Title: William H. Phillips v. Lew Dickey et al.

State: alabama

Issuer: Alabama Supreme Court

Document:

Rel 04/24/2009
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)
229-0649), 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, 2008-2009
_________________________
1061046
_________________________
William H. Phillips
v.
Lew Dickey et al.
Appeal from Mobile Circuit Court
(CV-06-3119)
COBB, Chief Justice.
William H. Phillips, the plaintiff in an action in the
Mobile Circuit Court alleging civil conspiracy and tortious
interference with a business relationship, appeals from
1061046
The name of this entity also appears in the record as
1
"DotCom Plus, L.L.C."
2
summary judgments in favor of Ken Johnson, .Com+, L.L.C.,  Lew
1
Dickey, Cumulus Licensing, L.L.C., Cumulus Broadcasting,
L.L.C., and Cumulus Media, Inc.  Because the Mobile Circuit
Court lacked jurisdiction of the matter, we vacate the summary
judgments, dismiss this appeal, and dismiss the action.
This case has its genesis in a dispute between Barry Wood
and Phillips over ownership interests in Baldwin Broadcasting
Company (hereinafter "Baldwin"), which owned and operated FM
radio broadcast stations WAVH in Daphne and WZEW in Fairhope.
Phillips contended that Baldwin was a partnership between Wood
and Phillips; Wood contended that Phillips was an employee of
Baldwin.  This Court has considered that case on two
occasions.  See Wood v. Phillips, 823 So. 2d 648 (Ala. 2001)
("Wood I"), and Wood v. Phillips, 849 So. 2d 951 (Ala. 2002)
("Wood II").  The facts surrounding the dispute are fully set
forth in Wood I and Wood II.
In 1999, Cumulus Broadcasting Company (now Cumulus
Broadcasting, L.L.C.) offered to purchase WAVH and WZEW, the
two radio stations owned by Baldwin.  Subsequently Phillips
sued Wood in a dispute over ownership interests in Baldwin.
1061046
The order sought is referred to as the McDermott order
2
because it would have been entered by the late Judge William
H. McDermott.
3
On November 3, 2000, Wood filed a petition in bankruptcy in
the United States District Court for the Eastern District of
Virginia.  While Wood's bankruptcy proceeding was pending, a
jury in the state-court action returned a verdict in favor of
Phillips, finding that he had a 40% partnership interest in
Baldwin.  Wood appealed to this Court.  Wood II.  While Wood
II was pending on appeal before this Court, the bankruptcy
court ordered an auction of Wood's assets, including the radio
stations.  In conjunction with the sale of the radio stations,
Woods and Phillips entered into a settlement agreement,
pursuant to which Phillips would receive a percentage of the
proceeds from the sale of the stations.  The settlement
agreement also stated that Wood and Phillips would ask the
trial court to modify its order "to clarify that the
partnership found by the jury was [Baldwin Broadcasting
Company partnership] and that such entity did not own the
licenses (the 'McDermott Order'),"  which, the agreement
2
stated, "always have been held by the sole proprietorship
Baldwin Broadcasting Company."  The settlement agreement
1061046
The actual parties to the asset-purchase agreement were
3
Cumulus Broadcasting, Inc., and Cumulus Licensing Corp., the
predecessors to Cumulus Broadcasting, L.L.C., and Cumulus
Licensing, L.L.C., respectively.
4
further provided that Wood would request dismissal of his
appeal before this Court.  On May 14, 2002, .Com+, L.L.C.,
entered into one, and Cumulus Broadcasting, L.L.C., and
Cumulus Licensing, L.L.C.,  entered into another, "Amended and
3
Restated Asset Purchase Agreement" with Wood. .Com+, L.L.C.,
was proposing to purchase WZEW, and Cumulus Broadcasting,
L.L.C., and Cumulus Licensing, L.L.C., were proposing to
purchase WAVH.  Both asset-purchase agreements contained
escalation clauses if the sale of the radio stations did not
close by December 31, 2002.  Both asset-purchase agreements
also stated that the agreements could be terminated at any
time by the mutual written consent of the seller and buyer, by
written notice to the buyer if the seller breached any
material representations or warranties or defaults on its
agreements, by written notice of either party if the FCC
denied the FCC application, or by written notice of either
party if the closing was not consummated by the expiration of
the local-marketing agreements.
1061046
5
On May 15, 2002, the United States Bankruptcy Court for
the Eastern District of Virginia entered an order confirming
Wood's amended plan of reorganization, approving the asset-
purchase 
agreements, 
which 
incorporated 
the 
settlement
agreement, and approving the sale of the radio stations.  The
bankruptcy court's order contained the following provisions:
"6.
The Plan is binding upon all parties in
interest, regardless of whether the claims of
interests 
of 
such 
parties 
are 
impaired 
or
unimpaired, regardless of whether the holders of
such claims or interests have accepted the Plan, and
regardless of whether the holders of such claims or
interests have filed proofs of claim or interest.
"....
"9.
The Court retains jurisdiction over this
matter in accordance with the terms of the Plan and
as otherwise provided by applicable law.
"....
"34. This Court retains jurisdiction to enforce
and implement the terms and provisions of the Plan,
this Order, the Asset Purchase Agreements, and the
Bid Procedures Order, all amendments thereto, any
waivers and consents thereunder, and of each of the
agreements executed in connection therewith in all
respects, including, but not limited to, retaining
jurisdiction to:  (a) compel delivery of the Assets
to 
[Cumulus 
Broadcasting, L.L.C., and Cumulus
Licensing, L.L.C.,] and [.Com+, L.L.C.]; (b) resolve
any disputes arising under, or related to, the Asset
Purchase 
Agreements, 
this 
Order 
and 
the 
Bid
Procedures Order; (c) interpret, implement, and
enforce the provisions of this Order and the Bid
1061046
Without deciding the issue, this Court notes that it is
4
uncertain whether the trial court would have had jurisdiction
to enter such an order.  As this Court held in George v. Sims,
888 So. 2d 1224, 1226-27 (Ala. 2004):
"'A 
final 
judgment 
is 
an 
order 
"that
conclusively determines the issues before the court
and ascertains and declares the rights of the
parties involved."'  Lunceford v. Monumental Life
Ins. Co., 641 So. 2d 244, 246 (Ala. 1994) (quoting
Bean v. Craig, 557 So. 2d 1249, 1253 (Ala. 1990)).
Generally, a trial court has no jurisdiction to
modify or amend a final order more than 30 days
after the judgment has been entered, except to
correct clerical errors.  See Rule 59(e) and Rule
60, Ala. R. Civ. P.; Cornelius v. Green, 477 So. 2d
1363, 1365 (Ala. 1985) (holding that the trial court
had no jurisdiction to modify its final order more
than 30 days after its final judgment); Dickerson v.
Dickerson, 885 So. 2d 160, 166 (Ala. Civ. App. 2003)
(holding that, absent a timely postjudgment motion,
the trial court has no jurisdiction to alter, amend,
or vacate a final judgment); and Superior Sec.
Serv., Inc. v. Azalea City Fed. Credit Union, 651
So. 2d 28, 29 (Ala. Civ. App. 1994) ('It is well
settled that after 30 days elapse following the
entry of a judgment, the trial court no longer has
authority to correct or amend its judgment, except
for clerical errors.').
"... Although a trial court has 'residual
6
Procedures Order; and (d) protect Cumulus and
[.Com+, L.L.C.,] against any kind or nature of
Encumbrance whatsoever (except those contemplated by
the Plan and the Sale)."
After entering into the settlement agreement, the parties
failed to have the trial court enter the order referred to in
that agreement as the McDermott Order.   Wood also failed to
4
1061046
jurisdiction or authority to take certain actions
necessary to enforce or interpret a final judgment,'
that authority is not so broad as to allow
substantive modification of an otherwise effective
and unambiguous final order.  Helms v. Helms'
Kennels, Inc., 646 So. 2d 1343, 1347 (Ala. 1994)."
7
ask this Court to dismiss his appeal as he agreed to do in the
settlement agreement, and on November 8, 2002, this Court
reversed the trial court's judgment holding that Phillips was
a partner in Baldwin and remanded the cause to the trial court
for a new trial.  Wood II.
By May 2004, the local-marketing agreements had expired,
and the FCC had yet to approve the application to transfer the
FCC licenses to facilitate the sale of the radio stations. On
September 9, 2004, Cumulus Broadcasting, L.L.C., and Cumulus
Licensing, L.L.C., gave Wood notice of their termination of
the WAVH asset-purchase agreement, and .Com+, L.L.C., gave
Wood notice of its termination of the WZEW asset-purchase
agreement on January 20, 2005.  Wood subsequently moved the
bankruptcy court to terminate the settlement agreement between
him and Phillips, and the bankruptcy court scheduled a hearing
on May 20, 2005.  Before the hearing in the bankruptcy
proceeding, Dickey, president of Cumulus Media, and Johnson,
president of .Com+, L.L.C., were deposed.  The attorney
1061046
8
representing Phillips in the bankruptcy proceeding was present
either in person or by telephone during both depositions.
Phillips alleges that the deposition testimony of both
individuals 
indicated 
an 
agreement 
between 
Cumulus
Broadcasting, L.L.C., Cumulus Licensing, L.L.C., .Com+,
L.L.C., and Wood to convince the bankruptcy court to set aside
the sale of the radio stations in part so that Wood, following
this Court's decision in Wood II, would not have to pay
Phillips a percentage of the proceeds of the sale of the radio
stations.
At the hearing before the bankruptcy court, Phillips
failed to bring to the court's attention Dickey's and
Johnson's deposition testimony regarding an alleged quid pro
quo between Wood and Cumulus Broadcasting, L.L.C., and Cumulus
Licensing, L.L.C., and Wood and .Com+, L.L.C., regarding the
asset-purchase agreements and the sale of WAVH and WZEW.   The
bankruptcy 
court 
subsequently 
held 
that 
intervening
circumstances prohibited the closing of the sale of the radio
stations and, thus, that the settlement agreement between
Woods and Phillips was to be set aside. 
1061046
9
On September 8, 2006, Phillips instituted the present
action against Dickey, Cumulus Licensing, L.L.C., Cumulus
Broadcasting, L.L.C., Cumulus Media, Inc., Wood, Johnson, and
.Com+, L.L.C., alleging that Dickey, Johnson, the Cumulus
entities, and .Com+, L.L.C., had conspired with Wood to
terminate the asset-purchase agreements so that Wood would
then be able to terminate the settlement agreement with
Phillips and that they tortiously interfered with the
contractual agreement between Phillips and Wood.  On October
13, 2006, Wood removed the action to the United States
District Court for the Southern District of Alabama, arguing
that pursuant to 28 U.S.C. § 1452, the case must be removed to
federal district court because it was related to a bankruptcy
proceeding.  Phillips amended his complaint, voluntarily
dismissing Wood, and the case was remanded to the Mobile
Circuit Court on November 13, 2006.  
Johnson and .Com+, L.L.C., moved for a summary judgment
on January 31, 2007.  Phillips responded, and on March 16,
2007, the trial court held a hearing on the summary-judgment
motion filed by Johnson and .Com+, L.L.C.  The trial court
granted their summary-judgment motion on March 21, 2007.
1061046
10
Dickey and the Cumulus entities then filed a motion for a
summary judgment on April 9, 2007, and the trial court granted
their summary-judgment motion on April 10, 2007.  Phillips
appeals.
Before addressing the issues Phillips raises before this
Court, we must consider whether the trial court had subject-
matter jurisdiction.  As this Court recently held:
"This Court is not limited by the parties'
jurisdictional arguments; we are obligated to look
beyond those arguments and to dismiss an appeal ex
mero motu if, for any reason, jurisdiction does not
exist.  Reynolds v. Colonial Bank, 874 So. 2d 497,
503 (Ala. 2003) ('"[I]f there is an absence of
jurisdiction over the subject-matter, this ends the
inquiry; it cannot be waived or supplied by
consent."' (quoting Wilkinson v. Henry, 221 Ala.
254, 256, 128 So. 362, 364 (1930) (emphasis
added))); Ex parte Smith, 438 So. 2d 766, 768 (Ala.
1983) ('Lack of subject matter jurisdiction may not
be waived by the parties and it is the duty of an
appellate court to consider lack of subject matter
jurisdiction 
ex 
mero 
motu.' 
(citing 
City 
of
Huntsville v. Miller, 271 Ala. 687, 688, 127 So. 2d
606, 608 (1958))); Payne v. Department of Indus.
Relations, 423 So. 2d 231 (Ala. Civ. App. 1982); and
Bibb v. Boyd, 417 So. 2d 206, 208 (Ala. Civ. App.
1982) ('[I]n any event, lack of jurisdiction over
the subject matter is not waivable and may be raised
ex mero motu by either a trial court or by an
appellate court' (citing 5 Wright and Miller,
Federal Practice and Procedure, Civil § 1393)).  A
court is obligated to vigilantly protect against
deciding cases over which it has no jurisdiction
because '[i]t would amount to usurpation and
oppression for a court to interfere in a matter over
1061046
11
which it has no jurisdiction, and its pronouncements
in respect thereto would be without force, and its
decrees and judgments would be wholly void.  This is
a universal principle, as old as the law itself.'
Wilkinson, 221 Ala. at 256, 128 So. at 364."
Crutcher v. Williams, [Ms. 1050893, March 14, 2008] ___ So. 3d
___, ___ (Ala. 2008).
In its May 15, 2002, order confirming Wood's amended plan
of reorganization, approving the asset-purchase agreements,
and approving the sale of substantially all assets of Wood's
bankruptcy estate, the bankruptcy court explicitly retained
jurisdiction over matters relating to the asset-purchase
agreements.  Specifically, the bankruptcy court stated:
"34.  This Court retains jurisdiction to enforce
and implement the terms and provisions of the Plan,
this Order, the Asset Purchase Agreements, and the
Bid Procedures Order, all amendments thereto, any
waivers and consents thereunder, and of each of the
agreements executed in connection therewith in all
respects, including, but not limited to, retaining
jurisdiction to:  (a) compel delivery of the Assets
to 
[Cumulus 
Broadcasting, L.L.C., and Cumulus
Licensing, L.L.C.,] and [.Com+, L.L.C.]; (b) resolve
any disputes arising under, or related to, the Asset
Purchase 
Agreements, 
this 
Order 
and 
the 
Bid
Procedures Order; (c) interpret, implement, and
enforce the provisions of this Order and the Bid
Procedures Order; and (d) protect Cumulus and
[.Com+, L.L.C.,] against any kind or nature of
Encumbrance whatsoever (except those contemplated by
the Plan and the Sale)."
1061046
12
Phillips's claim of a conspiracy among Dickey and the Cumulus
entities, Johnson and .Com+, L.L.C., and Wood to have the
bankruptcy court set aside the asset-purchase agreements and
his claim that Dickey, the Cumulus entities, Johnson, and
.Com+, L.L.C., tortiously interfered with his business
relationship with Wood are clearly claims relating to
"disputes arising under, or related to, the Asset Purchase
Agreements ...."  As the United States District Court for the
Northern District of Alabama has observed:
"All courts, including bankruptcy courts, retain
jurisdiction to enforce their own orders and
judgments. 
 
The 
Bankruptcy 
Court 
retains
jurisdiction to construe and enforce its own orders
from prior core proceedings and should do so." 
Consumer Portfolio Servs., Inc. v. Coleman, 342 B.R. 817, 820
(N.D. Ala. 2006).  
Phillips's 
claims 
regarding 
Wood's, 
Dickey's, 
and
Johnson's actions should have been raised before the
bankruptcy court at its hearing on May 20, 2005.  Phillips
knew before the hearing of both Dickey's and Johnson's
deposition testimony to the effect that there was purportedly
a quid pro quo agreement to have the asset-purchase agreements
and settlement agreement set aside; yet he failed to inform
1061046
13
the bankruptcy court of the alleged quid pro quo agreement.
At the time Phillips filed his claims in the state court, they
were subject to the jurisdiction of the bankruptcy court. 
The bankruptcy court explicitly retained jurisdiction
over "disputes arising under, or related to, the Asset
Purchase Agreements."  Phillips's claims clearly are disputes
related to the asset-purchase agreements.  Because the
bankruptcy court retained jurisdiction, the courts of this
State lack jurisdiction.  See Wollman v. Jocar Realty Co., 19
A.D. 3d 210, 211, 799 N.Y.S.2d 17, 18 (2005) ("Where
jurisdiction is expressly retained by the bankruptcy court, it
should be construed as exclusive jurisdiction, even though not
specifically denominated as such, so as not to render the
provision a nullity.");  Bryan v. Speakman, 53 F.2d 463, 465
(5th Cir. 1931) ("By the great weight of authority, it has
always been the law that the rule which operates to prevent
unseemly conflicts between state and federal equity courts,
that that which first acquires jurisdiction of a res retains
possession of it ... has governed the relations between state
courts and courts of bankruptcy."); City of Opelika v. Daniel,
59 Ala. 211, 214 (1877) ("To preserve harmonious the relations
1061046
14
between the State tribunals and those of the United States, it
was early seen that when matters that were within the
jurisdiction of both, had been subjected to the control of one
of them, there should not be any unnecessary interference
therewith by the other.").  We therefore vacate the summary
judgments in favor of Dickey, Cumulus Broadcasting, L.L.C.,
Cumulus Licensing, L.L.C., Cumulus Media, Inc., Johnson, and
.Com+, L.L.C.  Furthermore, because a void judgment will not
support an appeal, this appeal is dismissed.
Because we conclude that the trial court lacked subject-
matter jurisdiction, we pretermit discussion of the issues
raised by Phillips in his appeal.
JUDGMENT VACATED; APPEAL DISMISSED; AND CASE DISMISSED.
Woodall, Smith, Parker, and Shaw, JJ., concur.