Case Title: SMM Gulf Coast, LLC v. Dade Capital Corporation and David J. Fournier

Citation: 

Docket Number: 1170743

State: alabama

Court: Alabama Supreme Court

Date: 2020-06-05T00:00:00Z

Document:
REL: June 5, 2020
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2019-2020
____________________
1170743
____________________
SMM Gulf Coast, LLC
v.
Dade Capital Corporation and David J. Fournier
____________________
1170771
____________________
Oliver Collier, Charles Deel, Pearl River Recycling, LLC,
and Recycling Centers, Inc.
v.
Dade Capital Corporation and David J. Fournier
Appeals from Mobile Circuit Court
(CV-13-903094)
1170743, 1170771
MITCHELL, Justice.
These consolidated appeals stem from an August 2012
transaction in which SMM Gulf Coast, LLC ("SMM"), purchased
the assets of four salvage and recycling businesses in Alabama
and Mississippi.  After that transaction closed, Dade Capital
Corporation ("Dade"), a creditor of one of the businesses
whose assets were purchased by SMM, and Dade's president David
J. Fournier, who owned stock in that same business, sued SMM,
the four businesses that had sold their assets to SMM, and
various individuals associated with those businesses in the
Mobile Circuit Court alleging that Dade and Fournier should
have received a greater share of the purchase price paid by
SMM.  Following a bifurcated trial, the trial court found that
Dade and Fournier's claims were barred by a release agreement
that Fournier executed in conjunction with the 
transaction and
entered a judgment against them.
SMM, two of the businesses that had sold their assets to
SMM, and two individuals with ownership interests in those
businesses subsequently moved the trial court to award them
attorney fees, court costs, and litigation expenses in
accordance with a prevailing-party provision in the release
2
1170743, 1170771
agreement.  The trial court denied their motions, and those
parties appeal, arguing that the prevailing-party provision
entitles them to the requested awards and that they have not
waived their right to recover the requested amounts.  We
reverse and remand.
Facts and Procedural History
In approximately 2005, David Hickman, who at the time was
an owner or part owner of several salvage and recycling
businesses 
along 
the 
Mississippi Gulf 
Coast, 
began 
formulating
plans to open David's Auto Shredding, Inc. ("DAS"), a similar
business in Mobile.  Hickman enlisted Dade, an Ohio firm with
experience arranging financing and equipment deals for
businesses in the salvage and recycling industry, to assist
him in setting up DAS, and DAS ultimately executed two
promissory notes in favor of Dade totaling $1,350,000.  In
addition, DAS issued 800 shares of stock to Fournier, giving
him an 8% ownership interest in the company. 
In 2009, Hickman, DAS, and one of Hickman's Mississippi
businesses, David Motor & Scrap, Inc. ("DM&S"), filed separate
petitions for bankruptcy in the United States Bankruptcy Court
for the Southern District of Alabama.  Dade filed claims with
3
1170743, 1170771
the bankruptcy court, and, under the reorganization plans that
were ultimately approved by that court, Dade was due to
receive $274,031 on its claims.  
After those reorganization plans were approved, SMM
contacted Hickman and expressed its interest in 
purchasing: 1)
DAS; 2) DM&S 3) Pearl River Recycling, LLC ("Pearl River"),
a salvage and recycling business in Picayune, Mississippi,
that Hickman co-owned with Charles Deel; and 4) Recycling
Centers, Inc. ("RCI"), a salvage and recycling business in
Pascagoula, Mississippi, that Hickman co-owned with Oliver
Collier (these four businesses are hereinafter referred to
collectively as "the selling companies").  On May 21, 2012,
SMM entered into an asset-purchase agreement in which it
agreed, upon closing of the asset purchase, to pay up to
$11,926,610 to purchase substantially all the assets of the
selling companies, with much of that purchase price being used
to satisfy the selling companies' creditors.  An appendix to
the asset-purchase agreement noted that Dade and Fournier
claimed a debt owed them of $1,300,000, but the asset-purchase
agreement did not guarantee that they would receive any
specific part of the purchase price. 
4
1170743, 1170771
In early August 2012, Fournier was notified by Hickman
that SMM objected to paying him and Dade the entire $1,300,000
they were claiming.  Fournier claims that he was told during
his ensuing negotiations with the selling companies that SMM
might complete its purchase of the selling companies' assets
without his or Dade's consent and that they would then receive
only 
what 
they 
were 
entitled 
to 
receive 
under 
the
reorganization plans approved by the bankruptcy court. 
Ultimately, Fournier agreed to accept $650,000, and, on 
August
16, 2012, Fournier executed a release agreement providing that
he and Dade would not thereafter pursue any claims against
SMM, the selling companies, Hickman, Deel, or Collier
(hereinafter referred to collectively as "the released
parties"):
"[Dade], on behalf of itself and its respective
affiliates, officers, directors, managers, members,
agents, 
consultants, 
employees, 
predecessors,
attorneys, successors and assigns ..., hereby
completely and forever releases and discharges each
of [the released parties] ... from any claims (as
defined below) which any of them may now have, has
ever had or shall ever have against any of the
released parties arising contemporaneously with or
prior to the date of this release or on account of
or arising out of any matter, cause or event related
to [the selling companies], the sale of the assets
to [SMM], the operation of [the selling companies],
the business of [the selling companies], the
5
1170743, 1170771
governance 
of 
[the 
selling 
companies], 
any
investments in, agreements with, or loans to, [one
of the selling companies], and any other actions (or
omissions) 
regarding 
[the 
selling 
companies],
occurring contemporaneously with or prior to the
date of this release."
The release agreement also contained a prevailing-party
provision stating that, "[i]n any action to enforce the terms
of [the release agreement], the prevailing party shall be
entitled to recover its attorneys' fees and court costs and
other non-reimbursable litigation expenses."
On August 20, 2012, SMM closed on its purchase of the
selling companies' assets and, three days later, sent a
$650,000 payment to the law firm that had been representing
Dade and Fournier.  When Fournier was informed that the
payment had been received, he instructed the law firm to
withhold a retainer for "round two" before transmitting the
balance of the funds to him.
On November 14, 2013, Dade and Fournier sued the released
parties and various other individuals who had received some
portion of the purchase price paid by SMM, alleging that they
had conspired to suppress the details of the asset purchase
from Dade and Fournier and that Dade and Fournier had
accordingly been paid a smaller share of the purchase price
6
1170743, 1170771
than they were entitled to receive.  Dade and Fournier
specifically asserted claims of breach of fiduciary duty,
fraud, 
conspiracy, 
negligence, 
breach 
of 
contract, 
conversion,
and unjust enrichment.  The trial court later dismissed the
claims asserted against Hickman, DAS, and DM&S, as well as the
claims asserted against several of the other individual
defendants named by Dade and Fournier.  Eventually, the trial
court also entered judgment in favor of all the other
individual defendants except Deel and Collier.  (Because the
only defendants before this Court in these appeals are SMM,
Pearl River, RCI, Deel, and Collier, the remainder of our
opinion addresses only the claims asserted against those
parties (Pearl River, RCI, Deel, and Collier are hereinafter
referred to collectively as "the appellant sellers").)
Dade and Fournier acknowledge in their brief submitted to
this Court that, after they initiated this action, SMM and the
appellant sellers filed answers and dispositive motions
asserting that the release agreement (1) barred the claims
asserted against them and (2) authorized them to recover the
attorney fees, court costs, and litigation expenses they had
incurred 
defending themselves from 
Dade 
and 
Fournier's 
claims. 
7
1170743, 1170771
After those dispositive motions were all denied by the trial
court, SMM filed a motion noting that it was undisputed that
Dade and Fournier had not returned the $650,000 they had
received as consideration for executing the release agreement
and asking the trial court to therefore conduct a bifurcated
trial under Rule 42(b), Ala. R. Civ. P., "solely on the issue
of whether it was impossible for [Dade and Fournier] to
restore the consideration paid by SMM."  SMM argued that if
that issue was resolved against Dade and Fournier, it would
obviate the need to consider the merits of their various
claims, thus saving all parties involved time and money.  See
United States Cast Iron & Foundry Co. v. Marler, 17 Ala. App.
358, 360, 86 So. 103, 104 (1920) ("The Supreme Court of
Alabama is firmly committed to the principle that, where money
is paid as an inducement for signing a release, there can be
no repudiation of the release without first tendering back the
money as paid."); see also Taylor v. Dorough, 547 So. 2d 536,
541 (Ala. 1989) (recognizing that a party seeking to avoid a
release is not required to return the consideration received
if it would be impossible, impractical, or futile to do so).
8
1170743, 1170771
On March 1, 2017, the trial court granted SMM's motion
for a bifurcated trial, defining the scope of the issues to be
tried as broader than SMM had requested:
"The separate issues to be tried include the
effect of the August 16, 2012, release on [Dade and
Fournier's] claims, whether [Dade and Fournier] are
bound by the release, whether the release was
obtained by fraud or duress, and whether on any
ground under Alabama law [Dade and Fournier] can
avoid the release they executed though they have not
returned the $650,000 in consideration.  The parties
are directed to be prepared to present evidence
bearing on their respective burdens of proof as
outlined 
generally 
by 
[Alabama 
Pattern 
Jury
Instructions] 11.43, 11.45, 11.47, 11.48, and/or
11.49.  The parties are further directed to amend
their pleadings, as may be necessary, no later than
March 31, 2017, to add or confirm any defenses or
affirmatives defenses that would be considered in
the bifurcated bench trial."
None of the parties amended their pleadings, and the
bifurcated trial was held as scheduled beginning on April 19. 
During the course of the trial, neither SMM nor the appellant
sellers addressed any claim they might have under the
prevailing-party provision of the release agreement, nor did
they address those claims in the proposed orders they
submitted to the trial court after the trial concluded.  
On August 7, 2017, the trial court entered a final
judgment in favor of SMM and the appellant sellers, holding
9
1170743, 1170771
that all of Dade and Fournier's claims were barred by the
release agreement.  The 30-day period during which any party
could file a postjudgment motion under Rule 59, Ala. R. Civ.
P., subsequently elapsed without any party requesting the
trial court to alter, amend, or vacate its judgment.
On September 29, 2017, SMM moved the trial court to order
Dade and Fournier to reimburse SMM for its attorney fees,
court costs, and litigation expenses –– a total of $427,822 ––
in accordance with the terms of the 
prevailing-party provision
in the release agreement.  On October 6, 2017, the appellant
sellers filed a similar motion requesting an award of $71,053
in their favor.  Both motions were supported by affidavits
supporting the amounts of the reimbursement requests.  
Dade and Fournier thereafter filed a response in which
they did not dispute the validity or applicability of the
prevailing-party provision 
but, 
instead, 
argued 
that 
the 
trial
court lacked jurisdiction to consider the reimbursement
requests because the time for filing postjudgment motions, as
well as the time for filing an appeal of the trial court's
judgment, had expired before those requests were made.  Dade
and Fournier argued that, because the trial court did not
10
1170743, 1170771
expressly retain jurisdiction over any future requests for
attorney fees, court costs, and litigation expenses in its
final judgment, the trial court was now required to strike
both motions for reimbursement.
The parties submitted additional briefing on this issue
and presented oral arguments in support of their respective
positions.  On April 2, 2018, the trial court entered an order
denying the motions for reimbursement, explaining that SMM and
the appellant sellers had waived their right to recover their
attorney fees, court costs, and litigation expenses because
(1) they failed to assert counterclaims encompassing their
claims for reimbursement; (2) they did not ask the trial court
to expressly retain jurisdiction over their reimbursement
claims before the court lost jurisdiction over the case; (3)
they did not file postjudgment motions raising their claims
within the 30-day period allowed by Rule 59(e), Ala. R. Civ.
P.; and (4) they did not address their claims for
reimbursement at any point during the bifurcated trial.  SMM
and the appellant sellers thereafter filed separate notices of
appeal to this Court.
11
1170743, 1170771
Standard of Review
In Arnold v. Hyundai Motor Manufacturing Alabama, LLC,
[Ms. 1170974, July 12, 2019] ___ So. 3d ___, ___ (Ala. 2019),
this Court explained that the de novo standard of review
applies to a trial court's grant or denial of a request for
attorney fees and other amounts that a prevailing party is
entitled to recover under a contract.  The parties agree that
questions about the trial court's jurisdiction or the proper
interpretation of the Alabama Rules of Civil Procedure are
also questions of law subject to de novo review by this Court. 
See, e.g., Ex parte Scott, 220 So. 3d 1042, 1050 (Ala. 2016)
(explaining that "questions of jurisdiction" are subject to 
de
novo review by this Court); Skinner v. Bevans, 116 So. 3d
1147, 1151 (Ala. Civ. App. 2012) ("An appellate court reviews
de novo the trial court's interpretation of procedural rules
...." (citing United States v. Elmes, 532 F.3d 1138, 1141
(11th Cir. 2008))).
Analysis
SMM and the appellant sellers argue that none of the
reasons offered by the trial court for denying their motions
seeking the reimbursement of their attorney fees, court costs,
12
1170743, 1170771
and litigation expenses was a proper basis for denying those
motions.  Specifically, they argue (1) that a party seeking to
recover under a prevailing-party provision is not required to
assert a counterclaim stating their potential claim at the
beginning of an action that will determine whether, in fact,
that party will be the prevailing party; (2) that a trial
court may award attorney fees, court costs, and litigation
expenses that are owed under a prevailing-party provision
after a final judgment has been entered even if the trial
court did not expressly reserve jurisdiction to do so; (3)
that postjudgment motions requesting attorney fees, court
costs, and litigation expenses that the losing party is
obligated to pay under a prevailing-party provision are not
filed under Rule 59(e) and therefore do not have to be filed
within the 30-day period allowed by Rule 59(e); and (4) that
they did not waive their right to seek reimbursement for their
attorney 
fees, 
court 
costs, 
and 
litigation 
expenses
postjudgment by not addressing that issue during the
bifurcated trial because the trial court defined the scope of
the bifurcated trial to include only issues directly related
13
1170743, 1170771
to whether the release agreement barred Dade and Fournier from
pursuing their claims.  We consider these arguments in turn.
A. Compulsory Counterclaims under Rule 13(a), Ala. R.
Civ. P.
In its order denying the motions for attorney fees, court
costs, and litigation expenses filed by SMM and the appellant
sellers, the trial court stated that their claims "for fees
and expenses were not ancillary to the core case [but] arose
out of the transaction or occurrence that was the subject
matter of [Dade and Fournier's] claim."  Citing Rule 13(a),
Ala. R. Civ. P., the trial court therefore concluded that
those 
claims 
"were 
compulsory counterclaims, 
requiring 
SMM 
and
[the appellant] sellers to [assert them] to be tried in the
April 2017 trial."  Because they did not assert their claims
for reimbursement as counterclaims, the trial court held that
the doctrine of res judicata barred them from asserting those
claims postjudgment.  See Mississippi Valley Title Ins. Co. v.
Hardy, 541 So. 2d 1057, 1059-60 (Ala. 1988) (explaining that
the doctrine of res judicata bars a party from subsequently
asserting a claim that should have previously been asserted as
a compulsory counterclaim).  SMM and the appellant sellers
argue that the trial court's ruling is inconsistent with the
14
1170743, 1170771
plain language of Rule 13(a), which defines a compulsory
counterclaim as:
"[A]ny claim which at the time of serving the
pleading the pleader has against any opposing party,
if it arises out of the transaction or occurrence
that is the subject matter of the opposing party's
claim and does not require for its adjudication the
presence of third parties of whom the court cannot
acquire jurisdiction."
(Emphasis added.)  Highlighting the emphasized language, SMM
and the appellant sellers argue that their reimbursement
claims cannot be considered compulsory counterclaims because
the reimbursement claims had not accrued and were not ripe at
the time they served their answers.  At that time, they argue,
they held only potential claims that would not ripen unless
and until the trial court entered a judgment deciding Dade and
Fournier's claims in favor of SMM and the appellant sellers. 
See Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568,
580–581 (1985) (explaining that a claim is not ripe for
adjudication if it rests upon contingent future events that
may not occur).  We agree.
In Brooks v. Peoples National Bank of Huntsville, 414 So.
2d 917, 920 (Ala. 1982), this Court explained that "the time
for determining whether a counterclaim exists is at the time
15
1170743, 1170771
the counterclaimant must serve an answer.  ...  The pleader
does not waive his right to assert a counterclaim which
accrues after serving the pleading."  SMM and the appellant
sellers did not have a ripe claim against Dade and Fournier
when they served their answers in early 2014 because the
release agreement gave the right to recover attorney fees,
court costs, and litigation expenses only to "the prevailing
party" in an action enforcing the release agreement, and SMM
and the appellant sellers had yet to prevail on Dade and
Fournier's claims at that time.  In fact, SMM and the
appellant sellers did not become "prevailing part[ies]" under
the terms of the release agreement until the trial court
entered its August 2017 judgment over three years after they
filed their early 2014 answers to Dade and Fournier's
complaint.  For that reason, SMM's and the appellant sellers'
claims for attorney fees, court costs, and 
litigation expenses
were not compulsory counterclaims that were waived when they
were not asserted in the 2014 answers to Dade and Fournier's
complaint.  The trial court therefore erred by holding that
those claims were barred by the doctrine of res judicata.  See
also Desroches v. Ryder Truck Rental, Inc., 429 So. 2d 1010,
16
1170743, 1170771
1012 (Ala. 1983) (explaining that a claim for attorney fees,
costs, and expenses stemming from the breach of a release
agreement was not a compulsory counterclaim under Rule 13(a)
because, among other things, the claim was not "fixed in
amount until the litigation in the first action was
completed").
B. 
The 
Trial 
Court's 
Jurisdiction 
to 
Consider
Postjudgment Requests for Attorney Fees, Court Costs, and
Litigation Expenses
In its order denying the motions for reimbursement filed
by SMM and the appellant sellers, the trial court also held
that it lacked jurisdiction over those requests because its
August 2017 order holding that Dade and Fournier's claims were
barred by the release agreement was a final judgment. 
Therefore, the trial court reasoned, because it had not
expressly stated that it was retaining jurisdiction to
consider any future requests for attorney fees, court costs,
or litigation expenses, it lost jurisdiction over the case 30
days after the judgment was entered.  See Ex parte Caremark
Rx, LLC, 229 So. 3d 751, 757 (Ala. 2017) ("If no Rule 59
motion is filed after a judgment is entered, the trial court
that entered the judgment generally loses jurisdiction to
17
1170743, 1170771
amend the judgment 30 days after the judgment is entered."). 
SMM and the appellant sellers do not dispute that the August
2017 judgment was a final judgment, but they argue that their
reimbursement claims based on the prevailing-party provision
were collateral to that judgment and that the trial court
therefore retained jurisdiction to address those claims
without regard to whether it had expressly reserved
jurisdiction to do so.  We agree.
All the parties acknowledge that the trial court's August
2017 judgment was a final judgment that would have supported
an appeal by Dade and Fournier.  See State Bd. of Educ. v.
Waldrop, 840 So. 2d 893, 899 (Ala. 2002) (recognizing that "a
decision on the merits disposing of all claims is a final
decision from which an appeal must be timely taken, whether a
request for attorney fees remains for adjudication"); see 
also
Ray Haluch Gravel Co. v. Central Pension Fund of Int'l Union
of Operating Eng'rs, 571 U.S. 177, 184 (2014) (rejecting
argument that unresolved claims for attorney fees authorized
by contract are not collateral for finality purposes).  This
Court and the Court of Civil Appeals have both recognized that
a trial court has jurisdiction to award attorney fees and
18
1170743, 1170771
costs after entering a final judgment because such requests
are collateral to the merits.  See, e.g., Complete Cash
Holdings, LLC v. Powell, 239 So. 3d 550, 555 n.6 (Ala. 2017)
(noting that the appellee's request for attorney fees and
costs, which was ultimately granted, was still pending when
the appellant filed its notice of appeal); Ford v. Jefferson
Cty., 989 So. 2d 542, 545 (Ala. Civ. 2007) (affirming an award
of attorney fees, costs, and expenses entered over five months
after final judgment was entered).  See also Dunlap v. Regions
Fin. Corp., 983 So. 2d 374, 379 n.5 (Ala. 2007) (noting that
"a majority of other jurisdictions have held that a trial
court retains jurisdiction to award attorney fees after a
notice of appeal has been filed").  It is thus clear that a
trial court may grant a request for an award of attorney fees,
court costs, and litigation expenses even after a final
judgment has been entered.  As explained below, there is an
exception to this general rule for requests made under the
Alabama Litigation Accountability Act ("the ALAA"), § 12-19-
270 et seq., Ala. Code 1975, but that exception does not apply
in this case.
19
1170743, 1170771
In explaining its holding that it lost jurisdiction to
consider the reimbursement motions filed by SMM and the
appellant sellers because it did not expressly reserve
jurisdiction to do so in its August 2017 judgment, the trial
court cited Gonzalez, LLC v. DiVincenti, 844 So. 2d 1196, 1202
(Ala. 2002), in which this Court concluded that the trial
court's failure to expressly reserve jurisdiction to consider
an attorney-fee award in its final judgment barred it from
subsequently considering such a request.  Importantly,
however, the request for an award of attorney fees in Gonzalez
was made under the ALAA.  Section 12-19-272(a) of the ALAA
provides that a court "shall award, as part of its judgment
and in addition to any other costs otherwise assessed,
reasonable attorneys' fees and costs against any attorney or
party" that initiates an action or asserts a claim or defense
that the court determines "to be without substantial
justification."  (Emphasis added.)  Based on this plain
language, the Gonzalez Court explained that a trial court
"'must make its award of attorney's fees under [the ALAA] as
part of its judgment on the merits of the case.'" 844 So. 2d
at 1201 (quoting Baker v. Williams Bros., 601 So. 2d 110, 112
20
1170743, 1170771
(Ala. Civ. App. 1992)).  The Court nevertheless recognized
that "'it is within the court's discretion to hold a separate
hearing on an ALAA petition after the entry of final judgment
on the merits, provided that the court retained jurisdiction
to do so.'"  Gonzalez, 844 So. 2d at 1201 (quoting Baker, 601
So. 2d at 112).  See also Terminix Int'l Co., L.P. v. Scott,
142 So. 3d 512, 528 (Ala. 2013) ("The trial court does not
have jurisdiction to rule upon an ALAA claim after it has
entered a final judgment on the underlying claim unless it has
specifically reserved jurisdiction to hear the ALAA claim."). 
Because Gonzalez involved a request for attorney fees under
the ALAA –– not a contractual prevailing-party provision ––
its holding that a trial court can award attorney fees only
after a final judgment has been entered if the court has
expressly retained jurisdiction to do so does not apply.  Dade
and Fournier's reliance on Gonzalez and other ALAA cases is
misplaced.
C. Rule 59 and Postjudgment Motions Requesting Attorney
Fees, Court Costs, and Litigation Expenses
The trial court did not expressly state that it was
denying the requests for reimbursement filed by SMM and the
appellant sellers because they failed to make those requests
21
1170743, 1170771
in the context of a Rule 59(e) motion asking the trial court
to alter or amend its August 2017 final judgment.  But in its
order denying those requests, the trial court emphasized that
SMM and the appellant sellers had failed to make their
requests during the 30-day period in which Rule 59 motions are
permitted, and the court concluded that if it were to grant
their requests it would be ignoring "the letter and intent" of
Rule 59.  The trial court's order was wrong on this point.  As
Alabama courts have explained, a party making a postjudgment
request for an award of attorney fees, court costs, and
litigation expenses does not make that request under Rule 59.
In Russell v. State, 51 So. 3d 1026, 1027 (Ala. 2010), a
property owner challenged the trial court's denial of his
request for "litigation expenses" after the State's attempt to
condemn a portion of his property using its eminent-domain
powers failed.1  After the trial court dismissed the State's
1Section 18-1A-232(a), Ala. Code 1975, requires a trial
court to award the defendant in an eminent-domain action
"litigation expenses" if the action is "dismissed for any
reason."  Section 18-1A-3(12), Ala. Code 1975, defines
"litigation expenses" to include "[t]he sum of the costs,
disbursements, and expenses, including reasonable attorney,
appraisal, and engineering fees, necessary to prepare for
anticipated or participation in actual probate or circuit
court proceedings."
22
1170743, 1170771
action on August 20, 2008, the property owner moved the trial
court to award him litigation expenses; on October 31, 2008,
the trial court denied his motion.  On November 24, 2008, the
property owner moved the trial court to reconsider its denial
of his request, but, on December 5, 2008, the trial court
denied that motion as well.  The property owner thereafter
filed a notice of appeal on December 31, 2008, and it appears
an issue subsequently arose concerning the timeliness of that
notice of appeal.2  If the property owner's initial request
for an award of litigation expenses was considered a Rule
59(e) motion, the trial court's denial of that motion on
October 31 started the 42-day period in which the property
owner could appeal, and his notice of appeal was therefore due
by December 12, 2008, thus making his December 31 notice of
appeal untimely.  Conversely, if the trial court's October 31
denial of the property owner's initial request was the
"judgment" and his November 24 motion to reconsider was
2The specific date the property owner filed his notice of
appeal is not stated in Russell, but SMM and the appellant
sellers have cited Russell and "this Court may take judicial
notice of its own records in another proceeding when a party
refers to the proceeding."  Kennedy v. Boles Invs., Inc., 53
So. 3d 60, 66 n.2 (Ala. 2010) (citing Butler v. Olshan, 280
Ala. 181, 187-88, 191 So. 2d 7, 13 (1966)).
23
1170743, 1170771
effectively a Rule 59(e) motion, then the trial court's denial
of that motion on December 5 started the appeal clock and the
December 31 notice of appeal was timely.  The Russell Court
ultimately agreed with the latter position and concluded that
the property owner's appeal was timely:
"[The property owner's] motion for litigation
expenses and attorney fees was not a motion to alter
or amend a judgment pursuant to Rule 59(e), Ala. R.
Civ. P.  ...  Therefore, [the property owner's]
motion to 'reconsider' the denial of that request
was not a successive postjudgment motion, and it
tolled the 42–day period for filing an appeal.  See,
e.g., Ex parte Keith, 771 So. 2d 1018, 1022 (Ala.
1998) (noting that 'a successive postjudgment motion
does not suspend the running of the time for filing
a notice of appeal')."
51 So. 3d at 1028 n.4.  See also Ford v. Jefferson Cty., 989
So. 2d 542, 545 (Ala. Civ. App. 2008) (concluding that a
postjudgment request for attorney fees and costs was not
subject to the 30–day time limitation of Rule 59(e) and
observing that "the United States Supreme Court has held that
a request for an award of attorney fees ... is not a 'motion
to alter or amend a judgment'" (quoting White v. New Hampshire
Dep't of Employment Sec., 455 U.S. 445, 452 (1982))). 
Although the basis of the postjudgment request for litigation
expenses in Russell was a statute, the Russell Court
24
1170743, 1170771
recognized that such awards may be allowed by statute or by
contract, 51 So. 3d at 1028, and Dade and Fournier have
offered no compelling reason why we should treat requests
based upon a statute differently from requests based upon a
contract.
In sum, a party requesting attorney fees, court costs,
and litigation expenses in accordance with a prevailing-party
provision is not required to make that request within a motion
invoking Rule 59(e), nor is such a party required to file that
request within the 30-day postjudgment period set forth in
Rule 59(e).  The decisions of SMM and the appellant sellers to
file their motions for reimbursement without regard to Rule 59
was therefore an insufficient basis for the trial court to
deny those motions.
D. Lack of Argument and Evidence about the Prevailing-
Party Provision during the Bifurcated Trial
Finally, the trial court held that "[a]ll matters related
to the [release agreement], including claims for fees, were
triable in the bifurcated bench trial" and that "SMM and the
[appellant sellers] abandoned any claim[s] for fees which may
have existed" by failing to address those claims during the
bifurcated trial.  SMM and the appellant sellers state,
25
1170743, 1170771
however, that the arguments they made and the evidence they
presented during the bifurcated trial were consistent with the
trial court's order defining the scope of that trial. 
Therefore, they argue that their inattention at trial to the
prevailing-party provision did not constitute a waiver of
their right to subsequently seek reimbursement based upon that
provision.  
Before considering the scope of the issues that were
before the court during the bifurcated trial, we note that no
party disputes that, at the very earliest stages of this
litigation, SMM and the appellant sellers notified the trial
court and Dade and Fournier of their position that the
prevailing-party provision entitled them to recover the
attorney fees, court costs, and litigation expenses they
incurred defending this action if the action was ultimately
resolved in their favor.  The trial court, in fact, recognized
that SMM and the appellant sellers had made this argument in
both their motions for judgment on the pleadings and their
later motions for a summary judgment.  After those motions
were denied, however, SMM moved the trial court to conduct a
bifurcated trial "solely on the issue of whether it was
26
1170743, 1170771
impossible 
for 
[Dade 
and 
Fournier] 
to 
restore 
the
consideration paid by SMM."  The resolution of this issue, SMM
argued, would obviate the need to expend time and resources on
the merits of Dade and Fournier's claims.
On March 1, 2017, the trial court granted SMM's motion to
bifurcate.  In its order doing so, the trial court
characterized the thrust of SMM's motion as follows: "SMM
essentially seeks to bifurcate the trial of the issue of
whether [Dade and Fournier] are bound by the terms of the
[release agreement] –– that is, whether [Dade and Fournier]
can avoid the terms of the release."  The trial court went on
to conclude that, because a bifurcated trial would be more
expedient and promote the interests of justice, "the issues
related to the effect of the release executed by or on behalf
of [Dade and Fournier] on the claims asserted by [Dade and
Fournier] shall be tried in a bifurcated trial."  The trial
court further specifically defined the issues to be tried as
follows:
"The separate issues to be tried include the
effect of the August 16, 2012, release on [Dade and
Fournier's] claims, whether [Dade and Fournier] are
bound by the release, whether the release was
obtained by fraud or duress, and whether on any
ground under Alabama law [Dade and Fournier] can
27
1170743, 1170771
avoid the release they executed though they have not
returned the $650,000 in consideration.  The parties
are directed to be prepared to present evidence
bearing on their respective burdens of proof as
outlined 
generally 
by 
[Alabama 
Pattern 
Jury
Instructions] 11.43, 11.45, 11.47, 11.48, and/or
11.49.  The parties are further directed to amend
their pleadings, as may be necessary, no later than
March 31, 2017, to add or confirm any defenses or
affirmatives defenses that would be considered in
the bifurcated bench trial."
Dade and Fournier state that the purpose of the
bifurcated trial was therefore to determine the efficacy of
the release agreement, which, they argue, had three primary
elements: (1) the payment of $650,000 to Dade; (2) Dade's
release of SMM, the selling companies, Hickman, Deel, and
Collier; and (3) the entitlement of the parties to the release
agreement to attorney fees, court costs, and litigation
expenses if there was a breach of that agreement.  Thus, Dade
and Fournier argue, any claim for attorney fees, court costs,
and litigation expenses based on a breach of the release
agreement was a triable issue in the bifurcated trial.  We do
not agree.
When SMM moved the trial court to conduct a bifurcated
trial, it requested that the bifurcated trial be held to
determine one single issue –– "whether it was impossible for
28
1170743, 1170771
[Dade and Fournier] to restore the consideration paid by SMM." 
That request clearly does not include the issue of whether SMM
or the appellant sellers were entitled to recover the attorney
fees, court costs, and litigation expenses they incurred
defending themselves against Dade and Fournier's claims. 
Nevertheless, "Rule 42(b)[, Ala. R. Civ. P.,] gives the trial
court a virtually unlimited freedom to order separate trials
of claims, issues, or parties," Committee Comments on the 1973
Adoption of Rule 42, Ala. R. Civ. P., and a trial court's
authority under Rule 42(b) is not limited by the parties'
requests.  See Colley v. Estate of Dees, 266 So. 3d 707, 716
(Ala. 2018) (explaining that a trial court has broad
discretion under Rule 42(b) to schedule and manage trials). 
Thus, the trial court could have structured the bifurcated
trial to include the issue of whether SMM and the appellant
sellers were entitled to recover their attorney fees, court
costs, and litigation expenses.  It is apparent from the
language of the trial court's order, however, that it did not.
The trial court initially stated in its order that
"issues related to" the effect of the release agreement on the
claims asserted by Dade and Fournier –– the primary issue ––
29
1170743, 1170771
would be tried in the bifurcated trial.  The effect of the
prevailing-party provision is arguably such a related issue,
but, in the next paragraph of its order, the trial court
further defined the four specific issues to be tried: (1) the
effect of the release agreement on Dade and Fournier's claims;
(2) whether Dade and Fournier were bound by the release
agreement; (3) whether the release agreement was obtained by
fraud or duress; and (4) whether on any ground under Alabama
law Dade and Fournier can avoid the release agreement even
though they had not returned the $650,000 they received in
consideration for executing it.  We cannot conclude that this
delineation of the issues to be tried included the issue of
whether SMM and the appellant sellers were entitled to recover
their attorney fees, court costs, and litigation expenses,
especially when, as SMM and the appellant sellers note, that
delineation was immediately followed by an instruction
notifying them "to be prepared to present evidence bearing on
their respective burdens of proof as outlined generally by
[Alabama Pattern Jury Instructions] 11.43, 11.45, 11.47,
11.48, and/or 11.49" –– which specifically address releases
and the avoidance of releases but have no relevance to SMM and
30
1170743, 1170771
the appellant sellers' burden to establish any damages they
might be entitled to receive under the prevailing-party
provision.  In light of the trial court's order, the decision
by SMM and the appellant sellers not to present evidence of
their potential claims under the prevailing-party provision
should not be viewed as an abandonment of those claims, but as
compliance with the terms of the trial court's order.
Conclusion
Following a bifurcated trial, the trial court found that
the claims Dade and Fournier had asserted against SMM and the
appellant sellers were barred by the terms of a release
agreement.  SMM and the appellant sellers then moved the trial
court to award them their attorney fees, court costs, and
litigation expenses in accordance with a prevailing-party
provision in that release agreement, but the trial court
denied their motions, holding that they had waived their right
to recover those amounts because (1) they failed to assert
counterclaims 
encompassing 
their 
claims 
for 
reimbursement; 
(2)
they did not ask the trial court to retain jurisdiction over
their reimbursement claims before the court lost jurisdiction
over the case; (3) they did not file postjudgment motions
31
1170743, 1170771
raising their claims within the 30-day period allowed by Rule
59(e); and (4) they did not address their claims for
reimbursement at any point during the bifurcated trial.  As
discussed above, none of the reasons set forth by the trial
court was a proper basis for denying the reimbursement motions
filed by SMM and the appellant sellers.  The trial court's
judgment is therefore reversed and the cause remanded for the
trial court to consider the evidence submitted by SMM and the
appellant sellers in conjunction with their motions for
reimbursement and to enter an appropriate award based on that
evidence.
1170743 –– REVERSED AND REMANDED.
1170771 –– REVERSED AND REMANDED.
Parker, C.J., and Bolin, Wise, Bryan, Mendheim, and
Stewart, JJ., concur.
Sellers, J., dissents.
32