Title: DGB, LLC et al. v. Michael Hinds et al.

State: alabama

Issuer: Alabama Supreme Court

Document:

REL: 06/30/2010 
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 
OCTOBER TERM, 2009-2010 
1081767 
DGB, LLC, 
e t a l . 
v. 
M i c h a e l Hinds e t a l . 
Appeal from Baldwin C i r c u i t 
Court 
(CV-08-9001120) 
LYONS, 
J u s t i c e . 
DGB, LLC ("DGB"), D a v i d P. H e r r i c k , B r a d l e y P. K a t z , a n d 
C. G i b s o n V a n c e a p p e a l 
f r o m a j u d g m e n t o f 
t h e 
B a l d w i n 
C i r c u i t 
C o u r t d i s m i s s i n g t h e i r c l a i m s a g a i n s t m u l t i p l e d e f e n d a n t s . 
We 
a f f i r m t h e t r i a l c o u r t ' s j u d g m e n t i n 
p a r t , r e v e r s e i t 
i n p a r t , 
and 
remand 
t h e c a s e 
t o t h e 
t r i a l 
c o u r t 
f o r f u r t h e r 
1081767 
p r o c e e d i n g s . 
P r o c e d u r a l 
H i s t o r y 
H e r r i c k , K a t z , and V a n c e own DGB. 
DGB i s p a r t - o w n e r o f 
a 
l i m i t e d 
l i a b i l i t y 
company 
known as Bon H a r b o r , LLC 
("Bon 
H a r b o r " ) . 
On F e b r u a r y 
5, 2008, DGB, 
H e r r i c k , K a t z , and V a n c e 
( c o l l e c t i v e l y 
" t h e 
i n v e s t o r s " ) 
s u e d 
M i c h a e l 
H i n d s ; 
P a u l 
K i r k l a n d ; Ray J a c o b s e n ; D e c a t u r , LLC ( " D e c a t u r " ) ; G u l f S t r e a m 
P r o p e r t i e s , I n c . ( " G u l f S t r e a m " ) ; F r u i t t i c h e r - L o w e r y A p p r a i s a l 
G r o u p , I n c . ( " F r u i t t i c h e r " ) ; and S e a s i d e 
T i t l e Company, LLC 
( " S e a s i d e " ) , 
i n t h e M o n t g o m e r y 
C i r c u i t C o u r t . 
The 
c o m p l a i n t 
s t a t e d 
c l a i m s 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n , 
f r a u d u l e n t 
s u p p r e s s i o n , 
s e c u r i t i e s f r a u d , s h a r e h o l d e r o p p r e s s i o n , 
b r e a c h 
o f 
f i d u c i a r y 
d u t y , 
n e g l i g e n c e , 
and 
c o n s p i r a c y 
a g a i n s t 
t h e 
v a r i o u s named d e f e n d a n t s . 
The c o m p l a i n t a l l e g e d m i s c o n d u c t b y 
t h e d e f e n d a n t s r e l a t e d t o Bon H a r b o r ' s J u l y 2005 p u r c h a s e o f 
r e a l p r o p e r t y 
l o c a t e d i n B a l d w i n 
C o u n t y . 
The i n v e s t o r s amended t h e i r c o m p l a i n t i n May 2008 t o add 
E d e n J o n e s H i n d s , M i c h a e l H i n d s ' s w i f e , as a d e f e n d a n t and t o 
add 
c l a i m s 
a g a i n s t 
t h e 
H i n d s e s 
f o r 
c o n v e r s i o n , 
u n j u s t 
e n r i c h m e n t , 
and f r a u d u l e n t 
t r a n s f e r . 
I n O c t o b e r 2008, t h e 
a c t i o n was 
t r a n s f e r r e d t o t h e B a l d w i n 
C i r c u i t 
C o u r t . 
G u l f 
2 
1081767 
S t r e a m and K i r k l a n d s u b s e q u e n t l y 
moved t o d i s m i s s t h e c l a i m s 
a g a i n s t them. 
T h e y a r g u e d 
t h a t 
t h a t t h e i n v e s t o r s ' c l a i m s 
were b a r r e d b y t h e a p p l i c a b l e s t a t u t e s o f l i m i t a t i o n ; t h a t t h e 
i n v e s t o r s 
l a c k e d s t a n d i n g ; t h a t t h e i n v e s t o r s h a d f a i l e d t o 
s t a t e a c l a i m upon w h i c h 
r e l i e f 
c o u l d be g r a n t e d , 
s e e 
R u l e 
1 2 ( b ) ( 6 ) , A l a . 
R. C i v . 
P.; and t h a t t h e i n v e s t o r s h a d 
f a i l e d 
t o p l e a d 
t h e i r 
f r a u d c l a i m s w i t h p a r t i c u l a r i t y as r e q u i r e d b y 
R u l e 9 ( b ) , A l a . 
R. C i v . 
P. 
D e c a t u r and t h e H i n d s e s 
f i l e d an 
i d e n t i c a l m o t i o n . 
The i n v e s t o r s r e s p o n d e d and moved t o amend 
t h e i r c o m p l a i n t . 
On M a r c h 3, 2009, e x c e p t f o r 
t h e f r a u d u l e n t -
t r a n s f e r c l a i m a s s e r t e d a g a i n s t t h e H i n d s e s , 
t h e t r i a l 
c o u r t 
d i s m i s s e d t h e i n v e s t o r s ' 
c l a i m s a g a i n s t G u l f S t r e a m , K i r k l a n d , 
D e c a t u r , 
and t h e H i n d s e s . 
On t h e same d a y , t h e t r i a l 
c o u r t 
g r a n t e d 
t h e 
i n v e s t o r s ' m o t i o n 
f o r l e a v e 
t o amend 
t h e i r 
c o m p l a i n t . 
J a c o b s e n , 
F r u i t t i c h e r , and S e a s i d e 
t h e n moved t o d i s m i s s 
t h e 
i n v e s t o r s ' c l a i m s 
a g a i n s t 
them, 
a s s e r t i n g 
t h e 
same 
a r g u m e n t s as t h e o t h e r 
d e f e n d a n t s . 
The i n v e s t o r s r e s p o n d e d 
and 
f i l e d a s e c o n d amended c o m p l a i n t , 
a d d i n g a c l a i m f o r an 
a c c o u n t i n g and d i s s o l u t i o n o f Bon H a r b o r . 
W i t h i n a week, t h e 
i n v e s t o r s 
f i l e d a t h i r d amended c o m p l a i n t , 
s t a t i n g t h e same 
3 
1081767 
c l a i m s 
and n o t i n g 
t h a t t h e new 
c o m p l a i n t 
" a d d r e s s [ e d ] 
t h e 
[ t r i a l 
c o u r t ' s ] 
c o n c e r n 
o v e r 
t h e 
s p e c i f i c i t y 
o f 
t h e 
[ i n v e s t o r s ' ] 
f r a u d a l l e g a t i o n s . " 
The d e f e n d a n t s a l l r e n e w e d 
t h e i r m o t i o n s t o d i s m i s s , 
s t a t i n g t h e same g r o u n d s as 
t h e i r 
p r e v i o u s 
m o t i o n s . 
U l t i m a t e l y , i n a s e r i e s o f o r d e r s , t h e 
t r i a l 
c o u r t 
d i s m i s s e d 
a l l 
b u t t h e i n v e s t o r s ' f r a u d u l e n t -
t r a n s f e r 
c l a i m a g a i n s t t h e H i n d s e s . 
On A u g u s t 24, 2009, on 
t h e i n v e s t o r s ' 
m o t i o n , t h e t r i a l c o u r t c e r t i f i e d i t s o r d e r s o f 
d i s m i s s a l as 
f i n a l 
u n d e r R u l e 
5 4 ( b ) , A l a . 
R. C i v . P. 
The 
i n v e s t o r s 
a p p e a l e d . 
F a c t s as A l l e g e d i n t h e T h i r d Amended C o m p l a i n t 
I n 
t h e i r 
b r i e f on a p p e a l , t h e i n v e s t o r s e x p r e s s l y w a i v e 
any 
a p p e a l 
f r o m t h e t r i a l 
c o u r t ' s d i s m i s s a l o f t h e i r 
c l a i m s 
a g a i n s t 
F r u i t t i c h e r and S e a s i d e 
and f r o m t h e t r i a l 
c o u r t ' s 
d i s m i s s a l 
o f 
t h e i r 
c l a i m s 
a l l e g i n g 
c o n v e r s i o n 
a n d 
u n j u s t 
e n r i c h m e n t a g a i n s t t h e H i n d s e s . 
The i n v e s t o r s ' f r a u d u l e n t -
t r a n s f e r c l a i m a g a i n s t t h e H i n d s e s r e m a i n s p e n d i n g b e f o r e t h e 
t r i a l 
c o u r t . 
A c c o r d i n g l y , t h e o n l y c l a i m s b e f o r e us a r e t h e 
i n v e s t o r s ' c l a i m s e e k i n g an a c c o u n t i n g and d i s s o l u t i o n o f Bon 
H a r b o r and t h e i r c l a i m s a l l e g i n g f r a u d u l e n t m i s r e p r e s e n t a t i o n , 
f r a u d u l e n t 
s u p p r e s s i o n , 
s e c u r i t i e s 
f r a u d , 
s h a r e h o l d e r 
4 
1081767 
o p p r e s s i o n , 
b r e a c h 
o f 
f i d u c i a r y 
d u t y , 
n e g l i g e n c e , 
and 
c o n s p i r a c y 
a g a i n s t 
G u l f 
S t r e a m , 
K i r k l a n d , 
D e c a t u r , M i c h a e l 
H i n d s 
( " H i n d s " ) , 
and 
J a c o b s o n . 
I n 
t h e i r 
t h i r d 
amended 
c o m p l a i n t t h e i n v e s t o r s a l l e g e t h e f o l l o w i n g f a c t s r e l e v a n t t o 
t h o s e 
c l a i m s . 
H i n d s and K i r k l a n d , 
t h r o u g h o t h e r e n t i t i e s , 
own 
D e c a t u r 
and 
G u l f 
S t r e a m . 
I n 
e a r l y 
2005, 
D e c a t u r 
and 
G u l f 
S t r e a m 
f o r m e d 
Bon 
H a r b o r 
t o p u r c h a s e 
and d e v e l o p 
r e a l p r o p e r t y i n 
B a l d w i n C o u n t y . 
A t a b o u t t h e same t i m e , H i n d s and 
K i r k l a n d 
a s k e d H e r r i c k , K a t z , and V a n c e t o i n v e s t i n t h e 
d e v e l o p m e n t . 
H e r r i c k , 
K a t z , 
and 
V a n c e 
a g r e e d , 
and 
i n J u n e 
2005, 
t h e i r 
company, 
DGB, 
p u r c h a s e d 
a 
4 0 % 
i n t e r e s t 
i n Bon 
H a r b o r 
f o r 
$ 2 , 0 0 0 , 0 0 0 . 
Bon H a r b o r , t h e r e f o r e , i s owned by D e c a t u r , G u l f 
S t r e a m , and 
DGB. 
H i n d s and K i r k l a n d a c t e d as m a n a g e r s o f Bon H a r b o r . 
The 
i n v e s t o r s 
a l l e g e 
t h a t t h e y e n t r u s t e d H i n d s and 
K i r k l a n d 
" t o 
n e g o t i a t e 
and 
e x e c u t e 
l a n d 
t r a n s a c t i o n s 
on 
b e h a l f 
o f 
Bon 
H a r b o r 
b e c a u s e 
o f 
t h e i r 
p u r p o r t e d 
e x p e r t i s e 
and 
t h e i r 
r e s p e c t i v e r o l e s as M a n a g i n g Members h a v i n g a u t h o r i t y t o make 
m a n a g e r i a l 
d e c i s i o n s . " 
The 
i n v e s t o r s 
a l s o 
a l l e g e 
t h a t , 
as 
m a n a g e r s 
and, 
t h r o u g h 
D e c a t u r 
and 
G u l f 
S t r e a m , 
as 
a l l e g e d 
5 
1081767 
m a j o r i t y members o f Bon H a r b o r , H i n d s and K i r k l a n d owed them 
" f i d u c i a r y 
o b l i g a t i o n s 
t o p r o t e c t 
t h e l e g i t i m a t e 
i n v e s t m e n t 
e x p e c t a t i o n s o f t h e [ i n v e s t o r s ] and t o d i s c l o s e m a t e r i a l 
f a c t s 
s u r r o u n d i n g Bon H a r b o r ' s b u s i n e s s a c t i v i t i e s , 
i n c l u d i n g 
f a c t s 
s u r r o u n d i n g t h e p u r c h a s e o f " r e a l p r o p e r t y b y Bon 
H a r b o r . 
Bon 
H a r b o r 
p u r c h a s e d 
14.36 
a c r e s 
o f 
r e a l 
p r o p e r t y i n 
B a l d w i n C o u n t y 
("the p r o p e r t y " ) 
on 
J u l y 
6, 2005 
("the 
J u l y 
2005 
t r a n s a c t i o n " ) .
1 
H i n d s and K i r k l a n d 
r e p r e s e n t e d t o t h e 
i n v e s t o r s 
t h a t 
t h e 
p u r c h a s e 
p r i c e 
f o r t h e 
p r o p e r t y 
was 
$ 1 0 , 0 0 0 , 0 0 0 . 
A t H i n d s and K i r k l a n d ' s 
r e q u e s t , 
F r u i t t i c h e r 
a p p r a i s e d t h e p r o p e r t y a t a p p r o x i m a t e l y $ 1 4 , 0 0 0 , 0 0 0 . 
A l t h o u g h 
t h e 
i n v e s t o r s ' 
a l l e g a t i o n s 
o f 
t h i s 
f a c t 
a r e 
u n c l e a r , 
i t 
a p p e a r s 
t h a t 
S e a s i d e 
a c t e d 
as 
c l o s i n g 
a g e n t 
f o r 
t h e 
t r a n s a c t i o n . 
The i n v e s t o r s 
c o n t r i b u t e d $2,500,000 t o w a r d t h e 
p u r c h a s e p r i c e ; t h e t h i r d amended c o m p l a i n t d o e s n o t 
s p e c i f y 
w h e t h e r t h i s c o n t r i b u t i o n was made t h r o u g h DGB o r by 
H e r r i c k , 
K a t z , 
and 
V a n c e 
d i r e c t l y . 
The 
r e m a i n i n g 
$ 7 , 5 0 0 , 0 0 0 
was 
f i n a n c e d 
t h r o u g h a l o a n f r o m U n i t e d Bank, w h i c h H e r r i c k , 
K a t z , 
and V a n c e p e r s o n a l l y 
g u a r a n t e e d . 
H i n d s and K i r k l a n d d i d n o t 
1 A l t h o u g h t h e c o m p l a i n t a l l e g e s t h a t t h i s o c c u r r e d on J u l y 
6, 2005, o t h e r d o c u m e n t s i n t h e r e c o r d 
i n d i c a t e t h a t t h e d a t e 
on w h i c h t h e p u r c h a s e o c c u r r e d was 
J u l y 8, 2005. 
6 
1081767 
c o n t r i b u t e any f u n d s t o t h e J u l y 2005 t r a n s a c t i o n , and i t 
i s 
u n c l e a r w h e t h e r t h e y g u a r a n t e e d t h e l o a n f r o m U n i t e d 
Bank. 
Bon H a r b o r p u r c h a s e d t h e p r o p e r t y 
f r o m J a c o b s e n . 
Unknown 
t o t h e i n v e s t o r s , 
j u s t d a y s b e f o r e 
Bon H a r b o r p u r c h a s e d t h e 
p r o p e r t y f o r 
$ 1 0 , 0 0 0 , 0 0 0 , J a c o b s e n h a d p u r c h a s e d t h e p r o p e r t y 
f o r $ 5 , 0 0 0 , 0 0 0 . 
The 
t h i r d amended c o m p l a i n t d o e s n o t 
s t a t e 
f r o m whom J a c o b s e n 
p u r c h a s e d 
t h e p r o p e r t y . 
The 
i n v e s t o r s 
a l l e g e t h a t H i n d s and K i r k l a n d , and t h r o u g h them D e c a t u r and 
G u l f S t r e a m , knew t h a t J a c o b s e n h a d p u r c h a s e d t h e p r o p e r t y f o r 
o n e - h a l f 
what Bon H a r b o r p a i d f o r i t 
b u t c o n c e a l e d t h a t 
f a c t 
f r o m t h e i n v e s t o r s , " b e f o r e , 
d u r i n g , and a f t e r " t h e J u l y 2005 
t r a n s a c t i o n . 
The 
i n v e s t o r s 
a l l e g e 
t h a t 
t h e 
i n f o r m a t i o n 
c o n c e a l e d 
was 
" e n t i r e l y 
u n d e r 
t h e 
c o n t r o l " 
o f 
H i n d s 
a n d 
K i r k l a n d and t h a t t h e i n v e s t o r s " d i d 
n o t have a c c e s s " 
t o i t . 
The i n v e s t o r s a l s o a l l e g e t h a t H i n d s , K i r k l a n d , D e c a t u r , and 
G u l f S t r e a m h a d f i d u c i a r y d u t i e s t o d i s c l o s e f a c t s m a t e r i a l t o 
t h e 
J u l y 
2005 
t r a n s a c t i o n - - i n c l u d i n g 
J a c o b s e n ' s 
p u r c h a s e 
p r i c e - - t o them b u t f a i l e d t o do s o . 
The i n v e s t o r s a l s o a l l e g e t h a t b e f o r e 
J a c o b s e n p u r c h a s e d 
t h e 
p r o p e r t y , 
he 
" o b t a i n e d " 
f u n d s 
f r o m Bon H a r b o r and 
t h a t 
H i n d s and K i r k l a n d u s e d Bon H a r b o r a s s e t s t o o b t a i n o p t i o n s on 
7 
1081767 
and t o d e v e l o p 
t h e i r own p r o p e r t i e s 
a d j a c e n t t o t h e 
p r o p e r t y 
p u r c h a s e d b y Bon H a r b o r . 
The i n v e s t o r s 
a l l e g e t h a t H i n d s and 
K i r k l a n d c o n c e a l e d a l l o f t h i s 
i n f o r m a t i o n 
f r o m them. 
The 
i n v e s t o r s a l l e g e t h a t t h e y " r e l i e d on t h e d e f e n d a n t s ' 
s i l e n c e by f o r g o i n g 
i n d e p e n d e n t 
i n i t i a t i v e s t o o b t a i n t h e 
p r o p e r t y 
r e c o r d s 
f o r t h e m s e l v e s 
t o 
l e a r n 
w h e t h e r 
t h e i r 
f i d u c i a r i e s were c o m m i t t i n g a f r a u d . " 
They a l s o 
a l l e g e 
t h a t 
t h e y d i d n o t h a v e 
a c t u a l k n o w l e d g e o f t h e c o n c e a l e d 
f a c t s 
u n t i l 
2007 when 
t h e y 
were 
d e p o s e d 
i n s e p a r a t e 
l i t i g a t i o n 
i n i t i a t e d b y U n i t e d 
B a n k 
r e l a t e d t o t h e t r a n s a c t i o n 
("the 
U n i t e d 
B a n k 
l i t i g a t i o n " ) and t h a t 
t h e y 
c o u l d 
n o t have h a d 
c o n s t r u c t i v e k n o w l e d g e o f t h e f a c t s c o n c e a l e d u n t i l F e b r u a r y 
6, 2006, when 
H i n d s and K i r k l a n d 
s e n t 
them t a x d o c u m e n t s 
r e l a t e d t o t h e J u l y 2005 
t r a n s a c t i o n . 
S t a n d a r d o f R e v i e w 
We r e v i e w t h e t r i a l 
c o u r t ' s 
d i s m i s s a l o f t h e i n v e s t o r s ' 
c l a i m s de n o v o . 
"On 
a p p e a l , a d i s m i s s a l i s n o t e n t i t l e d t o a 
p r e s u m p t i o n 
o f 
c o r r e c t n e s s . 
J o n e s 
v . L e e 
C o u n t y  
C o m m i s s i o n , 394 So. 2d 928, 930 
( A l a . 1 9 8 1 ) ; 
A l l e n  
v. J o h n n y B a k e r H a u l i n g , 
I n c . , 
545 So. 2d 7 7 1 , 772 
( A l a . C i v . 
App. 1 9 8 9 ) . The a p p r o p r i a t e 
s t a n d a r d o f 
r e v i e w u n d e r R u l e 
1 2 ( b ) ( 6 ) [ , 
A l a . 
R. C i v . 
P . , ] i s 
w h e t h e r , when t h e a l l e g a t i o n s o f t h e c o m p l a i n t a r e 
v i e w e d 
most 
s t r o n g l y 
i n t h e p l e a d e r ' s 
f a v o r , i t 
8 
1081767 
a p p e a r s 
t h a t 
t h e 
p l e a d e r 
c o u l d 
p r o v e 
any 
s e t 
o f 
c i r c u m s t a n c e s 
t h a t 
w o u l d 
e n t i t l e 
h e r 
t o 
r e l i e f . 
R a l e y v. C i t i b a n c o f A l a b a m a / A n d a l u s i a , 474 
So. 
2d 
640, 
641 
( A l a . 1 9 8 5 ) ; 
H i l l 
v. 
F a l l e t t a , 589 
So. 
2d 
746 
( A l a . 
C i v . 
App. 
1 9 9 1 ) . 
I n 
m a k i n g 
t h i s 
d e t e r m i n a t i o n , 
t h i s C o u r t does n o t c o n s i d e r 
w h e t h e r 
t h e 
p l a i n t i f f 
w i l l 
u l t i m a t e l y 
p r e v a i l , 
b u t 
o n l y 
w h e t h e r 
she 
may 
p o s s i b l y 
p r e v a i l . 
F o n t e n o t 
v. 
 
B r a m l e t t , 
470 
So. 2d 669, 
671 
( A l a . 1 9 8 5 ) ; R i c e 
v. 
 
U n i t e d 
I n s . Co. 
o f A m e r i c a , 
465 
So. 
2d 1100, 
1101 
( A l a . 
1 9 8 4 ) . We n o t e t h a t a R u l e 1 2 ( b ) ( 6 ) 
d i s m i s s a l 
i s p r o p e r o n l y when i t a p p e a r s b e y o n d d o u b t t h a t t h e 
p l a i n t i f f 
c a n p r o v e no 
s e t o f f a c t s i n s u p p o r t o f 
t h e 
c l a i m 
t h a t 
w o u l d 
e n t i t l e 
t h e 
p l a i n t i f f 
t o 
r e l i e f . 
G a r r e t t v. Hadden, 495 So. 2d 616, 617 ( A l a . 
1 
98 6 ) ; 
H i l l 
v. 
K r a f t , 
I n c . , 496 
So. 
2d 
768, 
769 
( A l a . 
1 9 8 6 ) . " 
Nance v. M a t t h e w s , 
622 So. 2d 297, 299 
( A l a . 1 9 9 3 ) . 
A n a l y s i s 
The 
t r i a l 
c o u r t 
d i d n o t 
s p e c i f y 
t h e 
g r o u n d s 
f o r i t s 
d i s m i s s a l 
o f t h e 
i n v e s t o r s ' 
c l a i m s . 
A c c o r d i n g l y , 
i n 
t h e i r 
b r i e f 
on 
a p p e a l , 
t h e 
i n v e s t o r s 
a r g u e 
t h a t 
t h e 
t r i a l 
c o u r t 
e r r e d 
i n d i s m i s s i n g 
t h e i r 
c l a i m s 
as t o e a c h o f t h e 
g r o u n d s 
a s s e r t e d 
by 
H i n d s , 
D e c a t u r , 
K i r k l a n d , 
G u l f 
S t r e a m , 
and 
J a c o b s o n 
( 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 
as 
" t h e 
d e f e n d a n t s " ) i n t h e i r m o t i o n s t o 
d i s m i s s . 
I . 
S t a t u t e s 
o f L i m i t a t i o n 
The e v e n t s g i v i n g r i s e t o t h e i n v e s t o r s ' c l a i m s 
o c c u r r e d 
i n J u l y 2005. 
The i n v e s t o r s 
f i l e d t h e i r 
i n i t i a l c o m p l a i n t i n 
9 
1081767 
F e b r u a r y 
2008, 
more 
t h a n 
two 
and a 
h a l f 
y e a r s 
l a t e r . 
R e g a r d i n g 
t h e 
i n v e s t o r s ' 
c l a i m 
f o r an 
a c c o u n t i n g 
and 
d i s s o l u t i o n 
o f Bon 
H a r b o r , 
§ 
1 0 - 1 2 - 3 8 , 
A l a . Code 1975, 
p r o v i d e s : 
"On a p p l i c a t i o n b y o r f o r 
a member, t h e c i r c u i t 
c o u r t 
f o r t h e c o u n t y 
i n w h i c h 
t h e 
a r t i c l e s 
o f 
o r g a n i z a t i o n a r e f i l e d may d e c r e e d i s s o l u t i o n o f a 
l i m i t e d 
l i a b i l i t y 
company 
w h e n e v e r 
i t i s n o t 
r e a s o n a b l y p r a c t i c a b l e t o c a r r y on t h e b u s i n e s s i n 
c o n f o r m i t y 
w i t h 
t h e 
a r t i c l e s 
o f 
o r g a n i z a t i o n 
o r 
o p e r a t i n g 
a g r e e m e n t . " 
( E m p h a s i s 
added.) 
A c c o r d i n g l y , 
DGB, 
as a member 
o f Bon 
H a r b o r , c o u l d h a v e s o u g h t a j u d i c i a l d i s s o l u t i o n o f Bon H a r b o r 
" w h e n e v e r " 
DGB 
c o u l d 
show 
t h a t 
i t was 
" n o t 
r e a s o n a b l y 
p r a c t i c a b l e t o c a r r y on t h e b u s i n e s s i n c o n f o r m i t y 
w i t h " Bon 
H a r b o r ' s a r t i c l e s o f o r g a n i z a t i o n . 
§ 1 0 - 1 2 - 3 8 . 
As a r e s u l t , 
t h e r e 
i s no b a s i s 
f o r c o n c l u d i n g 
t h a t 
t h i s 
c l a i m i s 
t i m e -
b a r r e d by a s t a t u t e o f l i m i t a t i o n s . 
A t w o - y e a r s t a t u t o r y l i m i t a t i o n s 
p e r i o d 
a p p l i e s t o e a c h 
o f t h e i n v e s t o r s ' r e m a i n i n g c l a i m s . 
See, e . g . , §§ 
6 - 2 - 3 8 ( l ) , 
and 
8 - 6 - 1 9 ( f ) , 
A l a . 
Code 1975. 
The d e f e n d a n t s , 
t h e r e f o r e , 
a r g u e 
t h a t 
t h e s e 
c l a i m s 
a r e u n t i m e l y 
and a r e b a r r e d by t h e 
a p p l i c a b l e s t a t u t e s o f l i m i t a t i o n . 
The i n v e s t o r s a r g u e 
t h a t 
a l l o f t h e i r r e m a i n i n g c l a i m s 
f a l l 
w i t h i n t h e s a v i n g s 
c l a u s e 
10 
1081767 
o f § 6-2-3, A l a . Code 1975, w h i c h s t a t e s : 
" I n 
a c t i o n s 
s e e k i n g 
r e l i e f 
on t h e g r o u n d 
o f 
f r a u d where t h e s t a t u t e has c r e a t e d a b a r , t h e c l a i m 
must n o t be c o n s i d e r e d 
as h a v i n g 
a c c r u e d 
u n t i l t h e 
d i s c o v e r y 
b y 
t h e 
a g g r i e v e d 
p a r t y 
o f 
t h e 
f a c t 
c o n s t i t u t i n g t h e f r a u d , a f t e r w h i c h he must h a v e two 
y e a r s 
w i t h i n w h i c h t o p r o s e c u t e 
h i s a c t i o n . " 
The 
i n v e s t o r s a r g u e 
t h a t 
§ 6-2-3 
a p p l i e s n o t o n l y t o 
t h e i r 
f r a u d - b a s e d 
c l a i m s - - f r a u d u l e n t 
m i s r e p r e s e n t a t i o n , 
f r a u d u l e n t 
s u p p r e s s i o n , 
and 
s e c u r i t i e s 
f r a u d - - b u t 
a l s o 
t o 
t h e i r 
r e m a i n i n g 
c l a i m s o f s h a r e h o l d e r 
o p p r e s s i o n , 
b r e a c h o f 
f i d u c i a r y d u t y , 
c i v i l 
c o n s p i r a c y , and n e g l i g e n c e .
2 
We 
a g r e e . 
T h i s C o u r t has s t a t e d : "We have r e c o g n i z e d 
t h a t § 6-2-3 may be 
' a p p l i e d t o o t h e r 
t o r t s n o t a r i s i n g i n f r a u d i n a p p r o p r i a t e 
c a s e s , 
and 
a p p l i e s 
t o 
a 
f r a u d u l e n t 
c o n c e a l m e n t 
o f 
t h e 
e x i s t e n c e o f a c a u s e o f a c t i o n . ' " 
H o l d b r o o k s v. C e n t r a l Bank 
o f A l a b a m a , N.A., 
435 So. 2d 1250, 1251 ( A l a . 
1983) 
( q u o t i n g 
T o n s m e i r e v . T o n s m e i r e , 285 A l a . 454, 457, 233 So. 2d 465, 467 
( A l a . 
1 9 7 0 ) ) . 
More 
s p e c i f i c a l l y , 
t h i s C o u r t has 
e x p l a i n e d , 
r e g a r d i n g a p r e d e c e s s o r 
o f § 6 - 2 - 3 : 
" W h i l e 
t h i s 
s t a t u t e i s u s u a l l y a p p l i c a b l e t o 
c a s e s w h e r e i n 
f r a u d i s t h e b a s i s o f t h e c a u s e o f 
a c t i o n , 
i t i s t h e 
s e t t l e d 
c o n s t r u c t i o n 
t h a t i t s 
2 A l t h o u g h 
t h e d e f e n d a n t s 
a r g u e d b e f o r e 
t h e 
t r i a l 
c o u r t 
t h a t t h e s a v i n g s 
c l a u s e 
a p p l i e d o n l y t o f r a u d - b a s e d 
c l a i m s , 
t h e y do n o t r e a s s e r t t h a t a r g u m e n t on 
a p p e a l . 
11 
1081767 
p u r p o s e 
i s 
t o 
make 
a v a i l a b l e 
a t 
l a w 
t h e 
r u l e 
t h e r e t o f o r e 
p r e v a i l i n g i n e q u i t y ; 
and 
a p p l i e s 
t o 
a 
 
f r a u d u l e n t 
c o n c e a l m e n t 
o f 
t h e 
e x i s t e n c e 
o f 
a c a u s e  
o f a c t i o n f r o m t h e p a r t y i n whose f a v o r t h e c a u s e 
o f  
a c t i o n 
e x i s t s . 
A 
p a r t y 
c a n n o t 
p r o f i t 
by 
h i s 
own 
w r o n g 
i n 
c o n c e a l i n g 
a 
c a u s e 
o f 
a c t i o n 
a g a i n s t 
h i m s e l f 
u n t i l 
b a r r e d 
by 
l i m i t a t i o n . 
The 
s t a t u t e 
o f 
l i m i t a t i o n s 
c a n n o t be 
c o n v e r t e d 
i n t o an 
i n s t r u m e n t 
o f 
f r a u d . " 
Hudson v. M o o r e , 239 
A l a . 
130, 
133, 
194 
So. 
147, 
149 
(1940) 
o v e r r u l e d on o t h e r g r o u n d s by Ex p a r t e S o n n i e r , 
707 
So. 
2d 
635 
( A l a . 
1 9 9 7 ) ( e m p h a s i s 
a d d e d ) .
3 
3 S e e 
a l s o 
P a y t o n 
v. 
M o n s a n t o 
Co., 
801 
So. 
2d 
829, 
834 
( A l a . 
2 0 0 1 ) ( s t a t i n g 
r e g a r d i n g 
c o m p l a i n t 
a l l e g i n g 
n e g l i g e n c e , 
w a n t o n n e s s , b r e a c h o f a d u t y t o w a r n , f r a u d , 
m i s r e p r e s e n t a t i o n 
and 
d e c e i t , p r i v a t e and 
p u b l i c n u i s a n c e , 
t r e s p a s s , 
b a t t e r y , 
a s s a u l t , 
n e g l i g e n t 
and 
i n t e n t i o n a l i n f l i c t i o n 
o f 
e m o t i o n a l 
d i s t r e s s , 
s t r i c t 
l i a b i l i t y , and b r e a c h o f r i p a r i a n r i g h t s t h a t 
" t h e 
p l a i n t i f f 
can 
o v e r c o m e 
a 
d e f e n s e 
o f 
l i m i t a t i o n s 
by 
a v e r m e n t and p r o o f 
o f c i r c u m s t a n c e s 
p e r m i t t i n g t o l l i n g o f 
t h e 
r u n n i n g 
o f t h e 
l i m i t a t i o n s p e r i o d , s u c h as 
f r a u d on 
t h e 
p a r t 
o f t h e d e f e n d a n t i n c o n c e a l i n g 
t h e w r o n g d o i n g 
. . . . " ) ; 
A n g e l l 
 
v. S h a n n o n , 455 
So. 2d 823, 823-24 ( A l a . 19 8 
4 ) ( a p p l y i n g § 
6-2¬
3 
and 
R u l e 
9 ( b ) , 
A l a . 
R. 
C i v . 
P., 
t o 
a 
b r e a c h - o f - c o n t r a c t 
c l a i m ) ; M i l l e r v. M o b i l e C o u n t y Bd. 
o f H e a l t h , 
409 
So. 
2d 
420 
( A l a . 
1 9 8 1 ) ( a p p l y i n g 
§ 
6-2-3 
and 
R u l e 
9(b) 
t o 
a 
b r e a c h - o f -
c o n t r a c t c l a i m ) ; Amason v. 
F i r s t S t a t e Bank o f L i n e v i l l e , 
369 
So. 
2d 547, 
550 
( A l a . 1979) 
( " [ S e c t i o n 6-2-3] w o u l d i n e f f e c t 
s t a y 
t h e 
r u n n i n g 
o f 
t h e 
g e n e r a l 
s t a t u t e 
o f 
l i m i t a t i o n s 
f o r 
t o r t s 
(one 
y e a r ) 
u n t i l 
s u c h 
t i m e 
as Amason 
d i s c o v e r e d , 
o r 
o u g h t 
t o have d i s c o v e r e d , 
t h e 
f r a u d . " ) ; Van 
A n t w e r p v. 
Van 
 
A n t w e r p , 
242 
A l a . 
92, 
100, 
5 So. 
2d 
73, 
80 
(1941) 
( s t a t i n g 
r e g a r d i n g 
a p r e d e c e s s o r 
o f 
§ 6-2-3 
t h a t 
" t h i s 
s t a t u t e makes 
p r o v i s i o n 
f o r a l i m i t a t i o n 
o f one 
y e a r f r o m t h e d a t e 
o f 
... 
d i s c o v e r y , 
p r o v i d e d 
i t s 
d i s c o v e r y 
was 
c o n c e a l e d 
by 
some 
a c t i v i t y 
o f 
d e f e n d a n t , 
a m o u n t i n g 
t o 
a 
f r a u d . 
And 
i n 
t h i s 
c o n n e c t i o n 
i t i s n o t 
l i m i t e d 
t o 
a c t i o n s b a s e d 
on 
f r a u d . " ) ; 
R u t l e d g e v. F r e e m a n , 914 
So. 
2d 364, 
369 
( A l a . C i v . App. 
2004) 
12 
1081767 
I n B & B P r o p e r t i e s v. 
D r y v i t S y s t e m s , I n c . , 
708 
So. 
2d 
189 
( A l a . C i v . App. 
1 9 9 7 ) , t h e C o u r t o f C i v i l A p p e a l s f o u n d a 
p l a i n t i f f ' s 
a s s e r t i o n 
o f 
t o l l i n g 
b a s e d 
on 
f r a u d u l e n t 
c o n c e a l m e n t " w i t h o u t 
m e r i t , " s t a t i n g : " T h e r e i s no 
' d i s c o v e r y 
r u l e ' 
t h a t 
t o l l s 
t h e 
r u n n i n g 
o f t h e 
l i m i t a t i o n s 
p e r i o d 
w i t h 
r e s p e c t 
t o n e g l i g e n c e 
o r w a n t o n n e s s a c t i o n s . 
The 
' d i s c o v e r y 
r u l e ' i s a p p l i c a b l e o n l y t o f r a u d a c t i o n s . " 
708 
So. 
2d a t 
192 
( c i t i n g 
Henson v. C e l t i c L i f e I n s . Co., 
621 
So. 
2d 1268, 
1274 
( A l a . 
1 9 9 3 ) ) .
4 
The 
C o u r t 
o f 
C i v i l 
A p p e a l s ' 
c o n c l u s i o n 
i s 
( " A l t h o u g h t h e w o r d i n g o f § 6-2-3 
i n d i c a t e s t h a t 
i t a p p l i e s 
o n l y t o f r a u d a c t i o n s , t h a t s e c t i o n and 
i t s p r e d e c e s s o r 
h a v e 
l o n g b e e n h e l d t o a p p l y 
t o any c a u s e o f a c t i o n t h a t has 
b e e n 
f r a u d u l e n t l y 
c o n c e a l e d 
f r o m 
a 
p l a i n t i f f . " 
( c i t a t i o n s 
o m i t t e d ) ) ; Crowe v. C i t y o f A t h e n s , 733 
So. 
2d 447, 
453 
( A l a . 
C i v . 
App. 
1 9 9 9 ) ( a p p l y i n g 
p l e a d i n g r e q u i r e m e n t s o f R u l e 9(b) 
t o 
c o n v e r s i o n a c t i o n ) ; C i t y o f G a d s d e n v. H a r b i n , 
398 
So. 2d 
707, 
709 
( A l a . 
C i v . 
App. 
1 9 8 1 ) ( " I t 
i s 
w e l l 
s e t t l e d 
t h a t 
a 
f r a u d u l e n t c o n c e a l m e n t o f a t o r t 
o r 
i n j u r y by 
t h e 
d e f e n d a n t 
w i l l 
t o l l 
t h e r u n n i n g 
o f t h e s t a t u t e o f l i m i t a t i o n s 
u n t i l 
t h e 
t o r t o r i n j u r y i s d i s c o v e r e d o r c o u l d h a v e b e e n d i s c o v e r e d 
by 
due 
d i l i g e n c e . " ) . 
4 T h i s 
C o u r t 
has 
s t a t e d t h a t 
§ 6-2-3 
does n o t 
p r o v i d e 
a 
" d i s c o v e r y 
r u l e " 
f o r n o n - f r a u d c l a i m s . 
See, 
e.g., 
B o y c e 
v.  
C a s s e s e , 
941 
So. 
2d 
932 , 
94 6 
n.2 
( A l a . 2 0 0 6 ) ; 
S a n d e r s 
v. 
 
P e o p l e s Bank & T r u s t 
Co., 
817 
So. 
2d 
683, 
68 6 
( A l a . 2001 ); 
T r a v i s v. 
Z i t e r , 
681 
So. 
2d 1348, 
1355 
( A l a . 1 9 9 6 ) ; Henson v.  
C e l t i c L i f e I n s . Co., 
621 
So. 2d 12 68 , 1274 
( A l a . 1 
9 9 3 ) ; 
T r u s t 
 
Co. Bank v. S t a t e , 420 
So. 
2d 10, 13 
( A l a . 1 9 8 2 ) ; S i n g e r 
A s s e t 
 
F i n . 
Co. 
v. 
C o n n e c t i c u t 
Gen. 
L i f e 
I n s . Co., 
975 
So. 
2d 
375, 
382 
( A l a . 
C i v . 
App. 
2007 ); 
and 
W i l l i a m s 
v. 
N o r w e s t 
F i n . 
 
A l a b a m a , I n c . 723 
So. 2d 97, 
104 
( A l a . C i v . App. 
1 9 9 8 ) . 
These 
c a s e s , 
h o w e v e r , o n l y d i s a v o w a g e n e r a l 
" d i s c o v e r y 
r u l e " 
f o r 
13 
1081767 
i n c o n s i s t e n t w i t h t h e s e t t l e d p r i n c i p l e , 
c i t e d a b o v e , 
t h a t § 
6-2-3 
" a p p l i e s t o a f r a u d u l e n t c o n c e a l m e n t o f t h e e x i s t e n c e o f 
a c a u s e o f a c t i o n f r o m t h e p a r t y i n whose f a v o r t h e c a u s e o f 
a c t i o n 
e x i s t s . " 
Hudson , 239 A l a . a t 133, 
194 
So. 
a t 
149. 
F u r t h e r m o r e , t h e C o u r t o f C i v i l A p p e a l s ' r e l i a n c e on H e n s o n , 
621 So. 2d a t 1274, i s m i s p l a c e d 
b e c a u s e t h a t d e c i s i o n d i d n o t 
i n v o l v e 
any 
a l l e g a t i o n 
t h a t 
t h e 
d e f e n d a n t 
f r a u d u l e n t l y 
c o n c e a l e d 
t h e e x i s t e n c e o f t h e c a u s e o f a c t i o n . 
See 
f o o t n o t e 
4, 
s u p r a . 
We 
t h e r e f o r e 
o v e r r u l e B & B P r o p e r t i e s v. 
D r y v i t  
S y s t e m s , 
I n c . , t o 
t h e 
e x t e n t 
t h a t 
i t c o n f l i c t s 
w i t h 
o u r 
d e c i s i o n s 
r e c o g n i z i n g 
t h e 
a p p l i c a t i o n o f 
§ 
6-2-3 
t o 
t h e 
f r a u d u l e n t c o n c e a l m e n t o f a c a u s e o f a c t i o n . 
B e c a u s e § 6-2-3 
" a p p l i e s t o t h e f r a u d u l e n t c o n c e a l m e n t o f 
t h e 
e x i s t e n c e 
o f a c a u s e o f a c t i o n , " Hudson , 
s u p r a , 
i f t h e 
i n v e s t o r s h a v e s u f f i c i e n t l y a l l e g e d t h e f r a u d u l e n t 
c o n c e a l m e n t 
o f 
t h e i r 
c l a i m s , 
§ 6-2-3 
may 
a p p l y 
e v e n 
t o t h e i r 
n o n - f r a u d 
c l a i m s . 
T h i s C o u r t has 
s t a t e d : "When, as i n t h i s c a s e , 
t h e 
p l a i n t i f f ' s 
c o m p l a i n t 
on i t s f a c e i s b a r r e d by t h e s t a t u t e o f 
l i m i t a t i o n s , t h e c o m p l a i n t must a l s o show t h a t he o r she 
f a l l s 
w i t h i n 
t h e 
s a v i n g s 
c l a u s e 
o f 
§ 6-2-3." 
M i l l e r 
v. 
M o b i l e 
n o n - f r a u d 
c l a i m s ; 
t h e y 
do 
n o t 
s p e a k 
t o 
t h e 
f r a u d u l e n t 
c o n c e a l m e n t o f a c a u s e o f a c t i o n . 
14 
1081767 
C o u n t y Bd. o f H e a l t h , 409 So. 2d 420 , 422 ( A l a . 1 9 8 1 ) . 
" [ T ] h e 
b u r d e n i s upon he who 
c l a i m s t h e b e n e f i t o f § 6-2-3 t o show 
t h a t he comes 
w i t h i n 
i t . " 
Amason 
v . 
F i r s t 
S t a t e Bank o f 
L i n e v i l l e , 
369 
So. 2d 547, 551 
( A l a . 1 9 7 9 ) . 
However, 
a 
" d i s m i s s a l b a s e d on t h e s t a t u t e o f l i m i t a t i o n s i s p r o p e r o n l y 
i f , 
f r o m t h e f a c e o f t h e c o m p l a i n t , i t i s a p p a r e n t t h a t t h e 
t o l l i n g p r o v i s i o n s do n o t a p p l y . " 
T a v i s v . Z i t e r , 681 So. 2d 
1348, 1351 ( A l a . 1 9 9 6 ) . 
T h i s 
C o u r t 
has 
h e l d 
t h a t 
t o show 
t h a t 
a 
p l a i n t i f f ' s 
c l a i m s 
f a l l 
w i t h i n t h e s a v i n g s c l a u s e o f § 6-2-3 a c o m p l a i n t 
must a l l e g e t h e t i m e and c i r c u m s t a n c e s o f t h e d i s c o v e r y o f t h e 
c a u s e o f a c t i o n . 
See, e . g . , A n g e l l v . S h a n n o n , 455 So. 2d 
823, 823-24 ( A l a . 
1 9 8 4 ) ; P a p a s t e f a n v . B & L C o n s t r . Co., 356 
So. 2d 158, 160 ( A l a . 
1 9 7 8 ) . 
The c o m p l a i n t must a l s o 
a l l e g e 
t h e 
f a c t s o r c i r c u m s t a n c e s by w h i c h t h e d e f e n d a n t s c o n c e a l e d 
t h e 
c a u s e o f a c t i o n o r i n j u r y and what p r e v e n t e d t h e p l a i n t i f f 
f r o m d i s c o v e r i n g t h e f a c t s s u r r o u n d i n g t h e i n j u r y . 
See, e . g . , 
S m i t h v. N a t i o n a l 
S e c . I n s . Co., 8 
60 So. 2d 343, 345, 347 
( A l a . 
2 0 0 3 ) ; Lowe v. E a s t End Mem'l Hosp. & H e a l t h C t r s . , 477 
So. 2d 339, 341-42 
( A l a . 1 9 8 5 ) ; 
M i l l e r , 
409 So. 2d a t 422. 
See a l s o Amason, 369 So. 2d a t 550. 
15 
1081767 
In 
M i l l e r , 
t h e 
p l a i n t i f f s , 
h u s b a n d 
and 
w i f e , 
s u e d 
a 
m e d i c a l 
c l i n i c and t h e m a n u f a c t u r e r o f a c o n t r a c e p t i v e 
d e v i c e 
t h a t 
t h e y 
a l l e g e d had 
i n j u r e d t h e 
w i f e some y e a r s 
b e f o r e . 
R e g a r d i n g 
c o n c e a l m e n t , 
t h e 
p l a i n t i f f s 
a l l e g e d o n l y 
t h a t 
t h e 
c l i n i c and t h e m a n u f a c t u r e r had " ' f r a u d u l e n t l y c o n c e a l [ e d ] 
t h e 
d e f e c t i v e 
and 
u n r e a s o n a b l y 
d a n g e r o u s 
c o n d i t i o n 
o f 
[ t h e ] 
p r o d u c t 
f r o m t h e 
P l a i n t i f f 
a f t e r 
t h e y knew s a i d p r o d u c t 
was 
d e f e c t i v e 
and 
d a n g e r o u s . ' " 
409 
So. 
2d 
422. 
T h i s 
C o u r t 
s t a t e d : 
"The 
c o m p l a i n t 
f a i l s 
t o a l l e g e any 
o f t h e 
f a c t s 
o r 
 
c i r c u m s t a n c e s 
by w h i c h t h e 
a p p e l l e e s 
c o n c e a l e d 
t h e 
 
c a u s e o f a c t i o n o r i n j u r y . 
The 
c o m p l a i n t 
a l s o 
f a i l s 
 
t o 
a l l e g e 
what 
p r e v e n t e d 
M r s . 
M i l l e r 
f r o m 
 
d i s c o v e r i n g f a c t s s u r r o u n d i n g 
t h e i n j u r y . See Amason  
v. 
F i r s t 
S t a t e Bank 
o f 
L i n e v i l l e , 
369 
So. 
2d 
547 
( A l a . 
1 9 7 9 ) ; G a r r e t t v. R a y t h e o n Co., 
368 
So. 2d 
516 
( A l a . 
1979) . The 
p l a i n t i f f s make o n l y 
g e n e r a l i z e d  
a l l e g a t i o n s 
t o 
s u p p o r t 
t h e i r 
c l a i m 
f o r 
f r a u d u l e n t  
c o n c e a l m e n t . 
A l t h o u g h 
u n d e r modern 
r u l e s o f 
c i v i l 
p r a c t i c e 
t h e 
p l e a d i n g s 
o n l y 
n e e d 
t o 
p u t 
t h e 
d e f e n d i n g p a r t y on n o t i c e o f t h e c l a i m s a g a i n s t 
h i m , 
R u l e 
9 ( b ) [ , 
A l a . 
R. 
C i v . 
P.,] 
q u a l i f i e s 
t h e 
g e n e r a l i z e d p l e a d i n g s p e r m i t t e d by R u l e 
8 ( a ) , [ A l a . 
R. C i v . P . ] . 
'The 
p l e a d i n g must show t i m e , p l a c e 
and 
t h e 
c o n t e n t s 
o r 
s u b s t a n c e 
o f 
t h e 
f a l s e 
r e p r e s e n t a t i o n s , 
t h e 
f a c t s 
m i s r e p r e s e n t e d , 
and 
an 
i d e n t i f i c a t i o n 
o f 
what 
has 
b e e n 
o b t a i n e d . ' 
R u l e 
9 ( b ) , 
... 
C o m m i t t e e 
Comments. 
The 
a l l e g a t i o n s 
c o n t a i n e d 
i n c o u n t 
6 
f a i l 
t o meet t h e 
r e q u i r e m e n t s 
o f 
R u l e 
9. 
Thus, 
t h e 
t r i a l 
c o u r t 
d i d 
n o t 
e r r 
i n 
g r a n t i n g 
t h e 
m o t i o n 
t o 
d i s m i s s 
i n 
f a v o r 
o f 
[ t h e 
d e f e n d a n t ] . " 
16 
1081767 
409 So. 2d a t 422 
( e m p h a s i s a d d e d ) . 
I n Lowe, t h e a d m i n i s t r a t o r 
o f a d e c e d e n t ' s e s t a t e s u e d a 
h o s p i t a l i n 1983 s e e k i n g r e c o v e r y f o r t h e d e c e d e n t ' s 
a l l e g e d 
w r o n g f u l d e a t h i n 1980. 
The p l a i n t i f f a l l e g e d s i m p l y 
t h a t t h e 
h o s p i t a l 
h a d 
f r a u d u l e n t l y 
c o n c e a l e d 
i t s c o n d u c t 
f r o m 
t h e 
p l a i n t i f f and h a d d e n i e d 
c a u s i n g 
t h e d e c e d e n t ' s d e a t h . 
The 
p l a i n t i f f f u r t h e r a l l e g e d t h a t he " ' d i s c o v e r e d 
i n J u l y o f 1983 
r e p r e s e n t a t i o n s 
o f [ t h e h o s p i t a l ] were 
f a l s e and t h a t 
[ t h e 
h o s p i t a l ] h a d f r a u d u l e n t l y c o n c e a l e d f a c t s g i v i n g r i s e t o t h e 
c a u s e o f a c t i o n . ' " 
477 So. 2d a t 340. 
B a s e d on M i l l e r , 
t h i s 
C o u r t d e t e r m i n e d t h a t t h e a l l e g a t i o n s o f t h e c o m p l a i n t d i d n o t 
s t a t e f a c t s s u f f i c i e n t t o show t h a t t h e s t a t u t o r y l i m i t a t i o n s 
p e r i o d h a d b e e n t o l l e d . 477 So. 2d a t 342. 
I n 
S m i t h , 
t h e 
p l a i n t i f f 
a l l e g e d 
m u l t i p l e 
t o r t 
c l a i m s 
a g a i n s t 
an 
i n s u r a n c e 
company 
and 
a l l e g e d 
t h a t 
she 
h a d 
d i s c o v e r e d h e r c l a i m s w i t h i n two y e a r s o f f i l i n g h e r c o m p l a i n t 
when she " ' h e a r d i n h e r c o m m u n i t y t h a t t h e r e may be s o m e t h i n g 
w r o n g 
w i t h 
h e r i n s u r a n c e 
p o l i c y . ' " 
860 So. 2d a t 345-46. 
R e l y i n g on M i l l e r and Lowe, 
t h i s C o u r t c o n c l u d e d t h a t 
S m i t h ' s 
c o m p l a i n t 
" ' f a i l [ e d ] 
t o 
a l l e g e 
any 
o f 
t h e 
f a c t s 
o r 
c i r c u m s t a n c e s by w h i c h t h e a p p e l l e e s 
c o n c e a l e d t h e c a u s e o f 
17 
1081767 
a c t i o n 
o r 
i n j u r y , ' and 
' f a i l [ e d ] t o a l l e g e 
what 
p r e v e n t e d 
[ S m i t h ] f r o m d i s c o v e r i n g 
f a c t s s u r r o u n d i n g t h e [ f r a u d ] . ' " 
860 
So. 2d a t 347 
( q u o t i n g 
M i l l e r , 409 So. 2d a t 4 2 2 ) . 
B a s e d on M i l l e r , 
Lowe, and S m i t h , t h e d e f e n d a n t s 
a r g u e 
t h a t t h e i n v e s t o r s h a v e n o t a l l e g e d 
f a c t s o r c i r c u m s t a n c e s b y 
w h i c h t h e d e f e n d a n t s c o n c e a l e d a c a u s e o f a c t i o n n o r h a v e t h e y 
a l l e g e d 
what 
p r e v e n t e d 
t h e 
i n v e s t o r s 
f r o m 
d i s c o v e r i n g 
t h e 
f a c t s t h e i n v e s t o r s 
a l l e g e were c o n c e a l e d . 
T h e r e f o r e , t h e 
d e f e n d a n t s 
a r g u e , 
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 
i n v e s t o r s ' 
c l a i m s . 
We 
d i s a g r e e . 
A l t h o u g h t h e t h i r d 
amended 
c o m p l a i n t i s n o t l i k e l y t o be c o n s i d e r e d f o r i n c l u s i o n i n a 
f o r m 
b o o k 
as 
a 
m o d e l 
c o m p l a i n t , 
u n l i k e 
t h e 
g e n e r a l i z e d 
a l l e g a t i o n s a t i s s u e i n M i l l e r , Lowe, and S m i t h , t h e i n v e s t o r s 
h a v e 
a l l e g e d 
more 
t h a n 
j u s t 
t h e 
c i r c u m s t a n c e s 
o f 
t h e i r 
d i s c o v e r y 
o f t h e i r c l a i m s 
and t h a t t h e d e f e n d a n t s 
c o n c e a l e d 
them. 
V i e w e d i n t h e l i g h t most 
f a v o r a b l e 
t o t h e 
i n v e s t o r s , 
see N a n c e , 622 So. 2d a t 299, t h e t h i r d 
amended 
c o m p l a i n t 
a l l e g e s 
1) 
t h e 
t i m e 
and 
c i r c u m s t a n c e s 
o f t h e 
i n v e s t o r s ' 
d i s c o v e r y 
o f 
t h e i r 
c a u s e s 
o f 
a c t i o n , 
2) 
t h e 
f a c t s 
o r 
c i r c u m s t a n c e s b y w h i c h t h e d e f e n d a n t s c o n c e a l e d t h e i n v e s t o r s ' 
c a u s e s 
o f 
a c t i o n 
o r 
i n j u r y , 
and 
3) 
what 
p r e v e n t e d 
t h e 
18 
1081767 
i n v e s t o r s f r o m d i s c o v e r i n g t h e f a c t s s u r r o u n d i n g t h e i r i n j u r y . 
F i r s t , 
t h e i n v e s t o r s 
a l l e g e 
t h a t 
t h e y d i s c o v e r e d 
t h e i r 
c a u s e s o f a c t i o n when t h e y were d e p o s e d i n 2007 i n t h e U n i t e d 
Bank 
l i t i g a t i o n . 
The i n v e s t o r s , 
t h e r e f o r e , 
a l l e g e t h e t i m e 
and 
c i r c u m s t a n c e s 
o f 
t h e i r 
d i s c o v e r y 
o f 
t h e i r 
c a u s e s 
o f 
a c t i o n . 
See A n g e l l , 455 So. 2d a t 823-24; P a p a s t e f a n , 356 So. 
2d a t 160. 
S e c o n d , t h e i n v e s t o r s 
a l l e g e 
t h a t 
J a c o b s e n 
h a d o b t a i n e d 
f u n d s f r o m Bon H a r b o r b e f o r e he p u r c h a s e d t h e p r o p e r t y ; t h a t 
H i n d s 
and 
K i r k l a n d 
u s e d 
Bon 
H a r b o r 
f u n d s 
f o r t h e i r 
own 
p u r p o s e s , 
and t h a t t h e d e f e n d a n t s knew and c o n c e a l e d 
t h e s e 
f a c t s f r o m t h e i n v e s t o r s . 
The i n v e s t o r s a l s o a l l e g e t h a t t h e 
d e f e n d a n t s knew t h a t J a c o b s e n h a d p u r c h a s e d t h e p r o p e r t y f o r 
$5,000,000 j u s t d a y s b e f o r e t h e J u l y 2005 t r a n s a c t i o n ; 
t h a t 
t h i s 
i n f o r m a t i o n 
was 
e n t i r e l y 
u n d e r 
t h e 
c o n t r o l 
o f t h e 
d e f e n d a n t s ; and t h a t t h e d e f e n d a n t s c o n c e a l e d "and o t h e r w i s e 
p r e v e n t e d " 
t h e 
i n v e s t o r s 
f r o m 
d i s c o v e r i n g 
t h e 
i n f o r m a t i o n 
b e f o r e , 
d u r i n g , 
and 
a f t e r t h e J u l y 2005 
t r a n s a c t i o n . 
The 
i n v e s t o r s , 
t h e r e f o r e , 
a l l e g e t h e f a c t s o r c i r c u m s t a n c e s b y 
w h i c h t h e d e f e n d a n t s c o n c e a l e d t h e i n v e s t o r s ' c a u s e s o f a c t i o n 
o r i n j u r y . 
See M i l l e r , 409 So. 2d a t 422; Lowe, 477 So. 2d a t 
19 
1081767 
342; 
and 
S m i t h , 
860 
So. 
2d 
a t 
347. 
R e g a r d i n g 
t h i s 
p o i n t , 
t h e 
i n v e s t o r s 
a l s o 
a l l e g e 
t h a t 
H i n d s , 
D e c a t u r , 
K i r k l a n d , 
and 
G u l f 
S t r e a m 
had 
f i d u c i a r y 
o b l i g a t i o n s 
t o 
d i s c l o s e 
t o them 
i n f o r m a t i o n 
c o n c e r n i n g 
t h e 
J u l y 2005 t r a n s a c t i o n b u t 
f a i l e d t o do 
s o . 
S p e c i f i c a l l y , 
t h e 
i n v e s t o r s 
a l l e g e 
t h a t 
H i n d s 
and 
K i r k l a n d 
were 
a c t i n g 
as 
m a n a g e r s o f 
Bon 
H a r b o r 
and 
t h a t 
t h e 
i n v e s t o r s 
e n t r u s t e d 
t h e 
n e g o t i a t i o n 
and 
c o n s u m m a t i o n o f t h e 
J u l y 2005 t r a n s a c t i o n 
t o 
H i n d s 
and 
K i r k l a n d b e c a u s e 
o f 
t h e i r 
s u p e r i o r 
k n o w l e d g e 
and 
e x p e r i e n c e . 
The 
i n v e s t o r s 
a l s o 
a l l e g e t h a t D e c a t u r and 
G u l f 
S t r e a m were m a j o r i t y members o f Bon 
H a r b o r and owed 
f i d u c i a r y 
d u t i e s 
t o DGB 
as 
an 
a l l e g e d m i n o r i t y member. 
I n t h e i r b r i e f s on a p p e a l , t h e p a r t i e s a r g u e 
e x t e n s i v e l y 
r e g a r d i n g 
t h e m e r i t s 
o f t h e q u e s t i o n s w h e t h e r H i n d s , D e c a t u r , 
K i r k l a n d , 
and 
G u l f 
S t r e a m owed 
t h e 
i n v e s t o r s 
any 
d u t y 
t o 
d i s c l o s e 
i n f o r m a t i o n 
and 
w h e t h e r 
f i d u c i a r y 
r e l a t i o n s h i p s 
e x i s t e d among them. 
However, w h a t e v e r may 
l a t e r be 
d e t e r m i n e d 
i n 
t h e 
t r i a l 
c o u r t p r o c e e d i n g s , 
t h i s a p p e a l comes t o us 
f r o m 
t h e 
t r i a l c o u r t ' s 
d i s m i s s a l o f t h e i n v e s t o r s ' c l a i m s 
and 
" t h i s 
C o u r t 
d o e s 
n o t 
c o n s i d e r 
w h e t h e r 
t h e 
[ i n v e s t o r s ] 
w i l l 
u l t i m a t e l y 
p r e v a i l , 
b u t 
o n l y 
w h e t h e r 
[ t h e y ] 
may 
p o s s i b l y 
20 
1081767 
p r e v a i l . " 
N a n c e , 622 So. 2d a t 299. 
When t h e a l l e g a t i o n s o f 
t h e 
t h i r d amended c o m p l a i n t a r e v i e w e d most s t r o n g l y i n t h e 
i n v e s t o r s ' 
f a v o r , 
s e e N a n c e , s u p r a , t h e i n v e s t o r s 
a l l e g e 
1) 
t h a t 
f i d u c i a r y 
and o t h e r r e l a t i o n s h i p s e x i s t e d b e t w e e n them 
and H i n d s , D e c a t u r , K i r k l a n d , and G u l f S t r e a m 
t h a t 
o b l i g a t e d 
t h o s e d e f e n d a n t s t o d i s c l o s e i n f o r m a t i o n t o t h e i n v e s t o r s 
and 
2) 
t h a t 
t h o s e d e f e n d a n t s 
f a i l e d 
t o do 
s o . 
B a s e d 
on 
t h e s e 
a l l e g a t i o n s , 
we 
c a n n o t 
s a y 
t h a t 
i n v e s t o r s 
c a n n o t 
p o s s i b l y 
p r e v a i l 
on 
t h i s 
p o i n t . 
The 
i n v e s t o r s , 
t h e r e f o r e , 
h a v e 
s u f f i c i e n t l y 
a l l e g e d t h a t t h e d e f e n d a n t s owed them d u t i e s 
t o 
d i s c l o s e i n f o r m a t i o n and t h a t t h e y b r e a c h e d t h o s e d u t i e s as an 
a d d i t i o n a l 
f a c t 
o r 
c i r c u m s t a n c e by 
w h i c h 
H i n d s , 
D e c a t u r , 
K i r k l a n d , and G u l f S t r e a m c o n c e a l e d t h e i n v e s t o r s ' c a u s e s o f 
a c t i o n o r i n j u r y . 
See 
M i l l e r , Lowe, and S m i t h , s u p r a . 
F i n a l l y , 
t h e 
t h i r d 
amended c o m p l a i n t a l l e g e s 
t h a t 
t h e 
i n v e s t o r s h a d no 
a c t u a l k n o w l e d g e 
o f t h e f a c t t h a t 
J a c o b s e n 
h a d 
o b t a i n e d 
Bon 
H a r b o r 
f u n d s 
b e f o r e 
he 
p u r c h a s e d 
t h e 
p r o p e r t y , 
o f H i n d s and K i r k l a n d ' s 
p e r s o n a l 
u s e o f Bon 
H a r b o r 
f u n d s , o r o f t h e f a c t t h a t J a c o b s e n p a i d $5,000,000 f o r t h e 
p r o p e r t y ; 
t h a t 
t h e 
i n v e s t o r s 
d i d n o t 
h a v e 
a c c e s s 
t o 
t h a t 
i n f o r m a t i o n 
b e c a u s e 
i t was 
e n t i r e l y u n d e r t h e c o n t r o l o f t h e 
21 
1081767 
d e f e n d a n t s ; t h a t 
t h e 
i n v e s t o r s e n t r u s t e d 
t h e 
n e g o t i a t i o n 
and 
e x e c u t i o n 
o f t h e p u r c h a s e t o H i n d s and 
K i r k l a n d ; and 
t h a t 
t h e 
i n v e s t o r s d i d n o t 
o b t a i n 
t h e p r o p e r t y 
r e c o r d s 
u n d e r l y i n g 
t h e 
t r a n s a c t i o n b e c a u s e t h e y r e l i e d on t h e d e f e n d a n t s ' s i l e n c e 
and 
r e p r e s e n t a t i o n s 
r e g a r d i n g 
t h e 
p u r c h a s e p r i c e . 
A c c o r d i n g l y , 
t h e 
i n v e s t o r s h a v e a l l e g e d 
t h e 
c i r c u m s t a n c e s 
t h a t 
p r e v e n t e d 
t h e i r 
d i s c o v e r y 
o f 
t h e 
f a c t s s u r r o u n d i n g 
t h e i r 
i n j u r y . 
See 
M i l l e r , Lowe, and 
S m i t h , 
s u p r a . 
Any 
q u e s t i o n 
r e g a r d i n g 
t h e 
r e a s o n a b l e n e s s o f t h e 
i n v e s t o r s ' a c t i o n s 
o r i n a c t i o n s i s 
n o t 
y e t b e f o r e 
u s . 
See N a n c e , s u p r a . W h a t e v e r may 
be shown a t 
any 
s u b s e q u e n t 
t r i a l 
p r o c e e d i n g s , 
t h e 
i n v e s t o r s 
have 
a l l e g e d 
s u f f i c i e n t 
f a c t s s h o w i n g 
t h a t 
t h e i r 
c l a i m s 
f a l l 
w i t h i n 
t h e 
s a v i n g s 
c l a u s e 
o f § 6-2-3. 
A c c o r d i n g l y , 
t h e d i s m i s s a l o f 
t h e 
i n v e s t o r s ' c l a i m s 
on t h e g r o u n d o f t h e s t a t u t e o f l i m i t a t i o n s 
a t 
t h i s s t a g e o f t h e p r o c e e d i n g s was 
e r r o r . 
I I . 
S t a n d i n g 
The 
p a r t i e s 
n e x t 
d i s p u t e 
w h e t h e r 
t h e 
i n v e s t o r s 
h a v e 
s t a n d i n g 
t o m a i n t a i n 
t h e i r c l a i m s a g a i n s t t h e d e f e n d a n t s . 
The 
d e f e n d a n t s a r g u e t h a t any 
i n j u r y r e s u l t i n g f r o m t h e i r 
a c t i o n s 
i s 
an 
i n j u r y 
t o 
Bon 
H a r b o r , 
n o t 
t o 
t h e 
i n v e s t o r s . 
The 
d e f e n d a n t s 
a r g u e 
t h a t 
t h e 
i n v e s t o r s ' 
c l a i m s 
a r e 
t h e r e f o r e 
22 
1081767 
d e r i v a t i v e i n n a t u r e and t h a t , as a r e s u l t , 1) H e r r i c k , 
K a t z , 
and V a n c e h a v e no s t a n d i n g t o s e e k r e l i e f 
i n d i v i d u a l l y , and 2) 
DGB was 
r e q u i r e d 
t o 
f i r s t 
demand 
t h a t 
Bon H a r b o r sue t h e 
d e f e n d a n t s 
a n d , i f t h a t 
demand was 
u n s u c c e s s f u l , 
t o 
t h e n 
p u r s u e a d e r i v a t i v e c l a i m u n d e r § 1 0 - 1 2 - 2 5 , A l a . 
Code 1 9 7 5 .
5 
The 
i n v e s t o r s 
c o n t e n d 
t h a t 
t h e y 
h a v e 
a l l e g e d 
i n j u r y t o 
t h e m s e l v e s 
i n d i v i d u a l l y , 
n o t 
j u s t 
i n j u r y 
t o Bon 
H a r b o r . 
A c c o r d i n g l y , 
t h e 
i n v e s t o r s 
a r g u e , 
t h e y 
have 
s t a n d i n g 
t o 
m a i n t a i n 
i n d i v i d u a l c l a i m s 
a g a i n s t t h e d e f e n d a n t s . 
The 
d e f e n d a n t s 
c i t e 
t h i s 
C o u r t ' s 
d e c i s i o n i n C a r e y v .  
Howard, 950 So. 2d 1131 ( A l a . 2 0 0 6 ) . 
C a r e y i n v o l v e d 
p r o p e r t y 
h e l d by a f a m i l y - o w n e d l i m i t e d l i a b i l i t y company ("the L L C " ) . 
C e r t a i n 
members 
o f t h e LLC 
("the p e t i t i o n e r s " ) 
s o u g h t 
a 
j u d g m e n t d e c l a r i n g t h a t a n o t h e r member's o p t i o n t o p u r c h a s e an 
i n t e r e s t i n t h e L L C ' s p r o p e r t y 
f o r a p r i c e 
a l l e g e d l y b e l o w 
m a r k e t 
v a l u e 
was 
u n e n f o r c e a b l e . 
On 
a p p e a l , 
t h i s 
C o u r t 
c o n s i d e r e d 
w h e t h e r t h e p e t i t i o n e r s h a d s t a n d i n g 
t o 
m a i n t a i n 
t h e i r c l a i m f o r d e c l a r a t o r y 
r e l i e f . 
B a s e d on t h e l a n g u a g e o f 
5 S e c t i o n 1 0 - 1 2 - 2 5 ( a ) s t a t e s : "A member may b r i n g an a c t i o n 
i n 
t h e r i g h t o f a 
l i m i t e d 
l i a b i l i t y 
company t o r e c o v e r 
a 
j u d g m e n t 
i n i t s f a v o r 
i f t h e members 
o r m a n a g e r s 
w i t h 
a u t h o r i t y t o do so have r e f u s e d t o b r i n g t h e a c t i o n o r i f 
an 
e f f o r t t o c a u s e t h o s e members o r m a n a g e r s t o b r i n g t h e a c t i o n 
i s n o t l i k e l y t o s u c c e e d . " See a l s o R u l e 2 3 . 1 , A l a . R. C i v . 
P. 
23 
1081767 
t h e D e c l a r a t o r y Judgment A c t , § 6-6-223, A l a . Code. 1975, 
t h i s 
C o u r t 
s t a t e d 
t h a t 
t h e 
p e t i t i o n e r s 
had 
" s t a n d i n g 
t o 
s e e k 
d e c l a r a t o r y 
r e l i e f 
r e l a t i n g 
t o 
t h e 
o p t i o n 
a g r e e m e n t o n l y 
i f 
t h e y [were] ' i n t e r e s t e d u n d e r ' o r i f t h e i r 
' r i g h t s , s t a t u s , 
o r 
o t h e r 
l e g a l 
r e l a t i o n s 
[were] 
a f f e c t e d 
by' 
t h e 
o p t i o n 
a g r e e m e n t . " 
950 
So. 
2d a t 1135. 
T h i s C o u r t d e t e r m i n e d 
t h a t , 
b e c a u s e t h e 
c h a l l e n g e d 
o p t i o n 
r e l a t e d o n l y 
t o an 
i n t e r e s t i n 
p r o p e r t y 
h e l d 
by 
t h e 
LLC, 
t h e 
o n l y 
i n j u r y 
a l l e g e d 
by 
t h e 
p e t i t i o n e r s was 
an i n j u r y t o t h e LLC. 
As a r e s u l t , 
t h i s C o u r t 
d e t e r m i n e d 
t h a t 
"any 
r i g h t 
t o 
b r i n g 
a 
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 w i t h r e s p e c t 
t o t h a t i n j u r y r e s t [ e d ] w i t h t h e LLC," 
and 
c o u l d be p u r s u e d o n l y by 
t h e 
LLC 
i t s e l f 
o r by 
t h e 
p l a i n t i f f s 
d e r i v a t i v e l y 
u n d e r 
§ 1 0 - 1 2 - 2 5 . 
950 
So. 
2d 
a t 
1136. 
T h i s 
C o u r t f u r t h e r c o n c l u d e d t h a t 
t h e p e t i t i o n e r s had 
n o t 
a l l e g e d 
any 
i n j u r y t o 
t h e i r 
s e p a r a t e , 
i n d i v i d u a l i n t e r e s t s 
i n 
t h e 
p r o p e r t y 
h e l d 
by 
t h e 
LLC 
and, 
t h e r e f o r e , 
t h a t 
t h e y 
" l a c k e d 
s t a n d i n g 
t o 
s e e k 
d e c l a r a t o r y 
r e l i e f 
i n 
t h e i r 
i n d i v i d u a l 
c a p a c i t i e s . " 
950 
So. 
2d 
a t 
1137. 
I n 
t h i s c a s e , t h e 
i n v e s t o r s have n o t 
a t t e m p t e d t o 
s t a t e 
any 
d e r i v a t i v e c l a i m 
on 
b e h a l f 
o f 
Bon 
H a r b o r ; 
i n s t e a d 
t h e y 
a s s e r t c l a i m s 
o n l y on 
t h e i r own 
b e h a l f . 
They a l l e g e t h a t 
t h e 
24 
1081767 
d e f e n d a n t s made 
r e p r e s e n t a t i o n s 
d i r e c t l y 
t o and 
c o n c e a l e d 
i n f o r m a t i o n 
d i r e c t l y 
f r o m them 
r e g a r d i n g 
t h e 
c i r c u m s t a n c e s 
s u r r o u n d i n g 
t h e J u l y 2005 t r a n s a c t i o n . 
They a l l e g e t h a t 
t h e y 
r e l i e d on t h e d e f e n d a n t s ' r e p r e s e n t a t i o n s and c o n c e a l m e n t s and 
t h a t , 
as 
a 
r e s u l t , 
H e r r i c k , 
K a t z , 
and 
V a n c e 
p e r s o n a l l y 
g u a r a n t e e d 
t h e 
$7,500,000 
l o a n 
f r o m 
U n i t e d 
Bank 
and, 
t h e r e f o r e , 
were 
p e r s o n a l l y 
i n t e r e s t e d 
i n t h e 
J u l y 
2005 
t r a n s a c t i o n . 
The i n v e s t o r s a l s o a l l e g e t h a t n e i t h e r H i n d s n o r 
K i r k l a n d 
c o n t r i b u t e d any f u n d s t o t h e J u l y 2005 
t r a n s a c t i o n 
and 
t h a t 
t h e i n v e s t o r s were 
r e q u i r e d 
t o p a y t h e 
r e m a i n i n g 
$2,500,000 o f t h e p u r c h a s e p r i c e . 
B a s e d on t h e s e a l l e g a t i o n s , 
t h e 
i n v e s t o r s a r g u e t h a t t h e y s u f f e r e d i n d i v i d u a l 
i n j u r y as a 
r e s u l t o f t h e d e f e n d a n t s ' 
a c t i o n s . 
To t h e e x t e n t 
t h a t 
t h e t h i r d amended c o m p l a i n t 
s t a t e s 
i n j u r y t o Bon H a r b o r as a r e s u l t o f t h e d e f e n d a n t s ' 
c o n d u c t , 
t h e 
i n v e s t o r s h a v e no 
s t a n d i n g 
t o r e c o v e r 
on Bon 
H a r b o r ' s 
b e h a l f . 
However, b a s e d on t h e a l l e g a t i o n s d e s c r i b e d 
a b o v e , 
u n l i k e t h e c i r c u m s t a n c e s p r e s e n t e d i n C a r e y , we c o n c l u d e 
t h a t 
t h e i n v e s t o r s h a v e a l l e g e d i n j u r y t o t h e m s e l v e s 
i n d i v i d u a l l y ; 
t h a t 
t h e i r 
c l a i m s 
a r e 
n o t 
d e r i v a t i v e 
i n 
n a t u r e ; 
a n d , 
t h e r e f o r e , 
t h a t 
t h e y h a d s t a n d i n g 
t o m a i n t a i n 
t h e i r 
c l a i m s 
25 
1081767 
a g a i n s t t h e 
d e f e n d a n t s . 
I I I . 
S u f f i c i e n c y o f 
P l e a d i n g 
F i n a l l y , 
t h e 
i n v e s t o r s a r g u e 
on 
a p p e a l 
t h a t 
t h e 
t r i a l 
c o u r t 
e r r e d 
i n d i s m i s s i n g 
t h e i r 
c l a i m s b e c a u s e , 
t h e y 
a r g u e , 
t h e i r 
c l a i m s 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n , 
f r a u d u l e n t 
s u p p r e s s i o n , 
and 
s e c u r i t i e s 
f r a u d 
a r e 
s t a t e d 
w i t h 
p a r t i c u l a r i t y 
as r e q u i r e d by R u l e 9 ( b ) , A l a . R. 
C i v . P., 
and 
b e c a u s e t h e r e m a i n i n g 
c o u n t s o f t h e i r 
t h i r d amended 
c o m p l a i n t 
s t a t e 
c l a i m s 
upon 
w h i c h 
r e l i e f 
can 
be 
g r a n t e d 
and 
a r e 
t h e r e f o r e n o t 
s u b j e c t t o d i s m i s s a l u n d e r R u l e 1 2 ( b ) ( 6 ) , 
A l a . 
R. 
C i v . 
P. 
The 
d e f e n d a n t s 
a r g u e 
t h a t none 
o f 
t h e 
c l a i m s 
a l l e g e d a g a i n s t them a r e 
s u f f i c i e n t l y 
p l e a d e d . 
A. 
F r a u d u l e n t 
M i s r e p r e s e n t a t i o n 
The 
i n v e s t o r s 
a s s e r t e d 
t h e i r 
c l a i m 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n 
a g a i n s t 
H i n d s , 
D e c a t u r , 
K i r k l a n d , 
G u l f 
S t r e a m , and 
J a c o b s e n . 
R u l e 9 ( b ) , A l a . R. 
C i v . P., 
p r o v i d e s : 
" I n 
a l l a v e r m e n t s 
o f 
f r a u d 
o r 
m i s t a k e , 
t h e 
c i r c u m s t a n c e s 
c o n s t i t u t i n g 
f r a u d 
o r 
m i s t a k e 
s h a l l 
be 
s t a t e d 
w i t h 
p a r t i c u l a r i t y . 
M a l i c e , i n t e n t , k n o w l e d g e , and o t h e r c o n d i t i o n 
o f m i n d o f a p e r s o n may 
be a v e r r e d g e n e r a l l y . " 
The 
C o m m i t t e e 
Comments on 
1973 
A d o p t i o n 
o f R u l e 9 e x p l a i n : 
26 
1081767 
" [ T ] h i s 
s p e c i a l 
r e q u i r e m e n t 
[ i n R u l e 
9 ( b ) ] 
as 
t o 
f r a u d and m i s t a k e d o e s n o t r e q u i r e e v e r y e l e m e n t 
i n 
s u c h 
a c t i o n s 
t o be 
s t a t e d 
w i t h 
p a r t i c u l a r i t y . 
I t 
s i m p l y 
commands 
t h e 
p l e a d e r 
t o 
u s e 
more 
t h a n 
g e n e r a l i z e d o r c o n c l u s o r y s t a t e m e n t s t o s e t o u t 
t h e 
f r a u d 
c o m p l a i n e d 
o f . The 
p l e a d i n g must show 
t i m e , 
p l a c e 
and 
t h e 
c o n t e n t s 
o r 
s u b s t a n c e 
o f 
t h e 
f a l s e 
r e p r e s e n t a t i o n s , 
t h e 
f a c t 
m i s r e p r e s e n t e d , 
and 
an 
i d e n t i f i c a t i o n 
o f what has b e e n o b t a i n e d . 
... 
B u t 
k n o w l e d g e by 
t h e 
d e f e n d a n t 
o f 
t h e 
f a l s i t y 
o f 
t h e 
r e p r e s e n t a t i o n and r e l i a n c e on t h e r e p r e s e n t a t i o n by 
t h e 
p l a i n t i f f 
c a n 
s t i l l 
be 
g e n e r a l l y 
a l l e g e d . 
... 
[ I ] t 
s h o u l d be e x p e c t e d t h a t t h e c o u r t s w i l l 
s t r i v e 
t o 
f i n d t h e d e t a i l s n e c e s s a r y f o r t h e s u f f i c i e n c y o f 
s u c h a c o m p l a i n t , i f t h e p l e a d i n g g i v e s f a i r 
n o t i c e 
t o 
t h e o p p o s i n g p a r t y 
" 
See 
a l s o B e t h e l v. T h o r n , 
757 
So. 2d 1154, 
1158 
( A l a . 1 9 9 9 ) . 
"The 
p u r p o s e 
o f 
t h i s 
r u l e 
i s t o 
g i v e 
f a i r 
n o t i c e 
t o 
t h e 
o p p o s i n g p a r t y . " 
W i n n - D i x i e M o n t g o m e r y , I n c . v. 
H e n d e r s o n , 
371 So. 2d 899, 
901 
( A l a . 1 9 7 9 ) ; see a l s o K a b e l v. B r a d y , 
519 
So. 2d 912, 
916 
( A l a . 1 9 8 7 ) . 
I n 
t h e i r 
t h i r d amended c o m p l a i n t , t h e 
i n v e s t o r s 
a l l e g e 
t h e 
f o l l o w i n g 
f a c t s 
r e g a r d i n g H i n d s , 
D e c a t u r , 
K i r k l a n d 
and 
G u l f 
S t r e a m : 
1) 
t h a t 
J a c o b s e n 
p u r c h a s e d 
t h e 
p r o p e r t y 
f o r 
$5,000,000 j u s t d a y s b e f o r e t h e J u l y 2005 t r a n s a c t i o n ; 2) 
t h a t 
H i n d s , D e c a t u r , K i r k l a n d , and G u l f S t r e a m knew and 
c o n c e a l e d 
t h i s i n f o r m a t i o n f r o m t h e i n v e s t o r s ; 3) t h a t t h i s i n f o r m a t i o n 
was 
e n t i r e l y u n d e r t h e 
c o n t r o l o f t h o s e d e f e n d a n t s ; 
4) 
t h a t 
t h e y c o n c e a l e d f r o m 
"and 
o t h e r w i s e p r e v e n t e d " t h e 
i n v e s t o r s 
27 
1081767 
f r o m d i s c o v e r i n g t h e i n f o r m a t i o n b e f o r e , d u r i n g , a n d a f t e r t h e 
p u r c h a s e o f t h e p r o p e r t y ; 5) t h a t H i n d s and K i r k l a n d o b t a i n e d 
an a p p r a i s a l o f t h e p r o p e r t y f o r $14,000,000 w i t h k n o w l e d g e 
t h a t J a c o b s e n h a d p u r c h a s e d t h e p r o p e r t y f o r $5,000,000 
o n l y 
d a y s 
b e f o r e ; 
6) 
t h a t 
H i n d s and K i r k l a n d r e p o r t e d 
t h a t t h e 
p u r c h a s e p r i c e o f t h e p r o p e r t y was $ 1 0 , 0 0 0 , 0 0 0 ; 7) t h a t Bon 
H a r b o r 
p u r c h a s e d 
t h e 
p r o p e r t y 
f o r $10,000,000 
and 
t h a t 
H e r r i c k , K a t z , and V a n c e p e r s o n a l l y g u a r a n t e e d t h e $7,500,000 
l o a n 
f r o m 
U n i t e d 
Bank, and t h e i n v e s t o r s were 
r e q u i r e d t o 
c o n t r i b u t e t h e r e m a i n i n g 
$2,500,000 t o w a r d t h e t r a n s a c t i o n ; 
and 8) t h a t t h e i n v e s t o r s d i d n o t o b t a i n t h e p r o p e r t y 
r e c o r d s 
u n d e r l y i n g t h e J u l y 2005 t r a n s a c t i o n b e c a u s e 
t h e y 
r e l i e d on 
H i n d s ' s and K i r k l a n d ' s s i l e n c e and r e p r e s e n t a t i o n s 
r e g a r d i n g 
t h e t r a n s a c t i o n . 
B a s e d on t h e f o r e g o i n g , i t 
i s a p p a r e n t t h a t t h e i n v e s t o r s 
a l l e g e 
t h e t i m e 
o f t h e m i s r e p r e s e n t a t i o n s 
made by 
H i n d s , 
D e c a t u r , K i r k l a n d , and G u l f S t r e a m 
( J u l y 2 0 0 5 ) , t h e c o n t e n t o f 
t h e 
m i s r e p r e s e n t a t i o n s 
( t h a t 
t h e 
p u r c h a s e 
p r i c e 
o f 
t h e 
p r o p e r t y 
was 
$10,000,000 
and 
t h e 
a p p r a i s e d 
v a l u e 
o f t h e 
p r o p e r t y was $ 1 4 , 0 0 0 , 0 0 0 ) , 
t h e f a c t s m i s r e p r e s e n t e d 
( t h a t t h e 
v a l u e 
o f 
t h e 
p r o p e r t y 
was 
$ 5 , 0 0 0 , 0 0 0 ) , 
t h e 
d e f e n d a n t ' s 
28 
1081767 
k n o w l e d g e 
o f 
t h e 
f a l s i t y 
o f 
t h e 
r e p r e s e n t a t i o n s 
( H i n d s , 
D e c a t u r , K i r k l a n d , and G u l f S t r e a m ' s 
k n o w l e d g e t h a t 
J a c o b s e n 
had p u r c h a s e d t h e p r o p e r t y f o r $5,000,000 o n l y d a y s b e f o r e 
t h e 
J u l y 
2005 
t r a n s a c t i o n ) , 
and 
t h e 
r e s u l t 
o f 
t h e 
m i s r e p r e s e n t a t i o n s 
(Bon 
H a r b o r 
p u r c h a s e d 
t h e 
p r o p e r t y 
f o r 
t w i c e 
i t s v a l u e ; 
H e r r i c k , 
K a t z , 
and 
V a n c e ' s 
p e r s o n a l l y 
g u a r a n t e e d a $7,500,000 l o a n ; and 
t h e i n v e s t o r s 
c o n t r i b u t e d 
$2,500,000 t o w a r d t h e t r a n s a c t i o n ) . 
The 
i n v e s t o r s 
d i d 
n o t 
a l l e g e 
t h e 
p l a c e 
where 
t h e 
m i s r e p r e s e n t a t i o n s 
o c c u r r e d . 
However, 
t h e i r 
t h i r d 
amended 
c o m p l a i n t 
i n c l u d e d 
s u f f i c i e n t 
a l l e g a t i o n s 
t o 
p l a c e 
t h e 
d e f e n d a n t s on n o t i c e o f t h e a c t s c o m p l a i n e d o f ; t h e i n v e s t o r s , 
t h e r e f o r e , 
s a t i s f i e d 
t h e 
r e q u i r e m e n t s 
o f 
R u l e 
9 ( b ) . 
See 
V a n l o o c k v. C u r r a n , 489 So. 2d 525, 534 
( A l a . 1 9 8 6 ) ( " W h i l e t h e 
p l e a d i n g i s p e r h a p s n o t a m o d e l o f c l a r i t y and s p e c i f i c i t y , i t 
s u f f i c i e n t l y c o m p o r t s w i t h t h e p u r p o s e o f R u l e 9(b) i n t h a t i t 
g i v e s t h e d e f e n d a n t s f a i r n o t i c e o f t h e a c t s c o m p l a i n e d 
o f . " ) . 
The 
t r i a l c o u r t , t h e r e f o r e , e r r e d i n d i s m i s s i n g t h e i n v e s t o r s ' 
f r a u d u l e n t - m i s r e p r e s e n t a t i o n 
c l a i m 
as 
t o 
H i n d s , 
D e c a t u r , 
K i r k l a n d , and G u l f 
S t r e a m . 
R e g a r d i n g J a c o b s e n , t h e i n v e s t o r s h a v e a l l e g e d o n l y 
t h a t 
29 
1081767 
he 
s o l d t h e p r o p e r t y 
t o Bon 
H a r b o r f o r more t h a n he 
p a i d 
f o r 
i t . 
I t does 
n o t 
a p p e a r 
f r o m 
t h e 
a l l e g a t i o n s o f 
t h e 
t h i r d 
amended c o m p l a i n t t h a t J a c o b s e n had 
any 
d i r e c t d e a l i n g s 
w i t h 
t h e 
i n v e s t o r s o r t h a t he m i s r e p r e s e n t e d any 
m a t e r i a l f a c t s t o 
them. 
A c c o r d i n g l y , 
t h e i n v e s t o r s h a v e n o t p l e a d e d t h e i r 
c l a i m 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n 
a g a i n s t 
J a c o b s e n 
w i t h 
p a r t i c u l a r i t y 
as 
r e q u i r e d 
by 
R u l e 
9 ( b ) . 
The 
t r i a l 
c o u r t , 
t h e r e f o r e , 
c o r r e c t l y d i s m i s s e d 
t h i s 
c l a i m as 
t o 
J a c o b s e n . 
B. 
F r a u d u l e n t 
S u p p r e s s i o n 
The 
i n v e s t o r s 
a s s e r t e d 
t h e i r 
c l a i m 
o f 
f r a u d u l e n t 
s u p p r e s s i o n 
a g a i n s t G u l f S t r e a m , K i r k l a n d , D e c a t u r , H i n d s , 
and 
J a c o b s e n . 
The 
e l e m e n t s 
o f 
a c l a i m 
o f 
f r a u d u l e n t 
s u p p r e s s i o n 
a r e : 
" ' ( 1 ) 
a d u t y 
on 
t h e 
p a r t 
o f 
t h e 
d e f e n d a n t 
t o 
d i s c l o s e 
f a c t s ; 
(2) c o n c e a l m e n t o r n o n d i s c l o s u r e 
o f m a t e r i a l 
f a c t s 
by 
t h e 
d e f e n d a n t ; 
(3) 
i n d u c e m e n t 
o f 
t h e 
p l a i n t i f f 
t o 
a c t ; 
(4) 
a c t i o n by t h e p l a i n t i f f t o h i s o r h e r i n j u r y . ' " F r e i g h t l i n e r ,  
L.L.C. v. W h a t l e y C o n t r a c t 
C a r r i e r s , L.L.C., 932 
So. 
2d 
883, 
891 
( A l a . 2005) 
( q u o t i n g 
L a m b e r t 
v. 
M a i l 
H a n d l e r s 
B e n e f i t 
 
P l a n , 
682 
So. 
2d 
61, 
63 
( A l a . 
1 
9 9 6 ) ) . 
T h i s 
c l a i m must 
be 
p l e a d e d w i t h 
p a r t i c u l a r i t y u n d e r R u l e 
9 ( b ) . 
R e g a r d i n g 
a d u t y 
t o 
d i s c l o s e , 
t h e 
i n v e s t o r s 
a l l e g e 
1) 
30 
1081767 
t h a t H i n d s and K i r k l a n d , as m a n a g e r s o f Bon H a r b o r , h a d a d u t y 
t o d i s c l o s e m a t e r i a l f a c t s r e g a r d i n g t h e J u l y 2005 
t r a n s a c t i o n 
t o t h e i n v e s t o r s ; 2) t h a t D e c a t u r and G u l f S t r e a m , as members 
o f Bon H a r b o r , h a d a d u t y t o d i s c l o s e m a t e r i a l f a c t s 
r e g a r d i n g 
t h e 
J u l y 2005 
t r a n s a c t i o n 
t o t h e i n v e s t o r s ; 3) 
t h a t 
H i n d s , 
D e c a t u r , K i r k l a n d , and G u l f S t r e a m h a d f i d u c i a r y r e l a t i o n s h i p s 
w i t h 
t h e i n v e s t o r s 
u n d e r w h i c h t h e y h a d a d u t y t o 
d i s c l o s e 
m a t e r i a l 
f a c t s 
r e g a r d i n g 
t h e J u l y 2005 
t r a n s a c t i o n 
t o t h e 
i n v e s t o r s ; 
and 4) 
t h a t 
t h e 
i n v e s t o r s 
e n t r u s t e d 
H i n d s 
and 
K i r k l a n d 
w i t h 
t h e n e g o t i a t i o n 
o f t h e J u l y 2005 
t r a n s a c t i o n 
b a s e d on t h e i r 
s u p e r i o r 
e x p e r i e n c e and k n o w l e d g e . 
As t o J a c o b s e n , t h e i n v e s t o r s h a v e n o t a l l e g e d 
t h a t 
he 
had any d u t y t o d i s c l o s e i n f o r m a t i o n 
t o them. 
T h e r e f o r e , t h e 
i n v e s t o r s 
have 
n o t 
s u f f i c i e n t l y 
p l e a d e d 
t h e i r 
c l a i m 
o f 
f r a u d u l e n t 
s u p p r e s s i o n 
a g a i n s t 
J a c o b s e n . 
As 
t o 
H i n d s , 
D e c a t u r , 
K i r k l a n d , and G u l f 
S t r e a m , as d i s c u s s e d 
a b o v e , t h e 
p a r t i e s a r g u e e x t e n s i v e l y r e g a r d i n g t h e m e r i t s o f t h e 
q u e s t i o n 
w h e t h e r 
t h e s e 
d e f e n d a n t s 
owed 
a 
d u t y 
t o 
d i s c l o s e 
t o t h e 
i n v e s t o r s 
o r h a d any 
f i d u c i a r y 
r e l a t i o n s h i p w i t h 
them. 
As 
s t a t e d a b o v e , a t t h i s s t a g e o f t h e l i t i g a t i o n we must 
c o n s i d e r 
o n l y w h e t h e r t h e i n v e s t o r s have s t a t e d any s e t o f f a c t s upon 
31 
1081767 
w h i c h 
t h e y 
may 
p o s s i b l y 
p r e v a i l . 
See 
N a n c e , 
s u p r a . 
C o n s i d e r i n g 
t h e a l l e g a t i o n s l i s t e d a b o v e , t h e i n v e s t o r s h a v e 
s u f f i c i e n t l y a l l e g e d t h a t t h e s e d e f e n d a n t s h a d d u t i e s - - a r i s i n g 
f r o m 
t h e i r 
s t a t u s as m a n a g e r s , members, and 
f i d u c i a r i e s - - t o 
d i s c l o s e i n f o r m a t i o n t o DGB, as a member o f Bon H a r b o r , and t o 
H e r r i c k , 
K a t z , 
and V a n c e , as g u a r a n t o r s o f t h e U n i t e d 
Bank 
l o a n . 
R e g a r d i n g t h e c o n c e a l m e n t 
o r n o n d i s c l o s u r e 
o f 
m a t e r i a l 
f a c t s 
b y 
H i n d s , 
D e c a t u r , 
K i r k l a n d , 
and 
G u l f 
S t r e a m , 
t h e 
i n v e s t o r s a l l e g e 1) t h a t J a c o b s e n h a d o b t a i n e d 
f u n d s f r o m Bon 
H a r b o r b e f o r e he p u r c h a s e d t h e p r o p e r t y ; 
2) t h a t 
H i n d s a n d 
K i r k l a n d u s e d Bon H a r b o r f u n d s f o r t h e i r own p u r p o s e s ; 3) t h a t 
J a c o b s e n 
p u r c h a s e d 
t h e p r o p e r t y 
f o r $5,000,000 
j u s t 
d a y s 
b e f o r e Bon H a r b o r p u r c h a s e d i t f r o m h i m f o r $ 1 0 , 0 0 0 , 0 0 0 ; 4) 
t h a t 
t h e 
d e f e n d a n t s 
knew 
o f 
t h e s e 
f a c t s 
and 
t h a t 
t h e 
i n f o r m a t i o n was e n t i r e l y i n 
t h e c o n t r o l o f t h e d e f e n d a n t s ; and 
5) 
t h a t 
t h e 
d e f e n d a n t s 
c o n c e a l e d 
f r o m 
"and 
o t h e r w i s e 
p r e v e n t e d " 
t h e i n v e s t o r s 
f r o m 
d i s c o v e r i n g 
t h e 
i n f o r m a t i o n 
b e f o r e , 
d u r i n g , 
and a f t e r t h e t r a n s a c t i o n . 
The 
i n v e s t o r s 
h a v e , 
t h e r e f o r e , 
a l l e g e d 
t h a t H i n d s , D e c a t u r , K i r k l a n d , and 
G u l f S t r e a m c o n c e a l e d m a t e r i a l 
f a c t s r e g a r d i n g t h e J u l y 2005 
32 
1081767 
t r a n s a c t i o n f r o m them. 
R e g a r d i n g w h e t h e r t h e s e d e f e n d a n t s i n d u c e d t h e i n v e s t o r s 
t o a c t , t h e i n v e s t o r s 
a l l e g e 
t h a t 
t h e y p a r t i c i p a t e d i n t h e 
J u l y 
2005 
t r a n s a c t i o n 
and 
t h a t 
t h e y 
d i d n o t 
o b t a i n 
t h e 
p r o p e r t y 
r e c o r d s 
u n d e r l y i n g 
t h e 
t r a n s a c t i o n 
b e c a u s e 
t h e y 
r e l i e d on t h e a c t i o n s , s i l e n c e , and r e p r e s e n t a t i o n s 
o f H i n d s , 
D e c a t u r , 
K i r k l a n d , 
and 
G u l f 
S t r e a m . 
F i n a l l y , 
r e g a r d i n g 
w h e t h e r t h e i n v e s t o r s a c t e d t o t h e i r 
i n j u r y , t h e y a l l e g e 
t h a t 
Bon H a r b o r p u r c h a s e d t h e p r o p e r t y 
f o r t w i c e 
i t s 
v a l u e , 
t h a t 
H e r r i c k , K a t z , and V a n c e p e r s o n a l l y g u a r a n t e e d t h e $7,500,000 
U n i o n Bank l o a n , a n d t h a t t h e i n v e s t o r s c o n t r i b u t e d $2,500,000 
t o t h e t r a n s a c t i o n . 
The i n v e s t o r s , 
t h e r e f o r e , h a v e 
a l l e g e d 
e a c h e l e m e n t o f 
t h e i r 
f r a u d u l e n t - s u p p r e s s i o n 
c l a i m 
a g a i n s t 
H i n d s , D e c a t u r , K i r k l a n d , and G u l f S t r e a m w i t h 
p a r t i c u l a r i t y 
as 
r e q u i r e d 
b y 
R u l e 
9 ( b ) . 
T h e r e f o r e , 
t h e 
t r i a l 
c o u r t 
c o r r e c t l y 
d i s m i s s e d 
t h e f r a u d u l e n t - s u p p r e s s i o n 
c l a i m 
as t o 
J a c o b s e n b u t 
e r r e d 
i n d i s m i s s i n g 
t h a t 
c l a i m 
as t o 
H i n d s , 
D e c a t u r , K i r k l a n d , and G u l f 
S t r e a m . 
C. 
S e c u r i t i e s F r a u d 
S e c t i o n 8 - 6 - 1 9 ( a ) ( 2 ) , A l a . 
Code 1975, g r a n t s t h e b u y e r o f 
a s e c u r i t y a r i g h t o f a c t i o n 
a g a i n s t 
a s e l l e r who 
s o l d t h e 
33 
1081767 
s e c u r i t y "by means o f any u n t r u e s t a t e m e n t o f a m a t e r i a l 
f a c t 
o r any o m i s s i o n t o s t a t e a m a t e r i a l 
f a c t . " 
T h i s 
C o u r t h a s 
s t a t e d : " [ A ] c l a i m o f a v i o l a t i o n o f § 8 - 6 - 1 9 ( a ) ( 2 ) , A l a . Code 
1975, 
r e q u i r e s 
(1) a s a l e o r an o f f e r t o s e l l a s e c u r i t y (2) 
by means o f a f a l s e s t a t e m e n t o r o m i s s i o n (3) o f m a t e r i a l 
f a c t 
and 
(4) t h e i g n o r a n c e 
o f t h e b u y e r as t o t h e u n t r u t h 
o r 
o m i s s i o n . " 
B l a c k m o n v . N e x i t y 
F i n . C o r p . , 953 So. 2d 1180, 
1191 
( A l a . 2 0 0 6 ) . 
T h i s 
c l a i m 
must 
be 
p l e a d e d 
w i t h 
p a r t i c u l a r i t y u n d e r R u l e 9 ( b ) . 
The 
i n v e s t o r s 
a s s e r t e d 
t h e i r 
c l a i m o f s e c u r i t i e s 
f r a u d 
a g a i n s t 
H i n d s , D e c a t u r , K i r k l a n d , and G u l f S t r e a m . 
I n t h e i r 
b r i e f s 
on 
a p p e a l , 
t h e i n v e s t o r s 
m a i n t a i n 
t h a t 
t h i s 
c l a i m 
r e l a t e s t o DGB's p u r c h a s e o f a 40% i n t e r e s t i n Bon H a r b o r i n 
J u n e 2005. 
I t i s u n c l e a r w h e t h e r a c l a i m u n d e r § 8 - 6 - 1 9 ( a ) ( 2 ) 
may a r i s e f r o m t h e s a l e o f an i n t e r e s t i n an L L C . 
M o r e o v e r , 
t h e i n v e s t o r s h a v e n o t a l l e g e d a n y f a l s e s t a t e m e n t o r o m i s s i o n 
o f m a t e r i a l 
f a c t by H i n d s , D e c a t u r , K i r k l a n d , o r G u l f 
S t r e a m 
r e l a t i n g t o DGB's p u r c h a s e o f an i n t e r e s t i n Bon H a r b o r . 
The 
i n v e s t o r s , 
t h e r e f o r e , have n o t s t a t e d a c l a i m o f s e c u r i t i e s 
f r a u d upon w h i c h 
r e l i e f c a n be g r a n t e d , and t h e t r i a l 
c o u r t 
d i d n o t e r r i n d i s m i s s i n g t h e c l a i m . 
34 
1081767 
D. 
S h a r e h o l d e r 
O p p r e s s i o n 
The i n v e s t o r s a s s e r t e d a c l a i m o f s h a r e h o l d e r 
o p p r e s s i o n 
a g a i n s t 
H i n d s , D e c a t u r , K i r k l a n d , and G u l f S t r e a m . 
I n t h e i r 
b r i e f on a p p e a l , 
t h e i n v e s t o r s 
c i t e 
o n l y § 1 0 - 1 2 - 2 1 ( h ) , A l a . 
Code 1975, a n d a l e g a l 
t r e a t i s e t o s u p p o r t 
t h e i r 
c o n t e n t i o n 
t h a t t h e t r i a l 
c o u r t e r r e d i n d i s m i s s i n g t h a t c l a i m . 
S e c t i o n 
1 0 - 1 2 - 2 1 ( h ) 
s t a t e s o n l y 
t h a t " [ a ] member s h a l l d i s c h a r g e t h e 
d u t i e s t o a member-managed company and i t s o t h e r members u n d e r 
t h i s c h a p t e r o r u n d e r t h e o p e r a t i n g a g r e e m e n t and e x e r c i s e any 
r i g h t s c o n s i s t e n t l y w i t h t h e o b l i g a t i o n o f g o o d f a i t h a n d f a i r 
d e a l i n g . " 
The i n v e s t o r s have n o t c i t e d any A l a b a m a 
a u t h o r i t y 
s h o w i n g 
t h a t 
§ 
1 0 - 1 2 - 2 1 ( h ) 
a p p l i e s 
t o 
H i n d s , 
D e c a t u r , 
K i r k l a n d , o r G u l f 
S t r e a m , o r t h a t § 1 0 - 1 2 - 2 1 ( h ) 
s u p p o r t s a 
c l a i m o f " s h a r e h o l d e r 
o p p r e s s i o n . " 
N o r h a v e t h e i n v e s t o r s 
c i t e d 
any a u t h o r i t y 
s h o w i n g 
t h a t 
t h e a l l e g a t i o n s o f 
t h e i r 
t h i r d amended c o m p l a i n t a d e q u a t e l y s t a t e s u c h a c l a i m . 
T h i s C o u r t h a s s t a t e d : 
" R u l e 2 8 ( a ) ( 1 0 ) , A l a . R. App. P., r e q u i r e s 
t h a t 
a r g u m e n t s i n 
an a p p e l l a n t ' s b r i e f c o n t a i n 
' c i t a t i o n s 
t o t h e c a s e s , s t a t u t e s , o t h e r 
a u t h o r i t i e s , and p a r t s 
o f t h e r e c o r d 
r e l i e d 
o n . ' 
F u r t h e r , 
' i t 
i s w e l l 
s e t t l e d 
t h a t 
a 
f a i l u r e 
t o 
c o m p l y 
w i t h 
t h e 
r e q u i r e m e n t s o f R u l e 2 8 ( a ) ( 1 0 ) r e q u i r i n g c i t a t i o n o f 
a u t h o r i t y 
i n s u p p o r t 
o f t h e a r g u m e n t s 
p r e s e n t e d 
p r o v i d e s 
t h i s 
C o u r t 
w i t h a b a s i s f o r d i s r e g a r d i n g 
35 
1081767 
t h o s e a r g u m e n t s . ' S t a t e Farm Mut. A u t o . I n s . 
Co. v .  
M o t l e y , 
909 So. 2d 806, 822 ( A l a . 2005) 
( c i t i n g Ex  
p a r t e 
S h o w e r s , 812 So. 2d 277 
, 281 
( A l a . 2001 ) ) . 
T h i s i s 
s o , b e c a u s e 
' " i t i s 
n o t t h e f u n c t i o n o f t h i s  
C o u r t t o do a p a r t y ' s 
l e g a l r e s e a r c h o r t o make and  
a d d r e s s 
l e g a l 
a r g u m e n t s 
f o r a 
p a r t y 
b a s e d 
on 
 
u n d e l i n e a t e d 
g e n e r a l 
p r o p o s i t i o n s n o t s u p p o r t e d b y  
s u f f i c i e n t 
a u t h o r i t y o r a r g u m e n t . " ' B u t l e r v. Town  
o f A r g o , 871 So. 2d 1, 20 ( A l a . 2003) ( q u o t i n g Dykes  
v. Lane T r u c k i n g , I n c . , 
652 So. 2d 248 
, 251 ( A l a . 
19 9 
4 ) ) . " 
Jimmy Day P l u m b i n g & H e a t i n g , I n c . 
v. S m i t h , 964 So. 2d 1, 9 
( A l a . 
2007) ( e m p h a s i s a d d e d ) . 
B e c a u s e t h e i n v e s t o r s have n o t 
c o m p l i e d w i t h t h e r e q u i r e m e n t s o f R u l e 2 8 ( a ) ( 1 0 ) , A l a . R. 
C i v . 
P., we w i l l n o t c o n s i d e r t h e i r a r g u m e n t s as t o t h i s c l a i m , and 
we a f f i r m t h e t r i a l 
c o u r t ' s d i s m i s s a l o f t h i s 
c l a i m . 
E. 
B r e a c h o f F i d u c i a r y D u t y 
The 
i n v e s t o r s a l l e g e a c l a i m o f b r e a c h o f f i d u c i a r y 
d u t y 
a g a i n s t H i n d s , 
D e c a t u r , 
K i r k l a n d , and G u l f S t r e a m . 
I n Bank o f 
Red Bay v . K i n g , 482 So. 2d 274 ( A l a . 1 9 8 5 ) , a f i d u c i a r y o r 
c o n f i d e n t i a l 
r e l a t i o n s h i p was d e f i n e d : 
"'"A 
c o n f i d e n t i a l 
r e l a t i o n s h i p i s one i n 
w h i c h one p e r s o n 
o c c u p i e s 
t o w a r d 
a n o t h e r 
s u c h a p o s i t i o n o f a d v i s e r o r c o u n s e l o r as 
r e a s o n a b l y 
t o i n s p i r e 
c o n f i d e n c e 
t h a t he 
w i l l 
a c t i n g o o d 
f a i t h 
f o r t h e 
o t h e r ' s 
i n t e r e s t s , o r when one p e r s o n h a s 
g a i n e d 
t h e 
c o n f i d e n c e o f a n o t h e r and p u r p o r t s t o 
a c t 
o r a d v i s e w i t h t h e o t h e r ' s 
i n t e r e s t i n 
m i n d ; 
where 
t r u s t 
and 
c o n f i d e n c e 
a r e 
r e p o s e d b y one p e r s o n i n a n o t h e r who, as a 
36 
1081767 
r e s u l t , 
g a i n s an i n f l u e n c e o r 
s u p e r i o r i t y 
o v e r t h e o t h e r ; and i t a p p e a r s 
when t h e 
c i r c u m s t a n c e s make i t c e r t a i n t h e p a r t i e s 
do n o t d e a l on e q u a l t e r m s , b u t , 
on t h e one 
s i d e , t h e r e i s an o v e r m a s t e r i n g 
i n f l u e n c e , 
o r , on t h e o t h e r , w e a k n e s s , d e p e n d e n c e , o r 
t r u s t , 
j u s t i f i a b l y 
r e p o s e d ; 
i n b o t h 
an 
u n f a i r a d v a n t a g e i s p o s s i b l e . I t a r i s e s i n 
c a s e s i n w h i c h 
c o n f i d e n c e i s r e p o s e d and 
a c c e p t e d , o r i n f l u e n c e a c q u i r e d , and i n a l l 
t h e v a r i e t y o f r e l a t i o n s i n w h i c h 
d o m i n i o n 
may 
be 
e x e r c i s e d 
by 
one 
p e r s o n 
o v e r 
a n o t h e r . " 
"'15A 
C . J . S . C o n f i d e n t i a l 
( 1 9 6 7 ) . ' " 
482 So. 2d a t 284. See a l s o K & C Dev. C o r p . v . AmSouth Bank,  
N.A., 597 So. 2d 671, 675 ( A l a . 1 9 9 2 ) . 
As d i s c u s s e d a b o v e , 
t h e 
i n v e s t o r s 
h a v e 
s u f f i c i e n t l y 
a l l e g e d 
t h e e x i s t e n c e o f 
f i d u c i a r y 
r e l a t i o n s h i p s w i t h t h e s e d e f e n d a n t s . The 
i n v e s t o r s 
f u r t h e r a l l e g e t h a t t h e s e d e f e n d a n t s b r e a c h e d 
t h e i r 
f i d u c i a r y 
d u t i e s 
by 
m i s r e p r e s e n t i n g 
i n f o r m a t i o n t o and 
c o n c e a l i n g 
i n f o r m a t i o n f r o m t h e i n v e s t o r s , b y u s i n g Bon H a r b o r 
f u n d s f o r 
t h e i r 
own 
p u r p o s e s , 
and by p r o c e e d i n g 
w i t h t h e J u l y 
2005 
t r a n s a c t i o n 
d e s p i t e k n o w l e d g e o f t h e a c t u a l 
v a l u e 
o f t h e 
p r o p e r t y . 
F i n a l l y , 
t h e i n v e s t o r s 
a l l e g e 
t h a t 
t h e y 
were 
i n j u r e d as a r e s u l t o f t h e s e d e f e n d a n t s ' 
a c t i o n s b e c a u s e Bon 
H a r b o r 
p u r c h a s e d t h e p r o p e r t y f o r t w i c e i t s v a l u e , H e r r i c k , 
K a t z , a n d V a n c e g u a r a n t e e d t h e $7,500,000 U n i t e d Bank l o a n , 
37 
1081767 
and 
t h e i n v e s t o r s c o n t r i b u t e d $2,500,000 t o w a r d t h e J u l y 2005 
t r a n s a c t i o n . 
B a s e d 
on 
t h e 
f o r e g o i n g , 
t h e 
i n v e s t o r s 
have 
s t a t e d a c l a i m o f b r e a c h o f 
f i d u c i a r y d u t y upon w h i c h 
r e l i e f 
may 
be 
g r a n t e d , 
and 
t h e 
t r i a l 
c o u r t 
e r r e d 
i n d i s m i s s i n g 
t h e 
c l a i m . 
F. 
C i v i l 
C o n s p i r a c y 
The 
i n v e s t o r s s t a t e a c l a i m o f 
c i v i l 
c o n s p i r a c y 
a g a i n s t 
H i n d s , D e c a t u r , K i r k l a n d , G u l f S t r e a m , and 
J a c o b s e n b a s e d 
on 
an 
a l l e g e d 
c o n s p i r a c y 
among 
them 
t o 
"commit 
t h e 
... 
i n t e n t i o n a l 
t o r t s " 
a l l e g e d i n t h e i r 
t h i r d amended 
c o m p l a i n t . 
T h i s C o u r t has 
s t a t e d : 
" ' A l a b a m a 
r e c o g n i z e s 
[ c i v i l 
c o n s p i r a c y ] 
as 
a 
s u b s t a n t i v e 
t o r t . ' 
P u r c e l l 
Co. 
v. 
S p r i g g s 
E n t e r s . , 
 
I n c . , 
431 
So. 
2d 
515, 
522 
( A l a . 1 9 8 3 ) . 
' I n e s s e n c e , 
c i v i l 
c o n s p i r a c y 
i s a 
c o m b i n a t i o n 
o f 
two 
o r more 
p e r s o n s t o do: 
(a) s o m e t h i n g t h a t i s u n l a w f u l ; 
[ o r ] 
(b) s o m e t h i n g t h a t i s l a w f u l by u n l a w f u l means.' I d . 
See 
a l s o E i d s o n 
v. O l i n C o r p . , 527 
So. 
2d 1283, 
1285 
( A l a . 
1 9 8 8 ) . 
' I n 
a 
c o n s p i r a c y , 
t h e 
a c t s 
o f 
c o c o n s p i r a t o r s 
a r e 
a t t r i b u t a b l e 
t o 
e a c h 
o t h e r . ' 
W i l l i a m s 
v. A e t n a F i n . Co., 
83 O h i o S t . 3 d 464, 
476, 
700 N.E.2d 859, 
868 
( 1 9 9 8 ) . " 
Ex 
p a r t e 
R e i n d e l , 
963 
So. 
2d 
614, 
621 
n.11 
( A l a . 2 0 0 7 ) . 
"A 
c i v i l 
c o n s p i r a c y 
c l a i m o p e r a t e s t o e x t e n d , b e y o n d t h e 
a c t i v e 
w r o n g d o e r , 
l i a b i l i t y 
i n 
t o r t 
t o 
a c t o r s 
who 
have 
m e r e l y 
a s s i s t e d , 
e n c o u r a g e d , 
o r p l a n n e d 
t h e w r o n g d o e r ' s a c t s . " 
16 
38 
1081767 
Am. 
J u r . 2d C o n s p i r a c y 
§ 57 
( 2 0 0 9 ) . 
"A 
p l a i n t i f f 
a l l e g i n g 
a 
c o n s p i r a c y 
must 
h a v e 
a 
v a l i d 
u n d e r l y i n g 
c a u s e 
o f 
a c t i o n . 
[ D r i l l 
P a r t s 
& S e r v . 
Co. 
v. 
J o y 
M f g . 
Co., 
619 
So. 
2d 
1280 
( A l a . 
1 9 9 3 ) . ] 
'[A] 
c o n s p i r a c y 
c l a i m 
must 
f a i l 
i f 
t h e 
u n d e r l y i n g a c t 
i t s e l f w o u l d n o t s u p p o r t 
an a c t i o n . ' 
T r i p l e 
J 
 
C a t t l e , 
I n c . v. Chambers, 621 
So. 
2d 1221, 
1225 
( A l a . 1 9 9 3 ) . " 
C a l l e n s v. J e f f e r s o n C o u n t y N u r s i n g Home, 769 
So. 
2d 273, 
280 
( A l a . 
2 0 0 0 ) . 
B a s e d on t h e s e 
p r i n c i p l e s , t h e d e f e n d a n t s a r g u e 
t h a t , b e c a u s e t h e i n v e s t o r s ' u n d e r l y i n g c l a i m s were d i s m i s s e d , 
t h e 
t r i a l 
c o u r t a l s o c o r r e c t l y d i s m i s s e d 
t h e i r c l a i m o f 
c i v i l 
c o n s p i r a c y . 
We 
h a v e p r e v i o u s l y c o n c l u d e d 
t h a t t h e 
t r i a l 
c o u r t 
e r r e d 
i n 
d i s m i s s i n g 
t h e 
i n v e s t o r s ' 
c l a i m s 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n and f r a u d u l e n t s u p p r e s s i o n as t h e y r e l a t e t o 
H i n d s , 
D e c a t u r , 
K i r k l a n d , 
and 
G u l f 
S t r e a m . 
The 
i n v e s t o r s 
a l l e g e t h a t t h o s e d e f e n d a n t s a g r e e d and w o r k e d t o g e t h e r , 
w i t h 
J a c o b s e n , t o k n o w i n g l y m i s r e p r e s e n t 
i n f o r m a t i o n t o and 
c o n c e a l 
m a t e r i a l f a c t s f r o m t h e i n v e s t o r s . 
The 
i n v e s t o r s , t h e r e f o r e , 
h a v e a l l e g e d t h a t 
t h i s 
c o m b i n a t i o n 
o f p e r s o n s and 
e n t i t i e s - ¬
H i n d s , 
D e c a t u r , 
K i r k l a n d , G u l f S t r e a m , 
and 
J a c o b s e n - - a g r e e d 
and 
a c t e d t o g e t h e r 
t o engage i n u n l a w f u l c o n d u c t t h a t i n j u r e d 
39 
1081767 
t h e 
i n v e s t o r s . 
B e c a u s e 
t h e 
i n v e s t o r s 
h a v e 
a l l e g e d 
v a l i d 
u n d e r l y i n g c a u s e s o f a c t i o n and b e c a u s e a c t s o f 
c o c o n s p i r a t o r s 
a r e 
a t t r i b u t a b l e t o e a c h 
o t h e r , 
s e e 
R e i n d e l , 
s u p r a , 
t h e 
i n v e s t o r s h a v e s t a t e d a c l a i m o f c i v i l 
c o n s p i r a c y 
upon w h i c h 
r e l i e f 
may 
be 
g r a n t e d 
a g a i n s t 
e a c h 
o f 
t h e s e 
d e f e n d a n t s . 
A c c o r d i n g l y , 
t h e t r i a l 
c o u r t 
e r r e d i n d i s m i s s i n g 
t h i s 
c l a i m . 
G. 
N e g l i g e n c e 
The i n v e s t o r s s t a t e a n e g l i g e n c e 
c l a i m a g a i n s t H i n d s and 
K i r k l a n d . 
" I n any n e g l i g e n c e 
c a s e , t h e p l a i n t i f f 
b e a r s t h e 
b u r d e n 
o f 
p r o v i n g 
t h e 
e x i s t e n c e 
o f 
a 
d u t y 
owed 
by 
t h e 
d e f e n d a n t , 
a b r e a c h 
o f t h a t 
d u t y , 
c a u s a t i o n , 
and damage." 
G l a s s v . B i r m i n g h a m S o u t h e r n R.R., 
905 So. 2d 789, 794 ( A l a . 
2 0 0 4 ) . 
The 
i n v e s t o r s 
a l l e g e 
t h a t 
H i n d s 
and 
K i r k l a n d , 
as 
m a n a g e r s o f Bon H a r b o r and i n d i v i d u a l s t o whom t h e i n v e s t o r s 
had 
e n t r u s t e d 
t h e n e g o t i a t i o n s 
c u l m i n a t i n g 
i n t h e J u l y 2005 
t r a n s a c t i o n , 
owed 
a 
d u t y 
o f 
c a r e 
w i t h 
r e s p e c t 
t o 
t h a t 
t r a n s a c t i o n ; 
t h a t 
H i n d s and K i r k l a n d b r e a c h e d 
t h a t 
d u t y o f 
c a r e 
b y g o i n g 
f o r w a r d 
w i t h 
t h e J u l y 2005 
t r a n s a c t i o n 
w i t h 
k n o w l e d g e 
t h a t t h e v a l u e 
o f t h e p r o p e r t y 
was 
l e s s t h a n t h e 
i n v e s t o r s were r e q u i r e d t o p a y ; and t h a t t h e i n v e s t o r s were 
i n j u r e d 
by 
H i n d s 
and 
K i r k l a n d ' s 
c o n d u c t 
i n 
t h a t 
t h e y 
40 
1081767 
c o n t r i b u t e d 
$2,500,000 t o w a r d t h e J u l y 2005 t r a n s a c t i o n and 
H e r r i c k , K a t z , and V a n c e p e r s o n a l l y g u a r a n t e e d t h e $7,500,000 
U n i t e d Bank l o a n . 
A c c o r d i n g l y , 
t h e i n v e s t o r s have s t a t e d a 
c l a i m o f n e g l i g e n c e 
upon w h i c h r e l i e f may be g r a n t e d , and 
t h e 
t r i a l 
c o u r t 
e r r e d i n d i s m i s s i n g 
t h i s 
c l a i m . 
H. 
A c c o u n t i n g and D i s s o l u t i o n 
I n 
t h e i r 
b r i e f on a p p e a l , 
t h e i n v e s t o r s do n o t c i t e any 
a u t h o r i t y t o s u p p o r t t h e i r a r g u m e n t t h a t t h e t r i a l c o u r t 
e r r e d 
i n d i s m i s s i n g t h e i r c l a i m f o r an a c c o u n t i n g and d i s s o l u t i o n o f 
Bon 
H a r b o r . 
As n o t e d a b o v e , R u l e 2 8 ( a ) ( 1 0 ) , 
A l a . R. C i v . 
P., 
r e q u i r e s 
t h a t 
a p p e l l a n t s 
s u p p o r t 
t h e i r 
a r g u m e n t s 
w i t h 
c i t a t i o n s t o a u t h o r i t y . 
" ' " [ I ] t i s n o t t h e f u n c t i o n o f t h i s 
C o u r t t o do a p a r t y ' s 
l e g a l 
r e s e a r c h o r t o make and a d d r e s s 
l e g a l 
a r g u m e n t s f o r a p a r t y 
b a s e d on u n d e l i n e a t e d 
g e n e r a l 
p r o p o s i t i o n s 
n o t 
s u p p o r t e d 
b y 
s u f f i c i e n t 
a u t h o r i t y 
o r 
a r g u m e n t . " ' " 
Jimmy Day P l u m b i n g , 964 So. 2d a t 9 
( q u o t i n g 
B u t l e r v . Town o f A r g o , 871 So. 2d 1, 20 ( A l a . 2 0 0 3 ) , 
q u o t i n g 
i n 
t u r n Dykes v. Lane 
T r u c k i n g , 
I n c . , 
652 So. 2d 248, 251 
( A l a . 
1 9 9 4 ) ) . 
B e c a u s e t h e i n v e s t o r s have 
f a i l e d t o c o m p l y 
w i t h t h e r e q u i r e m e n t s o f R u l e 2 8 ( a ) ( 1 0 ) as t o t h i s c l a i m , we 
w i l l 
n o t c o n s i d e r 
t h e i r 
a r g u m e n t s and we 
a f f i r m t h e 
t r i a l 
41 
1081767 
c o u r t ' s d i s m i s s a l o f t h i s c l a i m . 
We n o t e , h o w e v e r , t h a t t h e 
r e s o l u t i o n 
o f t h e r e m a i n i n g 
c l a i m s 
i n t h i s 
p r o c e e d i n g 
on 
remand may g i v e 
r i s e t o new f a c t s a n d c i r c u m s t a n c e s 
t h a t a r e 
c o m p a t i b l e 
w i t h a r e n e w a l o f t h e m a t t e r s made t h e b a s i s o f 
t h i s 
c l a i m . 
C o n c l u s i o n 
A c c o r d i n g l y , we a f f i r m t h e t r i a l c o u r t ' s d i s m i s s a l o f 
t h e 
i n v e s t o r s ' 
c l a i m f o r an a c c o u n t i n g 
a n d d i s s o l u t i o n 
o f Bon 
H a r b o r , o f t h e i r f r a u d u l e n t - m i s r e p r e s e n t a t i o n a n d f r a u d u l e n t -
s u p p r e s s i o n 
c l a i m s 
a g a i n s t 
J a c o b s e n , a n d o f t h e i r 
c l a i m s o f 
s e c u r i t i e s 
f r a u d a n d s h a r e h o l d e r 
o p p r e s s i o n . 
We r e v e r s e t h e 
t r i a l 
c o u r t ' s d i s m i s s a l o f t h e i n v e s t o r s ' c l a i m s o f b r e a c h o f 
f i d u c i a r y 
d u t y , 
c i v i l 
c o n s p i r a c y , 
n e g l i g e n c e 
a n d , as 
t h e y 
r e l a t e t o H i n d s , 
D e c a t u r , 
K i r k l a n d , a n d G u l f 
S t r e a m , 
t h e i r 
c l a i m s 
o f 
f r a u d u l e n t 
m i s r e p r e s e n t a t i o n 
a n d 
f r a u d u l e n t 
s u p p r e s s i o n . 
We remand t h e c a u s e t o t h e t r i a l 
c o u r t f o r 
f u r t h e r p r o c e e d i n g s 
c o n s i s t e n t w i t h 
t h i s 
o p i n i o n . 
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. 
Cobb, C . J . , a n d W o o d a l l , 
S t u a r t , S m i t h , 
B o l i n , 
P a r k e r , 
and M u r d o c k , J J . , c o n c u r . 
42