Title: Charles M. Fogarty and Jane C. Fogarty v. Parker, Poe, Adams & Bernstein, LLP et al.

State: alabama

Issuer: Alabama Supreme Court

Document:

REL:8/18/2006 Fogarty v. Parker Poe
REL:1/12/2007 As modified on denial of rehearing 
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of
Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741
((334) 242-4621), of any typographical or other errors, in order that corrections may
be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 OCTOBER TERM, 2006-2007
_________________________
1040335
_________________________
Charles M. Fogarty and Jane C. Fogarty
v.
Parker, Poe, Adams, and Bernstein, L.L.P., et al.
Appeal from Baldwin Circuit Court
(CV-04-68)
SMITH, Justice.
The plaintiffs below, Charles M. Fogarty and Jane C.
Fogarty, appeal from the trial court's judgment dismissing all
claims against the defendants, J. Keith Jones, John T. Baron,
and Parker, Poe, Adams, and Bernstein, L.L.P.  We affirm in
part, reverse in part, and remand.
1040335
2
Facts and Procedural History
Parker, Poe, Adams, and Bernstein is a North Carolina law
firm.  Jones and Baron are licensed attorneys who practice at
that firm; Jones and Baron are apparently licensed to practice
law in various states, but they are not licensed to practice
law in Alabama (hereinafter all three appellees will
collectively be referred to as "Parker Poe"). 
The Fogartys are residents of South Carolina; they were
minority members in three closely held companies: Confederate
Money, LLC; Pleasure Island Hotel Corporation; and Victory
Ventures, LLC.  All of these companies were organized under
the laws of Alabama and were involved in a failed real-estate
venture in Gulf Shores, Alabama.  The majority shareholder in
the venture was MacPherson Group, Inc., which is made up of
Gary Southworth, Ann Bearden, and James Bearden. 
In early 2002, the Fogartys became concerned by a sudden
deterioration in the finances of the venture.  Based on this
concern, the Fogartys traveled to Gulf Shores and met with
Robert Grant, the accountant for Confederate Money.  Based on
statements made by Grant, the Fogartys suspected that
Southworth 
and 
the 
Beardens 
had 
made 
numerous
1040335
3
misrepresentations regarding the affairs of the venture.  Jane
Fogarty later returned to Robert Grant's office, where she was
permitted only limited access to certain Confederate Money
records located at Grant's office.  Around March 2002, the
Fogartys initiated their ongoing attempts to obtain certain
accounting information and other records of the failed real-
estate venture from the MacPherson Group, Inc.  The Fogartys
allege that Southworth illegally deposited Confederate Money
funds into a MacPherson Group checking account.  
Parker Poe delivered a letter to the Fogartys on April
17, 2002, explicitly stating that it represented the
MacPherson Group and Southworth, and stating that the Fogartys
would not be allowed to inspect and copy the records of
Confederate Money.  It is unclear whether at that time Parker
Poe was also representing Confederate Money.  According to the
Fogartys, Parker Poe repeatedly threatened legal action
against them if they continued to seek access to the records
and to claim that Southworth and the MacPherson Group had
committed fraud.  The Fogartys allege that Parker Poe
misrepresented to them Alabama law by stating that under
Alabama law the Fogartys were not entitled to review the books
1040335
4
and records of Confederate Money.  After the Fogartys had
retained their own attorney, they received a letter from
Parker Poe in July 2002, stating that the Fogartys were
already in possession of all the records of Confederate Money.
The Fogartys then attempted to meet again with Robert Grant,
but Parker Poe sent letters to the Fogartys stating that the
Fogartys did not have the right to contact Grant.  According
to the complaint, in August 2003, Parker Poe explicitly stated
that it had represented Confederate Money.  Parker Poe never
produced the business records the Fogartys were seeking.
According to the complaint, Parker Poe removed the books and
records of Confederate Money from Alabama specifically to
prevent the Fogartys from having access to those books and
records.
Because of Parker Poe's actions, the Fogartys allege,
they were unable to investigate how the funds they had
contributed to the venture had been used and the financial
status of Confederate Money, a company in which they were
minority members.  The Fogartys also allege that they are due
statutory penalties as a result of Parker Poe's role in
wrongfully preventing the Fogartys from inspecting the
1040335
5
company's records.
On January 16, 2004, the Fogartys sued 13 defendants,
including Parker Poe.  The complaint stated 14 counts, all of
which arise out of the failed real-estate development venture
in Gulf Shores.  The Fogartys' complaint sought a preliminary
injunction (count 1) and a declaratory judgment (count 2).
The complaint also sought damages for money owed (count 3),
oppression (count 4), breach of fiduciary duty (count 5),
conversion 
(count 
6), 
fraud, 
suppression, 
and
misrepresentation (count 7), conspiracy to defraud and
suppress (count 8), and civil theft/embezzlement (count 9).
The complaint further alleged violations under the Alabama
Limited Liability Company Act, § 10-12-1 et seq., Ala. Code
1975 (count 10), and the Alabama Business Corporation Act, §
10-2B-1.01 et seq., Ala. Code 1975 (count 11).  Finally, the
complaint alleged abuse of corporate form (count 12), a
derivative action (count 13), and the unauthorized practice of
law (count 14).  The unauthorized-practice-of-law claim is
specifically directed at Parker Poe, but all of the counts in
the complaint include demands for relief against the
"defendants" generally.
1040335
6
On April 21, 2004, Parker Poe filed a Rule 12(b)(6), Ala.
R. Civ. P., motion to dismiss all of the claims against them.
The grounds for the motion were: (1) that it affirmatively
appeared from the complaint that the Fogartys were not clients
of Parker Poe for purposes of a legal-malpractice action
because, it alleged, the Fogartys were not in privity with
Parker Poe and Parker Poe thus owed no legal duty to the
Fogartys; (2) that it affirmatively appeared from the
complaint that the Fogartys' claims arose out of the rendition
of legal services by Parker Poe and that the Fogartys'
exclusive remedy for such claims is under the Alabama Legal
Services Liability Act, § 6-5-570 et seq., Ala. Code 1975
("the ALSLA") and no claim is made under that Act; and (3)
that no cause of action exists in Alabama either for the
unauthorized practice of law or for the violation of the
Alabama Rules of Professional Conduct, which prohibit the
unauthorized practice of law.  
On June 28, 2004, the trial court entered the following
notation on the case-action summary: "Motion to dismiss
granted as to J. Keith Jones, John T. Baron, and Parker, Poe,
Adams and Bernstein, L.L.P."  The Fogartys filed a motion to
1040335
7
alter, amend, or vacate the judgment of dismissal, which the
trial court denied.  On November 8, 2004, the trial court
certified the order as final under Rule 54(b), Ala. R. Civ. P.
The Fogartys appealed.
Standard of Review
"This Court must review de novo the propriety of
a dismissal for failure to state a claim and must
resolve all doubts in favor of the plaintiff: 
"'It is a well-established principle of law
in this state that a complaint, like all
other 
pleadings, 
should 
be 
liberally
construed, Rule 8(f), Ala. R. Civ. P., and
that a dismissal for failure to state a
claim is properly granted only when it
appears beyond a doubt that the plaintiff
can prove no set of facts entitling him to
relief. Winn-Dixie Montgomery, Inc. v.
Henderson, 371 So. 2d 899 (Ala. 1979)....
"'Where a 12(b)(6)[, Ala. R. Civ. P.,]
motion has been granted and this Court is
called upon to review the dismissal of the
complaint, we must examine the allegations
contained therein and construe them so as
to resolve all doubts concerning the
sufficiency of the complaint in favor of
the plaintiff. First National Bank v.
Gilbert Imported Hardwoods, Inc., 398 So.
2d 258 (Ala. 1981). In so doing, this Court
does not consider whether the plaintiff
will ultimately prevail, only whether he
has stated a claim under which he may
possibly prevail. Karagan v. City of
Mobile, 420 So. 2d 57 (Ala. 1982).' 
"Fontenot v. Bramlett, 470 So. 2d 669, 671 (Ala.
1040335
Count 1 seeks a preliminary injunction to freeze the
1
assets of the real-estate venture, and it is not alleged that
Parker Poe has any control over the spending of those assets.
Count 2 seeks a judgment declaring the interest of each party
in the various limited liability companies, and it is
undisputed that Parker Poe does not have any ownership
interest in any of the limited liability companies.  Count 3
seeks money owed the Fogartys from capital contributions made
toward the real-estate venture.  Parker Poe does not control
the funds of the real-estate venture, and, based on the facts
alleged in the complaint, there is no indication that Parker
Poe had any involvement whatsoever in the alleged capital
contributions.  Counts 4 and 5 allege oppression and breach of
fiduciary duty by the majority shareholders in the real-estate
venture, and Parker Poe is not a shareholder in the venture.
Count 6 alleges conversion of funds, and it is apparent from
the factual allegations in the complaint that this allegation
concerns conversion of the assets of the venture by the
majority shareholders, not Parker Poe, for their own personal
use.  Count 9 alleges civil theft/embezzlement, again stemming
8
1985)."
Bay Lines, Inc. v. Stoughton Trailers, Inc., 838 So. 2d 1013,
1017-18 (Ala. 2002).
Analysis
On appeal, the Fogartys have not specifically stated
which of the 14 counts in the complaint they contend should
not have been dismissed for failure to state a claim against
Parker Poe.  It appears that the actions alleged in counts 1-
6, 9, 12, and 13 are not applicable to Parker Poe, and the
Fogartys have not specifically mentioned those counts in their
brief to this Court.   We will thus consider whether the trial
1
1040335
from the alleged personal use of funds dedicated to the
venture by the majority shareholders, not Parker Poe.  Count
12 specifically alleges that "Southworth, the Beardens,
[Gerald] McGill, [Eric] Nelson, and/or [Robert] Young" in
their capacities as "stockholders, officers or managers" of
the real-estate venture abused the corporate and limited-
liability forms of the various entities involved in the
venture for their own personal advantage.  Parker Poe is not
named in that count, and there are no factual allegations in
the complaint that Parker Poe is a stockholder, officer, or
manager of any of the entities involved in the venture or that
Parker Poe made personal use of the corporate or limited-
liability form of any of those entities.  Finally, count 13 is
a derivative action directed specifically at the "directors,
officers, and/or managers" of the real-estate venture, and
again it is not alleged that Parker Poe fits any of those
descriptions.
9
court erred in dismissing counts 7 (fraud, suppression, and
misrepresentation), 8 (conspiracy to defraud and suppress), 10
(violations of the Alabama Limited Liability Company Act), 11
(violations of the Alabama Business Corporation Act), and 14
(unauthorized practice of law).
On appeal, Parker Poe asserts the same three grounds for
dismissal of the Fogartys' claims against it for failure to
state a claim upon which relief can be granted as Parker Poe
raised in its motion to dismiss.  While it is unclear the
precise grounds on which the trial court granted the motion to
dismiss for failure to state a claim, the three grounds for
dismissal asserted by Parker Poe in its Rule 12(b)(6) motion
1040335
10
are the only grounds addressed by either party on appeal.
First, Parker Poe alleges that the motion to dismiss for
failure to state a claim was properly granted because, it
argues, all of the claims alleged in the complaint arise
solely out of the rendition of legal services by Parker Poe,
and the exclusive remedy for such claims is the ALSLA, and the
Fogartys make no claim under the ALSLA in the complaint.  We
disagree with Parker Poe's assertion that the ALSLA is the
exclusive remedy for the Fogartys' claims against it.  The
ALSLA applies only to allegations of legal malpractice, i.e.,
claims against legal-service providers that arise from the
performance of legal services, and only to allegations against
attorneys licensed to practice law in the State of Alabama.
Thus, it does not apply to Parker Poe in the present case.
The ALSLA is codified at §§ 6-5-570 to -581, Ala. Code
1975, and creates one form of action against legal-service
providers, as follows:
"There shall be only one form and cause of
action against legal service providers in courts in
the State of Alabama and it shall be known as the
legal service liability action and shall have the
meaning as defined herein."
§ 6-5-573, Ala. Code 1975.
1040335
11
The ALSLA defines a legal-service provider as:
"Anyone licensed to practice law by the State of
Alabama or engaged in the practice of law in the
State of Alabama. The term legal service provider
includes professional corporations, associations,
and 
partnerships 
and 
the 
members 
of 
such
professional 
corporations, 
associations, 
and
partnerships and the persons, firms, or corporations
either employed by or performing work or services
for the benefit of such professional corporations,
associations, and partnerships including, without
limitation, law clerks, legal assistants, legal
secretaries, 
investigators, 
paralegals, 
and
couriers."
§ 6-5-572(2), Ala. Code 1975.
In Cunningham v. Langston, Frazer, Sweet & Freese, P.A.,
727 So. 2d 800 (Ala. 1999), this Court throughly discussed the
issue of the applicability of the ALSLA to claims against
legal-service providers that do not arise from the performance
of legal services.  In Cunningham, a lawyer sued a law firm,
alleging breach of contract and negligence or wantonness
arising out of a fee-splitting arrangement in an underlying
case. Cunningham, 727 So. 2d at 801-02.  After a thorough
examination of the language of the entire Act, this Court held
that "the ALSLA does not apply to an action filed against a
'legal service provider' by someone whose claim does not arise
out of the receipt of legal services." Cunningham, 727 So. 2d
1040335
at 804 (emphasis added).
Counts 7, 8, 10, 11, and 14 of the complaint do not
allege tortious conduct resulting from the receipt of legal
services by the Fogartys from Parker Poe.  Also, Parker Poe,
in arguing that no "privity" existed between itself and the
Fogartys, expressly states that it never provided legal
services to the Fogartys.  Therefore, it appears that the
ALSLA does not apply to the Fogartys' claims; thus, it cannot
be, as Parker Poe asserts, their exclusive remedy.
Furthermore, it appears that the ALSLA applies only to
attorneys who are licensed to practice law in Alabama.  Parker
Poe argues that it was "engaged in the practice of law in the
State of Alabama" and, thus, falls under the second prong of
the ALSLA's definition of a legal-service provider.  However,
[substituted p. 12]
1040335
13
this Court has expressly stated that "[t]he plain language of
§ 6-5-572(2), as well as that of the other portions of the
ALSLA, clearly indicates that the Legislature intended for the
ALSLA to apply only to lawyers and to entities that are
composed of members who are licensed to practice law within
the State of Alabama." Alabama Educ. Ass'n v. Nelson, 770 So.
2d 1057, 1059 (Ala. 2000) (emphasis added).
According to the complaint, Jones and Baron were not
licensed to practice law within the State of Alabama, and
Parker Poe does not dispute this allegation.  Thus, the ALSLA
would not apply to the claims against Parker Poe, and the
ALSLA could not be the Fogartys' exclusive remedy.   The trial
court erred, therefore, in granting Parker Poe's Rule 12(b)(6)
motion on Parker Poe's first stated ground.
Next, Parker Poe alleges that no cause of action exists
in Alabama for the unauthorized practice of law.  The
Fogartys, however, argue that Armstrong v. Brown Service
Funeral Home West Chapel, 700 So. 2d 1379 (Ala. Civ. App.
1997), does recognize such a cause of action.  Parker Poe, in
turn, argues that this Court should overrule Armstrong.
In Armstrong, certain customers brought an action against
1040335
14
a funeral home, alleging fraudulent suppression and the
unauthorized practice of law under § 34-3-6, Ala. Code 1975.
Armstrong, 700 So. 2d at 1380.  Section 34-3-6, Ala. Code
1975, provides, in pertinent part:
"(a) Only such persons as are regularly licensed
have authority to practice law.
"(b) For the purposes of this chapter, the
practice of law is defined as follows:
"Whoever,
"(1) In a representative capacity appears as an
advocate or draws papers, pleadings or documents, or
performs any act in connection with proceedings
pending or prospective before a court or a body,
board, committee, commission or officer constituted
by law or having authority to take evidence in or
settle or determine controversies in the exercise of
the judicial power of the state or any subdivision
thereof; or
"(2) For a consideration, reward or pecuniary
benefit, present or anticipated, direct or indirect,
advises or counsels another as to secular law, or
draws or procures or assists in the drawing of a
paper, document or instrument affecting or relating
to secular rights; or
"(3) For a consideration, reward or pecuniary
benefit, present or anticipated, direct or indirect,
does any act in a representative capacity in behalf
of another tending to obtain or secure for such
other the prevention or the redress of a wrong or
the enforcement or establishment of a right; or
"(4) As a vocation, enforces, secures, settles,
adjusts or compromises defaulted, controverted or
1040335
15
disputed accounts, claims or demands between persons
with neither of whom he is in privity or in the
relation of employer and employee in the ordinary
sense;
"is practicing law."
In Armstrong, the complaint alleged that the customers
and the funeral home had entered into a burial contract
pursuant to which the customers were charged $175 for
assistance with preparing certain Social Security, legal, and
insurance forms. 700 So. 2d at 1380.  The funeral home filed
a motion to dismiss for failure to state claim under Rule
12(b)(6), Ala. R. Civ. P., and the trial court granted the
motion.  The Court of Civil Appeals reversed the trial court's
order, holding that the fraudulent-suppression claim and the
unauthorized-practice-of-law claim were "cognizable theories
of law which may, upon proof of the proper facts, entitle the
plaintiffs to recover against the defendant." 700 So. 2d at
1382.  Thus, Armstrong did recognize a cause of action for the
unauthorized practice of law.
In the present situation, as was the case in Armstrong,
the Fogartys have stated a claim alleging the unauthorized
practice of law under § 34-3-6, Ala. Code 1975.  In accordance
with that statute, the Fogartys have alleged that Jones and
1040335
16
Baron were not licensed to practice law in Alabama, that Jones
and Baron were making representations concerning Alabama law
for both the majority shareholders of Confederate Money and
for Confederate Money itself, and that the Fogartys were
injured as a result.  Therefore, it appears that the Fogartys
can prove a set of facts entitling them to relief on this
claim; thus, the trial court erred in dismissing count 14
under Rule 12(b)(6).
Parker Poe seems to concede that if a private cause of
action for the unauthorized practice of law does exist and if
the ALSLA does not apply to this claim, then the Fogartys have
stated a claim upon which relief can be granted.  However,
Parker Poe asks this Court to overrule Armstrong and to hold
that the unauthorized practice of law is not a cognizable
claim in Alabama.  We are not persuaded to do so.  In Alabama,
the unauthorized practice of law is a criminal act. Section
34-3-7, Ala. Code 1975, states:
"Any person, firm or corporation who is not a
regularly licensed attorney who does an act defined
in this article to be an act of practicing law is
guilty of a misdemeanor and, on conviction, must be
punished as provided by law. Any person, firm or
corporation who conspires with, aids and abets
another 
person, 
firm 
or 
corporation 
in 
the
commission of such misdemeanor must, on conviction,
1040335
17
be punished as provided by law."
This Court has long recognized that "[e]ven though an act
may constitute a crime, if it also results in injury to the
person or property of another, the act may still be the basis
of a civil action for damages." Martinson v. Cagle, 454 So. 2d
1383, 1385 (Ala. 1984).  Therefore, the Armstrong decision,
which 
recognizes 
a 
private 
cause 
of 
action 
for 
the
unauthorized practice of law, is consistent with Alabama
caselaw that recognizes a private cause of action for a
criminal act that results in injury.
Furthermore, Armstrong is consistent with the law in
other jurisdictions recognizing the unauthorized practice of
law as a private cause of action.   In McMahon v. Advanced
Title Services Co. of West Virginia, 216 W. Va. 413, 607
S.E.2d 519 (2004), the Supreme Court of Appeals of West
Virginia recognized the right of a plaintiff to predicate a
claim for relief upon allegations of the unauthorized practice
of law.  In making this recognition, that court listed several
other jurisdictions, including Alabama, that recognize such a
claim:
"Our research indicates that in cases from a
number of jurisdictions, courts have recognized the
1040335
18
right of plaintiffs to predicate claims for damages
and 
other 
relief 
upon 
allegations 
of 
the
unauthorized practice of law by a defendant. See,
e.g., Armstrong v. Brown Service Funeral Home West
Chapel, 700 So. 2d 1379 (Ala. Civ. App. 1997)
(claims for damages and class action relief for
unauthorized practice held cognizable); American
Abstract and Title Co. v. Rice, [186 S.W.3d 705
(Ark. 2004)] (unfair trade practices and class
action claims cognizable, existence of State Bar
Committee on unauthorized practice did not oust
trial court of jurisdiction); accord, Speights v.
Stewart Title Guaranty Co., [186 S.W.3d 715 (Ark.
2004)]; Herman v. Prudence Mutual Casualty Company,
41 Ill. 2d 468, 244 N.E.2d 809 (1969) (plaintiff
could seek injunctive relief against unauthorized
practice); Kim v. Desert Document Services, 101
Wash. App. 1043 ... (Div. 1 2000) (unpublished)
(plaintiffs could bring private action asserting
unauthorized practice of law), review denied, 142
Wash. 2d 1026, 21 P.3d 1149 (2001); J.H. Marshall &
Associates v. Burleson, 313 A.2d 587 (D.C. 1973)
(individual 
plaintiff 
had 
standing 
to 
seek
injunction against unauthorized practice of law);
Dressel v. Ameribank, 468 Mich. 557, 664 N.W.2d 151
(2003) (plaintiffs asserted class action claim for
unauthorized practice); accord, Perkins v. CTX
Mortgage Co., 137 Wash. 2d 93, 969 P.2d 93 (1999);
but compare Reliable Collection Agency, Ltd. v.
Cole, 59 Haw. 503, 584 P.2d 107 (1978) (statute
prohibiting unauthorized practice of law did not
confer standing)."
216 W. Va. at 417, 607 S.E.2d at 523.
The decision in Janssen v. Guaranty Land Title Co., 571
S.W.2d 702 (Mo. Ct. App. 1978), is the only example cited by
Parker Poe in which the unauthorized practice of law was not
recognized as a private cause of action.  That decision is
1040335
19
easily distinguishable from the present case.  In Janssen, the
plaintiffs based their cause of action on Missouri Supreme
Court Rule 5.25, which stated: "No provision of Rule 5 shall
limit the right of any individual to seek any remedy afforded
by law, nor shall this Rule constitute an exclusive method for
regulating the practice of law." 571 S.W.2d at 706.  Based on
this Rule the Missouri Court of Appeals held:
"Rule 
5 
deals 
generally 
with 
complaints 
and
proceedings arising out of the practice of law and
provides the procedure for investigating charges
against persons, firms, or corporations accused of
illegally practicing law.  The intendment of Rule 5
and the procedures thereunder is to protect the
public and those charged with the administration of
justice from individuals who are not qualified and
duly licensed attorneys; to maintain the integrity
of the courts and the honorable profession of the
practice 
of 
law. 
 
The 
main 
purpose 
is 
not
punishment, and certainly not punishment through the
device of punitive damages.  Placed in its proper
context, Rule 5.25 should be interpreted to preserve
traditional remedies at law for individuals who are
harmed by unscrupulous lawyers or by persons acting
in an unauthorized legal capacity.  Such choses in
action may be based, for example, on a theory of
fraud, or of negligence.  But plaintiffs may not
bootstrap the injury suffered by virtue of a
defective title into a cause of action for the
unauthorized practice of law."
571 S.W.2d at 706 (citations omitted; footnote omitted).
Unlike Janssen, the present cause of action is based on
statutes that specifically prohibit the unauthorized practice
1040335
20
of law, that make the unauthorized practice of law criminal,
and that expressly authorize some punishment. See §§ 34-3-6
and 34-3-7, Ala. Code 1975.  Also, the Fogartys are not
attempting to "bootstrap" the alleged injury suffered into a
cause of action for the unauthorized practice of law.
Instead, the Fogartys allege that they were directly injured
by the misrepresentations of Alabama law made by Parker Poe.
Therefore, the reasoning set forth in Janssen is unconvincing
and inapplicable in the present situation.  Parker Poe fails
to provide this Court with any convincing reason to overrule
Armstrong, and we decline to do so.  Because Alabama does
recognize a cause of action for the unauthorized practice of
law, we need not address Parker Poe's alternative argument
regarding whether Alabama recognizes such a cause of action
based on a violation of the Alabama Rules of Professional
Conduct.
Finally, Parker Poe asserts that the Fogartys cannot
bring a legal-malpractice claim against Parker Poe because no
privity existed between the Fogartys and Parker Poe.  However,
the Fogartys expressly state that they did not allege a legal-
malpractice claim in their complaint, and a review of the
1040335
21
complaint does not reveal any claims of legal malpractice.
(Fogartys' reply brief at 15.)  Therefore, we see no need to
determine whether there was sufficient privity to support a
legal-malpractice claim.
The sole issue before us is whether the trial court erred
in granting Parker Poe's motion to dismiss.  Our standard of
review requires us to reverse an order dismissing a claim if
the plaintiff could possibly prove any set of facts allowing
for recovery. Fontenot v. Bramlett, 470 So. 2d 669 (Ala.
1985); Bay Lines, supra.  For the reasons already discussed,
Parker Poe's motion to dismiss for failure to state a claim
should not have been granted based on its arguments premised
on the rendition of legal services, the ALSLA, or the
unavailability in Alabama of a cause of action for the
unauthorized practice of law.
Examining the individual allegations in the complaint
also leads us to conclude that the Rule 12(b)(6) motion should
not have been granted as to all of the Fogartys' claims.  As
already noted, it appears that counts 1-6, 9, 12, and 13 have
no application to Parker Poe, and, on appeal, the Fogartys do
not make any explanation of how those claims would apply.
1040335
22
However, considering our standard of review on a dismissal
under Rule 12(b)(6) and our liberal construction of a
complaint, it does not appear "beyond a doubt" that the
Fogartys could not prove any set of facts entitling them to
relief on count 7 (fraud, suppression, and misrepresentation),
count 8 (conspiracy to defraud and suppress), count 10
(violations of the Alabama Limited Liability Company Act),
count 11 (violations of the Alabama Business Corporation Act),
and count 14 (unauthorized practice of law).
According to Rule 8(a), Ala. R. Civ. P., a claim for
relief need only contain (1) a short and plain statement of
the claim showing that the pleader is entitled to relief and
(2) a demand for judgment for the relief to which the pleader
deems himself entitled.
As to counts 7 and 8, the Fogartys allege that Parker Poe
engaged in fraud, suppression, and misrepresentation, and that
it conspired to defraud the Fogartys.  It appears that the
Fogartys could prove a set of facts that would support a claim
for fraud, suppression, and misrepresentation, or conspiracy
to defraud, and Parker Poe does not offer any explanation as
to why these particular claims should be dismissed except for
1040335
23
the implausible arguments discussed above.
Count 10 alleges violations under the Alabama Limited
Liability Company Act against "defendants" generally and
demands judgment for various types of relief the Fogartys
believe they are entitled to.  Included in the Alabama Limited
Liability Company Act is § 10-12-16, Ala. Code 1975, which
provides:
"(a) Each limited liability company shall keep
at the office referred to in subdivision (1) of
subsection (a) of Section 10-12-15 the following
records:
"(1) A current list of the full name and
last known business or residence street address
of each member, and each manager, if any.
"(2) A copy of the filed articles of
organization 
and 
all 
amendments 
thereto,
together with executed copies of any powers of
attorney pursuant to which any documents have
been executed.
"(3) Copies of the limited liability
company's federal, state, and local income tax
returns and reports, if any, for the three most
recent years.
"(4) Copies of any then effective operating
agreements including any amendments thereto.
"(5) Copies of any financial statements of
the limited liability company for the three
most recent years.
"(b) Those records, and any other books and
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24
records of the limited liability company, wherever
situated, are subject to inspection and copying for
any proper purpose at the reasonable request, and at
the expense of, any member or the member's agent or
attorney during regular business hours. Any agent,
member, or manager of a limited liability company
who, without reasonable cause, refuses to allow any
member or the member's agent or attorney to inspect
or copy any books or records of the limited
liability company for any proper purpose shall be
personally liable to the member for a penalty in an
amount not to exceed 10 percent of the fair market
value of the membership interest of the member, in
addition to any other damages or remedy."
(Emphasis added.)
In their complaint, the Fogartys allege that Parker Poe
was acting as an agent of Confederate Money and that it,
without reasonable cause, refused to allow the Fogartys to
inspect certain records even though the Fogartys were members
of the limited liability company.  If proven, these facts
could support a claim for relief under § 10-12-16, Ala. Code
1975.  Therefore, the motion to dismiss should not have been
granted as to count 10.
Count 11 alleges violations under the Alabama Business
Corporation Act.  This allegation may be construed to include
violations of § 10-2B-16.02, Ala. Code 1975, which provides,
in part:
"(a) A shareholder of a domestic corporation or
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25
of a foreign corporation with its principal office
within this state is entitled to inspect and copy,
during regular business hours at the corporation's
principal office, or if its principal office is
outside this state, at a reasonable location within
this state, specified by the corporation, any of the
records of the corporation described in Section
10-2B-16.01(e) if he or she gives the corporation
written notice of his or her demand at least five
business days before the date on which he or she
wishes to inspect and copy.
"(b) A shareholder of a domestic corporation or
of a foreign corporation with its principal office
within this state who shall have been a holder of
record of shares for 180 days immediately preceding
his or her demand or who is the holder of record of
at least five percent of the outstanding shares is
entitled to inspect and copy during regular business
hours at a reasonable location within this state
specified by the corporation, or in the case of
accounting records of the corporation, if the
records are maintained outside the state and
inspection 
and 
copying 
within 
this 
state 
is
impracticable, at a reasonable location outside the
state specified by the corporation, for any proper
purpose, all of its books, papers, records of
account, minutes and record of shareholders, if the
shareholder gives the corporation written notice of
his or her demand, stating the purpose therefor, at
least five business days before the date on which he
or she wishes to inspect and copy. ...
"(c) Any officer or agent who, or a corporation
which, without reasonable cause, shall refuse to
allow any such shareholder, or his or her agent or
attorney so to examine and make copies of and
extracts from its books, papers, records of account,
minutes and record of shareholders, for any proper
purpose, shall be liable to such shareholder for a
penalty of an amount not to exceed 10 percent of the
value of the shares owned by such shareholder, in
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26
addition to any other damages or remedy afforded him
or her by law. It shall be a defense to an action
brought to collect the penalty specified in this
section that the person suing therefor within the
two years next preceding the demand has sold or
offered for sale any list of shareholders of such
corporation, or any other corporation or knowingly
has aided or abetted any person in procuring any
list of shareholders, or improperly has used any
information secured through any prior examination of
the books, papers, records of account, minutes or
record of shareholders, or was not acting in good
faith or for a proper purpose in making this
demand."
(Emphasis added.)
Again, under the facts alleged in the complaint, the
Fogartys contend that Parker Poe was acting as "an agent" who
obstructed the Fogartys from examining certain records.  If
proven, these facts could support a claim for relief.
Therefore, the motion to dismiss for failure to state a claim
should not have been granted as to count 11.
Finally, count 14 alleges that Parker Poe was engaged in
the unauthorized practice of law and that there existed a
causal connection between this practice and the injuries
suffered by the Fogartys.  As discussed earlier, contrary to
Parker Poe's allegation, Alabama does recognize such a cause
of action.  The facts alleged by the Fogartys may support a
claim for relief; thus, the motion to dismiss should not have
1040335
27
been granted as to count 14.  Furthermore, as already
discussed, this claim was the only claim that specifically
referenced Parker Poe, and Parker Poe appears to concede that
if Alabama recognizes such a cause of action then the Fogartys
have stated a claim upon which relief could be granted.
Conclusion
We express no opinion on the merits of the case; however,
we affirm the trial court's dismissal for failure to state a
claim as to counts 1-6, 9, 12, and 13, and we reverse as to
counts 7, 8, 10, 11, and 14.  We remand the cause for
proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
Nabers, C.J., and Woodall, Stuart, and Parker, JJ.,
concur.  
Lyons, J., recuses himself.