Case Title: State of Alabama Banking Department v. Gwyn Ellis Taylor and Net Axcess, LLC

Citation: 

Docket Number: 1061640

State: alabama

Court: Alabama Supreme Court

Date: 2009-09-25T00:00:00Z

Document:
Rel 09/25/2009 
Notice: T h i s 
o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e 
p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e 
Reporter of 
Decisions, 
Alabama 
A p p e l l a t e 
C o u r t s , 
300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 
2 2 9 - 0 6 4 9 ) , o f 
any t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may be made 
b e f o r e t h e 
o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
SPECIAL TERM, 2009 
1061640 
S t a t e o f Alabama Banking Department 
v. 
Gwyn E l l i s T a y l o r and Net Axcess, LLC 
Appeal from C o f f e e C i r c u i t 
Court 
(CV-05-126) 
PER CURIAM. 
The 
S t a t e 
o f 
A l a b a m a 
B a n k i n g 
D e p a r t m e n t ("the 
D e p a r t m e n t " ) a p p e a l s 
f r o m a d e c l a r a t o r y j u d g m e n t i n 
an a c t i o n 
i n s t i t u t e d b y 
Gwyn E l l i s T a y l o r , t h e 
s o l e owner o f 
N e t A x c e s s , 
L L C , a n d N e t A x c e s s , L L C ( h e r e i n a f t e r r e f e r r e d t o c o l l e c t i v e l y 
1061640 
as "Net A x c e s s " ) , a g a i n s t t h e D e p a r t m e n t . 
We v a c a t e t h e 
t r i a l 
c o u r t ' s j u d g m e n t and d i s m i s s t h e a p p e a l . 
On May 12, 2005, N e t A x c e s s s u e d t h e D e p a r t m e n t , 
s e e k i n g 
a j u d g m e n t 
d e c l a r i n g 
t h a t 
t h e A l a b a m a 
D e f e r r e d 
P r e s e n t m e n t 
S e r v i c e s A c t , § 5-18A-1 e t s e q . , A l a . Code 1975 
("the 
A c t " ) , 
d i d 
n o t a p p l y t o N e t A x c e s s ' s b u s i n e s s a n d , 
t h u s , 
t h a t 
t h e 
D e p a r t m e n t 
h a d no 
j u r i s d i c t i o n 
o r c o n t r o l 
o v e r N e t A x c e s s . 
N e t 
A x c e s s ' s 
c o m p l a i n t 
a l s o 
s o u g h t 
c o m p e n s a t i o n 
f o r 
t h e 
D e p a r t m e n t ' s 
a l l e g e d 
" u n l a w f u l 
t a k i n g , " 
" n e g l i g e n c e 
a n d / o r 
w a n t o n n e s s , " 
" i n t e n t i o n a l 
i n t e r f e r e n c e 
w i t h 
b u s i n e s s , " 
and 
" f r a u d 
o r 
m i s r e p r e s e n t a t i o n . " 
On 
J u n e 
17, 
2005, 
t h e 
D e p a r t m e n t moved t o d i s m i s s N e t A x c e s s ' s d e c l a r a t o r y - j u d g m e n t 
a c t i o n , 
a r g u i n g 
t h a t , 
as t o i t s d e c l a r a t o r y - j u d g m e n t 
c l a i m , 
N e t A x c e s s h a d 
f a i l e d t o e x h a u s t i t s a d m i n i s t r a t i v e r e m e d i e s 
and 
t h a t 
t h e 
o t h e r 
c l a i m s were 
b a r r e d 
by 
t h e 
d o c t r i n e 
o f 
s o v e r e i g n i m m u n i t y u n d e r A r t . I , § 14, A l a . C o n s t . 1901, w h i c h 
s t a t e s 
t h a t 
" t h e 
S t a t e 
o f A l a b a m a 
s h a l l 
n e v e r 
be made 
a 
d e f e n d a n t i n any c o u r t o f l a w o r e q u i t y . " 
S u b s e q u e n t l y , N e t 
A x c e s s 
f i l e d 
an amended c o m p l a i n t 
a d d i n g S c o t t 
C o r s c a d d e n , 
s u p e r v i s o r o f t h e D e p a r t m e n t ' s B u r e a u o f L o a n s , as a p a r t y . 
The 
D e p a r t m e n t 
f i l e d 
a 
m o t i o n 
t o 
d i s m i s s 
t h e 
amended 
2 
1061640 
c o m p l a i n t , 
a s s e r t i n g t h e same a r g u m e n t s 
i t a d v a n c e d 
i n i t s 
o r i g i n a l 
m o t i o n t o d i s m i s s . 
On 
O c t o b e r 23, 
2006, t h e 
t r i a l 
c o u r t e n t e r e d 
an o r d e r 
s t a t i n g t h a t Net A x c e s s had 
c o n s e n t e d 
t o 
t h e D e p a r t m e n t ' s m o t i o n t o d i s m i s s 
a l l t h e 
c l a i m s 
e x c e p t 
t h e d e c l a r a t o r y - j u d g m e n t 
c l a i m . 
A f t e r 
a b e n c h 
t r i a l 
on 
J u n e 
7, 
2007, 
t h e 
t r i a l 
c o u r t 
d e t e r m i n e d 
t h a t 
Net 
A x c e s s 
was 
n o t 
e n g a g e d 
i n 
a 
b u s i n e s s 
s u b j e c t 
t o r e g u l a t i o n by 
t h e D e p a r t m e n t u n d e r t h e A c t . 
The 
D e p a r t m e n t 
a p p e a l e d . 
A l t h o u g h 
t h e D e p a r t m e n t d i d n o t a r g u e t h a t Net 
A x c e s s ' s 
r e q u e s t 
f o r d e c l a r a t o r y r e l i e f s h o u l d h a v e b e e n b a r r e d 
u n d e r 
t h e 
d o c t r i n e o f 
s o v e r e i g n 
i m m u n i t y , 
a c o n s i d e r a t i o n o f 
t h a t 
i s s u e 
i s 
n o t 
b e y o n d 
t h e 
s c o p e 
o f 
o u r 
r e v i e w 
b e c a u s e 
i t 
c o n c e r n s t h e 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n 
o f t h e 
t r i a l 
c o u r t , 
w h i c h i s r e v i e w a b l e 
by 
an 
a p p e l l a t e c o u r t 
ex mero motu. 
Ex 
 
p a r t e V.S., 
898 
So. 
2d 713, 
714 
( A l a . 2 0 0 4 ) . 
I n Ex p a r t e A l a b a m a D e p a r t m e n t o f T r a n s p o r t a t i o n , 978 
So. 
2d 
17 
( A l a . 2007) 
("Good H o p e " ) , 
t h i s 
C o u r t 
a d d r e s s e d 
t h e 
c o n s e q u e n c e s o f s u i n g a S t a t e 
a g e n c y : 
" T h i s 
C o u r t has 
l o n g 
h e l d 
t h a t ' " ' t h e 
c i r c u i t 
c o u r t 
i s w i t h o u t 
j u r i s d i c t i o n 
t o 
e n t e r t a i n a 
s u i t 
a g a i n s t 
t h e 
S t a t e 
b e c a u s e 
o f 
S e c . 
14 
o f 
t h e 
C o n s t i t u t i o n . ' " ' 
L a r k i n s 
v. 
D e p a r t m e n t 
o f 
M e n t a l 
3 
1061640 
H e a l t h 
& M e n t a l 
R e t a r d a t i o n , 
8 
0 
6 So. 
2d 
358 , 
364 
( A l a . 
2001) 
( q u o t i n g A l a b a m a 
S t a t e 
Docks 
T e r m i n a l 
 
Ry. 
v. 
L y l e s , 
7 
97 
So. 
2d 
432, 
435 
( A l a . 
2 0 0 1 ) , 
q u o t i n g 
i n t u r n A l a n d v. Graham, 287 
A l a . 226, 
229, 
250 
So. 
2d 677, 
678 
( 1 9 7 1 ) ) . 
' [ A ] n a c t i o n c o n t r a r y 
t o 
t h e S t a t e ' s i m m u n i t y i s an a c t i o n o v e r w h i c h 
t h e 
c o u r t s 
o f 
t h i s 
S t a t e 
l a c k 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n . ' 
" T h i s C o u r t has 
r e p e a t e d l y h e l d t h a t § 14, A l a . 
C o n s t . 1901, 
' a f f o r d s t h e S t a t e and 
i t s a g e n c i e s 
an 
" a b s o l u t e " i m m u n i t y f r o m s u i t 
i n any 
c o u r t . ' 
H a l e y 
 
v. B a r b o u r C o u n t y , 885 
So. 
2d 783, 
788 
( A l a . 2 0 0 4 ) ; 
see a l s o Ex p a r t e M o b i l e C o u n t y Dep't o f Human 
R e s . , 
815 
So. 
2d 527, 
530 
( A l a . 2001) 
( ' P u r s u a n t t o § 
14, 
A l a . 
C o n s t . 
o f 
1901, 
t h e 
S t a t e 
o f A l a b a m a and i t s 
a g e n c i e s 
have 
a b s o l u t e 
i m m u n i t y 
f r o m 
s u i t 
i n 
any 
c o u r t . ' ) ; 
Ex 
p a r t e 
T u s c a l o o s a 
C o u n t y , 
796 
So. 
2d 
1100, 
1103 
( A l a . 2000) ('Under A l a . C o n s t . o f 
1901, 
§ 
14, 
t h e 
S t a t e 
o f A l a b a m a 
has 
a b s o l u t e 
i m m u n i t y 
f r o m 
l a w s u i t s . T h i s 
a b s o l u t e 
i m m u n i t y 
e x t e n d s 
t o 
arms o r a g e n c i e s 
o f t h e s t a t e 
' ) . " 
978 
So. 
2d a t 2 1 - 2 2 . 
A l s o i n Good Hope, t h i s C o u r t 
a d d r e s s e d 
a p l a i n t i f f ' s a t t e m p t t o amend a c o m p l a i n t n a m i n g o n l y a S t a t e 
a g e n c y i n o r d e r 
t o add 
t h e p r o p e r 
p a r t y , t h e r e b y 
s e e k i n g 
t o 
e s t a b l i s h s u b j e c t - m a t t e r 
j u r i s d i c t i o n : 
" [ I ] n 
Ex p a r t e B l a n k e n s h i p , 
893 
So. 
2d 
303, 
306-07 
( A l a . 
2 0 0 4 ) , 
t h i s 
C o u r t 
h e l d t h a t , i f a 
t r i a l 
c o u r t 
l a c k s 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n , 
i t has 
no 
power 
t o 
t a k e 
any 
a c t i o n 
o t h e r 
t h a n 
t o 
d i s m i s s 
t h e 
c o m p l a i n t . 
A 
t r i a l 
c o u r t 
l a c k s 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n 
i f t h e 
d e f e n d a n t 
i s immune u n d e r 
t h e 
d o c t r i n e 
o f 
s o v e r e i g n 
i m m u n i t y . 
L a r k i n s 
[v. 
 
D e p a r t m e n t o f M e n t a l 
H e a l t h 
& M e n t a l 
R e t a r d a t i o n ] , 
806 
So. 
2d 
[358,] 364 
[ ( A l a . 
2 0 0 1 ) ] 
( ' " A r t i c l e I , § 
4 
1061640 
14, o f 
t h e 
A l a b a m a C o n s t i t u t i o n o f 1901 t h u s removes 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n f r o m t h e c o u r t s when an 
a c t i o n i s 
d e t e r m i n e d t o 
be one a g a i n s t t h e S t a t e . " ' 
( q u o t i n g 
[ A l a b a m a 
S t a t e 
Docks 
T e r m i n a l 
Ry. v . ] 
L y l e s , 797 So. 2d [432,] 435 [ ( A l a . 2 0 0 1 ) ] ) ) . 
Thus, 
t h i s 
C o u r t 
c a n n o t 
o r d e r t h e t r i a l 
c o u r t t o a l l o w 
[ t h e 
p l a i n t i f f ] t o amend i t s c o m p l a i n t 
b e c a u s e t h e 
t r i a l 
c o u r t 
l a c k s s u b j e c t - m a t t e r 
j u r i s d i c t i o n . " 
978 So. 2d a t 
26. 
I n Ex p a r t e A l a b a m a D e p a r t m e n t o f T r a n s p o r t a t i o n , 6 So. 
3d 1126 ( A l a . 2008) 
( " R u s s e l l P e t r o l e u m " ) , 
t h i s C o u r t a p p l i e d 
t h e 
a b o v e - q u o t e d 
p r i n c i p l e s 
f r o m 
Good 
Hope. 
I n R u s s e l l  
P e t r o l e u m , 
a 
c o r p o r a t i o n 
s u e d 
t h e A l a b a m a 
D e p a r t m e n t o f 
T r a n s p o r t a t i o n 
("ADOT") 
s e e k i n g 
" c o m p e n s a t i o n 
f o r ADOT's 
a l l e g e d 
' i n v e r s e 
c o n d e m n a t i o n ' 
o f 
[ t h e 
c o r p o r a t i o n ' s ] 
p r o p e r t y . " 
6 So. 3d a t 1 1 2 6 . ADOT moved t o d i s m i s s t h e 
a c t i o n on t h e 
g r o u n d t h a t t h e 
a c t i o n was b a r r e d b y § 14 o f t h e 
A l a b a m a C o n s t i t u t i o n . 
S u b s e q u e n t l y , t h e c o r p o r a t i o n 
f i l e d a 
m o t i o n t o d i s m i s s ADOT as a d e f e n d a n t a n d t o s u b s t i t u t e 
t h e 
d i r e c t o r o f ADOT ("the d i r e c t o r " ) as t h e d e f e n d a n t i n 
t h e 
c a s e . 
6 So. 3d a t 1 1 2 6 - 2 7 . 
The c o r p o r a t i o n 
a l s o 
f i l e d an 
amended c o m p l a i n t n a m i n g t h e 
d i r e c t o r , as w e l l as 
ADOT, i n t h e 
s t y l i n g o f t h e c a s e . 
I d . 
a t 1127. 
ADOT a n d t h e d i r e c t o r a g a i n moved t o d i s m i s s t h e c a s e , 
a r g u i n g 
t h a t , b a s e d on t h e a b o v e - q u o t e d p r i n c i p l e s f r o m Good 
5 
1061640 
Hope, 
t h e 
c i r c u i t 
c o u r t 
d i d n o t 
h a v e 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n 
o v e r them. 
T h i s C o u r t s u m m a r i z e d ADOT a n d 
t h e 
d i r e c t o r ' s a r g u m e n t , as f o l l o w s : 
" I n t h e i r b r i e f i n s u p p o r t o f t h a t m o t i o n , ADOT a n d 
t h e 
d i r e c t o r a r g u e d t h a t t h e amended c o m p l a i n t was 
a n u l l i t y a n d t h a t t h e c o u r t h a d no a l t e r n a t i v e b u t 
t o 
d i s m i s s t h e a c t i o n . T h i s was s o , b e c a u s e , 
t h e y 
a r g u e d , t h e o r i g i n a l c o m p l a i n t 
f a i l e d t o i n v o k e t h e 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n 
o f t h e 
t r i a l 
c o u r t , 
h a v i n g named o n l y ADOT, w h i c h i s a b s o l u t e l y immune 
f r o m 
s u i t , 
a n d t h e amended 
c o m p l a i n t , 
w h i c h 
p u r p o r t e d 
t o amend 
an 
a c t i o n 
t h a t 
was 
v o i d ab  
i n i t i o , was a n u l l i t y ; 
t h e r e f o r e , no 
j u r i s d i c t i o n 
a t t a c h e d as a r e s u l t o f t h e p u r p o r t e d 
amendment." 
6 So. 3d a t 1 1 2 7 . 
The c i r c u i t 
c o u r t 
d e n i e d ADOT a n d 
t h e 
d i r e c t o r ' s 
m o t i o n 
t o d i s m i s s , 
a n d ADOT a n d t h e d i r e c t o r 
p e t i t i o n e d 
t h i s 
C o u r t f o r 
a w r i t o f mandamus d i r e c t i n g t h e 
c i r c u i t 
c o u r t t o v a c a t e 
i t s o r d e r 
d e n y i n g 
t h e i r 
m o t i o n t o 
d i s m i s s a n d t o d i s m i s s t h e a c t i o n w i t h p r e j u d i c e f o r l a c k o f 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n . I d . 
B e f o r e 
t h i s C o u r t , ADOT a n d 
t h e 
d i r e c t o r m a i n t a i n e d 
t h e i r 
r e l i a n c e 
on Good Hope a n d a r g u e d 
t h a t 
t h e 
c o r p o r a t i o n ' s 
i n i t i a l c o m p l a i n t 
a g a i n s t ADOT d i d 
n o t c o n f e r 
j u r i s d i c t i o n on 
t h e 
c i r c u i t c o u r t a n d , t h u s , c o u l d n o t s e r v e as t h e 
b a s i s 
f o r 
any amendment. 
T h i s C o u r t a g r e e d w i t h ADOT a n d t h e 
d i r e c t o r 
and 
h e l d , on t h e a u t h o r i t y o f Good Hope, 
t h a t t h e c i r c u i t 
6 
1061640 
c o u r t 
d i d n o t have 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n . 
F u r t h e r , 
b e c a u s e 
o f 
t h e 
c i r c u i t 
c o u r t ' s 
l a c k 
o f 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n , 
t h i s C o u r t a l s o r e f u s e d t o a l l o w t h e c o r p o r a t i o n 
t o amend i t s 
c o m p l a i n t 
t o add t h e p r o p e r 
p a r t y and 
g r a n t e d 
ADOT 
a n d 
t h e 
d i r e c t o r ' s 
p e t i t i o n , 
i s s u i n g t h e 
w r i t 
and 
o r d e r i n g t h e c i r c u i t c o u r t t o v a c a t e i t s o r d e r d e n y i n g 
t h e i r 
m o t i o n t o d i s m i s s and t o d i s m i s s t h e a c t i o n w i t h p r e j u d i c e f o r 
l a c k o f s u b j e c t - m a t t e r 
j u r i s d i c t i o n . 
6 So. 3d a t 1128. 
A n e a r l y i d e n t i c a l 
s i t u a t i o n 
i s p r e s e n t e d 
i n t h e p r e s e n t 
c a s e . 
J u s t 
as i n R u s s e l l P e t r o l e u m , N e t A x c e s s 
s u e d t h e 
D e p a r t m e n t , an a g e n c y o f t h e S t a t e . 
See § 5-2A-1, A l a . Code 
1975. 
Upon t h e D e p a r t m e n t ' s 
f i l i n g a m o t i o n t o d i s m i s s b a s e d 
on t h e d o c t r i n e o f s o v e r e i g n i m m u n i t y , N e t A x c e s s amended i t s 
c o m p l a i n t 
t o add C o r s c a d d e n as a p a r t y . 
A l t h o u g h 
t h e 
t r i a l 
c o u r t 
p r o p e r l y 
d i s m i s s e d 
t h e r e s t o f N e t A x c e s s ' s 
c l a i m s 
a g a i n s t 
t h e 
S t a t e , 
i t a l l o w e d 
N e t 
A x c e s s ' s 
d e c l a r a t o r y -
j u d g m e n t c l a i m a g a i n s t t h e S t a t e t o p r o c e e d t o 
t r i a l . 
On t h e a u t h o r i t y o f Good Hope and R u s s e l l P e t r o l e u m , we 
h o l d t h a t t h e t r i a l 
c o u r t 
l a c k e d s u b j e c t - m a t t e r 
j u r i s d i c t i o n 
t o 
e n t e r t a i n N e t A x c e s s ' s 
o r i g i n a l 
c o m p l a i n t 
a g a i n s t 
t h e 
D e p a r t m e n t a n d , t h u s , 
l a c k e d 
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7 
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Net 
A x c e s s ' s 
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The 
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o v e r 
t h i s 
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9