maryland law as follows:

“Waller v. Waller, 187 Md. 185, 49 A.2d 449 (1946), remains the leading Maryland case on shareholder standing. There, a shareholder brought a direct action against, inter alios, a corporation’s sales manager alleging that he and others had caused injury to the shareholder through the improvident discharge of employees, diversion of customers to competitors, choice of detrimental pricing policies, embezzlement of corporate funds, and disruption of corporate governance activities. Id. at 189, 49 A.2d at 451-52. In ruling that the plaintiffs claims could not be brought in a direct shareholder suit, the Maryland Court of Appeals observed:
“ ‘It is a general rule that an action at law to recover damages for an injury to a corporation can be brought only in the name of the corporation itself acting through its directors, and not by an individual stockholder, though the injury may incidentally result in diminishing or destroying the value of the stock. The reason for this rule is that the cause of action for injury to the property of a corporation or for impairment or destruction of its business is in the corporation, and such injury, although it may diminish the value of the capital stock, is not primarily or necessarily a damage to the stockholder, and hence the stockholder’s derivative right can be asserted only through the corporation.’
“Id., 49 A.2d at 452. The Court of Appeals further explained:
“‘The rule is advantageous not only because it avoids a multiplicity of suits by the various stockholders, but also because any damages so recovered will be available for the payment of debts of the corporation, and, if any surplus remains, for distribution to the stockholders in proportion to the number of shares held by each.’
“Id. at 189-90, 49 A.2d at 452. Thus, Waller noted that a direct action for injuries shared by the corporation may inequitably displace the claims of creditors and thereby subvert the creditors’ priority. The court then determined that the injuries alleged by the plaintiff derived from injuries to the corporation itself, and thus the plaintiff lacked standing to bring direct claims. Id. at 191, 49 A.2d at 453.
“In deciding whether a shareholder may bring direct suit, the question the Maryland courts ask not whether the shareholder suffered injury; if a corporation is injured those who own the corporation are injured too. The inquiry, instead, is whether the shareholders’ injury is ‘distinct’ from that suffered by the corporation. Tafflin [v. Levitt], 92 Md.App. [375,] 381, 608 A.2d [817,] 820 [(1992)].
“Tafflin deals not with a shareholders’ suit, but with the analogous situation of depositors in an insolvent savings and loan association seeking to recover for losses against the association’s directors, officers, accountants, lawyers, and others. It is nonetheless illuminating because it explains, in comparable circumstances, the ‘distinct injury' requirement by reference to the concern expressed in Waller for making damages recovered for injury to the corporation available to pay the debts of the corporation.
“ ‘Appellants’ [alleged injuries] are not distinct from the injury sustained by [the bank] and all its depositors as a result of appellees’ mismanagement and wrongdoing- [P]ermitting depositors to bring individual actions for [mismanagement of funds] would invariably impair the rights of other general creditors and claimants with superior interests_ [T]hat ... fraud may have induced all of the depositors to make their original deposits does not justify bypassing this equitable and common-sense system for recovery.’
“Tafflin, 92 Md.App. at 381-82, 608 A.2d at 820 (internal citation omitted).
“Both Waller and Tafflin acknowledge that harm to shareholders may flow from injuries to a corporation’s business or property, including those that decrease the value of firm assets or otherwise impair the corporation’s ability to generate profits. Maryland law nonetheless provides that in such circumstances, despite the harm to shareholders, the corporation alone has a cause of action to recover for the injury asserted. Although shareholders suffer collateral injury, they may have that injury redressed only through the collateral effect of the results of the corporation’s lawsuit — which might, for instance, result in a recovery of damages by the corporation and thus a corresponding increase in share value. Allowing shareholders to recover directly, on the other hand, besides threatening the ‘multiplicity of suits’ cited by Waller, 187 Md. at 189, 49 A.2d at 452, makes possible recoveries that are inequitably distributed among those other than shareholders with an interest in the corporation. Specifically, if the corporation were in default on its debt, direct shareholder suits for corporate injury could defeat the prior claim of corporate creditors to corporate assets because the rule of limited liability would prevent the creditors from reaching damages recovered by the shareholders personally. Where shareholders suffer an injury that does not stem from an injury to the corporation’s business or property, by contrast, the corporation lacks standing to sue, and Maryland’s ‘distinct injury' rule allows shareholders access to the courts to seek compensation directly.
“Thus, under Maryland law, when the shareholders of a corporation suffer an injury that is distinct from that of the corporation, the shareholders may bring direct suit for redress of that injury; there is shareholder standing. When the corporation is injured and the injury to its shareholders derives from that injury, however, only the corporation may bring suit; there is no shareholder standing. The shareholder may, at most, sue derivatively, seeking in effect to require the corporation to pursue a lawsuit to compensate for the injury to the corporation, and thereby ultimately redress the injury to the shareholders.”

(Footnote omitted.) We must therefore determine whether the shareholders have suffered an injury that is distinct from the injury suffered by the RMK funds, or whether the injury to the shareholders merely derives from that injury.

The injury alleged by the shareholders is the loss of their investment as a result of the collapse of the RMK funds. The shareholders argue that that injury was the result of their reliance on misrepresentations made by MAM and Kelsoe and that their injury is unique to them — and thus their claims are direct claims — because they relied not only on misrepresentations made by MAM and Kelsoe in marketing materials, prospectuses, and annual and semiannual reports directed to all prospective and actual investors in the RMK funds, but they also relied on misrepresentations made by MAM and Kelsoe exclusively to them in repeated personal interactions during the summer of 2007. See shareholders’ brief, p. 17 (“The injury in this case as to the [shareholders] was caused by misleading information provided directly by the [defendants] which induced the [shareholders] to buy or hold their interests (thus, no other investors were affected by these misstatements). Had the [shareholders] known the true value of [the RMK] funds or of the other material matters alleged in the complaint, they would have avoided these catastrophic investment losses by avoiding the [RMK] funds altogether or getting out of them before it was too late.”).

The defendants, however, argue that the root cause of the shareholders’ injury was actually the defendants’ failure to properly manage the RMK funds, i.e., to properly value the assets held by the RMK funds and to abide by the restrictions in the RMK funds on liquidity and asset concentration, and not by any misrepresentations made by MAM and Kelsoe, regardless of whether such misrepresentations were directed to the shareholders or to the public. Therefore, the defendants argue, the injury resulting from MAM and Kelsoe’s actions was inflicted first upon the RMK funds, and any injury suffered by the shareholders necessarily is derivative to that injury.

The shareholders vigorously refute this characterization of their claims, stating:

“The [defendants’] central contention is that their ‘decoding’ of the [shareholders’] otherwise clear allegations reveals that this action somehow seeks recovery for mismanagement. This argument cannot withstand scrutiny.
“As discussed above, the [shareholders] do not allege that the [RMK] funds at issue were devalued as a result of ‘mismanagement.’ Rather, the [shareholders] allege simply that the [defendants] were responsible at all material times for matters which were misrepresented, including the valuation and composition of the assets included in these funds. Because of that responsibility, the [shareholders] allege that the [defendants’] misstatements were intentional and that the [defendants] knew them to be false at the time they were made. Thus, these allegations identified by the [defendants] as relating to ‘mismanagement’ actually relate to the frauds alleged.”

Shareholders’ brief, pp. 14-15. However, although the shareholders appear therefore to be arguing that their claims must be direct claims because they are fraud claims, under Maryland law, fraud claims may still be derivative claims if the alleged injury is to the corporation. In Tafflin v. Levitt, 92 Md.App. 375, 608 A.2d 817 (1992), also discussed supra in the quoted excerpt from Strougo, the plaintiffs had asserted fraud claims against certain officers and directors of the failed Old Court Savings & Loan, Inc., a state-chartered savings and loan association, and the Court of Special Appeals of Maryland nevertheless held that those claims were derivative claims, stating:

“Appellants argue that the gravamen of their complaint is that appellees fraudulently induced them to deposit their money in Old Court and, therefore, they have stated a claim of direct injury since they, rather than Old Court, were injured by appellees’ fraud. We reject this argument.
“In In re Sunrise Securities Litigation, 916 F.2d 874 (3rd Cir.1990), a federal court was presented with the same argument as appellants present in the instant case, and similarly rejected the contention of depositors of an insolvent savings and loan institution that they had stated a claim that could be brought individually. The court reasoned as follows:
“ ‘Although the allegations are cast in terms of defendants’ misrepresentation of and failure to disclose information, we believe that under the distinct circumstances of this case, such allegations do not state a claim of direct injury founded on fraud. The essence of the complaint is that defendants misrepresented the financial condition of Old Sunrise by failing to disclose that they had mismanaged Old Sunrise rendering the institution insolvent.... The asserted injury emanated from mismanagement, not fraud. Furthermore, in this case, the depositors’ loss cannot be separated from the injury suffered by the institutions and all other depositors, and the damages recoverable are assets of the institutions.’
“Other federal courts have likewise held that the remedy for fraudulent representations affecting all depositors of an insolvent savings and loan association belongs to the institution’s receiver for the benefit of all depositors. See, e.g., Downriver Community Federal Credit Union v. Penn Square Bank, 879 F.2d 754 (10th Cir.1989); Brandenburg v. Seidel, 859 F.2d 1179 (4th Cir.1988).
“We find these decisions to be persuasive. Appellees’ alleged mismanagement and misappropriation of Old Court funds are assertable by [the Maryland Deposit Insurance Fund] in its capacity as Old Court’s receiver — the damages recoverable for appellees’ mismanagement and wrongdoing are assets of [the Maryland Deposit Insurance Fund] as receiver of Old Court and successor-in-interest of [the Maryland Savings-Share Insurance Corporation, a state-chartered insurer of deposits in Maryland savings and loan associations that collapsed in the period following Old Court’s collapse]. Appellants have alleged no special damages not common to other depositors. They allegedly relied upon misleading information available to all depositors. Appellants’ allegations of fraudulent representations are not distinct from the injury sustained by Old Court and all its depositors as a result of appellees’ mismanagement and wrongdoing. See Sunrise Securities, 916 F.2d at 887 (‘The injury — loss of principal or interest — is sustained by all depositors and is incidental to and dependent on injury to the institution.’). Under the circumstances, we think the requirements of a demand on the receiver and petition to the receivership court are applicable.
“ ‘The alternative, permitting depositors to bring individual actions for such injuries, would invariably impair the rights of other general creditors and claimants with superior interests. In our view, the fact that ... fraud may have induced all of the depositors to make their original deposits does not justify bypassing this equitable and common-sense system for recovery[.]’
“Sunrise Securities, 916 F.2d at 887. See also Pritchard [v. Myers], 174 Md. [66,] 79, 197 A. 620 [ (1938) ] (‘In this manner, the jurisdiction of the court will be retained, a multiplicity of suits averted, and the rights and interests of all parties concerned enforced and protected.’).”

92 Md.App. at 380-82, 608 A.2d at 819-20 (footnote omitted). The shareholders argue to this Court that Tafflin has “no remote connection to this actiori [because it] falls under a body of law relating exclusively to depositor claims against insolvent financial institutions in receivership,” shareholders’ brief, pp. 21-22; however, although the facts in Tafflin may not be perfectly analogous to those in the present case, we agree with the Strougo court that “[i]t is nonetheless illuminating because it explains, in comparable circumstances, the ‘distinct injury' requirement,” which requirement, under Maryland law, determines whether claims are in fact direct or derivative. Strougo, 282 F.3d at 170.

We further note that the shareholders’ reliance on Shenker v. Laureate Education, Inc., 411 Md. 317, 983 A.2d 408 (2009), which, they state, “describes perfectly” why their claims are properly viewed as direct claims, is misguided. Shareholders’ brief, p. 12. In Shenker, certain minority shareholders in a corporation sued the corporation’s board of directors, alleging that the board had breached fiduciary duties owed the minority shareholders when the board, in a process initiated by the majority shareholders, decided to sell the corporation via a “cash-out” or “freeze-out” merger and then approved a share price the minority shareholders allege was too low. On the board’s motion, the trial court dismissed the minority shareholders’ complaint on the basis that they should have filed a derivative action instead of a direct action. However, the Court of Appeals of Maryland reversed that decision, holding that “where a shareholder’s action is based on breach of a duty owed directly to the shareholder, a direct action may be filed against the directors.” 411 Md. at 346, 983 A.2d at 425. The shareholders in the instant action argue that they easily surpass the standard set by the Shenker court because the fraud claims they have asserted are even more direct than the breach-of-fiduciary-duty claims brought by the minority shareholders in Shenker.

However, the present facts differ from those in Shenker. This case does not involve the alleged breach of fiduciary duties related to a cash-out merger, and the shareholders are not suing the directors of the RMK funds; rather, they are suing those responsible for the management of the RMK funds. Accordingly, the limited rule announced by the Shenker court that, “in a cash-out merger transaction where the decision to sell the corporation already has been made, shareholders may pursue direct claims against directors for breach of their fiduciary duties of candor and maximization of shareholder value,” 411 Md. at 342, 983 A.2d at 422, is inapplicable here, where the shareholders are essentially seeking damages for fraud based on the defendants’ misrepresentations covering up their alleged mismanagement of the RMK funds. Courts have generally rejected attempts by plaintiffs to convert traditionally derivative claims into direct claims based on the failure of the alleged guilty parties to disclose their bad acts, see, e.g., Kas v. Financial Gen. Bankshares, Inc., 796 F.2d 508, 513 (D.C.Cir.1986) (stating that “a plaintiff may not ‘bootstrap’ a claim of breach of fiduciary duty into a federal securities claim by alleging that directors failed to disclose that breach of fiduciary duty”), and Shenker in fact reaffirms the principle that a shareholder does not have standing to sue to redress an injury resulting from mismanagement of the corporation. 411 Md. at 342, 983 A.2d at 421.

In the instant case, the defendants represented to the shareholders that the RMK funds had a certain value per share, thus inducing them to hold their shares and/or to buy additional shares when, in fact, the true value of the shares was allegedly much lower because of the mismanagement by MAM and Kelsoe. Applying the principles discussed above to these facts, we conclude that the actions of MAM and Kelsoe first injured the RMK funds and only secondarily injured the shareholders; accordingly, in the absence of any distinct injury to the shareholders, the claims they now assert must be considered derivative claims belonging to the RMK funds, not direct claims. See also In re Triarc Cos., 791 A.2d 872, 878 (Del.Ch.2001) (“ ‘[I]t may be said that, where the substantive nature of the alleged injury is such that it falls directly on the corporation as a whole and collectively, but only secondarily, upon its stockholders as a function of and in proportion to their pro rata investment in the corporation, the claim is derivative in nature and may be maintained only on behalf of the corporation.’” (quoting Donald J. Wolfe and Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 9-2, at 516 (1998))); and Smith v. Waste Mgmt., Inc., 407 F.3d 381, 386 (5th Cir.2005) (“ ‘To decide if the harm was to the corporation or to the stockholder individually, the [Delaware Supreme Court in Tooley [v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 (Del.2004),]] suggested the most relevant question is whether the stockholder can prevail without showing an injury to the corporation. ... The stockholder must demonstrate that the duty breached was owed to the stockholder and that he or she can prevail without showing a corresponding injury to the corporation. Applying those principles here leads to the conclusion that the [plaintiffs’] complaints are derivative, not direct, and could be asserted only on behalf of the corporation. The misrepresentations the [plaintiffs] allege caused their injury were based on mismanagement of the corporation’s assets. The [plaintiffs] cannot prove their injury without proving an injury to the corporation. We hold, therefore, that the [plaintiffs’] suit is derivative under Delaware law.’ ” (quoting Shirvanian v. DeFrates, 161 S.W.3d 102, 110 (Tex.App.2004)) (emphasis added)). Accordingly, the shareholders’ claims should have been dismissed by the trial court for failing to comply with Rule 23.1.

III.

After the shareholders sued the defendants in the Jefferson Circuit Court, asserting multiple counts of securities fraud stemming from the collapse of the RMK funds, the defendants moved to dismiss the complaint, arguing, among other things, that the claims asserted by the shareholders were derivative claims that belonged to the RMK funds and that the claims could therefore be asserted by a shareholder only derivatively and in compliance with Rule 23.1, Ala. R. Civ. P., with which it is undisputed the shareholders have not complied. The trial court denied the defendants’ motion to dismiss, and the defendants then petitioned this Court for a writ of mandamus directing the trial court to vacate its order denying their motion to dismiss and to enter an order granting the same. However, because the claims asserted by the shareholders are properly viewed as derivative claims, and because the shareholders did not comply with the requirements of Rule 23.1 for asserting such claims, the shareholders lack standing, and the defendants’ motion to dismiss should have been granted. We accordingly grant the defendants’ petition and issue a writ of mandamus directing the trial court to vacate its previous order denying the defendants’ motion to dismiss and to enter an order granting the motion.

PETITION GRANTED; WRIT ISSUED.

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

MURDOCK, J., dissents.

MURDOCK, Justice

(dissenting).

Even assuming the claims asserted by the plaintiffs are derivative in nature, as the main opinion concludes, I disagree with the notion that the plaintiffs lacked standing to bring them. The issue in that case would be a real-party-in-interest issue, in my opinion, not a standing issue.

As a threshold matter, I cannot agree that the plaintiffs’ claims are derivative in nature. The gravamen of the plaintiffs’ claims is that the defendants misrepresented to them the nature of the investments that were held and would be held by the RMK funds, thus inducing the plaintiffs, as individuals, to invest (or to remain invested) in those funds. The plaintiffs’ claims are thus different from claims of investors who suffered losses merely as a result of any mismanagement of the RMK funds.

Because I disagree with the conclusion that the plaintiffs’ claims are derivative in nature, I also disagree with the conclusion reached by the main opinion as to choice of law.

      . MAM was the investment advisor for the RMK funds and Kelsoe was the manager of the RMK funds.

      . 28 U.S.C. § 1407(a) provides:
      “When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claim and remand any of such claims before the remainder of the action is remanded.”

      . The defendants sought removal of this case and four similar cases pending in the Jefferson Circuit Court pursuant to the Securities Litigation Uniform Standards Act of 1998 ("SLUSA”), codified in scattered sections of 15 U.S.C.
      "Congress passed SLUSA with the intent to make federal court the exclusive venue for class actions alleging state fraud claims in the sale of ‘covered securities.’ Congress accomplished this goal by providing for the removal of state class action lawsuits to federal court, and requiring federal courts to dismiss those lawsuits that meet certain statutory requirements. See Riley v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 292 F.3d 1334, 1341 (11th Cir.2002). The Riley opinion summarized SLUSA’s requirements:
      " ‘Under SLUSA, the removing party must show that (1) the suit is a "covered class action,” (2) the plaintiffs’ claims are based on state law, (3) one or more "covered securities” has been purchased or sold, and (4) the defendant misrepresented or omitted a material fact "in connection with the purchase or sale of such security.” ’

        “Id. at 1342.”

        Herndon v. Equitable Variable Life Ins. Co., 325 F.3d 1252, 1253 (11th Cir.2003). The United States District Court for the Northern District of Alabama, however, held that SLU-SA did not apply to the 5 cases the defendants sought to remove because they did not meet the statutory definition of a "covered class action” in 15 U.S.C. § 77p(f)(2)(A)(ii) inasmuch as the 5 actions had not been joined or consolidated as a single action and because no individual action sought damages on behalf of more than 50 persons.

      . Maryland courts often look to Delaware caselaw on issues of corporate law. Werbowsky v. Collomb, 362 Md. 581, 618, 766 A.2d 123, 143 (2001).

      . The shareholders have also argued that this Court should deny the defendants’ petition for a writ of mandamus based upon the doctrine of judicial estoppel because the defendants previously attempted to remove this action to federal court pursuant to the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), codified in scattered sections of 15 U.S.C., which, the shareholders argue, does not apply to derivative actions. However, the defendants ultimately failed in their attempt to remove the case; thus, the doctrine of judicial estoppel does not apply. See Pegram v. Herdrich, 530 U.S. 211, 228 n. 8, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000) ("Judicial estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.”); and Jefferson County Comm’n v. Edwards, 49 So.3d 685, 689 (Ala.2010) ("In Ex parte First Alabama Bank, 883 So.2d 1236, 1244 (Ala.2003), quoting New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001), this Court recognized an essential element of judicial estoppel — the party attacked for asserting an inconsistent position must have been successful in the prior proceeding so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first court or the second court was misled. No such circumstance exists here.”).


author: STUART, Justice.

text:
    Ex parte PHENIX CITY BOARD OF EDUCATION. (In re Alaysia Randolph, a minor, by and through her next friends and parents, Samuel Randolph and Wanda Randolph v. Kimberly Sue Montee and the Phenix City Board of Education). Ex parte Phenix City Board of Education. (In re Kenyetta King, a minor, by and through her next friend and parent, Olitha King v. Kimberly Sue Montee and the Phenix City Board of Education). Ex parte Phenix City Board of Education. (In re Eric Robinson, a minor, by and through his next friend and parent, Jackie Woods, et al. v. Kimberly Sue Montee and the Phenix City Board of Education).
    1100122, 1100124, and 1100125.
    Supreme Court of Alabama.
    Jan. 14, 2011.

      Stanley A. Martin, S. Allen Martin, Jr., and Christopher M. Bazzell of Law Office of Stanley A. Martin, Opelika, for petitioner Phenix City Board of Education.
    Kenneth L. Funderburk of Funderburk & Lane, Phenix City, for respondents.
   STUART, Justice.

The Phenix City Board of Education (“the Board”) petitions this Court for writs of mandamus directing the Russell Circuit Court to vacate its orders denying the Board’s motion to dismiss the actions filed against it by Alaysia Randolph, a minor, by and through her next friends and parents, Samuel Randolph and Wanda Randolph (case no. CV-10-206); Kenyetta King, a minor, by and through her next friend and parent, Olitha King (case no. CV-10-208); and Eric Robinson, Nyesha Robinson, Nasia Robinson, and Nadia Robinson, minors, by and through their next friend and parent, Jackie Woods, and Tamor Woods, a minor, by and through his parents and next friends, Jackie Woods and Christopher Woods (case no. CV-10-204), and to enter orders dismissing with prejudice the claims against the Board. We grant the petitions and issue the writs.

Factual Background and Procedural History

On March 2, 2010, Kimberly Sue Mon-tee, an employee of the Board, was driving a school bus. Alaysia Randolph, Kenyetta King, and Eric Robinson, Nyesha Robinson, Nasia Robinson, Nadia Robinson, and Tamor Woods (“the Woods minors”) were passengers on the school bus when it was involved in an accident with a stationary vehicle. Randolph, King, and the Woods minors filed separate complaints against the Board and Montee, alleging against the Board claims of negligent entrustment, against Montee claims of negligence and wantonness, and against the Board and Montee claims of loss of services asserted by the parents.

On September 21, 2010, the Board moved to dismiss the claims asserted against it, arguing that it was immune from suit pursuant to Art. I, § 14, Ala. Const. 1901. On September 28, 2010, the court denied the Board’s motions to dismiss. The Board petitions this Court for writs of mandamus directing the Russell Circuit Court to vacate the September 21, 2010, orders denying the Board’s motions to dismiss and to enter orders dismissing the claims against the Board with prejudice..

Standard of Review

“ ‘ “ ‘The appropriate standard of review under Rule 12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of the complaint are viewed most strongly in the pleader’s favor, it appears that the pleader could prove any set of circumstances that would entitle [it] to relief. In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [it] may possibly prevail. We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.’ ” ’
“Ex parte Troy Univ., 961 So.2d 105, 108 (Ala.2006) (quoting Knox v. Western World Ins. Co., 893 So.2d 321, 322 (Ala.2004), quoting in turn Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993)). ‘A ruling on a motion to dismiss is reviewed without a presumption of correctness.’ Newman v. Savas, 878 So.2d 1147, 1148-49 (Ala.2003).
“ ‘When a motion for judgment on the pleadings is made by a party, “the trial court reviews the pleadings filed in the case and, if the pleadings show that no genuine issue of material fact is presented, the trial court will enter a judgment for the party entitled to a judgment according to the law.” B.K.W. Enters., Inc. v. Tractor & Equip. Co., 603 So.2d 989, 991 (Ala.1992). See also Deaton, Inc. v. Monroe, 762 So.2d 840 (Ala.2000). A judgment on the pleadings is subject to a de novo review. Harden v. Ritter, 710 So.2d 1254, 1255 (Ala.Civ.App.1997). A court reviewing a judgment on the pleadings accepts the facts stated in the complaint as true and views them in the light most favorable to the nonmoving party. Id. at 1255-56.’
“Universal Underwriters Ins. Co. v. Thompson, 776 So.2d 81, 82-83 (Ala.2000).
“‘It is well established that mandamus will he to compel a dismissal of claim that is barred by the doctrine of sovereign immunity.’ Ex parte Blankenship, 893 So.2d 303, 305 (Ala.2004).
“ ‘A writ of mandamus is a
“ ‘ “drastic and extraordinary writ that will be issued only when 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 Wood, 852 So.2d 705, 708 (Ala.2002) (quoting Ex parte United Serv. Stations, Inc., 628 So.2d 501, 503 (Ala.1993)).
“ ‘ “[I]f an action is an action against the State within the meaning of § 14, such a case ‘presents a question of subject-matter jurisdiction, which cannot be waived or conferred by consent.’ ” Haley v. Barbour County, 885 So.2d 783, 788 (Ala.2004) (quoting Patterson v. Gladwin Corp., 835 So.2d 137, 142-43 (Ala.2002)). “Therefore, a court’s failure to dismiss a case for lack of subject-matter jurisdiction based on sovereign immunity may properly be addressed by a petition for the writ of mandamus.” Ex parte Alabama Dep’t of Mental Health & Retardation, 837 So.2d 808, 810-11 (Ala.2002).’
“Ex parte Davis, 930 So.2d 497, 499-500 (Ala.2005).”

Ex parte Lawley, 38 So.3d 41, 44-45 (Ala.2009).

Discussion

The Board contends that it is not subject to tort actions against it alleging negligent entrustment and asserting claims of loss of services because, it says, it is entitled to absolute immunity and it cites Art. I, § 14, Ala. Const. 1901. In Enterprise City Board of Education v. Miller, 348 So.2d 782 (Ala.1977), this Court held that city boards of education were immune from civil actions. We stated:

“City boards of education are authorized by the legislature. Title 52, Section 148, et seq. [now § 16-11-1 et seq., Ala Code 1975].
“Like county school boards, they are agencies of the state, empowered to administer public education within the cities. As such, a city school board is not a subdivision or agency of the municipal government. Opinion of the Justices, 276 Ala. 239, 160 So.2d 648 (1964). A city school board’s relation to the city is analogous to a county school board’s relation to the county. State v. Brandon, 244 Ala. 62, 12 So.2d 319 (1943).
“There is no mention in the statutes under which city school boards are created of the ability to be sued. Title 52, section 168 [now § 16-11-13], allows a city school board to institute condemnation proceedings. The only other statute which refers to litigation at all is Title 52, section 161 [now § 16-11-12], which provides:
“‘The city board of education shall have the full and exclusive rights within the revenue appropriated for such purposes, or accruing to the use of the public schools, to purchase real estate, furniture, appropriate libraries, fuel and supplies for the use of the schools, and to sell the same, and to make expenditures for the maintenance and repairs of the school grounds, buildings and other property, to establish and build new schools, to superintend the erection thereof, to purchase sites therefor, to make additions, alterations and repairs to the building and other property erected for school uses, and to make necessary and proper notes, contracts and agreements in relation to such matters. All such contracts shall inure to the benefit of the public schools, and any suit in law or equity brought upon them and for the recovery and protection of money and property belonging to and used by the public schools, or for damages, shall be brought by and in the name of the city.’
“It is clear, therefore, that there is no express language in the legislation which would allow a tort action against a city school board. Neither is there language from which legislative intent to allow such actions may be inferred. To the contrary, the legislation seems clearly to deny such suits.”

348 So.2d at 783-84.

City boards of education are local agencies of the State; therefore, they enjoy constitutional immunity from tort actions alleging negligent entrustment and asserting claims of loss of services. Enterprise City Bd. of Educ., supra; Bessemer Bd. of Educ. v. Tucker, 999 So.2d 957, 962 (Ala.Civ.App.2008) (noting that, because city boards of education are agencies of the State, they enjoy immunity from suit to the extent authorized by the legislature and further noting, as an example, that, because city boards of education are authorized to contract, they may sue and be sued on those contracts). Accordingly, the claims against the Board of negligent en-trustment and asserting loss of services on behalf of the parents are barred by Art. I, § 14, Ala. Const. 1901.

Conclusion

Because the Board has demonstrated that under Art. I, § 14, Ala. Const. 1901, it has absolute immunity from suit on the negligent-entrustment and loss-of-services claims asserted against it, the Board has established a clear legal right to have the claims against it dismissed with prejudice. Therefore, we grant the Board’s petitions and issue writs directing the Russell Circuit Court to vacate its orders denying the Board’s motions to dismiss and enter orders dismissing with prejudice the claims asserted against the Board.

PETITIONS GRANTED; WRITS ISSUED.

COBB, C.J., and LYONS, BOLIN, and MURDOCK, JJ., concur.