Title: Banyan Corporation v. W. Bruce Leithead III

State: alabama

Issuer: Alabama Supreme Court

Document:

Rel 12/11/09 
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) 229¬
0 6 4 9 ) , o f 
any 
t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may 
be 
made b e f o r e 
t h e o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2009-2010 
1071078 
Banyan C o r p o r a t i o n 
v. 
W. Bruce L e i t h e a d 
I I I 
Appeal from Shelby 
C i r c u i t 
Court 
(CV-04-924) 
PER CURIAM. 
B a n y a n C o r p o r a t i o n 
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 
o r d e r 
e n t e r i n g a p a r t i a l 
summary j u d g m e n t i n f a v o r o f W. 
B r u c e 
L e i t h e a d 
I I I . We d i s m i s s t h e a p p e a l . 
L e i t h e a d 
f i l e d 
h i s c o m p l a i n t 
on 
J a n u a r y 
9 , 
2 0 0 4 , 
1071078 
a s s e r t i n g a g a i n s t B a n y a n and D o u b l e C a s e C o r p o r a t i o n , a w h o l l y 
owned s u b s i d i a r y o f B a n y a n , c l a i m s o f n e g l i g e n c e and b r e a c h o f 
h i s 
employment 
c o n t r a c t 
w i t h D o u b l e C a s e . 
L e i t h e a d 
a l l e g e d 
t h a t B a n y a n h a d d e n i e d h i m c e r t a i n b e n e f i t s , c o m p e n s a t i o n , and 
s t o c k 
o p t i o n s 
t o w h i c h he 
s a y s he was 
e n t i t l e d 
u n d e r t h e 
employment 
c o n t r a c t . 
On M a r c h 15, 2004, 
L e i t h e a d 
f i l e d 
an 
amended c o m p l a i n t , a s s e r t i n g a d d i t i o n a l c l a i m s o f f r a u d u l e n t 
m i s r e p r e s e n t a t i o n 
and f r a u d u l e n t 
s u p p r e s s i o n 
a g a i n s t 
B a n y a n 
and D o u b l e C a s e . 
On 
O c t o b e r 26, 
2007, 
L e i t h e a d 
f i l e d 
a m o t i o n 
f o r a 
p a r t i a l summary j u d g m e n t on h i s b r e a c h - o f - c o n t r a c t 
c l a i m . 
I n 
h i s 
m o t i o n , L e i t h e a d a r g u e d t h a t t h e c o r p o r a t e 
v e i l 
s h o u l d be 
p i e r c e d as t o D o u b l e C a s e and t h a t B a n y a n s h o u l d be h e l d 
l i a b l e 
f o r 
D o u b l e C a s e ' s b r e a c h 
o f L e i t h e a d ' s 
employment 
c o n t r a c t . 
L e i t h e a d 
a l l e g e d 
t h a t 
B a n y a n 
c o n t r o l l e d D o u b l e C a s e t o t h e 
e x t e n t t h a t D o u b l e C a s e became a mere i n s t r u m e n t a l i t y o r 
a l t e r 
ego o f B a n y a n a n d , a l t e r n a t i v e l y , 
t h a t B a n y a n was a p a r t y t o 
and b r e a c h e d L e i t h e a d ' s 
employment 
c o n t r a c t . 
I n i t s o r d e r , 
t h e 
t r i a l c o u r t s t a t e d t h a t i t 
was g r a n t i n g L e i t h e a d ' s m o t i o n 
f o r 
a p a r t i a l summary j u d g m e n t on b o t h a l t e r n a t i v e g r o u n d s : 
" 1 . W i t h 
r e s p e c t 
t o t h e e q u i t a b l e 
d o c t r i n e o f 
' p i e r c i n g 
t h e 
c o r p o r a t e 
v e i l , ' 
t h e 
c o u r t 
f i n d s 
2 
1071078 
o v e r w h e l m i n g , 
u n d i s p u t e d 
e v i d e n c e 
t h a t 
t h e r e 
was 
l i t t l e 
o r no e f f o r t on t h e p a r t o f e i t h e r B a n y a n 
C o r p o r a t i o n 
o r D o u b l e C a s e 
C o r p o r a t i o n 
t o 
m a i n t a i n 
s e p a r a t e 
c o r p o r a t e 
f o r m a l i t i e s . To t h e c o n t r a r y , t h e 
e v i d e n c e 
i s u n d i s p u t e d 
t h a t 
D o u b l e C a s e 
h a d no 
i n d e p e n d e n t , 
f o r m a l 
management 
o r 
f i n a n c i a l 
s t r u c t u r e , 
a n d 
t h a t 
t h e 
p r i n c i p a l s 
o f 
B a n y a n 
o p e r a t e d 
D o u b l e C a s e o u t o f t h e i r b a c k p o c k e t . 
The 
e v i d e n t i a r y 
r e c o r d 
i s r e p l e t e 
w i t h 
c i r c u m s t a n c e 
a f t e r 
c i r c u m s t a n c e 
i n w h i c h 
B a n y a n 
c o m p l e t e l y 
d i s r e g a r d e d 
t h e 
e x i s t e n c e 
o f 
D o u b l e C a s e 
as 
a 
s e p a r a t e 
c o r p o r a t e 
e n t i t y . 
As a 
r e s u l t 
o f t h e 
d o m i n a t i o n 
a n d c o n t r o l o f D o u b l e C a s e b y 
B a n y a n , 
c o m b i n e d w i t h t h e t o t a l 
l a c k o f e f f o r t on t h e p a r t 
o f 
t h e s e 
c o m p a n i e s t o m a i n t a i n 
e v e n a modicum o f 
c o r p o r a t e 
f o r m a l i t y , D o u b l e C a s e 
e x i s t e d 
i n name 
o n l y . When v i e w e d i n t h e l i g h t 
most 
f a v o r a b l e t o 
[ B a n y a n a n d D o u b l e C a s e ] , t h e o v e r w h e l m i n g 
e v i d e n c e 
i s 
t h a t 
D o u b l e C a s e was t h e mere 
i n s t r u m e n t a l i t y 
a n d / o r a l t e r ego o f B a n y a n . 
"The 
c o u r t 
f i n d s 
t h a t 
t h e r e 
e x i s t no g e n u i n e 
i s s u e s 
o f m a t e r i a l 
f a c t , 
a n d t h a t 
[ L e i t h e a d ] i s 
e n t i t l e d 
t o j u d g m e n t 
as 
m a t t e r 
o f l a w on h i s 
e q u i t a b l e 
c l a i m . 
[ L e i t h e a d ' s ] 
M o t i o n 
f o r P a r t i a l 
Summary J u d g m e n t i s due t o b e , a n d i t h e r e b y i s , 
GRANTED. I t i s t h e j u d g m e n t o f t h i s 
c o u r t 
t h a t no 
c o r p o r a t e 
s h i e l d 
e x i s t s 
b e t w e e n D e f e n d a n t s 
B a n y a n 
C o r p o r a t i o n 
a n d 
D o u b l e C a s e 
C o r p o r a t i o n . 
As 
D o u b l e C a s e C o r p o r a t i o n i s t h e mere i n s t r u m e n t a l i t y 
a n d / o r 
a l t e r 
ego 
o f 
B a n y a n 
C o r p o r a t i o n , 
a n y 
l i a b i l i t y f o r 
a b r e a c h o f d u t y o r o b l i g a t i o n on t h e 
p a r t o f D o u b l e C a s e 
s h a l l be b o r n e b y B a n y a n . 
" 2 . W i t h r e s p e c t t o [ L e i t h e a d ' s ] c o n t e n t i o n 
t h a t 
D e f e n d a n t B a n y a n C o r p o r a t i o n was a d i r e c t 
p a r t y t o 
t h e 
c o n t r a c t made t h e b a s i s o f [ L e i t h e a d ' s ] 
s u i t , 
t h e c o u r t f i n d s t h a t b y [ B a n y a n ' s a n d D o u b l e C a s e ' s ] 
t e s t i m o n y , 
a n d as 
s i g n i f i e d 
on t h e f a c e 
o f t h e 
document i t s e l f , D e f e n d a n t B a n y a n i n t e n t i o n a l l y made 
i t s e l f a p a r t y t o t h e c o n t r a c t . B a n y a n a c k n o w l e d g e d 
t h e 
e x i s t e n c e o f t h e c o n t r a c t a n d i t s o b l i g a t i o n s 
3 
1071078 
t h e r e u n d e r 
i n i t s 10-K 
f i l i n g s . When v i e w e d i n 
t h e 
l i g h t most 
f a v o r a b l e 
t o [ B a n y a n ] , 
t h e 
c o u r t 
f i n d s 
t h a t t h e r e e x i s t no g e n u i n e i s s u e s o f m a t e r i a l 
f a c t , 
and 
t h a t as a m a t t e r o f l a w , [ L e i t h e a d ' s ] M o t i o n f o r 
P a r t i a l Summary J u d g m e n t i s due 
t o be, 
and 
i t h e r e b y 
i s , GRANTED. B a n y a n C o r p o r a t i o n 
i s a d j u d g e d t o be 
a 
s i g n a t o r y and 
p a r t y t o t h e 
c o n t r a c t made t h e 
b a s i s 
o f 
t h i s 
s u i t . 
As 
s u c h , B a n y a n C o r p o r a t i o n 
s h a l l 
be 
l i a b l e 
f o r 
any 
b r e a c h 
o f 
s a i d c o n t r a c t 
as 
may 
be 
d e t e r m i n e d by 
t h e 
j u r y . 
" 3 . 
W i t h 
r e s p e c t 
t o 
[ L e i t h e a d ' s ] a l l e g a t i o n s 
c o n c e r n i n g 
[ B a n y a n ' s 
and 
D o u b l e C a s e ' s ] b r e a c h 
o f 
c o n t r a c t 
and 
t h e damages 
r e s u l t i n g 
t h e r e f r o m , 
t h e 
c o u r t 
f i n d s 
t h a t 
t h e r e 
e x i s t 
g e n u i n e 
i s s u e s 
o f 
m a t e r i a l 
f a c t 
w h i c h 
r e n d e r 
summary 
j u d g m e n t 
i n a p p r o p r i a t e . 
[ L e i t h e a d ' s ] 
M o t i o n 
f o r 
P a r t i a l 
Summary 
J u d g m e n t 
w i t h 
r e s p e c t 
t o 
[ B a n y a n ' s 
and 
D o u b l e C a s e ' s ] b r e a c h o f c o n t r a c t i s h e r e b y DENIED. 
" 4 . 
B a s e d upon t h e 
f o r e g o i n g , 
t h e 
c o u r t 
f i n d s 
t h a t 
t h e 
M o t i o n 
f o r Summary J u d g m e n t by 
D e f e n d a n t 
B a n y a n C o r p o r a t i o n 
i s due 
t o be, 
and 
i t h e r e b y i s , 
DENIED. 
" 5 . 
The 
C o u r t 
e x p r e s s l y d i r e c t s e n t r y 
o f 
t h i s 
j u d g m e n t p u r s u a n t t o A [ l a ] . 
R. 
C i v . P. 
R u l e 
5 4 ( b ) , 
as 
t h e 
C o u r t 
has 
d e t e r m i n e d 
t h a t 
t h e r e 
i s no 
j u s t 
r e a s o n f o r d e l a y i n t h e e n t r y o f a f i n a l j u d g m e n t 
as 
t o 
t h e 
i s s u e s 
a d d r e s s e d 
i n p a r a g r a p h s 
1. 
and 
2. 
a b o v e . " 
The 
t r i a l 
c o u r t ' s 
o r d e r 
d o e s n o t 
u l t i m a t e l y d i s p o s e 
o f 
t h e 
b r e a c h - o f - c o n t r a c t 
c l a i m . 
B a n y a n 
a p p e a l s . 
On a p p e a l , B a n y a n a r g u e s t h a t t h e r e a r e g e n u i n e i s s u e s o f 
m a t e r i a l 
f a c t c o n c e r n i n g 
t h e 
t r i a l 
c o u r t ' s d e c i s i o n t h a t 
t h e 
c o r p o r a t e 
v e i l 
as 
t o D o u b l e C a s e be 
p i e r c e d , 
t h e r e b y 
h o l d i n g 
4 
1071078 
B a n y a n l i a b l e f o r any damages L e i t h e a d s u f f e r e d as a r e s u l t 
o f 
D o u b l e C a s e ' s 
b r e a c h 
o f 
h i s 
e m p l o y m e n t 
c o n t r a c t 
a n d , 
a l t e r n a t i v e l y , 
t h a t 
B a n y a n 
was 
a 
p a r t y 
t o 
L e i t h e a d ' s 
e m p l o y m e n t c o n t r a c t and t h u s i s l i a b l e f o r any b r e a c h o f t h a t 
c o n t r a c t . 
B e f o r e we c a n a d d r e s s B a n y a n ' s a r g u m e n t s , h o w e v e r , 
i t 
i s 
n e c e s s a r y 
t o 
d e t e r m i n e 
w h e t h e r 
t h i s 
C o u r t 
has 
j u r i s d i c t i o n 
t o h e a r B a n y a n ' s a p p e a l . 
I n o u r r e c e n t c a s e o f N o r t h A l a b a m a E l e c t r i c 
C o o p e r a t i v e  
v. New Hope T e l e p h o n e 
C o o p e r a t i v e , 7 So. 3d 342, 344-45 ( A l a . 
2 0 0 8 ) , 
t h i s 
C o u r t 
s t a t e d : 
" I t 
i s i n c u m b e n t upon 
t h i s 
C o u r t t o e n s u r e 
t h a t i t 
has 
j u r i s d i c t i o n 
t o h e a r t h e a p p e a l . 
"'"As 
t h i s 
c o u r t has 
s a i d many 
t i m e s 
p r e v i o u s l y , 
a 
f i n a l 
j u d g m e n t i s n e c e s s a r y 
t o 
g i v e 
j u r i s d i c t i o n 
t o 
t h i s 
c o u r t on 
an 
a p p e a l , 
and 
i t c a n n o t 
be 
w a i v e d 
by 
t h e 
p a r t i e s . 
... " 
"'When i t i s d e t e r m i n e d 
t h a t an o r d e r 
a p p e a l e d f r o m i s n o t a 
f i n a l 
j u d g m e n t , i t 
i s 
t h e 
d u t y 
o f t h e 
C o u r t 
t o d i s m i s s 
t h e 
a p p e a l ex mero motu.' 
" P o w e l l v. 
R e p u b l i c N a t ' l 
L i f e 
I n s . Co., 
293 
A l a . 
101 , 
102, 
300 
So. 
2d 
359, 
360 
(1 
974) 
( q u o t i n g 
McGowin I n v e s t m e n t 
Co. 
v. J o h n s t o n e , 
291 A l a . 
714, 
715, 
287 
So. 2d 835, 
836 
( 1 9 7 3 ) ) . 
" ' O r d i n a r i l y , an a p p e a l c a n be 
b r o u g h t 
5 
1071078 
o n l y f r o m a f i n a l j u d g m e n t . A l a . 
Code 1975, 
§ 
1 2 - 2 2 - 2 . 
I f a 
c a s e 
i n v o l v e s m u l t i p l e 
c l a i m s 
o r m u l t i p l e p a r t i e s , 
an 
o r d e r i s 
g e n e r a l l y n o t f i n a l 
u n l e s s i t d i s p o s e s o f 
a l l 
c l a i m s as t o a l l p a r t i e s . 
R u l e 
5 4 ( b ) , 
A l a . 
R. 
C i v . P. However, when an 
a c t i o n 
c o n t a i n s more t h a n 
one 
c l a i m f o r 
r e l i e f , 
R u l e 5 4 ( b ) a l l o w s t h e c o u r t t o d i r e c t t h e 
e n t r y o f a f i n a l j u d g m e n t as t o one o r more 
o f 
t h e 
c l a i m s , 
i f i t makes 
t h e 
e x p r e s s 
d e t e r m i n a t i o n t h a t t h e r e i s no j u s t 
r e a s o n 
f o r 
d e l a y . ' 
" G r a n t h a m v. V a n d e r z y l , 
802 
So. 2d 1077, 
1079-80 
( A l a . 
2 0 0 1 ) . " 
F u r t h e r , i n Haynes v . A l f a 
F i n a n c i a l 
C o r p . , 730 So. 2d 178, 
181 ( A l a . 1 9 9 9 ) , 
t h i s C o u r t 
h e l d : 
" P u r s u a n t 
t o R u l e 
5 4 ( b ) , [ A l a . 
R. C i v . P.,] a 
t r i a l 
c o u r t 
may 
d i r e c t 
' t h e 
e n t r y 
o f 
a 
f i n a l 
j u d g m e n t as t o one o r more b u t f e w e r t h a n a l l 
o f t h e 
c l a i m s o r p a r t i e s . ' 
B u t R u l e 
5 4 ( b ) makes an 
o r d e r 
f i n a l -- and t h e r e f o r e a p p e a l a b l e -- ' o n l y where t h e 
t r i a l 
c o u r t 
"has 
c o m p l e t e l y 
d i s p o s e d 
o f one o f a 
number 
o f 
c l a i m s , 
o r one 
o f 
m u l t i p l e 
p a r t i e s . " ' 
T a n n e r v. A l a b a m a 
Power 
Co., 
617 
So. 2d 656, 
656 
( A l a . 1993) 
( q u o t i n g C o m m i t t e e Comments on t h e 1973 
a d o p t i o n o f R u l e 5 4 ( b ) ) 
( e m p h a s i s a d d e d i n T a n n e r ) . 
I n 
o t h e r w o r d s , f o r a R u l e 
5 4 ( b ) 
c e r t i f i c a t i o n 
o f 
f i n a l i t y t o be e f f e c t i v e , i t must 
f u l l y 
a d j u d i c a t e 
a t l e a s t one c l a i m o r f u l l y d i s p o s e o f t h e c l a i m s as 
t h e y r e l a t e t o a t l e a s t one p a r t y . " 
I n t h e p r e s e n t c a s e , i t 
i s u n d i s p u t e d t h a t t h e o r d e r 
f r o m 
w h i c h 
t h i s a p p e a l was t a k e n d i d n o t c o m p l e t e l y d i s p o s e o f any 
o f 
t h e s u b s t a n t i v e c l a i m s i n t h i s 
c a s e , 
n o r d i d t h e 
o r d e r 
f u l l y 
d i s p o s e o f t h e c l a i m s as t h e y 
r e l a t e t o a t l e a s t 
one 
6 
1071078 
p a r t y . 
The 
t r i a l 
c o u r t d e t e r m i n e d 
o n l y t h a t D o u b l e C a s e 
was 
B a n y a n ' s mere 
i n s t r u m e n t a l i t y 
o r 
a l t e r 
ego 
and 
t h a t , 
as 
a 
r e s u l t , any 
l i a b i l i t y a t t r i b u t a b l e t o D o u b l e C a s e w o u l d a l s o be 
b o r n e 
by B a n y a n 
and 
t h a t B a n y a n was 
a p a r t y t o L e i t h e a d ' s 
e m p l o y m e n t 
c o n t r a c t w i t h 
D o u b l e C a s e . 
The 
t r i a l 
c o u r t ' s 
d e c i s i o n , h o w e v e r , does n o t d e t e r m i n e 
w h e t h e r D o u b l e C a s e 
o r 
B a n y a n i s l i a b l e f o r t h e a l l e g e d b r e a c h o f 
c o n t r a c t . 
A c c o r d i n g l y , 
t h e 
t r i a l 
c o u r t 
e r r e d 
i n 
c e r t i f y i n g 
i t s 
p a r t i a l summary j u d g m e n t on t h e b r e a c h - o f - c o n t r a c t c l a i m 
as 
f i n a l 
p u r s u a n t 
t o R u l e 
5 4 ( b ) , A l a . R. 
C i v . P. 
"When i t i s 
d e t e r m i n e d 
t h a t 
an 
o r d e r 
a p p e a l e d 
f r o m 
i s 
n o t 
a 
f i n a l 
j u d g m e n t , i t i s t h e d u t y o f t h e C o u r t t o d i s m i s s t h e a p p e a l ex 
mero motu." 
P o w e l l v. R e p u b l i c N a t ' l 
L i f e I n s . Co., 
293 A l a . 
101, 
102, 
300 
So. 2d 359, 
360 
( 1 9 7 4 ) . 
APPEAL DISMISSED. 
Cobb, C . J . , and W o o d a l l , 
S m i t h , P a r k e r , and Shaw, J J . , 
c o n c u r . 
7