author: THOMPSON, Presiding Judge. MOORE, Judge,

text:
    TLIG MAINTENANCE SERVICES, INC., et al. v. Deann FIALKOWSKI.
    2150255.
    Court of Civil Appeals of Alabama.
    Sept. 2, 2016.

      Robert V. Wood, Jr., Matthew T. Dukes, and Elena G. Moats of Wilmer & Lee, P.A., Huntsville, for appellants.

      Melissa D. Endsley and Thomas S. McGrath of McGrath Law Firm, Huntsville, for appellee.
   THOMPSON, Presiding Judge.

TLIG Maintenance Services, Inc. (“TLIG”), Gala P. Rusich, and Bruce Kit-chura (hereinafter referred to collectively as “the defendants”) appeal from a judgment entered on a jury verdict in favor of Deann Fialkowski on her claims against TLIG alleging breach of the implied warranty of good workmanship and breach of contract. Based on the jury’s verdict, a judgment was entered against TLIG for $27,176 in compensatory damages and $15,000 for mental anguish. Following the jury trial, a separate bench hearing was held after which the trial court entered a final judgment determining that TLIG’s corporate veil was due to be pierced and assessing the jury’s verdict against Rusich and Kitchura individually. The defendants filed a timely postjudgment motion, which the trial court denied. They then appealed to the Alabama Supreme Court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala.Code 1975.

On appeal, the defendants do not challenge the award of compensatory damages. They do, however, argue that the evidence presented at trial was insufficient to support an award of damages to Fial-kowski for mental anguish arising from the breach of contract and the breach of the implied warranty of good workmanship. They also argue that the trial court erred in denying their motion for a judgment as a matter of law as to this issue at the conclusion of the evidence presented during Fialkowski’s case-in-chief and in denying their renewed motion for a judgment as a matter of law as to this issue at the close of all the evidence in the jury trial.

“ ‘In reviewing a jury verdict, an appellate court must consider the evidence in the light most favorable to the prevailing party....’ Delchamps, Inc. v. Bryant, 738 So.2d 824, 831 (Ala.1999). See also Cobb v. MacMillan Bloedel, Inc., 604 So.2d 344 (Ala.1992), and Mason & Dixon Lines, Inc. v. Byrd, 601 So.2d 68 (Ala.1992). A presumption of correctness attaches to a jury verdict, ‘if the verdict passes the “sufficiency test” presented by motions for directed verdict and a JNOV [i.e., judgment notwithstanding the verdict].’ S & W Properties, Inc. v. American Motorists Ins. Co., 668 So.2d 529, 534 (Ala.1995). (Rule 50(a), Ala. R. Civ. P., now designates a motion for a directed verdict as a motion for a judgment as a matter of law, and Rule 50(b) now designates a motion for JNOV as a renewed motion for a judgment as a matter of law.) This presumption is strengthened by a trial court’s denial of a motion for a new trial. Christiansen v. Hall, 567 So.2d 1338 (Ala.1990). ‘This Court will not, on a sufficiency of the evidence basis, reverse a judgment based on a jury verdict unless the evidence, when viewed in a light most favorable to the [verdict winner], shows that the verdict was “plainly and palpably wrong and unjust.”,’ S & W Properties, 668 So.2d at 534 (quoting Christiansen, 567 So.2d at 1341). ‘Whether to grant or deny a motion for, new trial rests within the sound discretion of the trial court, and , this. .Court will not reverse a ruling in ¡.that regard unless it finds that the trial court’s ruling constituted an abuse of that discretion.’ Colbert County-Northwest Alabama Healthcare Authority v. Nix, 678 So.2d 719, 722 (Ala.1995). ‘Without a. showing of such an abuse, the trial court’s ruling must be affirmed.’ Id.” ■

Liberty Nat’l Life Ins. Co. v. Sanders, 792 So.2d 1069, 1072 (Ala.2000).

“ ‘A judgment as a matter of law is proper only where there is a complete absence of proof on a material issue or where there are no controverted ques-of fact on which reasonable people could differ and the moving party is entitled to a judgment as a matter of Locklear Dodge City, Inc. v. Kimbrell, 703 So.2d 303, 304 (Ala.1997) (internal quotations and alterations omitted). In reviewing the denial of a motion for a judgment as a matter of law, this Court must view all evidence in the light most favorable to the non-moving party. See Bussey v. John Deere Co., 531 So.2d 860, 863 (Ala.1988).”

Southern Energy Homes, Inc. v. Washington, 774 So.2d 505, 510-11 (Ala.2000).

The evidence adduced at trial tends to demonstrate the following facts relevant to the issue of the propriety of an award of damages for mental anguish. Fialkowski purchased her house in Huntsville in May 2007. She testified that the outside of the house “was looking pretty rough” and that there was construction work and repairs she wanted done on the house, including the replacement of exterior siding and two decks, repairs to a leaking chimney, and the addition of a screened-in porch to the back of the house. She said that she estimated the cost of the projects to be about $35,000, and she saved money for several years to pay for them. After three years,' she said, she had saved $20,000.

Fialkowski worked as a nurse at a local hospital. During a discussion about the work she wanted to have done on the house, Fialkowski said, one of her coworkers, Rusich, who is also a nurse, told her that she and her boyfriend, Kitchura, “had a company” and that Kitchura was a contractor. When Fialkowski believed she had saved a sufficient amount of money to begin the projects, she said, she told Ru-sich she would like to talk with Kitchura.

After meeting and discussing her plans, Fialkowski said, she and Kitchura entered into a contract on March 14, 2013, for numerous repairs to the house, including the installation of new shutters, doors, and exterior siding, as well as the construction of an upper and lower deck or porch. The upper deck was to be enclosed underneath to create a dry storage room. The lower deck was to be screened in, with a “lean-to” roof.

On April 4, 2013, Kitchura accompanied Fialkowski to complete the application for the building permit required for the project. Kitchura testified that he filled out the application, which indicated that the job was to consist of only repair work and that the total cost of the “alterations or additions” was to be $5,300. Kitchura acknowledged that TLIG’s business license permitted him to paint, wallpaper, and do drywall and Sheetrock work and that the work Fialkowski wanted completed was beyond the scope of TLIG’s business license. He also admitted that neither he nor TLIG was permitted to enter into a contract for more than $10,000 because he did not have a homebuilder’s license. Based on the information provided on the application, however, the building permit was issued on April 11, 2013.

Work on Fialkowski’s house began in April 2013 and proceeded over a period of many months, including times when no work was being done on the house at all. Fialkowski testified that, as construction progressed, she had concerns about how stable the structure was and about the amount of head space there would.be once the roof was placed on the porch. She said that, when she expressed her concerns to Kitchura, he assured her that everything would be fine. She also had to remind Kitchura that the porch was to be screened in. Fialkowski said that, because of her concerns, she contacted the building inspector’s office for the City of Huntsville.

On December 27, 2013, Claire Davies, a building inspector with the City of Huntsville, went to Fialkowski’s house to assess the work in progress. Davies testified that she saw that concrete slabs had been poured and learned that decks that, according to the building permit, were only to be repaired were actually being replaced. Davies said that she noticed the deck under construction had tall posts, so she asked Fialkowski about what was being built. Fialkowski told Davies that the. lower deck was to be a screened-in porch attached to the house and that the upper deck was to be a “story-up deck.” That work exceeded the scope of the building permit, Davies said.

Davies testified that her inspection showed that the work that had been done on the deck up to that point failed to comply with the International Residential Building Code (“the building code”). Davies said that the building code sets forth minimum standards required for the construction of one- and two-family residences and that it governs structures, including framing and footings, but does not include electrical or mechanical standards. Because the screened-in porch was to have a roof, it was considered part of the structure, Davies said.

Davies said that, during her inspection, she noted that soil had been brought to the construction site. She explained that engineers needed to ensure that the soil where the structure was being built could support the load, that the soil had to meet certain compaction rates, and that the footings of the structure had to be a certain depth. The purpose of such requirements, Davies said, was to ensure that the house would remain stable as the ground changed and moved with moisture. Davies said that there was no footing at all under the concrete slab poured for what was to be the screened-in porch and that, therefore, the construction failed to meet the building code. The framing for the porch was not complete at that point, Davies said, but, she stated, the girders used to support the floor joists underneath the porch did not meet building-code requirements. Davies also noted other building-code violations regarding the way the steps and handrail had been constructed. ' Davies said that she suggested ways that the proper footings and girders could be added so that the structure could be brought into compliance with the building code without the need to remove what had already been built.

Fialkowski said that, after Davies inspected the construction, she contacted Kitchura. He told Fialkowski that he needed more money to complete the work. Fialkowski said that she questioned Kit-chura about how her payments to him thus far had been used and that he could not satisfactorily account for how that money had been spent. She also told Kitchura she was unhappy with the way the construction was proceeding. At the end of their conversation, Fialkowski said, she told Kitchura she could not “continue the build the way it is.” Kitchura told her he was going to leave and would come back later for his tools.

Fialkowski said that she felt like she “was stuck between a rock and a hard place” because she had spent all the money she had saved for the project and all the proceeds from the loan she had taken out to pay for the project in full. She said that she was forced into wondering how she could continue to pay her bills and complete the project, adding: “If I couldn’t keep my house, I couldn’t sell it either.” Fialkowski said that she believed she had no choice but to go forward, so she “sold” one of her retirement plans to have money to rebuild, and, in April 2014, she hired someone else to complete the building project. She also testified that she had been worried and unable to sleep, so she would “go through the house” at night to find things to sell on an Internet auction site to raise money. Fialkowski testified that it cost $8,076 to demolish the work Kitchura had done and that, to complete the porch and deck project, she paid $15,171.69 in addition to the total she had paid TLIG for the work Kitchura had done.

In Alabama, the general rule is that damages for mental anguish are not recoverable as part of a claim alleging breach of contract. B & M Homes, Inc. v. Hogan, 376 So.2d 667, 671 (Ala.1979). One of the exceptions to that general rule, however, allows damages to be awarded for mental anguish when the action involves a contract for construction or repairs to a person’s residence and the breach of the contract “ ‘actually caused the complaining party mental anguish or suffering and ... was such that it would necessarily result in emotional or mental detriment to the plaintiff....’ ” Id. at 672 (quoting Hill v. Sereneck, 355 So.2d 1129, 1132 (Ala.Civ.App.1978)).

In Baldwin v. Panetta, 4 So.3d 555 (Ala.Civ.App.2008), this court included a survey of the circumstances under which damages for mental anguish have been permitted in connection with the construction or repair of a residence. This court stated:

“In Ruiz de Molina v. Merritt & Furman Insurance Agency, Inc., 207 F.3d 1351 (11th Cir.2000), the United States Court of Appeals for the Eleventh Circuit accurately summarized Alabama law concerning the recovery of mental-anguish damages for breach of a contract to build a residence:
“ ‘Under Alabama law, “[d]amages for mental anguish can be recovered ... where the contractual duty or obligation is so coupled with matters of mental concern or solicitude, or with the feelings of the party to whom the duty is owed, that a breach of that duty will necessarily or reasonably result in mental anguish or suffering.” Liberty Homes, Inc. v. Epperson, 581 So.2d 449, 454 (Ala.1991) (quoting F. Becker Asphaltum Roofing Co. v. Murphy, 224 Ala. 655, 141 So. 630, 631 (1932))....
“ ‘.... The majority of the cases in which a plaintiff has been allowed to recover damages for mental anguish involved actions on “contracts for the repair or construction of a house or dwelling or the delivery of utilities thereto, where the breach affected habitability.” See, e.g., Epperson, 581 So.2d at 454; Orkin Exterminating Co. v. Domaran, 519 So.2d 1330 (Ala.1988); Lawler Mobile Homes, Inc. v. Tarver, 492 So.2d 297 (Ala.1986); Alabama Power Co. v. Harmon, 483 So.2d 386 (Ala.1986). Because a person’s home is said to be his “castle” and the “largest single individual investment the average American family will make,” these contracts are “so coupled with matters of mental concern or solicitude or with the feelings of the party to whom the duty is owed, that a breach of that duty will necessarily or reasonably result in mental anguish or suffering.” B & M Homes, Inc. v. Hogan, 376 So.2d 667, 671-72 (Ala.1979). Where such a contractual duty [is] breached, the Alabama Supreme Court has said that “it is just that damages therefor be taken into consideration and awarded.” Id. at 671.
“ ‘The Alabama Supreme Court has made very clear, however, that all these eases represent an exception to the general rule prohibiting mental anguish damages for breach of contract. These cases deserve special treatment because it is highly foreseeable that egregious breaches of certain contracts—involving one’s home ..., for example—will result in significant emotional distress. See Sexton v. St. Clair Federal Sav. Bank, 653 So.2d 959, 962 (Ala.1995).’
“Ruiz de Molina, 207 F.3d at 1359-60. See also Hardesty v. CPRM Corp., 391 F.Supp.2d 1067, 1074 (M.D.Ala.2005) (citing Volkswagen of America, Inc. v. Dillard, 579 So.2d 1301, 1304 (Ala.1991), for the proposition that ‘[t]he Alabama Supreme Court has indicated that it is not eager to “widen the breach in the general rule [prohibiting such damages]” ’)....
“The Eleventh Circuit Court of Appeals’ summary of Alabama law indicates that our decisions have set out three elements that are essential to the right to recover mental-anguish damages for the breach of a home-construction contract, namely: (1) that the breach be egregious, i.e., that it result in severe construction defects; (2) that those defects render the home virtually uninhabitable; and (3) that the breach necessarily or reasonably result in mental anguish or suffering. See, e.g., Liberty Homes, Inc. v. Epperson, 581 So.2d 449, 454 (Ala.l991)(wiring defects that presented an imminent fire hazard); B & M Homes, Inc. v. Hogan, 376 So.2d 667 (Ala.1979) (crack in the concrete slab extending from the front porch through the den that widened and extended throughout the house, causing severe damage); Hill v. Sereneck, 355 So.2d 1129, 1132 (Ala.Civ.App.1978) (crack in the concrete slab that warped the doors and made them unable to be closed and locked, causing the owner’s stay-at-home wife to be ‘afraid and apprehensive’ about her safety); F. Becker Asphaltum Roofing Co. v. Murphy, 224 Ala. 655, 141 So. 630 (1932) (roof that, each time it rained, leaked into every room of the house, including the bedroom where the plaintiff slept).”

Baldwin, 4 So.3d at 567-68.

In considering the severity of the defects involved in home-construction cases in which damages awards for mental anguish had been upheld, the Baldwin court determined that, because “[n]one of the defects [complained of] was severe enough to render the house uninhabitable,” the homeowners in that case were not entitled to recover damages for mental anguish. Id. at 568. This court noted that the safety and integrity of the house was not an issue for the homeowners, the homeowners were not facing “the possibility of financial ruin,” and the homeowners were not left without a place to live while repairs were made. Id.

In Volkswagen of America, Inc. v. Dillard, 579 So.2d 1301, 1306 (Ala.1991), our supreme court accepted the following definition of “mental anguish” from Black’s Law Dictionary (6th ed.1990):

“ ‘.,. As an element of damages [mental anguish] implies a relatively high degree of mental pain and distress; it is more than mere disappointment, anger, worry, resentment, or embarrassment, although it may include all of these, and it includes mental sensation of pain resulting from such painful emotions as grief, severe disappointment, indignation, wounded pride, shame, despair and/or public humiliation. In other connections, and as a ground for divorce or for compensable damages or an element of damages, it includes the mental suffering resulting from the excitation of the more poignant and painful emotions, . such as grief, severe disappointment, indignation, wounded pride, shame, public humiliation, despair, etc.’ ”

Fialkowski testified that, as a result of having to pay the added expense of removing the work done by Kitchura and then completing the project, she had been “worried” and had been unable to sleep. However, a review of the record reveals no evidence- from which the jury could have determined that, as a result of Kitchura’s poor construction work or TLIG’s failure to complete the terms of the contract, Fial-kowski suffered severe disappointment or distress rising to the level required to warrant an award of damages for mental anguish.

Furthermore, although there is no question that Kitchura’s work on the upper deck and screened-in porch was substandard, there is no evidence in the record to suggest that the substandard work rendered Fialkowski’s house uninhabitable or, in fact, caused any damage to the house itseilf. There is also no evidence demonstrating that Fialkowski’s health or safety was endangered in any way by remaining in the house or that any of her possessions were exposed to harm. Although Fialkow-ski unquestionably incurred additional expenses in having to remove the unacceptable work Kitchura had done and that she worried about how to pay for that added expense, there is no' evidence that those expenses were financially devastating to Fialkowski.

Although we sympathize with Fial-kowski on the frustration, worry, and added expense that she experienced in this case, we cannot say that they exceed the frustration, worry, and added expense in any given breach-of-contract case in which damages for mental anguish are not recoverable. The rationale for allowing the recovery of mental-anguish damages in a contract case involving the construction or repair of a house is that it is foreseeable that an individual who is left with a house that is rendered uninhabitable by defective construction or repairs “would undergo extreme mental anguish.” B & M Homes, 376 So.2d at 672. The same cannot be said for the addition of a deck or porch to an existing home. Under the facts of this case, we decline to expand the exception allowing recovery of damages for mental anguish in contract cases alleging severe defects in the construction of or repairs to a home to include the construction of decks or porches added to an existing home. For these reasons, we conclude that the defendants were entitled to a judgment as a matter of law regarding the issue of mental anguish. Therefore, the trial court erred in denying the defendants’ motion for a judgment as a matter of law as to this issue, and the judgment entered on the jury’s verdict awarding Fialkowski $15,000 in damages for mental anguish is reversed.

Rusich and Kitchura also argue that the- trial court erred in disregarding the corporate existence of TLIG and holding them personally liable for the damages awarded to Fialkowski under a theory of piercing the corporate veil.

“Whether the corporate veil of a business entity should be pierced is a matter of equity, properly decided by a judge after a jury has resolved the accompanying legal issues. Stephens v. Fines Recycling, Inc., 84 So.3d 867, 877 (Ala. 2011); Ex parte Thorn, 788 So.2d 140 (Ala.2000). We accordingly review a trial court’s determination in this regard under the ore tenus standard of review, which dictates that the trial court’s judgment based on ore tenus evidence ‘“is presumed correct and should be reversed only if the judgment is found to be plainly and palpably wrong, after consideration of all the evidence and after drawing all inferences that can logically be drawn from that evidence.” ’ Thomas v. Neal, 600 So.2d 1000, 1001 (Ala.1992) (quoting Sundance Marina, Inc. v. Reach, 567 So.2d 1322, 1324-25 (Ala.1990)).”

Heisz v. Galt Indus., Inc., 93 So.3d 918, 929 (Ala.2012).

In its judgment piercing the corporate veil, the trial court stated that it considered evidence adduced at both the trial and at the subsequent hearing devoted solely to this issue. The evidence relevant to the issue of whether the trial court properly pierced the corporate veil indicated the following. .

As mentioned, Rusich worked as a nurse at a hospital in Huntsville. In 2010, Kit-chura, whom Rusich had known for more than 30 years, moved from New Orleans'to Huntsville and began living with her: Ru-sich testified that Kitchura had been in the construction business before moving to Huntsville. In an effort to obtain a job, Rusich,said, Kitchura approached real-estate agents, but, she said,- they required Kitchura to be licensed before he could do work for them. Rusich said that she believed Kitchura had to -have a company to obtain a license, so, she said, she “ended up with a gentleman” who helped her form a corporation, TLIG, through-which Kit-chura could conduct business.

Rusich testified that she 'was the only shareholder in the corporation. .Kitchura testified that he never had .an ownership interest in TLIG, that he never owned stock in the corporation, .and that.he was never an officer or director -of the corporation. Rusich then obtained a business license for TLIG. She. testified that -it was her understanding that, with the license, Kitchura could do anything required for residential construction with the exception of putting roofs on houses. Rusich said that she opened a corporate bank account using $100 of her own money, and had business cards printed. She testified that she also later deposited money with which to pay TLIG’s insurance. Rusich ..stated that Kitchura had the title of “superintendent.” She said that he did not receive,a salary from TLIG but that he had. her authorization to withdraw any money he needed from the corporate account for work expenses and for personal expenses, without limitation. Rusich testified that TLIG had no employees.

Kitchura testified that, after Fialkow-ski’s payments were deposited in the .corporate account, he could use that money for personal expenses. The only limitations on his use of the money, Kitchura said, were “common sense things” like gambling or going to strip clubs, “things that would just be outrageously stupid.” Rusich said that she did not monitor Kit-chura’s spending and that she made no effort to ensure that sufficient amounts of the money Fialkowski paid to TLIG for her building project were held in reserve to pay for the expenses TLIG incurred to complete the project. Rusich testified that she and Kitchura also had an agreement pursuant to which they would split TLIG’s profits “60/40.” The record is unclear as to who would receive which portion of the profits. They did not have an agreement as to the allocation of loss.

TLIG had had only one previous client before beginning the project for Fialkow-ski. Rusich testified that TLIG had sustained a loss on that project. The evidence indicated that the corporate account did not contain any money when Fialkow-ski agreed to use TLIG for the construction work she wanted completed.

Fialkowski presented evidence indicating that both Rusich and Kitchura made numerous personal purchases from the corporate account, including purchases from a jewelry store, a Gander Mountain sporting-goods store, a Dillard’s department store, a TJ Maxx department store, and Stauer’s, a shop specializing in sunglasses and watches. Additional evidence showed that money from the corporate account was used to pay for service performed on Rusich’s personally owned Mercedes, new tires for the Mercedes, personal medical prescriptions for Rusich, haircuts, groceries, and food and beverages at bars and restaurants in Huntsville, including a meal at a steakhouse for Kitchura, Rusich, and Rusich’s mother “just to be nice.” A bank statement indicates that $200 from the corporate account was used to purchase a pair of sunglasses. Expenses incurred during trips to the Jack Daniel’s Distillery and to visit Kitchura’s family in Pennsylvania were paid for from the corporate account, as were expenses incurred at a veterinarian’s clinic. Bank records indicate that at least $8,000 worth of cash withdrawals were made from the corporate account while the Fialkowski project was in progress, but TLIG had no receipts or other documentation to demonstrate how that money was spent.

Kitchura testified that he determined that he could do the Fialkowski project for $82,000, which would include approximately $4,500 of profit for TLIG. However, he said, he did not limit his personal spending from the corporate account to $4,500. The evidence presented indicated that almost $17,500 of the approximately $88,000 Fial-kowski had paid to TLIG for completion of the building project either would not have been spent or would have come out of Rusich’s own pocket to pay for Kitchura’s purchases had Kitchura not been authorized to withdraw money from the corporate account without limitation.

“The Alabama Supreme Court has set out the following extraordinary circumstances in which it would be appropriate to pierce the corporate veil: 1) where the corporation is inadequately capitalized; 2) where the corporation is conceived or operated for a fraudulent purpose; or 3) where the corporation is operated as an instrumentality or alter ego of an individual or entity with corporate control. First Health, Inc. v. Blanton, 585 So.2d [1331] at 1334 [(Ala.1991)] (citing Messick v. Moring, 514 So.2d 892, 894 (Ala.1987)). See also M & M Wholesale Florist, Inc. v. Emmons, 600 So.2d 998 (Ala.1992).”

Gilbert v. James Russell Motors, Inc., 812 So.2d 1269, 1273 (Ala.Civ.App.2001)(em-phasis added).

In Alabama, “the court will disregard the corporate entity when it is used solely to avoid personal liability of the owner while reserving to the owner the benefits gained through use of the corporate name.” Woods v. Commercial Contractors, Inc., 384 So.2d 1076, 1079 (Ala.1980). Our supreme court has held:

“The corporate veil may be pierced where a corporation is set up as a subterfuge, where shareholders do not observe the corporate form, where the legal requirements of corporate law are not complied with, where the corporation maintains no corporate records, where the corporation maintains no corporate bank account, where the corporation has no employees, where corporate and personal funds are intermingled and corporate funds are used for personal purposes, or where an individual drains funds from the corporation.”

Simmons v. Clark Equip. Credit Corp., 554 So.2d 398, 401 (Ala.1989); see also Econ Marketing, Inc. v. Leisure American Resorts, Inc., 664 So.2d 869, 870 (Ala.1994). Furthermore, to pierce the corporate veil, a plaintiff must show fraud in asserting the corporate existence or must show that recognition of the corporate existence will result in injustice or inequitable consequences. Econ Marketing, 664 So.2d at 870; Washburn v. Rabun, 487 So.2d 1361, 1366 (Ala.1986).

In this case, the trial court found that it was appropriate to pierce the corporate veil on the grounds that TLIG was under-capitalized and that Rusich and Kitchura operated TLIG merely as an instrumentality or alter ego of Rusich. The undisputed evidence indicates that Rusich authorized Kitchura to use money from TLIG’s corporate account to pay for personal expenses for both Rusich and Kitchura. Moreover, Rusich acknowledged that, by allowing Kitchura to make cash withdrawals and pay for personal expenses from the corporate account, she did not have to provide him with money from her own account to pay for those expenses. Additionally, she did not require Kitchura to ensure that, after making his personal purchases with money from the corporate account, there was sufficient money remaining in that account to pay for the materials and labor to complete the Fialkowski project. There is substantial evidence to- indicate that TLIG funds and Rusich’s personal funds were intermingled, that TLIG funds were used for Kitchura’s and Rusich’s personal purposes, and that Kitchura used money from the TLIG corporate account for his benefit and for the benefit of Rusich. The evidence further indicates that TLIG failed to keep adequate financial records to account for its expenditures in connection with the Fialkowski project or to ensure that a sufficient amount of Fialkowski’s payments remained in the TLIG corporate account to pay for the expenses connected with that project.

From the evidence presented, the trial court reasonably could have found that, by allowing Kitchura to withdraw money from the TLIG corporate account for virtually any purpose, including to pay for personal expenses that Rusich otherwise would have had to pay out of her own pocket, Rusich disregarded the separate existence of the corporate form-for her benefit, that is, Rusich operated TLIG as an instrumentality or alter ego. To allow her to avoid liability for the compensatory damages owed to Fialkowski because of the existence of the corporation would result in an injustice and have inequitable consequences. Because we hold that the trial court’s determination that the corporate veil was due to be pierced on the ground that- Rusich operated TLIG as an alter ego, we pretermit discussion of the other grounds upon which the trial court could have, found to pierce the corporate veil, for examples that TLIG was undercapitalized. We -conclude that the trial court’s judgment piercing the corporate veil is due to be. affirmed as to Rusich.

Kitchura contends that, because he was not-- a shareholder in or officer óf TLIG, the: trial court could not properly pierce the- corporate veil to hold him liable for the darriáges TLIG had been ordered to pay to Fialkowski. In its judgment, the' trial court found that, because it had pierced the corporate veil, “there was no corporate existence behind” which Kitchura could be shielded from- paying damages.

“ ‘In Alabama, as elsewhere, it is basic that a corporation is a distinct and separate entity from the individuals who compose it as stockholders or who manage it' as directors or 'officers. Loper v. Gill, 282 Ala. 614, 213 So.2d 674 (1968).’” Hill v. Fairfield Nursing & Rehab. Ctr., LLC, 134 So.3d 396, 407 (Ala.2013)(quoting Cohen v. Williams, 294 Ala. 417, 420 318 So.2d 279, 281 (1975))(emphasis added).

“ ‘ “The doctrine that a corporation is a legal entity existing separate and apart from the persons composing it is a legal -theory introduced for purposes of convenience and to subserve the ends of justice. The concept cannot, -therefore, be extended to a point beyond its reason and policy, and when invoked in support of an end subversive of this policy, will be disregarded by the ¡courts. Thus, in an appropriate case -and in furtherance ■ of the ends of justice, a corporation and the individual or individuals omiing all its stock and assets mil be treated as identical.” ’
“Cohen v. Williams, 294 Ala. 417, 420, 318 So.2d 279, 280-81 (1975) (quoting 18 Am.Jur.2d Corporations § 14, p. 559).”

Id. Furthermore, “[a] court may ‘pierce the corporate veil’ and declare a stockholder or officer the corporation’s alter ego when evidence is present that the stockholder or officer used the corporate form to escape personal liability. Alorna Coat Corporation, Inc. v. Behr, 408 So.2d 496, 498 (Ala.1981).” McKissick v. Auto-Owners Ins. Co., 429 So.2d 1030, 1033 (Ala.l983)(emphasis added).

As the cited cases demonstrate, our supreme court has allowed the corporate veil to be pierced to hold liable a corporate entity’s shareholders, officers, and/or directors under certain circumstances. Research has revealed no Alabama authority in which our supreme court has expanded the doctrine of disregarding the corporate existence to reach one who is associated with a corporate entity, even in a managerial role, but who is not a shareholder, officer, or director of that corporate entity. After due deliberation of the issues associated with such an expansion, our supreme court may choose to broaden the application of the doctrine under certain circumstances; however, at this time, this court has chosen to follow established precedent, which limits possible liability under the doctrine to shareholders, officers, and/or directors of corporate entities. Additionally, research has revealed no legal basis for the trial court’s determination that, because the corporate veil had been pierced, there was no corporate structure to shield Kitchura, a non-shareholder, from liability. The evidence indicates that Rusich was the sole shareholder of TLIG. In their appellate brief, which was submitted jointly, the defendants maintain that Rusich was the sole shareholder. The evidence is also undisputed that Kitchura was not an officer or director of TLIG. Because Kitchura was not a shareholder, officer, or director of TLIG, there was no legal basis, under Alabama law, for the trial court to hold Kitchura responsible for the debts or liabilities of TLIG, including the compensatory damages awarded to Fialkowski in this case.

For the reasons set forth above, the trial court’s judgment piercing the corporate veil and concluding that Rusich was individually and personally liable for the compensatory damages awarded to Fialkowski is due to be affirmed. However, we reverse the trial court’s determination that Kitchura was also individually liable for the award of compensatory damages TLIG was ordered to pay Fialkowski. We also reverse that portion of the judgment awarding Fialkowski damages for mental anguish. The cause is remanded for the trial court to enter a judgment consistent with this opinion. •

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

PITTMAN, THOMAS, and DONALDSON, JJ., concur,

MOORE, J., concurs in part and dissents in part, with writing.

MOORE, Judge,

concurring in part and dissenting in part.

In the present case, the trial court applied the principle of piercing the corporate veil to extend individual liability for Deann Fialkowski’s claims alleging breach of the implied warranty of good workmanship and breach of contract to Bruce Kit-chura, who had performed construction work for Fialkowski under the corporation named TLIG Maintenance Services, Inc. (“TLIG”). ■ The main opinion concludes that the principle of piercing the corporate veil cannot apply to an individual who, like Kitchura, was not a shareholder, officer, or director of a corporation. Because I disagree with that conclusion, I respectfully dissent as to the main opinion’s reversal of the trial court’s imposition of individual liability on Kitchura.

Our supreme court has explained the rationale for piercing a corporate veil as follows; “[T]he piercing-the-corporate-veil doctrine is an equitable doctrine.... ‘[I]t ... furnishes a means for a complainant to reach a second corporation or individual upon a cause of action that otherwise would have existed only against the first corporation.’ ” Ex parte Thorn, 788 So.2d 140, 145 (Ala.2000) (quoting 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 41.10 (perm. ed. rev.vol.1999)). Additionally,

“[t]he Alabama Supreme Court has set out the following extraordinary circumstances in which it would be appropriate to pierce the corporate veil: 1) where the corporation is inadequately capitalized; 2) where the corporation is conceived or operated for a fraudulent purpose; or 3) where the corporation is operated as an instrumentality or alter ego of an individual or entity with corporate control.”

Gilbert v. James Russell Motors, Inc., 812 So.2d 1269, 1273 (Ala.Civ.App.2001).

“Courts and commentators are split as to whether the veil may be pierced to reach nonshareholders. Compare Mark J, Loewenstein, Veil Piercing to Non-Owners: A Practical and Theoretical Inquiry, 41 Seton Hall L.Rev. 839, 873 (2011) (discouraging veil-piercing to. reach nonshareholders), with Glenn G. Morris, Agency, Partnership and Corporations, 52 La. L.Rev. 493, 508 (1992) (encouraging veil-piercing to reach non-shareholders,- where appropriate).... [T]he majority of jurisdictions addressing this - question allow veil-piercing against nonshareholders. Additionally, with few exceptions, those jurisdictions that allow veil-piercing against non-shareholders have not required that the nonshareholder hold other formal roles within the corporation—for instance, as an officer, director, or employee—but rather abandon such formalism in favor of an equitable approach focusing on the individual’s domination of the corporation.”

Buckley v. Abuzir, 8 N.E.3d 1166, 1172, 380 Ill.Dec. 624, 630 (Ill.App.Ct.2014).

The United States Court of Appeals for the Second Circuit, applying New York law, held that “an individual who exercises sufficient control over the corporation may be deemed an ‘equitable owner,’ notwithstanding the fact that the individual is not a shareholder of the corporation.” Freeman v. Complex Computing Co., 119 F.3d 1044, 1051 (2d Cir.1997) (citing Guilder v. Corinth Constr. Corp., 235 A.D.2d 619, 619, 651 N.Y.S.2d 706, 707 (1997)); see also Buckley, 8 N.E.3d at 1172, 380 Ill.Dec. at 630. Additionally, the Colorado Court of Appeals determined that “it would elevate form over substance to allow [the defendant] to avoid personal liability merely because he [or she] has avoided owning stock in his [or her] own name and assuming a corporate title such as officer or director.” McCallum Family L.L.C. v. Winger, 221 P.3d 69, 75 (Colo.App.2009); see also Buckley, 8 N.E.3d at 1173-74, 380 Ill.Dec. at 631-32. The Indiana Court of Appeals also allowed veil-piercing with regard to a nonshareholder when the nonshareholder was the “principal figure” who had dealt with the person who was seeking to impose liability on that nonshareholder. Fairfield Dev., Inc. v. Georgetown Woods Sr. Apartments Ltd. P’ship, 768 N.E.2d 463, 473 (Ind.Ct.App.2002); see also Buckley, 8 N.E.3d at 1173-74, 380 Ill.Dec. at 631-32.

Connecticut and Louisiana courts have held that an individual’s status as a shareholder or a nonshareholder is but one factor to consider in determining whether to impose individual liability despite the existence of a corporate form. Angelo Tomasso, Inc. v. Armor Constr. & Paving, Inc., 187 Conn. 544, 556, 447 A.2d 406, 412 (1982); and Middleton v. Parish of Jefferson, 707 So.2d 454, 456 (La.Ct.App.1998); see also Buckley, 8 N.E.3d at 1173-74, 380 Ill.Dec. at 631-32. Specifically, the Louisiana Court of Appeals relied on the reasoning that, “ ‘[i]f the corporation’s very existence is to be disregarded in a veil-piercing case, it hardly makes sense to resurrect the stock ownership records of the legally nonexistent corporation as a means of limiting the class of persons that may be found to have acted in a way that justifies making them personally liable under a veil-piercing theory.’ ” Middleton, 707 So.2d at 457 (quoting Glenn G. Morris, Agency, Partnership and Corporations, 52 La. L.Rev. 493, 508 (1992)); see also Buckley, 8 N.E.3d at 1173-74, 380 Ill.Dec. at 631-32.

Finally, I note that the United States Court of Appeals for the Fifth Circuit, before the creation of the Eleventh Circuit, applied Alabama law and concluded that the key issue in determining whether equity requires a court to pierce the corporate veil of a corporation is not merely stock ownership but actual control of the corporation. Krivo Indus. Supply Co. v. National Distillers & Chem. Corp., 483 F.2d 1098 (5th Cir.1973).

In the present case, the main opinion notes that the undisputed evidence indicates that the entire purpose of the corporation was to have an entity “through which Kitchura could conduct business” and that the corporate functions were undertaken by only him. 218 So.3d at 1279. Furthermore, Kitchura was allowed “to withdraw any money he needed from the corporate account for work expenses and for personal expenses, without limitation.” 218 So.3d at 1279. The evidence also indicates that Kitchura was the principal figure in TLIG’s dealings with Fialkowski and that he “ ‘exercise[d] considerable authority over [the corporation] ... to the point of completely disregarding the corporate form....’” Freeman, 119 F.3d at 1051 (quoting Lally v. Catskill Airways, Inc., 198 A.D.2d 643, 645, 603 N.Y.S.2d 619, 621 (1993)).

I find that, under the facts of this case, Kitchura is an equitable owner of TLIG. Freeman, 119 F.3d at 1051. To prevent Fialkowski from taking advantage of the equitable remedy of piercing the corporate veil under these facts would “elevate form over substance” and would, in fact, work against achieving equity in this case. McCollum Family L.L.C., 221 P.3d at 75. Therefore, I conclude that, in accordance with the majority of jurisdictions that have addressed this issue, the fact that Kitchura was not a shareholder, officer, or director of TLIG does not prevent him from being held individually liable for breach of the implied warranty of good workmanship and breach of contract and that, under the facts of this case, the trial court did not err in entering a judgment against Kitchura in his individual capacity. In all other respects, I concur in the main opinion.

      . The jury returned a verdict in favor of each of the defendants on Fialkowski's claim alleging violation of the Alabama Deceptive Trade Practices Act, § 8-19-1 et seq., Ala.Code 1975.

      . Before filing her appellate brief, Fialkowski had filed a motion to dismiss the appeal on the ground that the defendants’ notice of appeal was untimely and that Rusich and Kit-chura lacked standing to prosecute the appeal. This court denied the motion to dismiss on April 26, 2016. In her brief on appeal, which was filed on April 29, 2016, Fialkowski again asserts that the appeal was untimely. Specifically, in a one-paragraph argument, she contends that TLIG’s motion for a judgment as a matter of law, filed before the trial court entered its final judgment piercing the corporate veil, constituted the defendants’ first “postjudgment motion.” Therefore, she says, their subsequently filed motion to alter, amend, or vacate the final judgment was a successive postjudgment motion. The defendants’ motion to alter, amend, or vacate the judgment, filed after the final judgment was entered, was not a successive postjudgment motion, and it tolled the time in which the defendants had to appeal. The notice of appeal was filed within 42 days of the denial of the defendants’ postjudgment motion to alter, amend, or vacate the judgment. Therefore, it was timely.

      , .We are also mindful that, in this case, the jury was given the option of returning a verdict against Kitchura in his individual capacity as to Fialkowski’s claim that he had ■ violated the Deceptive Trade Practices Act. Specifically, Fialkowski had alleged that Kit-chura had engaged in construction without the proper licenses and had constructed a substandard product. The jury found in favor of Kitchura as to that claim.


source: Caselaw Access Project

author: THOMPSON, Presiding Judge.

license: Public Domain

text:
    Eva May SIMS v. Timothy Bruce SIMS and Wanette Sims.
    2150382.
    Court of Civil Appeals of Alabama.
    Sept. 2, 2016.

      Jack Floyd of Floyd Law Firm, LLC, Gadsden, for appellant.

      Chris Speaks, Clanton, for appellee Timothy Bruce Sims.
   THOMPSON, Presiding Judge.

Eva May Sims (“the mother”) appeals from a judgment of the Chilton Circuit Court (“the trial court”) denying her request to set aside a transfer of property between Timothy Bruce Sims (“the father”) and his current wife, Wanette Sims.

Most of the evidence presented to the trial court was documentary evidence. At the evidentiary hearing, the mother was the only person to testify, and her testimony was brief. The evidence presented to the trial court demonstrated the following. The trial court divorced the mother and the father in March 1992, and the mother was awarded custody of their minor child (“the child”). Pursuant to the divorce judgment, which incorporated an agreement between the mother and the father, the father was to pay child support to the mother for the benefit of their child, who was born in 1992. In January 1998, the trial court entered a judgment that increased the father’s child-support obligation. The child reached the age of majority in February 2011. However, during the time the child was a minor, the father did not make the child-support payments as ordered.

The father’s grandfather, Benjamin H. Sims, Jr., died in 2013, and three parcels of real property (“the three parcels”) in Chilton County were left to the father in Benjamin Sims’s will. The will was probated in the Chilton County Probate Court on March 26, 2013. In October 2013, the mother filed a petition for a rule nisi in the DeKalb Circuit Court, where she and the child had resided for more than ten years, seeking to have the father held in contempt for his failure to pay child support as ordered in the divorce and modification judgments of the trial court. The mother also sought a determination of the' father’s child-support arrearage.

On February 25, 2014, a warranty deed was executed conveying to-the father and his wife, Wanette, the three parcels devised to the father under Benjamin Sims’s will.

According to the mother’s complaint in this action, at the hearing in the DeKalb Circuit Court, “a consent to the $90,000 judgment was made by” the mother and the father. In his responses tp requests for admissions submitted to the trial court in this action, the father admitted that Wanette accompanied him to the DeKalb Circuit Court for a hearing on the mother’s petition for a rule nisi on September 2, 2014. However, in his interrogatory responses, which were also submitted into evidence, the father denied that “the hearing and the agreement for the $90,000 [was] set for and heard in DeKalb County on September 2, 2014.” On September 5, 2014, while the mother’s petition for a rule nisi was pending, the father executed a warranty deed conveying his interest in the three parcels to Wanette for consideration of one dollar.

On September 15, 2014, .the DeKalb Circuit Court entered an order (“the arrear-age judgment”), finding: . ■

“[T]he' parties have agreed that the [father] is in arrears in child support payments called for by the Chilton County Circuit Court in the sum of $90,000, which sum is due and owing at the time that the minor child became of legal age.... .. (
“[T]he [father] has agreed .to begin payments on said arrears on October -1, 2014, in a monthly sum of $400 per month.” ¡

The DeKalb Circuit Court also found that the father’s child-support obligation ended when the child reached the age of majority in February 2011. Based on its findings, the DeKalb Circuit Court entered a judgment of $90,000 against the father for unpaid child support, “for the collection of which execution may issue.” In a subsequent paragraph in the arrearage judgment, the DeKalb Circuit Court ordered the father to pay $400 each month toward the arrearage. There is no evidence in the record on appeal that either party appealed from- the arrearage judgment.

At the hearing on the mother’s complaint in this action, seeking to set aside the father’s conveyance of his interest in the three parcels, the mother testified that she had agreed to the entry of a consent judgment, i.e., the arrearage judgment, that determined that the father’s child-support obligation was $90,000 in arrears. However, she said, she did not agree that he could pay off that amount only through monthly $400 payments and that she could not seek to enforce the arrearage judgment through other means. She testified that she “was never told that.”

The father did not testify at the hearing in this matter. In the responses to interrogatories the mother propounded in this action, which were submitted into evidence, the father stated that he had consented to the arrearage judgment the De-Kalb Circuit Court entered against him “under the stipulation that [he] would pay it back at $400 per month.”

On September 30, 2015, the trial court entered its judgment denying the mother’s request to set aside the transfer of the father’s interest in the three parcels. In doing so, the trial court found that the mother and the father had “entered into a negotiated settlement for the payment of past due child support and therefore, the [mother] has no claim to the subject real estate.”

The mother timely filed a motion to alter, amend, or vacate the judgment, which the trial court denied. The mother then timely filed a notice of appeal to the Alabama Supreme Court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

“ ‘Because the trial court heard ore tenus evidence during the bench trial, the ore tenus standard of review applies. Our ore tenus standard of review is well settled. “ ‘When a judge in a nonjury case hears oral testimony, a judgment based on findings of fact based on that testimony will be presumed correct and will not be disturbed on appeal except for a plain and palpable error.’ ” Smith v. Muchia, 854 So.2d 85, 92 (Ala.2003) (quoting Allstate Ins. Co. v. Skelton, 675 So.2d 377, 379 (Ala.1996)).
“““The ore tenus rule is grounded upon the principle that when the trial court hears oral testimony it has an opportunity to evaluate the demeanor and credibility of witnesses.’ Hall v. Mazzone, 486 So.2d 408, 410 (Ala.1986). The rule applies to ‘disputed issues of fact, ’ whether the dispute is based entirely upon oral testimony or upon a combination of oral testimony and documentary evidence. Born v. Clark, 662 So.2d 669, 672 (Ala.1995). The ore tenus standard of review, succinctly stated, is as follows:
“ ‘ “ ‘[W]here the evidence has been [presented] ore tenus, a presumption of correctness attends the trial court’s conclusion on issues of fact, and this Court will not disturb the trial court’s conclusion unless it is clearly erroneous and against the great weight of the evidence, but will affirm the judgment if, under any reasonable aspect, it is supported by credible evidence.’ ”
“‘Reed v. Board of Trs. for Alabama State Univ., 778 So.2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane, 342 So.2d 358, 360 (Ala.1977)). However, “that presumption [of correctness] has no application when the trial court is shown to have improperly applied the law to the facts.” Ex parte Board of Zoning Adjustment of Mobile, 636 So.2d 415, 417 (Ala.1994).’
“Kennedy v. Boles Invs., Inc., 58 So.3d 60, 67-68 (Ala.2010). Furthermore, where there are no disputed facts and where the judgment is based entirely upon documentary evidence, our review is de novo. Weeks v. Wolf Creek Indus., Inc., 941 So.2d 263, 268-69 (Ala.2006).”

E.B. Invs., L.L.C. v. Pavilion Dev., L.L.C., 212 So.3d 149, 162 (Ala.2016)(emphasis added).

On appeal, the mother argues that there was no “settlement agreement” or “negotiated settlement agreement” incorporated into the arrearage judgment, and, she says, no proof was offered to show that such an agreement existed. The plain language of the arrearage judgment states that the DeKalb Circuit Court found that “the parties,” i.e., the mother and the father, had agreed that the father was in arrears in the amount of $90,000 and that “the defendant,” i.e., the father, had agreed to make payments of $400 a month. There is no mention that the mother had agreed to the latter term. In awarding the mother “$90,000 as unpaid child support called for by the [divorce judgment and subsequent modification] for the collection of which execution may issue,” it appears that the DeKalb Circuit Court did not intend to limit execution on the judgment to only the $400 monthly installments. No language in the arrearage judgment indicates that the mother waived her right to execute on the full amount of the judgment.

It is true that the arrearage judgment allowed the father to pay off the arrearage in monthly installments of $400. However, this court has held:

“Accrued installment payments for child support or alimony are final judgments, and an order of a trial court permitting payment of such judgments in installments is not a bar to any other process for collection of judgments, such as execution or garnishment. State ex rel. B.D.N. v. D.S., 591 So.2d 878, 879 (Ala. Civ.App.1991). This court in Osborne v. Osborne, 57 Ala.App. 204, 207, 326 So.2d 766, 767 (Civ.1976), stated:

“‘We comprehend that a contempt of court may be purged by an order of payment of a sum upon past-due installments, but such order should not be a bar to collection of the judgment by execution or garnishment if assets of defendant are available to such process.’

“In the present case, the trial court erred in restricting execution of the judgment to the monthly payments. As we stated in Osborne, supra, ‘accrued installments of support are final judgments and may be collected as any other judgment. An order of the trial court permitting the payment of such judgments in installments is not a bar to any other process for collection of judgments.’ 57 Ala.App. at 207, 326 So.2d at 767. Although it does not appear that the father currently has the assets to satisfy the arrearage, the mother should not be limited in obtaining what is owed to her if the father obtains such assets.”

Horwitz v. Horwitz, 897 So.2d 337, 344-45 (Ala.Civ.App.2004).

Thus, we find no language in the arrear-age judgment from which one could reasonably conclude that the agreement between the parties as to the amount of the father’s arrearage was contingent upon the method by which the father would pay the judgment. In other words, there is nothing in the DeKalb Circuit Court’s arrear-age judgment to support the trial court’s conclusion, that the parties negotiated a settlement pursuant to which the father would agree that he was $90,000 in arrears on his child-support obligation provided that the mother would agree to accept a monthly payment of $400 until the judgment -was. paid and waive her right to execute on the judgment, regardless of whether the father obtained additional assets from which to pay the arrearage judgment. It is worth reiterating that neither party, appealed from the DeKalb Circuit Court’s arrearage judgment. In light of the. provision set forth in the arrearage judgment allowing the mother to execute on, the full amount of the judgment, we also .conclude that the father’s interrogatory response that he consented to the ar-rearage of $90,000 “under the stipulation that [he] would pay it back at $400 per month” is insufficient to support the trial court’s conclusion in this action that the parties had “entered into a negotiated settlement for the payment of past due child support” and, therefore, that the mother was not entitled to execute on the arrear-age judgment. Because the evidence does not support the trial court’s conclusion, the judgment denying the mother’s request to set aside the transfer of the three parcels must be reversed and the cause remanded to the trial court.

On appeal, the .mother also argues that the father’s conveyance of the three parcels to- Wanette constituted a fraudulent transfer. The trial court did not make any factual findings or conclusions of law regarding that issue in its judgment. It is not the .province of an appellate court to make factual findings.

“In reviewing a decision of the trial court, an appellate court is not permitted to reweigh the evidence, because weighing the evidence is solely a function of the trier of fact. However, it is the function of the appellate court to ascertain that the trial court’s findings of fact are supported by substantial evidence with due regard to, and respect for, the appropriate level of evidentiary proof required.... ”

Ex parte Mclnish, 47 So.3d 767, 778 (Ala.2008)(emphasis added). The trial court, as the trier of fact, must make the determination whether the father’s conveyance of the three parcels constituted a fraudulent transfer and whether that conveyance is due to be set aside. On remand, the trial court is directed to make the factual determinations required as to the issue of whether the father’s transfer of the three parcels to Wanette was fraudulent and to enter a judgment accordingly.

The father’s request on appeal for an award of “all damages and costs” is denied.

REVERSED AND REMANDED WITH INSTRUCTIONS.

PITTMAN, THOMAS, and MOORE, JJ., concur.

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

      . We note that interest on the judgment would accrue at a rate of 7.5% per ánnum, or approximately $6,750 per year. § 8-8-10, Ala. Code 1975. Thus, based on the father’s annual payment of $4,800 ($400 x 12 = $4,800), the interest is accruing faster than the principal is being paid.


author: THOMAS, Judge.,

text:
    Martha TURNER v. Martha WILLIAMS et al.
    2150511.
    Court of Civil Appeals of Alabama.
    Sept. 2, 2016.
    L. Hunter Compton, Jr., and Taylor T. Perry, Jr., of Manley, Traeger, Perry, Stapp & Compton, Demopolis, for appellant. ' '
    John A. Nichols and J. Levi Nichols of Lightfoot & Nichols, Luverne; and Faye A. Schofield of Schofield Legal Solutions, LLC, Highland Home, for appellee,
   THOMAS, Judge.,

James Wilson Williams was the owner of a 618-acre tract of land (“the property”). When James died in 1958, his seven children—Ralph . Williams, Gene Williams, Warren Williams, Leo Williams, Bernice Hightower, Katy McGrath, and Lucille Farrior—inherited the property as tenants in common, each with an undivided interest. Katy, who did not have heirs, died. Thus, at .one time, it appears that the surviving siblings each had an undivided one-sixth interest in the property. All the siblings are now deceased. There are two surviving widows of the siblings, Warren’s widow, Martha Williams (“Martha”) and Leo’s widow, Helen, There are 13 adult grandchildren of James. Ralph’s children are Roger and Cary. Gene’s children are Kay, John, and Jimmy. Warren’s children are Emily Newman (“Newman”) and Joe. Leo’s children are Wendy, Hal, and Ken. Bernice’s child is the appellant, Martha Turner (“Turner”). Lucille’s children are Emily Watts (“Watts”) and Jef Farri- or.

On July 6, 2015, Jef filed a complaint in the circuit court seeking to quiet title to the property and seeking a partition or a sale for division. Jef named the other 14 living family members as defendants (“the defendants”). On July 15, 2015, the defendants, with the exception of Turner, together filed an answer to Jefs complaint and a counterclaim, in which they asserted, among other things, that Turner had conveyed “all of her interest” to Leo, Martha, Eugenia (the now deceased widow of Ralph), Kay, John, and Jimmy by a deed dated November 10, 2006 (“the November 2006 deed”); they included the November 2006 deed as an exhibit. The November 2006 deed, executed by Turner, but not by Watts or Jef, conveyed or purports to convey (see discussion infra) Turner’s, Jefs, and Watts’s interests in four parcels to Leo, Martha, Eugenia, Kay, John, and Jimmy in consideration of “previous agreements” made by James and his children.

On August 21, 2015, Turner filed ' an answer to Jefs complaint in which she asserted that she owned an undivided one-sixth interest in the property, that she was a tenant in common, and that the November 2006 deed was invalid for various reasons, including that it had not been executed by Watts and Jef. Turner also cross-claimed, requesting a reformation of the November 2006 deed or an order setting aside the November 2006 deed. Turner also requested damages for negligence, wantonness, conspiracy, unjust enrichment, the tort of outrage, theft by deception, breach of contract, and fraud.

On October 9, 2015, Hal, Ken, Martha, Roger, Cary, Kay, John, Jimmy, and CWM, LLC (“CWM”) (see supra note 1) (collectively referred to as “the cross-claim defendants”), filed a motion to dismiss Turner’s cross-claim pursuant to Rule 12(b)(6), Ala. R. Civ. P., asserting that Turner had failed to state a claim upon which relief could be granted, that the claims contained in Turner’s cross-claim were barred by the applicable limitations periods, and that Turner’s uncles had purchased the interest of Turner’s mother in the early 1960s. Turner filed a response to the motion to dismiss in which she asserted that the cross-claim defendants’ allegation 'that her mother had conveyed her interest had caused the motion to dismiss to be converted to a motion for a summary judgment; thus, Turner requested a continuance to respond to the motion. See Rule 12(b)(“If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, [Ala. R. Civ. P.,] and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.”). Turner’s attorney, L. Howard Compton, Jr., filed an affidavit in which he testified that discovery was necessary to respond to what he characterized as a motion for a summary judgment.

After a motion hearing, the circuit court declined to treat the motion to dismiss as having been converted into a motion for a summary judgment and granted the motion to dismiss Turner’s cross-claim on February 10, 2016. Turner filed a motion seeking the entry of a Rule 54(b), Ala. R. Civ. P., certification, thereby making the interlocutory order dismissing Turner’s cross-claim final for purposes of appeal, which the circuit court granted on February 29, 2016. On March 11, 2016, Turner filed a timely notice of appeal to the Alabama Supreme Court. The appeal was transferred to this court by the supreme court, pursuant to § 12-2-7(6), Ala.Code 1975.

Turner seeks review of whether the circuit court erred by concluding that Turner could prove no set of facts that would entitle her to the relief sought in her cross-claim or by denying her motion to continue when, according to Turner, the cross-claim defendants presented arguments outside the pleadings at the motion hearing.

“The standard of review applicable to an appeal of a trial court’s judgment granting a Rule 12(b)(6)[, Ala. R. Civ. P.,] motion to dismiss is well settled. In Crosslin v. Health Care Authority of Huntsville, 5 So.3d 1193, 1195 (Ala.2008), our supreme court stated:
“Tn considering whether a complaint is sufficient to withstand a motion to dismiss under Rule 12(b)(6), Ala. R. Civ. P., a court “must accept the allegations of the complaint as true.” Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala.2002) (emphasis omitted). “ ‘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.’ ” Smith v. National Sec. Ins. Co., 860 So.2d 343, 345 (Ala.2003) (quoting Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993)). In determining whether this is true, a court considers only whether the plaintiff may possibly prevail, not whether the plaintiff will ultimately prevail. Id. Put another way, “‘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.’ ” Id. (emphasis added).’ ”

Murray v. Prison Health Servs., Inc., 112 So.3d 1103, 1106 (Ala.Civ.App.2012).

The sole argument that the cross-claim defendants “care[d] to present” at the motion hearing was the expiration of the limitations periods applicable to the claims asserted in Turner’s cross-claim. According to the cross-claim defendants, the date Turner was aware or should have been aware of the alleged injury was November 10, 2006, when Turner executed the November 2006 deed and left it with the grantees’ agent. According to Turner, she had not become aware of the alleged injury until July 8, 2015, when she was served with a copy of the other defendants’ answer to Jefs complaint and their counterclaim. If Turner is correct, she filed her cross-claim within weeks of her discovery of the alleged injury, thus defeating any argument regarding the expiration of limitations periods.

The dismissal would proper if it appears beyond doubt that no set of facts in support of Turner’s claims would entitle her to relief. See Murray, 112 So.3d at 1106. To examine the propriety of the dismissal, we must accept Turner’s allegations as true; view them strongly in her favor; and consider only whether Turner may possibly prevail, not whether she will ultimately prevail. Turner alleged that she could not have discovered the alleged injury on November 10, 2006, because, she said, the November 2006 deed was not effective because it was not “perfect on its face.”

In Shelby v. Tardy, 84 Ala. 327, 329-30, 4 So. 276, 278 (1888), the deed in question had included two signature lines and language in body of the deed indicating that a certain parcel of property had been conveyed by Clarence Tardy and his wife, Annie Tardy. Id. The deed was executed by Clarence and was left in the custody of his attorney until Shelby paid the purchase price. Id. Shelby did so, and the attorney delivered the deed to Shelby. Id. Shelby recorded the deed. Id. On appeal, the court explained that the deed was not “perfect on its face” because Annie had demonstrated that she was meant to be a party to the conveyance but had not “consummated [the] conveyance, vesting the legal title in Shelby.” Id. at 330, 4 So. 276.

Likewise, in this case, Turner asserted that she had no reason to believe that the November 2006 deed was effective because, she said, it was not perfect on its face because Watts and Jef had not executed it and because Leo, Martha, Eugenia, Kay, John, and Jimmy had not paid the alleged purchase price. We agree.

In reaching this conclusion, we have not overlooked the cross-claim defendants’ cite to Travis v. Travis, 399 So.2d 243, 245 (Ala.1981), in which our supreme court examined a final judgment regarding a deed that was not executed by persons who were named as grantors. Our supreme court held that the “deed is operative as to those grantors who executed that deed.” 399 So.2d at 245. However, Travis is distinguishable from the case at hand because, in Travis, our supreme court operated under the ore tenus standard of review of a final judgment. It was not, as are we, reviewing an order of dismissal in which we are considering only whether Turner may possibly prevail, not whether she will ultimately prevail. Furthermore, we note that our supreme court did not overrule Shelby in Travis. In Travis, our supreme court stated that it had been unable to find any Alabama cases that address whether, as a matter of law, a deed that is executed by some but not all of the grantors is totally inoperative. 399 So.2d at 245. Section 12-3-16, Ala.Code 1975, provides that this court is bound by the decisions of our supreme court. We express no opinion regarding whether the circuit court should, after a hearing, conclude that the November 2006 deed was “operative” as to Turner because she executed that deed or “totally inoperative” because less than all the grantors executed it. Turner, supra. However, at this stage of the litigation, we conclude that the circuit court erred by dismissing Turner’s cross-claim on the ground of the expiration of the applicable limitations periods because Turner could possibly prove a set of facts that would entitle her to relief.

We pretermit discussion of Turner’s second issue. See Favorite Mkt. Store v. Waldrop, 924 So.2d 719, 723 (Ala.Civ.App.2005)(stating that this court would pretermit discussion of further issues in light of dispositive nature of another issue). In conclusion, we reverse the trial court’s dismissal of Turner’s cross-claim, and we remand the cause for further proceedings.

REVERSED AND REMANDED.

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

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

      . Kay, John, and Jimmy formed CWM, LLC, which owns their alleged interests in the property. The circuit court entered an order joining CWM as a party on August 31, 2015.

      . No party has raised as an issue that Wendy, Helen, Joe, Newman, and Watts are not named as parties to the motion to dismiss. Therefore, we do not address that issue, except insofar as we have amended the style of this appeal.

      . No party has raised as an issue that the circuit court included Wendy, Helen, Joe, Newman, and Watts as persons who had filed the motion in the body of its order of dismissal or that it failed to include CMW as a movant. See supra note 2.