author: SHAW, Justice.

text:
    Mary HALL, as personal representative of the Estate of Adolphus Hall, Sr., deceased, and Anaya McKinnon, as personal representative of the Estate of Wanzy Lee Bowman, deceased v. ENVIRONMENTAL LITIGATION GROUP, P.C.
    1151077
    Supreme Court of Alabama.
    September 1, 2017
    Kearney Dee Hutsler, Birmingham, for appellants.
    Floyd D. Gaines and Daniel B. Snyder of Gaines LLC, Birmingham; and Bruce F. Rogers and Sela S. Blanton of Bainbridge, Mims, Rogers & Smith, LLP, Birmingham, for appellee.
   SHAW, Justice.

Mary Hall, as personal representative of the estate of Adolphus Hall, Sr., and Anaya McKinnon, as personal representative of the estate of Wanzy Lee Bowman (hereinafter collectively referred to as "the plaintiffs"), appeal from the Jefferson Circuit Court's dismissal of their class-action claims against Environmental Litigation Group, P.C. ("ELG"). We reverse and remand.

Facts and Procedural History

This is the second time this matter has come before the Court. Our previous decision, Hall v. Environmental Litigation Group, P.C., 157 So.3d 876, 878 (Ala. 2014) (" Hall I"), discusses the pertinent factual and procedural history:

"On March 19, 2013, the plaintiffs filed a complaint in the Jefferson Circuit Court against ELG, requesting a declaratory judgment and alleging one count of unjust enrichment and one count of breach of contract. The plaintiffs asserted those claims on behalf of the estates they represented and on behalf of 'others similarly situated as a class action pursuant to Rule 23,' Ala. R. Civ. P. The plaintiffs' complaint included the following factual allegations: in the 1990s, ELG agreed to represent hundreds of clients who had been exposed to asbestos, including Adolphus Hall and Bowman; ELG entered into an attorney-employment agreement with each client; pursuant to that agreement, ELG agreed to 'take all legal steps necessary to enforce the said tort claim,' and in return ELG would receive 40% of amounts collected from any settlement or judgment as its fee; the agreement also permitted ELG to reimburse itself for reasonable expenses related to the clients' claims; on February 23, 2012, ELG sent a memorandum to all of its 'asbestos clients' stating that, as a result of additional work required to obtain the proceeds of a settlement that ELG had negotiated, ELG would begin charging an 'administrative-service-expense charge' in the amount of $250 for living clients and $600 for clients who were deceased, which could be deducted from settlement proceeds due to be passed on to the client; between April 2011 and July 2012, the estate of Adolphus Hall received settlement proceeds from three asbestos defendants and, from those proceeds, ELG deducted $192.01 in expenses and a $600 administrative-service-expense charge, in addition to deducting 40% of the settlement proceeds as an attorney fee; and, in December 2012, the estate of Wanzy Lee Bowman received settlement proceeds from one asbestos defendant and ELG deducted $68.64 as an 'administrative credit' in addition to deducting 40% of the proceeds as an attorney fee. The plaintiffs alleged that the administrative-service-expense charge 'is nothing more than an extra attorney fee collected by ELG in addition to the 40% contingent fee' provided as the attorney fee in the attorney-employment agreement.
"The plaintiffs asked the circuit court to enter an order declaring that ELG had breached the attorney-employment agreement 'by charging, without legal authority, more than 40% for attorney staff services'; that ELG had been unjustly enriched by its wrongful activities; that the plaintiffs were due monetary relief; and that the plaintiffs were entitled to recover an attorney fee and reasonable expenses related to the prosecution of this action. In addition, the plaintiffs alleged separate counts of unjust enrichment and breach of contract, which were based on ELG's alleged breach of the attorney-employment agreement.
"In response to the plaintiffs' complaint, ELG moved the circuit court to dismiss the complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P., for failure to state a claim upon which relief could be granted. ELG attached several documents to its motion to dismiss, including the attorney-employment agreement signed by Adolphus Hall and Mary Hall, the attorney-employment agreement signed by Bowman, and an 'adoption and ratification' of Bowman's attorney-employment agreement signed by McKinnon. ELG also attached the memorandum dated February 23, 2012, from ELG to its asbestos clients informing them of the implementation of the administrative-service-expense charge.
"ELG subsequently filed a supplement to its motion to dismiss, arguing that the plaintiffs had, 'in essence, ... asserted that ELG has charged its clients an excessive fee and [they] ask this court to enter a declaratory judgment to that effect.' ELG further argued, among other things, that Rule 1.5, Ala. R. Prof. Cond., directly addresses the issue of excessive attorney fees; that the Alabama State Bar was not a party to the action; and that a declaratory judgment in the present case would constitute only an advisory opinion by the circuit court because, it argued, the Alabama State Bar has sole authority to enforce the Alabama Rules of Professional Conduct and to determine whether an attorney fee is excessive under Rule 1.5. Thus, ELG argued, the circuit court was required to dismiss the plaintiffs' complaint for lack of subject-matter jurisdiction. See Rule 12(b)(1), Ala. R. Civ. P. (providing that 'lack of jurisdiction over the subject matter' is a defense that may be made by motion). ELG cited B.W.T. v. Haynes & Haynes, P.C., 20 So.3d 815, 822 (Ala. Civ. App. 2009), to support its position. The plaintiffs filed a response to ELG's motion to dismiss, arguing, among other things, that their complaint was not 'based merely on an ethics charge of "excessive fees" ' but was based on an allegation that 'ELG ha[d] breached the terms of the [attorney-employment agreement,] which ELG drafted and entered into with each client.'
"....
"On November 20, 2013, the circuit [court] entered an order ... dismissing the case with prejudice. The plaintiffs timely filed a notice of appeal. On appeal, the plaintiffs argue[d] that the circuit court erred in dismissing their complaint because, they [said], the allegations in their complaint articulated a breach-of-contract claim against ELG and because their complaint was not an ethics complaint against ELG, which, they contend, would have been subject to the exclusive jurisdiction of the Alabama State Bar. In response, ELG assert[ed] that the circuit court properly dismissed the plaintiffs' complaint because, ELG says, the circuit court did not have subject-matter jurisdiction over the plaintiffs' complaint."

157 So.3d at 877-79 (footnotes omitted).

On appeal, this Court disagreed with the circuit court's holding. We held that "[t]he 'crux' of the plaintiffs' claims [was] that ELG breached the attorney-employment agreement by allegedly taking as an attorney fee more than 40% of the settlement proceeds" and, thus, the plaintiffs' claims "[fell] within the subject-matter jurisdiction of the circuit court." 157 So.3d at 881. Unlike B.W.T. v. Haynes & Haynes, P.C., 20 So.3d 815, 822 (Ala. Civ. App. 2009), which ELG cited, "the 'crux' of the plaintiffs' case [was] not whether ELG's fee arrangement with the plaintiffs violated Rule 1.5, Ala. R. Prof. Cond." 157 So.3d at 881. We therefore reversed the circuit court's order of dismissal and remanded the matter for further proceedings.

Following remand, ELG moved for a status conference to establish a discovery schedule and to consider class certification. Shortly thereafter, the plaintiffs filed a "First Amended Class Action Complaint" that added to the previously pending individual and class-based claims a count against ELG pursuant to the Alabama Legal Services Liability Act, § 6-5-570 et seq., Ala. Code 1975. Additionally, the plaintiffs filed a motion seeking, after discovery, class certification pursuant to Rules 23(b)(2) and 23(b)(3), Ala. R. Civ. P.

After numerous additional filings by the parties and the trial court's appointment of a special master, who recommended the denial of ELG's renewed dismissal request, on February 23, 2016, ELG filed a "Motion to Dismiss Class Claims or, Alternatively, for Partial Judgment on the Pleadings." In that motion, ELG sought the dismissal of only the plaintiffs' class-based claims on the ground that the claims "require individualized inquiries" that would destroy the "commonality" required for class-based relief because, according to ELG, the contract at issue was ambiguous. Specifically, the parties disagree on whether the "Administrative Service Expense Charge" (hereinafter "the new charge") assessed to the plaintiffs was permitted under the terms of the attorney-employment contract, which allowed recoupment of ELG's "expenses," or whether the new charge was an additional "fee." ELG further maintained that the plaintiffs' proposed definition of a class, which included all past and present ELG asbestos clients who executed a contingency-fee contract, was both "overly broad" and "inconsistent with and contradicted by the allegations in the Complaint."

On April 11, 2016, ELG filed, as a "supplement" to its motion to dismiss, an "alternate" motion to strike the plaintiffs' class claims and allegations pursuant to Rules 12(f), 23(c)(1), and 23(d)(4), Ala. R. Civ. P., which, according to ELG, "provide a clear path for the Court to evaluate class claims at an early stage under the burden of proof and standard of review of Alabama Rule 23" and, where appropriate, to strike class allegations before the class-certification process.

Following a hearing-but without permitting the plaintiffs' requested discovery on the class-certification issue-the trial court granted ELG's motion to dismiss. The trial court agreed with ELG that the "[p]laintiffs' contracts with ELG are ambiguous regarding whether the 'Administrative Service Expense Charge' was an expense or should have been included in the 40% contingency fee." The trial court held:

"Specifically, the contract is ambiguous in at least three ways. First, the definition of expense is open-ended and ambiguous. Second, the client contracts are silent and ambiguous regarding how work related to probate, bankruptcy, and Medicare should be charged to the client. Third, the client contracts are ambiguous regarding whether post-settlement work done to make sure that claims that have already been recovered are paid out to the proper party is an expense or part of the contingency fee for prosecution and 'enforce[ment of] the said tort claim,' or outside the scope of the contract."

As a result of that ambiguity and of the particular nature of the asbestos claims themselves, including "the fact that the current plaintiffs are not even victims of asbestos injuries but instead are actually second or third generation descendants of the original clients who signed the fee agreements in 1992 and 1994" and that ELG's long-term representation could have given rise to "situation[s] ... not anticipated and addressed by the parties on the face of the contract," the trial court concluded that "individualized inquiry is required to resolve the ambiguity and delve into the state of mind of each party and determine what each party intended at the time of contracting" and that, therefore, such inquiry "destroys predominance and commonality and bars class ... breach-of-contract-based claims in this case." In sum, opining that no amount of discovery would alleviate the above-identified issues with the plaintiffs' class-based claims, the trial court granted ELG's motion to dismiss, "struck" the plaintiffs' claims for class-based relief, and held that the class-based claims were "denied." The plaintiffs appeal.

Standard of Review

ELG contends that the trial court was authorized to "strike" the class allegations in the complaint under the authority of a combination of three rules: Rule 12(f), Rule 23(c)(1), 8 and Rule 23(d)(4). In support of this argument, ELG cites numerous federal court decisions explaining that Rule 12(f), Fed. R. Civ. P.; Rule 23(c)(1)(A), Fed. R. Civ. P.; and Rule 23(d)(1)(D), Fed. R. Civ. P., together can form the basis for striking class allegations in the pleading stage and before the class-certification process begins:

"As an initial matter, the authority to strike class allegations stems from Federal Rules of Civil Procedure 12(f), 23(c)(1)(A), and 23(d)(1)(D).... See Gray v. BMW of North America, LLC, 22 F.Supp.3d 373 (D.N.J. 2014) (citing Fed. R. Civ. P. 12(f) as authority for the District Court to strike class allegations); In re Paulsboro Derailment Cases, [Civ. No. 13-784, April 8, 2014] (D.N.J. 2014) ('A motion to strike class allegations implicates Federal Rules of Civil Procedure 12(f) and 23(c)(1) ( [A] ).... A further procedural vehicle is provided by Federal Rule of Civil Procedure Rule 23(d)(1)(D), which provides that a "court may issue orders that ... require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly." '); see also 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 3:4 (11th ed. 2014) (Noting that Federal Rule of Civil Procedure 23(d)(1)(D) 'expressly authorizes a motion to strike class action allegations by authorizing the court to issue an order "requiring that the pleadings be amended to eliminate allegations about representation of absent persons...." '[).] Rule 12(f) permits a district court to 'strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter,' and Rule 23(c)(1)(A) directs the court to make the class certification determination '[a]t an early practicable time.' Fed. R. Civ. P. 12(f), 23(c)(1)(A).
"These Rules, together, provide authority for the Court to strike the class allegations from Plaintiffs' Complaint, if appropriate, even before Plaintiffs move for class certification. The Court of Appeals for the Third Circuit has acknowledged that there are a 'rare few [cases] where the complaint itself demonstrates that the requirements for maintaining a class action cannot be met,' although, '[i]n most cases, some level of discovery is essential.' Landman & Funk PC v. Skinder-Strauss Assoc., 640 F.3d 72, 93, 93 at n. 30 (3d Cir. 2011). Class allegations may be stricken only when no amount of discovery will demonstrate that the class can be maintained. Goode v. LexisNexis Risk & Info. Analytics Group, Inc., 284 F.R.D. 238, 244 (E.D. Pa. 2012) (citing Thompson v. Merck & Co., Inc., [No. C.A. 01-1004, January 6, 2004] (E.D. Pa. 2004) ); see also Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178, 182 (M.D. Pa. 2008) (noting that a 'district court will strike class allegations without permitting discovery or waiting for a certification motion where the complaint and any affidavits clearly demonstrate that the plaintiff cannot meet the requirements for a class action')."

Bell v. Cheswick Generating Station, Genon Power Midwest, L.P., No. 12-929, Jan. 28, 2015 (W.D. Pa. 2015) (not selected for publication in F. Supp. 3d).

No Alabama decisions are cited that have addressed the propriety of a motion to strike class allegations before class-certification discovery or the class-certification process. However, in the instant case, we are not required to determine such issue, because it does not appear that the trial court simply struck the plaintiffs' class allegations. Specifically, ELG's motion to dismiss requested that the trial court dismiss the plaintiffs' class claims "with prejudice." The trial court's order stated: "[ELG's motion to dismiss] is hereby granted. Plaintiffs' class allegations are hereby stricken and the claims denied." (Emphasis added.) It appears that, by stating that the class claims were "denied," the trial court was dismissing them with prejudice. Specifically, stating that the claims were "denied" is inconsistent with merely striking the claims or "requiring that the pleadings be amended" under Rule 23(d)(4). Further, we see no basis in this case for striking the class claims for containing "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Rule 12(f). Therefore, we treat the trial court's dismissal as pursuant to the initial ground specified in ELG's motion to dismiss: failure to state a claim under Rule 12(b)(6).

Generally, a Rule 12(b)(6) motion " 'should not be used to test the sufficiency of a complaint after a responsive pleading has been filed.' " Pontius v. State Farm Mut. Auto. Ins. Co., 915 So.2d 557, 562 (Ala. 2005) (quoting Sims v. Lewis, 374 So.2d 298, 301 (Ala. 1979) ). However, "a defense of failure to state a claim upon which relief can be granted, although typically raised pursuant to Rule 12(b)(6), can be raised after an answer has been filed by moving for a judgment on the pleadings" under Rule 12(c), Ala. R. Civ. P. Pontius, 915 So.2d at 562.

This Court has discussed the distinction between the standard of review for a ruling based on Rule 12(c) and one based on Rule 12(b)(6) as follows:

"In Reed Elsevier, Inc. v. TheLaw.net Corp., 269 F.Supp.2d 942, 947 (S.D. Ohio 2003), the federal district court stated with regard to Rule 12(b)(6) and Rule 12(c), Fed. R. Civ. P.:
" '....
" 'The difference between the two types of motions stems from when in the course of proceedings they can be raised. Motions brought under Rule 12(b)(6), indeed, under 12(b) generally, must be brought by a defendant "before pleading" (i.e., before filing its answer to the complaint). Motions brought under Rule 12(c) cannot be filed until "[a]fter the pleadings are closed" (i.e., after filing its answer). Still and all, the standard for reviewing Rule 12(c) motions is often identical to that used for reviewing Rule 12(b)(6) motions, given that Rule 12(c) can be invoked in a number of situations where a Rule 12(b) motion could have been, but was not, filed by the defendant. See Rule 12(h)(2) & (3) ; 5A Wright & Miller § 1368, at 514-17. Thus, often times, after a responsive pleading has been filed, a defendant will move to dismiss for failure to state a claim under Rule 12(c), even though there may be no need to refer to the responsive pleading, such that it would have been proper to move for dismissal under Rule 12(b)(6). In such an instance, it is proper to treat the motion in the manner as one brought pursuant to Rule 12(b)(6). See id., at 515....' "

Pontius, 915 So.2d at 561-62 (footnotes omitted).

ELG explicitly argued in the trial court that the class allegations failed to state a claim because, it said, the plaintiffs could not meet the requirements of Rule 23. Therefore, we will treat the motion as a Rule 12(b)(6) motion.

" 'On appeal, a dismissal is not entitled to a presumption of correctness. The appropriate standard of review under Rule 12(b)(6) 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 her to relief. In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether she 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.' "

Lloyd Noland Found., Inc. v. HealthSouth Corp., 979 So.2d 784, 791 (Ala. 2007) (quoting Nance v. Matthews, 622 So.2d 297, 299 (Ala. 1993) (citations omitted in Lloyd Noland )).

Discussion

I.

As noted above, the trial court held that the attorney-employment agreement was ambiguous and that this ambiguity was fatal to the plaintiffs' class-allegation claims. Thus, the trial court dismissed the class claims before the class-certification process began.

To maintain a class action, the trial court must find that questions of law or fact common to the plaintiff class members predominate over questions impacting individual members. Rule 23(a)(2) and (b)(3), Ala. R. Civ. P. This is difficult to show in the context of an action alleging breach of contract when the contract at issue is deemed ambiguous; in such a case, each individual class member may have differing interpretations of the ambiguous contract language and, thus, the finder of fact will have to determine how each individual plaintiff interpreted the language, resulting in determinations of individual issues predominating over the common issues. In University Federal Credit Union v. Grayson, 878 So.2d 280, 293 (Ala. 2003), this Court explained:

" 'Under some circumstances, this Court has held that the conclusion that a contract was ambiguous was fatal to a claim for class certification. Mann v. GTE Mobilnet of Birmingham, Inc., 730 So.2d 150, 155 (Ala. 1999) (failure to "satisfy the commonality requirement of Rule 23(a)(2) as to questions of fact, because the evidence necessary to resolve those questions of fact will vary from case to case"). See also Lackey v. Central Bank of the South, 710 So.2d 419 (Ala. 1998) (trial court did not abuse its discretion in decertifying a class, when it determined that the evidence of an ambiguity rendered class certification improper on a breach-of-contract claim) (plurality opinion).'
" Alfa Life Ins. Corp. v. Johnson, 822 So.2d 400, 404-05 (Ala. 2001).... Additionally, because resolving an ambiguity forces the finder of fact to determine how each individual class member interpreted the ambiguous language, an ambiguity may foreclose the conclusion that common issues predominate over individual issues. General Motors Acceptance Corp. v. Dubose, 834 So.2d 67, 72-73 (Ala. 2002)."

See also General Motors Acceptance Corp. v. Dubose, 834 So.2d 67, 72 (Ala. 2002) (noting that an "ambiguity prevents [the class representatives] from satisfying the 'commonality' requirement of Rule 23(a)(2), Ala. R. Civ. P., and forecloses the conclusion that 'common issues predominate' ").

"A contractual provision is ambiguous if it is reasonably susceptible of more than one meaning." FabArc Steel Supply, Inc. v. Composite Constr. Sys., Inc., 914 So.2d 344, 357 (Ala. 2005).

"[T]he question is not whether the parties have differing interpretations of allegedly ambiguous language; whether there is an ambiguity is for the trial court to determine. In Winkleblack v. Murphy, 811 So.2d 521, 525 (Ala. 2001), this Court stated:
" 'The question whether a contract is ambiguous is for a court to decide. State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293 (Ala. 1999). As long as the contractual terms are clear and unambiguous, questions of their legal effect are questions of law. Commercial Credit Corp. v. Leggett, 744 So.2d 890 (Ala. 1999). Thus, we apply a de novo review to a trial court's determination of the legal effect of an unambiguous contract term.'
"See also Woodall v. Alfa Mut. Ins. Co., 658 So.2d 369 (Ala. 1995).
"In Mann [v. GTE Mobilnet of Birmingham, Inc., 730 So.2d 150 (Ala. 1999) ], this Court determined that the language in GTE's contract that provided that customers would be billed 'per minute' was ambiguous, because the language was 'susceptible to more than one reasonable interpretation by the various members of the proposed class.' 730 So.2d at 155. We held that Mann had not satisfied the commonality requirement because the evidence necessary to resolve questions of fact would vary from case to case. Id.
" 'An "instrument is unambiguous if only one reasonable meaning clearly emerges." ' Sealing Equip. Prods. Co. v. Velarde, 644 So.2d 904, 908 (Ala. 1994), quoting Reeves Cedarhurst Dev. Corp. v. First Amfed Corp., 607 So.2d 184, 186 (Ala. 1992)."

General Motors Acceptance, 834 So.2d at 72 (emphasis added).

In construing contractual language, this Court has observed that " 'the mere fact that a word or a phrase ... is not defined in [a document] does not mean that the word or phrase is inherently ambiguous.' " Lambert v. Coregis Ins. Co., 950 So.2d 1156, 1161 (Ala. 2006) (quoting Safeway Ins. Co. of Alabama v. Herrera, 912 So.2d 1140, 1143 (Ala. 2005) ). Cf. Grove Hill Homeowners' Ass'n, Inc. v. Rice, 43 So.3d 609, 614 (Ala. Civ. App. 2010) (noting that " 'an undefined word or phrase [does not] create an inherent ambiguity' ") (quoting Hipsh v. Graham Creek Estates Owners Ass'n, 927 So.2d 846, 849 (Ala. Civ. App. 2005) ). In the absence of a definition, "the court should construe the word or phrase according to the meaning a person of ordinary intelligence would reasonably give it." Safeway Ins., 912 So.2d at 1143.

The pertinent portion of the attorney-employment agreement states:

"This attorney employment agreement expresses the intent of the undersigned to employ Environmental Litigation Group, P.C., attorneys at law, Birmingham, Alabama, to represent the undersigned in the prosecution of a tort claim and cause of action for injuries suffered by the undersigned (or the undersigned's decedent) as a result of exposure to asbestos products. The undersigned hereby give to the said attorneys the exclusive right to take all legal steps necessary to enforce the said tort claim....
"In consideration of the services rendered by the said attorneys, the undersigned hereby assign and convey unto the said attorneys as their compensation the following present and undivided interest in the said claim or claims: 40% of collection from settlement or trial. No fee for services will be charged unless some amount is recovered."

The attorney-employment agreement, the plaintiffs argue, provides that the work performed by ELG is to be compensated through the 40% contingency fee. The agreement states that, in exchange for representing the client "in the prosecution of a tort claim ... for injuries suffered by the [client] (or the [client's] decedent)" and "the exclusive right to take all legal steps necessary to enforce the said tort claim," ELG was entitled to receive, "as [its] compensation," 40% of "collection from settlement or trial," and "no fee" would be charged "unless some amount is recovered." This part of the agreement specifies the work that ELG would perform-all legal steps necessary for the prosecution and enforcement of the claim-and that the client is charged nothing for this work until a recovery is had for the client.

The plaintiffs alleged in their complaint and on appeal that the new charge described in the February 23, 2012, memorandum ("the memorandum") is for "additional work" that should be part of the 40% contingency fee and that the new charge is thus an "extra attorney fee." The memorandum describes the nature of the new charge:

"Environmental Litigation Group ('ELG') is devoted to achieving the best possible recovery in your case. There are certain unavoidable legal requirements that we have had to meet over the past seven years, and we must continue to do so, as the legal landscape has changed. In order to comply with these requirements most efficiently, there are certain services that our attorneys and staff provide that are in addition to the work performed under the terms of the attorney client contract. The contingency fee agreement provides that this additional fee will be deducted from your settlement(s). ELG is required to correspond with Medicaid and Medicare under the terms of the Secondary Payer in relation to potential subrogation (whether or not you have ever been covered by Medicaid or Medicare), administrate certain probate-related activities on behalf of deceased clients, and perform extensive work and research in determining if clients have filed for bankruptcy protection (whether or not you have ever filed for bankruptcy protection). The work required to fully comply with legal requirements relating to these three areas of service [is] very significant.
"Therefore, ELG has instituted an 'Administrative Service Expense Charge' of $250.00 for living clients and $600.00 for deceased clients, which have been applied to your account. Living clients who have been charged $250.00 and subsequently pass away will incur an additional offset cost of $350.00. Law firms which specialize in dealing with subrogation and bankruptcy matters typically charge hourly rates exceeding our charge for an attorney's time, which quickly trickles down to be additionally handled by another law firm's personnel at high hourly rates. A detailed study of the significant amount of time spent by ELG attorneys and staff working on these matters has proven that ELG's cost of this service to clients can easily exceed the Administrative Service Expense Charge. Finally, to have these matters handled by a firm other than ELG would quickly exceed our onetime charge, as these matters typically take several hours to deal with, and often must be revisited over what we believe will be the four year lifespan of the remainder [of] your case."

(Emphasis added.)

The memorandum describes "certain services that [ELG's] attorneys and staff provide" that are related to corresponding with Medicaid and Medicare, probate-related activities, and determining if clients have filed for bankruptcy protection. These services are described as "in addition" to the work performed under the attorney-employment agreement and are described as "extensive work" "required to fully comply with legal requirements relating to these three areas of service." It then describes three new, flat charges that are applicable to all clients. The charges for the services are described as an "additional fee." The memorandum further states that the cost of its attorneys and staff working on the issues described in the first paragraph might exceed the actual amount of the flat charge.

The plaintiffs, in their complaint, describe the new charge as a "flat fee" for "legal services necessary to enforce" the clients' claims. When these allegations are viewed in the light most favorable to the plaintiffs, and given the existence of the memorandum, the plaintiffs can prove a set of circumstances demonstrating that the services for which the new charge is assessed are work performed "in the prosecution of a tort claim," and part of the "legal steps necessary to enforce the said tort claim" and delivery of the "amount [that] is recovered" for the client. This, under the attorney-employment agreement, is "compensat[ed]" by the 40% of "the collection" from settlement or trial.

ELG argues, as it did below, that the new charge is an "expense" the attorney-employment agreement specifically contemplated in a provision describing expenses. This "expense provision" states:

"The said attorneys are authorized to pay all expenses in this case, including but not limited to medical expenses, court costs, deposition expenses, long distance calls, investigation expenses, copy expenses, and the said attorneys are further authorized to deduct and withhold from any amount collected or recovered with respect to any such claim or claims the full amount of such expenses as reimbursement thereof (including estimated fixed amounts for such expenses as copy expense, long distance telephone calls and investigation costs). Such expense reimbursements are in addition to the legal fees payable to the said attorneys."

(Emphasis added.)

Viewing the allegations in the light most favorable to the plaintiffs, we conclude that the new charge does not meet what is described in the expense provision, even if such provision is ambiguous. An expense under this provision is only something for which ELG would receive a full "reimbursement"-an amount expended that is paid back from the award collected for the client. The memorandum, as the complaint alleges, shows that the new charge is not a reimbursement of amounts that were expended, but a flat charge for work and services unrelated to specific amounts that were expended and subject to full reimbursement. The memorandum describes the new charge, not as repayment for out-of-pocket expenses, but as a charge for work and services performed. Simply put, the new charge is not an "expense" as described by this portion of the attorney-employment agreement.

ELG contends that the new charge is a "fixed amount" that fits within the following portion of the expense provision: "estimated fixed amounts for such expenses as copy expense, long distance telephone calls and investigation costs." This portion, however, simply explains that ELG may deduct or withhold an estimated fixed amount for certain things already described as expenses. It does not state that all fixed charges constitute expenses. Further, construing the allegations in the plaintiffs' favor, nothing before us suggests the work and services encompassed in the new charge are susceptible to a fixed estimated amount. In fact, the memorandum even describes the work or services performed as varying and notes that the costs of such work or services "can" exceed the amount of the new charge.

The trial court held that the attorney-employment agreements were "silent and ambiguous regarding how work related to probate, bankruptcy, and Medicare should be charged to the client." We disagree. The agreements provide that ELG would be compensated for the work and services performed by the 40% contingency fee. This general description would necessarily include all such narrowly defined work identified by the trial court; the failure of the agreement to address any specific type of work does not make it ambiguous. See In re Laughlin, 265 F.2d 377, 378 (D.C. Cir. 1959) (denying attorneys additional compensation for defending a negligence judgment on appeal based on the conclusion that "in the absence of a specific provision in the contract for additional fees the contract must be construed to include the services rendered on appeal"). Again, work in prosecuting the clients' claims and taking the legal steps necessary to enforce the claims is compensated for by the contingency fee.

Finally, the trial court held that the attorney-employment agreements in general were ambiguous regarding whether post-settlement work done to ensure payment to the client is an expense, part of the contingency fee, or outside the scope of the contract. However, the agreement is to represent the client in the prosecution of the tort claim, ELG is assigned the right to "take all legal steps necessary to enforce" the claims, and no fees for services are charged unless the client recovers. Under the standard of review, nothing in the agreement suggests that ELG's obligation to enforce the clients' claims ends before recovery is had by its clients.

The relevant inquiry is whether, based on the nature of the work involved, the collection of the new charge was, under the plain language of the employment agreement, permitted by ELG as recoupment of its expenses under the contract terms or whether it was an improper attempt by ELG to recover an additional fee exceeding the 40% provided for in the parties' original agreement. At this point in the proceedings and under the standard of review, we see no ambiguity in the attorney-employment agreements on these issues. This holding negates the trial court's contrary conclusion as to the individualized inquiry necessary with regard to the plaintiffs' contract claims. We therefore reverse the trial court's order dismissing the plaintiffs' claims for class-based relief and remand the matter for further proceedings.

II.

The plaintiffs further challenge the trial court's alternative conclusion that the class definition included in the plaintiffs' amended complaint was "fatally defective." Specifically, the trial court's holding in this regard, which appeared in a footnote to the dismissal order, provided, in full:

"In addition, Plaintiffs' class definition is fatally defective. A 'proposed class definition must specify a particular group harmed during a particular time period via a particular manner.' Fisher v. Ciba Specialty Chemicals Corp., 238 F.R.D. 273, 301 (S.D. Ala. 2006). See also CVS Caremark Corp. v. Lauriello, 175 So.3d 596, 613 (Ala. 2014) (finding that the class, as defined, was 'overly broad'). The proposed class in this case includes all past and present ELG asbestos clients who signed contingent fee contracts, which is everyone: 'All clients with asbestos claims who were and are represented by ELG as attorneys under a contingent fee contract.' (Complaint at ¶ 5.) This class definition includes ELG clients who were never charged the Administrative Service Expense Charge, and thus, is overly broad."

The plaintiffs assert that such a finding was premature at the present state of the litigation. They include in their brief authority suggesting that "[r]eviewing the complaint alone is not normally a suitable method for determining whether a class eventually can be certified" and that "a sufficiently defined class is appropriately addressed after some development of the facts and under Rule 23's established protocol for weighing the propriety of class certification." College of Dental Surgeons of Puerto Rico v. Connecticut Gen. Life Ins. Co., 585 F.3d 33, 41-42 (1st Cir. 2009).

ELG counters that "a class definition, at a minimum, must limit the class to the group who suffered the alleged harm" and cites authority purporting to deny class certification on the ground that the class is "overly broad." (ELG's brief at p. 7) (citing Fisher v. Ciba Specialty Chems. Corp., 238 F.R.D. 273, 301 (S.D. Ala. 2006), and CVS Caremark Corp. v. Lauriello, 175 So.3d 596, 613 (Ala. 2014) ). ELG further contends that because the plaintiffs allegedly failed, in the trial court, to oppose its motion on this ground, the plaintiffs have waived any such challenge-and more specifically a challenge on the ground that such a determination was premature-for purposes of appeal.

Initially, we note that we are unable to determine from the face of the dismissal order the extent to which the trial court relied on this apparent aside as alternate support for its decision to dismiss the plaintiffs' class-based claims. We are, however, unpersuaded by ELG's assertion that the plaintiffs waived, for purposes of appeal, their prematurity challenge. To the contrary, the transcript of the dismissal hearing makes clear that, during that proceeding, the parties repeatedly agreed that the "one issue for the [trial] Court to decide" was whether "[the] contract [was] ambiguous." More specifically, according to ELG, "the only thing [it was] asking the [trial] Court to look at" was "the threshold issue on the class-certification issue, [namely] whether the contract is ambiguous." Counsel for the plaintiffs subsequently agreed that "[a]mbiguity ... [was] the heart of the issue." Therefore, the plaintiffs presumably did not oppose the overbreadth argument as premature because it was apparent that the only issue for consideration was the alleged ambiguity in the attorney-employment agreement. As a result, we are unable to agree that the plaintiffs waived a challenge to the dismissal of their class-based claims on an alternate ground.

Further, we agree that any challenge regarding the sufficiency of the plaintiffs' class definition appears premature. Moore v. Walter Coke, Inc., 294 F.R.D. 620, 627 (N.D. Ala. 2013) ("[S]triking a class claim before a motion for certification (and before the benefit of pre-certification discovery) is rare."). To avoid pre-certification dismissal, Rule 23 requires only that class representatives propose a class definition that is objectively ascertainable, i.e., "to determine who will be bound by rulings once the class is certified," and that only "[w]here a proposed class definition ... is so amorphous that it is not ascertainable" is dismissal appropriate on a motion by the defendant. See id. at 627, 624-25. See also id. at 626 ("When other courts have dismissed a plaintiff's complaint on the pleadings (i.e., before a motion for certification has been filed or any preliminary discovery taken place) based on ascertainability, the class definitions have been intrinsically indefinite."). "The Eleventh Circuit has said that, '[i]n a class action, it is sufficient that a complaint generally give the defendant notice of the nature and scope of the plaintiffs' claims; it is not necessary that the class representatives plead evidence or otherwise meet any burden beyond the minimal Rule 8 standard.' " Id. at 631 (quoting United States v. Baxter Int'l, Inc., 345 F.3d 866, 882 (11th Cir. 2003) ).

Further, as the plaintiffs note, in Connecticut General, supra, the United States Court of Appeals for the First Circuit concluded that where the plaintiffs' complaint "plausibly allege[d] claims for class-wide relief," that pleading was sufficient even in the "absence of any sufficient class definition." 585 F.3d at 40. Whether the class is appropriately defined is addressed in the later class-certification process. In sum, we are unable to agree that the initial class definition proposed by the plaintiffs, even if in need of subsequent clarification during discovery and before class certification, is, at this posture, so facially indeterminate to support dismissal. See Gray v. BMW of N. America, LLC, 22 F.Supp.3d 373, 386 (D.N.J. 2014) ("Motions to strike class allegations from a pleading are disfavored because a motion for class certification is a more appropriate vehicle for arguments about class propriety.").

Conclusion

In consideration of the foregoing, the trial court's judgment is reversed and the case is remanded for proceedings consistent with this opinion.

REVERSED AND REMANDED.

Stuart, C.J., and Bolin, Parker, Main, Wise, Bryan, and Sellers, JJ., concur.

      The record reflects that, during the pendency of these proceedings, Mary Hall died and was succeeded as executor of the estate of Adolphus Hall, Sr., by Joyce Hall, the daughter of Adolphus. Subsequent to her appointment as successor executor, the plaintiffs moved the trial court to substitute Joyce for Mary as a named plaintiff. Nothing in the record suggests that the trial court ruled on that motion before the appeal. Therefore, we retain the style of the case as it appeared in the trial court.

      The record suggests that, during the pendency of this matter and approximately four days after this Court's decision in Hall I, ELG initiated separate litigation in the Jefferson Circuit Court (case no. CV-2014-902655) against the plaintiffs' counsel alleging "intentional interference with business or contractual relations and abuse of process." The two matters were, on motion of the plaintiffs and with the consent of ELG, consolidated for purposes of discovery. The record further suggests that all proceedings in case no. CV-2014-902655 have been stayed and the matter placed on the court's administrative docket pending resolution of this appeal.

      According to ELG's motion, it also contemporaneously filed both an answer and a counterclaim alleging breach of contract. Neither of those pleadings, however, appears to have been included in the record on appeal.

      In response, ELG again moved, pursuant to Rule 12, Ala. R. Civ. P., to dismiss the plaintiffs' amended complaint on numerous grounds and for sanctions pursuant to Rule 11, Ala. R. Civ. P. In support of those requests, ELG explained the imposition of the challenged expenses and reiterated its belief that recoupment of those expenses was contemplated by the attorney-employment agreement and allegedly informally preapproved by the Alabama State Bar. ELG further argued that the plaintiffs' complaints were not only baseless but also alleged only around $900 in actual damages, and, according to ELG, the plaintiffs' lawyers were attempting to "turn [the action] into to a money-making machine for the Plaintiffs' lawyers." Finally, it argued that the legal-malpractice count, which it says was filed more than two years after the occurrence or omission on which it was based, did not relate back to the original complaint and was, therefore, untimely. See § 6-5-574, Ala. Code 1975; Rule 15(c)(2), Ala. R. Civ. P. No ruling on this motion is before us in this appeal.

      The trial court also concluded that, under Alabama law, "unjust enrichment claims depend on the particular facts and circumstances of each class member's case and are unsuitable for class treatment." On appeal, the plaintiffs do not challenge the trial court's holding as to the unjust-enrichment claim.

      See Mann v. GTE Mobilnet of Birmingham Inc., 730 So.2d 150, 154 (Ala. 1999) ("Although an order denying class certification is an interlocutory order, it is nevertheless an appealable 'final' order because it 'finally determines a claim of right separate from and collateral to the rights asserted in the cause of action' and makes further judicial proceedings in the action ineffective.") (quoting Butler v. Audio/Video Affiliates, Inc., 611 So.2d 330, 331 (Ala. 1992) (emphasis omitted)). In this case, the trial court's order dismissing the class allegations is the functional equivalent of denying class certification.

      Rule 12(f) provides:
      "Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within thirty (30) days after the service of the pleading upon the party or upon the court's own initiative at any time, the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter."

      Rule 23(d)(4) provides: "In the conduct of actions to which this rule applies, the court may make appropriate orders ... requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly ...."

      Although the parties' various filings below included exhibits, which do not appear to have been specifically excluded by the trial court, the dismissal motion on which the present appeal is based appears, as the trial court noted, to rely solely on documents referenced in and/or relied upon by the plaintiffs' complaint, namely the attorney-employment contracts executed by the decedents of the named plaintiffs and the February 23, 2012, memorandum imposing the new charge. See, e.g., Donoghue v. American Nat'l Ins. Co., 838 So.2d 1032, 1035 (Ala. 2002) (" ' "[I]f a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiffs claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss." ' ") (quoting Wilson v. First Union Nat'l Bank of Georgia, 716 So.2d 722, 726 (Ala. Civ. App. 1998), quoting other cases).

      ELG might ultimately produce evidence that shows, despite the characterization of the new charge by the complaint and the memorandum, that it actually constituted an expense as described in the attorney-employment agreement. At this point in the proceedings, however, the allegations in the complaint, which are confirmed by the memorandum, show that the plaintiffs might possibly prevail on their allegations.

      ELG's reliance on Lauriello appears misplaced. Specifically, although we, in Lauriello, agreed that the proposed class definition was "impermissibly broad" to the extent that it included potential class plaintiffs who were allegedly not damaged by the defendants' purported tortious conduct, we specifically noted that the trial court's certification order had appropriately limited certification solely to those damaged by the challenged conduct. 175 So.3d at 613. We see nothing that would prevent, if necessary, a similar adjustment by the trial court in the present case when the matter proceeds to class certification.

      Our decision is not intended as a commentary upon the trial court's eventual consideration of the class-certification issue.


source: Caselaw Access Project

author: BRYAN, Justice. SELLERS, Justice (dissenting).

license: Public Domain

text:
    Thomas W. HINOTE, Cindy S. Hinote, Rebecca L. Dowdy, and David H. Dowdy v. Annette Freeman OWENS et al.
    1160268
    Supreme Court of Alabama.
    September 8, 2017
    Barry C. Leavell of Leavell & Associates Attorneys at Law, LLC, Montgomery, for appellants.
    Mark A. Scogin of Espy, Scogin, McWilliams & Cain, P.C., Tuscaloosa, for appellees.
   BRYAN, Justice.

This case involves two competing claims to a 40-acre tract of land ("the property") and whether the rule of repose may be applied to resolve that dispute. In 1930, Felix Jackson Freeman ("Felix") inherited the property from his father Matt Freeman through Matt's will. Felix married and had 12 children. The record on appeal contains no evidence establishing that Felix conveyed the property during his life. Thus, the record indicates that Felix owned the property when he died in 1961. Felix died intestate, and he was predeceased by his wife and three of his children, only one of whom had a surviving spouse or children. Thus, when Felix died, the property passed by intestate succession to his nine surviving children (each having a one-tenth interest) and to the heirs of one of Felix's predeceased children (who shared the predeceased child's one-tenth interest).

The complications in this case began in 1964, when one of Felix's children, James Freeman ("James"), purported to deed all the property to another child of Felix's, Joseph Freeman ("Joseph"). The 1964 deed was duly recorded. Nothing in the record establishes that, before that deed was executed, James owned more than the one-tenth interest in the property he had inherited from Felix in 1961. The 1964 deed from James to Joseph began a series of conveyances involving various parties over several years. That line of conveyances ended with two deeds in 2004, when DRL, LLC, purported to convey one-half of the surface estate of the property to Thomas W. Hinote and Cindy S. Hinote and one-half of the surface estate of the property to David H. Dowdy and Rebecca L. Dowdy. DRL also purported to convey a portion of the mineral rights in the property to the Hinotes and the Dowdys; DRL retained a portion of the mineral rights for itself. However, for the sake of simplicity, we will describe the competing claims to the property only as they relate to the surface estate, as to which, for purposes of this appeal, the mineral estate is similarly situated.

The various transactions created a situation with two sides laying claim to the property. On the one hand, Felix's descendants claim to own various fractional parts of the property as cotenants. They claim that James never owned more than the one-tenth interest in the property he inherited on Felix's death and, thus, that he could not have conveyed more than that one-tenth interest to Joseph in 1964. They contend that, after the 1964 deed, Joseph owned only a two-tenths interest in the property (the one-tenth interest he inherited on Felix's death plus the one-tenth interest he acquired from James). Under their view, the Hinotes and the Dowdys would also be cotenants, each having actually acquired a one-tenth interest instead of the one-half interest they thought they had acquired. The Hinotes and the Dowdys, on the other hand, each claim to own one-half of the property, tracing their titles back to the 1964 deed in which James purported to deed all the property to Joseph.

In 2011, four of Felix's descendants, Annette Freeman Owens, Willie Freeman, Jr., Eva N. Freeman Jones, and Nona Freeman Farrior, sued the Hinotes and the Dowdys. In pertinent part, the plaintiffs sought a judgment determining the ownership of the property, and they requested a sale of the property for a division of the proceeds. The Hinotes and the Dowdys primarily argued that the plaintiffs' action is barred by the 20-year rule of repose; the plaintiffs dispute that their action is barred by the rule of repose. The Hinotes and the Dowdys alternatively argued that they had acquired the property by adverse possession, contending that they and their predecessors had been in actual, hostile, open, notorious, and exclusive possession of the property for many years.

Following a trial, the trial court entered a judgment in favor of the plaintiffs. The trial court concluded that the plaintiffs owned the property as cotenants, along with the Hinotes, the Dowdys, and dozens of other descendants of Felix. That is, the court determined that the Hinotes and the Dowdys had each acquired a one-tenth interest in the property instead of the one-half interest their respective deeds indicate. The trial court further ordered that the property be sold and the proceeds divided according to the property interest held. The trial court did not discuss the rule of repose in its judgment. The Hinotes and the Dowdys appealed. We affirm.

On appeal, the Hinotes and the Dowdys argue that Alabama's common-law rule of repose bars this action. In Ex parte Liberty National Life Insurance Co., 825 So.2d 758 (Ala. 2002), this Court clarified the law concerning the rule of repose. In that case, we explained that the rule of repose bars an action not brought within 20 years from the time the action could have been brought. 825 So.2d at 764. The rule is based solely on the passage of time. Id. This concept is distinct from the accrual of a claim for purposes of a statute of limitations: "[R]epose does not depend on 'accrual,' because the concept of accrual sometimes incorporates other factors, such as notice, knowledge, or discovery." 825 So.2d at 764 n.2. However, in some cases the start of the 20-year period of repose will coincide with the accrual of a claim. Unlike a statute of limitations, which extinguishes the remedy rather than the right, the rule of repose extinguishes both the remedy and the action itself. 825 So.2d at 765. The rule is based on the ideas that " '[i]t is necessary for the peace and security of society' " that disputes should end at some point and that " 'it is inequitable to allow those who have slept upon their rights for a period of 20 years' " to bring an action after memories have faded and parties and witnesses have passed away. 825 So.2d at 763 (quoting Snodgrass v. Snodgrass, 176 Ala. 276, 280, 58 So. 201, 202 (1912) ). " '[T]he only circumstance that will stay the running of the 20 year period of repose is a recognition of the existence of the claimant's right by the party defending against the claim.' " 825 So.2d at 765 (quoting Boshell v. Keith, 418 So.2d 89, 92 (Ala. 1982) (emphasis omitted)). That recognition must be express and explicit. 825 So.2d at 765.

The Hinotes and the Dowdys trace their titles to the 1964 deed by which James purported to convey all the property to Joseph. They contend that "[a] claim existed and a right could have been asserted as early as 1964 when James ... purported to convey the full interest-not just his interest-in the [property] to Joseph." The Hinotes and the Dowdys' brief, at 16. Thus, the Hinotes and the Dowdys argue that a 20-year period of repose began to run at that point in 1964. Therefore, they argue, the 20-year period expired long before the plaintiffs filed their action in 2011 and, thus, the action is barred. However, the rule of repose simply does not apply in this case.

Initially, we emphasize the fundamental principle that one cannot convey more property that one owns. Simmons Grp., LTD v. O'Rear, 233 So.3d 335, 339 (Ala. 2017) (stating "the basic property rule that a grantor cannot convey more than the grantor actually owns"). In 1964, James purported to convey all the property to Joseph by deed. However, nothing in the record establishes that, when that deed was executed, James owned more than the one-tenth interest in the property he had inherited in 1961. The record indicates that James was a cotenant of the property with Felix's other heirs. The Hinotes and the Dowdys acknowledge as much in their brief by noting that "one cotenant[, James,] attempted to convey all of the [property]" and that, in the 1964 deed, "James ... purported to convey the full interest-not just his interest-in the [property] to Joseph." The Hinotes and the Dowdys' brief, at 14 and 16 (emphasis in original).

Given that James attempted in the 1964 deed to convey more than he owned and that the Hinotes and the Dowdys claim through that deed, it is evident that the plaintiffs, who claim through intestate succession from Felix, have superior title to the Hinotes and the Dowdys. Once superior title has been established, there is a limited manner by which another party may wrest away that title. In this case, the Hinotes and the Dowdys attempt to use the rule of repose to divest title from the other cotenants; however, the rule may not be used in that way. "The rule of repose has been described as the 'running of the period against claims' rather than a device to displace title. ... [T]he rule of repose cannot be used against one with valid record title by one who clearly does not have title." Oehmig v. Johnson, 638 So.2d 846, 850 (Ala. 1994) (quoting Boshell, 418 So.2d at 92 (emphasis in Boshell omitted)), overruled on other grounds by Ex parte Liberty National, supra. In a case like this, the method of divesting title from other cotenants would be to establish adverse possession.

Knouff v. Knouff, 485 So.2d 1155 (Ala. 1986), illustrates that point. In the proceedings below and on appeal there has been some discussion about whether and how Knouff relates to Ex parte Liberty National, which clarified the law on the rule of repose 16 years after the opinion in Knouff was issued. We take this opportunity to address that issue. Like this case, Knouff involved several heirs who inherited land intestate and thus became cotenants. After taxes were not paid on the land, one of the cotenants, S.S. Knouff, purchased the land at a tax sale. S.S. received a tax deed to the land in his own name. More than 20 years later, certain heirs, claiming they still owned the land as cotenants, sought a sale for division. S.S.'s son and heir, J.R. Knouff, then sought to quiet title to the land. J.R. argued that the rule of repose barred the heirs' attempt to have the trial court order a sale for division. This Court disagreed, concluding that the rule of repose did not bar the action.

The Court first observed that, although S.S. had bought the land at a tax sale and had acquired a tax deed in his own name, his doing so was deemed to be for the benefit of all the cotenants. Thus, the tax deed had not actually given S.S. exclusive ownership of the land. The Court then addressed J.R.'s argument that he and his father S.S. had nevertheless adversely possessed the land since the date of the tax deed. The Court used "repose" language when discussing the adverse-possession claim:

"There is a strong presumption in the law that the possession of one co-tenant is the possession of all, and possession by one tenant in common alone does not repel the presumption. Monte v. Montalbano, 274 Ala. 6, 145 So.2d 197 (1962). Neither do the payment of taxes and lapse of time. ...
"The reason for the presumption that possession by one tenant in common is for the benefit of all tenants in common is obvious. One co-tenant should not be favored over another simply because the latter makes no objection to the first co-tenant's possessing and using the land they own in common. If the one using common land intends to deprive his co-tenant of his interest, he should have the burden of bringing his evil intent to the attention of his co-tenant. It is only after actual knowledge of the fact that the possession is hostile and intended to oust the co-tenant and defeat his common interest that the rule of repose begins to run against the co-tenant. One cannot be said to have slept on his rights unless it has been brought home to him that his rights have been invaded."

Knouff, 485 So.2d at 1156 (emphasis added).

Knouff concerns how one cotenant might wrest title from another cotenant. In that context, the Court used the term "rule of repose" to describe adverse possession. The "rule of repose" discussed in Knouff is not the rule of repose discussed 16 years later in Ex parte Liberty National, which clarified the rule. The rule of repose, as discussed in Ex parte Liberty National, is based solely on the passage of time. However, the "rule of repose" discussed in Knouff is actually adverse possession, which of course involves more elements than the mere passage of time.

Ex parte Liberty National did not discuss Knouff, which is not surprising, given that the cases discuss distinct concepts. The rule of repose discussed in Ex parte Liberty National is "a defensive matter" and "is unlike adverse possession, which affirmatively establishes title." Boshell, 418 So.2d at 92. However, although repose and adverse possession are distinct, they are related and come from the same legal root; thus, it is not surprising that "repose" language will sometimes appear in adverse-possession cases. Both the rule of repose and adverse possession are based on the idea that unasserted rights may be extinguished under certain conditions. With the rule of repose, the only requirement is the passage of time; adverse possession requires the passage of time plus all the other requirements of adverse possession. In short, adverse possession is a rule of repose in that it puts to rest a property claim, but it is not the rule of repose discussed in Ex parte Liberty National. See, e.g., Sparks v. Byrd, 562 So.2d 211, 214 (Ala. 1990) ("In Alabama, the common-law doctrine of adverse possession by prescription acts as a rule of absolute repose ...."); Snow v. Boykin, 432 So.2d 1210, 1212 (Ala. 1983) (stating that the common-law doctrine of adverse possession by "prescription of twenty years is a rule of absolute repose"); and Fitts v. Alexander, 277 Ala. 372, 376, 170 So.2d 808, 811 (1965) (stating that the 20-year prescriptive period for adverse possession "operates as an absolute rule of repose"); see also Herrick v. Moore, 185 Iowa 828, 169 N.W. 741, 742 (1918) ("[A]dverse possession is in the nature of a rule of repose.").

Knouff illustrates that adverse possession is the method of "repose" one cotenant may use to displace title from another cotenant. Ex parte Walker, 739 So.2d 3 (Ala. 1999), further illustrates this point. In Ex parte Walker, one cotenant, Cox, argued that he had acquired all of a tract of land from his other cotenants by adverse possession. The case was a straightforward adverse-possession case concerning cotenants. The Court, in concluding that Cox had not established adverse possession, quoted and relied on Knouff. Specifically, the Court quoted that part of Knouff, also quoted above, concluding that " '[i]t is only after actual knowledge of the fact that the possession is hostile and intended to oust the co-tenant and defeat his common interest that the rule of repose begins to run against the co-tenant.' " Ex parte Walker, 739 So.2d at 7 (quoting Knouff, 485 So.2d at 1156 ). It is evident that the "rule of repose" discussed in Ex parte Walker, like the "rule of repose" discussed in Knouff, is actually adverse possession.

We need not discuss whether the Hinotes and the Dowdys obtained the property by adverse possession because they have not presented and argued that issue. Their appeal rises or falls on their argument that the rule of repose bars the plaintiffs' action. We conclude that the rule of repose is inapplicable in this case and thus does not bar the plaintiffs' action. Accordingly, we affirm the trial court's judgment in favor of the plaintiffs.

AFFIRMED.

Stuart, C.J., and Bolin, Parker, Shaw, Main, and Wise, JJ., concur.

Murdock, J., concurs specially.

Sellers, J., dissents.

MURDOCK, Justice (concurring specially).

I fully agree with the well considered analysis of the main opinion. I write separately to offer a few additional thoughts.

The law begins with this fundamental principle, well explained by the main opinion: One cannot convey better title than one owns. And an application of the rule of repose in the same "space" as this fundamental principle would eviscerate this principle. It would mean that, in fact, a person could be conveyed a better title by his grantor than was held by his grantor so long as no one files an action challenging that conveyance, e.g., a quiet-title action, for 20 years.

Applying a bare, 20-year rule of repose in the manner suggested by the appellants (i.e., merely because a grantee records his deed) would prevent not only the holder under an older, superior chain from defending or suing to vindicate his title once another grantee's deed had been on record for 20 years, but also would prevent the holder under the younger, inferior chain from invoking judicial assistance to defend or vindicate that holder's claim to the land because, typically, the older, superior chain of title also is of record and therefore would have been on record even longer than the challenger's chain. That is, the appellants' approach would mean that when two competing, recorded chains of title are both at least 20 years old, neither side could obtain judicial relief to clarify ownership of land. I suppose self-help would be the only remedy at that point.

Temporal limitations imposed by our law-statutes of limitations and rules of repose-are apposite in civil claims of wrong committed by one party against another. If there is no recovery in such an action because of those limitations, then there is no recovery. So be it.

But disputes over ownership of land are different. The purpose of a quiet-title action is not to allow the law to take the measure of a wrong by one party against another. There is no actionable "wrong" by either party, except for the "cloud" that both parties cast on the title of the other. Moreover, where two parties each lay claim to ownership of the same land, there must be a recovery. Unlike a civil action that measures a claimed wrong by one party against another, the action can not end without a recovery. One of the parties must come away with an award of title to the land. A rule of repose is inapposite.

The main opinion also well states a corollary to the principle that one cannot convey more than he actually owns, namely that the superior chain of title governs the question of land ownership, unless a third party is able to "wrest" that title away from the proper title holder. And to give full vitality to this principle, the law has always required something more to wrest ownership from the rightful owner than a claim under an otherwise invalid conveyance, even if recorded, followed by a period of inaction and waiting. That "more"-that has developed over hundreds of years in our common law (and is now codified in some measure)-are the additional elements of adverse or prescriptive possession, i.e., (i) actual and exclusive possession that is (ii) open, (iii) hostile, (iii) notorious, and (iv) continuous.

The "more" is not the recording of a deed. In fact, the cases where the law has required the challenger to meet the adverse-possession elements under statutory adverse possession (10 years) or common-law prescription (20 years), are not affected by whether the challenger's deed is recorded. Application of the contrary notion would mean (i) that the legal theories of adverse possession and prescription are in large measure rendered unnecessary and (ii) that everyone who receives valid title to land must go to the courthouse and check that title every 20 years for any recordation of a competing deed, else risk losing title to the land to an otherwise stealth owner who takes no other action to put the rightful owner on notice of his adverse claim to the land. That, of course, is not required. See Oehmig v. Johnson, 638 So.2d 846 (Ala. 1994).

SELLERS, Justice (dissenting).

I respectfully dissent.

In Oehmig v. Johnson, 638 So.2d 846 (Ala. 1994), the purported grantee of real property in fee simple sought to quiet title as against the purported owners of the mineral rights in the property. In discussing the rule of repose, which the grantee had asserted in support of his quiet-title action, this Court said:

"The rule of repose is 'a defensive matter' and 'is unlike adverse possession, which affirmatively establishes title.' Boshell v. Keith, 418 So.2d 89, 92 (Ala. 1982). The rule of repose has been described as the 'running of the period against claims' rather than a device to displace title. Id. (Emphasis in original.) We hold that the rule of repose cannot be used against one with valid record title by one who clearly does not have title.
"... It was not the responsibility of the [purported owners of the mineral rights] to continually check the title records to see if someone had purported to convey their mineral interests. The time for the rule of repose cannot run until there is at least constructive notice of a potential claim. ..."

638 So.2d at 850-51.

Oehmig, however, was criticized in Ex parte Liberty National Life Insurance Co., 825 So.2d 758 (Ala. 2002). In that case, this Court indicated that Oehmig was incorrect in suggesting that the rule of repose cannot start to run until there has been "notice" of the claim at issue. 825 So.2d at 764 n.3. The Court, however, did not criticize Oehmig for indicating that the rule of repose cannot "be used offensively (in a manner similar to the concept of adverse possession) 'against one with valid record title by one who clearly does not have title' in order to divest the title owner of property." Id. (quoting Oehmig, 638 So.2d at 850 ).

In Harrison v. Alabama Forever Wild Land Trust, 4 So.3d 1114 (Ala. 2008), however, this Court held that the rule of repose applied in a quiet-title action, which was commenced by a plaintiff claiming to own a parcel of real property more than 20 years after the recording of a deed that, if valid, would defeat the plaintiff's claim to ownership. The property at issue in Harrison was originally granted to Greenberry Williams, Sr., by the United States government in 1848. In 1856, Greenberry Williams, Sr., conveyed the property to one of his sons, Ausker. In 1907, a deed was recorded by which Ausker's brother, Greenberry Williams, Jr., purported to convey the property to J.T. Crotts and P.B. Worley. There was, however, no deed whereby the property had been conveyed to Greenberry Williams, Jr. The plaintiff in Harrison disputed the validity of the 1907 deed from Greenberry Williams, Jr., to Crotts and Worley, suggesting that it was a "forgery." 4 So.3d at 1116-18. He claimed that the property actually had "passed down through the Ausker Williams family pursuant to the 1856 deed by which Greenberry Williams, Sr., conveyed the property to Ausker Williams." 4 So.3d at 1116. After the 1907 deed to Crotts and Worley was recorded, multiple additional deeds, which purported to convey the property to various grantees, were executed and recorded. In 2002, the property was conveyed to the Alabama Forever Wild Land Trust ("the Trust Fund"), which was named as a defendant in the quiet-title action.

The trial court in Harrison entered a judgment in favor of the Trust Fund. On appeal, this Court held that the rule of repose applied to the plaintiff's claim of ownership:

"The Trust Fund claims ownership of the property by way of the 1907 deed whereby Greenberry Williams, Jr., transferred the property to Crotts and Worley. That deed was properly recorded in Colbert County, and [the plaintiff's] ancestors were accordingly on notice as of that date that another party claimed an interest in the property. See § 35-4-63, Ala. Code 1975 ('The recording in the proper office of any conveyance of property or other instrument which may be legally admitted to record operates as a notice of the contents of such conveyance or instrument without any acknowledgment or probate thereof as required by law.'). Nevertheless, none of those ancestors took any steps to contest the 1907 deed. Rather, it was not until 2005-98 years after the 1907 deed was recorded-that [the plaintiff] initiated the present action to quiet title to the property. During those 98 years in which [the plaintiff] and his ancestors 'slept upon their rights' and took no action to quiet title to the property, 'the memory of transactions ... faded and parties and witnesses passed away.' Boshell [v. Keith, 418 So.2d 89, 91 (Ala. 1982) ] (emphasis omitted). Indeed, [the plaintiff] has raised the possibility that the 1907 deed was a forgery; however, the parties that might have personal knowledge of the circumstances surrounding the execution and filing of that deed have almost certainly all passed away. These are precisely the facts for which the rule of repose was fashioned, and that rule accordingly serves as an absolute bar to [the plaintiff's] action."

4 So.3d at 1118 (footnote omitted).

Relying on the circumstances and the reasoning in Harrison, I would conclude that, in 1964 when James recorded a deed purporting to convey the entire 40-acre property to Joseph in fee simple, the 20-year rule of repose began to run. That recording put Felix's heirs on notice that "another party claimed an interest in the property." Harrison, 4 So.3d at 1118. The rule of repose creates finality by barring claims after an established period. That finality is important because memories fade and parties and witnesses pass away. Id. (citing Boshell v. Keith, 418 So.2d 89, 91 (Ala. 1982) ).

I also note that the record indicates that, in 1980, other family members were involved in conveyances with persons in the relevant chain of title, who claimed to own the property at issue. Thus, it appears that the appellees had knowledge at that time of a dispute regarding ownership of the property. The appellees, however, took no action until 2011. We should not reward parties who sleep on their rights and fail to take actions to protect their interests in real property. The rule of repose prevents parties who here have some 30 years' prior notice of a possible dispute as to ownership from bringing suit to establish title. Accordingly, I would reverse the trial court's judgment.

      The plaintiffs also sued, as necessary parties, many Freeman relatives who allegedly held interests in the property. Concerning the issue on appeal, the interests of those additional defendants are actually aligned with the interests of the plaintiffs. Thus, the additional defendants were listed as appellees in the notice of appeal. However, the additional defendants did not file appellate briefs and have not actively participated in this appeal.

      For a summary of the law concerning adverse possession as it relates to cotenants, see Horne v. Ward, 585 So.2d 877, 878 (Ala. 1991).

      Ex parte Liberty National Life Insurance Co., 825 So.2d 758 (Ala. 2002) is inapposite. It did not involve challenges to ownership of real property but, instead, involved an action against a life insurer to recover for use of race-distinct mortality rates in industrial insurance policies.


author: PITTMAN, Judge.

text:
    D.S.H. v. E.B.H.
    2140159.
    Court of Civil Appeals of Alabama.
    November 20, 2015 Rehearing Denied January 22, 2016 Certiorari Quashed September 29, 2017
    Wendy Brooks Crew of Crew Gentle Law, P.C., Birmingham, for appellant.
    W. Donald Bolton, Jr., and John E. Bolton of W. Donald Bolton, Jr., P.C. Foley, for appellee.
   PITTMAN, Judge.

AFFIRMED. NO OPINION.

See Rule 53(a)(1) and (a)(2)(C), Ala. R.App. P.; Robbins v. Sanders, 890 So.2d 998, 1010-11 (Ala.2004) ; Davis v. Blackstock, 159 So.3d 708, 732 (Ala.Civ.App.2013) ; Kreitzberg v. Kreitzberg, 80 So.3d 925, 932-33 (Ala.Civ.App.2011) ; Dunn v. Dunn, 12 So.3d 704, 709 (Ala.Civ.App.2008) ; T.K.T. v. F.P.T., 716 So.2d 1235, 1238-39 (Ala.Civ.App.1998) ; Figures v. Figures, 624 So.2d 188, 191 (Ala.Civ.App.1993) ; Johnson v. Johnson, 585 So.2d 89, 91 (Ala.Civ.App.1991) ; and Hammond v. Hammond, 500 So.2d 27, 29 (Ala.Civ.App.1986).

The appellant's application for an award of an attorney fee on appeal is denied. The appellee's application for an award of an attorney fee on appeal is granted in the amount of $7,500.

THOMPSON, P.J., and THOMAS, MOORE, and DONALDSON, JJ., concur specially.

DONALDSON, Judge, concurring specially.

I concur in affirming the trial court's judgment. I write to address an issue presented on appeal regarding the manner in which the judgment was prepared. After the trial was completed, the trial judge contacted an attorney for a party and directed the attorney to prepare the final judgment. This contact was made without the knowledge of the attorney for the opposing party. The judgment was prepared as directed and sent to the trial judge for entry, again without the knowledge of the attorney for the opposing party. This or a similar procedure has been followed for many years by some trial judges in this state without any improper motive or intent. But the practice must come to an end.

In certain types of cases, it is completely proper and, due to limited resources allocated to the judicial branch, at times essential for the trial court to ask an attorney for a party or attorneys for all parties to prepare and submit a proposed order or judgment. But all communications regarding the request and the submission of the proposed order or judgment must include the attorneys for all parties and any unrepresented parties. "[The Supreme] Court has held that a trial court's adoption of [an] order prepared by one of the parties is appropriate, so long as opposing counsel are furnished with a copy of the proposed order prior to its entry. Ex parte Masonite Corp. , 681 So.2d 1068 (Ala.1996)." General Motors Acceptance Corp. v. City of Red Bay, 825 So.2d 746, 749 (Ala.2002) (emphasis added). As observed by the Florida Supreme Court:

"The judicial practice of requesting one party to prepare a proposed order for consideration is a practice born of the limitations of time. Normally, any such request is made in the presence of both parties or by a written communication to both parties. We are not unmindful that in the past, on some occasions, judges, on an ex parte basis, called only one party to direct that party to prepare an order for the judge's signature. The judiciary, however, has come to realize that such a practice is fraught with danger and gives the appearance of impropriety. See generally Steven Lubet, Ex Parte Communications: An Issue in Judicial Conduct, 74 Judicature 96, 96-101 (1990)."

Rose v. State, 601 So.2d 1181, 1183 (Fla.1992). See also Richard E. Flamm, Judicial Disqualification: Recusal and Disqualification of Judges § 14.8, pp. 401-02 (2d ed.2007) ("Appellate courts have frequently admonished lower courts about engaging in [an ex parte communication requesting counsel to prepare an order], the dangers of which are readily apparent.... [A] judge's ex parte request that a party's counsel prepare an order is not calculated to foster an impression of judicial objectivity." (footnotes omitted)).

Nevertheless, the procedural error in the preparation of an order or judgment does not, in itself, mandate the vacation or reversal of the order or judgment. As noted by the United States Court of Appeals for the Eleventh Circuit:

"This circuit and other appellate courts have repeatedly condemned the ghostwriting of judicial orders by litigants....
"The dangers inherent in litigants ghostwriting opinions are readily apparent. When an interested party is permitted to draft a judicial order without response by or notice to the opposing side, the temptation to overreach and exaggerate is overwhelming.... The proposed order or opinion serves as an additional opportunity for a party to brief and argue its case and thus is unfair to the party not accorded an opportunity to respond.... [T]he ex parte communications occasioned by this practice create an obvious potential for abuse....
"The fact that a judge allowed a litigant to draft the court's orders without notice to the opposing party does not automatically invalidate these orders, however.... Such orders will be vacated only if a party can demonstrate that the process by which the judge arrived at them was fundamentally unfair."

Colony Square Co. v. Prudential Ins. Co. of America (In re Colony Square Co.), 819 F.2d 272, 274-76 (11th Cir.1987). See also Fuller v. Fuller, 279 Ga. 805, 806, 621 S.E.2d 419, 421 (2005) (finding no due-process violations in the preparation of a divorce judgment by an attorney for a party following ex parte communications, but disapproving of the practice).

In this case, the record does not establish that the judgment entered by the trial court did not reflect the independent findings and conclusions reached by the trial judge, and the nonprevailing party had an opportunity to challenge the findings and conclusions set out in the judgment, albeit not until after it was entered. See, e.g., Ex parte Masonite Corp., 681 So.2d 1068, 1073 (Ala.1996) ("Any harm that may have occurred from the judge's failing to follow the earlier-announced plan of allowing review of a proposed order after it had been drafted by the prevailing party was cured by the hearing at which the defendants were given the opportunity to object to any portions of the order they deemed to be incorrect or inappropriate."). Therefore, I believe, although the procedure utilized by the trial court was flawed, the nonprevailing party is not entitled to relief from the judgment on that basis alone.

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