Case Title: Ex parte Kenneth G. Hood.  PETITION FOR WRIT OF MANDAMUS (In re: Joan Dudley Hood, individually and on behalf of Broadview Properties Family Limited Partnership v. Kenneth G. Hood and Broadview Properties Family Limited Partnership) (Lee Circuit Court: CV-23-900114).

Citation: 

Docket Number: SC-2023-0806

State: alabama

Court: Alabama Supreme Court

Date: 2024-03-29T00:00:00Z

Document:
Rel: March 29, 2024 
 
 
 
 
 
 
 
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, 
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SUPREME COURT OF ALABAMA 
 
OCTOBER TERM, 2023-2024 
 
_________________________ 
 
SC-2023-0806 
_________________________ 
 
Ex parte Kenneth G. Hood 
 
  PETITION FOR WRIT OF MANDAMUS 
  
(In re: Joan Dudley Hood, individually and on behalf of 
Broadview Properties Family Limited Partnership 
 
 v. 
 
 Kenneth G. Hood and Broadview Properties Family Limited 
Partnership)  
 
(Lee Circuit Court: CV-23-900114) 
 
SELLERS, Justice. 
SC-2023-0806 
2 
 
 
Kenneth G. Hood ("the husband") petitions this Court for a writ of 
mandamus directing the Lee Circuit Court to dismiss the derivative 
claims asserted by Joan Dudley Hood ("the wife") on behalf of Broadview 
Properties Family Limited Partnership ("the partnership") and to enter 
a protective order prohibiting discovery into those claims.  For the 
reasons stated below, we deny the petition. 
I.  Facts as Alleged in the First Amended Complaint 
The husband and the wife are in the midst of a divorce.  The wife 
commenced the underlying action individually and derivatively on behalf 
of the partnership, alleging, in relevant part, that the husband had used 
the partnership as a means to improperly hide and transfer marital 
assets.1 The wife alleges the following in the first amended complaint:  In 
January 2006, the husband formed the partnership, listing himself as the 
sole general and limited partner. In 2012, the husband amended the 
partnership agreement to transfer ownership interests in the 
partnership to his three sons.  As a result of that amendment, the 
 
1In this mandamus proceeding, the husband challenges only the 
derivative claims asserted on behalf of the partnership. He argues that 
those claims should be dismissed because, he says, the wife has never 
been a partner of the partnership and, therefore, has no right to enforce 
the rights of the partnership.  
SC-2023-0806 
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membership interests in the partnership were as follows: the husband, 
general partner (3%); Phillip Kenneth Hood, limited partner (32 1/3%); 
Keith Vinson Hood, limited partner (32 1/3%); and Garrett Dudley Hood, 
limited partner (32 1/3%).  In February 2019, Garrett died intestate and 
the Lee Probate Court entered an order requiring the personal 
representative of his estate to distribute the estate assets equally to the 
husband and the wife. The personal representative executed an 
"assignment of limited partnership units," transferring "any and all 
rights to the thirty-two and one-third (32 1/3) Limited Partnership Units 
in the Partnership owned by the Estate" equally to the husband and the 
wife. That assignment lists both the husband and the wife as limited 
partners, reflecting that each owned 16 1/6 partnership units. Around 
that same time, the husband executed an "assignment of limited 
partnership units," transferring to the wife the 16 1/6 partnership units 
that he had been assigned from Garrett's estate. That assignment also 
lists the wife as a limited partner, reflecting that, as a result of the 
assignment, she owned 32 1/3 partnership units. After execution of the 
second assignment, the husband led the wife to believe that she held a 32 
1/3% interest in the partnership.  Since 2020, the partnership's 
SC-2023-0806 
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accountant has distributed K-1 federal tax forms to the wife, listing her 
as a limited partner and stating her share of any profit, loss, and capital 
was 32.33%.  In June 2022, the wife requested access to the partnership's 
records based on her belief that the partnership was being mismanaged; 
she was denied access to the records.  In January 2023, representatives 
of the wife met with the accountant for the husband and numerous 
entities owned and/or controlled by the husband.  At that meeting, the 
husband's accountant stated that the husband had taken funds from the 
partnership without approval and/or documentation and had loaned that 
money to various third parties. The complaint also describes other 
examples of alleged mismanagement on the part of the husband with 
regard to the unauthorized or improper transfer of partnership assets.  
On March 2, 2023, the wife sent the partners a letter, demanding that 
they render an accounting and that they institute an action within seven 
days to enforce the rights of the partnership.  After receiving no response 
to her demand, the wife commenced the underlying action. 
II.  Proceedings in the Trial Court 
The husband filed a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss, 
arguing, in relevant part, that neither of the two assignments 
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transferring partnership units to the wife was a transfer of a full limited-
partnership interest.2  He asserted that the first transfer of partnership 
units from Garrett's estate was "at most" the transfer of a "transferable 
interest" from a "dissociated limited partner," which, he said, did not 
confer upon the wife any rights to participate in the management or 
affairs of the partnership; instead, he said, the wife was entitled only to 
distributions from the partnership.  The husband then argued that, when 
he "purported" to transfer to the wife the 16 1/6 partnership units he had 
inherited from Garrett's estate, he could not have "unilaterally" admitted 
her as a limited partner because, he said, he had also held only a 
"transferable interest" in those partnership units. In support of those 
 
2Some of the exhibits included with the husband's mandamus 
petition were either attached to the complaint or referenced in the 
complaint and are central to the claims therein, including, among other 
documents, the Lee Probate Court's order for final settlement of Garrett's 
estate, the two assignments, the partnership agreement, the demand 
letter to the partners, and the tax documentation. See Rule 10(c), Ala. R. 
Civ. P. ("A copy of any written instrument which is an exhibit to a 
pleading is a part thereof for all purposes.").  Accordingly, the trial court's 
consideration of those documents did not convert the husband's motion 
to dismiss into a motion for a summary judgment, pursuant to Rule 56(c), 
Ala. R. Civ. P.  Moreover, as explained herein, the transcript of the 
September 2023 hearing on the motion to dismiss and motion for 
protective order confirm that the trial court did not convert the motion to 
dismiss into a motion for a summary judgment.  
    
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arguments, the husband quoted various provisions of the Alabama 
Limited Partnership Law ("the ALPL"), Ala. Code 1975, § 10A-9A-1.01 et 
seq., regarding transfers, transferable interests, restrictions upon 
transferable interests, and dissociation of limited partners. Finally, the 
husband argued that, pursuant to the partnership agreement, the wife 
could be admitted as a limited partner in the partnership only by the 
"unanimous consent" of all the partners and that she had not alleged in 
the complaint that all the partners had unanimously approved her as a 
limited partner.  
In response to the motion to dismiss, the wife argued that her status 
as a limited partner devolved upon her by operation of law pursuant to 
the laws of intestate succession and in accordance with the Lee Probate 
Court's order regarding the settlement of Garrett's estate.  She further 
claimed that her partnership units increased when the husband, the sole 
general partner, assigned to her the 16 1/16 partnership units that he 
had inherited from Garrett's estate. The wife stated that, to the extent 
that the husband had argued that the two assignments were not in 
compliance with the partnership agreement, such argument would be 
meritless because, she said, the actions of a general partner are binding 
SC-2023-0806 
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on the partnership.  Finally, the wife argued that the husband's course 
of conduct revealed that she had been a limited partner of the 
partnership since December 2019.  Finally, the wife asserted that the 
provisions of the ALPL referred to by the husband regarding a 
dissociated limited partner did not control because, she said, the 
partnership agreement governed what occurs upon a limited partner's 
death.    
The trial court held two hearings in this case, one on August 23, 
2023, and one on September 27, 2023.3  At the latter hearing, the trial 
court heard arguments on the motion to dismiss and the husband's 
motion for a protective order seeking to prohibit discovery into the wife's 
derivative claims; the transcript of that hearing is included as Exhibit 16 
 
3After this Court ordered answers and briefs, the trial judge 
presiding over the case filed a motion requesting that this Court order 
the husband to supplement the record to include the transcript of the 
August 23, 2023, hearing, which, he indicated, included the "majority" of 
the information and arguments regarding the motion to dismiss. This 
Court granted that motion, giving the husband until February 27, 2024, 
to supplement the record; the husband did not respond. See Rule 
21(a)(1)(F), Ala. R. App. P. (noting, in relevant part, that the petition for 
a writ of mandamus shall contain an appendix including "all parts of the 
record that are essential to understanding the matters set forth in the 
petition … and any transcripts of proceedings that resulted in the order 
or orders").  
SC-2023-0806 
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to the mandamus petition.  During that hearing, the trial judge orally 
indicated that the wife had met her burden of pleading to survive a Rule 
12(b) dismissal.  The trial judge made clear, however, that he was not 
making a decision regarding whether the wife was a limited partner. 
Rather, he explained that there were "too many [disputed] facts" and 
submissions -- i.e., that the husband did not "have enough to fight."  The 
trial judge further indicated that such an attack on the wife's status as a 
limited partner was better reserved for the summary-judgment stage of 
the proceedings. The trial court thereafter entered an order denying the 
motion to dismiss; it made no express ruling on the motion for a 
protective order.  This mandamus proceeding followed. 
III. Standard of Review 
"A writ of mandamus is an extraordinary remedy 
available only when the petitioner can demonstrate: '"(1) a 
clear legal right to the order sought; (2) an imperative duty 
upon the respondent to perform, accompanied by a refusal to 
do so; (3) the lack of another adequate remedy; and (4) the 
properly invoked jurisdiction of the court."' Ex parte Nall, 879 
So. 2d 541, 543 (Ala. 2003) (quoting Ex parte BOC Grp., Inc., 
823 So. 2d 1270, 1272 (Ala. 2001))." 
 
Ex parte Alabama Dep't of Corr., 252 So. 3d 635, 636 (Ala. 2017).  
Mandamus review is the proper method by which to review whether a 
party has satisfied the pleading requirements for a derivative claim. Ex 
SC-2023-0806 
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parte 4tdd.com, Inc., 306 So. 3d 8, 18 (Ala. 2020).  This Court reviews a 
dismissal under Rule 12(b)(6), Ala. R. Civ. P., de novo.  Cathedral of Faith 
Baptist Church, Inc. v. Moulton, 373 So. 3d 816, 818 (Ala. 2022). "A 
dismissal for failure to state a claim upon which relief can be granted is 
warranted only when the allegations of the complaint, viewed most 
strongly in favor of the pleader, demonstrate that the pleader can prove 
no set of facts that would entitle the pleader to relief." Id.  Finally, a trial 
court's denial of a protective order in response to discovery requests is an 
appropriate basis for mandamus review. Ex parte Loube Consulting Int'l, 
Inc., 45 So. 3d 741 (Ala. 2010).  "[M]andamus will issue to reverse a trial 
court's ruling on a discovery issue only (1) where there is a showing that 
the trial court clearly exceeded its discretion, and (2) where the aggrieved 
party does not have an adequate remedy by ordinary appeal." Ex parte 
Ocwen Fed. Bank, FSB, 872 So. 2d 810, 813 (Ala. 2003). 
IV.  Analysis 
A.  Clear Legal Right to Dismissal of the Derivative Claims 
The husband argues that he has a clear legal right to the dismissal 
of the derivative claims the wife has asserted on behalf of the partnership 
because, he says, the wife has never been a partner of the partnership; 
SC-2023-0806 
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thus, he argues, she lacks "standing" to enforce the rights of the 
partnership. The husband seeks mandamus review based on Ex parte 
4tdd.com., 306 So. 3d at 18 (holding that "mandamus relief is available 
when it is demonstrated that a shareholder plaintiff in a derivative 
action, in which the corporation is the real party in interest, has not 
complied with the heightened pleading requirements of Rule 23.1[, Ala. 
R. Civ. P.]").4  The husband points out the rationale stated in Ex parte 
4tdd.com for granting mandamus review: 
"[I]t would appear that Rule 23.1 logically requires a 
threshold determination, and an avenue for mandamus 
review, as to whether the derivative action may be 
maintained by the plaintiff before any decision is made 
regarding whether to proceed toward litigation on the merits. 
There is no procedure for appealing from a wrongful 
determination of that issue before the entry of a final 
 
4Notably, the husband has stated throughout these proceedings 
that the wife lacked "standing" to sue derivatively on behalf of the 
partnership.  However, in Ex parte 4tdd.com, the case upon which he 
relies, this Court clarified that 
 
"questions 
pertaining 
to 
the 
heightened 
pleading 
requirements of Rule 23.1 do not invoke the plaintiff's 
standing to bring the substantive claims and do not implicate 
the trial court's subject-matter jurisdiction; rather, Rule 23.1 
imposes a procedural bar on a derivative action when the 
plaintiff fails to [comply with the pleadings requirements of 
Rule 23.1]." 
 
306 So. 3d at 16.  
SC-2023-0806 
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judgment on the merits. In other words, the only alternative 
to mandamus review would be for the corporation whose 
rights are at issue to appeal after a final judgment has been 
entered on the merits. Such an appeal obviously is not 
adequate to protect the corporation's right to prevent the 
maintenance of a derivative action by one who does not fairly 
and adequately represent the interests of the shareholders 
because the action will have been maintained by the time the 
corporation can file an appeal. To hold that the review of that 
issue must await a determination of the merits would defeat 
the very right Rule 23.1 is designed to protect, namely the 
right to prevent the maintenance of litigation on behalf [of] 
the corporation by a plaintiff who does not 'fairly and 
adequately represent the interests of the shareholders' of the 
corporation." 
 
306 So. 3d at 17.  
To begin, we note that, although Rule 23.1, Ala. R. Civ. P., applies 
specifically to the pleading requirements in shareholder derivative 
actions,5 the ALPL contains similar, if not identical, pleading 
 
5Rule 23.1, Ala. R. Civ. P., requires, in relevant part, that a plaintiff 
suing derivatively on behalf of a corporation must (1) allege that he or 
she was a shareholder of the corporation at the time of the alleged offense 
or that his or her status as a shareholder thereafter devolved upon him 
or her by operation of law and (2) allege "with particularity the efforts, if 
any, made by the plaintiff to obtain the action the plaintiff desires … and 
the reasons for the plaintiff's failure to obtain the action or for not making 
the effort." Rule 23.1 further provides that a derivative action "may not 
be maintained if it appears that the plaintiff does not fairly and 
adequately represent the interests of the shareholders or members 
similarly situated in enforcing the right of the corporation or association."   
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requirements.  Section 10A-9A-9.03, Ala. Code 1975, provides that only a 
partner may sue "in the right of [a] limited partnership": 
"A partner may commence or maintain a derivative 
action in the right of the limited partnership only if the 
partner: 
 
 
"(1) fairly and adequately represents the interests 
 
of the limited partnership in enforcing the right of  
 
the limited partnership; and 
 
 
"(2) either: 
 
 
"(A) was a partner of the limited 
 
partnership at the time of the act or omission 
 
of which the partner complains; or 
 
 
"(B) whose status as a partner devolved 
 
upon the person by operation of law or 
 
pursuant to the terms of the partnership 
 
agreement from a person who was a partner 
 
at the time of the act or omission of which the 
 
partner complains." 
 
Section 10A-9A-9.04, Ala. Code 1975, provides that a partner may 
commence a derivative action "in the right of [a] limited partnership" if  
"(a) the partner first makes a written demand upon general partners 
requesting that they cause the limited partnership to bring an action to 
enforce the right and the general partners do not bring the action within 
a reasonable time" or "(b) a demand under subsection (a) would be futile."  
The Alabama Comment to § 10A-9A-9.04 states that this section is 
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derived from, among other sources, Rule 23.1, Ala. R. Civ. P.   Finally, § 
10A-9A-9.05, Ala. Code 1975, states that, in a derivative action, the 
complaint "must state with particularity" "(a) the date and content of 
plaintiff's demand and the general partner's response by the limited 
partnership to the demand" or "(b) why the demand should be excused as 
futile."      
In his mandamus petition, the husband challenges only the wife's 
status as a limited partner in the partnership. § 10A-9A-9.03.  
Accordingly, we will address whether the wife has alleged sufficient facts 
to demonstrate that she is a proper party to enforce the rights of the 
partnership. § 10A-9A-9.03.  Under the applicable standard of review, we 
must accept the wife's factual allegations as true and draw all reasonable 
inferences in her favor.  Moulton, 373 So. 3d at 818.  As indicated, the 
first amended complaint alleges that Garrett, a limited partner owning 
32 1/3 partnership units, died intestate and that the personal 
representative of his estate executed an assignment transferring his 
partnership units equally to the husband and the wife, each receiving 16 
1/6 partnership units. The complaint further alleges that the husband 
thereafter executed an assignment transferring to the wife the 16 1/16 
SC-2023-0806 
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partnership units that he had inherited from Garrett's estate.  Both 
assignments refer to the wife as a "limited partner" and reflect the 
"number of limited partnership units [that she] owned." The complaint 
then alleges that, following the second assignment, the husband led the 
wife to believe that she held a 32 1/3% interest in the partnership. The 
complaint further asserts that, since 2020, the wife has received federal 
K-1 tax forms. Those forms also reference the wife as a limited partner. 
Finally, although not challenged, the allegations of the complaint make 
clear that the wife complied with the demand requirements of the ALPL 
before commencing the underlying action.  Based on the materials before 
us, we conclude that the trial court properly denied the husband's Rule 
12(b)(6) motion to dismiss. The allegations of the complaint, if taken as 
true, do not foreclose the possibility that the wife may possibly prevail in 
demonstrating that she is a proper person to enforce the rights of the 
partnership. As the trial court noted, there are too many disputed facts 
regarding the wife's status as a limited partner.  We would further note 
that the facts are also disputed or at least not fully developed regarding 
what actually happens to a limited partner's partnership units if that 
partner dies.   See § 10A-9A-1.08(a)(1), Ala. Code 1975 (noting that "the 
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partnership agreement governs relations among the partners as partners 
and between the partners and the partnership"), and § 10A-9A-1.08(a)(2) 
(noting that, "to the extent the partnership agreement does not otherwise 
provide for a matter described in subsection (a)(1)," the ALPL governs).  
Accordingly, the husband has not demonstrated a clear legal right to the 
dismissal of the derivative claims at this juncture in the litigation.    
B.  Clear Legal Right to a Protective Order 
The husband also asserts that he has a clear legal right to a 
protective order prohibiting discovery into the derivative claims.  Given 
the procedural posture of the case, we disagree.  The materials before us 
indicate that, after the parties were unable to resolve the discovery 
disputes, the wife filed a motion to compel responses to her first set of 
interrogatories and the production of documents; the trial court granted 
that motion.  On August 22, 2023, the husband moved the trial court for 
a protective order seeking to prevent discovery into the derivative claims, 
arguing that the wife did not have the right to sue derivatively to enforce 
the rights of the partnership. The transcript of the September 2023 
hearing on the motion to dismiss and the motion for a protective order 
indicates that, after the trial judge orally denied the husband's motion to 
SC-2023-0806 
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dismiss, the trial judge stated that it was his understanding that there 
were pending discovery issues that the parties were going to work on 
going forward.  At that point, the wife's attorney stated that, to the extent 
that the wife still had a pending motion to compel, he "would withdraw" 
it. The trial judge responded that, because he did not know whether the 
wife was a limited partner, he was not giving her "everything" she wanted 
in terms of discovery.  The trial judge then stated that he would like the 
parties to work out the discovery issues without court intervention; 
otherwise, he said, the court would get involved. In other words, the 
transcript reflects that the wife agreed to withdraw her motion to compel; 
that the trial court suggested that the parties work out the discovery 
issues without court intervention; and that the husband never objected 
to that suggestion, thus impliedly agreeing to proceed with discovery. 
Notably, following the September 2023 hearing, the trial court entered 
an order denying the husband's motion to dismiss; it made no ruling on 
his motion for a protective order.  Because the husband impliedly agreed 
to move forward with discovery and because he presumably did not ask 
the trial court for an express ruling on his motion for a protective order, 
we cannot say that the trial court had an imperative duty to perform, 
SC-2023-0806 
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accompanied by a refusal to do so.   See Ex parte Oliver, 864 So. 2d 1064, 
1067 (Ala. 2003) ("This Court will not direct a court to take some action 
it has not previously refused to take."). For the above-stated reasons, the 
husband has not demonstrated a clear legal right to a protective order.    
V.  Conclusion 
 
Based on the foregoing, the husband has demonstrated neither a 
clear legal right to have the derivative claims asserted on behalf of the 
partnership dismissed nor a clear legal right to a protective order.  Thus, 
we deny the petition for a writ of mandamus. 
 
PETITION DENIED.   
 
Wise, Bryan, Mendheim, Stewart, and Cook, JJ., concur. 
 
Mitchell, J., dissents in part and concurs in the result in part, with 
opinion, which Shaw, J., joins. 
 
Parker, C.J., dissents. 
 
 
SC-2023-0806 
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MITCHELL, Justice (dissenting in part and concurring in the result in 
part). 
 
In my view, the central issue presented in this mandamus petition 
-- whether Joan Dudley Hood ("the wife") is entitled to sue on behalf of 
Broadview Properties, FLP -- is a legal question.  The main opinion 
concludes that we cannot resolve that question because, it says, "there 
are too many disputed facts," ___ So. 3d at ___, but the main opinion does 
not identify any disputed facts, nor does it explain how those facts could 
affect our resolution of the question. 
Respectfully, I believe that existing law, as applied to the 
undisputed facts before us, clearly establishes that the wife lacks the 
ability to bring derivative claims on behalf of Broadview.  I would 
therefore grant the petition to the extent that it seeks an order directing 
the trial court to dismiss those claims and deny the remainder of the 
petition (which relates to discovery issues surrounding those claims) as 
moot.     
Facts and Procedural History 
 
The facts in this case are complicated but, in relevant part, 
undisputed.  Kenneth Hood ("the husband") and his three sons -- Phillip 
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("the first son"), Keith ("the second son"), and Garrett ("the third son") -- 
were partners in a family limited partnership called Broadview 
Properties, FLP, which had the following structure:  
The husband: general partner with a 3% ownership interest; 
The first son: limited partner with a 32 1/3% ownership 
interest; 
The second son: limited partner with a 32 1/3% ownership 
interest; and 
The third son: limited partner with a 32 1/3% ownership 
interest.  
In 2019, the third son died without a will and left behind no spouse 
or children.  His assets were distributed according to the normal rules of 
intestate succession, which meant that his interest in Broadview was 
split equally between his two parents, the husband and the wife, with 
each of them getting a 16 1/6 % interest. 
The husband immediately transferred his 16 1/6% interest to the 
wife and stated that this transfer made the wife a "limited partner" with 
a 32 1/3% partnership interest.  The wife has been treated as a limited 
partner of Broadview for tax purposes (and seemingly all other purposes) 
ever since. 
SC-2023-0806 
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But, not long after this transfer, difficulties arose in the husband 
and wife's marriage, which eventually led the wife to file for divorce.  The 
wife represents that, during the course of the divorce proceedings, she 
came to believe that her husband was using Broadview as means to 
improperly hide and transfer marital assets.  In 2022, she attempted to 
investigate this concern by requesting access to Broadview's records.  
After those requests were denied, she filed this suit, both individually 
and derivatively as a minority owner of Broadview.  She asserted 
individual claims for declaratory judgment, constructive trust, and fraud 
and derivative claims for breach of contract and fraud.  She also filed a 
motion seeking to compel production of various documents and 
information.   
The husband and Broadview moved to dismiss the wife's derivative 
claims because, they said, she lacked statutory "standing" to sue on 
behalf of Broadview.6  In particular, they argued that the wife could not 
 
6The parties have used the term "standing" to describe the 
authority to bring a derivative action, but that loose use of the term -- 
while once commonplace -- has fallen out of favor.  As this Court 
explained in Ex parte 4tdd.com, Inc., 306 So. 3d 8, 16 (Ala. 2020)  
"questions pertaining to the heightened pleading requirements of Rule 
23.1[, Ala. R. Civ. P.,] do not invoke the plaintiff's standing" -- in the 
ordinary, jurisdictional sense -- but, "rather, Rule 23.1 imposes a 
SC-2023-0806 
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sue because she is not, and never has been, a limited partner of 
Broadview -- instead, they argued, she is a mere transferee.  And under 
Alabama law, they argued, only partners are permitted to file claims on 
the partnership's behalf.     
A few days later, the wife filed a motion in the trial court seeking 
to compel responses to her requests for production and interrogatories, 
and the trial court granted that motion before the husband had a chance 
to oppose it.  The trial court's order required the husband to answer the 
wife's requests for production and interrogatories within 10 days.   
The next day, the husband filed a motion for protective order, 
effectively seeking to undo the trial court's earlier ruling and prevent his 
wife from obtaining discovery.  The trial court held a hearing, in which it 
stated that it was planning to deny the motion to dismiss and in which it 
directed the parties to work out the discovery issues on their own.  
Shortly thereafter, the trial court entered an order denying the motion to 
dismiss, but it made no ruling on (and did not mention) his motion for 
protective order.   
 
procedural bar on a derivative action" when the plaintiff fails to comply 
with the pleading requirements of that rule.  306 So. 3d at 16. 
SC-2023-0806 
22 
 
The husband then filed this petition for a writ of mandamus, asking 
us to (1) direct the trial court to dismiss the wife's derivative claims in 
the proceeding below and (2) enter a protective order prohibiting 
discovery into those claims.   
Analysis 
 
The first and primary question is whether the wife qualifies as a 
limited partner of Broadview, empowered to sue on its behalf.  Under 
Alabama statutory law and the terms of Broadview's partnership 
agreement, the answer to that question is no.  In the alternative, the wife 
argues that the husband has either waived Broadview's ability to 
challenge her partnership status or is equitably estopped from 
challenging it.  Those arguments are foreclosed by statute and by this 
Court's precedents.  Accordingly, the husband has demonstrated a clear 
legal right to dismissal of the wife's derivative claims.     
A. The Wife is Not a Limited Partner 
The wife's ability to sue on behalf of Broadview turns on whether 
she is a "partner" of Broadview or, instead, merely a "transferee."  That 
is because both the Alabama Limited Partnership Law, § 10A-9A-1.01 et 
seq., Ala. Code 1975, and our rules of civil procedure provide that only "a 
SC-2023-0806 
23 
 
partner" can commence or maintain a derivative action on behalf of a 
limited partnership.  § 10A-9A-9.03, Ala. Code 1975; Ala. R. Civ. P. 23.1.  
A mere transferee has no such authority.  
 
To understand which of those two labels applies to the wife's 
interest in Broadview, we must look to Alabama statutory law.  Section 
10A-9A-1.02(7)(A)(i), Ala. Code 1975, defines a "limited partner" as 
someone who has been "admitted as a limited partner under Section 10A-
9A-3.01."  There are only four ways to become admitted as a limited 
partner under § 10A-9A-3.01, Ala. Code 1975:  (1) as provided in the 
partnership agreement; (2) as the result of a conversion or merger; (3) 
with the consent of all partners; or (4) when there are no remaining 
partners and certain triggering conditions are met.  A "transferee," by 
contrast, is defined as "a person to which all or part of a transferable 
interest has been transferred, whether or not the transferor is a partner."  
§ 10A-9A-1.02(15).  A "transferable interest" is "a partner's right to 
receive distributions from a limited partnership" -- in other words, the 
right to receive money.  § 10A-9A-1.02(14).  But unlike a limited partner, 
a mere transferee is not entitled to "participate in the management" of 
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the partnership or to "access … information concerning the partnership's 
activities and affairs."  § 10A-9A-7.02(a)(4)(A) and (B), Ala. Code 1975.  
Based on the undisputed facts before us, the wife has not satisfied 
any of the four avenues for becoming a limited partner set out in § 10A-
9A-3.01: (1) she is not and never has been named as a partner in 
Broadview's partnership agreement;7 (2) she did not join or acquire 
Broadview by way of a conversion or merger; (3) she never obtained the 
"consent of all partners"; and (4) Broadview has other remaining partners 
(namely, the husband and the first two sons).   
But the wife attempts to get around this problem by arguing that 
there is an unlisted fifth way to acquire partnership status: inheritance 
 
7The wife concedes that she is not named in Broadview's 
partnership agreement, but briefly argues that the terms of the 
agreement implicitly authorized her to become a partner after the third 
son's death.  This argument is unavailing.  She relies on § 12.03 of the 
partnership agreement, which says that, upon a partner's death, the 
partner's estate "shall sell his or its Partnership Unit(s) to the 
Partnership as provided in this agreement."  But that provision simply 
provides that a deceased partner's estate is required to provide 
Broadview the option to purchase back the decedent's partnership units 
-- an option which, everyone agrees, Broadview did not exercise here.  
Section 12.03 says nothing about what happens if Broadview chooses not 
to exercise its buyback rights and does not suggest that the deceased 
partner's estate can sell or transfer "limited partner" status in the 
absence of a buyback agreement.   
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or transfer.  In particular, she contends that she first became a limited 
partner when she inherited the third son's partnership interest after his 
death and that she acquired additional partnership status when the 
husband gave her his portion of their son's partnership interest. 
The wife's theory is foreclosed by the Alabama Limited Partnership 
Law.  Under that law, when a limited partner dies, he "disassociates" 
from the partnership.  Ala. Code 1975, § 10A-9A-6.01(b)(5).  The deceased 
partner's heirs can inherit his "transferrable interest" in the partnership, 
but they cannot inherit his status or "capacity as a limited partner."  Ala. 
Code 1975, § 10A-9A-6.02(a)(3) (emphasis added).  The only way to 
receive that status or capacity is by satisfying one of the four criteria 
listed in § 10A-9A-3.01 -- which, as discussed above, the wife has not 
done.   
The upshot here is that the third son could not transfer (and the 
wife could not inherit) his status as a limited partner.  All he could 
transfer was his "transferrable interest" in Broadview -- i.e., his right to 
receive distributions.  The same is true for the husband.  When the 
husband gave away his share of the ownership interest that he had 
inherited from the third son, all that he inherited (and all that he could 
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26 
 
pass on) was the transferrable interest, not the third son's status of being 
a limited partner.   
B. The Wife Did Not Acquire De Facto Limited-Partnership Status 
Through Waiver or Estoppel 
The wife next raises two fallback arguments, both of which fail.  
First, she argues that the husband -- by treating her as a limited partner 
in the past -- waived Broadview's ability to challenge her claimed 
partnership status.  She rests this argument on the text of § 10A-9A-
4.02(a), Ala. Code 1975, which provides: 
"Each general partner is an agent of the limited partnership 
for the purposes of its activities and affairs. An act of a general 
partner, including the signing of a writing in the partnership's 
name, for apparently carrying on in the ordinary course the 
limited partnership's activities and affairs or activities and 
affairs of the kind carried on by the limited partnership binds 
the limited partnership, unless the general partner did not 
have authority to act for the limited partnership in the 
particular matter and the person with which the general 
partner was dealing knew, had received a notification, or had 
notice under Section 10A-9A-1.03(d) that the general partner 
lacked authority." 
(Emphasis added.)  According to the wife, this provision establishes that 
when the husband agreed to treat her as a limited partner, he "b[ound] 
the limited partnership" to that position.   
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27 
 
But this argument, like her earlier ones, runs headlong into 
statutory text.  That is because even if we assume that a partnership's 
internal management agreements fall within the scope of § 10A-9A-
4.02(a) (a question about which I have serious doubts), the wife would 
still be ineligible to claim waiver under that section because she knew or 
should have known that "the general partner [her husband] lacked 
authority" to unilaterally confer partnership status.   
Under governing law and the terms of Broadview's partnership 
agreement, the general partner plainly lacked power to admit an 
additional limited partner without the unanimous consent of all the other 
partners.  See § 10A-9A-3.01; Broadview Agreement Art. X (specifying 
that no new limited partner can be admitted "without the unanimous 
consent of all the Partners" and that "[a]ny admission of any Additional 
Limited Partner in violation of this Article shall be null and void and of 
no force and effect whatsoever").  The wife had notice of both Alabama 
law and the terms of Broadview's agreement.  See Ex parte Hicks, 153 
So. 3d 53, 65 (Ala. 2014) ("'All persons are presumed to know the law.'" 
(citation omitted)).  She therefore had either actual or constructive 
knowledge that the husband could not unilaterally make her a limited 
SC-2023-0806 
28 
 
partner.  As a result, she is not eligible to take advantage of § 10A-9A-
4.02(a)'s safe harbor.   
 
The wife's second and final fallback argument is that the husband 
is equitably estopped from arguing that she is not a partner.  She 
emphasizes that she has consistently been treated as a limited partner 
for tax purposes and that her husband -- both in the years prior to this 
lawsuit and in his initial discovery responses -- referred to her as a 
limited partner.   
While this type of conduct would ordinarily present a strong case 
for estoppel, our Court has consistently held that, "among the parties to 
a partnership, membership cannot be acquired by estoppel." Steele v. 
Rosenfeld, LLC, 936 So. 2d 488, 495 (Ala. 2005) (emphasis omitted); see 
also Vergos v. Waterman Bldg. P'ship, 613 So. 2d 383, 389 (Ala. 1993) 
(explaining that this Court has long "held that a partnership 'is never 
established by implication or operation of law, at least in the situation 
where the dispute concerning the existence of a partnership is between 
the parties'" (citation omitted)).  The wife has not challenged our caselaw 
on this point or asked us to overrule it.  Accordingly, those precedents 
control here, and they squarely foreclose her equitable-estoppel theory.  
SC-2023-0806 
29 
 
Conclusion 
 
The wife is not a limited partner of Broadview and cannot sue on 
its behalf.   Respectfully, the Court should grant the husband's petition 
for a writ of mandamus to the extent that it asks us to direct to the trial 
court to dismiss the wife's derivative claims.  We should deny as moot the 
remainder of the petition, which relates to discovery issues surrounding 
those claims.    
 
Shaw, J., concurs.