Case Title: McKenzie Methane Corp. v. MW Drilling, Inc.

Citation: 653 So. 2d 982

Docket Number: 1930261

State: alabama

Court: Alabama Supreme Court

Date: 1995-01-27T00:00:00Z

Document:
653 So. 2d 982 (1995)
McKENZIE METHANE CORPORATION
v.
M-W DRILLING, INC., et al.
1930261.

Supreme Court of Alabama.
January 27, 1995.
Anna Lee Giattina of Anna Lee Giattina, P.C., Birmingham, for appellant.
Mitchell A. Spears, Montevallo, for appellees.
COOK, Justice.
The defendant, McKenzie Methane Corporation, appeals from a judgment awarding the plaintiffs, M-W Drilling Company and Michael Whitehead (hereinafter collectively *983 referred to as the plaintiff) $135,120.77. We affirm.
The plaintiff's claim arose out of a contract Michael Whitehead entered with Richard Pilgreen, operator of Pilgreen Producing Company, for the plaintiff to drill coal methane gas wells in Alabama. Whitehead used the following names during the course of his business relationship with Pilgreen: M-W Drilling; G.M. Whitehead; and M-W Drilling, Inc. Although Whitehead's contract was with Pilgreen, McKenzie Methane was the actual owner of the wells dug by the plaintiff. When Pilgreen failed to make the payments called for by the contract, Whitehead filed liens against several of the wells he had dug. The plaintiff later agreed to release the liens in exchange for a promissory note from Pilgreen guaranteed by McKenzie Methane. When Pilgreen again failed to pay, the plaintiff sought payment from McKenzie Methane. McKenzie Methane refused to pay; the plaintiff sued, alleging a breach of the guaranty agreement.
McKenzie Methane does not dispute that it signed the guaranty agreement wherein the plaintiff agreed to release the liens, nor does it dispute the amount Pilgreen owed on the drilling contract. McKenzie contends that the plaintiff is a corporation not licensed to do business in Alabama and that it therefore cannot avail itself of the courts of Alabama to enforce the guaranty agreement. See § 10-2A-247, Ala.Code 1975; Sanjay, Inc. v. Duncan Construction Co., 445 So. 2d 876 (Ala. 1983). Whitehead, on the other hand, contends that M-W Drilling was operating in Alabama as his sole proprietorship and that § 10-2A-247(a) is therefore not applicable. Section 10-2A-247(a), the "door closing" statute, prevents corporations not holding a "certificate of authority" from using the courts of Alabama to enforce their contracts entered into in this state. The trial judge, as factfinder in this ore tenus case, determined that the business known in this contractual relationship as M-W Drilling was, in fact, a sole proprietorship operated by Michael Whitehead. The judge's order reads in pertinent part as follows:
C.R., 252-55.
Marvin's, Inc. v. Robertson, 608 So. 2d 391, 393 (Ala.1992).
Although the contract Michael Whitehead signed with McKenzie Methane named "M-W Drilling, Inc." as the contracting party, Whitehead signed the document "G.M. Whitehead, M-W Drilling" and under that signature wrote "Owner." C.R., 23. Furthermore, Whitehead testified that the invoices submitted to Pilgreen were submitted under the name "M-W Drilling Company." C.R., 59. When Pilgreen failed to pay, Whitehead filed liens against the wells he had dug. The liens were filed by "M-W Drilling Company, G.M. Whitehead." C.R., 84-85. When the liens were released upon the execution of the guaranty agreement, the release documents were signed "G.M. Whitehead, owner, sole proprietor," C.R., 71, and the releases "came from M-W Drilling Company and G.M. Whitehead." C.R., 71.
Clearly, the evidence supports the trial court's finding that M-W Drilling was operating in Alabama as a sole proprietorship when it entered the guaranty agreement with McKenzie Methane. Thus, that finding was not "palpably wrong, manifestly unjust, or without supporting evidence." Marvin's, Inc., supra. Accordingly, the judgment is affirmed.
AFFIRMED.
HORNSBY, C.J., and ALMON, HOUSTON and KENNEDY, JJ., concur.