Title: Lawson v. Harris Culinary Enterprises, LLC

State: alabama

Issuer: Alabama Supreme Court

Document:

REL:10/21/2011 
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, 2011-2012 
1091751 
M i t z i Lawson 
v. 
H a r r i s C u l i n a r y E n t e r p r i s e s , LLC, 
e t a l . 
Appeal from Lauderdale C i r c u i t 
Court 
(CV-07-306) 
SHAW, J u s t i c e . 
M i t z i L a w s o n , a d e f e n d a n t b e l o w , a p p e a l s f r o m a $500,000 
j u d g m e n t i n 
f a v o r o f H a r r i s C u l i n a r y E n t e r p r i s e s , LLC ("HCE"), 
J o h n C. 
H a r r i s 
I I I ( " C l i n t o n " ) , 
a n d J o h n C. 
H a r r i s , J r . 
( " J o h n " ) , t h e 
p l a i n t i f f s b e l o w ( h e r e i n a f t e r s o m e t i m e s r e f e r r e d 
1091751 
t o 
c o l l e c t i v e l y as " t h e H a r r i s e s " ) , 
on t h e i r 
f r a u d 
c l a i m s 
r e l a t e d 
t o t h e i r 
p u r c h a s e o f a 
r e s t a u r a n t 
f r a n c h i s e . 
We 
r e v e r s e a n d r e n d e r a j u d g m e n t i n f a v o r o f M i t z i . 
F a c t s a n d P r o c e d u r a l 
H i s t o r y 
A t 
a l l t i m e s p e r t i n e n t 
t o t h e e v e n t s g i v i n g 
r i s e t o t h e 
u n d e r l y i n g 
a c t i o n , M i t z i was m a r r i e d t o h e r c o d e f e n d a n t , Sims 
L a w s o n . 
F o l l o w i n g 
h i s m a r r i a g e t o M i t z i , S i m s , an a c c o u n t a n t , 
f o r m e d SYM, I n c . 
("SYM"), a l s o a c o d e f e n d a n t i n 
t h e 
u n d e r l y i n g 
a c t i o n , 
f o r t h e p u r p o s e o f o p e r a t i n g 
a " F o x ' s 
P i z z a Den" 
r e s t a u r a n t 
f r a n c h i s e i n K i l l e n ("the 
K i l l e n f r a n c h i s e " ) . 
Sims 
i s 
p r e s i d e n t o f SYM. Sims p u r c h a s e d a b u i l d i n g i n w h i c h t o 
o p e r a t e t h e K i l l e n 
f r a n c h i s e ; t h a t b u i l d i n g was t i t l e d 
s o l e l y 
i n M i t z i ' s name. 
A t 
some 
t i m e 
b e f o r e 
t h e e v e n t s 
g i v i n g 
r i s e t o 
t h e i r 
p r e s e n t 
c l a i m s , 
J o h n 
a n d C l i n t o n 
f o r m e d H C E , an 
A l a b a m a 
l i m i t e d l i a b i l i t y c o m p a n y , 
f o r t h e 
p u r p o s e o f o p e r a t i n g p i z z a -
r e s t a u r a n t 
f r a n c h i s e s . 
A l t h o u g h b o t h J o h n a n d C l i n t o n a r e 
members o f H C E , C l i n t o n 
was 
d e s i g n a t e d 
a s t h e " m a n a g i n g 
member." 
I n M a r c h 2 0 0 7 , t h e H a r r i s e s 
e n t e r e d 
i n t o 
n e g o t i a t i o n s 
w i t h Sims t o p u r c h a s e t h e K i l l e n 
f r a n c h i s e . 
A c c o r d i n g t o 
t h e 
2 
1091751 
H a r r i s e s , i n an a p p a r e n t a t t e m p t t o s e c u r e a h i g h e r 
p u r c h a s e 
p r i c e , 
Sims 
p u r p o r t e d l y 
g e n e r a t e d 
f a l s e 
f i n a n c i a l 
r e p o r t s 
e v i d e n c i n g 
h i g h e r 
g r o s s 
s a l e s 
and 
p r o f i t s 
f o r t h e 
K i l l e n 
f r a n c h i s e 
t h a n were 
a c t u a l l y r e a l i z e d . 
Upon r e v i e w o f t h e 
p u r p o r t e d 
f a l s i f i e d 
r e p o r t s , 
t h e H a r r i s e s 
i n c r e a s e d 
t h e i r 
i n i t i a l 
o f f e r a n d , i n May 
2007, 
u l t i m a t e l y p u r c h a s e d t h e 
K i l l e n 
f r a n c h i s e . 
As a c o n d i t i o n o f t h e s a l e s a g r e e m e n t , t h e 
H a r r i s e s 
e n t e r e d 
i n t o a o n e - y e a r l e a s e a g r e e m e n t t o 
c o n t i n u e 
o p e r a t i o n 
o f 
t h e 
K i l l e n 
f r a n c h i s e 
i n i t s t h e n 
c u r r e n t 
l o c a t i o n . 
I n A u g u s t 
2007, t h e H a r r i s e s 
i n i t i a t e d 
t h e 
u n d e r l y i n g 
a c t i o n , 
a l l e g i n g t h a t , as a r e s u l t o f S i m s ' s p r e s e n t a t i o n t o 
them o f f a l s i f i e d 
r e p o r t s , t h e y h a d b e e n i n d u c e d t o p u r c h a s e 
t h e 
K i l l e n 
f r a n c h i s e and t o e n t e r 
i n t o t h e l e a s e 
a g r e e m e n t , 
s u f f e r i n g damage as a r e s u l t . 
T h e i r c o m p l a i n t , 
w h i c h c h a r g e d 
SYM, 
S i m s , 
and 
M i t z i 
u n d e r 
s e v e r a l 
t h e o r i e s 
o f 
f r a u d , 
s p e c i f i c a l l y i n d i c a t e d t h a t M i t z i was b e i n g s u e d "as owner and 
l e s s o r o f t h e [ b u i l d i n g ] " i n w h i c h t h e K i l l e n 
f r a n c h i s e was 
l o c a t e d . 
I n r e s p o n s e t o t h e H a r r i s e s ' c o m p l a i n t , 
M i t z i moved 
b o t h 
t o d i s m i s s 
any 
c l a i m s 
a s s e r t e d 
a g a i n s t 
h e r i n 
t h a t 
p l e a d i n g 
a n d , s u b s e q u e n t l y , 
f o r a summary j u d g m e n t i n h e r 
3 
1091751 
f a v o r 
on 
t h e g r o u n d t h a t 
t h e c o m p l a i n t d i d n o t 
a l l e g e -- 
and 
t h a t 
t h e r e 
was 
no 
e v i d e n c e 
t o s u p p o r t 
-- 
a c l a i m 
t h a t 
M i t z i 
had 
made 
any 
r e p r e s e n t a t i o n , 
f a l s e 
o r 
o t h e r w i s e , 
t o 
t h e 
H a r r i s e s . 
The 
t r i a l 
c o u r t d e n i e d b o t h m o t i o n s . 
The 
m a t t e r p r o c e e d e d t o a b e n c h 
t r i a l 
on 
J u l y 13, 
2010, 
a t 
w h i c h 
n e i t h e r 
Sims 
n o r 
SYM 
(nor 
a 
r e p r e s e n t a t i v e 
f o r 
e i t h e r ) 
a p p e a r e d 
t o 
d e f e n d 
a g a i n s t 
t h e 
H a r r i s e s ' 
c l a i m s .
1 
D u r i n g 
t h a t 
p r o c e e d i n g , 
t h e 
t r i a l 
c o u r t 
h e a r d 
o r e 
t e n u s 
e v i d e n c e 
f r o m 
C l i n t o n 
and 
J o h n , 
f r o m 
M i t z i , 
and 
f r o m 
D a v i d 
H o l c o m b e , 
a f o r m e r e m p l o y e e 
o f 
SYM, 
who 
had 
w o r k e d 
a t 
t h e 
K i l l e n 
f r a n c h i s e . 
C l i n t o n 
t e s t i f i e d 
t h a t , 
as 
a 
r e s u l t 
o f 
h i s 
p a s t 
e x p e r i e n c e i n t h e " p i z z a b u s i n e s s , " 
t h e H a r r i s e s b e g a n l o o k i n g 
a t p i z z a - r e s t a u r a n t 
f r a n c h i s e 
o p p o r t u n i t i e s . 
A f t e r 
l e a r n i n g 
a b o u t 
and 
i n v e s t i g a t i n g o p p o r t u n i t i e s 
a v a i l a b l e w i t h 
F o x ' s 
P i z z a Den, 
t h e H a r r i s e s u l t i m a t e l y p u r c h a s e d a F o x ' s P i z z a 
Den 
f r a n c h i s e and o p e n e d an 
i n i t i a l 
l o c a t i o n i n P e t e r s v i l l e 
("the 
P e t e r s v i l l e f r a n c h i s e " ) . B e c a u s e o f t h e 
p r o f i t a b i l i t y o f 
t h a t 
1 A t 
t h e t i m e o f t h e 
t r i a l , 
M i t z i was 
d i v o r c e d 
f r o m S i m s . 
S p e c i f i c a l l y , h e r t e s t i m o n y i n d i c a t e d t h a t t h e i r m a r r i a g e 
was 
t e r m i n a t e d 
i n F e b r u a r y 2009. 
A d d i t i o n a l l y , i t a p p e a r s 
t h a t 
Sims was 
u n a v a i l a b l e 
f o r 
t r i a l b e c a u s e , a t t h a t 
t i m e , 
he 
was 
i n c a r c e r a t e d 
on 
an u n r e l a t e d 
f e d e r a l t a x - e v a s i o n 
c o n v i c t i o n . 
4 
1091751 
i n i t i a l 
l o c a t i o n , t h e 
H a r r i s e s 
b e g a n 
s e e k i n g 
a n o t h e r 
F o x ' s 
P i z z a 
Den 
f r a n c h i s e , 
w h i c h 
t h e y 
u l t i m a t e l y 
p u r c h a s e d 
and 
o p e n e d i n 
M u s c l e S h o a l s 
("the 
M u s c l e S h o a l s f r a n c h i s e " ) . 
A t t h e t i m e t h e H a r r i s e s were e x p a n d i n g t h e i r 
o p e r a t i o n s , 
a c c o r d i n g 
t o C l i n t o n , J o h n e n c o u n t e r e d Sims a t a f u n e r a l t h e y 
were b o t h 
a t t e n d i n g , 
and 
t h e 
H a r r i s e s were 
a p p r i s e d 
o f 
t h e 
p o s s i b i l i t y 
o f 
p u r c h a s i n g 
t h e 
K i l l e n 
f r a n c h i s e 
f r o m 
S i m s . 
C l i n t o n 
s u b s e q u e n t l y went 
t o 
i n s p e c t 
t h e 
K i l l e n 
f r a n c h i s e . 
A c c o r d i n g 
t o 
C l i n t o n , he 
r e c e i v e d 
a t o u r 
o f 
t h e 
b u i l d i n g i n 
w h i c h t h e 
K i l l e n 
f r a n c h i s e was 
l o c a t e d and 
an e x p l a n a t i o n 
o f 
i t s 
b u s i n e s s 
p r a c t i c e s . 
C l i n t o n 
i n d i c a t e d 
t h a t 
M i t z i 
was 
p r e s e n t 
d u r i n g 
t h e s e 
a c t i v i t i e s 
b u t 
t h a t 
" [ s ] h e 
was 
q u i e t . " 
C l i n t o n 
i n d i c a t e d 
t h a t , 
a t 
t h e 
c o n c l u s i o n 
o f 
h i s 
t o u r , 
he 
r e q u e s t e d 
t h e 
" s a l e s 
n u m b e r s " 
a s s o c i a t e d 
w i t h 
t h e 
K i l l e n 
f r a n c h i s e . 
A f t e r 
r e c e i v i n g 
r e c o r d s 
e v i d e n c i n g 
t h e 
s a l e s 
r e c e i p t s f o r t h e K i l l e n f r a n c h i s e t h r o u g h December 2006, w h i c h 
e v i d e n c e d m o n t h l y a v e r a g e s a l e s o f $20,000, C l i n t o n i n d i c a t e d 
t o Sims t h a t 
he 
was 
no 
l o n g e r 
i n t e r e s t e d 
i n p u r c h a s i n g 
t h e 
K i l l e n 
f r a n c h i s e b e c a u s e t h e s a l e s f i g u r e s "were t o o low 
" 
C l i n t o n s t a t e d t h a t once he r e l a y e d h i s d i s i n t e r e s t b a s e d 
on 
t h e 
d i s a p p o i n t i n g 
s a l e s n u m b e r s , Sims c o n t a c t e d 
J o h n 
and 
5 
1091751 
f u r t h e r 
n e g o t i a t i o n 
e n s u e d , w h i c h 
c u l m i n a t e d 
i n an 
i n i t i a l 
o f f e r by t h e H a r r i s e s t o p u r c h a s e t h e K i l l e n 
f r a n c h i s e . 
SYM, 
h o w e v e r , 
r e j e c t e d 
t h a t 
i n i t i a l 
o f f e r , 
and 
a d d i t i o n a l 
n e g o t i a t i o n 
o c c u r r e d , 
w h i c h 
u l t i m a t e l y 
r e s u l t e d 
i n 
an 
a g r e e m e n t f o r t h e H a r r i s e s t o p u r c h a s e t h e K i l l e n 
f r a n c h i s e . 
C l i n t o n 
t e s t i f i e d 
t h a t , 
d u r i n g 
t h e 
c o u r s e 
o f 
t h e 
n e g o t i a t i o n s 
i m m e d i a t e l y 
p r e c e d i n g 
t h e p u r c h a s e 
a g r e e m e n t 
r e a c h e d by t h e p a r t i e s , Sims r e p r e s e n t e d 
t o t h e H a r r i s e s 
t h a t 
t h e s a l e s numbers f o r t h e K i l l e n f r a n c h i s e were i n c r e a s i n g and 
t h a t t h e y were b e t t e r t h a n t h e i n i t i a l 
s a l e s numbers 
t h a t h a d 
b e e n 
p r o v i d e d 
t o t h e H a r r i s e s . 
S p e c i f i c a l l y , 
a c c o r d i n g 
t o 
C l i n t o n , 
Sims 
" [ t o l d them] 
t h a t s i n c e b r i d g e 
c o n s t r u c t i o n 
[on t h e 
a d j a c e n t S h o a l s C r e e k B r i d g e ] 
h a d e n d e d i n December 
o f 2006, ... [ t h e K i l l e n 
f r a n c h i s e ' s ] 
a v e r a g e 
s a l e s 
had 
i n c r e a s e d 
f r o m t h e t w e n t y t h o u s a n d a v e r a g e 
we 
were 
shown 
g o i n g 
t h r o u g h 
December 
2006 
t o 
— 
s t e a d i l y t o an a v e r a g e o f t h i r t y 
t h o u s a n d i n M a r c h 
o f 2007." 
C l i n t o n 
f u r t h e r 
s t a t e d 
t h a t 
t h e 
H a r r i s e s 
were 
i n i t i a l l y 
p r o v i d e d 
"a 
p r i n t o u t " 
e v i d e n c i n g 
t h e 
a l l e g e d l y 
i n c r e a s i n g 
s a l e s numbers f o r J a n u a r y 2007, F e b r u a r y 2007, and M a r c h 2007. 
C l i n t o n 
t e s t i f i e d t h a t d o c u m e n t a t i o n was p r o v i d e d 
"by 
[ S i m s ] " 
6 
1091751 
and was p r e s e n t e d 
" [ o ] n b e h a l f o f t h e c o r p o r a t i o n . "
2 
C l i n t o n 
was 
u n a b l e 
t o 
i d e n t i f y 
any 
d o c u m e n t a t i o n 
t h a t 
h a d 
b e e n 
p r o v i d e d 
t o t h e H a r r i s e s by M i t z i . 
He 
f u r t h e r a c k n o w l e d g e d 
t h a t , d u r i n g t h e n e g o t i a t i o n p e r i o d , M i t z i n e v e r made a s i n g l e 
s t a t e m e n t t o t h e H a r r i s e s n o r a n s w e r e d any q u e s t i o n 
t h a t 
t h e y 
m i g h t h a v e a s k e d . 
C l i n t o n 
i n d i c a t e d t h a t , upon t h e H a r r i s e s ' 
r e q u e s t 
f o r 
f u r t h e r s u p p o r t i n g d o c u m e n t a t i o n , Sims a l s o p r o v i d e d 
s a l e s - t a x 
r e c o r d s 
f o r J a n u a r y 
2007, 
F e b r u a r y 
2007, 
and M a r c h 
2007. 
A c c o r d i n g 
t o 
C l i n t o n , 
t h e 
i n f o r m a t i o n 
p r o v i d e d 
by 
Sims 
v e r i f i e d S i m s ' s c l a i m s t h a t s a l e s f o r t h e K i l l e n f r a n c h i s e h a d 
s t e a d i l y 
i n c r e a s e d 
f r o m December 
2006 
t h r o u g h M a r c h 
2007. 
C l i n t o n 
i n d i c a t e d 
t h a t , 
b a s e d 
on 
t h a t 
i n f o r m a t i o n , 
t h e 
H a r r i s e s e n t e r e d 
i n t o 
f i n a l 
n e g o t i a t i o n s f o r t h e p u r c h a s e o f 
t h e 
K i l l e n 
f r a n c h i s e . 
C l i n t o n 
n o t e d 
t h a t 
o n l y 
Sims 
was 
i n v o l v e d i n t h e n e g o t i a t i o n s 
a s s o c i a t e d w i t h t h e s a l e o f t h e 
K i l l e n 
f r a n c h i s e and w i t h r e g a r d t o t h e l e a s e o f t h e b u i l d i n g 
2 S p e c i f i c a l l y , 
a t t h e t i m e o f t h e a d m i s s i o n i n t o e v i d e n c e 
o f t h e r e p o r t s h o w i n g t h e p u r p o r t e d 
a c t u a l s a l e s numbers f o r 
t h e 
K i l l e n 
f r a n c h i s e , c o u n s e l 
f o r t h e H a r r i s e s 
s t i p u l a t e d on 
t h e r e c o r d t h a t t h e a l l e g e d f r a u d u l e n t 
i n f o r m a t i o n "came f r o m 
S i m s . " 
7 
1091751 
where t h e f r a n c h i s e was l o c a t e d .
3 
He f u r t h e r 
a c k n o w l e d g e d 
t h a t 
o n l y S i m s , i n h i s c a p a c i t y as p r e s i d e n t o f SYM, 
s i g n e d 
t h e 
s a l e s 
c o n t r a c t 
t r a n s f e r r i n g t h e K i l l e n 
f r a n c h i s e t o 
t h e 
H a r r i s e s . 
However, 
C l i n t o n 
i n d i c a t e d 
t h a t , 
w i t h 
r e g a r d 
t o t h e 
l e a s e , Sims a s s e r t e d 
t h a t he was h a n d l i n g t h e n e g o t i a t i o n s on 
b e h a l f 
o f M i t z i , who, Sims 
i n d i c a t e d t o t h e H a r r i s e s , was 
a c t u a l l y t h e s o l e owner o f t h e b u i l d i n g . 
As w i t h t h e s a l e s 
n e g o t i a t i o n s , 
C l i n t o n c o n f i r m e d t h a t 
M i t z i 
a p p a r e n t l y 
s i g n e d 
t h e 
l e a s e a g r e e m e n t o u t s i d e h i s 
p r e s e n c e , a n d he n e v e r h a d a 
s i n g l e d i s c u s s i o n w i t h h e r r e g a r d i n g t h e l e a s e t e r m s Sims h a d 
n e g o t i a t e d . 
N o n e t h e l e s s , 
C l i n t o n 
s t a t e d 
t h a t 
he 
was 
i n s t r u c t e d 
t o make t h e l e a s e 
p a y m e n t s 
d i r e c t l y 
t o 
M i t z i . 
C l i n t o n 
f u r t h e r 
t e s t i f i e d 
t h a t , 
w i t h 
r e g a r d 
t o t h e 
l e a s e 
t r a n s a c t i o n s , no m i s r e p r e s e n t a t i o n s 
were made t o 
t h e H a r r i s e s . 
F o l l o w i n g t h e s a l e , t h e H a r r i s e s 
t o o k p o s s e s s i o n 
o f 
t h e 
K i l l e n f r a n c h i s e a n d M i t z i ' s b u i l d i n g on May 14, 2007. C l i n t o n 
i n d i c a t e d t h a t , 
f o l l o w i n g t h e t r a n s f e r , t h e K i l l e n 
f r a n c h i s e 
3 I n 
f a c t , 
as 
C l i n t o n 
a c k n o w l e d g e d 
d u r i n g 
h i s 
t r i a l 
t e s t i m o n y , h i s p r e v i o u s s w o r n r e s p o n s e s t o d i s c o v e r y , i n w h i c h 
he 
was a s k e d t o i d e n t i f y 
a l l p e r s o n s 
w i t h whom he 
s p o k e 
r e g a r d i n g 
t h e v a l u e 
o f t h e K i l l e n 
f r a n c h i s e , 
p u r p o s e f u l l y 
o m i t t e d 
M i t z i ' s name b e c a u s e he d i d 
n o t s p e a k w i t h h e r . 
8 
1091751 
a v e r a g e d $4,000 t o $5,000 p e r week, w h i c h numbers, he 
s a i d , 
"were n o t i n k e e p i n g w i t h [ S i m s ' s ] r e p r e s e n t a t i o n s . " 
I n 
f a c t , 
C l i n t o n n o t e d , t h e numbers were more i n l i n e w i t h t h e 
i n i t i a l 
s a l e s numbers p r o v i d e d 
t o t h e 
H a r r i s e s 
( t h o s e 
e v i d e n c i n g 
t h e 
s a l e s numbers f o r t h e 
K i l l e n 
f r a n c h i s e 
i n l a t e 2 0 0 6 ) , 
w h i c h 
C l i n t o n 
h a d deemed t o be 
t o o 
l o w 
t o 
j u s t i f y 
t h e p u r c h a s e 
o f 
t h e 
K i l l e n 
f r a n c h i s e . 
S p e c i f i c a l l y , 
a c c o r d i n g 
t o 
C l i n t o n , 
$20,000 
was 
t o o 
l o w 
a 
m o n t h l y 
s a l e s 
f i g u r e 
f o r 
a 
p i z z a 
f r a n c h i s e t o o p e r a t e 
p r o f i t a b l y . 
C l i n t o n 
s t a t e d t h a t , i n a c c o r d a n c e w i t h 
t h e p u r c h a s e 
o f 
t h e 
f r a n c h i s e , he 
had 
b e e n p r o v i d e d 
" t h e 
c a r d 
n e c e s s a r y 
t o 
a c c e s s 
... 
t h e 
c o m p u t e r s 
a t 
t h e 
K i l l e n 
[ f r a n c h i s e ] . "
4 
A l t h o u g h t h e o n l y a c c e s s c a r d p r o v i d e d 
t h e H a r r i s e s was 
i s s u e d 
i n M i t z i ' s name, C l i n t o n t e s t i f i e d t h a t Sims a c t u a l l y gave 
h i m 
t h e 
c o m p u t e r - a c c e s s c a r d . 
C l i n t o n t h e n had 
an e m p l o y e e 
use 
t h e 
a c c o u n t i n g 
s o f t w a r e 
s t i l l 
l o a d e d 
on 
one 
o f t h e 
c o m p u t e r s 
a t 
t h e 
K i l l e n 
f r a n c h i s e 
t o 
p r o d u c e 
a 
r e p o r t 
o f 
t h e 
s a l e s 
numbers b e g i n n i n g 
i n J a n u a r y 2007. 
A c c o r d i n g 
t o C l i n t o n , t h e 
4The r e c o r d 
r e f l e c t s 
t h a t 
t h e r e were t h r e e 
c o m p u t e r s 
a t 
t h e 
K i l l e n 
f r a n c h i s e : two 
t h a t were u s e d "up 
f r o n t " and 
were 
a s s o c i a t e d 
w i t h 
p l a c i n g 
c u s t o m e r 
o r d e r s 
and 
a 
s e p a r a t e 
c o m p u t e r 
" i n t h e 
b a c k " 
t h a t 
was 
u s e d 
t o 
o b t a i n 
f i n a n c i a l 
i n f o r m a t i o n 
a s s o c i a t e d w i t h r u n n i n g 
t h e 
b u s i n e s s . 
9 
1091751 
r e p o r t 
g e n e r a t e d by 
t h a t 
s e a r c h 
c o n f i r m e d 
" [ t ] h a t t h e 
s t o r e 
s a l e s a v e r a g e n e v e r went o v e r [$20,000] a m o n t h . "
5 
C l i n t o n a c k n o w l e d g e d 
t h a t 
t h e 
H a r r i s e s 
had 
no 
e v i d e n c e 
i n d i c a t i n g t h a t M i t z i "had 
a n y t h i n g 
t o do w i t h 
[ t h e ] d o c u m e n t s 
Sims gave 
[ t h e H a r r i s e s ] . " As 
t o e v i d e n c e i n d i c a t i n g M i t z i ' s 
i n v o l v e m e n t 
i n t h e 
K i l l e n 
f r a n c h i s e , 
C l i n t o n p o i n t e d 
t o 
t h e 
f a c t t h a t 
M i t z i had b e e n r e s p o n s i b l e 
f o r h a n d l i n g 
p a y r o l l a t 
t h e 
K i l l e n 
f r a n c h i s e 
and 
t h a t , as e v i d e n c e d by 
t h e 
c o m p u t e r -
a c c e s s 
c a r d 
i s s u e d 
i n 
h e r 
name, 
M i t z i 
had 
a c c e s s 
t o 
t h e 
c o m p u t e r 
s y s t e m 
u s e d 
a t 
t h e 
K i l l e n 
f r a n c h i s e .
6 
Once 
t h e 
H a r r i s e s 
became 
aware 
o f 
t h e 
d i s c r e p a n c y 
i n 
t h e 
r e p o r t e d 
e a r n i n g s 
v e r s u s 
t h e 
a c t u a l 
e a r n i n g s , 
as 
n o t e d 
a b o v e , 
t h e y 
f i l e d 
t h e 
u n d e r l y i n g 
a c t i o n . 
J o h n ' s t e s t i m o n y was 
s u b s t a n t i a l l y s i m i l a r t o 
C l i n t o n ' s 
t e s t i m o n y . 
J o h n c o n f i r m e d 
t h a t 
he 
i n c o r p o r a t e d 
HCE 
f o r 
t h e 
5 I t a p p e a r s f r o m t h e 
r e c o r d 
t h a t 
SYM 
a c t u a l l y p a i d 
s a l e s 
t a x on t h e a l l e g e d l y i n f l a t e d s a l e s numbers Sims had 
f u r n i s h e d 
t o t h e 
H a r r i s e s . 
6 C l i n t o n 
s p e c i f i c a l l y 
a c k n o w l e d g e d d u r i n g 
h i s 
t e s t i m o n y 
t h a t 
t h e 
a l l e g e d l y 
f a l s i f i e d 
r e p o r t s 
p r o v i d e d 
by 
Sims w o u l d 
h a v e had 
t o have b e e n p r e p a r e d on 
a c o m p u t e r o t h e r 
t h a n 
t h e 
one 
u s e d 
i n 
t h e 
K i l l e n 
f r a n c h i s e 
and 
t r a n s f e r r e d 
t o 
t h e 
H a r r i s e s a t t h e t i m e o f t h e s a l e o f t h e f r a n c h i s e , b e c a u s e 
t h e 
c o m p u t e r 
a t 
t h e 
K i l l e n 
f r a n c h i s e 
r e t a i n e d 
t h e 
l o w e r 
s a l e s 
f i g u r e s . 
10 
1091751 
p u r p o s e o f o p e r a t i n g 
a p i z z a 
f r a n c h i s e 
i n P e t e r s v i l l e 
and 
t h a t , as a r e s u l t o f t h e s u c c e s s o f t h a t 
i n i t i a l 
e n t e r p r i s e , 
t h e 
H a r r i s e s 
b e g a n 
l o o k i n g 
t o e x p a n d 
t h a t 
b u s i n e s s . 
He 
f u r t h e r c o n f i r m e d t h a t he was a p p r o a c h e d by S i m s , w i t h whom he 
was p r e v i o u s l y 
a c q u a i n t e d , 
a t a f u n e r a l , 
d u r i n g 
w h i c h 
Sims 
i n d i c a t e d t h a t he was l o o k i n g t o r e t i r e and t o s e l l h i s p i z z a 
b u s i n e s s . 
J o h n t e s t i f i e d t h a t he r e l a y e d t h a t i n f o r m a t i o n t o 
C l i n t o n , who t h e n v i s i t e d t h e K i l l e n 
f r a n c h i s e . 
J o h n 
a l s o 
c o n f i r m e d 
t h a t he p e r s o n a l l y 
g u a r a n t e e d t h e 
s t a r t - u p 
l o a n s 
a s s o c i a t e d 
w i t h e a c h o f t h e t h r e e F o x ' s 
P i z z a 
Den 
f r a n c h i s e s 
t h e H a r r i s e s 
o p e r a t e d and t h a t he 
e x p e n d e d 
moneys f r o m h i s 
p e r s o n a l 
s a v i n g s t o c o v e r m o n t h l y e x p e n s e s f o r 
e a c h f r a n c h i s e and was u l t i m a t e l y f o r c e d t o t a k e o u t a 
l o a n 
s e c u r e d 
b y 
t h e 
b u i l d i n g 
t h a t 
h o u s e d 
h i s l a w 
p r a c t i c e . 
D o c u m e n t a t i o n a d m i t t e d d u r i n g J o h n ' s t e s t i m o n y i n d i c a t e d t h a t 
he h a d p e r s o n a l l y i n c u r r e d o b l i g a t i o n s a n d / o r e x p e n d e d moneys 
i n a s s o c i a t i o n w i t h t h e o p e r a t i o n o f t h e f r a n c h i s e s 
t o t a l i n g 
$ 3 8 5 , 5 4 6 . He f u r t h e r i n d i c a t e d t h a t 
a t t e m p t i n g 
t o u s e moneys 
g e n e r a t e d b y t h e p r o f i t a b l e P e t e r s v i l l e f r a n c h i s e t o keep t h e 
M u s c l e S h o a l s and K i l l e n 
f r a n c h i s e s a f l o a t a n d , l a t e r , t o p a y 
t h e o u t s t a n d i n g 
o b l i g a t i o n s a s s o c i a t e d w i t h t h o s e two 
f a i l i n g 
11 
1091751 
f r a n c h i s e s d u r i n g 
an e c o n o m i c d o w n t u r n u l t i m a t e l y doomed 
t h e 
e n t i r e 
e n t e r p r i s e . 
As 
a 
r e s u l t , 
J o h n 
i n d i c a t e d 
t h a t 
t h e 
H a r r i s e s 
a l s o 
c l o s e d 
t h e 
P e t e r s v i l l e 
f r a n c h i s e 
i n December 
2009. 
J o h n 
o f f e r e d 
no 
t e s t i m o n y 
r e g a r d i n g 
M i t z i ' s r o l e 
i n 
e i t h e r t h e K i l l e n f r a n c h i s e o r t h e n e g o t i a t i o n s l e a d i n g t o 
t h e 
H a r r i s e s ' p u r c h a s e o f t h a t 
f r a n c h i s e . 
I n 
h e r 
t r i a l 
t e s t i m o n y , 
M i t z i 
c o n f i r m e d 
t h a t 
she 
was 
w o r k i n g 
a t 
t h e 
K i l l e n 
f r a n c h i s e 
on 
t h e 
d a t e 
o f 
C l i n t o n ' s 
i n i t i a l 
v i s i t . 
S p e c i f i c a l l y , 
she 
r e c a l l e d s e e i n g 
C l i n t o n 
s t a n d i n g 
a t t h e 
c o u n t e r . 
M i t z i 
a l s o r e c a l l e d , h o w e v e r , 
t h a t 
h e r o n l y c o n t a c t w i t h C l i n t o n d u r i n g h i s v i s i t 
was "when 
[she] 
was 
up 
f r o n t 
u s i n g 
t h e 
phone 
t o make 
s u r e 
t h e y 
was 
[ s i c ] 
g e t t i n g a d e l i v e r y c o r r e c t l y [ s i c ] and 
[she] 
saw 
him, 
and Sims 
i n t r o d u c e d 
[ t h e m ] . " 
A l t h o u g h 
she 
t e s t i f i e d 
t h a t 
Sims 
o c c a s i o n a l l y 
a s k e d 
h e r 
f o r h e r 
i n p u t when m a k i n g 
b u s i n e s s -
r e l a t e d d e c i s i o n s , M i t z i d e n i e d any " e x t e n s i v e " i n v o l v e m e n t i n 
t h e 
o p e r a t i o n 
o f 
t h e 
K i l l e n 
f r a n c h i s e . 
I n 
f a c t , 
M i t z i 
s p e c i f i c a l l y d e n i e d e v e r s e r v i n g as t h e manager o f t h e 
K i l l e n 
f r a n c h i s e and c o u l d n o t 
r e c a l l e v e r h a v i n g e v e n s i g n e d a c h e c k 
r e l a t e d t o i t s o p e r a t i o n . 
A c c o r d i n g 
t o M i t z i , 
t h e 
o n l y b a n k 
12 
1091751 
d e p o s i t s she was e v e r r e s p o n s i b l e f o r 
m a k i n g were when she was 
a s s i s t i n g w i t h p i z z a d e l i v e r y . 
A l t h o u g h 
M i t z i 
a c k n o w l e d g e d 
t h a t she m i g h t 
o c c a s i o n a l l y 
h a v e a c c e p t e d c u s t o m e r p a y m e n t s w h i l e s t a n d i n g a t o r n e a r t h e 
c o u n t e r , she s a i d t h a t she n e v e r 
t o t a l e d t h e d a y ' s r e c e i p t s 
f o r d e p o s i t and c o u l d n o t r e c a l l e v e r h a v i n g b e e n r e s p o n s i b l e 
f o r m a k i n g any " f i n a l 
d e p o s i t a t n i g h t . " 
She d i d , h o w e v e r , 
a c k n o w l e d g e t h a t she was r e s p o n s i b l e f o r p a y r o l l 
d u r i n g t h e 
t h r e e y e a r s SYM o p e r a t e d t h e K i l l e n f r a n c h i s e , a j o b she s a y s 
she 
p e r f o r m e d 
f r o m a c o m p u t e r a t h e r r e s i d e n c e . 
I n 
f a c t , 
M i t z i 
s t a t e d 
t h a t 
t h e o n l y 
t i m e 
she e v e r 
l o g g e d 
o n t o 
a 
c o m p u t e r a t t h e K i l l e n 
f r a n c h i s e w o u l d have b e e n i n r e l a t i o n 
t o a s c h e d u l i n g 
i s s u e . 
She f u r t h e r i n d i c a t e d t h a t she was 
u n a b l e 
t o 
r e c a l l 
e v e r 
l o g g i n g 
i n t o 
a 
p a s s w o r d - p r o t e c t e d 
p r o g r a m on a c o m p u t e r a t t h e K i l l e n 
f r a n c h i s e . 
A c c o r d i n g t o 
M i t z i , t h e o n l y t i m e she e v e r u s e d t h e c o m p u t e r - a c c e s s 
c a r d , 
w h i c h Sims 
l a t e r gave t o C l i n t o n , was when i t 
was 
i n i t i a l l y 
i s s u e d 
d u r i n g 
t e s t s t o c o n f i r m 
t h a t t h e c a r d was 
w o r k i n g 
p r o p e r l y 
a n d t o 
e n t e r 
t h e 
d e l i v e r y 
a d d r e s s e s 
o f 
r e p e a t 
c u s t o m e r s . 
She s p e c i f i c a l l y d e n i e d e v e r h a v i n g s e e n any t y p e 
o f s p r e a d s h e e t on t h e c o m p u t e r d u r i n g t h a t l i m i t e d u s e o r e v e r 
13 
1091751 
h a v i n g 
" w o r k e d w i t h numbers" 
i n t h e c o m p u t e r a t t h e 
K i l l e n 
f r a n c h i s e . M i t z i a l s o d e n i e d e v e r l o o k i n g a t o r a s s i s t i n g 
w i t h 
t h e 
a s s e m b l y 
o f 
m o n t h l y 
s a l e s 
f i g u r e s 
f o r 
t h e 
K i l l e n 
f r a n c h i s e . 
More s p e c i f i c a l l y , M i t z i d e n i e d e v e r s e e i n g t h e a l l e g e d l y 
f r a u d u l e n t 
s a l e s 
r e c o r d s 
Sims 
p r o v i d e d 
t o 
t h e 
H a r r i s e s . 
A c c o r d i n g 
t o h e r t e s t i m o n y , 
t h e o n l y i n f o r m a t i o n she 
r e c e i v e d 
f r o m 
Sims was 
an 
i n d i c a t i o n t h a t 
" t h e b u s i n e s s 
was 
d o i n g 
w e l l . " 
M i t z i a l s o d e n i e d 
t h a t Sims d i s c u s s e d w i t h h e r any o f 
h i s n e g o t i a t i o n s w i t h t h e H a r r i s e s , i n c l u d i n g h i s s t a t e m e n t t o 
t h e 
H a r r i s e s 
t h a t b u s i n e s s 
h a d i m p r o v e d s i n c e t h e 
c o n c l u s i o n 
o f n e a r b y r o a d - c o n s t r u c t i o n w o r k . 
A c c o r d i n g t o M i t z i , she and 
Sims 
" d i d n ' t 
d i s c u s s 
t h e p i z z a 
p l a c e 
v e r y 
much a t 
a l l . " 
M i t z i d i d a d m i t , h o w e v e r , 
t h a t Sims i n f o r m e d h e r 
d u r i n g 
t h e 
c o u r s e 
o f t h e n e g o t i a t i o n s 
w i t h 
t h e H a r r i s e s 
t h a t 
t h e 
H a r r i s e s were 
g o i n g 
t o r e n t t h e b u i l d i n g and t h a t she 
" s a i d 
t h a t ' s f i n e . " 
She f u r t h e r i n d i c a t e d t h a t , a l t h o u g h Sims n e v e r 
a p p r o a c h e d h e r t o o b t a i n h e r a p p r o v a l 
b e f o r e 
a r r i v i n g 
a t a 
r e n t a l 
f i g u r e f o r t h e b u i l d i n g , t h e r e n t a l amount he 
q u o t e d 
t h e 
H a r r i s e s was 
a c c e p t a b l e 
t o h e r . 
14 
1091751 
Holcombe 
i n d i c a t e d t h a t he w o r k e d as a s h i f t 
l e a d e r a t 
t h e 
K i l l e n 
f r a n c h i s e 
f o r a p p r o x i m a t e l y 
f i v e 
months 
i n o r 
a r o u n d 2005 o r 2006. 
A c c o r d i n g 
t o H o l c o m b e ' s t e s t i m o n y , 
he 
was p r o m o t e d t o a s s i s t a n t manager, a t w h i c h t i m e Sims 
a s k e d 
h i m t o t a k e r e s p o n s i b i l i t y f o r t h e f i n a l n i g h t d e p o s i t s , w h i c h 
Holcombe 
s a i d , 
i n c l u d e d 
t a l l y i n g 
a l l 
r e c e i p t s t o a r r i v e 
a t 
t o t a l 
i n t a k e 
( a d d i n g 
c h e c k s and c a s h and s u b t r a c t i n g 
c r e d i t -
c a r d p u r c h a s e s ) , 
t h e n s u b t r a c t i n g t h e $200 o p e r a t i n g c a s h f o r 
t h e n e x t day and d e p o s i t i n g t h e r e m a i n d e r . 
Holcombe i n d i c a t e d 
t h a t , a t t h e t i m e he was a s s i g n e d 
t h a t d u t y , Sims 
s p e c i f i c a l l y 
i n f o r m e d h i m " t h a t t h o s e d e p o s i t s h a d b e e n done i n t h e p a s t i n 
p a r t by M i t z i . " 
However, he s p e c i f i c a l l y 
n o t e d t h a t , once he 
assumed t h a t 
r e s p o n s i b i l i t y , " [ h e ] was t h e o n l y one t h a t d i d 
them." 
A c c o r d i n g t o H o l c o m b e , d u r i n g t h e t i m e he was 
r e s p o n s i b l e 
f o r t h e n i g h t l y d e p o s i t s , t h e i n t a k e o f t h e K i l l e n 
f r a n c h i s e 
r a n g e d f r o m a r o u n d $200 on a s l o w n i g h t t o $2,000 on a b u s y 
n i g h t . 
A l s o a c c o r d i n g t o H o l c o m b e , t h e c o m p u t e r i n t h e 
o f f i c e 
o f 
t h e 
K i l l e n 
f r a n c h i s e 
"had a l l t h e 
a c t u a l 
i n f o r m a t i o n " 
a s s o c i a t e d w i t h t h e b u s i n e s s , 
i n c l u d i n g a s p r e a d s h e e t s h o w i n g 
t h e 
d a i l y 
r e c e i p t s f o r t h e K i l l e n 
f r a n c h i s e as r e f l e c t e d b y 
15 
1091751 
t h e 
n i g h t l y d e p o s i t s . 
Holcombe d e s c r i b e d 
M i t z i ' s r o l e 
w i t h 
r e g a r d t o t h e K i l l e n 
f r a n c h i s e as 
f o l l o w s : " I t 
was h e r j o b 
b a s i c a l l y 
[ t o ] keep up r e l a t i o n s w i t h 
[ t h e b i g g e r ] 
c u s t o m e r s . " 
He f u r t h e r n o t e d 
t h a t when 
l a r g e 
o r d e r s 
came i n a s s o c i a t e d 
w i t h c h u r c h o r s c h o o l e v e n t s M i t z i was r e s p o n s i b l e f o r m a k i n g 
t h e 
d e l i v e r y and r e t u r n i n g 
t h e a s s o c i a t e d 
payment t o t h e 
K i l l e n 
f r a n c h i s e . 
A t t h e c l o s e o f t h e H a r r i s e s ' e v i d e n c e , 
M i t z i moved f o r 
a 
" d i r e c t e d v e r d i c t "
7 on g r o u n d s 
t h a t t h e H a r r i s e s ' 
c l a i m s 
a g a i n s t h e r a l l e g e d m i s r e p r e s e n t a t i o n s 
o f m a t e r i a l 
f a c t and 
t h a t t h e H a r r i s e s h a d f a i l e d t o p r e s e n t any e v i d e n c e o f a 
s i n g l e m i s r e p r e s e n t a t i o n 
o r any f a i l u r e t o d i s c l o s e on M i t z i ' s 
p a r t .
8 
The 
t r i a l 
c o u r t 
d e n i e d M i t z i ' s m o t i o n . 
I m m e d i a t e l y 
t h e r e a f t e r , 
M i t z i 
b o t h 
r e s t e d and r e n e w e d h e r m o t i o n f o r a 
j u d g m e n t as a m a t t e r o f l a w , a g a i n 
a r g u i n g 
t h a t 
t h e r e was no 
7"A d i r e c t e d v e r d i c t i s now r e f e r r e d t o as a j u d g m e n t as 
a m a t t e r o f l a w . See R u l e 50, A l a . 
R. C i v . 
P." 
S k e r l i c k v .  
G a i n e y , 
42 So. 3d 1288, 128 
9 n.2 
( A l a . 
C i v . App. 
2 0 1 0 ) . 
However, " [ i ] n an a c t i o n t r i e d upon t h e f a c t s w i t h o u t a j u r y , 
s u c h a m o t i o n i s p r o p e r l y 
c h a r a c t e r i z e d as a m o t i o n f o r a 
j u d g m e n t on p a r t i a l 
f i n d i n g s b y t h e t r i a l 
c o u r t . " 
Ex 
p a r t e 
Wood, [Ms. 1090877, O c t , 29, 2010] 
So. 3d 
, 
n.3 
( A l a . 
2010) ( c i t i n g R u l e 5 2 ( c ) , A l a . 
R. C i v . P . ) . 
8 M i t z i i n c l u d e d t h i s 
l a s t a r g u m e n t d e s p i t e h e r c o n t e n t i o n 
t h a t t h e H a r r i s e s ' c o m p l a i n t f a i l e d t o a l l e g e t h a t she h a d and 
b r e a c h e d a d u t y t o d i s c l o s e . 
16 
1091751 
e v i d e n c e 
o f 
any 
" w r o n g d o i n g 
[by 
M i t z i ] as 
a 
l e s s o r 
o f 
t h e 
b u i l d i n g . " 
The 
H a r r i s e s 
r e s p o n d e d 
by 
a c k n o w l e d g i n g 
t h a t 
a l t h o u g h 
" t h e 
e v i d e n c e 
... 
d o e s n ' t 
have 
[ M i t z i ] 
d i r e c t l y 
s a y i n g 
a n y t h i n g 
t o 
e i t h e r 
o f 
t h e 
H a r r i s e s 
w i t h 
r e g a r d 
t o 
r e p r e s e n t a t i o n s 
a b o u t 
b u s i n e s s 
e a r n i n g s 
and 
t h a t 
s o r t 
o f 
t h i n g [ , t h e e v i d e n c e ] p r o v e s t h a t s h e ' s a l l i n and a r o u n d t h [ e 
o p e r a t i o n 
o f t h e 
K i l l e n f r a n c h i s e ] . " 
F o l l o w i n g 
t h e 
c o n c l u s i o n 
o f 
t h e 
t r i a l , 
t h e 
t r i a l 
c o u r t 
e n t e r e d 
on 
J u l y 
14, 
2010, 
a 
j u d g m e n t 
" i n 
f a v o r 
o f 
t h e 
p l a i n t i f f s 
and 
a g a i n s t 
t h e 
d e f e n d a n t s " 
i n 
t h e 
amount 
o f 
$ 5 0 0 , 0 0 0 , 
w h i c h 
amount 
r e p r e s e n t e d 
a 
c o m p e n s a t o r y - d a m a g e s 
a w a r d o f $380,000 and 
a p u n i t i v e - d a m a g e s a w a r d o f 
$ 1 2 0 , 0 0 0 . 
The 
t r i a l 
c o u r t ' s 
o r d e r , 
h o w e v e r , 
f a i l e d 
t o 
i n c l u d e 
t h e 
f a c t u a l 
f i n d i n g s 
on 
w h i c h 
t h o s e 
a w a r d s were b a s e d . 
M i t z i 
t i m e l y 
f i l e d , 
p u r s u a n t 
t o 
R u l e 
5 9 ( e ) , 
A l a . 
R. 
C i v . 
P., 
a 
p o s t j u d g m e n t 
m o t i o n 
s e e k i n g 
t o 
amend 
t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t on 
t h e g r o u n d s t h a t 
t h e 
t r i a l 
c o u r t 
m i s a p p l i e d 
t h e 
l a w 
t o t h e 
f a c t s e s t a b l i s h e d by 
t h e 
e v i d e n c e a t 
t r i a l ; 
t h a t 
t h e H a r r i s e s p r e s e n t e d 
i n s u f f i c i e n t e v i d e n c e t o d e f e a t M i t z i ' s 
m o t i o n 
f o r 
a 
j u d g m e n t 
on 
p a r t i a l 
f i n d i n g s ; 
t h a t 
t h e 
c o m p e n s a t o r y - d a m a g e s a w a r d had b e e n i n c o r r e c t l y c a l c u l a t e d and 
17 
1091751 
was 
n o t s u p p o r t e d by t h e e v i d e n c e ; and t h a t p u n i t i v e damages 
were n o t w a r r a n t e d a n d / o r 
t h a t t h e p u n i t i v e - d a m a g e s 
a w a r d 
was 
e x c e s s i v e .
9 
The 
t r i a l c o u r t d e n i e d M i t z i ' s m o t i o n by an o r d e r 
e n t e r e d A u g u s t 
16, 2010. 
M i t z i 
a p p e a l s .
1 0 
S t a n d a r d o f R e v i e w 
As 
n o t e d 
a b o v e , M i t z i 
a p p e a l s 
f r o m 
t h e 
t r i a l 
c o u r t ' s 
d e n i a l o f h e r m o t i o n 
f i l e d a t t h e c l o s e o f a l l 
t h e e v i d e n c e , 
p r o p e r l y t e r m e d a m o t i o n f o r a j u d g m e n t on p a r t i a l f i n d i n g s b y 
t h e 
t r i a l 
c o u r t . 
See s u p r a n o t e 7. 
"The 
s t a n d a r d o f r e v i e w 
a p p l i c a b l e ... t o r u l i n g s on m o t i o n s f o r a j u d g m e n t on 
p a r t i a l 
f i n d i n g s 
b y 
t h e 
t r i a l 
c o u r t " 
i s 
" [ o ] r d i n a r i l y 
... 
t h e 
o r e 
 
t e n u s s t a n d a r d . " 
B u r k e s Mech., I n c . v. F t . 
J a m e s - P e n n i n g t o n , 
 
I n c . , 
908 
So. 
2d 
905, 
910 
( A l a . 2004) 
( c i t i n g 
L o g g i n s 
v. 
 
R o b i n s o n , 
738 
So. 
2d 1268, 
1270 
( A l a . C i v . App. 
1 9 9 9 ) , 
a n d 
G r a n t 
v. 
B u l l o c k 
C o u n t y 
Bd. 
o f 
E d u c . , 
895 
F.Supp. 
1506, 
1508-09 
(M.D. 
A l a . 1995) 
( r e v i e w u n d e r R u l e 52, F e d . R. C i v . 
P . ) ) . 
U n d e r t h e o r e t e n u s 
s t a n d a r d o f r e v i e w , 
f i n d i n g s 
on 
9 M i t z i s u p p o r t e d h e r c o n t e n t i o n t h a t t h e 
p u n i t i v e - d a m a g e s 
a w a r d 
was 
e x c e s s i v e 
w i t h 
h e r 
own 
a f f i d a v i t 
t e s t i m o n y 
i n d i c a t i n g t h a t " [ h e r ] n e t w o r t h i s $0 o r i s n e g a t i v e . " 
1 0Upon a p p l i c a t i o n t o t h e 
t r i a l 
c o u r t , 
M i t z i was 
g r a n t e d 
l e a v e t o p r o c e e d i n f o r m a p a u p e r i s on a p p e a l . 
See R u l e 2 4 ( a ) , 
A l a . 
R. App. 
P. 
18 
1091751 
d i s p u t e d 
f a c t s a r e p r e s u m e d c o r r e c t , a n d t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t b a s e d on t h o s e 
f i n d i n g s w i l l n o t be r e v e r s e d 
u n l e s s 
t h e 
j u d g m e n t i s p a l p a b l y 
e r r o n e o u s 
o r 
m a n i f e s t l y 
u n j u s t . 
S o u t h s i d e Cmty. Dev. C o r p . v. W h i t e , 10 So. 3d 990, 991 ( A l a . 
2 0 0 8 ) . 
"'"'The 
p r e s u m p t i o n 
o f 
c o r r e c t n e s s , 
h o w e v e r , i s 
r e b u t t a b l e a n d may be o v e r c o m e w h e r e 
t h e r e 
i s 
i n s u f f i c i e n t 
e v i d e n c e 
p r e s e n t e d 
t o 
t h e 
t r i a l 
c o u r t 
t o 
s u s t a i n i t s 
j u d g m e n t . ' " ' " 10 So. 3d a t 991-92 
( q u o t i n g R e t a i l 
D e v e l o p e r s  
o f A l a b a m a , I n c . v. E a s t G a d s d e n G o l f C l u b , I n c . , 985 So. 2 d 
924, 
929 ( A l a . 
2 0 0 7 ) , q u o t i n g i n t u r n Waltman v . R o w e l l , 
913 
So. 
2 d 1083, 1086 
( A l a . 2 0 0 5 ) , 
q u o t i n g 
i n t u r n 
D e n n i s 
v .  
Dobbs, 474 So. 2 d 77, 79 ( A l a . 1985) ) . See a l s o F i r s t A l a b a m a  
Bank o f M o n t g o m e r y , N.A. 
v. C o k e r , 
408 So. 2 d 510, 
512-13 
( A l a . 1982) ("The p r e s u m p t i o n o f c o r r e c t n e s s 
[ a t t e n d a n t t o o r e 
t e n u s f i n d i n g s ] i s r e b u t t a b l e a n d may be o v e r c o m e w h e r e 
t h e r e 
i s 
i n s u f f i c i e n t 
e v i d e n c e 
p r e s e n t e d 
t o t h e 
t r i a l 
c o u r t 
t o 
s u s t a i n i t s j u d g m e n t . I n s u c h 
i n s t a n c e s w h e r e t h e p r o o f 
a t 
t r i a l 
f a i l s t o s u p p o r t t h e m a t e r i a l a l l e g a t i o n s on w h i c h t h e 
s u i t 
i s b a s e d , 
t h e j u d g m e n t 
r e n d e r e d 
c a n n o t be 
u p h e l d 
on 
a p p e a l . " ) . A d d i t i o n a l l y , 
we n o t e t h a t " t h e o r e t e n u s 
s t a n d a r d 
i s 
i n a p p l i c a b l e 'where t h e e v i d e n c e i s u n d i s p u t e d , 
o r where 
19 
1091751 
t h e 
m a t e r i a l 
f a c t s 
a r e 
e s t a b l i s h e d 
by 
t h e 
u n d i s p u t e d 
e v i d e n c e . ' 
S a l t e r 
v. 
H a m i t e r , 
887 
So. 
2d 
230, 
234 
( A l a . 
2 0 0 4 ) . " B u r k e s M e c h a n i c a l , 
908 
So. 
2d a t 910. 
I n s u c h 
c a s e s , 
a p p e l l a t e 
r e v i e w 
i s 
de 
n o v o . 
I d . 
See 
a l s o 
R a g s d a l e 
v. 
 
R a g s d a l e , 
991 
So. 
2d 770, 
772 
( A l a . C i v . App. 
2 0 0 8 ) . 
D i s c u s s i o n 
On 
a p p e a l , 
M i t z i 
i n i t i a l l y 
a r g u e s 
t h a t 
t h e 
H a r r i s e s 
p r e s e n t e d 
i n s u f f i c i e n t e v i d e n c e t o s u p p o r t a c o n c l u s i o n 
t h a t 
she made any 
m i s r e p r e s e n t a t i o n 
t o 
t h e 
H a r r i s e s 
o r 
t h a t 
she 
s u p p r e s s e d 
any 
f a c t 
t h a t 
she 
was 
d u t y - b o u n d 
t o d i s c l o s e .
1
1 
( I s s u e s 
I 
a n d 
I I , r e s p e c t i v e l y , i n 
M i t z i ' s b r i e f 
t o 
t h i s 
C o u r t ) .
1 2 
More s p e c i f i c a l l y , 
she c o n t e n d s t h a t t h e o r e 
t e n u s 
1 1 C o n t r a r y 
t o 
t h e 
H a r r i s e s ' 
a s s e r t i o n i n t h e i r 
b r i e f 
t o 
t h i s 
C o u r t , 
M i t z i ' s a r g u m e n t 
p e r t a i n i n g 
t o 
any 
p o t e n t i a l 
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 
does 
n o t 
c o n c e d e 
t h a t 
t h e 
H a r r i s e s 
a c t u a l l y p r e s e n t e d 
s u c h a c l a i m . 
M i t z i ' s b r i e f , 
a t 
p. 25. 
I n s t e a d , M i t z i makes c l e a r t h a t , a l t h o u g h 
a 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 was 
n o t i n c l u d e d i n t h e H a r r i s e s ' 
c o m p l a i n t , 
b a s e d 
on 
t h e 
a r g u m e n t s 
o f 
c o u n s e l 
f o r 
t h e 
H a r r i s e s 
d u r i n g 
t r i a l 
and 
t h e a b s e n c e o f 
any 
s p e c i f i c 
f i n d i n g s by 
t h e 
t r i a l 
c o u r t 
i n t h a t 
r e g a r d , 
t o 
t h e 
e x t e n t 
t h a t 
any 
s u c h c l a i m 
may 
h a v e b e e n t r i e d by 
t h e 
i m p l i e d c o n s e n t o f t h e p a r t i e s , i t i s 
a l s o u n s u p p o r t e d by 
t h e 
e v i d e n c e . 
1 2 B e c a u s e 
i n 
h e r 
p o s t j u d g m e n t 
m o t i o n 
M i t z i 
p r o p e r l y 
c h a l l e n g e d 
t h e 
s u f f i c i e n c y o f 
t h e 
e v i d e n c e 
t o 
s u s t a i n 
t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t , 
w h i c h 
d i d 
n o t 
i n c l u d e 
f i n d i n g s 
o f 
f a c t , 
she 
has 
p r o p e r l y 
p r e s e r v e d 
h e r 
c l a i m s 
f o r p u r p o s e s 
o f 
a p p e a l . 
See 
New 
P r o p s . , L.L.C. v. 
S t e w a r t , 
905 
So. 
2d 
797, 
801-02 
( A l a . 2004) 
( " [ H ] o l d [ i n g ] 
t h a t , 
i n a n o n j u r y 
c a s e 
i n 
20 
1091751 
e v i d e n c e d e m o n s t r a t e d n e i t h e r a n y a c t 
n o r a n y f a i l u r e t o 
a c t 
on h e r p a r t a m o u n t i n g t o a c t i o n a b l e 
f r a u d a n d t h a t t h e t r i a l 
c o u r t ' s 
a p p a r e n t 
c o n c l u s i o n t o t h e c o n t r a r y was 
e r r o n e o u s . 
M i t z i 
a r g u e s 
t h a t 
a n y f r a u d u l e n t 
a c t s 
i n t h i s 
c a s e 
w e r e 
c o m m i t t e d b y Sims 
a l o n e . 
The 
H a r r i s e s 
c o u n t e r 
M i t z i ' s 
c o n t e n t i o n 
t h a t 
s h e 
p e r s o n a l l y made no m i s r e p r e s e n t a t i o n b y c i t i n g t h e f o l l o w i n g 
e v i d e n c e : 
" M i t z i 
owned 
t h e b u i l d i n g 
i n K i l l e n 
w h e r e t h e 
[ K i l l e n 
f r a n c h i s e ] 
was 
l o c a t e d . 
She 
l e a s e d t h e 
b u i l d i n g 
t o 
t h e 
H a r r i s e s 
u n d e r 
an 
a g r e e m e n t 
n e g o t i a t e d 
i n h e r b e h a l f 
b y h e r h u s b a n d , 
Sims 
L a w s o n . She r e c e i v e d 
l e a s e p a y m e n t s a n d a c t e d a s a 
c o m m u n i t y r e l a t i o n s 
l i a i s o n f o r 
t h e s t o r e . She h a d 
i n p u t 
i n t o how t h e b u s i n e s s 
was r u n a n d d i d 
t h e 
s t o r e p a y r o l l f o r 
t h r e e y e a r s . She p r e p a r e d 
r e p o r t s 
a n d 
n i g h t 
d e p o s i t s 
w h i c h 
r e q u i r e d t h e u s e o f t h e 
s t o r e c o m p u t e r c o n t a i n i n g a l l t h e s t o r e ' s 
f i n a n c i a l 
i n f o r m a t i o n . She h a d t h e c a r d w h i c h g a v e h e r a c c e s s 
t o t h e c o m p u t e r 
w i t h h e r name on i t a n d no one 
e l s e ' s . She e v e n a d m i t t e d 
( a l t h o u g h g r u d g i n g l y ) 
t h a t 
she 
u s e d t h e c a r d t o l o g i n t o t h e c o m p u t e r . 
M i t z i 
was 
a l s o 
p r e s e n t 
when Sims L a w s o n s h o w e d 
C l i n t o n 
H a r r i s a r o u n d t h e s t o r e d u r i n g n e g o t i a t i o n s f o r i t s 
s a l e . " 
w h i c h t h e t r i a l 
c o u r t makes no s p e c i f i c 
f i n d i n g s o f f a c t , a 
p a r t y must move f o r 
a new 
t r i a l o r o t h e r w i s e 
p r o p e r l y 
r a i s e 
b e f o r e 
t h e 
t r i a l 
c o u r t 
t h e 
q u e s t i o n 
r e l a t i n g 
t o t h e 
s u f f i c i e n c y o r w e i g h t o f t h e e v i d e n c e i n o r d e r t o 
p r e s e r v e 
t h a t q u e s t i o n f o r 
a p p e l l a t e 
r e v i e w . " ) . 
21 
1091751 
The 
H a r r i s e s ' 
b r i e f , 
a t 
p. 
15-16 
( c i t a t i o n s 
t o 
r e c o r d 
o m i t t e d ) . 
"To 
e s t a b l i s h a c a u s e o f a c t i o n f o 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 , 
t h e 
p l a i n t i f f must show 1) 
t h a t 
t h e d e f e n d a n t made a m i s r e p r e s e n t a t i o n ; 
2) t h a t 
t h a t 
m i s r e p r e s e n t a t i o n 
c o n c e r n e d 
a 
m a t e r i a l 
e x i s t i n g 
f a c t ; 
3) 
t h a t 
t h e 
p l a i n t i f f 
r e l i e d 
on 
t h e 
m i s r e p r e s e n t a t i o n ; 
a n d 
4) 
t h a t t h e 
r e l i a n c e was 
t o 
t h e 
p l a i n t i f f ' s 
d e t r i m e n t . 
A l a . 
Code 
1975, 
§ 
6-5-101; C r o w d e r v. Memory 
H i l l G a r d e n s , 
I n c . , 
516 
So. 
2d 
602 
( A l a . 1 9 8 7 ) . U n d e r 
[ A l a . Code 1975,] 
§ 
6-5-101, 
' l e g a l 
f r a u d ' 
i n c l u d e s 
m i s r e p r e s e n t a t i o n s 
o f m a t e r i a l f a c t made 'by m i s t a k e o r i n n o c e n t l y , ' 
as 
w e l l 
as 
m i s r e p r e s e n t a t i o n s 
made 
' w i l l f u l l y 
t o 
d e c e i v e , 
o r r e c k l e s s l y w i t h o u t 
k n o w l e d g e . ' Young v.  
S e r r a V o l k s w a g e n , I n c . , 579 
So. 
2d 1337 
( A l a . 1991) . 
" I n 
o r d e r 
t o 
e s t a b l i s h a c a u s e 
o f 
a c t i o n 
f o r 
f r a u d u l e n t 
s u p p r e s s i o n , 
t h e 
p l a i n t i f f must show 
1) 
t h a t t h e d e f e n d a n t 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 , 
2) 
t h a t t h e d e f e n d a n t c o n c e a l e d 
o r 
f a i l e d 
t o 
d i s c l o s e 
t h o s e 
f a c t s , 
3) 
t h a t 
t h e 
c o n c e a l m e n t 
o r 
f a i l u r e 
t o 
d i s c l o s e i n d u c e d 
t h e 
p l a i n t i f f 
t o 
a c t ; 
a n d 
4) t h a t t h e d e f e n d a n t ' s a c t i o n r e s u l t e d i n harm 
t o t h e 
p l a i n t i f f . 
I n t e r s t a t e T r u c k L e a s i n g , 
I n c . 
v. 
 
B e n d e r , 
608 
So. 
2d 
716 
( A l a . 
1 9 9 2 ) . 
A 
d u t y 
t o 
c o m m u n i c a t e 
c a n 
a r i s e 
f r o m 
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 
b e t w e e n 
t h e 
p l a i n t i f f 
a n d 
t h e 
d e f e n d a n t , f r o m t h e p a r t i c u l a r c i r c u m s t a n c e s 
o f 
t h e 
c a s e , 
o r 
f r o m a r e q u e s t 
f o r i n f o r m a t i o n , 
b u t 
mere 
s i l e n c e i n t h e a b s e n c e o f a d u t y t o d i s c l o s e i s 
n o t 
f r a u d u l e n t . 
Dodd 
v. 
N e l d a 
S t e p h e n s o n 
C h e v r o l e t , 
 
I n c . , 
626 
So. 
2d 
1288 
( A l a . 1 9 9 3 ) ; H a r d y 
v. 
B l u e 
 
C r o s s & B l u e S h i e l d o f A l a b a m a , 585 
So. 
2d 29 
( A l a . 
1 9 9 1 ) ; 
K i n g 
v. 
N a t i o n a l 
F o u n d a t i o n 
L i f e 
I n s . 
Co., 
541 
So. 
2d 502 
( A l a . 1 9 8 9 ) ; See, McGowan v. 
C h r y s l e r  
C o r p . , 
631 
So. 
2d 
842 
( A l a . 1 9 9 3 ) ; A l a . Code 
1975, 
§ 6-5-102." 
22 
1091751 
J e w e l l v. S e a b o a r d I n d u s . , I n c . , 667 
So. 
2d 653, 657-58 ( A l a . 
1 9 9 5 ) . 
See a l s o C r o w d e r v. Memory H i l l G a r d e n s , I n c . , 516 
So. 
2d 602, 
604-05 
( A l a . 1 9 8 7 ) . 
T h e r e f o r e , 
t o 
s u c c e e d 
on 
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 
c l a i m 
a g a i n s t 
M i t z i , 
t h e 
H a r r i s e s 
w e r e 
r e q u i r e d 
t o show a m i s r e p r e s e n t a t i o n 
o f 
a m a t e r i a l 
f a c t 
b y 
M i t z i . However, as 
t h e 
H a r r i s e s a c k n o w l e d g e d i n r e s p o n s e 
t o 
M i t z i ' s r e n e w e d m o t i o n f o r a j u d g m e n t as 
a m a t t e r o f l a w 
a t 
t h e 
c l o s e 
o f 
a l l t h e 
e v i d e n c e , 
and 
as 
M i t z i 
a r g u e s 
i n 
h e r 
b r i e f 
t o 
t h i s 
C o u r t , 
no 
r e p r e s e n t a t i o n was made by 
M i t z i 
t o 
t h e H a r r i s e s t h a t w o u l d s u p p o r t 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 
c l a i m u n d e r § 6-5-101, A l a . Code 1975. 
See 
P a r k e r v. 
T h y s s e n  
M i n i n g 
C o n s t r . , 
I n c . , 
428 
So. 
2d 
615, 
618 
( A l a . 1983) 
("To 
c o n s t i t u t e 
f r a u d , 
t h e r e 
must 
be 
some m i s r e p r e s e n t a t i o n 
o f 
 
m a t e r i a l 
f a c t 
t o 
a 
p a r t y 
who 
r e l i e s 
u p o n 
s u c h 
m i s r e p r e s e n t a t i o n 
t o h i s d e t r i m e n t . 
B a l l v. V o g t n e r , 362 
So. 
2d 
894 
( A l a . 1 9 7 8 ) ; A l a . Code 1975, 
§§ 6-5-100 t o 6-5-104." 
( e m p h a s i s a d d e d ) ) , a n d Mann v. Adams R e a l t y Co., 
556 F.2d 
288, 
296 
( 5 t h 
C i r . 1977) 
( a p p l y i n g A l a b a m a 
l a w 
a n d 
n o t i n g 
t h a t 
" [ t ] h e m i s r e p r e s e n t a t i o n 
may 
be 
w i l l f u l 
o r i t m i g h t be 'made 
23 
1091751 
by 
m i s t a k e a n d i n n o c e n t l y , ' b u t i t must be 'made' i n a n y 
e v e n t . " 
( f o o t n o t e 
o m i t t e d ) ) . 
B a s e d 
on 
t h e i r 
i n a b i l i t y 
t o 
make 
t h e 
r e q u i s i t e 
d e m o n s t r a t i o n u n d e r t h e f a c t s o f t h e i r c a s e , a n d as e x p l a i n e d 
i n 
t h e i r 
b r i e f t o t h i s 
C o u r t , 
t h e H a r r i s e s ' 
f r a u d 
c l a i m s 
a g a i n s t 
M i t z i w e r e b a s e d p r i m a r i l y on t h e i r 
c o n t e n t i o n 
t h a t 
M i t z i ' s 
mere 
p r o x i m i t y 
t o a n d o c c a s i o n a l 
p r e s e n c e i n t h e 
K i l l e n 
f r a n c h i s e , b y v i r t u e o f h e r m a r r i a g e t o S i m s , was 
s u f f i c i e n t 
" t o show 
t h a t 
M i t z i 
p a r t i c i p a t e d i n 
a n d / o r 
s u p p r e s s e d t h e f r a u d u l e n t r e p r e s e n t a t i o n s made b y h e r h u s b a n d , 
S i m s . " 
The H a r r i s e s ' b r i e f , a t p. 10. We 
d i s a g r e e . 
S p e c i f i c a l l y , e v e n a s s u m i n g , as H o l c o m b e t e s t i f i e d , 
t h a t 
M i t z i h a d , a t some t i m e b e f o r e 2005 o r 2006, o c c a s i o n a l l y b e e n 
r e s p o n s i b l e f o r n i g h t d e p o s i t s a n d f o r p a y r o l l , we s e e n o t h i n g 
a s s o c i a t e d w i t h 
e i t h e r o f t h o s e 
r e s p o n s i b i l i t i e s 
t h a t 
w o u l d 
h a v e p l a c e d h e r i n a p o s i t i o n t o be aware o f t h e t o t a l 
s a l e s 
numbers f o r 
t h e K i l l e n f r a n c h i s e i n 
t h e f i r s t q u a r t e r o f 2007 
( e s p e c i a l l y g i v e n t h e v a r i a n c e i n 
t h e n i g h t l y d e p o s i t amounts 
as 
t e s t i f i e d t o b y H o l c o m b e ) . 
I n i t i a l l y , we n o t e t h a t i t was 
a l s o 
u n d i s p u t e d 
t h a t 
a n y 
p a y r o l l 
r e s p o n s i b i l i t i e s 
M i t z i 
p e r f o r m e d w e r e p e r f o r m e d u s i n g h e r home c o m p u t e r a n d n o t 
t h e 
24 
1091751 
c o m p u t e r on t h e p r e m i s e s a t t h e K i l l e n 
f r a n c h i s e . 
M o r e o v e r , 
e v e n 
i f , a s H o l c o m b e a l s o t e s t i f i e d , i n f o r m a t i o n r e g a r d i n g t h e 
d a i l y s a l e s r e c e i p t s f o r 
t h e K i l l e n f r a n c h i s e was a v a i l a b l e on 
t h e 
c o m p u t e r 
a t t h e K i l l e n 
f r a n c h i s e , 
M i t z i ' s 
u n d i s p u t e d 
t e s t i m o n y 
i n d i c a t e d 
t h a t 
s h e 
n e v e r 
l o o k e d 
a t o r 
h e l p e d 
a s s e m b l e t h o s e n u m b e r s . A d d i t i o n a l l y , b y a l l a c c o u n t s , a n d as 
e v i d e n c e d b y C l i n t o n ' s l a t e r r e t r i e v a l , t h e f i g u r e s a v a i l a b l e 
on t h e o f f i c e c o m p u t e r a t t h e K i l l e n f r a n c h i s e w e r e , i n f a c t , 
t h e a c t u a l s a l e s numbers f o r 
t h e b u s i n e s s . 
The H a r r i s e s 
f a i l 
t o e x p l a i n how, i n t h e a b s e n c e o f a n y e v i d e n c e p r e s e n t e d b y 
them 
i n d i c a t i n g t h a t 
M i t z i 
c o u l d be l i n k e d t o o r was 
e v e n 
aware o f t h e a l l e g e d l y f a l s i f i e d numbers g e n e r a t e d b y Sims o r 
t h a t s h e was p r e s e n t when t h e r e p o r t c o n t a i n i n g t h o s e numbers 
was p r o v i d e d 
t o t h e H a r r i s e s , 
a c c e s s t o t h e a c t u a l 
numbers 
w o u l d h a v e made M i t z i a p a r t y t o S i m s ' s 
f r a u d u l e n t 
a c t i o n s . 
M o r e o v e r , 
M i t z i 
i n d i c a t e d 
t h a t 
s h e p o s s e s s e d 
no 
p e r s o n a l 
i n f o r m a t i o n 
i n d i c a t i n g 
t h a t 
a n y o f t h e 
i n f o r m a t i o n 
Sims 
p r o v i d e d t o t h e H a r r i s e s was a n y t h i n g 
o t h e r t h a n a c c u r a t e a n d 
c o m p l e t e when i t 
was p r o v i d e d . 
F i n a l l y , we n o t e t h a t 
M i t z i 
t e s t i f i e d as t o h e r l i m i t e d i n p u t 
i n t o a n d p a r t i c i p a t i o n 
i n 
t h e 
b u s i n e s s , 
a 
f a c t 
t h a t , 
we 
f i n d , 
was 
s u p p o r t e d 
b y 
25 
1091751 
H o l c o m b e ' s 
t e s t i m o n y , 
as s e t o u t a b o v e , a n d t h a t was n o t 
d i s p r o v e d b y t h e H a r r i s e s . 
A s s u m i n g , 
w i t h o u t 
d e c i d i n g , 
t h a t 
t h e 
H a r r i s e s ' 
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 was t r i e d b y t h e i m p l i e d c o n s e n t 
o f t h e p a r t i e s , 
s e e R u l e 
1 5 ( b ) , 
A l a . R. C i v . P., a n d 
t h a t 
t h e i r c o m p l a i n t 
was c o n s t r u c t i v e l y amended t o c o n f o r m t o t h e 
e v i d e n c e , 
we 
a l s o 
c o n c l u d e 
t h a t 
t h e r e 
was 
i n s u f f i c i e n t 
e v i d e n c e t o s u p p o r t a j u d g m e n t i n t h e i r f a v o r on a 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 M i t z i . 
S p e c i f i c a l l y , i n t h e a b s e n c e 
o f a n y e v i d e n c e 
d e m o n s t r a t i n g 
M i t z i ' s 
k n o w l e d g e a s t o t h e 
c r e a t i o n 
o f 
a n d 
p a r t i c i p a t i o n 
i n p r o v i d i n g 
t h e 
a l l e g e d 
f r a u d u l e n t 
f i n a n c i a l 
r e p o r t , we 
c o n c l u d e , 
a n d t h e 
H a r r i s e s 
c o n c e d e , 
t h a t 
n o t 
o n l y 
d i d 
M i t z i 
n o t 
make 
a n y 
m i s r e p r e s e n t a t i o n t o t h e H a r r i s e s , b u t t h e e v i d e n c e a d d u c e d a t 
t r i a l 
f a i l e d t o d e m o n s t r a t e 
t h a t s h e was e v e n aware o f a n y 
m a t e r i a l 
f a c t 
t o c o n c e a l . 
See Dodd v. W e l c h 
S t e p h e n s o n 
 
C h e v r o l e t , 
I n c . , 
626 So. 2d 1288, 1292 
( A l a . 1993) ("One c a n 
be 
l i a b l e 
f o r s u p p r e s s i o n 
o n l y o f a 
f a c t o f w h i c h one h a s 
k n o w l e d g e . " 
( c i t i n g C o r n e l i u s v. A u s t i n , 542 So. 2d 1220, 1224 
( A l a . 
1 9 8 9 ) ) ; 
a n d M c G a r r y v . F l o u r n o y , 
624 So. 2d 1359, 1362 
( A l a . 1993) ("An a c t i o n f o r s u p p r e s s i o n 
w i l l 
l i e o n l y i f 
t h e 
26 
1091751 
d e f e n d a n t a c t u a l l y knows t h e f a c t a l l e g e d t o 
be 
s u p p r e s s e d . " ) . 
See 
a l s o B o a c k l e v. B e d w e l l C o n s t r . Co., 770 So. 2d 1076, 
1080 
( A l a . 
2 0 0 0 ) ; C h e r o k e e F a r m s , I n c . v. F i r e m a n ' s F u n d I n s . Co., 
526 So. 2 d 8 7 1 , 
875 ( A l a . 1 9 8 8 ) ; H a r r e l l v. D o d s o n , 398 So. 2 d 
272, 276 ( A l a . 1 9 8 1 ) ; M c I v e r v. B o n d y ' s F o r d , 
I n c . , 963 So. 2 d 
136, 
143 ( A l a . C i v . 
App. 2 0 0 7 ) ; a n d L a C o s t e v . S C I A l a b a m a  
F u n e r a l S e r v s . , 
I n c . , 689 So. 2 d 76, 80 ( A l a . C i v . App. 1996) . 
We 
w i l l n o t p r e s u m e an e l e m e n t o f t h e H a r r i s e s ' 
c l a i m 
t h a t 
t h e i r e v i d e n c e a d m i t t e d l y 
f a i l s t o d e m o n s t r a t e . 
T h e r e f o r e , as 
t o M i t z i , t h e H a r r i s e s ' f r a u d c l a i m s must 
f a i l . 
M o r e o v e r , t o t h e e x t e n t 
t h a t t h e H a r r i s e s a r g u e t h a t an 
a g e n c y r e l a t i o n s h i p e x i s t e d b e t w e e n Sims a n d M i t z i w i t h 
r e g a r d 
t o t h e l e a s e o f M i t z i ' s b u i l d i n g a n d t h a t , t h e r e f o r e , M i t z i i s 
l i a b l e f o r 
S i m s ' s a l l e g e d m i s r e p r e s e n t a t i o n s , 
e v e n a s s u m i n g , 
as t h e y c o n t e n d , t h a t a n a c t u a l a g e n c y r e l a t i o n s h i p a r o s e w i t h 
r e g a r d t o t h a t 
s e p a r a t e 
t r a n s a c t i o n , t h a t a r g u m e n t i s a l s o 
u n p e r s u a s i v e i n l i g h t o f C l i n t o n ' s t e s t i m o n y 
t h a t Sims made no 
m i s r e p r e s e n t a t i o n 
w i t h r e g a r d t o 
t h e l e a s e . 
I n s t e a d , t h e o n l y 
m i s r e p r e s e n t a t i o n s 
i d e n t i f i e d b y t h e H a r r i s e s w e r e a l l e g e d l y 
made b y Sims 
w i t h 
r e g a r d 
t o t h e b u s i n e s s 
o f t h e 
K i l l e n 
f r a n c h i s e . 
B e c a u s e 
M i t z i 
was 
n e i t h e r 
an 
o f f i c e r 
n o r a 
27 
1091751 
s h a r e h o l d e r i n SYM, w h i c h s o l e l y owned t h e K i l l e n 
f r a n c h i s e , 
M i t z i p o s s e s s e d no i n t e r e s t w i t h 
r e g a r d t o t h a t t r a n s a c t i o n 
f o r 
w h i c h Sims m i g h t h a v e s e r v e d a s h e r r e p r e s e n t a t i v e . 
I n sum, t h e r e was no e v i d e n c e b e f o r e t h e t r i a l c o u r t f r o m 
w h i c h i t 
c o u l d h a v e r e a s o n a b l y 
d e t e r m i n e d e i t h e r 
t h a t 
M i t z i 
made a n y m i s r e p r e s e n t a t i o n t o t h e H a r r i s e s o r t h a t M i t z i h a d 
k n o w l e d g e 
o f 
a n d 
f a i l e d 
t o 
d i s c l o s e 
t h e 
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 s 
Sims made t o t h e H a r r i s e s . 
S i m p l y 
s t a t e d , 
a f t e r c a r e f u l r e v i e w o f t h e r e c o r d , we h o l d t h a t t h e e v i d e n c e 
p r e s e n t e d 
i n t h i s 
c a s e b y t h e H a r r i s e s 
w i l l n o t s u p p o r t 
a 
v a l i d 
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 
o r 
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 
M i t z i . See C o k e r , 
s u p r a . 
A l t h o u g h t h e 
H a r r i s e s c o n t e n d t h a t t h e t r i a l 
c o u r t 
s i m p l y may h a v e 
f o u n d 
M i t z i n o t t o be c r e d i b l e , e v e n a s s u m i n g t h a t t h e t r i a l 
c o u r t 
c o n s i d e r e d 
a l l 
o f 
M i t z i ' s 
t e s t i m o n y 
t o be 
l a c k i n g 
i n 
c r e d i b i l i t y , t h e H a r r i s e s ' e v i d e n c e was s t i l l 
i n s u f f i c i e n t t o 
d e m o n s t r a t e a n y f r a u d u l e n t a c t b y M i t z i o r t o s u s t a i n t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t 
a g a i n s t 
h e r . 
See W h i t e , 
s u p r a . 
T h e r e f o r e , we r e v e r s e t h e t r i a l c o u r t ' s j u d g m e n t a g a i n s t 
M i t z i 
a n d 
r e n d e r a j u d g m e n t i n 
h e r f a v o r as t o t h e H a r r i s e s ' 
f r a u d 
c l a i m s . 
The j u d g m e n t a g a i n s t SYM a n d Sims was n o t a p p e a l e d , 
28 
1091751 
i s n o t p r o p e r l y b e f o r e u s , a n d , t h e r e f o r e , r e m a i n s 
u n a f f e c t e d 
b y o u r d e c i s i o n . 
B e c a u s e 
o f o u r 
r e v e r s a l o f t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t 
a g a i n s t M i t z i , we p r e t e r m i t d i s c u s s i o n o f t h e r e m a i n i n g 
i s s u e s 
r a i s e d on a p p e a l by M i t z i w i t h r e g a r d t o t h e p r o p r i e t y o f t h e 
t r i a l c o u r t ' s a c c o m p a n y i n g damages a w a r d . 
See F a v o r i t e M a r k e t  
S t o r e v. W a l d r o p , 
924 So. 2d 719, 723 
( A l a . C i v . App. 
2005) 
( s t a t i n g t h a t t h i s C o u r t w o u l d p r e t e r m i t d i s c u s s i o n o f f u r t h e r 
i s s u e s i n l i g h t o f t h e d i s p o s i t i v e n a t u r e o f a n o t h e r i s s u e ) . 
REVERSED AND JUDGMENT RENDERED. 
W o o d a l l , S t u a r t , B o l i n , P a r k e r , M u r d o c k , M a i n , and W i s e , 
J J . , c o n c u r . 
M a l o n e , C . J . , c o n c u r s i n t h e 
r e s u l t . 
29